Plaintiffs v Defendants

1 The first plaintiff, LDY Pty Ltd ("LDY"), is the trustee of GE & W Discretionary Trust ("the GE & W trust"). Liangdi Ge ("Lydia") is the second plaintiff and the director and shareholder of LDY (I will refer to the plaintiffs as "Lydia" or the "Lydia parties"). The GE & W trust is Lydia's family trust.

2 The first defendant, GE & L International Investment Pty Ltd ("GE & L"), is the former trustee of the GE & W Trust. Liangyan Ge ("Genie") is the second defendant and the director of GE & L, and the director and shareholder of the third defendant, GECW International Pty Ltd ("GECW") (I will refer to the defendants as "Genie" or the "Genie parties"). GECW is the trustee of Genie's family trust, the GECW Family Trust.

3 For the sake of clarity and without intending any offence, I will refer to participants by their anglicised names or first names as was done at the trial and in the evidence and submissions.

4 In summary, this hard fought case raised a range of issues. The main areas of dispute concerned:

• whether GE & L purchased the property at 7 St Georges Road, Armadale ("the Armadale property") in its own right or as trustee of Lydia's family trust;
• who is entitled to the funds in a Bankwest account established in Lydia's name;
• who contributed to the acquisition and redevelopment of the Armadale property and who is entitled to the profits generated by the project; and
• the directorships and shareholding of GE & L and the legality of changes to the ASIC register regarding that company.

5 I will set out the background facts that are agreed or not contested between the parties and later in the judgment I will deal with the disputed facts to the extent necessary.

1. Lydia and Genie are sisters. There are five sisters in total. The oldest sister, Liang Rong Ge, did not participate in this matter. The two younger sisters, Liangling Ge ("Grace") and Yu Ge ("Jade"), gave evidence.
2. Genie immigrated to Australia from China in 1999 to join her then husband Huifeng Wu ("Brian").
3. Lydia first arrived in Australia in 2000. She attended La Trobe University and graduated with a Master of Business Administration degree in 2001.
4. Between June 2007 and July 2009, Lydia visited Australia a number of times. During this period, she began to contemplate starting a property development business in Melbourne. Lydia discussed this with Dragan Backovic ("Dragan"), who owned a cabinetry and joinery business.
5. On 20 June 2009, Lydia and Genie together with other members of the family attended the auction of 38 Radnor Street, Camberwell ("the Radnor Street property"). The Radnor Street property was purchased for $1,840,000 and registered in Lydia's name. A deposit of $92,000 was paid.
6. In about August 2009, a loan of $1,472,000 was secured from Bankwest in Lydia's name to cover the balance of the Radnor Street property purchase price. On 11 August 2009, an account with Bankwest was opened in Lydia's name ("the Bankwest Account"). This was to be used as an offset account against the Bankwest loan. Both Genie and Lydia had access to this account.
7. The Radnor Street property settled on 19 August 2009 and Bankwest lodged a mortgage over the property which was registered on the title on 25 August 2009. Genie signed the mortgage document on behalf of Lydia. The transfer of land was signed and lodged on 25 August 2009.
8. Also in August, Genie, Lydia and their respective families, including their parents, moved into the Radnor Street property.
9. After the purchase of the Radnor Street property, Lydia, Genie, Grace and Jade agreed to invest in property together. To effect this, they established various trusts and corporate trustees.
10. On 6 September 2009, Lydia incorporated GELD & W Investments Pty Ltd ("GELD & W") to hold her interest in future property development projects. Lydia was appointed director and Genie was appointed secretary. Lydia held 90 shares and her partner, Gang Wang, held 10 shares.
11. On about 1 October 2009, GELD & W was appointed trustee of Lydia's family trust, the GE & W Trust. The trust deed was signed on this day but was back-dated to 8 September 2009. Lydia said she did not sign the document on 1 October 2009 but did not specify the exact date she did sign. However, she returned to China from Australia on 6 September 2009. GELD & W later changed its name to GE & L.
12. Genie incorporated GECW on 29 October 2009.[1]

18 GE International Investment Pty Ltd ("GE International") was registered on 27 January 2010. It was established as a corporate vehicle for Lydia, Genie and their sisters Grace and Jade to develop properties. The company was used to buy and develop two properties:

(a) 4 Saxton Hill, Box Hill North ("the Box Hill property"); and

(b) 21 Northcote Avenue, Balwyn ("the Balwyn property").

19 On 27 January 2010, Lydia, Grace, Jade and Brian, Genie's former husband, were appointed directors. On 28 October 2010, Genie was also appointed a director.

20 The initial shareholdings in GE International were as follows:

(a) Lydia held 50 of 100 issued shares;

(b) Grace held 10 of 100 issued shares;

(c) Jade held 20 of 100 issued shares; and

(d) Genie held 20 of 100 issued shares.

21 GE International was appointed trustee of the LGE Unit Trust. KST Partners drafted the Unit Trust Deed dated 27 January 2010.

22 The initial unitholders in the LGE Unit Trust were:

(a) GELD & W as the trustee of the GE & W trust which held 50 of 100 units;

(b) GECW as the trustee of the GECW Family Trust which held 20 of 100 units;

(c) Grace who held 10 of 100 units; and

(d) B & J Group Pty Ltd (which is Jade's company) which held 20 of 100 units.

23 GE International's first property purchase was the Box Hill property. Brian located this property in December of 2009 and the property was purchased for $755,000.

1. On 3 March 2010, Genie emailed Lydia with a breakdown of the purchase price and expenses related to the Radnor Street property. In this email, Genie noted that the shares in the Radnor Street property were to be 60% Lydia's and 40% Genie's.
2. The Box Hill property settled on 5 March 2010. GE International was registered as 80% owner and DSB Australia Pty Ltd ("DSB"), a company owned by Dragan, as 20% owner.
3. In September 2010, Genie and Brian sold their tobacco shop.[2] They received $219,065.54 for the business and stock.

27 On 12 October 2010, Jade sold her shares in GE International to Genie. B & J Group Pty Ltd sold its 20 units in the LGE Unit Trust to Genie's company, GECW. Accordingly, Genie became the holder of 40 of 100 shares in GE International and GECW held 40 of 100 units in the LGE Unit Trust.

1. On 28 October 2010, Grace resigned as a director of GE International.[3]
2. Genie attended the auction for the Balwyn property on 19 March 2011 and GE International purchased the property for $1,568,000. The division of ownership for the property was the same as the Box Hill property, namely 80% GE International and 20% DSB.
3. In the latter half of 2011, the registered proprietors completed the development of the Box Hill property. Unit 1 sold in about September of 2011 for $945,000[4] and unit 2 sold in November 2011 for $868,000.
4. Genie sent a second email to Lydia on 16 January 2014 containing a breakdown of the expenses related to the Radnor Street property ("the first Genie Spreadsheet"). Genie referred in the spreadsheet to the 60/40 split in the ownership of the property.
5. In February 2014, Genie emailed Philip Wu ("Wu"), an accountant from KST Partners, instructing him to change the name of GELD & W to GE & L. Genie also instructed Wu to appoint her a director and to give her 45% of the shares issued in the company.
6. On 26 February 2014, ASIC received the forms requesting the name change and issued a 'Certificate of Registration on Change of Name'.
7. On 11 March 2014, Wu lodged a form 484 with ASIC ("the first form 484") stating that, with effect from 5 March 2014:
   • Genie was appointed director of GE & L;
   • Lydia's shareholding was reduced from 90 shares to 55;
   • Gang Wang's shareholding was reduced from 10 to zero; and
   • Genie was to hold 45 shares.
8. Less than a week later, on 17 March 2014, both Lydia and Genie attended the Glen Waverley branch of the Commonwealth Bank of Australia ("CBA") and opened an account for GE & L.
9. In early April 2014, Lydia asked Genie for notarised documents including a company certificate of GE & L, CBA records showing that GE & L had an account in its name and a copy of Genie's passport. Lydia said that she needed these documents so that she could establish a new company in China. On 9 April, Genie sent the documents. The new company was incorporated in June 2014 as JiYi Shanghai Investment and Management Company ("JiYi").
10. From March until May 2015, Genie continued to look for further investment opportunities. She bid on a property in South Yarra and made a written offer on a property in Hawthorn. However, she was not successful on either purchase.
11. In May 2015, lot 3 of the Balwyn property sold for $1,740,000 and Stefan Backovic ("Stefan"), the son of Dragan, told Genie that he had identified a potential investment property at 7 St Georges Road, Armadale.
12. In June 2015, lot 2 of the Balwyn property sold for $1,600,000.
13. On 2 June 2015, GE & L purchased the Armadale property for $1,815,000.
14. Throughout June 2015, Lydia and Genie sent messages back and forth to one another containing a variety of documents.
15. In late June 2015, Genie and Lydia, and their respective families, went on holiday in England and France.
16. On 15 July 2015, KST Partners lodged a form 484 with ASIC ("the second form 484"). That form stated that:
    • as of 15 January 2015, Lydia had ceased as a director of GE & L;
    • Lydia's shareholding in GE & L was reduced from 55 shares to 14 shares;
    • Genie's shareholding in GE & L was reduced from 45 shares to zero; and
    • GECW gained 86 shares.[5]
17. On 16 July 2015, KST Partners lodged a form 484 with ASIC ("the third form 484") transferring Lydia's remaining 14 shares in GE & L to GECW.
18. In August 2015, Genie moved out of the Radnor Street property to prepare it for sale. Lot 1 of the Balwyn project sold for $1,750,000 on 17 August 2015.
19. On 17 September 2015, Genie informed Lydia about 2 Fordham Avenue, Camberwell ("the Fordham Avenue property"), a potential re-development property that the entire family could live in. On 24 September 2015, Genie signed a contract to purchase the Fordham Avenue property for $3,320,000.
20. On 13 October 2015, Genie emailed a power of attorney to Lydia. This was prepared by Genie's lawyer, Margaret Verducci. The power of attorney was backdated to 10 July 2015.
21. In December 2015, the Radnor Street property sold for $2,895,000. Genie signed the sale documentation on behalf of Lydia. On 8 February 2016, the Radnor Street property settled.
22. In late July 2016, Genie and Lydia met with Wu of KST Accountants.
23. On 25 October 2016, unit 3 of the Armadale property sold for $1,150,000 and settled on 7 December 2018.[6]
24. On 4 November 2016, unit 2 of the Armadale property sold for $1,410,000 and settled on 7 December 2018.[7]
25. On 2 December 2016, unit 4 of the Armadale property sold for $1,100,000 and settled on 7 December 2018.[8]
26. In early 2017, after a dispute arose between Lydia and the rest of the family, the family decided to sell the Fordham Avenue property. The Fordham Avenue property sold on 13 November 2017 for $3,500,000.
27. On 4 April 2017, Genie deposited $500,000 into the Bankwest Account[9] after discussions between her and Lydia.
28. Unit 1 of the Armadale property sold on 27 April 2017 for $1,225,000. The sale settled on 7 December 2018.
29. On 31 May 2017, Genie emailed Lydia another spreadsheet containing a list and history of transactions related to the Bankwest Account ("the second Genie Spreadsheet"). Genie sent Lydia a third version of the spreadsheet on 26 June 2017 ("the third Genie Spreadsheet"). Lydia received a fourth version of the spreadsheet on 11 October 2017 ("the fourth Genie Spreadsheet").
30. Between about March 2017 and July 2017, there were several meetings between Genie, Brian, Lydia and her husband Yves Goeminne ("Yves"). The purpose was to discuss property developments, possible future expansion of Hongwei's construction business and the potential involvement of Lydia and Yves in the Fordham Avenue property and the Armadale property. According to Genie, Lydia and Yves proposed being part of the Armadale project and to be shareholders in Hongwei without contributing much capital and without working on the projects. Genie and Brian were not happy with Lydia's approach. Genie considered that the potential outcome was that she and Brian did most of the work but Lydia and Yves enjoyed the profits. Genie said that if they were to work together as Lydia proposed, Genie and Brian would have to be paid management fees or wages. That suggestion led to arguments and disagreement and no agreement was reached.
31. In August 2017, after a meeting with Genie, Lydia cancelled Genie's access to the Bankwest account.
32. From late 2017 until mid-2018, the parties entered mediation to resolve disputes stemming from the Armadale property. The mediation was unsuccessful.

60 GE & L held units in the LGE Unit Trust between 2010 and April 2020 when the trustee of the LGE Unit Trust, GE International, was wound up.

61 Lydia presented in court as a well- spoken, intelligent and capable individual. The fact that she obtained a Masters of Business Administration degree is unsurprising. She appears to have a successful business career. In my view, she grasped the central elements of the Court's legal procedure and giving of evidence. Moreover, either through her own experience and language skills or through the interpreter, she understood the questions she was asked. Given her obvious intelligence, I consider that the approach she took to answering questions was intentional and deliberate.

62 I did not regard Lydia as a reliable witness whose evidence I could readily accept. Indeed, I would accept Lydia's evidence only if it were supported by another reliable and truthful witness, persuasive contemporaneous documentary evidence, an admission against interest or was otherwise uncontroversial. Generally, where Lydia's evidence conflicted with Genie's evidence or that of the defendants' other witnesses, I would prefer the evidence of the other witnesses over Lydia. I reached this view for a number of reasons.

63 First, Lydia was a frustrating and unsatisfactory witness during her days in the witness box. Because the Court had ordered witness statements to be filed in the proceeding, her evidence-in-chief was brief and uncomplicated. However, the cross-examination was needlessly long and drawn out primarily, if not exclusively, due to Lydia's approach to answering questions. From the outset of her cross-examination, Lydia was argumentative, evasive, unwilling to answer questions directly and often provided answers which did not address the question asked. She frequently made speeches emphasising points she was keen to convey. Her evidence was often repetitive and irrelevant to the question asked. I frequently directed her to attend to the question asked. In his submissions, the defendants' counsel observed that I directed her on 28 occasions to attend to the question or to answer the question that she was asked. The fact that I spoke so often to Lydia with such little effect reflects her intransigence and unwillingness to fulfill her obligations as a witness.

64 Secondly, during her evidence, Lydia gave evidence which I knew to be false. At the commencement of her evidence, the plaintiffs' counsel took Lydia to her witness statements, both in chief and in reply. Due to objections taken to the proposed statements, the plaintiffs' lawyers had prepared new amended versions of the statements. The new statements reflected the agreed changes and included court book references. Lydia signed the two witness statements. For some time after signing them, the statements remained with her in the witness box.

65 Lydia's witness statement in chief contained a table which set out the detail of Lydia's travel between Australia and China over the period 2000 to 2009. Later in cross-examination, counsel asked Lydia about where she was living at different times during that period. He asked if, after returning to China from Australia in January 2001, she remained there until May 2008 before having an extended visit to Australia from May 2008 to September 2009. Counsel put to Lydia that she returned to China more permanently on 6 September 2009. Lydia gave an answer. Counsel asked Lydia whether in giving the answer she did about the 6 September 2009 return date, she had referred to a document which she had with her in the witness box. Lydia's immediate response was to deny that she looked at any document. However, she later retracted this evidence and agreed that she had opened her witness statement to double-check the dates. Her admission as to the truth of the situation was wisely made because I had seen her open the witness statement in the witness box and look at it before giving her answer. The witness box in court 7 is close to the bench and I had a clear view. Moreover, Lydia often looked at me when answering questions and I expect that she realised that I had seen what she did.

66 The fact that Lydia's first instinct was to give false evidence concerned me. It caused me to worry about her truthfulness and reliability as a witness and cast a significant shadow over the credibility of her testimony.

67 Thirdly, Lydia sought to play down her English language skills or rely upon her alleged lack of familiarity with English to delay answering questions or not answer questions directly. I considered that this was a tactic which she adopted to give herself time to determine how she would answer a question and, in particular, to decide how much of the truth she would reveal. This was a concern because Lydia had the intelligence and the cunning to tailor her answers to promote her best interests.

68 I adopted this view because she seemed to have a reasonably strong grasp of the English language and there was usually no need for any delay. As the plaintiffs noted in their closing submissions,[10] Lydia gave evidence substantially in English, "only occasionally reverting to the use of the interpreter".[11] This was said to be in contrast to Genie, Jade and Grace who made greater use of the interpreter.

69 Given her background, it was not surprising that Lydia had reasonable English language skills. Lydia explained in her evidence that she studied at La Trobe University in Melbourne between July 2000 and December 2000 and obtained a Masters of Business Administration. She said that she was part of a group of 50 Chinese students who were accompanied to the university by a teacher.[12] Lydia suggested her English language skills at the time were not good. She contended that students studied in small groups and each student was meant to contribute to the group in a particular way. For example, one might be good at financial analysis and another at written English. Lydia claimed to rely upon the English skills of others in her group. She said that when using one particular textbook in the course, she relied upon an earlier edition written in Chinese. She made no mention of the other textbooks and course materials which she had to use in her studies. However, she acknowledged that the classes and textbooks were in English. So too was the assessment for the course. I infer that a university such as La Trobe would not award an MBA degree, or grade a component of such a degree as satisfactory, if the student did not display the requisite level of English literacy.

70 In subsequent years, Lydia travelled between China and Australia and lived here at different times. For example, Lydia lived in Australia between about 8 July 2008 and 6 January 2009 and again between about 14 January 2009 and 28 July 2009. She then returned to Australia for another four weeks in August/September 2009. This was in addition to stays totalling around 10 weeks in 2007/8 and further visits totalling about six weeks between 2012 and early 2015. Lydia returned to live in Australia again in June 2016 for an extended period, returning to China by about April 2019.[13]

71 Fourthly, Lydia had, at least in one regard, a lack of respect for the law and the obligations it imposed upon individuals. Her actions and attitude indicated that she would meet her obligations if it suited her but not otherwise. This was evident from her conduct in:

• meeting obligations she had as a director of a company registered in Australia; and
• filing corporate documents with ASIC.

72 Lydia acknowledged that she was the sole director of GELD & W, the trustee of her family trust, between October 2009 and January 2014. When asked whether there was any director of the company ordinarily resident in Australia during that time, she ultimately and reluctantly agreed that there were no directors of the company in Australia between those dates. She did not suggest that she was unaware of the requirement to have a director of the company ordinarily resident in Australia.

73 The position was similar in relation to LDY Pty Ltd. The directors of that company are Lydia and Yves. LDY Pty Ltd has been sole trustee of Lydia's family trust, the GE & W Trust, since May 2019. From that time until the trial, both Lydia and Yves lived in China and not in Australia. Again, this company had no directors normally resident within Australia.

74 Lydia accepted that it was important that a company filing a form 484 with ASIC should ensure that the information in the form was accurate. In relation to a particular form 484 filed with ASIC on Lydia's instructions on 1 December 2022,[14] the form stated that the information contained in the form was true and complete. However, her address was shown at 28 Wentworth Avenue, Canterbury. This was manifestly false when from about April 2019 Lydia lived in China. By validating the form 484 as she did, Lydia not only failed to comply with the law but gave ASIC information which she knew to be false.

75 There was another respect in which Lydia gave false evidence concerning the domestic living arrangements between her and Yves. Initially when asked, Lydia confirmed that from about August 2016 to December 2018 Yves lived with her at 28 Wentworth Avenue, Canterbury. When asked if Yves had ever lived at Unit 6/20 Denmark Hill Road, Hawthorn East, she replied 'no'. Counsel asked Lydia if she knew of any reason why Yves said he had lived at that address. After some prevarication and claiming to be confused, Lydia said that when she surrendered the lease on 28 Wentworth Avenue, they lived for a time at the Hawthorn East property. Lydia said that she had bought the apartment property for her mother to live in when she was in Australia.[15]

76 Fifthly, there were other aspects of Lydia's evidence which I find to be untrue and which I do not accept.

77 I do not accept Lydia's evidence that she was the legal and beneficial owner of the Radnor Street property and that Genie had no interest in that property. Genie, Grace, Jade and their mother all said that there were discussions at the time within the family which recognised that Lydia and Genie were buying the property together. In 2008, Lydia moved from China with her two children into Genie's Rowville house after the breakdown of Lydia's relationship with her former partner Gang Wang. Around this time Genie was looking to buy a house in an area with quality schools so she could give her children a good education. She examined various properties. Lydia asked if she could join her in relation to a property purchase because she had similar ambitions for her children.

78 I accept that, at that time, Lydia was not in a strong financial position because she had limited access to funds in Australia. She was not in a position to make a significant purchase without help. Indeed, Lydia made it clear that having secured the Radnor Street property at auction, she had to return to China to secure funds from Gang Wang to enable her to complete the acquisition with Genie.

79 Between about 2010 and 2014, Genie sent Lydia spreadsheets which sought to record the respective contributions of Genie and Lydia to the funds in the Bankwest account which was set up in Lydia's name. These documents recorded the 40/60 split between Genie and Lydia in relation to ownership of the Radnor Street property. At no time before the souring of family relations did Lydia complain about, or query, this division of interests by asserting that Genie had no interest of any kind in the property.

80 Lydia's assertion that she alone paid for the Radnor Street property and has full ownership of the property is inconsistent with contemporaneous bank records which show transfers of money from Genie and her former husband Brian into the National Australia Bank ("NAB") account which Lydia used before she opened her Bankwest account.[16] There were later contributions made into the Bankwest account.

81 In late June 2009, Genie (and Brian) transferred $296,000 into Lydia's NAB bank account. The transfers are apparent from Genie's Members Equity bank loan statements, Brian's CBA bank statement and Lydia's own bank statements. These were part of the funds used for the acquisition of the Radnor Street property.

82 The plaintiffs intimated that Genie's contribution to the Radnor Street acquisition was in fact money provided by Lydia. The suggestion was that Lydia transferred some money from China via Grace to use for this purpose. Grace disputed this and the bank records do not support it. The funds transferred to Grace in China appear to have been used primarily for the purchase and/or renovation of property in Beijing. The funds which Genie used in the acquisition looked to have been drawn against her Members Equity loan account which was secured over the Rowville property. In addition, some funds came from Brian's bank account

83 Another part of Lydia's evidence which I reject is her claim that she did not know until about July 2017 that Genie had changed the name, shareholding and directorship of GELD & W. This is dealt with at some length later in the judgment. Further, when it was put to Lydia that she did not manage or run the Armadale project, she said that she did. I find this evidence to be untrue and without any factual basis.

84 Yves is the current partner of Lydia and has been for over 10 years.

85 It is difficult to make any findings about the credit of Yves. He produced a witness statement which was admitted into evidence without challenge. The defendants did not cross-examine him. The contents of his statement were not of marked assistance in deciding the disputed issues in the case. A significant part of the statement dealt with a proposed agreement which was negotiated between Lydia's interests on the one hand and Dragan and Stefan on the other. However, the agreement was never finalised and signed by all the affected parties including Genie. To that extent, his evidence was largely irrelevant.

86 In paragraph 1.2.1 of his expert report, Greg Meredith ("Meredith") said that he was instructed by the solicitors for Lydia and her associated entity LDY to prepare a report containing an opinion on:

(a) the proper accounting of contributions to GE International and GE & L for the acquisition of the Box Hill, Balwyn and Armadale properties, and of the distribution of profits;

(b) the source of the contributions made into and withdrawals out of funds in the Bankwest account.

This summarised the focus of the report. In short, I found the report to be of little to no help in deciding the critical issues raised in the proceeding. This was the case for several reasons.

87 First, in writing the report, Meredith made a major assumption in favour of Lydia and against the interests of Genie. The comment was encapsulated at paragraph 1.6.8 of the report where Meredith said:

"... whilst Genie had access to the Bankwest account, given the account is held in the name of Lydia, it is more likely than not that the Bankwest contributions belong to Lydia unless shown otherwise."

A comment to this effect was repeated on several occasions in the report.

88 In his oral evidence, Meredith said that the comment was based upon his experience over many years as an insolvency practitioner investigating and tracing funds through bank accounts. This included his experience as a joint liquidator of Pyramid Building Society.[17] However, within the report, there was no explicit mention in this context of any connection between this part of the opinion and Meredith's experience. Indeed, the footnote reference which Meredith provided for the comment was a reference to the plaintiffs' further and better particulars. Thus, the only authority or document put forward in support of the quoted comment was the plaintiffs' own further and better particulars which represented no more than the plaintiffs' claim.

89 The defendants put to Meredith that the position he adopted in the report was as follows: whilst Genie had access to the Bankwest account, for the purposes of the report, Meredith had assumed that it was more likely than not that the Bankwest contributions belonged to Lydia unless shown otherwise, as stated in the plaintiffs' further and better particulars. Meredith accepted that this was a fair characterisation of his position.[18] It amounted to a situation in which, in the absence of evidence to establish that a contribution came from Genie, Meredith assumed that any contribution to the Bankwest account was, more than likely, made by Lydia.[19]

90 This evidence led to a recognition that the plaintiffs did not supply Genie's bank statements to Meredith for him to examine and analyse. After being retained as the plaintiffs' expert, Meredith sought further documents which might assist him in the preparation of his report. The documents he sought included Genie's bank statements for the period 2009 to 2020 and Lydia's NAB bank statements for the same period.

91 The plaintiffs' solicitors advised Meredith that no such documents were available from Genie. The solicitors' response thereby created a serious problem. This was evident in a couple of ways.

92 First, it appears that the information was incorrect. Various pages of Genie's bank statements were included within the court book and were referred to during the course of the trial. The defendant produced three affidavits of documents in 2021. The first contained no bank records. The second included a collection of redacted bank statements from various NAB and CBA accounts for different periods. The third affidavit had more largely redacted statements in relation to accounts at NAB, ANZ and Westpac. The defendants contend that bank statements relating to Genie's accounts were made available to the plaintiffs during 2021. These documents were available well before September 2022 when Meredith asked for the documents. It follows from this that the plaintiffs were either unaware that Genie's bank statements were accessible or they misled Meredith.

93 It appeared from the trial and the submissions made that the plaintiffs sought to deflect responsibility for the situation regarding Genie's bank statements by questioning why Genie had not produced unredacted bank statements at an earlier time. It seems to me that this does not grapple with an essential point. Even if Genie had failed in her discovery obligations, upon receipt of Meredith's request for her bank statements in September 2022, the plaintiffs' solicitors ought to have applied for an order for particular discovery in order to obtain the bank statements which were said to exist but which Genie had not produced. Again assuming, as in my view was likely, the Court would have made an order for discovery of the documents as they were plainly relevant, upon receipt of the documents, the plaintiffs should have forwarded them to Meredith and if required, sought a supplementary report. On the evidence advanced at trial, there is no basis to believe that the plaintiffs made any application for particular discovery or sought to obtain any supplementary report from Meredith. To that extent, responsibility for this shortcoming in the report lies wholly at the feet of the plaintiffs. An expert is bound by his instructions and cannot go beyond the documents with which he has been briefed.

94 Next, the failure to provide Meredith with Genie's bank statements underlines the unfairness of the major assumption which he made. Given that Meredith was operating on the basis that it was more likely than not that the Bankwest contributions belonged to Lydia unless shown otherwise, Genie's bank statements were crucial in providing evidence which showed that contributions were 'otherwise' than from Lydia. In circumstances where Meredith had no bank statements from Genie, and no other relevant correspondence, emails or other documents which might "show otherwise", Meredith acted on the assumption he referred to in order to reach a conclusion that it was more likely than not that it was Lydia who made the contributions to the Bankwest account. The absence of documentation supporting Genie's contributions made this conclusion inevitable in the circumstances.

95 Another respect in which the assumption operated unfairly was the focus which Meredith placed on interrogating contributions made to the Bankwest account by Genie alone. The plaintiffs did not instruct Meredith and he did not otherwise take it upon himself to interrogate which, if any, contributions to the Bankwest account were in fact made by or on behalf of Lydia. By relying upon the assumption, Meredith simply concluded that, in the absence of material from Genie demonstrating that she had made a particular contribution, it was more likely than not that the contribution belonged to Lydia.

96 Further, in paragraph 1.6.8(b) of his expert report Meredith says:

"the funds tracing exercise performed shows that Genie was not funding the Bankwest Account, as I have not identified any contributions attributable to Genie"

97 I regard this unqualified statement as seriously misleading. In my opinion, it implies that Meredith conducted the funds tracing exercise to determine the source of the contributions into the Bankwest account. However, it is apparent from paragraph 5.4.13 of Meredith's report that Meredith could not complete the exercise of tracing cash deposits from Genie's personal bank accounts to the Bankwest account because he was not supplied with those bank statements for the financial years ending 30 June 2016 and 30 June 2017. Meredith said that he would require:[20]

the transaction information relating to these accounts to identify instances where:

(i) Genie has deposited cash into the Bankwest account from a personal bank account;

(ii) the same cash amount has been transferred from the Bankwest account to account x0924 as an Armadale contribution.

98 Paragraph 1.6.8(b) of Meredith's report positively asserts that Genie was not funding the Bankwest account. Exercise 2 referred to in Meredith's report looked at Genie's cash contributions to the Bankwest account. The concept of cash contributions included all financial contributions, not just notes and coins. This was an important part of the funds tracing exercise.

99 Although Meredith failed to qualify the statement in paragraph 1.6.8 of his report, he said that his statement was not false or misleading because the body of the report acknowledged that he had not been able to complete the tracing exercise. Meredith said that his report was designed to be read as a whole. He said the disclosure subsequently in the body of the report was sufficient and there was no need to include the qualification in what he described as the 'executive summary'.

100 Meredith's inability to complete the tracing exercise also had the consequence that the minimum contribution of Genie to the Bankwest account set out in table 31 of the report was highly likely to be wrong. Meredith assessed the contribution by Genie as $436,302. Meredith accepted that, insofar as he was not given access to Genie's bank statements, it was highly likely that Genie was responsible for some percentage of the contribution which Meredith was unable to cross check. Meredith accepted that:

• it was unlikely that either Genie or Lydia was responsible for all of the other contributions to the Bankwest account.
• the figure which he found that Genie contributed, namely $436,302 was most likely a minimum figure.

101 In my view, when one has regard as to the whole of the available evidence, Genie made other significant contributions to the Bankwest account, directly and indirectly.

102 During the course of his cross-examination, counsel took Meredith to several documents which reflected contributions made by or on behalf of Genie. These were in addition to those which Meredith had already compiled and set out in Annexure G of his report. The documents provided a sound basis against which Meredith could have made cross-checks of the kind he would have usually made to verify the accuracy of the entries. Having been taken to these various documents for the first time, Meredith agreed that they would have been helpful and possibly important for him in conducting his fund tracing exercise.

103 Having examined the documents and, assuming them to be accurate, Meredith acknowledged that Genie's contributions to the Bankwest account were greater than set out in his report. The contributions should have included a $600,000 deposit made on 10 June 2016 and a $360,000 deposit made on 2 November 2011. In addition, there was a contribution credited from Hongwei Construction Pty Ltd ("Hongwei"), the building company owned by Genie's former husband, Brian. This deposit of $210,000 was made on 16 April 2012. Meredith said that he would not have classified that deposit as one from Genie but he would have separately and specifically referred to it in order to bring it to the Court's attention.

104 I note that the plaintiffs objected to document which showed the sum of $210,000 leaving the account of Brian's company Hongwei. It was not a business record of Genie's and there was no evidence called from either the company or Brian. My view is that, while the points made by the plaintiffs' counsel were factually correct, the document complained of and, more particularly, the evidence given by Meredith about it, remains available to the Court. I so conclude for the following reasons. First, early in the trial both parties and their counsel accepted as a governing rule that where a party referred to a document in opening or in evidence when questioning a witness, the document would form part of the written evidence in the trial unless objection was taken at the time. No objection was taken when the document was first referred to. Secondly, questions were asked about the company document and evidence was given before any objection was raised. Again, the objection was too late. Thirdly, when married to Brian, Genie was responsible for the production of financial documents of his company and had contact with the company's accountant about the financial documents. To that extent, she had personal knowledge of the books of account and transaction in question.

105 In summary, Meredith was an experienced witness, albeit unnecessarily obstinate in refusing to make some obvious concessions. He was well aware of his obligations to the Court. Because of the limitations in his instructions and the materials provided to him, his report was of little to no assistance in deciding the critical issues. However, his evidence was helpful to me concluding that Genie, directly or indirectly, contributed at least $1,100,000 to the Bankwest account in addition to the contributions which Meredith had already found in her favour.

106 Genie gave evidence at some length and was subjected to a detailed cross-examination. The period covered by her evidence was extensive and included events which occurred 8 - 10 years ago. Overall, I found Genie to be an honest witness and accept the substance of her evidence on major issues like the contributions to the Bankwest account in Lydia's name. Also, I believe her evidence to the effect that in 2015, Lydia did not wish to be involved in the purchase of the Armadale property. In making this assessment, I recognise that Genie was not without blemishes. Sometimes she was evasive and did not directly answer the question asked. She was not always in command of the details in her answers. However, by comparison with Lydia, Genie was a model of transparency who usually answered directly without the calculated self-interest which Lydia displayed. Genie's general recollection of events and their sequence was good. Her account on the main issues dividing the parties was preferable to that of Lydia.

107 The plaintiffs sought to attack Genie's credit on several bases:

(a) Genie admitted to putting Lydia's signature on various documents such as transfers for units 1, 2 and 3 of the Balwyn property, school application forms and the incorporation documents of GELD & W;

(b) Genie was slow to accept that, contrary to her initial evidence, Genie could not have notified the accountants of a change of name for GELD & W Investment Pty Ltd on 21 February 2014 before the date of the name change on the ASIC form;

(c) Genie failed to call Wu an accountant at KST Partners, the accountant for GE & L and Brian, her former husband.

108 In my opinion there is little substance in these points.

109 As to paragraph 107(a) above, until the rupture in relations between Genie and Lydia, they were very close. They trusted and helped each other. For this reason I am comfortably satisfied that Genie told the truth when she said that she signed documents on behalf of Lydia at Lydia's request and with her knowledge. This was not sinister unprincipled conduct by Genie but an example of a sister simply helping a sibling by doing things which the sibling asked her to do. It was a convenient arrangement for Lydia, especially when she was in China.

110 Regarding paragraph 107(b), in paragraph 48 of her witness statement, Genie says that on 21 February 2014, she sent a company search to Wu which reflected the change of name from GELD & W Investment Pty Ltd to GE & L International Investment Pty Ltd. This was incorrect as was obvious from the documentary evidence. The email which Genie sent Wu at 3:30pm on 21 February 2014 advised him of the changes to be made in relation to the company. The change of name had not yet been made. Genie informed Wu of the proposed new name and provided an alternate name if the first name was not available. The email headed "Company Information for GELD & W" did not contain any company search. In particular, there was no search bearing the new name of the company.

111 This error by Genie is odd. In my experience, if a witness or party seeks to mislead a court, they generally do not do so regarding a matter where the falsehood is so easily identified and comprehensively shown to be untrue. They normally focus on matters where the truth is harder to discern. Given the obviousness of this error, and having regard to the overall conduct and performance of Genie as a witness, I consider it most likely that Genie made a mistake and misread or misdescribed the document. I do not consider her evidence was calculated to mislead the Court. Nor do I find that this error should cause me to adopt a negative attitude to her evidence more broadly.

112 In relation to subparagraph 107(c), Genie's evidence included information about her dealings with Wu and her ex-husband Brian. I do not agree that Genie needed to call either of those two people as witnesses. If Lydia thought that either one or both of them was a necessary witness, she could have called them. There is no property in a witness and Lydia's lawyers were free to approach them. I would not draw an adverse inference against a party for not calling a former spouse. To simply assume in the absence of evidence that Brian is well disposed towards Genie and is "in her camp" is no proper foundation for a Jones v Dunkel inference. The same point applies to financial documents relating to Hongwei. Genie cannot be fairly criticised for not producing documents referable to a company owned and operated by her former husband, especially when there is no basis to believe such documents are within her power, possession or control.

113 Grace is the second youngest sister and lives in China. Her witness statement was short and dealt with only a few matters:

(a) Lydia told her around September 2009 that she and Genie had bought a property together in Camberwell which was a good area for schools;

(b) she had a 10% interest in the LGE Unit Trust which the sisters set up to undertake property development work in Melbourne;

(c) she lent the distribution she received from the trust to Genie on the basis that Genie would pay whatever tax was due on that distribution;

(d) she said Genie had never asked her to transfer Lydia's money to Australia. She denied that she had transferred funds from Lydia's Chinese bank accounts to Lydia's NAB account in August 2009;

(e) she was never told of any work which Lydia did on behalf of GE International and she never approved any payment of wages to Lydia from GE International.

114 In her cross-examination, Lydia's counsel established that:

(a) Grace had a difference of ideas or opinions with Lydia and Gang Wang. Grace said that it concerned their work relations and was nothing to do with the proceeding;

(b) Gang Wang was in charge of LeonTec (a business in China) and before it went public, he owned 50% of the shares and Lydia 43%. Lydia received that shareholding from her mother Baoying Shen ("Shen");

(c) Gang Wang promised Grace 5% of the capital of LeonTec but later broke his promise. The plaintiff suggested that a 5% interest in the business was worth around $50 million. The plaintiffs did not directly put to Grace that she was lying or giving false evidence against Lydia because she was upset, annoyed or seeking vengeance for the breach of promise regarding the share parcel. In the circumstances, because the point was not specifically raised, I will ignore it. I do not regard Grace's evidence as questionable on this basis.

115 Grace could not comment on the proposition that there was no distribution from the LG Unit Trust in 2017. She said that she saw the report from the accountants, KST Partners and thought the profits were distributed. It was on that assumption that she made the agreement with Genie to give her an interest-free loan. The loan theoretically represented the 10% distribution to which Grace was entitled as a unit holder.

116 Grace insisted it was only Lydia, not Genie, who asked her to transfer funds from China to Australia. She agreed that she helped Lydia with funds transfers from China. Grace said that she had a brown ledger or document in which she recorded all the funds transferred and the payments made to Lydia's account in Australia. Grace said that when she returned to Beijing, she did a handover to Lydia and gave her the brown satchel to keep. Although the defendant called for its production, it was not produced. The plaintiffs' counsel said that it had been lost.

117 Grace agreed that, between March 2009 and September 2009, a series of payments were made into her bank account from two accounts, one in Lydia's name and one in her mother's name. Grace said she followed Lydia's instructions in relation to the money and transferred what she stipulated. She said it was Lydia who supplied the account details and instructions.

118 I find Grace to be an honest and credible witness. I accept her evidence as truthful. Where it conflicts with Lydia's evidence, I prefer Grace's evidence.

119 Jade is the youngest sibling. She has lived in Australia for some years. She said Lydia and her two children came to live at Genie's house in about 2008 when Lydia's relationship with her partner went bad. Genie and her husband Brian were good to Lydia and her children. Jade said she lived not far from Genie and used to visit frequently.

120 Jade said that during the time Lydia was living with Genie in Rowville, Lydia told family members that she did not have money and relied upon regular Centrelink payments. During the trial Lydia denied this, saying that she had a stable income primarily from her directorship of LeonTec. Lydia said that she did not need Centrelink for her income. However, there was documentary evidence of a relationship between Lydia and Centrelink regarding the Family Assistance Office.

121 Although Lydia said that she did not need the government money, she did not deny taking it. This suggests that either she was opportunistic in taking social security benefits she did not need, or the LeonTec business was not as financially successful as the plaintiffs made out.

122 Jade said that in the presence of her and others at Genie's Rowville home, Lydia asked to buy a property with Genie because she wanted her children to go to good schools. In this regard she echoed Genie's sentiments. She had said to Jade and other family members at family gatherings that she wanted to live in a good school zone so she could give her children a better education. Genie spoke of auctions which she attended. Lydia said that it was good for her visa status to have property in her name. Lydia said that if she bought a property with Genie, it was a good basis to approach Gang Wang for money - he could compensate her for what he had done.[21]

123 Jade said that her parents asked Genie to help Lydia because Lydia was her older sister. Genie took Lydia to some property inspections. Jade herself sometimes went too because she was also looking for a property. Around June 2009, Jade bought a house at 239 Highfield Road, Camberwell. This was shortly before Genie and Lydia bought the Radnor Street property. Jade said that she and her husband attended the Radnor Street auction with Genie, Lydia and her parents. She said that Genie and Lydia discussed their upper limit for the auction in her presence. The amount was $1.6 million. However, at the auction Lydia said to keep bidding and she bought the property for $1.84 million.

124 Jade said that in family discussions at Genie's Rowville house, Lydia referred to the 60/40 ownership split between herself and Genie in relation to the Radnor Street property. Lydia persuaded Genie to register the property in Lydia's name only. Lydia said that being the sole owner would assist in getting funds from Gang Wang and also help with her Australian visa.

125 Jade gave evidence about the power of attorney which Lydia gave Genie to act on her behalf in 2015. Jade said that she went to China in September 2015 to visit her parents in Beijing. While there, she met up with Lydia at the end of her trip. Jade said that Lydia produced a document, which Jade saw was a power of attorney, and asked Jade to sign the document as a witness. Jade said that she witnessed Lydia's signature in Beijing and then signed the power of attorney herself. After returning to Melbourne, Jade said she brought the document to Genie and witnessed her signing it as well.

126 Lydia's account of events regarding the power of attorney was different. She said that she had already signed the power of attorney when she gave it to Jade and that Jade did not see her sign it. She said that Jade did not witness it either.

127 Jade and Lydia gave slightly different evidence about a visit by Jade and Genie to China in March 2019. In my view, the evidence was irrelevant to the major issues to be resolved so nothing turns upon it.

128 In cross-examination Jade remained steadfast in her evidence and vigorously rejected the notion that the statements contained in her witness statement were not true.

129 My only reservation about Jade concerned her response to some questions about financial dealings between Lydia and Genie on the one hand and Lydia and her mother on the other. When asked about her awareness or knowledge of such matters, Jade did not answer directly but said that such financial dealings were nothing to do with her. While her answers were normally directly responsive, these answers were a little evasive because she did not specifically address the issue of her knowledge or awareness of these dealings.

130 Generally speaking, I found Jade to be a credible, reliable and honest witness and I prefer her evidence to Lydia's on disputed matters.

131 Mrs Shen is the mother of Lydia, Genie, Grace and Jade. She gave limited evidence at the trial. The main points she made were as follows:

• Lydia and her two children came to Australia in 2008 to live with Genie and her family after Lydia's relationship with her husband, Gang Wang collapsed. Shen and her husband (who is now dead) also came to live in Australia with Genie.
• During that time, Genie was searching for a house in a good neighbourhood. Lydia said that she wanted to buy the house together with Genie and she would get money from Gang Wang.
• Sheng went with her husband, Genie, Lydia, and Jade and her husband to the auction of 38 Radnor Street, Camberwell. After the auction, Lydia said that she wanted to have the house registered in her name alone - it would help her family renew their permanent resident visas for Australia.
• Shen and her husband asked Genie to help Lydia as her older sister. Genie agreed that Lydia could be the sole registered proprietor of the property.
• In discussions held at Genie's home, Lydia and Genie agreed that the Radnor Street property would be held 60% by Lydia and 40% by Genie.
• In August 2009, Genie and her family, Lydia and her family and Shen and her husband moved into the Radnor Street property.
• Lydia went back to China in September 2009. She said she needed to return to get money from Gang Wang.
• In August 2016 while on a visit to Melbourne, Sheng stayed with Lydia and her family at their rental property. During the visit, Shen went with Lydia to the bank and opened her own bank account.
• While Shen was in Australia, Genie worked on organising a parent visa which would enable Shen to remain permanently in Australia.
• In about June 2017, Shen went with Lydia to a Bankwest branch and asked her to transfer $81,000 from Shen's account to Genie. This was for the visa application which Genie was attending to for her mother.
• When leaving Australia around the end of June 2017, Shen told Lydia to transfer whatever was left in her bank account - about $10,000 - to Genie as she was to pay for all the costs associated with obtaining the visa for Shen.
• In her cross-examination, it was put to Shen that she did not attend the Radnor Street auction or ask Genie to help Lydia in relation to the purchase of that property. She denied both suggestions.

132 Shen's response to questions about the bank accounts and payments was restricted because she is illiterate.

133 Counsel put to Shen that she had an argument with Lydia in about 2018. Shen agreed that this was the case. The purpose of such a question was unclear. Possibly the plaintiffs were expecting the Court to infer that Shen gave false evidence harmful to Lydia because of ill feeling against her arising from the argument. However no such proposition was put. It was put to Shen that she believed Lydia was wealthy and she should share that wealth with her sisters. Again, the relevance of that question was unclear. Shen denied she had that attitude.

134 In my view, Shen was a truthful witness whose evidence I could accept. She gave direct responses and, making due allowances for her age and the intervention of the interpreter, appeared to be honest and reliable. I accept her as a witness of truth and would prefer her evidence to Lydia's on disputed matters.

135 At the conclusion of the evidence 10 issues were agreed upon as requiring the Court's determination. They were:

1. Was the Armadale property purchased by GE & L:

(a) in its capacity as trustee of GE & W; or

(b) in its own capacity?

2. To the extent that identified deposits or withdrawals in the Bankwest account are disputed, who made (or for whose benefit were they made) the disputed withdrawals and deposits in the Bankwest account?

3. On or about June or 10 July 2015, did Lydia and Genie agree that:

(a) Lydia would not participate in the purchase and development of the Armadale property;

(b) Lydia would lend Lydia's funds in the Bankwest account to Genie on an interest free basis to assist in funding the Armadale project ("Loan agreement"); and

(c) Genie would repay the funds which she used at the completion of the Armadale project.

4. Did Lydia and Genie otherwise enter into any and what loan agreement for any and what sum in respect of the purchase and development of the Armadale property?

5. If yes to the preceding question, what were the terms of the alleged loan agreement?

6. Should the Court make an order under section 175 of the Corporations Act 2001 (Cth) rectifying the ASIC register for GE & L to reflect that:

(a) Lydia is the sole director of GE & L;

(b) Gang Wang is the holder of 10 of the 100 ordinary shares issued in GE & L; and

(c) Lydia is the holder of 90 of the 100 ordinary shares issued in GE & L?

7. If Lydia did not agree to lend her funds in the Bankwest account to Genie to assist in funding the Armadale property project, then did the use of her funds from the Bankwest account create a proportionate resulting trust in her favour in the Armadale property project? And if so, what is her proportion?

8. If not otherwise resolved by the above issues, who is entitled to the contributions made from the Bankwest account to GE & L for the purchase and development of the Armadale property project in any and what proportions?

9. If not otherwise resolved by the above issues, who is entitled to the net profit earned by GE & L in respect of the purchase and development of the Armadale property project and in which proportions?

10. What order should the Court make for the disposition of the funds held in Court?

1. Was the Armadale property purchased by GE & L in its capacity as trustee of GE & W or in its own capacity?

136 The Lydia parties contended that GE & L purchased the Armadale property in its capacity as trustee of the GE & W Trust.

137 The plaintiffs pointed to a range of factors in support of their position:

(a) Lydia, as director of GELD & W, signed the consent for GELD & W, as GE & L then was, to act as trustee for the GE & W Trust;

(b) the trust deed establishing the GE & W Trust gives GELD & W wide powers of investment, including the power to purchase property;

(c) GELD & W resolved to establish a bank account for the purposes of the GE & W Trust;

(d) GELD & W executed the LGE Unit Trust deed as trustee for the GE & W Trust;

(e) between 2010 and 2017, GELD & W's, and then later GE & L's, business was to hold units in unit trusts and to invest in, and receive funds from, GE International;

(f) Genie admitted that Lydia was appointed director of GELD & W, that GELD & W had two shareholders, being Lydia and Gang Wang, and that it was to be the trustee of Lydia's trust. Moreover, Genie admitted the purpose of GELD & W was to hold Lydia's interest in development projects;

(g) KST Partners confirmed at one point that the Armadale property was purchased by GE & L in its capacity as trustee for the trust. Later there was a meeting at the offices of KST Partners on 20 February 2018 during which Wu confirmed that GE & W was to be involved in and determine the profits of the Armadale project;

(h) GE & W Trust's tax return for the year ending 30 June 2016 contained a declaration that the Armadale property was purchased on its behalf and showed a distribution to GE & L of $320,026 from the LGE Unit Trust. Lydia contended that this tax return was prepared by KST Partners on Genie's instructions and that Genie subsequently organised for the tax liability on that distribution to be paid. Thus, the Lydia parties submit, that by her conduct Genie must have implicitly endorsed the declaration that Armadale was intended to form part of GE & W's trust fund;

(i) no minutes, emails or resolutions evidence that the directors of GE & L intended that the purchase of the Armadale property be different from previous investments;

(j) Genie gave evidence that GE & L did not hold any assets in its own name as at June 2015;[22]

(k) there is no dividend declaration in evidence;

(l) Lydia, a director of GE & L as at 2 June 2015, had not expressed any agreement at that time that the purchase of the Armadale property was to be in a capacity different from the purchase of previous investments;

(m) Genie disavowed any claim to profit from the Armadale property on the basis of shareholding when Genie said Genie's entitlement to profit was based on absence of an agreement between Genie and;

(n) the concept of GE & L purchasing the Armadale property in its own right and that shareholding in GE & L would determine profit is inconsistent with Genie's assertion that a deal was done between Genie, Lydia and B8 Group Pty Ltd (Stefan and Dragan's company) ("B8") that the profits would be split 34%, 51% and 15% respectively. It is also inconsistent with the evidence that Genie gave to the effect that the shares were of little or no value as at 2 June 2015.

138 Ultimately, the plaintiffs submitted that GE & L had, by its conduct, declared that it would hold the Armadale property on trust. They cited JW Broomhead (Vic) Pty Ltd (in liq) v JW Broomhead Pty Ltd[23] and Moyes & Anor v J & L Developments Pty Ltd & Anor (No 2)[24] as authority for this proposition.

139 They pointed out that the Genie parties conceded that LDY was validly appointed as trustee of the GE & W Trust in place of GE & L but that the defendants did not concede that the assets of the trust should have vested in LDY once it was appointed trustee. As such, the Lydia parties seek vesting orders in accordance with sections 51 and 58 of the Trustee Act 1958 (Vic).

140 For their part, the Genie parties argued that there was no suggestion that the Armadale property was purchased using monies belonging to the GE & W Trust. Moreover, they contend that the fact that GE & L was the trustee of the GE & W Trust when the property was purchased is not of itself enough to determine the issue.

141 Instead, they emphasised that trusts require certainty of intention, subject matter and object and pointed to the comments of French CJ in Korda v Australian Executor Trustees (SA) Ltd[25] where he stated that:[26]

"The question whether an express trust exists must always be answered by reference to intention. An express trust cannot be created unless the person or persons creating it can be taken to have intended to do so. Absent, as in this case, an explicit declaration of such an intention, the court must determine whether intention is to be imputed. It does so by reference to the language of the documents or oral dealings having regard to the nature of the transactions and the circumstances attending the relationship between the parties.

...

It has rightly been observed that "many express trusts are not express at all. They are implied, or inferred, or perhaps imputed to people on the basis of their assumed intent". The American Law Institute's Restatement Third, Trusts uses the term "trust" to refer to an express trust as distinct from a resulting or constructive trust and defines it as:

'a fiduciary relationship with respect to property, arising from a manifestation of intention to create that relationship and subjecting the person who holds title to the property to duties to deal with it for the benefit of charity or for one or more persons, at least one of whom is not the sole trustee.'

The seventh edition of Jacobs' Law of Trusts in Australia offers the usefully succinct observation that the creator of an express or declared trust will have used language which expresses an intention to create a trust:

'The author of the trust has meant to create a trust, and has used language which explicitly or impliedly expresses that intention, either orally or in writing. The fact that a trust was intended may even be deduced from the conduct of the parties concerned but if there is any uncertainty as to intention, there will be no trust.'"

142 They noted that when the Armadale property was purchased that there was no declaration by GE & L that it took the transfer of title as trustee or that the property would be held by it as trustee.

143 The defendants argued that, looking more broadly, neither the conduct of Genie nor the surrounding circumstances suggested any such intention. They pointed to the fact that:

(a) Genie and Stefan had agreed to split the profits of the project between themselves;

(b) Lydia and Genie had been removed as shareholders;

(c) GECW held 100% of the shares in GE & L; and

(d) GECW holding 100% of the shares only made commercial sense if the benefits of the purchase were to flow exclusively to GECW as shareholder, because otherwise it would receive no profits from its shareholding. If the property was purchased by GE & L in its capacity as trustee, then any benefit would flow to the beneficiaries of the GE & W Trust.

144 The Genie parties argued that the Armadale property was funded by Genie, Brian and Lydia. The funds from Lydia, Genie contends, were subject to a loan agreement with Genie. They said that as such, if the property was purchased by GE & L in its capacity as trustee, then Genie would receive no reward for her efforts. Instead, the beneficiaries of GE & W would receive all of the reward although they faced no commercial risk.

145 In regard to the evidence of Lydia, the defendants underscored that in Lydia's own words, she "would never have permitted GELD/GE&L, the corporate trustee of my family trust to acquire any property".[27] The Genie parties said that this evidence was contrary to any assertion by the Lydia parties that GE & L's intention was to purchase the property as trustee. By way of contrast, there is no evidence supporting any finding that the intention of GE & L was to purchase the Armadale property on trust for the GE & W Trust.

146 Finally, the defendants' submitted that, if the position of the plaintiffs is accepted, then an absurd situation would arise - the Armadale property was purchased, without Lydia's intention or consent, by Lydia's trust with funds that belonged to both Genie and Lydia and Genie then managed the development. In this scenario, Lydia and her fellow beneficiaries would receive all the benefit of the transaction while Genie would receive none.

147 The basic proposition regarding the creation of an express trust was articulated in Kauter v Hilton[28] by Dixon CJ, Williams and Fullagar JJ where their Honours stated:

"the established rule that in order to constitute a trust the intention to do so must be clear and that it must also be clear what property is subject to the trust and reasonably certain who are the beneficiaries"[29]

148 The first part of this proposition requires that the author of the trust expresses an intention to create such a trust. In Korda v Australian Executor Trustees (SA) Ltd[30] French CJ endorsed the explanation of what is meant by intention in the seventh edition of Jacobs' Law of Trusts in Australia:

"The author of the trust has meant to create a trust, and has used language which explicitly or impliedly expresses that intention, either orally or in writing. The fact that a trust was intended may even be deduced from the conduct of the parties concerned but if there is any uncertainty as to intention, there will be no trust."[31]

149 In assessing how clear that expression of an intention to create a trust must be, Mason CJ and Dawson J said in Bahr v Nicolay (No 2):[32]

"If the inference to be drawn is that the parties intended to create or protect an interest in a third party and the trust relationship is the appropriate means of creating or protecting that interest or of giving effect to the intention, then there is no reason why in a given case an intention to create a trust should not be inferred."

150 The manifestation of the intention can be established by clear inference.[33]

151 Determining whether the intention was manifested is an objective, not subjective, enquiry.[34]

152 In JW Broomhead (Vic) Pty Ltd (in liq) v JW Broomhead Pty Ltd[35] McGarvie J assessed whether the plaintiff had declared by its conduct that it held its building business on the trusts of the deed. In that case, the plaintiff was trustee under a trust of which the defendants were beneficiaries. The plaintiff had been placed into liquidation. The liquidator brought proceedings against the defendants seeking to have the plaintiff indemnified out of the trust fund for any losses the plaintiff's building business had incurred. The liquidator sought that indemnification on the basis that the building business was conducted by the plaintiff under the terms of the trust deed. The defendants argued that the building business never became part of the trust fund.

153 In the process of determining whether the business was conducted by the plaintiff as trustee or in its own capacity, his Honour outlined the applicable principles. His Honour said that the putative trustee must, by its words or by implication from its conduct, declare that it intended to hold the asset on trust.[36] His Honour canvassed a range of examples that could demonstrate such conduct. For example, a declaration of a trust can be implied by a: [37]

• trustee adding their own property to a trust fund of which they are trustee;
• trustee's entries into their own books of account and memoranda; or
• trustee treating their property as trust property.

154 His Honour found that there was no express declaration that the business would be held on trust prior to 6 May 1976. However, from that date, being the date a letter was sent on behalf of the plaintiffs to the Deputy Commissioner of Taxation, which set out that it would act as trustee and not be deriving income in its own right, that the plaintiff continually declared by its conduct that it held the business on trust. The conduct that led to this conclusion included:

• a meeting of members of the plaintiff which noted in minutes that the plaintiff would only be acting in its capacity as trustee;
• the opening of a bank account for the plaintiff with the settled sum and as trustee for the trust;
• providing a copy of the trust deed to the relevant bank;
• the preparation and circulation of accounts which were headed with the trust name of the trust; and
• the filing of a tax return for the trust which related to the financial operations of the plaintiff's building business (despite being filed before the plaintiff became trustee, it was still held to be relevant to the plaintiff's declared intention).

155 Subsequently, McGarvie J determined whether the execution of the trust deed brought about the result that everything the plaintiff did subsequently was done as trustee or that all its property was held on the trusts of the deed.[38] The initial $50 paid by the settlor of the trust constituted the trust fund and McGarvie J found that the $50 could not be considered as having been converted into the business. Instead, what made the business part of the trust fund was the plaintiff's declaration that it held the business on the trusts of the deed.[39]

156 In Moyes & Anor v J & L Developments Pty Ltd & Anor (No 2)[40] Debelle J had to determine whether a costs order should be met by a third party to the proceeding or by the trust of which the respondent was formerly trustee. His Honour had to determine whether the respondent was acting as trustee during the events subsequent to a purchase of property, including seeking consent for a development permit and lodging an appeal from a decision denying that same permit. After reviewing the evidence and documents of the director of the respondent, Mr Viscariello, his Honour found that the respondent was acting in its capacity as trustee. In his course of reasoning, he noted that:[41]

"[Mr Viscariello] did not produce any documentary evidence to support his assertions. He did not produce any minutes, financial returns or other records of either J & L Developments or of the Stirling Property Trust other than the trust deed, the deed amending it and the contract to purchase 33 Birch Road. There was no document to verify his assertion that J & L Developments was not acting as trustee of the Stirling Property Trust when it made the application for development consent or conducted the appeals thereafter."

[emphasis added]

157 His Honour then looked to the events and circumstances around the application for development and the appeal from that decision. He noted that:

(a) the land was purchased by J & L Developments as trustee,

(b) the purpose of the purchase was to develop a home for Mr Viscariello's family,

(c) the only asset of the trust was the property in question,

(d) the application in question was to construct a dwelling on the land;

(e) the intent was that if development consent was granted, it would be to construct a dwelling;

(f) the purpose of the trust purchasing the land was to construct a dwelling;

(g) the contract for the sale of land was executed by Mr Viscariello and another and they nominated J & L Developments as purchaser; and

(h) no person, other than the trust, was identified as the person for whom J & L Developments sought development consent.

158 His Honour held that the evidence led to the conclusion that the J & L Developments was seeking development consent in its capacity as trustee.

159 In Frigger v Trenfield (No 10) ("Frigger (No 10)") Jackson J reviewed the authorities concerning the necessary intention required to determine whether an express trust has been created.[42] His Honour noted that the same principles apply when assessing whether an express trust has been created and when assessing whether assets have been contributed to an existing trust.[43]

160 The presence of an existing written instrument providing for the creation of an express trust can be a significant part of the factual circumstances supporting the necessary intention for a finding that an asset has been contributed to a trust.[44]

161 The conduct relied on to demonstrate the intention necessary to create a trust need not necessarily be communicated to any particular person.[45] However, an absence of such communication raises an inference against an intention to contribute an asset to an existing trust.[46]

162 The burden of proof falls upon the party alleging that there existed an express intention that a trust would be created or that an asset would be contributed to an existing trust.[47] Where the existence of an express trust is in dispute, evidence of subsequent acts which tend to show the existence of the trust will be admitted as admissions against, but not for, the alleged trustee's interests.[48] That an asset is acquired by a person who happens to be a trustee of a trust does not by itself mean that that asset is acquired by that person acting in their capacity as trustee.[49]

163 In Frigger (No 10),[50] Jackson J applied these principles to a range of assets. In that case, the applicants were undischarged bankrupts. The respondent was their trustee in bankruptcy. The Frigger Super Fund ("FSF") was the family trust fund, established in 1997, a self-managed superannuation fund and an express trust constituted by a written deed. The fund's beneficiaries, which changed over time, always included the applicants. The trustee of the fund when it was first formed was a company, and over the course of the following two decades subsequently included the applicants, their children and a second company. In 2018, the Federal Court made a sequestration order against the applicants' respective estates.

164 Amongst other issues, the case turned on whether or not certain assets were property divisible amongst the creditors of the bankrupt estate. The key question was whether the disputed assets were assets held by the FSF.[51] The assets included two Bank of Queensland accounts, a CommSec share portfolio and two parcels of residential land. In the course of deciding the case, although not subject to a declaration sought by the applicants, Jackson J also determined whether a Bankwest account in the name of the first applicant was an asset of the FSF.

165 In determining that the Bankwest account was not an asset of the FSF, his Honour considered the evidence and found that:[52]

• the Bankwest account was in the first applicants' name ("Mrs Frigger") alone. Although she had been trustee of the FSF for most of the relevant period, she was at no point sole trustee and that at no point did the name of the Bankwest account correspond with trustees of the FSF. Mrs Frigger confirmed in evidence that she was aware of the need for trust assets to be held in the name of the trustee and that the fact that the Bankwest account was in her name speaks against any actual intention that it was an FSF asset;
• the Bankwest account name never stated that it was a trust asset. Although the name of the superannuation fund was used as a nickname for the account from an indefinite point in time, his Honour placed no weight on that. There was no evidence from Bankwest confirming that it was informed of the account's alleged trust status nor any evidence of such communication with any other person. His Honour noted that there was no reliable evidence of any written or oral statement prior to the proceeding that FSF was a trust asset;
• the documentary evidence said to support Mrs Frigger's case was unreliable and that the PPSR registration did not assist;
• the Bankwest account had been used for a variety of purposes which did not support an inference that money paid of out of retained its trust nature. The account was opened in 2005 had not been used to receive FSF funds until after February 2016. In that time period, it had operated as the business account for a business owned by the applicants that was not a part of the FSF. There was no evidence of an event or circumstance which changed the nature of the account to a trust account after 2016;
• the Bankwest account had received rental income which was income that was part of the FSF but that it also received income from other sources and used to as the paying account for a variety of purposes. That the account received FSF rental income could not be persuasively traced to any particular funds that found their way out of the Bankwest account and into the Bank of Queensland accounts subject to the applicants' application; and
• large payments out of the Bankwest account could equally be transfers of FSF funds or lump sum payments of benefits to the individual applicants in their personal capacities.

166 His Honour went on to repeat this exercise in relation to the Bank of Queensland accounts, the CommSec share portfolio and the real properties. The decision made clear that none of the assets subject of the declarations sought were trust assets and that even if the applicants had, subjectively, intended the assets to be FSF assets, that the applicants should have "manifest[ed] that choice objectively".[53] His Honour outlined the steps the applicants could have taken to objectively manifest the intention that the assets would be FSF assets. The applicants should have:[54]

• observed numerous structures which are found within the FSF deed and the laws surrounding superannuation as to the keeping of records, and the keeping of superannuation assets separate;
• prepared balance sheets recording the holding of the disputed assets and had those balance sheets independently audited in a timely way; and
• recorded the accounts status as assets of the FSF clearly in a separate, contemporaneous document

• opened high interest accounts which did not permit a trust capacity to be recorded in their name;
• used the Bankwest account to run a business which was not an FSF asset;
• used a share trading account which they had previously operated in their own personal capacities to acquire investments for the FSF; and
• attempted to contribute residential property to their self-managed superfund.

167 On appeal to the Full Court in Frigger v Trenfield (No 3)[55] the Court endorsed Jackson J's reasoning and dismissed the appeal. The Full Court provided a detailed outline of the applicable principles the essence of which is as follows:[56]

• the question of whether there exists an intention to contribute property to an existing trust is governed by the same principles as those used in ascertaining whether there was an intention to create a trust;
• the onus of proving an intention to create a trust lies with the person who claims a trust was created;
• when considering a person's intention to create a trust, the Court must consider the outward or objective manifestation of the intention as discerned from the person's words or conduct in the circumstances, not their subjective intent;
• unless an intention to create a trust is clearly identified from the objective circumstances, the Court should not readily infer the intention or be astute to discover indications of intention;
• when having regard to all the relevant circumstances including the relationship between the parties, the nature of the transaction and the language used, the Court can consider conduct occurring after the disposition of the property;

168 From the foregoing, I consider that the important question in the present context is whether by its conduct GE & L objectively manifested an intention that the Armadale property would form part of the trust property owned by the GE & W Trust.

169 There was no dispute that GE & L was the trustee of the GE & W Trust at the time the Armadale property was purchased.

170 The GE & W Trust was created by a trust deed dated 8 September 2009 and executed on 1 October 2009. GELD & W agreed to act as trustee on 8 September 2009.

171 The trust deed gave the trustee broad powers[57] including power to:

• invest the assets of the trust and vary such investment at any time;
• enter into and pay for those investments;
• purchase, acquire, sell, transfer, hire, lease, dispose of, manage, divide, encumber or otherwise deal with any real or personal property; and
• to sell, transfer, hire, lease, dispose of, manage, divide or otherwise deal with any assets of the trust.

172 The appointor of the trust was Lydia and the trust had only two named beneficiaries: Lydia and Gang Wang.

173 The trust fund is defined in the deed as including "any income that has been accumulated or that has not been distributed".[58] Income "for a given financial year, excludes any income for that year that the trustee has decided to accumulate".[59]

174 The trustee has a duty to organise the preparation of financial statements for the trust at the end of each financial year. The financial statements are to set out, inter alia, "investments and money comprised in the trust".[60]

175 Upon removal as trustee, the trustee of the GE & W Trust must:[61]

(a) immediately hand over the books, accounts, documents and property of the trust to the new trustee;

(b) do everything necessary to vest the assets of the trust in the new trustee;

(c) do everything reasonably required by the new trustee to hand over to the new trustee possession and control of any assets in the hands of third parties; and

(d) do everything reasonably required by the new trustee to inform the new trustee of the full state of affairs of the trust.

176 The trustee is not liable to the beneficiaries for any loss unless it arises from fraud, gross negligence or breach of trust on the part of the trustee.[62]

177 From the outset, the purpose of GELD & W was to "hold Lydia's interest in the proposed development projects company".[63] The LGE Unit Trust was to own the development projects through the trustee, GE International. Initially, GELD & W was the trustee of Lydia's family trust. Later, GELD & W changed its name to GE & L. The role of GE & L was to hold units in unit trusts and to invest in, and receive funds from, GE International. After the establishment of the LGE Unit Trust and the incorporation of GE International, the latter developed the Box Hill and Balwyn properties. GELD & W itself did not conduct property development. It simply held units on trust for the GE & W Trust. Until about 2014 when it became the sole shareholder in the company which Lydia formed in China, JiYi, GE & L conducted no other business. It did not make purchases or investments or engage in any other business activity in its own capacity.

178 Genie is noted as the purchaser of the Armadale property in an expression of interest to purchase dated 30 May 2015. On 1 June 2015, Stefan lodged an expression of interest to purchase the property with himself or a nominee as purchaser.

179 GE & L executed the contract of sale for the Armadale property on 2 June 2015.[64] The purchaser is noted on the third page of the contract of sale as "Liangyan Ge"[65] and is then hand written as "G.E. and L International Investment Pty Ltd and or nominee" in the particulars of sale.[66] Genie signed the contract of sale on behalf of the purchaser.

180 GE & L notified the Registrar of the transfer of the Armadale property with a section 45 Transfer of Land form. In that form, the transferee is "GE & L International Investment Pty Ltd".[67]

181 GE & L lodged a notice of acquisition of an interest with the State Revenue Office that stated the buyer of the Armadale property was "GE & L International Investment Pty Ltd".[68]

182 None of the paperwork relating to the purchase contains a clear declaration that the property was purchased by GE & L in its capacity as trustee for the GE & W Trust.

183 The question then turns to whether, by its conduct, GE & L declared itself to be holding the Armadale property on trust for the GE & W Trust.

Did GE & L by its conduct declare that it held the property on trust for GE & W?

184 I find that GE & L did not declare by its conduct or otherwise that it purchased the Armadale property in its capacity as trustee. Accordingly, I find that the Armadale property was not held on trust for the GE & W Trust. I so find for the following reasons.

185 First, as already noted, in the paperwork surrounding the purchase of the Armadale property, there is no declaration that GE & L purchased the property as trustee for the GE & W Trust. Moreover, there is no reference to GE & L acting as trustee whether for the GE & W Trust or any other trust in the:

• contract of sale;[69]
• transfer of land to GE & L;[70]
• notice of acquisition given to the State Revenue Office;[71]
• home loan issued to GE & L;[72]
• guarantee given by Genie;[73]
• mortgage in favour of CBA;[74]
• building permit issued to Hongwei Constructions;[75] and
• contracts of sale for the lots sold in late 2016 and early 2017.[76]

186 Further, the conduct of GE & L in relation to the purchase of the Armadale property did not embody or bespeak an objectively manifested intention to hold the property as part of the GE & W Trust.

187 Secondly, GE & L's role and involvement with the acquisition of the Armadale property and its redevelopment suggested that it intended to operate on its own behalf and not solely as trustee.

188 Although the trust deed gave the trustee of GELD & W broad powers of investment, prior to 2014 it seems to have only engaged in one specific investment - namely, the holding of an interest in LGE. Using the broad powers granted to it under the trust deed, GELD & W had executed the LGE Unit Trust in its capacity as trustee.[77] Lydia and Genie resolved in September 2009 to open a bank account for the purposes of the GE & W Trust. It appears however that, around this time, there was no account opened in the name of GELD & W Investment Pty Ltd or the trust.[78] But Lydia opened the Bankwest account in her own name in about August 2009.

189 There did not appear on the evidence to be any indication before 2014 that the GE & W Trust, through its trustee, intended to expand its investments away from its investment in GE International.

190 The initial indication of change was GELD & W becoming the only shareholder of JiYi in about June 2014. Lydia gave evidence that the purpose of the shareholding in JiYi was to enable the registration of JiYi in China by complying with Chinese regulations that required JiYi to have a foreign investor.[79]

191 The documents providing for the registration of JiYi note only that the shareholder is "GE & L International Investment Pty Ltd". The documents do not state that the shares were held by GE & L in its capacity as trustee.[80] In any case, JiYi did not trade from registration until deregistration.[81] Ultimately, JiYi looks to have engaged in no business activity.

192 On the question of GE & L manifesting an intention to hold the shares as trustee, the evidence on this issue is too equivocal and ambiguous. The shareholding in JiYi could reflect either that GE & L was acting in its own name because the shares were not registered in GE & L's name as trustee or that GE & L was acting as trustee. However, the fact that there was no mention of GE & L acting in its capacity as trustee does not assist Lydia to discharge the plaintiffs' onus.

193 The second indicator was the different role which GE & L adopted in relation to the Armadale property and its redevelopment compared to the role adopted for the Box Hill and Balwyn projects.

194 GELD & W's original purpose was to hold Lydia's interest in the property development business that the sisters were proposing to undertake. The sisters' property development business extended to two projects: the Box Hill and Balwyn properties. GELD & W lent money to GE International to enable it to develop these projects. Those developments had substantially concluded by early 2015. The Box Hill project was completed in 2011 with unit 1 selling in September and unit 2 selling in November of that year. The Balwyn project was completed in 2015 and unit 3 sold in May. Units 1 and 2 of the Balwyn project sold in June of 2015. At the end of the 2016 financial year, LGE distributed $320,630 to the GE & W Trust.

195 The Armadale property was the only major asset of GE & L. However, as the above makes clear, in June 2015 the GE & W Trust was still to receive dividends from the developments carried on by GE International.

196 Throughout the years in which GE International operated, at no point did GELD & W/GE & L itself engage actively in the business of property development or any other business.[82] It held interests in one entity that engaged in property development - the LGE Unit Trust. By contrast, the purpose of the purchase of the Armadale property was for GE & L to develop it in its own capacity. GE & L would go on, in December 2015, after it settled the purchase of the Armadale property, to hire Hongwei to perform the construction. This is notably different from the prior investments GE & L had made where it held units in LGE and lent money to GE International.[83] In those projects, GE & L had not signed contracts of sale for property, engaged the builders for the redevelopment and actively participated in the property development. Unlike the Box Hill and Balwyn projects, GE & L had direct involvement in the Armadale project.

197 Thirdly, when the Armadale property settled, Genie was the only director of GE & L in Australia.[84] Her conduct at the time does not evince an intention that the property was to be purchased on trust for the GE & W Trust. The decision to invest in the Armadale property and develop it was one made by Genie alone. Even if Lydia were a director at the relevant times, her evidence was that she would have never permitted GE & L to acquire any property at that time.[85] This supports the idea that GE & L did not manifest the necessary intention to treat the Armadale property as a trust asset and instead, acquired the Armadale property in its own capacity.

198 Fourthly, as discussed above, the documentation in connection with the purchase of the Armadale property makes no reference to the purchase being made by GE & L as trustee for G & W. The documentation suggests that the purchase was made by GE & L in its own capacity. Of particular note is the inclusion of the words "or nominee". If GE & L had intended to purchase the property in its capacity as trustee, then the inclusion of "or nominee" is difficult to explain. No nominee could purchase the property as trustee for Lydia's family trust except for GE & L. The inclusion of the nominee option suggests that, at the time the contract of sale was made, GE & L considered that an alternative entity or person may be used as purchaser. In such a case, the purchaser would not have been buying the Armadale property as trustee of Lydia's family trust. This indicates that there was no intent that the property would be purchased on trust when the contract of sale was executed.

199 Fifthly, another consideration supporting the proposition that GE & L purchased the Armadale property in its own capacity was that, by 17 July 2015, Lydia and Genie had both been removed as shareholders of GE & L and Genie's family trustee, GECW, was made sole shareholder.

200 Lydia's shares had been reduced from 55 to 14 by a form 484 prepared 15 July 2015 and backdated to 15 January 2015. Genie's shares had been reduced from 45 to zero. Correspondingly, GECW had received 86 shares.

201 Next, Lydia's remaining 14 shares had been reduced to zero and GECW's shares had increased to the total amount of 100 shares available by a form 484 prepared 16 July 2015 and backdated to 15 January 2015.

202 Genie's evidence was that these changes were made under the direction of Lydia because Lydia wanted to reduce her shareholding in foreign companies in preparation for JiYi[86] being incorporated and LeonTec being listed on the Shenzhen Stock Exchange.[87] Further, Genie said that she had received notice from an employee of CBA that Lydia's shareholding in GE & L could mean that the purchase would need to be reported to the Foreign Investment Review Board ("FIRB").[88]

203 Lydia said that she never gave these directions and that, while JiYi did need a non-Chinese shareholder,[89] Chinese regulations did not require her to resign from directorships nor sell shareholdings in a non-Chinese company.[90] In regard to LeonTec, she said that the stock exchange process began in 2009 and was completed in 2017. She said that she had complied with the disclosure requirements which Chinese law required. Lydia also stated that because she held Australian permanent residency, she did not believe there would be any FIRB issues arising from her shareholding.[91]

204 The Court must look to objective manifestations of intention to ascertain the intent of the company. Looking at the conduct objectively, the change in shareholding makes sense when it is understood as an indication that the company was moving away from its sole role as trustee of the GE & W Trust and beginning to engage in business in its own right. If it were intended that GE & L was to act solely as trustee for the GE & W Trust, then there was no need to change the shareholding. Any profits that GE & L made in its capacity as trustee would go to, and form part of, the GE & W Trust. Initially, the shareholders of GE & L were identical to the beneficiaries of the GE & W Trust and there was no risk that Lydia and Gang Wang would fail to receive the benefit of any money distributed by the trust. Once the shareholding altered, however, Genie, and then ultimately GECW, became entitled to any profit made by the company in its own capacity. If it was not intending to act in its own capacity, there was little utility in changing the shareholding.

205 Objectively, it appears that, by the time the shares were allotted to GECW, GE & L was manifesting an intention that it would not be acting solely as trustee but also in its own capacity.

206 Sixthly, the balance of the purchase price for the Armadale property was paid from Genie's own resources,[92] including $300,000 paid on behalf of Stefan. On 21 July 2015, GE & L secured a $1,130,200 loan from the CBA for the Armadale project. The CBA was granted a mortgage over the property and Genie was the sole guarantor of the loan.[93] A large part of the commercial risk stemming from the CBA loan fell upon Genie. The fact that Genie was the sole guarantor of the loan is another factor that suggests that GE & L was acting in its own capacity as a vehicle for Genie's property development business rather than as trustee of the GE & W Trust. If the property were intended to form part of the trust, it would be appropriate for the beneficiaries such as Lydia to also guarantee the loan. This would ensure that the risk associated with taking out a substantial loan to redevelop the Armadale property would be shared amongst those who would benefit from the project's success. If the Court accepted Lydia's argument, it would lead to the commercially unlikely scenario whereby Genie would have bought the Armadale property, undertaken the redevelopment of the property, and been sole guarantor of the CBA loan without receiving any payment for her work or the commercial risk which she took.

207 Also, Genie advancing the $300,000 on behalf of Stefan is inconsistent with the existence of a trust over the property. If the intention had been to purchase the Armadale property as part of the trust, it makes more sense that any funds necessary to be advanced to complete the purchase would be provided out of the trust fund itself or from funds borrowed by the trustee in its capacity as trustee. Instead, Genie provided those funds to Stefan out of her own resources. This exposed Genie to another potential liability and risk. If Stefan defaulted on repayment, then Genie would suffer a $300,000 personal loss. There would be no lawful way to compensate her from the GE & W trust. The trust would usually be expected to indemnify the trustee for losses suffered by the trustee when acting in its capacity as trustee. This scenario would suggest the Armadale property was not purchased as part of the trust and it does not demonstrate a manifested intention that the property was to be held by GE & L on trust.

208 Finally, when the Armadale property settled on 17 July 2015, Genie paid $1 million towards the purchase price by way of bank cheque drawn from the Bankwest account.[94] The Bankwest account, as will be discussed below, had become an account into which, for various purposes, both Lydia and Genie deposited funds and from which both Lydia and Genie withdrew funds. The account had been used for a range of credits and debits. [95] It was agreed, by the time the proceeding reached trial, that the account contained intermingled funds of the two sisters.[96] The exercise of assessing who contributed to, or took funds from, the Bankwest account will be undertaken later in these reasons. Given the prior conduct of Lydia and Genie and the factual circumstances in this case, the fact that Genie took money from an account in Lydia's name and used it in connection with the Armadale property is not persuasive regarding the manifestation of an intention to include that property as part of the trust.

209 Apart from the above matters which I consider worked in favour of Genie's case, I was not convinced that various matters argued by Lydia were compelling. I address the most prominent matters in turn. These matters are: the comments made by Wu in 2016 and 2018 about GE & L acting as trustee; the GE & W Trust tax return dated 8 June 2017; the failure of GE & L to distribute profits to its shareholder; the absence of documentary evidence; the absence of assets in GE & L's name; the low value of GE & L's shares; Genie's entitlement to profit being based upon the absence of an agreement with Lydia.

210 Lydia gave evidence that in discussions with Philip Wu of KST, between 2016 and 2018, the Armadale property was said to belong to her family trust.[97]

211 Lydia said that around the end of the July 2016, she and Genie had a meeting with Wu. In that meeting, Lydia said that she received a chart showing the assets which she held in Australia. On 10 August 2016, Wu emailed a copy of the asset chart to Lydia.[98] The chart referred to the GE & W Discretionary Trust, the trustee (mentioning both the originally named trustee GELD & W Investment Pty Ltd and the subsequently named GE & L International Investment Pty Ltd), Lydia as director and secretary and a shareholding of 100 shares. The chart also referred to GECW International Pty Ltd as trustee for the GECW Family Trust, a shareholding of 100 shares and the Armadale project.

212 Lydia also said that on 19 February 2018, she engaged MGA Lawyers to act for her in relation to various corporate and legal affairs in Victoria including the question of ownership of the Armadale property. Lydia said that she had another meeting with Wu together with Yves and her lawyer Mark Geremia of MGA Lawyers. She said in her evidence that at this meeting, Wu said Lydia's family trust would determine how to share the profits upon completion of the Armadale project.

213 Lydia also gave evidence about correspondence which passed subsequently between Geremia and Wu. Geremia asked Wu to confirm on 27 February 2018 that GE & L purchased the Armadale property as trustee of Lydia's family trust. KST, through a receptionist Su Lin, sent an email on 1 March 2018 at 3:27pm saying that GE & L bought the property as trustee. However, at 6:52pm the same day, Wu sent Geremia a clarifying email stating that GE & L owned the Armadale property in its own right.

214 Geremia emailed Wu the next day noting the contradiction in the advice given. Wu responded with an email stating that, as he had mentioned consistently in their meeting and in prior discussions with Lydia, based upon the information which KST held, GE & L owned the Armadale property in its own right.

215 I make the following observations about this evidence.

216 The evidence of the 2016 meeting between Lydia, Genie and Wu was admissible because Lydia and Genie were both present. The later evidence of the interactions between Lydia, Geremia and Wu is not strictly admissible. Genie was not present and neither Geremia nor Wu was called to give evidence. Given the nature of the evidence and the findings which Lydia wants the Court to make, this is significant.

217 To the extent that the evidence, including documents in the court book, were admitted without objection by the defendants, I note that:

• there is no specific oral evidence explaining the detail of the asset chart Lydia received and exactly what each entry meant.
• Geremia gave no evidence about his file notes. In any case, they are too ambiguous to be useful.
• I do not accept that Wu said to Lydia words to the effect that GE & L owned the Armadale property as trustee of Lydia's family trust or that Lydia's family trust would determine how to share the profits upon completion of the Armadale project. Apart from my concerns about Lydia's credit, I consider it significant that Lydia:
  • did not call Wu or Geremia to support her case;
  • did not put to Genie in cross-examination, that in Genie's presence at the 2016 meeting, Wu said words to the effect that GE & L bought the Armadale property as trustee of Lydia's family trust or that Lydia's family trust would determine how to share the profits upon completion of the Armadale project;
  • did not include in her witness statement, which stood as Lydia's evidence-in-chief, any evidence to the effect that Wu made these comments at a meeting attended by Lydia and Genie in 2016;
  • failed to explain this omission from paragraph [193] of her witness statement and her reply witness statement which otherwise addressed the meeting with Genie and Wu; and
  • only referred to this evidence regarding Wu and Genie when she was under cross-examination.[99] This evidence about what Wu allegedly said to Lydia regarding the ownership of the Armadale property or the determinative role her family trust would play is of central importance to Lydia's case. I find it astonishing that, if the evidence were true, such evidence was not included in Lydia's witness statements[100] and supported by other witnesses.

218 The plaintiffs referred next to a taxation return of the GE & W Trust dated 8 June 2017. This tax return included as part of the Rental Property Schedule, the Armadale property.[101] This tax return made reference to the purchase price and stamp duty of the Armadale property.[102] It noted the expenses incurred in relation to the property.[103] This tax return was then amended in August 2017.[104] The plaintiffs said that this tax return was, despite Genie's claim to the contrary,[105] prepared on her instructions and amounted to a declaration that the Armadale property was purchased on behalf of the trust. Moreover Lydia argued that, because Genie organised for Lydia to pay the tax on the GE & W Trust's income,[106] she demonstrated a clear intention that the property was purchased as part of the trust.

219 In correspondence between KST and Genie, Ellen Zhang of KST asked Genie to organise payment for the amount of $96,189.[107] This seems to correspond with a payment slip issued by the Australian Taxation Office ("ATO"), undated, for the amount of $96,189.[108] It seems to bear no direct correlation to the assets held by GE & L either in its own capacity or as trustee. The payment slip seems to be about the sisters' original property development business, GE International. This was distinct from the business conducted by GE & L. In her evidence, Genie clarified that she paid this amount out of GE International upon direction from Lydia. The amount is said to be the payment of tax for Lydia's family trust.[109]

220 The plaintiffs appear to contend that, because Genie organised the payment in relation to the 8 June 2017 tax return, she implicitly endorsed that tax return and thereby objectively manifested an intention to the ATO that the Armadale property was to be held on trust for the GE & W Trust.

221 In my opinion, I should not give any weight to this evidence.

222 Neither the 8 June 2017 tax return nor the amended August 2017 tax return is signed. Both contain the words "not complete" in the footer. It is unclear whether either or both were filed with the ATO. It is not appropriate to make major findings in the plaintiffs' favour in circumstances where the tax returns appear to be drafts and there is no evidence about the precise form of the final tax return lodged with the ATO. This is especially so when Genie denied having prepared any tax returns for GE & L in its capacity as trustee. Genie did accept, however, that she organised the payment of the tax liability on the basis of the 8 June 2017 tax return.[110] What purpose the amended tax return served and whether it superseded the 8 June 2017 tax return is unclear.

223 Secondly, confusingly, the email in which Ellen Zhang contacts Genie about the tax liability has the subject "GE International Investment".[111] Genie states in the email that "Liangdi Ge has made payment for for [sic] her family trust for 2015-2016 financial year" which reflects her evidence at trial but it is unclear whether, in that email, Genie is referring to the ATO payment slip or some other thing. Attached to the email chain is a document titled "Liangdi Family 2016 TAX payment receipt NetBank - Receipt.pdf". Which document in evidence, if any, is the document attached to the email chain is uncertain. Genie's evidence was that upon Lydia's instructions she transferred the $96,189 to the ATO from GE International's bank account.

224 Thirdly, it is from GE International Investment Pty Ltd's CBA account that the payment of the tax bill of $96,189 is made.[112] The payment is made on 6 July 2017. The funds are transferred into that account shortly before with the heading "Transfer from NetBank InternalFromSaving". These funds did not come from GE & L's home loan account.[113] Nor does it appear they came from the Bankwest account.[114] Like much of the evidence relating to these tax returns, the original source of the funds is unclear.

225 In summary, even if the 8 June 2017 tax return represented that GE & L bought the Armadale property as trustee for Lydia's family trust, the tax return was amended soon after and the amended return contains no reference to the Armadale property. To that extent, the amended tax return has overridden the initial return and withdrawn any representation about the Armadale property. In the circumstances, the evidence is too equivocal, confusing and conflicting and does not assist Lydia to discharge her burden.

226 As best I understand it, the plaintiffs also argued that if GE & L had purchased the Armadale property in its own capacity, it should have distributed profits from the venture to the shareholders. But the financial statements of the company and the evidence more generally did not reveal any distributions to shareholders. Thus, it was said that the company bought the property as trustee and not in its own capacity.

227 I reject this argument for the following reasons.

228 First, the Armadale project only began to generate income in 2018 with the final unit sold in 2023.[115] Genie gave evidence that once the final unit is sold, CFAS Advisory could calculate the profit of the Armadale project.[116] Until a profit was determined and calculated, there could be no dividend declaration. And even if there was a profit, the directors are entitled to accumulate that capital for future investment so it does not inevitably follow that a profit will result in a dividend distribution.

229 Secondly, apart from the issue of the accumulation of profits, the constitution of GE & L gave the directors discretion as to whether or not to declare and pay dividends when it "appear[s] to them to be justified in light of the profits made by the company".[117] As sole director of GE & L in the relevant period, Genie was not obligated to pay dividends.

230 Thirdly, the dispute which is the subject of this proceeding had arisen by around the latter half of 2017 or early 2018. The Armadale project is at the heart of the dispute. If there were profits to be distributed (which could not have been the case in 2020 when the plaintiffs issued the proceeding), it might well have been considered inflammatory and irresponsible for GE & L to distribute funds to shareholders while the Court proceeding was on foot and the Court had not ruled on the question of ownership of the Armadale property.

231 In my view, viewed in isolation, the lack of a dividend declaration cannot lead to an inference, much less a finding, that GE & L intended to hold the Armadale property on trust for the GE & W Trust.

232 The Lydia parties argued that there was no documentary evidence from any party showing that the Armadale property was to be purchased on a different basis from GE & L's other investments. No minutes of meetings, emails or company resolutions were provided. Despite the lack of clear documentary evidence, the difference was in the actions taken by GE & L. Previously the company had not directly participated in property development. The onus of proving the necessary intention falls upon the party who claims that the trust was created.[118] Thus, Lydia must prove that GE & L had a positive, objectively discernible intention, made clear by words or conduct, that the Armadale property was to be held on trust. The key indicators of such an intent are absent. The contract of sale was in the name of GE & L alone. No notation was made of the purchase being in its capacity as trustee. Such a notation in the contract of sale is "the sort of objective manifestation of intention"[119] that can indicate that an asset forms part of a trust fund. This evidence tends against the finding of the necessary intention.

233 It was submitted by Lydia that Genie's evidence was that GE & L did not hold any assets in its own name as at June or July 2015 and that this was consistent with it being a trustee. Prior to the Armadale property, GE & L held units in LGE on trust for the GE & W Trust. It lent funds to GE International. It received returns from GE International because of its unitholding in LGE from the Box Hill and Balwyn projects. Those funds were trust funds. It also had a 100% shareholding in JiYi. It is not clear whether GE & L intended that the shareholding in JiYi would form part of the trust fund. Whatever the intent, the shareholding in JiYi held little value because JiYi had not begun to, and would not go on to, trade. No other assets of the company were in evidence. That GE & L held no other assets is consistent with it acting solely as trustee. However, Lydia had been the only director and controlling mind of the company up until 2014. Once Genie was appointed a director, she began to dictate the actions of the company.

234 The Lydia parties submitted that Genie's evidence was that GE & L's shares were of little or no value as at 2 June 2015.[120] They submitted that this was inconsistent with the concept of GE & L purchasing the Armadale property in its own right and that profits would flow to its shareholders.

235 Prior to the purchase of the Armadale property, shares in the company itself would have been effectively valueless as any profits or income it made would have derived from its unitholding in the LGE Unit Trust. Because those units were held as trustee for the GE & W Trust, the income derived from them formed part of the trust fund. GE & L did not hold assets in its own name and profits would not flow to its shareholders. If GE & L held its shares in JiYi in its own capacity, the shares still would have held little value because JiYi did not trade.

236 GE & L did not hold the legal interest in the property when it signed the contract. It continued to hold no assets of substantial value (save for the chose in action created by the contract). The value of its shares would correspondingly not have increased to any marked degree. Before the shares could become valuable, the sale of the property needed to settle.[121] Any number of issues could have arisen between the date the contract was signed and settlement - lenders could have fallen through, Genie could have defaulted in some other aspect of the contract of sale or the vendor could have reneged on the sale. The asset would only become valuable to the company upon successful transfer. Accordingly, the shares in the company which held that asset would only become valuable upon successful transfer.

237 It is not inconsistent to say that as of 2 June 2015, when the contract of sale was signed, GE & L shares had little or no value and that GE & L purchased the property in its own right. Simply put, GE & L's purchase of the Armadale property was the first significant act it did in its own capacity. Its interest in the property, its subsequent development and the profits realised from selling the units would give value to the shares in GE & L because any profits from the successful completion of the project would, pending the decision of the director of the company, flow to the shareholders.

238 In July 2015, the Armadale property settled. Only after that date did GE & L hold a valuable asset other than the units in the LGE Unit Trust. Until then, it had a chose in action of uncertain value.

239 The Lydia parties submitted that Genie disavowed any claim to profit from the Armadale project on the basis of shareholding when Genie said that her entitlement to profit was based on the absence of agreement with Lydia. The written and oral submissions on this point did not point to any particular part of the transcript, Genie's written statement or the court book as the basis for this submission.

240 It appears that this point stems from an exchange early in Genie's cross-examination.[122] Genie gave evidence that Lydia lent her funds interest free to develop the Armadale project. She then said that there was an arrangement or agreement with Stefan where Stefan or one of his companies would be entitled to 15% of the profit and that GE & L would receive the remaining 85%. Genie then said that Lydia would not be entitled to any part of the profit GE & L would receive because Genie "didn't have any agreement with Lydia in relation to this project".[123]

241 Two things should be noted about this exchange:

(a) first, counsel did not state when the agreement initially referred to was made. It is difficult to discern from the context of the questioning when the agreement was said to arise; and

(b) second, there was a problem in communication throughout the hearing that is amplified in the transcript. Counsel and witnesses incorrectly named companies and trusts. I assume that this stemmed from difficulties in translation, difficulties in understanding accents and the general difficulties that can occur when transcribing oral hearings remotely, especially when some of the relevant entities have similar names. This particular exchange is a good example. In the transcript, counsel, the interpreter and Genie are noted as using different and incorrect names for the company. For example, in the transcript, counsel referred to "GE & LW" and Genie referred to "G & L". Neither of those is correct. Both are likely a mispronunciation or mistranscription of GE & L and I infer from the surrounding context of the exchange that when counsel and Genie said GE & LW or G & L, they meant to say and were referring to GE & L.

242 Further, Lydia's submission on this point fundamentally mischaracterises the evidence. Genie did not say that Genie's profit was based on the absence of agreement. Rather, her evidence was that Lydia was not entitled to any profit from the Armadale project because there was no agreement that Lydia or any entity she controlled would participate in the project. In my view, it is incorrect to construe this evidence as Genie disavowing her entitlement to profit from the Armadale project on the basis of shareholding due to an absence of agreement with Lydia.

243 Moreover, even taken at its highest, this evidence does not appear to show an objectively manifested intent by GE & L that the Armadale property would be purchased one way or another. On Genie's evidence, Lydia had expressly denied any interest in the project. On Lydia's evidence, she was not aware of the purchase of the Armadale property until July 2016.[124] Because Lydia either did not know of the purchase at the time the contract of sale was executed or had denied any interest in the project, she could not have formed an intention to include the property in the trust. It would be silly to suggest that there could be an agreement between the two sisters about how the profits would be distributed at the point when the project began when Lydia was, on her version of events, unaware that GE & L had purchased the Armadale property or had, on Genie's version of events, denied interest in participating in the project. This does not support an inference that the intention of GE & L was to hold the property on trust.

244 Instead, this is consistent with the evidence of Genie throughout this proceeding that Lydia had expressed a desire to not participate in the Armadale project and, as such, there was no reason to reach an agreement about profit share. The only parties who would receive profits were GE & L and Stefan. This reinforces the idea that GE & L purchased the property in its own capacity - not as trustee for the GE & W Trust because Genie, as director and controlling mind, intended that the profits would only be received by shareholders of GE & L and Stefan.

245 Lydia also relied upon a potential agreement whereby any profits from the Armadale project were to be split 51/34/15 percent respectively between Lydia, Genie and Stefan.[125] Lydia argued that such a deal was inconsistent with GE & L buying the Armadale property in its own capacity. Lydia and Yves said that Stefan proposed this profit share agreement. It arose from a meeting between Stefan, Lydia and Yves in late October or early November 2017. The proposal was discussed subsequently with Genie.

246 I regard the proposal as irrelevant. The short point is that at no time did all three parties finalise any agreement about a possible proportionate profit share in the event that the Armadale project produced a profit. Because the parties did not execute or otherwise make any agreement to this effect, there is no point in discussing the so called profit share agreement and its potential implications.

247 In any case, the evidence is not inconsistent with the idea that GE & L purchased the property in its own capacity. Genie did not deny that she used funds from the Bankwest account to purchase the Armadale property. The proposed profit share arrangement can be seen to reflect that reality. In the email of 8 December 2017, Genie notes that an audit could provide clarity on what each party needed to contribute to the project if the profit share was agreed. The alleged agreement was formed about two years after the Armadale property was purchased and construction had started. To prove that a party purchased a property on trust, it is not compelling to rely upon an unexecuted agreement made between only two of three parties a couple of years after the acquisition.

248 In short, having regard to the fact that it is for the Lydia parties to satisfy the burden of proof and establish that the property was purchased on trust, the evidence does not show an objectively manifested intent that the Armadale property was purchased by GE & L in its capacity as trustee. Although some evidence is at least consistent with the conclusion that the GE & L purchased the Armadale property in its capacity as trustee, the countervailing evidence is stronger and more persuasive. There is no clear inference[126] available to support Lydia's contention.

2. To the extent that identified deposits or withdrawals in the Bankwest account are disputed, who made (or for whose benefit were they made) the disputed withdrawals and deposits in the Bankwest account?

1. There are a number of disputed deposits and withdrawals in this matter. The withdrawals and deposits took place over many years, were of varying amounts and were made by different people. Each transaction in dispute was given an item number in an annexure to the plaintiffs' 13 August 2021 further and better particulars. I will use that number to identify the transactions.
2. The parties provided more than one large spreadsheet identifying the disputed transaction by their item number and set out their case about each item. As an aide memoire, the Lydia parties provided a list of transactions and a notation as to whether or not each transaction was in dispute. Schedule A to Lydia's witness statement contained the disputed transactions, the stated reason for the dispute and Lydia's position. In their oral and written closing submissions, the plaintiffs addressed the transactions either individually or as a bundle.
3. The defendants provided the Court with a spreadsheet of the disputed transactions. The spreadsheet contained the stated position of Genie and citations to her evidence and the reason why Lydia disputed the transaction.
4. The Lydia parties noted that it is agreed between the parties that a sum of $65,990 is payable to Lydia out of the funds in Court. This amount forms part of Lydia's contribution of funds other than from the Bankwest account.[127]
5. Next, the plaintiffs' argued that Genie's claim to the amount of $426,671.35, as Genie's share of the surplus funds from GE International, should be rejected. They contended that it is an overpayment to Lydia and therefore constituted a prima facie debt owed by Lydia to GE International. In support of this argument, they said that there is insufficient evidence to support Genie's claim that it belonged to her and that the Court cannot be satisfied that Genie and/or GECW have not already been paid their entitlements.
6. They said that Genie's claim about this amount should be rejected because the "share of profits" by which this sum is arrived at was distributed nearly two years after the sums of $1,680,000 and $520,000 were transferred from GE International to the Bankwest account.
7. The plaintiffs said that that these two later amounts were likely entered into the books of GE International against Lydia's loan account in 2015. The Lydia parties highlighted that there is a lack of relevant bookkeeping records, including loan accounts records of GECW (the unitholder for Genie's 40% interest in the LGE unit trust) and GE International.
8. The Lydia parties asserted that Genie's claim that $104,441.85 of the $426,671.35 is the balance of her investment in GE International cannot be accepted without documentary evidence.
9. Next, they said that up until 30 June 2018, GE International continued to operate its business and that considerable sums were paid into and out of its accounts. However, no financial statements were prepared for the financial years ending 30 June 2017 or 30 June 2018. As such, the Court cannot be satisfied that GE International has not paid Genie or GECW.
10. Finally, they said that Genie repaying $500,000 to Lydia on 27 April 2017 is a clear acknowledgement that the account was Lydia's and was not a joint account.[128]
11. In relation to the burden of proof, the Lydia parties said that it is open to the Court to say that the burden of proof lies on the person making a claim and that they have failed to meet that burden. They say that this will occur where the state of the evidence is unsatisfactory.[129] They submitted that the burden of proof falls on Genie because the Bankwest account was in Lydia's name and set up as an offset for a mortgage in her name. They say that Genie had a duty as an agent to account to Lydia for transactions she carried out in the Bankwest account and to keep money separate.[130]
12. For their part, the Genie parties provided a spreadsheet of transactions identifying the evidence in relation to each transaction. They largely relied on this spreadsheet in their closing submissions. They did however make a few general arguments about the transactions.
13. First, they said that transaction 48, a deposit made on 30 July 2010 for $22,832.70 should be a deposit in the Radnor Street property project.
14. Next, they said that in each case Genie's position is supported by evidence whereas the plaintiffs' position is not usually corroborated by evidence (except for some narrations in relation to some of the transactions found on the various Genie Spreadsheets). Moreover, Lydia has not provided any bank statements or other documents corroborating her contention regarding any disputed transaction (save for a deposit on 30 July 2010).
15. In regard to the Genie Spreadsheets, the Genie parties submitted:

(a) the notes in the Genie Spreadsheets were not written immediately after the transactions;

(b) the Genie Spreadsheets were only drafts and Genie had not cross-checked the spreadsheets against bank records when she lost access to the relevant bank statements (because she gave the originals to Lydia at her request and then Lydia would not provide any copies); and

(c) subsequent cross-checking has confirmed that several of the "withdrawal-personal" notes in the Genie Spreadsheets were not accurate or reliable and contrary to other documentary evidence.

1. The Genie parties said that any subsequent departures from the notes made in the Genie Spreadsheets were corroborated by bank records (except for a withdrawal made on 20 August 2010, of which Genie had no record or memory).
2. For almost every transaction, there is direct evidence from Genie or Lydia, corroborated by other accounts and documents, which allows the Court to make an informed decision as to each transaction. This is not a case where "the evidence left [the Court] in doubt"[131] as to who caused each transaction or to whom each transaction belonged. The "third course"[132] available to the Court is only available when a party has the burden of proof for a claim made. The Court can find that the burden of proof is not met so the claim cannot be made out.
3. The burden of proof falls upon Lydia as it is her case to establish. Although in her closing submissions it was submitted that Genie was Lydia's agent, this relationship is not pleaded nor is it an issue in dispute. Lydia signed a power of attorney in October 2015 which was backdated to July 2015. The impact of this power of attorney on the transactions in the Bankwest account was not addressed in the plaintiffs' closing address to the Court. Accordingly, I infer that they did not seek to make any particular point about it. For their parts, the defendants too did not rely upon the power of attorney.
4. I will now turn to the individual transactions in question.

268 On 12 August 2009, a $380,000 cheque was deposited into the Bankwest account.[133] That amount comprises transaction 2.1, for $296,000, and transaction 2.2, for $84,000. It is no longer in dispute that $84,000 of the $380,000 was the contribution of Lydia.[134] The sole focus of the dispute is who contributed the remaining $296,000.

1. The plaintiffs contested that the Radnor Street property was purchased in accordance with the alleged 60/40 split. Between 25 and 29 June 2009, $290,000 was deposited into Lydia and Gang Wang's NAB account ("Lydia and Gang Wang's account"). Then on 12 August 2009, $380,000 was transferred from the NAB account into the Bankwest account.
2. The Lydia parties pointed to evidence from both Lydia and Genie that while in China, Lydia transferred approximately $654,000 to Grace. Lydia said that Genie and Grace were arranging for the money to be brought out of China and into Australia for the purpose of buying property in Australia.
3. The Lydia parties point first to Genie's email to Grace on 24 June 2009 providing Lydia's bank account information.[135]
4. Secondly, they said that in a group chat in 2018, Lydia listed the payments sent in June and July and Lydia queried the final use of the funds. Grace responded acknowledging the transfers.[136]
5. Ultimately, the Lydia parties contended that, of the funds transferred to Grace, $318,53.43 (less $62,870) found its way to Genie and that, accordingly, it was Lydia's money that Genie contributed to the Bankwest account.
6. In further support of their contention, the Lydia parties said that the Radnor Street property was not purchased on a 60/40 split between Lydia and Genie because:

(a) the property was placed in Lydia's name alone;

(b) the Bankwest account was an offset account established in Lydia's name alone;

(c) Genie did not place any part of the proceeds of sale into her own account despite the fact she handled the sale of the Radnor Street property pursuant to a power of attorney;

(d) no agreement was drawn up to reflect any trust agreement despite the fact that Genie claimed an interest in land; and

(e) Lydia paid capital gains tax on the whole of the capital gain on the sale of the Radnor Street property.[137]

1. Finally, they said that Genie failed to show any capacity to pay $296,000 as at June 2009. Moreover, they said that at no point between 2009 and 2018 did she have the capacity to contribute the funds that she alleges she did.[138]

276 On 12 August 2009, $380,000 was transferred out of Lydia and Gang Wang's account.[139] That payment was in substance made up of the following:[140]

• the opening balance of the NAB account as at 9 May 2009 of $20,451.15;
• $85,000 received on 25 June 2009 with "008544859", "50305943L1" and "044861" noted in the particulars;
• $95,000 received on 25 June 2009 with "008544867", "50305943L1.1" and "044861 noted in the particulars;
• $20,000 received on 26 June 2009 with "Lydiagebanktransfe", "Netbank" and "068523" noted in the particulars;
• $90,000 received on 29 June 2009 with "Pay Debts", "Netbank" and "***523" noted in the particulars;
• $10,440 received on 30 June 2009 with "cash deposit" noted in the particulars; and
• $62,870 received on 20 July 2009 with "RTGS (BOC-000851)", "Cai Yun" and "China".

277 Lydia submitted that she organised a transfer of approximately $654,000 from her accounts in China to Grace and that the $296,000 came out of those funds.[141] Grace agreed that some funds were transferred to Cai Yun and that, with his help, the funds were transferred to Lydia and Gang Wang's account.[142] The transaction on 20 July 2009 has "Cai Yun" in the particulars and the note "China". Accordingly, I find that the $62,870 deposit on 20 July 2009 belonged to Lydia. That forms the bulk of the $84,000 that is not in dispute. In relation to the remaining sum of approximately $21,000 required to form the $84,000 of Lydia's deposit, I find that this amount was composed of the balance of the account as of May 2009 and minor deposits made between May 2009 and August 2009.

278 Genie's evidence was that the amount of $296,000 was her contribution as a temporary measure to the purchase of the Radnor Street property.[143] She contributed it to Lydia and Gang Wang's account because the Bankwest account was not yet open.[144] This then formed part of the $380,000 used as a deposit for the purchase of the Radnor Street property on 17 August 2009. She contended that the Radnor Street property was to be purchased on a 60/40 split.

279 Grace's evidence was that Genie never asked her to transfer Lydia's money to Australia and that she never transferred funds to Lydia and Gang Wang's account.[145]

280 The documents show that on 25 June 2009, Genie transferred $85,000 out of a Members Equity account with the loan number "008544859"[146] and transferred $95,000 out of a second Members Equity account with the loan number "008544867".[147]

281 Both deposits in Lydia and Gang Wang's account contain particulars that are identical to the loan number in the respective ME Bank accounts. The transactions in both of the ME Bank accounts contain the description "Transfer to 083414 854422805". These are identical to the BSB and account number of Lydia and Gang Wang's account. Because of the similarities in the description and particulars of the transactions, the timing and the quantum of the transactions, I find that Genie made the $85,000 and $95,000 deposits into Lydia and Gang Wang's account on 25 June 2009.

282 Genie gave evidence that the $20,000 deposited into Lydia and Gang Wang's account on 26 June 2009 came from an account in Brian's name. No documents were provided supporting this. Lydia did not give any direct evidence on this transaction beyond the general submission that the $296,000 is from the funds transferred out of China. The description in Lydia and Gang Wang's account includes "Lydiagebanktransfe", "Netbank" and "068523". The description "Lydiagebanktransfe" is equivocal because it could indicate that the funds were transferred to Lydia or were Lydia's.

283 There is no documentary evidence in relation to this transaction beyond the receipt of the funds and description in Lydia and Gang Wang's account. As I have noted throughout these reasons, where there is no documentary evidence to corroborate one version of events and there are competing versions, I prefer the evidence of Genie. Therefore, I find that the $20,000 deposited into Lydia and Gang Wang's account on 26 June 2009 was made on behalf of Genie.

284 The next deposit forming the bulk of the $296,000 was the $90,000 transaction received on 29 June 2009. That transaction contains the particulars "Pay Debts Netbank 068523".[148] Lydia provided no specific evidence about this transaction beyond her general claim that the funds were the same as the funds that came to her via Grace from Lydia's Chinese accounts. Again, there was no documentary evidence linking the payment received on 29 June 2009 to any payment made or organised by Grace. Genie's evidence was that this deposit was made on her behalf by Brian.

285 Brian's bank statement with an account number ending in 8133 shows a debit on 26 June 2009 for $90,000 with the description "NETBANK TFR Pay Debts".[149] "Pay Debts" and "Netbank" match the particulars on Lydia and Gang Wang's account when the $90,000 is received three days later. The three day delay between the date the deposit was made and the date it was received is explicable by reason of the general delay that can occur when transferring funds, particularly large funds, between accounts and between banks. Having regard to the similarity in the particulars described, I find that the $90,000 received on 29 June 2009 was deposited on behalf of Genie.

286 The next portion disputed is the remaining $6,000 of the $296,000. Genie's evidence was that the $10,440 cash deposit on 30 June 2009 was comprised of money belonging both to her and Lydia.[150] Genie said that $6,000 of it was hers and $4,440 belonged to Lydia.[151] Lydia did not give any specific evidence about this transaction beyond the general claim that the funds came via Grace and Lydia's Chinese accounts. Having regard to their conflicting accounts, and my preference for Genie's evidence over Lydia's, I attribute $6,000 of this deposit to Genie and $4,440 to Lydia.

287 In summary, I find that transaction 2.1 is attributable to Genie and transaction 2.2 is attributable to Lydia. Therefore, of the $380,000 deposit made into the Bankwest account on 12 August 2009, Genie contributed $298,000 and Lydia contributed $84,000.

288 At this juncture, I will note that, having regard to my credibility findings,[152] the deposit transaction discussed here and the surrounding documentary and oral evidence, I find that the Radnor Street property was purchased on the basis of Lydia having a 60% interest and Genie having a 40% interest. Of particular note is the evidence of Jade[153] and Shen[154] that Lydia discussed this ownership split among family at Rowville. Further, it is also significant that despite multiple documents noting her proportionate interest in the property, Lydia did not raise any objection to Genie's description of the split when those documents were sent to her.[155] I do not consider the fact that Lydia paid the whole of the capital gains liability as weighing substantially in favour of her case. As noted earlier, it was prepared a significant period of time after the property sold and the relationship between Lydia and Genie had soured. As a result, any capital gains tax paid by Lydia on her 2016 tax return that is greater than her respective share of Radnor Street should be returned to her.

289 On 17 August 2009, a $10,000 deposit was made with the particular "CASH DEPOSIT AT BOX HILL 9:47AM".[156]

290 Lydia's position was that this cash belonged to her and that she had brought it with her from China. She said that she deposited it along with the transaction two minutes earlier, also for $10,000, at the Box Hill branch. She said that the staff at the Box Hill branch spoke Mandarin.[157]

291 Genie's evidence was that Lydia and Genie both attended the Box Hill branch and both contributed $10,000 to the Bankwest account.[158]

292 I prefer the evidence of Genie where no documents corroborate either account. Therefore, I attribute this deposit to Genie.

293 On 29 October 2009, a $4,235 deposit was made into the Bankwest account with the particular "CASH DEPOSIT AT BOURKE STREET STORE 10:50AM".

294 Lydia's position was that she was in the country from 24 to 28 October 2009 and that she brought cash with her when she arrived in Australia. She said that she had unspent cash before she left and that she gave this money to Genie to deposit into the Bankwest account after she left.[159]

295 Genie's position was that she made this deposit and that Lydia was not in the country.[160] In Genie's first email to Lydia on 3 March 2010 ("first Radnor Street email") containing a description of the funds in the Bankwest account, this amount is placed in the Lydia deposit column.[161] In Genie's second email to Lydia on 25 October 2009 containing a description of the funds ("second Radnor Street email"),[162] the third such email ("third Radnor Street email")[163] and the fourth Radnor Street email ("fourth Radnor Street email")[164] (collectively, "the Radnor Street emails"), the first Genie Spreadsheet,[165] the second Genie Spreadsheet,[166] the third Genie Spreadsheet,[167] the fourth Genie Spreadsheet[168] (collectively, "the Genie Spreadsheets") and Genie's 5 July 2021 further and better particulars ("Genie's July FBP")[169] this amount is noted as a Genie deposit.

296 Also on 29 October 2011, $110,000 was deposited via cheque at 10:48am at the Bourke Street branch. This has been attributed to Lydia.

297 Except for the first Radnor Street email, the rest of the descriptions of this deposit have been consistent. But the first Radnor Street email was close to the date of the transaction and militates against finding that this was a deposit made by Genie. Because it was first described as such, the fact that the amount is consistent with spare cash in so far as it is an odd and non-zero number and that a cheque that is attributed to Lydia is deposited minutes earlier I consider that the probabilities favour Lydia's position. Therefore, I find that this sum was Lydia's contribution.

298 These transactions can all be grouped as transactions containing a note about "Netbank" and "salary":

• Transaction 23: $5,402.58 on 21 December 2009 with the description "NETBANK Lydia GEDec09Salary";
• Transaction 35: $9,803 on 21 April 2010 with the description "NETBANK LydiaGe SalaryMay10";
• Transaction 38: $2,601 on 19 May 2010 with the description "NETBANK LydiaGESalary04201";
• Transaction 58: $2,577.30 on 6 September 2010 with the description "NETBANK LydiaBrianwage0710";
• Transaction 63: $3,687.15 on 29 September 2010 with the description "NETBANK GeLSalary 100093"; and
• Transaction 64: $913.43 on 29 September 2010 with the description "NETBANK GeLSalary 10093".

299 For each of these transactions, Lydia's position was that these payments were her salary for setting up an immigration business in Beijing.[170] She said that she was involved in developing a network of students and immigrants which would generate a revenue for the migration part of GE International's business.[171] Lydia said that, at first, she paid the salary to herself from her personal funds but after GE International was incorporated, the company paid her salary. She said that her work was not extensive or long lasting.

300 The Lydia parties submitted that Genie's evidence about the six payments between December 2009 and September 2010 should be rejected because Genie:

(i) made the notations herself;

(ii) failed to produce employment documents or tax returns; and

(iii) failed to explain the reason for the notations.

301 Genie's evidence was that these deposits were made on her behalf and paid from her former employer, Visamaster Group Bank. Genie had directed the employer to pay her salary into the Bankwest account.[172] She did not recall why she used the descriptions she did. Genie's evidence was that Lydia was not an employee of Visamaster Group Bank while Lydia was in China. In all the Radnor Street emails, Genie Spreadsheets and Genie's July FBP, these transactions were in the Genie deposit column.

302 Here, the documentary evidence proximate to the transactions support Lydia's position - the descriptions in transaction 23, 35, 38 and 58 clearly describes these payments as Lydia's salary. In this circumstance, the evidentiary weight of the spreadsheet details do not outweigh the bank descriptions. Therefore, I find that these deposits belong to Lydia.

303 Transaction 63 and 64 only state "GelSalary". It is inconclusive who this money belongs to, but as a pattern had been established, I find that it is more likely than not that these were also payments of Lydia's salary. Therefore, it is more likely than not that transactions 23, 35, 38, 58, 63 & 64 were contributions made by Lydia.

304 These five deposits were made between mid-2010 and early 2011. The sum total of $66,100 was deposited over five transactions:

• $900 on 30 July 2010;
• $6,2000 on 20 August 2010;
• $16,000 on 4 October 2010;
• $9,000 on 19 January 2010; and
• $34,000 on 25 February 2010.

305 Lydia was not in the country when the deposits were made. Her evidence for each deposit was that she gave cash to friends who were visiting Australia.[173]

306 Genie's evidence was she made these deposits.[174]

307 The 30 July 2010 transaction is noted as a Lydia deposit in the second Radnor Street email, the third Radnor Street email and all of the Genie Spreadsheets. It is only in Genie's July FBP that this is first noted as Genie's deposit. I find that because of this consistent description, that the $900 deposit is, on the balance of probabilities, more likely to be Lydia's than Genie's.

308 The remaining four cash deposits however are different.

309 The Radnor Street emails and the Genie Spreadsheets record those deposits as Genie deposits where they appear.

310 In particular, the $16,000 and $34,000 transactions are significant and would quite likely have flagged some sort of border issue for the person carrying the cash.

311 Accordingly, with consideration given to the notes on the Radnor Street emails, the Genie Spreadsheets and the amounts involved, I find that those four transactions are more likely to be Genie's contributions to the Bankwest Account.

312 On 12 August 2010, $930 and on 13 August 2010, $12,000 was deposited into the Bankwest account. The description of both transactions is "NETBANK liubingze". Lydia provided no evidence about the source of these contributions. Genie's evidence was that these were repayments of a debt owed to Genie made into the Bankwest account by her friend Liu Bingze ("Billy").[175] The second, third and fourth Radnor Street emails and the Genie Spreadsheets were consistent in noting that these were Genie's deposits. Having regard to these factors, I find that the deposits belong to Genie.

313 $43,190 was withdrawn by cheque on 20 August 2010. Lydia's evidence was that she did not make this withdrawal.[176] Genie could not recall making the transaction or monies being paid to her. The second, third and fourth Radnor Street emails as well as the Genie Spreadsheets note this as a Genie withdrawal. Genie's July FBP note this as a Lydia or others withdrawal. Lydia was not in the country at the time.[177] Only Genie and Lydia had access to the account. Given the documentary evidence and Genie's lack of recollection, I find that Genie made this withdrawal.

314 On 4 and 12 January 2011, two withdrawals for $10,000 were made. The first was in cash and the second was by way of a cheque. Lydia's evidence was that these were made by Genie for her personal use.[178] Genie's evidence was that Lydia was in China at the time and that Lydia had given her instructions to give this money to Jade. Jade's evidence was consistent with Genie's account.[179] Accordingly, I find that that Lydia made these two withdrawals or they were made at her direction.

315 On 1 February 2011, $5,000 was paid out of the Bankwest account. Lydia's evidence was that this was a withdrawal by Genie for her personal use.[180] Genie's evidence was that this money was transferred to GE International's bank account for the Box Hill project.

316 The third Radnor Street email and the Genie Spreadsheets state that this was "GE Fund" and "GE Fund CBA". The $5,000 is split with Genie contributing $2,000 and Lydia contributing $3,000. In Genie's July FBP this withdrawal is in the Box Hill & Balwyn project column.[181]

317 GE International's account[182] shows that $5,000 was received on 2 February 2011. The transaction description says "GE, LIANGYAN Bankwest". Accordingly, I find that this money was deposited from the Bankwest account into GE International's account. The funds are therefore monies paid into the Box Hill and Balwyn project and are not withdrawals made by Genie for her personal use.

318 Transaction 139 is a deposit of $85,000 paid into the Bankwest account on 23 May 2011. The transaction description is "Netbank Fund GG". [183] Transaction 163 is a cheque deposited on 2 November 2011 for $360,000.

319 The Lydia parties submitted that these transactions were two parts of a broader scheme. They point to a range of transactions between 2011 and 2012 whereby, across eight transactions, $445,000 was paid to a person called Billy:

(a) $100,000 on 19 May 2011;

(b) $100,000 on 23 May 2011;

(c) $85,000 on 23 May 2011;

(d) $60,000 on 9 June 2011;

(e) $50,000 on 20 October 2011;

(f) $20,000 on 15 March 2012;

(g) $10,000 on 16 March 2012; and

(h) $20,000 on 16 March 2012.

320 They say that Genie's evidence was that these were GE International's repayments to Billy for a $400,000 loan. They submit that the transfers cannot be repayment as the amounts do not correlate. Moreover, Lydia submits, there is no evidence of a loan agreement or GE International's loan account and Billy did not give evidence. They submit that as such, the Court cannot be satisfied that these deposits are a contribution by Genie and that even if they were deposits by Billy or GE International, then they constitute money payable at the time by Lydia to either Billy or to GE International.

321 Genie's evidence in regard to transaction 139 was that the cheque was paid from the GE International bank account as part reimbursement for the $156,800 deposit she paid for the Balwyn property.[184] She said that she paid this deposit because GE International did not have the funds at the time the Balwyn property was purchased to reimburse Genie the full deposit. She said that she made the payment from the GE International account into the Bankwest account and that she allocated it to her as it was part reimbursement of her monies. Her evidence was that she understood it could have been allocated to the Box Hill and Balwyn projects column in Genie's July FBP but that would not have changed the result. Genie said that transaction 163 was her money that she deposited into the Bankwest account. She said that it was a cheque paid by her from her personal NAB account.[185]

322 It was agreed by both parties that transaction 139 was paid from the GE International CBA bank account into the Bankwest account.[186] The bank description is "NETBANK Fund GG". In the fourth Radnor Street email, each of the Genie Spreadsheets and Genie's July FBP, this is noted in the Genie deposit column. The description on the GE International bank account transaction is "Loan BillyLiu".

323 Genie's evidence about the loan from Billy was that in 2011 she needed to pay off bank loans to ensure that some of the Box Hill units' settlements would proceed. Genie said that DSB had financial difficulties, Lydia did not have the funds and that she herself did not have the money to pay off the loans. As such, GE International[187] borrowed $400,000 from Billy on 16 May 2011.[188] Genie said that she made the following repayments of this loan totalling $360,000:

(a) two transfers for $100,000 from GE International's CBA bank account made on 19 and 23 May 2011;

(b) $60,000 on 9 June 2011;

(c) $50,000 on 20 October 2011;[189]

(d) $20,000 on 15 May 2012;

(e) $20,000 on 16 May 2012; and

(f) $10,000 on 16 May 2012.

324 On that evidence, the loan is not repaid. Genie did not provide any other evidence about the rest of the money used to repay either the loan or the which presumably it incurred.

325 The bank description for transaction 139 in GE International's CBA account is "Loan BillyLiu".[190] The description in the Bankwest account is "NETBANK FundGG".[191] These differing descriptions are not helpful. But GE International's CBA Account containing the description "Loan BillyLiu" makes sense when the note is understood as indicating that the funds were formed out of the money Billy Liu lent to GE International.

326 There is no evidence showing that the $85,000 then left the Bankwest account and went elsewhere (for instance, to repay Billy Liu).

327 The amount is inconsistent with any proportionate ownership that Genie had in the Balwyn project. Genie did not say what part of the $156,000 was repaid in the $85,000 - whether it included stamp duty, Grace's portion or some other combination of funds.

328 I find that the funds came from the $400,000 GE International borrowed from Billy. Therefore, GE International itself deposited the funds in the Bankwest account and these funds are rightfully described as GE International's deposit into the Bankwest account. Accordingly, the deposit is to be apportioned in proportion to the parties' interest in GE International.

329 Lydia's evidence that transaction 163 was a repayment of a loan given to Billy is not consistent with the documentary evidence. First, the funds left Genie's NAB Homeside Deposit Offset Account.[192] That transaction contains a hand written note "Goto BW". The Bankwest account contains a hand written note "HomeSide".[193] Secondly, although the fourth Radnor Street email and the Genie Spreadsheets[194] refer specifically to Billy in relation to the transaction, that does not displace the evidentiary weight of Genie's bank statement from her NAB Homeside Deposit Offset Account. Moreover, the loan that Genie borrowed from Billy is repaid after this deposit from the GE International account.

330 Genie's evidence was that she repaid $360,000 of the loan.

331 The evidence does not reveal how the remaining balance of the loan and any interest were satisfied. Despite this, it is clear that the loan was, at least, partially satisfied and that transaction 163 was a separate and distinct transaction.

332 Accordingly, having regard to the bank statement showing that Genie transferred the funds out of her NAB account, I find that transaction 163 was a deposit made by Genie.

333 There are seven $5,417 deposits in the Bankwest account between May and November 2011 that include, in some part, a note about rent or Billy Liu.[195] The total amount deposited was $37,919.

334 Lydia's evidence was that these amounts were rent paid by Billy and cannot be considered contributions made by Genie.[196] In her written closing submissions, she contended that her evidence should be preferred over Genie's because Lydia gave credible evidence that this was rent Genie would pay and that Lydia paid tax on the rent received. She submitted that, by contrast, Genie's evidence was that the descriptions were designed to mislead the bank and that the funds were from Brian who Genie did not call as a witness.

335 There was no evidence from Lydia that she paid tax on any of these rents despite her submissions. If there was a tenancy relationship between GE International or Genie and Billy, one would usually expect to see some written proof.

336 Genie's evidence was that these transactions were payments made from Brian's bank account and her account on her behalf.[197] She agreed that the reason she described them as rent was to prove to future lenders that they were receiving rental income. She said that Lydia had asked her to do so.[198] She said that the transactions on 24 June 2011, 23 August 2011, 26 September 2011, 24 October 2011 and 22 November 2011 were all made from Brian's account ending in 2976. The transfer on 24 May 2011 was made from a different account in Brian's name ending in 8133. The transfer on 21 July 2011 was also from an account in Brian's name, however she could not locate the statement.

337 The fourth Radnor Street email, the Genie Spreadsheets and Genie's July FBP were all consistent in noting that these deposits belonged to Genie.

338 Brian's CBA statement shows on 24 May 2011 a debit of $5,417.[199] It contains the note "NETBANK TFR GEL". Transaction 140 in the Bankwest account shows a credit of $5,417 on the same day. There is a hand written note stating "rent" on the same line as the transaction.[200] I find that this deposit was made from Brian's account and the deposit rightfully belongs to Genie.

339 Transaction 144 on 24 June, transaction 153 on 23 August, transaction 157 on 26 September, transaction 161 on 24 October and transaction 167 on 22 November all have a corresponding debit in Brian's 2976 account.[201] Accordingly, on the balance of probabilities, I find that these were deposits made on Genie's behalf.

340 Transaction 147 on 21 July 2011 does not have any other evidence to support Genie's contention. However, given the pattern of payments referred to, I consider it more likely than not that this was also made on Genie's behalf and I find accordingly.

341 On 23 November 2011, $32,328 was debited from the Bankwest account. Lydia's evidence was that this was made for Genie's personal use. Genie's evidence was that this was GE International's part of a $40,410 payment made to the ATO. She said that it was transferred to an account in the name of GE International and DSB and from that account, money was paid to the ATO.

342 In the fourth Radnor Street email and the Genie Spreadsheets, this is noted as "Withdraw - personal" in Genie's column. In Genie's July FBP this is a withdrawal in the Box Hill and Balwyn column.

343 Although Genie's evidence is inconsistent with the fourth Radnor Street email and the Genie Spreadsheets, the documents clearly show that this money was transferred into the GE International and DSB account[202] and that DSB, or someone on its behalf, deposited $8,082 on 23 November 2011. From this account, a payment of $40,410 was paid to the ATO with the note "GST Pay Back".[203]

344 Accordingly, I find that the documents are consistent with Genie's evidence and the funds are properly attributable to the Box Hill and Balwyn column.

345 On 24 January 2012, $14,850 was debited from the Bankwest account. Lydia's evidence was that this was made for Genie's personal use. Genie's evidence was that Lydia was in Australia, this was a payment made by her and that Genie did not know what Lydia did with the money. In the fourth Radnor Street email and the first and second Genie Spreadsheet this is a withdrawal in Genie's column. In the third and fourth Genie Spreadsheet this is split between Genie and Lydia. In Genie's July FBP this is moved to the Lydia and Others column. Because of the description of this transaction in the fourth Radnor Street email, which is closest in time to the date of transaction, and the description in the first and second Genie Spreadsheets and the absence of contrary evidence, I attribute this debit to Genie.

Transactions 190, 200, 256, 284, 304, 315 and 370.

346 Each of these deposits are cash deposits made in Melbourne:

• transaction 190 was a deposit of $7,700 made on 16 February 2012;
• transaction 200 was a deposit of $12,000 made on 19 March 2012;
• transaction 256 was a deposit of $8,000 made on 29 January 2013;
• transaction 284 was a deposit of $18,000 made on 14 June 2013;
• transaction 304 was a deposit of $15,000 made on 29 August 2013;
• transaction 315 was a deposit of $10,000 made on 22 October 2013; and
• transaction 370 was a deposit of $568 made on 3 June 2014.

347 In relation to transaction 190 and 200, Lydia's evidence was that she departed Australia on 2 February 2012 and left funds with Genie who deposited them in the Bankwest account.

348 Lydia said that the remaining cash deposits belonged to her as she had given money to friends to take to Australia.

349 Genie's evidence was that these deposits were made by her and that Lydia was not in Australia at the time the deposits were made.

350 The fourth Radnor Street email,[204] the Genie spreadsheets and Genie's July FBP are all consistent with Genie's evidence.

351 The cash sums are quite large and it seems a little unlikely that one would hand over such large amounts for someone else to carry across international borders.

352 Accordingly, given the circumstances including the absence of corroborative documentary evidence,[205] I find that each of these deposits is attributable to Genie.

353 On 21 February 2012, $40,000 was debited from the Bankwest account. Lydia's position was that this money was used for Genie's personal purposes. Genie's evidence was that this was paid to the GE International and DSB bank account for the Box Hill project.[206] Genie pointed to a cheque in support of her position.

354 The fourth Radnor Street email and the Genie Spreadsheets place this transaction in Genie's column with the note "Withdraw - Personal". Genie's July FBP place this in the Box Hill and Balwyn project column.

355 On 20 February 2012, a cheque is made out to "GE + DSB Australia" for $40,000. The cheque is made from the Bankwest account.[207]

356 Despite the notes in the fourth Radnor Street email and Genie Spreadsheets I find that, having regard to the contemporaneous cheque and Genie's evidence on the point,[208] that the funds were paid to the GE International and DSB account for the purposes of the Box Hill and Balwyn projects.

357 On 8 March 2012, $50,000 was debited from the Bankwest account. Lydia argued that this was made for Genie's personal use. Genie's position was that this cheque was made for GE International and deposited into its account.[209] In the fourth Radnor Street email this is noted as a "Withdraw - personal". In the Genie Spreadsheets this transaction is placed in the Genie column. Genie's July FBP note this as a withdrawal in the Box Hill and Balwyn column. GE International's bank account supports Genie's position - $50,000 was credited to it on 8 March 2012.[210] Therefore, I find that the funds were not withdrawn for Genie's personal use but instead deposited into that account for the purposes of the Box Hill and Balwyn projects.

358 On 16 April 2012, $210,000 was deposited into the Bankwest Account.

359 Lydia's evidence was that this contribution was not made by Genie. She said that the amount relates to "sales returns" from the Box Hill development.[211] In her submissions, Lydia said that the description in the fourth Genie Spreadsheet[212] was "BoxHill Project" which was similar to a deposit of $686,400 on 20 December 2011. She said that Genie failed to explain why those words were written on the fourth Genie Spreadsheet and instead relied on a heavily redacted bank statement from Hongwei. They said that Genie failed to produce financial documents of GE International or to call Brian as a witness which could have established any loan agreement between Genie and Brian or Hongwei. Ultimately, she submitted that Genie failed to explain away the "BoxHill Project" notation which implies the deposit related to the Box Hill project and was a payment of profits or refund for overpayment of contributions to the Box Hill project.

360 Genie's evidence was that she made this deposit into the Bankwest account. She said that she made the payment by cheque from Brian's CBA account. In cross-examination, she described this as a repayment of a loan she made to Hongwei on 28 February 2012 which included $10,000 interest. Genie pointed to a debit in the Bankwest account on 28 February 2012 as supporting her statement.[213]

361 In the fourth Radnor Street email, this is noted as Genie's deposit. In the first and second Genie Spreadsheets this is a deposit in Genie's column with a note saying "BoxHill project". In the third and fourth Genie Spreadsheets this deposit is not attributed to anyone but includes the notation "Box Hill Project". In Genie's July FBP this is a deposit in Genie's column.

362 The 28 February 2012, $200,000 debit is a withdrawal in Genie's column in the fourth Radnor Street email, the Genie Spreadsheets and Genie's July FBP.

363 Hongwei's CBA account shows a cheque debited from the account on 16 April 2012 for $210,000.[214]

364 That the fourth Radnor Street email and the Genie Spreadsheets are inconsistent in describing the funds is not compelling. They were drafts and Genie had not completed an entire audit of the various accounts. The Box Hill note does not outweigh the fact that $210,000 was debited from the Hongwei account on 16 April and received into the Bankwest account on the same day. On balance, I find that this contribution was made on Genie's behalf and was the repayment of the loan Genie made to Hongwei from the Bankwest account.

365 $8,000 was debited on 9 April 2014. Lydia's position was that this was made for Genie's personal use and was not for the purpose of the Box Hill and Balwyn projects. Genie's evidence was she made this payment to GE International's Westpac account.

366 In the Genie Spreadsheets, this debit is in the Genie column. When this was put to Genie, she emphasised that the spreadsheets were a draft.[215] In Genie's July FBP this is a withdrawal in the Box Hill and Balwyn column.

367 GE International's Westpac account shows a credit of $8,000 on 10 April 2014. The description of the transaction is "Deposit Ge,Liangyan Bankwest Ge Deposi".[216]

368 The transaction's description in the GE International account makes clear that the funds were received from the Bankwest account. As such, I find that the funds were made into GE International's account and should be placed in the Box Hill & Balwyn account in accordance with Genie's July FBP.

369 On 30 June 2015, $300,000 was credited to the Bankwest account with the description "LAND".[217] Lydia's position was that Genie did not have the funds to make this deposit and that this amount was unrelated to the Armadale property deposit. In evidence, Lydia said she could not recall putting funds in on that date.[218]

370 Genie's evidence was that these were funds Brian paid on her behalf and were unrelated to any other transaction.[219]

371 During Genie's cross-examination, counsel for Lydia provided the Court a diagram that sought to link the 30 June 2015 deposit with a range of other transactions. It was put to Genie that this deposit formed part of a round robin of transactions which ultimately meant that Genie was not out of pocket $300,000.

372 It was put to Genie that $300,000 was deposited into the Bankwest account on 30 June 2015. On 1 July 2015, a further $300,000 was deposited into GE & L's bank account. Then on 4 August 2015, $300,000 was transferred from the GE & L account to Genie's bank account. Later, on 24 September 2015, DSB (either through Stefan or Dragan) then paid $300,000 to Genie directly. Finally, on 9 September 2015, GE International paid Billy $300,000.

373 This issue was explored further in written submissions. It was submitted that although a deposit slip dated 30 June 2015 for $300,000 was provided,[220] no relevant bank statement had been produced. Lydia said that it was apparent that three separate payments of $300,000 have been paid out to Genie or Billy as follows:

• 4 August 2015 GE & L paid $300,000 to Genie out of its home loan account;[221]
• 9 September 2015 GE International's Westpac account paid $300,000 to Billy;[222] and
• 24 September 2015 Dragan paid Genie $300,000.[223]

The Lydia parties submitted that as a result, Genie was not out of pocket $300,000 and that the payment on 30 June 2015 was not paid from Genie's personal funds. Moreover, the plaintiffs argued that, in the absence of evidence from Brian or Billy as to loan agreements, the Court could not be satisfied that Genie personally contributed those funds or that they were contributed on her behalf.

374 In response, Genie stressed that the transactions on 30 June 2015 and 1 July 2015 were distinct. She said that the transfer on 30 June was from Brian and that the 1 July credit was the deposit that she made as a loan for B8**.** She said that in the records of the company accounts, the 1 July 2015 transaction was recorded as a contribution from B8.[224]

375 A deposit slip dated 30 June 2015 shows that an account ending 074-4 paid $300,000 to the Bankwest account.[225] Genie's evidence was that the signature on that deposit slip was Brian's.[226] MFI-2 is a Bankwest statement that shows that an account ending 074-4 is an account in Brian's name. The Genie Spreadsheets and Genie's July FBP are consistent in placing this in Genie's column. The fourth Genie Spreadsheet notes includes the description "Genie Deposit Land Armadale".

376 That note is consistent with Armadale having been purchased by GE & L in its own capacity. The deposit funds were provided by Genie herself. She used $1,000,000 from the Bankwest account to pay the deposit. The $300,000 deposited on 30 June 2015 formed 30% of the monies drawn from the Bankwest account.

377 The remainder of the transactions that Lydia submits resulted in a round robin appear to me to be unrelated to transaction 439. The 1 July 2015 transaction was a loan from Genie to Dragan and Stefan. The loan monies were paid into GE & L on their behalf. This was repaid by Stefan in September of that year and then Genie refunded to Stefan the difference between the $300,000 and the portion of the deposit B8 ought to have paid.

378 The 4 August 2015 transaction does not contain any detail about who it was paid to.[227] Genie did not concede that this money was paid to her. Lydia has not met the burden required to prove this.

379 The 9 September 2015 transfer to Billy likewise was not adequately addressed in evidence and Lydia did not meet the burden of proof necessary to prove that these funds were related to the 30 June 2015 transaction.

380 As a whole, the round robin theory put forward by Lydia should be rejected as it is not substantiated by sufficient evidence to meet the burden of proof.

381 Accordingly, I find, in light of the deposit slip showing $300,000 was paid to the Bankwest account by Brian, that the transaction on 30 June 2015 was a contribution made by Brian on Genie's behalf.

382 On both 29 March and 1 April 2016 $16,800 was withdrawn from the Bankwest account. The 29 March transaction had the description "Liangling Withdraw Fordham".[228] The 1 April debit has the description "Yu GE Deposit".[229] Lydia's position was that these withdrawals should not be attributed to Lydia. Genie's position was that these transactions were made on Lydia's instructions and were repayments of Jade and Grace's overpayments for the Fordham Street property.

383 For both transactions, the Genie Spreadsheets were consistent in noting that these were not attributable to either Genie or Lydia. In Genie's July FBP, this was placed in the Lydia and Others column.

384 Jade[230] and Grace's[231] evidence was consistent that these were refunds of the Fordham deposit. Accordingly, I find that these withdrawals were attributable to neither Genie or Lydia and were repayments of funds overpaid by Jade and Grace.

385 $600,000 was credited to the Bankwest account on 10 June 2016 with a description that included a series of numbers and "Liangyan GE GGE".[232] Lydia's position was that this was an internal transfer of funds which was cancelled out by a further transaction for $600,000 on 13 June 2016.

386 Genie's position was that this contribution was made by her from her Commonwealth Bank account.

387 The Genie Spreadsheets note this as a deposit but do not place this against any particular person. In Genie's July FBP she notes this as her deposit.

388 I find that this deposit belonged to Genie. First, as noted, generally I prefer her evidence to Lydia's. Second, Genie withdrew $600,030 from her Commonwealth Bank Account on 10 June 2016. She provided a bank statement showing this.[233]

389 Lydia's submission that this was cancelled out by the 13 June 2016 internal transfer does not assist her. The funds may have been moved days later. However, it is clear that the funds originated in Genie's personal account.

390 Both transaction 650 and 660 relate to funds credited to the Bankwest account by Shen. On 9 June 2017, $81,000 was deposited into the account. On 1 August 2017 a further $10,000 was deposited.

391 Lydia's position was that transfer 650 was formed out of funds kept by her in an account in Shen's name in Australia. Transfer 660 was disputed because Genie described this transaction as a "transfer" in the fourth Genie Spreadsheet.

392 Genie's evidence was that transaction 650 was made on Genie's behalf by Shen. Genie said that she made a parenting visa application for Shen which required a payment of approximately $60,000 once the visa was granted and further payment may have been required. Genie's evidence was that Shen paid her the money and then once the visa was granted, Genie would pay the costs of the application as required. Genie's evidence was that, in the interim, Shen was happy for Genie to use the funds as necessary.

393 The second and third Genie Spreadsheets note this as "Liann deposit". The fourth Genie Spreadsheet places this in Lydia's deposit column with the note "Liann Deposit Brought from Mum".[234]

394 Shen's evidence was that she paid this money to Genie so that Genie could help her with her immigration issues.[235] She said that Lydia helped her to transfer the funds from her Bankwest account to Genie.[236] Shen was not sure from which account it was transferred but said that Lydia had told her that the funds had been transferred to Genie.

395 Genie did organise a parenting visa application for Shen. The Department of Immigration and Border Protection sent an email to Genie confirming receipt of such application.[237]

396 Shen's account shows that on 9 June 2017 she transferred $81,000 to the Bankwest account.[238] Of that money, $66,000 originated from a 24 May 2017 deposit with the description "SHEN BAOYING".[239] Shen's Chinese bank account shows that on 23 May 2017 she transferred out $66,000.[240] I do not believe Lydia that she kept funds in Shen's name in an Australian account. In my view, it is more likely that the funds paid into the Bankwest account originated from Shen's Chinese account. The evidence is sufficiently compelling to outweigh the evidentiary weight of Genie assigning this deposit to Lydia's column in the fourth Genie Spreadsheet.

397 I find that transaction 650 involved funds contributed by Shen on behalf of Genie to the Bankwest account.

398 Lydia provided no persuasive evidence or argument as to why she disputed the $10,000 deposit made into the account on 1 August 2017 other than Genie's description of it as a "transfer" in the fourth Genie Spreadsheet. Genie's evidence was that Shen gave this money to Lydia for the purpose of giving it to Genie. Shen's evidence corroborated this. I find that this money was deposited into the account on behalf of Genie.

Transactions that were not agreed to be in dispute

399 There were further transactions that were referred to in various aide memoires, Schedules and spreadsheets provided to the Court that were not apparently agreed to be in dispute.

400 Transactions 521, 526, 529, 536 and the 13 June 2016 transaction for $600,000 all contained a note relating to "internal transfer". In his opening address, counsel for Lydia conceded that they no longer disputed any transaction which contained the note "internal transfer".[241] Accordingly, I need make no decision about these transactions.

401 Transactions 653, 657, 664 and 665 were all deposits into the Bankwest account with a description that included "Hongwei Salary".[242] Lydia did not dispute these transactions and did not provide evidence about them.

402 Genie's evidence was Lydia asked Genie to pay these to the Bankwest account so that Lydia could show she had a salary to assist her borrowing capacity. Genie said she agreed to do this because at the time, she still believed that they may reach an agreement about the future involvement of Lydia and Yves in the property development business. As no agreement was reached, the payments stopped. Genie says that the funds should therefore be considered her contributions to the Bankwest account.

403 Throughout early to mid-2017, there were on-going discussions between the sisters about Lydia and Yves potentially joining Genie and Brian's property development business. Ultimately, these discussions came to nothing and Lydia and Yves did not participate in Genie and Brian's company.

404 The Genie Spreadsheets note these, where they appear, as "Salary Lydia" and placed them in Lydia's deposit column. In Genie's July FBP these are placed in the Lydia and Others column.[243]

405 As Lydia did not contest Genie's version of events, I find that these deposits should be considered Genie's contributions to the account.

406 Lydia submitted[244] that the Court cannot be satisfied that:

(a) GE International has not paid Genie or GECW their entitlements; and

(b) That $426,671.35 was Genie's share of the surplus funds from GE International. Lydia submitted that Genie's claim that $104,441.85 was the balance of her investment in GE International cannot be accepted without documentary evidence.

407 On 28 August 2015, $1,680,000 was deposited into the Bankwest account. On 25 September 2015, a further $520,000 was paid into the Bankwest account. The 28 August transaction contains the note "GE INTERNATIONAL". The 25 September transaction contains the note "GE INTERNATIONAL Northcote GE". Lydia submitted that these amounts were entered into GE International's books against Lydia's loan account. There was no evidence that such books existed or that any one was keeping any great detail of how the funds were moved around the various accounts associated with the developments.

408 In the Genie Spreadsheets, the 25 August transaction is split between Lydia and Genie on a 60/40 basis. The 25 September deposit is not apportioned between the sisters. The Genie Spreadsheets do not have the funds sorted into categories according to project. In Genie's July 2021 FBP both of these deposits are placed in the Box Hill & Balwyn column.

409 The total deposits and withdrawals in regard to the Box Hill & Balwyn project in the Bankwest account, according to Genie's July 2021 FBP, are:

(a) withdrawals: $2,152,544.49

(b) deposits: $2,898,246.33

The surplus of funds is $745,701.85 ("the Surplus").

410 In July 2017, after the sale of the final Balwyn unit, KST prepared the last financial statement of the LGE Unit Trust. This was for the June 2016 financial year. The total amount for distribution was $641,260.[245] Genie's share was $256,504. Grace's share was $64,126. Genie and Grace agreed that Grace's share of the profit would be paid into the Bankwest account.[246] Lydia's share was $320,630.[247]

411 Lydia has not met the necessary evidentiary threshold to to say that GE International paid Genie or GECW. Nor has she cast enough doubt about Genie's bookkeeping to give me reason to doubt Genie's record of the movements of funds as recorded in the Genie Spreadsheets and July 2021 FBP. In my view, having regard to the totality of my findings in regard to the disputed Bankwest transactions, Genie's record of the accounts is usually reliable. Moreover, I found her a trustworthy witness and unless evidence is provided contrary to her position, I believe her account. Accordingly, I reject Lydia's submission that the Court cannot be satisfied that Genie's profits have been paid to her or GECW.

412 There were insufficient documents provided to calculate the exact profit and losses of GE International or what the correct profit from the Box Hill and Balwyn projects were.[248] There are no compelling reasons for me to reject the profit/loss statement prepared by KST in 2017.

413 Ultimately, GE International paid the funds to the Bankwest account. The Surplus is therefore best described as money overpaid by GE International and its profits.

414 According to Genie, she had her, Lydia and Grace's profits paid into the Bankwest account.

415 Having regard to the documents and my preference for Genie's evidence, there are not sufficient documents to displace Genie's claim that she is entitled to the amount of $320,730 (being her 40% and Grace's 10% share of the LGE disbursement coming from the funds in the Bankwest account) from the Surplus.

416 In regard to the remaining $104,441.85, Lydia submitted that the Court cannot be satisfied without further documentary evidence that this belongs to Genie. Genie's evidence was that this was a repayment of funds she paid to GE International from other sources of hers. There is insufficient documentary evidence to rebut Genie's evidence that she is entitled to it. The Lydia parties have not pointed to any particular document to support their contention.

417 As the only apparent evidence on this overpayment is Genie's witness statement, I find that this money ought to belong to Genie.

418 Lydia also submitted that Genie repaying Lydia $500,000 on 27 April 2017 was a clear acknowledgement by Genie that the account was Lydia's. I do not agree.

419 As I have found elsewhere in these reasons, an arrangement existed whereby Genie could borrow funds as necessary from the Bankwest account for the Armadale property and those funds would be repaid. Genie's evidence was that this was such a payment.[249] Having regard to my preference for Genie's evidence where they conflict, I consider this payment is one repayment of such borrowed funds.

3. On or about June or 10 July 2015, did Lydia and Genie agree that: (a) Lydia would not participate in the purchase and development of the Armadale property; (b) Lydia would lend Lydia's funds in the Bankwest account to Genie on an interest free basis to assist in the funding of the Armadale project ("Loan agreement"); and (c) Genie would repay the funds which she used at the completion of the Armadale project.

420 The plaintiffs submitted that the Court cannot be satisfied on the evidence that any agreement was reached between Lydia and Genie in relation to any of (a), (b) or (c) above.

421 The Lydia parties contended that the Court cannot be satisfied that any loan agreement was entered into. They argued that it was said to be oral and never evidenced anywhere in writing prior to the filing of the 21 September 2020 amended defence despite extensive discussions between the parties over the Armadale project and the Bankwest account. They say that it was implausible that Lydia would lend whatever funds were required on an interest free basis without obtaining any interest on the loan or a share in the profits of the project.

422 They said that it was implausible that Lydia said, or agreed that she did not want to participate in the Armadale property project because:

(a) Lydia plainly expressed genuine enthusiasm about investing in future projects but only once the Balwyn property project was completed;

(b) Genie did not specifically identify the Armadale property, did not send Lydia a copy of the contract of sale or a copy of the electronic brochure or details in relation to the property;

(c) Genie's evidence as to when Lydia lost interest in participating in the project is vague and not believable; and

(d) assuming Lydia did lose interest, then using Lydia's company lacks plausibility.

423 The defendants first submitted that on matters of credit, Genie's version of events should be preferred. Moreover, in relation to this issue, they said that the objective evidence supported Genie's case.

(a) Lydia's knowledge of the Armadale property project and her decision not to be involved in that project, as apparently evidenced by emails and WeChat messages in June and July 2015;

(b) the fact that an agreement to share the funds in the Bankwest account is consistent with documents exchanged between Genie and Lydia over several years which demonstrate Genie and Lydia's mutual knowledge and acceptance of the use of the Bankwest account including fluctuations which benefited one or the other sister at different times, without any objection from the other sister;

(c) the absence of any:

(i) attempts by Lydia to inquire as to large movements of funds in the Bankwest account in relation to the Armadale property despite having access to the account at all times and transacting in the account in 2015 and 2016;

(ii) reference to interest in any of the many communications between the sisters and Bankwest spreadsheets;

(i) Lydia's demonstrated knowledge of the settlement date and the fact that the initial loan application, which Lydia was involved with, was not proceeding; and

(ii) Lydia's understanding of Genie's financial situation at the time in the absence of Lydia's financial assistance,

rendered it impossible on Lydia's understanding that the funds for the settlement of the Armadale property project could have come from anywhere other than the Bankwest account.

425 This issue turns on whether Lydia or Genie's account of a conversation that occurred in Europe in 2015 is to be preferred. Yves, who was present in Europe with Lydia and Genie, did not give evidence about the existence or content of the conversation. There was otherwise no evidence about the conversation.

426 As I have made clear throughout these reasons, where Lydia and Genie have competing versions of events and there is no document to corroborate one version or the other, I prefer the evidence of Genie. Moreover, Lydia, as plaintiff, has the burden of proof.

427 In late 2014 or early 2015, Genie's evidence was that Lydia told her she was not comfortable in the Australian property market and that the industry would not continue to grow. Genie had said she wanted to continue but Lydia had said words to the effect that Genie should not. According to Genie, Lydia, throughout early 2015, repeated her opinion that it was not a good idea to invest in the Australian property market.

428 Next, Genie said that when she told Lydia that she had put in the initial offer for the Armadale property, Lydia said that Genie should use GE & L to purchase it. According to Genie, Lydia said that this would support JiYi.

429 Genie also gave evidence that after she had purchased the Armadale property, Lydia asked for the details of the purchase and the property. Genie's evidence was that she told Lydia that she could expect to get a loan for 80% of the purchase price and that she would need Lydia's assistance in obtaining the loan. Genie recalled Lydia again saying that she was not confident in the Australian property market, but did not rule out completely taking part in the project and that Lydia would help Genie obtain the loan.

430 Finally, Genie's evidence was that in July 2015, she and Lydia had a conversation about the Australian property market. In that conversation:[250]

• Lydia said that she was not confident in the Australian property market and that they should sell the Radnor Street property;
• Genie said that instead of selling the Radnor Street property, Genie would move out of the Radnor Street property if required so that Lydia had a place to live in Melbourne;
• Lydia said that she had no interest in the Armadale property and once Lydia learned that a loan could not be secured to fund the re-development**,** she no longer wanted to participate in the project;
• Genie asked Lydia for permission to use the funds in the Bankwest account to which Lydia agreed. Lydia emphasised that the most important thing for her was that her money was secure;
• Genie said she would repay any funds used at the conclusion of the project;
• Lydia said that she did not want any interest on the funds which Genie borrowed; and
• Genie said that she did not feel comfortable signing documents on Lydia's behalf and needed written authority. Lydia agreed and told Genie to prepare the necessary documents.

431 Lydia largely denied the substance of Genie's version of this conversation. Her evidence was that:

• she did not want to participate in a further development project until the Balwyn project was complete;
• she was not told about the Armadale property or project.[251] When in mid-2016 she found out about the project she was upset and told Genie she was upset. Lydia said that she told Genie that Armadale should have been purchased by GE International. Lydia's evidence was that Genie offered no explanation as to why GE International was not the purchaser;
• there was no discussion about the Bankwest account and Lydia never agreed to let Genie use the Bankwest account to fund the purchase of the Armadale project;
• Lydia denied agreeing to lend Genie money on an interest free basis or at all; and
• she was optimistic about the Australian property market and wanted to expand their property development business.

Did Lydia say that she would not participate in the Armadale project?

432 Looking to the surrounding context, Lydia was aware that: Genie was purchasing a property; the property was settling imminently; and Genie needed to fund this purchase with loans.

433 In WeChat messages sent between Genie and Lydia in June 2015, Genie noted that the principal of an upcoming purchase was $1.815 million[252] and that settlement was going to take place in mid-July.[253] Lydia organised substantial documentation to help facilitate Genie obtaining a loan, including the provision of LeonTec's financials for 2013 and 2014, Gang Wang sealing documents and Lydia's photo identification.

434 Lydia's evidence on this point was that she knew Genie was asking for them to apply for finance for Genie's next development project[254] but that Genie did not tell her that the loan was for the Armadale project and that she did not know otherwise what specific project it was for.[255] Lydia said that she believed the reference about purchase price was in reference to a property in South Yarra.[256] She did not know what specific property was settling in July.[257]

435 Genie's evidence was that she had told Lydia about the Armadale property, that she would need to obtain a bank loan, that as a director of GE & L, Lydia would need to prepare documents to assist in obtaining the loan. Genie said that Lydia told her she was not confident in the Australian property market but had not ruled out participating in the development and that Lydia would assist her as required to obtain the loan. [258]

436 A series of WeChat messages between Lydia and Genie demonstrate that the sisters were going to great lengths to obtain finance. Lydia needed to provide copies of LeonTec's financial information, secure the help of Gang Wang and provide help while on holiday in Europe with her family. Lydia never asked any substantial questions in the WeChat messages about the loan or which property it was for.

437 These efforts make more sense in a context in which Lydia understood that a specific property was settling shortly. Lydia's evidence was that she had not decided on the project but was just assisting for finance pre-approval[259] and was concerned about investing in South Yarra.[260] She conceded that she knew Genie had purchased a property and it was settling in July, but not which property.[261] If Lydia's account is accurate, and Genie was only organising pre-approval for some future development, the sense of urgency underpinning Genie's messages and Lydia's efforts is difficult to explain.

438 Moreover, it is hard to imagine that, in the time that Lydia and Genie travelled in Europe together, the sisters did not discuss the loan Genie required and the nature of the imminent property settlement. In my view, given the closeness of the relationship between the sisters, it is more likely than not that they discussed details of the particular purchase which was settling including the identity of the party.

439 Lydia's lack of enquiries about the loan process and purchase of the property also makes sense in a context wherein Lydia was aware that the purpose of the loan was to purchase the Armadale property and why there was such urgency.

440 I find that, on the balance of probabilities, Lydia knew about the Armadale property.

441 The question then turns to whether or not Lydia said that she did not want to participate in the Armadale project.

442 Lydia's evidence on this point was succinct. She said that she never said that she did not want to participate in the Armadale project because she was not aware of the Armadale project until mid-2016. Instead, she said that she had expressed enthusiasm about continuing to participate in property development but only once the Balwyn project was complete.

443 Genie's evidence was that Lydia was not confident in the Australian property market and did not want to participate in the Armadale project.

444 Lydia would not be involved in the Armadale project until after mid-2016.

445 Lydia's decision not to participate in the Armadale project makes sense on her own account. The Balwyn project was only completed once the final unit in the Balwyn development settled. That unit sold in June 2015 and settled in August 2015.[262] It was not complete in May 2015 when Genie was contemplating the purchase of the Armadale property or in July 2015 when she signed the contract of sale.

446 On Genie's account, Lydia was wary of the Australian property market and did not want to invest. It was consistent with this view that Lydia withdrew from her Australian property portfolio, including the sale of the Radnor Street property, and elected not to begin a fresh development.

447 Whether on Lydia or Genie's account, it made sense that Lydia did not want, or rejected the opportunity, to participate in the Armadale project.

448 That Genie did not send any marketing information or the contract of sale to Lydia prior to the purchase and settlement of the Armadale project is consistent with Lydia stating she had no desire to continue to develop property until after the Balwyn project was complete. Why would Genie send detailed information - such as the sales brochure, the contract of sale or the particular details of the Armadale project - when Lydia did not want to participate? There is no point sending substantial documentation to a person who expressed no interest participating in a project. Genie would be expected to provide details like the contract of sale only if Lydia wished to participate. It is also different from the correspondence between the sisters about the Fordham Avenue property where Genie sent property listings and details about development plans. That was, as initially conceived, to be a property that each of the sisters and their parents could live in. It would require substantial investment from each sister with Lydia contributing funds on behalf of her mother.

449 Because of the dearth of evidence on this point, and my preference for Genie's evidence where her and Lydia's account of events conflict, I find that Lydia had told Genie in about July 2015 that she did not want to participate in the purchase and development of the Armadale property.

Did Lydia agree to lend funds out of the Bankwest account to Genie on an interest free basis to be returned upon completion of the Armadale project?

450 In summary, Lydia's evidence on this point was that she did not agree to lend Genie funds nor was she aware that Genie was using the Bankwest account for her own purposes. Lydia said that, as far as she was aware, it was only being used for the Radnor Street property.

451 Genie's evidence was that Lydia said she could use the funds in the Bankwest account so long as Lydia's money was secure.

452 The Lydia parties submitted that the Court cannot be satisfied that there was any agreement by which Genie could use the funds in the Armadale property on an interest free basis to be returned upon completion of the Armadale property. They said that despite the alleged oral agreement existing, it was never evidenced in writing prior to the filing of the 21 September 2020 amended defence.

453 It was understandable that the agreement was never evidenced in writing at the time it was made. The sisters were on largely good terms until 2017[263] and there were discussions being held as to whether or not Lydia would participate in the Armadale project and to what extent. After that point, the parties engaged in mediation until early 2019.

454 Once the proceeding was issued, the fact that Genie never put the agreement in writing is explained by looking at the pleadings. In regard to the Armadale property, in the Lydia parties' 17 February 2020 statement of claim, they only pleaded that it was purchased by GE & L in its capacity as trustee and sought orders:

(a) declaring that the property was purchased by GE & L as trustee;

(b) vesting the assets of GE & L in LDY including the proceeds of sale and unsold units; and

(c) the disposition of existing proceeds of sale held by GE & L's solicitors for the sale of the units.

455 The 17 February 2020 statement of claim did not deal with the Bankwest account or the monies used to purchase the Armadale property.

456 The Genie parties' defence dated 28 April 2020 only responded to the pleaded claims. It did not address the Bankwest account or the funds used to purchase the Armadale property. The defence pleaded that the plaintiffs have no entitlement to any part of the sale proceeds from the Armadale project.

457 It was in the 30 July 2020 amended statement of claim and the 21 August 2020 further amended statement of claim that the funding of the purchase from the Bankwest account became an issue. In those statements of claim, the Lydia parties pleaded that if GE & L did not purchase the property in its capacity as trustee then Lydia contributed money from her personal account to the purchase and development of the property.

458 In their amended defence dated 21 September 2020, the Genie parties responded to this new pleading by pleading the loan agreement and particularising that it stemmed from a conversation between Lydia and Genie in June 2015.

459 I do not find that the lack of written detail about the loan agreement prior to the filing of the amended defence is compelling evidence which speaks against the existence of the agreement.

460 The Lydia parties also submitted that it was implausible that Lydia would allow Genie to use the Bankwest account for the Armadale project whatever the cost without paying interest on the amount borrowed or receiving a share in the profits.

461 In my opinion, this arrangement was not implausible.

462 Both Genie and Lydia had, up until this point, used the Bankwest account for their own purposes. As discussed elsewhere in this judgment, both had contributed significant funds to the Bankwest account. The account had been used for purposes other than Radnor Street - for the Balwyn and Box Hill projects and for other payments.[264] This mixed use of the Bankwest account, despite the fact that it was the primary bank account for the GE & W Trust and a key source of funding for GE International, reflected the informal nature of the business arrangements between the two sisters.

463 A loan had not been secured to fund the purchase of the Armadale property and settlement was due within weeks of the sisters' trip to Europe. There was an urgent need for funds to ensure settlement could proceed. Both Lydia and Genie had used the Bankwest account. It contained funds contributed by both of them. Lydia had made clear that, from her perspective, the important thing was that the money would be secure and returned to her. The urgency, and Lydia's desire only that the money be secure and returned, is a further consideration weighing in favour of the Genie parties' case.

464 It is important to observe that this arrangement occurs within a background of informality and close familial relationships. As has been noted elsewhere in these reasons, there was a distinct lack of formality in business dealings - Genie would sign documents on behalf of Lydia, accounts were not rigorously maintained and Lydia had effectively outsourced her Australian financial and business arrangements to Genie. Lydia trusted Genie and never felt her funds were insecure.[265] Instead of strict corporate processes and accounting, the relationship between the sisters was underpinned by the unquestioning trust which siblings often have in each other. The sisters had relied on each other for living arrangements: Genie had taken in Lydia and her children when Lydia's marriage collapsed in 2009 and later their two families had lived together in the Radnor Street property. Conversations about business, such as those that occurred in June and July 2015, were interspersed with conversations about securing passports,[266] holiday plans[267] and schools.[268]

465 The conversation in which Lydia agreed that Genie could use the Bankwest account occurred during a July 2015 family holiday to Europe. At that point, there was no ill-will between the sisters and they were were on warm terms with each other. Yves had picked Genie and her family up from the airport. They had visited England and France together.

466 Later events support the notion that there was an arrangement of the kind alleged by Genie. Genie would go on to draw a cheque from the Bankwest account for $1,000,000 on 17 July 2015 for the purchase of the Armadale project. Her so doing suggests that the sisters made the agreement. The alternative was for the entire project to fall over and for Genie to be at risk of losing the deposit she had already paid. Furthermore, despite having access to the Bankwest account, Lydia made no immediate complaint about the withdrawal or use of the funds for the settlement of the Armadale project.

(a) Lydia decided not to participate in the Armadale project; and

(b) Lydia agreed to lend funds to Genie, on an interest free basis, that would be repaid upon completion of the Armadale project.

4. Did Lydia and Genie otherwise enter into any and what loan agreement for any and what sum in respect of the purchase and development of the Armadale property?

468 The Lydia parties' position was that the Court cannot be satisfied on the evidence that any loan agreement was entered into. First, they alleged the loan agreement was oral and never evidenced in writing prior to the filing of an amended defence in September 2020 despite extensive discussions about the Armadale property project and the Bankwest account. Secondly, they argued that it was implausible that there was a loan of any amount of money or that Lydia would help with the Armadale property project whatever the cost without having an interest or a share of the profit.

469 They submitted that the allegation that any loan existed lacks credibility and ought not to be accepted.

470 The Genie parties submitted that as far as it was relevant to this proceeding, no loan agreement other than the one discussed above was entered into.

471 They do acknowledge that GEY Investment Pty Ltd ("GEY") (Yves and Lydia's company) advanced funds to finish the project pursuant to an agreement between Lydia and Yves and the funds have been repaid to GEY, which is not a party to this proceeding.

472 Both parties ultimately submitted that the answer to this question should be no.[269]

473 I have found that Lydia and Genie had an arrangement between them for Genie's use of the Bankwest account to purchase the Armadale property. Aside from the later funds GEY advanced to GE & L to complete the development of the Armadale property (which were repaid), there was no other loan between Lydia and Genie pleaded, argued or evidenced.

474 In total $2,370,140.20 was withdrawn from the Bankwest account for the Armadale project.[270]

5. If yes to the preceding question, what were the terms of the alleged loan agreement?

475 I have set out above the understanding between the sisters regarding funds and how they would be used. In summary, Lydia agreed that Genie could have access to the Bankwest account so long as any funds used were returned upon the completion of the Armadale project.

476 Because the parties agree that the answer to the previous question is no (albeit for different reasons), this question does not require a decision.

6. Should the Court make an order under section 175 of the Corporations Act 2001 (Cth) rectifying the ASIC register for GE & L to reflect that: (a) Lydia is the sole director of GE & L; Gang Wang is the holder of 10 of the 100 ordinary shares issues in GE & L; and (c) Lydia is the holder of 90 of the 100 ordinary issues in GE & L?

(a) Lydia and Gang Wang's transfer of 45 shares in GE & L to Genie as provided for in the first form 484 and lodged with ASIC was not valid;

(b) Genie's appointment as director of GE & L on 5 March 2014 as provided for in the first form 484 and lodged with ASIC was not valid;

(c) Lydia's transfer of 41 shares and Genie's transfer of 45 shares in GE & L to GECW as provided for in the second form 484 and lodged with ASIC was not valid;

(d) Lydia's removal as director of GE & L as provided for in the second form 484 and lodged with ASIC was not valid; and

(e) Lydia's transfer of 14 shares in GE & L to GECW as provided for in the third form 484 and lodged with ASIC was not valid.

Rectification of ASIC Records and Member Register

1. In regard to ASIC and the members register, the plaintiffs submitted that rectification is required so that both registers show Lydia is the director of GE & L, holds 90 out of 100 shares and that Gang Wang holds the remaining 10 shares. They said that ss 175 and 1322 of the Corporations Act 2001 (Cth) ("Corporations Act") grants the Court the power to order such rectification.
2. The Lydia parties said that the three form 484s lodged with ASIC were not valid because:

(a) the Court should reject Genie's evidence that she was verbally directed to lodge them or that a verbal agreement existed between the sisters by which Lydia authorised Genie to make the changes; and

(b) there was a lack of due corporate process because no instrument of transfer was signed by the vendor and purchaser as required by the constitution of GE & L and the Corporations Act. Moreover, Genie's removal of Lydia as a director was not in compliance with the constitution of GE & L.

1. The plaintiffs said that there are several reasons to reject Genie's contention that she received verbal directions or that a verbal agreement existed authorising her to lodge the forms.
2. First, Genie lacked credibility and consequently her version of events should be rejected. They pointed out that Genie signed the document on behalf of Lydia and a copy of the form was never sent to Lydia. They allege that this was a breach of section 1308 of the Corporations Act. They also said that Genie's assertion that she had sent a company search showing the changes on 21 February 2014 was blatantly false as the changes did not occur at ASIC until 26 February 2014.
3. Secondly, the necessary elements for an agreement were not established. The Lydia parties cite Mahoney JA in Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd:[271]

"[D]id the parties arrive at a consensus? (if they did) was it such a consensus as was capable of forming a binding contract?; and (if it was) did the parties intend that the consensus at which they arrived should constitute a binding contract?"

1. The constitution of GE & L was the agreement between members of GE & L and between the directors and the members. It provided a process to follow. Given this, the Lydia parties said that it was apparent that the parties contemplated that a binding agreement would only be formed upon the delivery of signed written instruments of transfer in compliance with cl 107 of the constitution of GE & L. Clause 107 of the constitution states:

"A person may transfer shares to another person by a document in the usual or common form or in some other form approved by the directors, signed by both the transferor and the transferee. The transferor remains holder of the shares until the transfer is registered."

1. The constitution also provided for the appointment and removal of directors in clauses 7 and 8 of the constitution. Those clauses provide that:

"Appointment and removal of directors

1. The company or the directors may appoint a director, remove a director, or do both, by passing a resolution at a general meeting of the company.

The directors may appoint a director either to fill a casual vacancy or to add to their number. A director appointed by the directors ceases to be a director 6 months after the date of his or her appointment unless the appointment is confirmed by the company's passing a resolution at a general meeting.

Retirement of directors

1. A director may retire from office by giving written notice to the company at its registered office. The resignation is effective at the time stated in the notice, provided it is after the time the notice was given. If not, the notice is effective immediately it is given."

1. Moreover, the Lydia parties argued that essential elements of the agreement were missing.[272] There was no agreement as to purchase price, Gang Wang did not consent to the first transfer and GECW was not identified as the purchaser.
2. As a result, the plaintiffs submitted, the Court cannot be satisfied that any consensus was reached or that any alleged discussion was capable of forming a binding agreement.
3. Thirdly, they said that any alleged verbal agreement lacks plausibility. Lydia's decision to transfer the shares in her family trust's trustee to Genie and resign as director is said to have an air of "implausibility and unreality" insofar as it does not make sense and does not imply informed consent.

1. The lack of proper corporate process in the transfer of shares and removal of Lydia as director is, the plaintiffs said, by itself and irrespective of Lydia's behaviour, enough to warrant rectification of the ASIC and members register. They first pointed to non-compliance with cl 107 of the constitution of GE & L. Next, they said that the transfer was not compliant with section 1071B of the Corporations Act which is in the following terms:

Instrument of transfer

...

(2) Subject to subsection (5), a company must only register a transfer of securities if a proper instrument of transfer (see subsections (3) and (4)) has been delivered to the company. This is so despite:

(a) anything in its constitution; or

(b) anything in a deed relating to debentures.

(3) An instrument of transfer is not a proper instrument of transfer for the purposes of subsection (2) if it does not show the details, specified in the regulations, in relation to the company concerned.

(4) If the transfer of the securities is covered by Division 3 of this Part, then (in addition to subsection (3)), the instrument is not a proper instrument of transfer for the purposes of subsection (2) unless it is a sufficient transfer of the securities under regulations made for the purposes of that Division.

(5) Subsection (2) does not prejudice the power of the company to register, as the holder of securities, a person to whom the right to the securities has devolved by will or by operation of law.

1. The plaintiffs submitted that, in respect of s 1071B of the Corporations Act, the following principles can be discerned from the authorities:

(a) section 1071B of the Corporations Act provides that, subject to two exceptions that are not presently relevant, a company may only register a transfer of securities if a proper instrument of transfer has been delivered to the company;[273]

(b) a traditional form of share transfer signed by a transferor and transferee in relation to shares in a company effected otherwise than through a broker could constitute a "proper instrument of transfer" within the meaning of s 1071B(2) of the Corporations Act;[274]

(c) there is a public interest in maintaining the integrity of:

(i) the mechanisms for and in the adoption of the proper process for the removal of officers and the transfer of shares; and

(ii) the records maintained by ASIC;[275]

(d) the High Court has recognised the significance of the interest of a shareholder in his or her shares;[276]

(e) the Court should not permit the shareholder's interest to be expropriated other than in a manner permitted by the Corporations Act;[277]

(f) the mechanisms for the proper transfer of shares and proper change of office holders exist for the protection of the community generally and not only for the benefit of model corporate citizens;[278]

(g) the public interest and the administration of justice would be undermined if any application challenging the improper transfer of shares or the improper removal of a director seeking to correct an incorrect record maintained by ASIC could be met by a collateral attack on the character or behaviour of the shareholder or officer, delaying the resolution of the dispute or making it too costly for that shareholder or officer to vindicate his or her rights;[279]

(h) if the process leading to entry of information as to the directors and shareholders of a company was not properly founded in any corporate process, then the register should be rectified on that basis and the form 484s be withdrawn from the register kept by ASIC.[280]

1. The plaintiffs said that even if Lydia acquiesced to the form 484s, there were still no steps taken to ensure the transfer and change in directorships were in compliance with the Corporations Act. Consequently, it was immaterial whether Lydia gave any direction to Genie.

1. The defendants first submitted that there is a threshold issue in relation to s 175. That is, that the ASIC register is not a register kept by a company or scheme under Part 2C of the Corporations Act. As such, the plaintiffs are not entitled to the relief sought.
2. In any case, the defendants submitted that the plaintiffs' claim would nevertheless fail.
3. They said that the applicable principles regarding s 175 of the Corporations Act were summarised by Sifris J in HWG Holdings Pty Ltd v Fairlie Court Pty Ltd[281] as follows:

"This section does not confer jurisdiction on the Court to rectify the register. Rather, the section assumes the Court has jurisdiction as part of the general power of courts of equity.

In Grant v John Grant & Sons Pty Ltd, Fullagar J held:

The power to order rectification of the register must clearly, I think, be in all cases discretionary. The person claiming rectification must show that he has some equity which the court will protect. If he is a shareholder, then prima facie he shows such an equity if he establishes that a name is wrongly included or omitted from the register of his company. Some definite reason must be shown, I would think, for refusing rectification before rectification will be refused. But there may be circumstances which justify, or even compel, refusal ...[T]he power of a court of equity to order rectification is no more and no less than a part of its general jurisdiction to "act in personam" in aid of a legal right, and it must be subject to the same principles which apply generally to equitable remedies.

The Court's power to rectify the register is exercised to give effect to some legal or equitable right on the part of a plaintiff. An explanation of the practical advantages of rectifying the register is required for the Court to exercise its power of rectification. The register may be rectified nunc pro tunc or as of the date of the court's orders."

1. The discretionary and equitable nature of the remedy granted by s 175 means that general law principles of rectification are relevant. Those draw attention to where the position as recorded in a document reflects the common subjective intention of the parties.[282]
2. The applicable principles have been further described by Rees J in Re Pacific Springs Pty Ltd:[283]

"... as Young CJ in Eq noted in Kirwan v Cresvale Far East Ltd (in liq) (2002) 44 ACSR 21; [2002] NSWCA 395 at [335] (Meagher JA agreeing with Young CJ in Eq on this issue):

...An application to set aside an allotment of shares on the basis that the allotment was an improper exercise of the directors' duties, is a claim in equity. Even though s 175 of the Corporations Act gives statutory authority for the correction of the register, the correction is ordered applying the principles of equity.

As such, the relief is equitable in nature and an order seeking rectification under section 175 of the Corporations Act is discretionary: Re Motasea Pty Ltd (2014) 97 ACSR 589; [2014] NSWSC 69 at [47] per Black J; Re Centura Global Holdings Pty Ltd (2016) 111 ACSR 185; [2016] NSWSC 62 at [53] per Black J. Accordingly, the plaintiffs' relief is subject to be refused on the established bases for refusing equitable relief, including by reason of delay, laches, acquiescence and hardship."

And by Young CJ (with whom Meagher JA agreed) in Re Pacific Springs Pty Ltd:[284]

"It is axiomatic that equity does not allow claims to be made unless the claimant offers to 'do equity'."

1. The Genie parties submitted that the form 484s brought about a change in the registration, shareholding and directorships of GE & L which reflected the common intention of the parties. The evidence showed that Lydia was aware of, directed and agreed with these changes.
2. As such, it would be contrary to equity to enforce compliance with formalities contrary to the intention of the parties and Lydia's informed consent or acquiescence.
3. Beyond the principles of equity, the Genie parties made specific arguments about the allegations raised by the plaintiffs.
4. In respect of Genie's signing of the form 484s on behalf Lydia, they submitted that Lydia authorised this and, therefore, the signature was not invalid.
5. Next, they submitted that the power of attorney signed by Lydia and backdated to 10 July 2015 would lead to an estoppel by deed which would ratify Genie's actions on 15 and 16 July 2015 to change the shareholding and directorships.
6. Thirdly, on Genie's evidence neither Lydia or Gang Wang signed the GELD & W (as it then was) constitution. In those circumstances, at its highest, neither Lydia or Gang Wang can establish a right or equity which should be protected. At the least, any right or equity that Lydia or Gang Wang could establish would not be greater than the corresponding right or equity of GECW and Genie.
7. The Genie parties then submitted that there was no utility in amending the ASIC register because GE & L is no longer the trustee of the GE & W Trust and has no assets other than the funds in court. What happens to those funds in court depends on the rights of the parties as determined in this matter.
8. Fifthly, Genie has borne personal financial risk as guarantor of a loan and has undertaken significant labour without remuneration or reward other than the reward GECW will be entitled to as shareholder of GE & L. If the orders sought by the plaintiffs are made, then Genie will be denied any benefit from the work undertaken and Lydia and Gang Wang will receive an undeserved windfall.
9. Further, the Genie parties contend that Lydia was aware at all times of the work Genie undertook on the Armadale property. Despite this, she made no attempts to rectify the register until the work was substantially complete and a profit nearly realised. They said that Lydia should not be permitted to alter the register without doing equity to Genie and that no such offer has been made. Lydia had not offered to pay Genie for the management and related work she had undertaken in connection with the Armadale project.
10. Finally, an order to rectify the ASIC and members register would cause significant legal difficulties including that:

(a) Gang Wang never signed the GE & L constitution nor an application for shares. Any amendment of the register to reinstate Gang Wang as a shareholder would lead the Court to authorize an irregular shareholding;

(b) Genie's evidence is that she signed the necessary documents for Lydia. Consequently, an order reinstating Lydia as shareholder would have the same result as reinstating Gang Wang;

(c) for the reasons described in (a) and (b), any equity or interest Lydia pursues is as tainted as the interest she seeks to defeat because she does not seek relief with clean hands;

(d) section 201A of the Corporations Act requires that a company must have a director who is ordinarily resident in Australia. Lydia is not ordinarily resident in Australia and any such order restoring Lydia's directorship would be a breach of the Corporations Act;

(e) the current ASIC register reflects the members register and the proposed alteration would mean that the ASIC register would be in error; and

(f) documents Genie signed on behalf of GE & L could be made voidable. This includes the contract to purchase the Armadale property, the building contract with Hongwei Constructions, the contracts of sale for the six developed apartments on the Armadale property and any taxation document Genie signed.

1. In summary, the defendants argued that there would be little practical utility in ordering a rectification under s 175, that any such order would be contrary to equitable principles and effect a breach of the Corporations Act.

1. In addressing this issue there is a preliminary matter to be dealt with.
2. The plaintiffs, in the prayer for relief, seek orders rectifying "the ASIC Register" (sic) for GE & L under s 175 of the Corporations Act. This section has no application in the context. It is directed to companies and registered schemes which are covered by the provisions in Part 2C.1 of the Corporations Act. It is not concerned with ASIC. For this reason, I would not make the rectification orders sought by the plaintiff regarding the so-called ASIC register.
3. If I am wrong about this, I move on to consider the other arguments advanced.
4. I accept that the Court has power to rectify a register by directing ASIC to change information which is validly and correctly entered on a register in compliance with law as well as information which is invalid or incorrect.[285] But such amending orders are made pursuant to s 1322(4)(b) and not s 175 of the Corporations Act.[286] The plaintiffs' opening submissions made reference only to Part 2C of the Corporations Act and s 175.[287] I acknowledge that the plaintiffs made a throwaway reference to s 1322 in their closing submissions[288] saying that it was a section which "also gives power to the Court to rectify ASIC records". However, it was not a major part of the plaintiffs' case as presented at Court. In any case, the points made below hold good.
5. Further, insofar as the plaintiffs seek an order directing ASIC to rectify the registers it keeps, it appears that ASIC itself should be a party to the application, or at least be given notice of the application so that it can be heard by the Court as a party directly affected by the relief sought.[289] The plaintiffs did not draw the Court's attention to any evidence which suggested that the plaintiffs had notified ASIC of the relief sought, much less joined it as a party.
6. More generally, the plaintiffs' reliance on s 175 of the Corporations Act is subject to the usual matters which arise in relation to the grant of equitable relief. It is clear from the authorities referred to earlier that the relief sought is equitable in nature and that the Court has a discretion regarding the grant of rectification under s 175. The relief is subject to normal equitable principles. The Court can refuse relief due to factors such as delay, laches, acquiescence and hardship. It can also refuse relief if the party seeking the same does not offer to "do equity".
7. For the reasons which follow, I am not disposed to order the relief sought by the plaintiffs under s 175 of the Corporations Act.
8. First, in short, the changes made to the directorship and shareholding of GE & L were made at the request of, and with the knowledge and consent of, Lydia. I accept that the methodology adopted to effect the changes did not comply with the constitution of the company and/or the Corporations Act. But it seems to me unsatisfactory for the plaintiffs on the one hand to seek and direct those changes and then subsequently, to apply to have them set aside and reversed.
9. Genie gave evidence that in February 2014 Lydia told her to change the name, directorship and shareholding of GELD & W. Lydia denies this and says that, if at the time she was aware of the changes about to be made, she "would never have allowed" those changes to happen. However, in my opinion, the evidence indicates that Lydia was aware of the changes.
10. According to both Genie and Lydia, in February 2014, Lydia was living in China. Genie said that she and Lydia had a conversation around that time in which Lydia said that:
    • she intended to set up a company in Shanghai's free-trade zone;
    • she wanted Genie to change the name of GELD & W to GE & L International Investment Pty Ltd. Lydia said that she wanted the W removed from the company name because it represented Wang, her former husband, and he was not going to be part of the company in the future;
    • Lydia suggested the new name. She said that Lydia and Genie had GE as their surname and L as the initial for their given names;
    • if GE & L were unavailable, they should try for GE & LDY - L was the first letter of their given names, D was the first letter of the end part of Lydia's given name and Y was the first letter of the end part of Genie's given name;
    • she required a foreign investor in the new company and intended that it should be GE & L;
    • she could not be the sole director in the foreign investor company and wanted Genie to be joined as another director of GE & L. She also asked Genie to change the shareholding so that Lydia held 55 shares and Genie held 45 shares.
11. Lydia denied Genie's account of events. She agreed that in February 2014, she discussed with Genie and Grace her intent to establish a new company in China called JiYi which would conduct an import/export business. She incorporated the company in June 2014 and deregistered it in December 2018. The company was required to have at least one foreign, that is non-Chinese, shareholder. Lydia never operated or invested funds in JiYi. Lydia said that Genie changed the name, directors and shareholding of GELD & W without her knowledge and consent. Lydia said she found out about the changes only in July 2016 when she returned to Australia.
12. Genie's first 21 February 2014 email to Philip Wu was in Chinese and copied to Lydia through an email address she had, namely, gldge@126.com. Lydia said that she thought this email to Philip Wu referred to a new company.[290] In cross-examination, Lydia said that she did not use this email address for work purposes. She said that she used it for some advertisements and spam emails.[291] This is inconsistent with the documentary evidence. In October 2010, Genie sent a breakdown of the costs associated with the Radnor Street property.[292] Lydia received and responded to this email. Genie sent information relating to international bank transfers to that email account in November 2013.[293] In January 2014, Genie sent further accounting documents to this email address.[294] When this was put to Lydia, she said that she only checked the email address when Genie told her to.[295] However, it seems from the evidence at trial that no alternative email address was used before 21 February 2014.[296]
13. Lydia also said in evidence that she "mainly [did] not use email" for work and that in China she conducted business face to face or on the phone.[297] This appears inconsistent with written evidence which shows reasonably detailed discussions about business matters via email.[298] Lydia is a businessperson with a range of business interests in China and Australia who used email as a medium for business communications. I do not accept that she failed to read the 21 February 2014 email entitled "Company information for GELD & W". The email outlined the changes to GELD & W, including the change in shareholding, company name and appointing Genie as director. Genie sent a second email later on 21 February 2014 providing Wu with a company statement from 7 September 2012.[299] She also copied this email to Lydia and set out the company's shareholding and officeholding details as at that earlier date.
14. Genie said that she signed on behalf of Lydia a form 205 that was received by ASIC on 26 February 2014.[300] The form stated that on 24 February 2014, the company resolved to change its name with immediate effect. This was a change which Genie had emailed Wu a few days earlier.[301] Lydia says that Genie was not authorised to lodge the form 205 because she was not a director at the time, there was no resolution to change the name of the company and Genie was not authorised by Lydia or Gang Wang.

521 To set up JiYi, Lydia was required to provide notarised copies of documents relating to GE & L. Lydia contacted Genie on 25 March 2014 with instructions from Lydia's Chinese lawyer about the documents and steps required to assist in the registration of JiYi.[302] A notable aspect of this exchange was that Lydia called the company "GE & L" in her email to Genie. Genie replied by emailing the notarised documents to Lydia on 9 April 2014. Those documents included a "Notarial Certificate" which certified as a true copy, inter alia, a certificate showing that GELD & W had changed its name to GE & L. It also certified a copy of Genie's passport and a letter of confirmation from the CBA.[303] On the following day, 10 April 2014, Lydia sent an email to Genie saying "Documents received. Thanks!".[304] In my view, Lydia would have known by 10 April 2014 or soon thereafter that GELD & W had changed its name to GE & L. The notarised documents, especially the certificate about the change of company name, confirmed the earlier email from Genie to Wu (and copied to Lydia) dated 21 February 2014. Genie was doing exactly what Lydia asked her to do.

522 In her evidence, Lydia agreed that the documents which Genie sent her on 9 April were the notarised documents which she had earlier asked Genie to send. Lydia also said that her assistant or agent used the documents to arrange for the registration of JiYi. Lydia said that when she first got Genie's email with the attached documents, she received them on her phone and was unable to open the attachment. Assuming that was correct (and I do not necessarily accept that evidence as true) I would nevertheless expect and infer that Lydia examined the notarised documents later. I expect that she would have been interested to check that Genie had sent what was required by the Chinese authorities in order to procure registration of the company in China. Also, I expect she would have looked at the documents when providing them to her assistant to ensure that the assistant could attend properly to the administrative task required to achieve registration.

• Lydia asked for the changes to be made in relation to GELD & W;
• Genie informed Wu by email (and copied Lydia) about the proposed changes as set out in the email of 21 February 2014;
• Lydia received the notarised documents and was informed of the change of name for the company by early April 2014; and
• The changes in relation to GELD & W were made with Lydia's knowledge and at her request.

1. The fact that Genie might sign documents for Lydia or do other things to help Lydia before the rupture in family relations was quite common. Genie assisted Lydia where she could and did as she was asked by her older sister whether signing the transfer of a unit in the Balwyn property to the purchaser,[305] signing the consent for GELD & W to act as trustee[306] or the GE & W discretionary trust deed[307] for Lydia. Lydia raised no issue with Genie signing these documents on her behalf and at her request but complained about the changes to the name, directorship and shareholdings in GELD & W. Even then, Lydia raised her complaints not close to the time Genie made the changes, but a number of years later when relations between the sisters were acrimonious.
2. Secondly, various discretionary factors which are relevant to the grant of relief under s 175 militate against the claims of the plaintiffs.
3. It would be contrary to established equitable principles of rectification to alter a company register in a way which was contrary to the common intention of the parties.[308]
4. Because Lydia drove the changes and asked Genie to carry them out, it means that Lydia agreed to, and acquiesced in, the changes even if they were not made strictly in accordance with the constitution of the company and/or the Corporations Act. In circumstances where Genie agreed and was willing to carry out her sister's wishes, the new state of affairs in relation to GELD & W after the changes were made effectively represented the effect of a new agreement between Lydia and Genie with respect to the subject matter of the changes.
5. Because Lydia knew about the changes from around early 2014 and acquiesced in their implementation, it would not be appropriate to now seek to overturn those changes. Further, even if she had not agreed to, or acquiesced in, the changes made in relation to GELD & W, she ought not to have delayed for so many years before seeking to rectify them.
6. Apart from short periods when he visited his family in Melbourne, Gang Wang lived in China. He did not sign GELD & W's constitution or any application for shares in the company. Genie says that the position was the same for Lydia in that she did not sign those documents either. If I accept that (as I do),[309] it means that neither Gang Wang nor Lydia has established an entitlement in law or equity which should be protected by rectifying the company register. Alternatively, to the extent that they might have some interest worthy of protection, that interest does not have a higher value than the corresponding entitlement of Genie and GECW.
7. GE & L is no longer the trustee of the GELD & W discretionary trust. LDY has been the sole trustee of Lydia's family trust since 15 May 2019. It was made a trustee of that trust on 1 November 2018. Given that GE & L is not the trustee and has no assets except for the funds in court in this case, there is no practical utility in making changes which reinstate the former position. The Court will determine what is to happen with the funds in court. Once they are disposed of, GE & L will have no immediate role and no assets.
8. Because before the acquisition of the Armadale property, Lydia did not wish to be involved in the purchase and redevelopment of the property, Genie assumed responsibility for the project. She arranged the bank loan for the company and, importantly, was the sole guarantor of the loan. GE & L contracted to buy the property in about June 2015 and the sale of the last unit in the redeveloped property settled in June 2023. Genie had a major role throughout the life of the project and was not paid a wage or consulting fee for her work in managing the project. If GECW were removed as the shareholder of GE & L and replaced by Lydia and Gang Wang, Genie would not receive any benefit for the work she did. The whole of the benefit from the project would flow to others. Lydia was aware from her discussions with Genie in 2015 and subsequently that Genie had bought the Armadale property and was redeveloping the same. Lydia made no attempt to rectify the changes to the name, shareholding and directorship of GELD & W until a significant part of the work on the redevelopment was completed. Nor did Lydia offer to pay Genie for her work or acknowledge the financial risk she took in being the sole guarantor for the loan which GE & L obtained to buy and redevelop the Armadale project.
9. In the circumstances already discussed, one would expect that in order to obtain equitable relief, Lydia would offer to do equity towards Genie and recognise her contribution to the success of the redevelopment of the Armadale property. However, Lydia has not offered to do equity and to compensate her for her work and effort in bringing the project to fruition.
10. Given Lydia's conduct in:
    • not signing the company's constitution and an application for shares herself;
    • seeking the changes to GELD & W she now complains of;
    • enlisting Genie's help to effect the changes;
    • later wanting to rectify the changes;
    • not doing equity towards Genie

there is a sound basis for saying that Lydia (and the other parties associated with her) have not sought equity with clean hands.

1. Thirdly, on 10 July 2015 Lydia gave Genie a power of attorney under which Lydia authorised Genie to do on her behalf anything which she might lawfully authorise an attorney to do. This underlined the authority which Genie had to act on Lydia's behalf and the extent of the trust which existed between the sisters. The power of attorney is important also for the authority which it gave Genie to sign other documents. In particular, this power of attorney arguably gave Genie the power to sign the form 484s signed in July 2015 and direct Wu file them with ASIC on behalf of GE & L. The power of attorney being in force at the time means that, whether or not Genie was acting under the express instructions of Lydia to make the specific changes, she had the legal authority to make them and could effect the business arrangements as Lydia desired.
2. Fourthly, the plaintiffs seek rectifying orders so that:
   • Lydia is the sole director of GE & L;
   • Gang Wang holds 10 shares in GE & L;
   • Lydia holds 90 shares in GE & L.
3. If the Court made a rectification order of the kind sought by the plaintiffs, it would have the potential to create some issues. They could arise because:

(a) Gang Wang did not sign GELD & W's constitution or any application for shares. Rectifying the company register to give Gang Wang a shareholding in these circumstances would itself be irregular and contrary to law.

(b) Lydia did not sign GELD & W's constitution or application for shares. Her position is the same as Gang Wang's in this respect. Further, the same applies to making Lydia a director of the company when she did not sign a written consent to accepting such a position.

(c) Section 201A of the Corporations Act requires that a company have at least one director ordinarily resident in Australia. If Lydia is the sole director of the company and she ordinarily resides in China (as she does), then the Court would be making an order, the effect of which was to contravene a provision of the Corporations Act.

1. Finally, there could be a threat of litigation as persons or entities which relied upon documents signed by Genie on behalf of Lydia might seek to avoid or challenge transactions which they entered. These could include the purchase of the Armadale property, the building contract with Hongwei, and the contracts for sale of the six apartments.
2. In summary, the Court should not make an order under s 175 of the Corporations Act because it would be contrary to established equitable doctrine, involve contravention of the Corporations Act and potentially invalidate completed transactions because Genie lacked authority to act.

7. If Lydia did not agree to lend her funds in the Bankwest account to Genie to assist in funding the Armadale property project, then did the use of her funds from the Bankwest account create a proportionate resulting trust in her favour in the Armadale property project? And if so, what is her proportion?

539 The plaintiffs contend that the proportions of profit stemming from the sale of the Armadale property should be in proportion to the contributions of each party.[310] Consequently, Lydia submits that Genie should only be entitled to 11.66% of the proceeds of sale as that was her contribution. By contrast, Lydia says that she contributed the entirety of the funds from the Bankwest account in addition to funds sourced outside the Bankwest account as described in Annexure 2 of Genie's July FBP:[311]

540 The defendants said that even if no agreement is found to have existed, any presumption of a resulting trust would be rebutted. The particular reasoning would depend on the findings of the Court:

(a) on the evidence of Lydia and Genie's longstanding approach to the balance of funds in the Bankwest account, if there was a discrepancy in the funds in the account in favour of one sister, then there was no intention that that sister would gain a legal or beneficial interest in the property of the other; and

(b) if it is accepted that Lydia had decided that she did not wish to participate in the Armadale property project, she could not have intended to convert her cash into a financial interest in the property because this would expose her to the risk of financial loss that she sought to avoid.

541 Genie contended that the Court could not simultaneously find that Lydia intended to invest in the Armadale project and that she wanted to protect her capital by not investing in that project in 2015.

542 I have found that the Bankwest account contained mixed funds with both Lydia and Genie contributing funds to the account. I have also found that there was a loan agreement between Lydia and Genie regarding the purchase and development of the Armadale property. Accordingly, this question does not need to be decided. Of particular note is that, on both parties version of events, Lydia did not express an interest in investing in the Armadale project in July 2015.

543 However if I am wrong about those findings, then I would find that a resulting trust exists by which each party is entitled to profits in proportion to their contribution to the purchase price.

544 A resulting trust is a presumption that can, unless rebutted, arise when two or more persons pay the purchase price of property in different proportions. Equity will presume that the person to whom the legal title is transferred holds that property upon resulting trust in favour of the other contributor in proportion to that person's contribution.[312]

545 A total of $5,220,176.81 was used for the purchase and development of the Armadale project.[313] If a resulting trust does exist, I would find that the profits of the Armadale project are to be in the following proportions:

(a) If the Bankwest account only contained Lydia's money then Genie's contribution was only $477,030.61. Genie then paid Lydia $961,000 in 2017. This would bring the total of her contribution to $1,438,020.61. This would give her an entitlement to 27.55% of the profits of the Armadale project.

(b) B8 contributed $603,032 which would entitle it to 11.55% of the profits.

(c) GE & L, by way of the loan from the CBA, contributed $1,130,200 which would entitle it to 21.65% of the profits.

(d) Lydia contributed, by way of funds outside of the Bankwest account and the Bankwest account, $3,009,923.20. Genie repaid her $961,000 in 2017. As such, she would be entitled to 39.25% of the profits.

8. If not otherwise resolved by the above issues, who is entitled to the contributions made from the Bankwest account to GE & L for the purchase and development of the Armadale property project in any and what proportions?

546 As the account holder of the Bankwest account, the plaintiffs submitted that she is entitled to 100% of the contributions made from the Bankwest account to GE & L for the purchase and development of the Armadale property. They said that she is entitled to 100% of the contributions because Genie has not proved that she contributed any funds from the Bankwest account to the purchase and development of the Armadale property.

547 Citing Boscawen v Bajwa[314] the plaintiffs said that where money can be traced into improvements on the land and an increase in the value of underlying land, the Court can order a charge over the land so long as the other party is a wrongdoer.[315]

548 The Lydia parties contended that Genie's claim that the deposits she made into the Bankwest account exceed her withdrawals is not made out. They argued that, instead, there is a shortfall and if any excess existed then it is not traceable into the Armadale property and Genie would have a claim in money terms against Lydia.

549 They said that the tracing exercise that Genie attempted in her defence[316] and further and better particulars of her defence[317] is convoluted and assumes the account is a joint account, which it is not. Nevertheless, it does disclose that Genie withdrew $3,131,571.6 for personal use from the Bankwest account. That Genie completed this exercise does not mean that Genie has a claim against GE & L or Lydia and they underline that tracing is not a claim or a remedy but merely the process by which a claimant demonstrates what has happened to their money.[318]

550 Finally, the Lydia parties said they rely on the expert evidence of Meredith who concluded that apart from contributions or loan advances by Genie's companies to GE & L, none of the monies claimed by Genie to be contributed by her to the Bankwest account can be traced into the Armadale property.

551 The funds in court belong to GE & L and, prima facie, belong to GE & L to be distributed in accordance with the wishes of its director. They said that it is for the Lydia parties to establish an entitlement to GE & L's funds and that, if the plaintiffs have not otherwise been found to be entitled to some of the funds in court, then they should be released to GE & L.[319]

552 The Genie parties acknowledge that Lydia is to be repaid $518,776.52 pursuant to the 10 July 2015 loan agreement, subject to any offset.

553 I have set out above findings as to who contributed to the purchase and development of the Armadale property. In summary, the funds Genie used from the Bankwest account were monies borrowed on an interest free basis to be returned upon completion of the project.

554 If I am wrong about those findings, then I would have found that Genie made significant contributions to the purchase of the property using her own funds.[320] I would also have found that any further Bankwest funds used by Genie, if not repaid by Genie, were Lydia's contributions. Moreover, the $1,000,000 drawn from the Bankwest account would be considered Lydia's contribution.

555 I would have found that the contributions to the purchase and development of the Armadale project are those amounts set out above at paragraph 554.

9. If not otherwise resolved by the above issues, who is entitled to the net profit earned by GE & L in respect of the purchase and development of the Armadale property project and in which proportions?

556 The Lydia parties said that because GE & L purchased the property in its capacity as trustee that LDY, as the current trustee, is entitled to 100% of the profit less Genie's contribution.

557 In the alternative, if the property was not purchased by GE & L in its capacity as trustee, then the profits should be determined in accordance with the dividend payable proportional to shareholding once the ASIC register is restored. Therefore, Lydia would be entitled to 90% of the profit less Genie's contribution.

558 In the further alternative, the plaintiffs submitted that, if a resulting trust is found, then the entitlement to profit is calculated by reference to contributions. The plaintiffs relied upon the defendants' pleading which is found above.[321] As such, they said that Genie would therefore be entitled to $176,328 being 11.55% of the net profit before company tax.

559 The Genie parties' reiterated their arguments for the preceding two questions found above.[322]

560 I have found that GE & L purchased the Armadale property in its own capacity. I have not ordered a rectification of ASIC's register. I have not found that a resulting trust exists over the property. Consequently, this question does not need to be answered. However, I will briefly address the alternatives raised.

561 If I am wrong about the first of those conclusions, I would have found that the Armadale property was purchased by GE & L in its capacity as trustee, and that LDY as the current trustee is entitled to the profits from the project.

562 If I found that GE & L purchased the property in its own right and I had ordered rectification of the register, then the profits would be payable at the discretion of the director of GE &L to the shareholders of GE & L.

563 If I had found that a resulting trust did exist, then the profits would be distributed in the proportions set out at paragraph 554 of these reasons.

10. What order should the Court make for the disposition of the funds held in Court?

564 I will hear the parties on the questions of costs and form of final order. The parties should file and serve written submissions and any supporting material on these matters by 4:00pm on 22 November 2024. The submissions are limited to eight A4 pages, a minimum 12-point typeface, 1.4 spacing and 40mm margins on either side of the page. Unless I consider it otherwise necessary, I will decide the issue of costs and form of final order on the papers.

GE & L INTERNATIONAL INVESTMENT PTY LTD (ACN 139 294 590)

[3] CB1381. The form 484 contains a range of different dates on it. Genie's evidence was that resignation occurred on 17 November 2010, which appears to be the same date that the form 484 was registered.

[4] Lydia's evidence was that it sold in September 2011 see exhibit P1 at [91]. However, the transfer of land is dated 10 August 2011, see CB1384.

[5] I infer that GECW effectively accepted a transfer of the shares which Lydia and Genie disposed of.

[9] CB4244. This is the same account as noted in paragraph 11 of these reasons.

[10] Plaintiffs' closing submissions at [13].

[13] In April 2019, Genie visited Lydia at her Beijing home, P2 at [64](f).

[15] This was in addition to the two apartments Lydia had bought for her mother in China, one in Beijing and one in Xinjiang, see T213.

[16] The account was in the name of Lydia and Gang Wang.

[21] Gang Wang apparently misled Lydia about the legality of their marriage because he already had an existing wife and children.

[22] T977: 27 - 29. Genie's evidence on this point is at T693, 694 - 6.

[23] [1985] VicRp 88; [1985] VR 891.

[24] [2007] SASC 261.

[25] (2015) 255 CLR 62.

[28] [1953] HCA 95; (1953) 90 CLR 86.

[30] (2015) 255 CLR 62.

[32] [1988] HCA 16; (1988) 164 CLR 604 at 618 - 619.

[33] Frigger v Trenfield (No 10) (2021) 397 ALR 24; [2021] FCA 1500 ("Frigger (No 10)") at [103].

[35] [1985] VicRp 88; [1985] VR 891.

[40] [2007] SASC 261.

[42] Frigger (No 10) at [96] - [105].

[46] Ibid citing Re Cozens [1913] UKLawRpCh 67; [1913] 2 Ch 478 at 487.

[48] Ibid at [118] citing Herdegen v Federal Commissioner of Taxation [1988] FCA 419; (1988) 84 ALR 271 at 276 - 277 per Gummow J and the authorities therein cited.

[50] [2021] FCA 1500; (2021) 397 ALR 24.

[55] [2023] FCAFC 49.

[63] Exhibit D8 at [31]. GELD & W would not hold any interest in GE International but instead held units in the LGE Unit Trust.

[72] CB1711 - 1723. It should be noted that this version of the home loan documents are unsigned.

[73] CB1724 - 1735. This version of the guarantee is unsigned.

[77] CB1283. Unlike the Armadale property's contract for sale, the LGE Unit Trust's cover page notes that GELD & W is acting in its capacity as trustee for the GE & W Discretionary Trust.

[78] GE & L did open an account in its own name and notably not in its capacity as trustee in 2014, CB4117-8.

[80] See for example, SCB78 - 80; SCB85.

[81] It did not appear from the evidence available to the Court that JiYi had any substantial business activity at any point in its 4 to 5 year lifespan.

[82] Payments were however made to Hongwei Construction from the Bankwest account which were subsequently returned, see: CB4194 and as noted elsewhere the company held shares in JiYi.

[83] It appears that GELD & W used the Bankwest account to lend funds to GE International, see for example two transactions dated 8 November 2010 at CB4192 with the typed note "GE International" and the hand written note "SAXTON" being the name of the street of the Box Hill project.

[84] Lydia was not in Australia at that time, see exhibit P1 at [8]. The question of the validity of Genie's appointment as director is dealt with later in these reasons.

[92] Exhibit D8 at [85]. $1,000,000 had been drawn down from the Bankwest account.

[95] Some concerned the trust and some did not. The Bankwest account, although to a lesser extent than the disputed account in Frigger v Trenfield (No 10), was used for transactions unrelated to the business of the GE & W Trust. See for example the following: CB4243 where the account received what appears to be Medicare benefits and a debit called 'Mumfee'; CB4241 where a line item appears to show a loan to Jade; CB4240 where a payment is titled 'Yves tictet [sic]' and another is 'Airline Ticket', CB4238 which shows 'Electricity Bill' in the sum of $81.01'; CB4223 which contains a line item 'jade and bob mum operation' for $17,008.

[96] Defence at [36] and plaintiff's amended reply at [17].

[100] Lydia filed two witness statements - her primary one and another in reply.

[104] CB1096 - 1102. The notes to the amendment state that the reason for the change was "Tax agent's error - distribute family trust income to wrong beneficiary" at CB1102.

[116] A supplementary expert report from CFAS Advisory dated 24 October 2023 which calculated the expected profit from the Armadale project was in evidence: SCB3 - 65.

[118] Frigger v Trenfield (No 3) [2023] FCAFC 49 at [248] citing Re Armstrong [1960] VicRp 34; (1960) VR 202 at 206; Herdegen v Federal Commissioner of Taxation [1988] FCA 419; (1988) 84 ALR 271 at 277 (Gummow J).

[120] This was the day upon which the vendor of the Armadale property accepted Genie and Stefan's offer to purchase.

[121] In any case the value of the shares derived from the Armadale property would depend largely on the nett equity. Any valuation would need to take account of debt which encumbered the property.

[124] Exhibit P1 at [62] & [185]; T290: 1 - 4. Lydia's knowledge of the Armadale project is discussed later in these reasons.

[125] I have dealt with this matter briefly and in slightly general terms. This is partly because the parties, by agreement, deleted much of the evidence in the witness statements about this possible profit sharing and partly because it seems that this topic was discussed privately by the parties in the mediation process. Consistent with usual procedure, it was important that the Court remain ignorant of the detail of these discussions.

[127] Plaintiffs' closing submissions at [49].

[128] These arguments are considered at [414]ff after the disputed individual transactions are resolved.

[129] Rhesa Shipping Co SA v Edmunds [1985] 1 WLR 948 at 955-6; Moukhayber v Camden Timber & Hardware Co Pty Ltd [2002] NSWCA 58 per Heydon JA; Timms v Commonwealth Bank of Australia [2004] NSWSC 76 at [120] - [122]; Timms v Commonwealth Bank of Australia [2005] NSWCA 137 at [42] - [43].

[130] Re Jones; Ex Parte Mayne (1953) 16 ABC 169.

[131] Rhesa Shipping Co SA v Edmunds [1985] 1 WLR 948 at 956.

[132] Moukhayber v Camden Timber & Hardware Co Pty Ltd [2002] NSWCA 58 at [25].

[134] Annexure 1 to the defendants' further and better particulars at CB127.

[137] The tax return which resulted in the capital gains liability which Lydia paid the whole of was prepared by Lydia's accountant Pitch Partners Advisors in or around the middle of 2019 - some three or more years after the sale of the Radnor Street property and approximately two years after the relationship between Lydia and Genie deteriorated.

[138] Plaintiffs' closing submissions at [73].

[140] There were other minor transactions in the account during the period of the bank statement.

[141] Plaintiffs' closing submissions at [66] - [71].

[143] Exhibit D8 at [141] - [144].

[152] See [77] - [83] of these reasons.

[155] See, for example, CB1356 which is an email Genie sent to Lydia on 3 March 2010 in which Genie notes that the property would be "Lydia share 60% and Genie Share [sic] 40%". Lydia denied reading this email at the time, but acknowledged receiving it in her reply witness statement at exhibit P2 at [28]. As noted later in these reasons at [511] [para about businessperson], I have found it unlikely that she would not read emails relevant to her interests in Australia. See also CB1369 - 1378 which outlines the deposits Lydia and Genie should have contributed to the purchase of the Radnor Street property in proportion to their respective interest. Lydia replied to this email and said that the sisters would discuss when Genie was in Beijing but denied reading it at T257:19 - 26.

[158] Exhibit D8 at [144] & [148](a)

[169] CB127. I have referred to the 5 July 2021 further and better particulars of defence because that is the version of the document to which Lydia and Genie make reference in their witness statements. The further and better particulars were amended on 23 January 2024. Where the July 2021 and January 2024 amendments differ, I will address the difference.

[171] Exhibit P1 at [158] - [162].

[172] Exhibit D8 at [150] - [151].

[184] Genie's witness statement says that she paid this on 12 March 2012, see exhibit D8 at [146](c). The receipt for the deposit states that the money was paid in 2011, see CB1383.

[186] Schedule A to exhibit P1; Exhibit D8 at 146(c).

[187] Genie shifts between the singular and plural when referring to the loan. At T766:12 - 16, Genie states "Billy lent GE International that much money and then GE International made repayments to Billy".

[194] This deposit is otherwise treated as a credit in Genie's column in these documents and the July 2021 FBP.

[201] See CB4251, 4259, 4261 and 4262.

[204] Does not include transaction 370.

[205] And the inherent probabilities of carrying cash.

[209] Exhibit D8 at [138](d); T828: 30 - 829: 10.

[211] Schedule A to exhibit P1. Lydia's evidence does not make clear precisely what a "sales return" is - whether it is proceeds of sale, gross or net profits or deposits.

[223] No document in evidence supported this statement.

[243] In Genie's amended further and better particulars filed in January 2024, these are placed in Genie's column which lends further weight to my finding.

[244] This summarises the points Lydia made which are found at paragraphs 261 - 266.

[247] Exhibit D8 at [43]; this is adopted in GE & W's tax return, see CB2127 & 1102.

[248] At SCB110, there does appear to be a document that calculates the profit from the Box Hill project. The profit is said to be $200,473.65. There does not seem to be a corresponding document for the Balwyn project. At SCB109, a document said to be prepared by KST shows the revenue and expenses of GE International for the financial years ending 2013, 2014, 2015 and 2016.

[249] Exhibit D8 at [103]. I note that this was repaid sometime before the completion of the Armadale project. I do not consider that this weighs against the loan arrangement but is an early repayment prior to the completion of the project.

[262] Exhibit P1 at [105]; CB1809-10.

[263] In approximately mid-2017, the relationship between Lydia and Genie soured. The precise cause of the rupture was not clear. I have inferred from the available material that the cause might have been the refusal around July 2017 by Genie and Brian to have Lydia work on the Armadale project and to have Lydia and Yves as shareholders in Hongwei's construction business.

[264] For example, see the receipt of salary payments at CB4189 and the line item 'jade and bob mum operation' at CB4223.

[269] Plaintiffs' closing submissions at [79]; Defendants' closing submissions at [120].

[270] The Genie parties' 23 January 2024 amended further and better particulars. Two transactions occurred prior to the signing of the Armadale project: $300 on 11 September 2014 and $88,580.20 on 24 October 2014. Genie assigned these to the Armadale project because the funds were transferred to GE & L's bank account.

[271] (1985) 2 NSWLR 309.

[272] Encino Plaza Pty Ltd v Wilson International Pty Ltd (1988) V ConvR 54-308.

[273] See Re DCA Enterprises [2023] NSWSC 11; (2023) 166 ACSR 156 at [121] ('Re DCA Enterprises').

[274] See Ku v Song [2007] FCA 1189; (2007) 63 ACSR 661 at [199].

[275] See Re DCA Enterprises at [118] and [122].

[276] See Gambotto v WCP Ltd [1995] HCA 12; (1995) 182 CLR 432; Re DCA Enterprises at [119].

[277] See Re DCA Enterprises at [119].

[280] Ibid at [122]; Re DJG Equities Pty Ltd [2014] NSWSC 194 at [5] - [7]; Chidiac v Bhatt [2014] NSWSC 1253 at [52]; Re Centura Global Holdings Pty Ltd [2016] NSWSC 62; (2016) 111 ACSR 185 at [56] - [57]; Re Seabay Kitchen Pty Ltd [2019] NSWSC 790 at [8] ff, [14]; Re McDonagh Management Pty Ltd [2019] NSWSC 1099; (2019) 139 ACSR 447 at [4], [45]ff; Re Embedded Claims Pty Ltd [2021] NSWSC 969 at [8] - [9]; Yang v Zhang [2022] FCA 697 at [80] ff.

[281] [2015] VSC 519; (2015) 302 FLR 230 at [19]- [21].

[282] Re Mogul Stud Pty Ltd [2012] NSWSC 1639 at [7]; Re Motasea Pty Ltd (2014) 97 ACSR 589; [2014] NSWSC 69 at [47].

[283] [2020] NSWSC 1240; (2020) 148 ACSR 454 at [125].

[285] Kay v Playup Australia Pty Ltd (2018) 339 FLR 193 at [35].

[286] Re DJG Equities Pty Ltd [2014] NSWSC 194 at [5]- [7]; Chidiac v Bhatt [2014] NSWSC 1253 at [62]; Re Centura Global Holdings Pty Ltd [2016] NSWSC 62; (2016) 111 ACSR 185 at [56]- [57]; Re McDonagh Management Pty Ltd [2019] NSWSC 1099; (2019) 139 ACSR 447 at [4], [45]ff; Yang v Zhang [2022] FCA 697 at [80] ff.

[287] See plaintiffs' opening submissions [29]-[30].

[288] See plaintiffs' closing submissions [92].

[289] Re Embedded Claims Pty Ltd [2021] NSWSC 969 at [8]; Yang v Zhang [2022] FCA 697 at [80]- [87].

[296] Exhibit P6(1) and exhibit P6(2). Lydia had emailed Genie at 12:39pm on 21 February 2014 using a different email address, 13901179918@139.com, but it is unclear which time zone is used. In either case, the temporal difference makes little difference. Lydia was known to be and had been using the email address Genie sent that correspondence to prior to the emails of 21 February 2014.

[298] For example, Lydia's correspondence with her Chinese lawyer about the requirements for the notarisation of Australian documents at CB1488 - 1496.

[301] CB1461 - 1464. The email to Wu was sent to Lydia too.

[309] I am aware that Lydia claims to have signed these documents and a consent to act as director. Because of my view about Lydia's credit, I reject her evidence on the point.

[310] Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 at 266-7 per Deane J; Napier v Public Truste (WA) (1980) 32 ALR 153.

[311] CB124. I have referred to the July 2021 FBP because that is the document to which Lydia's closing submissions make reference to at [97], [105] & [107].

[312] Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 at 266-7 per Deane J.

[314] [1995] EWCA Civ 15; [1996] 1 WLR 328 (CA).

[315] Re Diplock [1948] 1 KB 339; [1948] CH 465 at 545 - 550.

[316] [40] of the Genie parties' defence.

[317] Genie's July 2021 FBP and amended further and better particulars dated 23 January 2024.

[318] Foskett v McKeown [2000] UKHL 29; [2001] 1 AC 102 approved by the NSWCA in Robb Evans of Robb Evans & Associates v European Bank Ltd [2004] NSWCA 82; (2004) 61 NSWLR 75 at [133].

[319] Subject to Genie's acknowledgement that Lydia is entitled to $518,776.52 pursuant to the 10 July 2015 loan agreement and any offset.