Quantum Investments (Aust) Pty Ltd & Ors v Zhi Wei Lin trading as Jack Lin

Nature of the application

1. The Second Plaintiff (Mr Zheng), the Third Plaintiff (Mr Shen), the Fourth Plaintiff (Ms Luo), the Fifth and Sixth Plaintiffs (Mr Wang and Ms Qian), and the Ninth Plaintiff (Moral Success Developments Ltd ("MSD")) (together, "Lenders") claim damages or compensation and consequential orders against the Defendant, Mr Lin. At the commencement of the hearing, the proceedings were dismissed in respect of the First, Seventh, Eighth and Tenth Plaintiffs for want of prosecution.
2. Broadly, the Lenders contend (Second Further Amended Commercial List Statement ("SFACLS") [4]) that they were approached by Mr Lin between May and July 2014 to lend funds for use in connection with a property development in Turramurra, involving the intended purchase and development of certain land as a residential apartment building ("Turramurra Project"). Mr Lin responds (Commercial List Response ("CLR") [4(c)]) that MV Golden Destiny Development (Turramurra) Pty Ltd ("MVGDD") sought to carry on the relevant development and that, in July 2014 he told Mr Zheng, Mr Wang and Ms Qian, and Mr Xu, the director of MSD, that MVGDD was seeking to borrow funds for the purpose of use in the Turramurra Project and that Mr Zheng approached, relevantly, Mr Shen and Ms Luo. The reference to MVGDD seeking to borrow funds for the purpose of use in the Turramurra Project is at least incomplete so far as Mr Lin's company, Quantum Investments (Aust) Pty Ltd ("Quantum"), rather than MVGDD entered the relevant loan transactions with the Lenders. Mr Lin accepts that he arranged meetings with the Lenders (with the exception of Mr Wang and Ms Qian) and Mr Fong, a director of MVGDD, but contends they were to enable discussions to occur between Mr Fong and those Plaintiffs regarding finance for the Turramurra Project. It now appears to be common ground that Mr He, who is Ms Luo's husband, dealt with Mr Lin and made the substantive decisions in respect of her loan; Mr Wang represented Ms Qian in dealing with Mr Lin; and Mr Xu, as director of MSD, acted for MSD in dealing with Mr Lin (SFACLS [4A]-[4C]).
3. The Lenders contend (SFACLS [7]) that Mr Lin was involved in a commercial relationship involving a property development with Mr Fong and Mr Fong's related entities including MV Development (Lane Cove) Pty Ltd in respect of a development project at Lane Cove ("Lane Cove Project") and MVGDD in respect of the Turramurra Project. Mr Lin accepts (CLR [7]) that Quantum loaned money to entities related to Mr Fong for the purposes of the Lane Cove Project including that it loaned money to MV Development (Lane Cove) Pty Ltd for the purposes of the Lane Cove Project, and denies that he was manager of that project. He also accepts that Quantum loaned money to MVGDD for the purposes of the Turramurra Project; denies that he was a manager of the Turramurra Project; and says that it was a term of the loan agreement between Quantum and MVGDD that, inter alia, he would be paid a project consultation fee. It appears to be common ground that, on or about 7 July 2014, purchase contracts in respect of the properties to be acquired for the development were novated from a third party, Golden Destiny Developments Pty Ltd, to MVGDD (SFACLS [8]).
4. The Lenders contend (SFACLS [10]) that Mr Lin made statements to each of them between May and July 2014 in the course of seeking to raise finance for the purposes of the Turramurra Project, although particulars which they have provided indicate that somewhat different statements are said to have been made to each of them. The particulars to this claim also identified additional representations alleged to have been made by Mr Lin in loan agreements between several Lenders and Quantum, but these postdated the payment of the relevant funds and Mr Katsoulas (who appears for the Lenders) did not press the claim based upon them in closing submissions. Mr Lin denies that he made the alleged statements to the Lenders, other than by stating that Quantum was his company.
5. The Lenders initially claimed (SFACLS [11]) that they entered into oral loan agreements with Quantum and Mr Lin and advanced monies to Quantum or alternatively Mr Lin on the basis of those agreements and pleaded the material terms of the alleged oral loan agreements, in alternative versions (SFACLS [12]-[13]). Mr Lin accepted in his Commercial List Response that oral loan agreements existed, other than in respect of MSD, but claimed that they were with Quantum rather than with him and that they were materially the same as those pleaded as the terms of the Deeds of Loan Agreement. The Lenders acknowledged that they subsequently signed two-page documents titled "Deed of Loan Agreement", but claimed to have been orally advised by Mr Lin that those agreements did not alter or record the full terms of the oral loan agreements that they had already entered into (SFACLS [14]). They contended that Quantum and Mr Lin breached the oral loan agreements in several respects, although the allegation of breach by Quantum had no apparent consequences, since the claim brought by Quantum as First Plaintiff have been dismissed, it was not a defendant to the proceedings and it would not be bound by their outcome. Mr Katsoulas indicated in closing submissions that the allegations as to oral loan agreements were no longer pressed and I need not address them further.
6. The Lenders also pleads a complex misleading and deceptive conduct case. Perhaps regrettably, each of them pleads multiple representations, and I will address those representations below. Mr Zheng contends that eight separate representations were made to him and he also initially relied on three other representations said to have been made by Mr Lin in the loan agreement, which Mr Katsoulas did not press in closing submissions. Mr Shen contends that Mr Lin made seven representations to him between May and July 2014, and also initially relied on three representations alleged to have been made in the loan agreement, which Mr Katsoulas similarly did not press in closing submissions. Ms Luo contends that Mr Zheng repeated five statements made by Mr Lin to Mr He, who made the investment decision for her between May and July 2014 and Mr Lin made corresponding representations orally at a meeting at his house in about July 2014 to Mr He, who in turn repeated them to Ms Luo. Ms Luo also initially relied on the three representations alleged to have been made in the loan agreement, which Mr Katsoulas did not press in closing submissions. Mr Wang and Ms Qian contend that Mr Lin made oral representations to them as to eight matters between May and July 2014 and also initially relied on the three representations made in the loan agreement, which Mr Katsoulas also did not press in closing submissions. MSD contends that Mr Lin made eight representations to its director, Mr Xu, between May and July 2014 and again initially relied on the three representations alleged to have been made in the loan agreement, which Mr Katsoulas did not press in closing submissions.
7. In closing submissions, Mr Mitchell (who appears with Mr Seow for Mr Lin) criticises the structure of the Lenders' misleading and deceptive conduct claim, and contends that they seek to have the Court make a finding of contravention without consideration of the material surrounding circumstances as to the making of the statements. It seems to me that the Further Amended Commercial List Statement, as particularised, sufficiently identifies the matters on which the Lenders rely and their affidavits adequately evidence the representations on which they rely. Mr Mitchell also submits that the Lenders do not engage with the documentation provided by Mr Lin to them; however, their claims are, for better or worse, that they relied on the representations made by Mr Lin, without detailed consideration of documents provided to them, sometimes in English, or the financial projections for the Turramurra Project. I will address their evidence in that respect and the representations on which they rely below.

Chronology

1. I now turn to a chronology of events. On 18 June 2014, Mr Lin sent Mr Zheng an email dated 17 June 2014 from Mr Fong which attached a feasibility assessment of the Turramurra Project (Lin [55]; Ex J1, 220). I will refer below to the disputed evidence of a meeting between Mr Lin and Mr Zheng at about this time (Zheng [9]-[11]; Lin [160]-[162]) and to a further conversations involving Mr Zheng in late June 2014 (Zheng [13], [16]). Mr He contends that, in late June 2014, Mr Zheng provided him with information and a document concerning the Turramurra Project and that he offered to invest $500,000 (He [8]-[16]). I will address Mr He's evidence concerning these matters below. In late June 2014, Mr Lin also sent Mr Wang, who had invested in the earlier Lane Cove Project, documents relating to the Turramurra Project (Lin [57]-[58]).
2. On 1 July 2014, Mr Lin forwarded documents that he had obtained from Mr Fong to Mr Shen (Lin [66]; Ex D1, 7-15). On 3 July 2014, Mr Lin sent Mr Zheng two emails linking to documents obtained from Mr Fong (Lin, [68]; Ex J1, 221). On 4 July 2014, Mr Zheng, Ms Luo, and Ms Qian (Mr Wang's wife) respectively transferred $100,000, $500,000 and $100,000 to Quantum (Lin [72], [72e]; He [17]; Luo [9]; Ex D1, 22; Ex J1, 226). On 7 July 2014, a further $400,000 was transferred from Ms Luo's account to Quantum (He [20]; Luo [10]; Lin [77]; Ex D1, 22-23) and Mr Shen paid $190,000 to Quantum (Shen [27]; Lin [77c]; Ex D1, 23).
3. On 11 July 2014, Mr Lin sent emails to each of Mr Zheng, Mr Wang and Mr Xu (for MSD) attaching a draft loan agreement, a document headed "Introduction to Turramurra Project" ("Turramurra Introduction document") (for example, Ex J1, 311, translated at 295, 315, 324) and architectural drawings (Lin [83], [85]-[86]; Ex J1, 242ff; Wang [20], Annexure B; Xu [32]-[33]). Also on 11 July 2014, Mr Lin sent Mr Shen a draft loan agreement and the Turramurra Introduction document (Lin [84]; Ex D1, 74-77, 78). The Turramurra Introduction document was apparently also provided to at least some other Lenders by email and to persons attending a meeting at Mr Lin's house in late July 2014.
4. The Turramurra Introduction document refers to the total area of the land and the total construction area for the Turramurra Project; forecasts total sales revenue of $75 million; makes a number of favourable observations as to the Turramurra area; explains that the Turramurra Project was taken over from another company, Golden Destiny Investments Pty Ltd ("GDI"); and states: "Fiducian transferred Turramurra Project to Victor Fong for management. Victor established a new project company MV Golden Destiny Development (Turramurra) Pty Ltd (MVGD) to run this project. Jack Lin works as the project manager and participates in the management and operation of this project. GDI and Fiducian has paid $8m for the above six plots on April 23, 2014, of which Fiducian paid for $6m, GDI paid for $2m. [A solicitor] is preparing legal documents to transfer GDI's 100% equity to MVGD, but MVGD has to pay $2m to [G]DI which had paid the same amount to buy land. The legal procedures for this equity transfer are completed on July 7, 2014. Among them, the investor paid $1m and Fiducian paid $1m. GDI has done a lot of work for this project. The total cost is $190,000. We will pay a part of the expenses we acknowledge, such as the design fee, etc."
5. That document then refers to the budget for the Turramurra Project (as shown in an attachment) and quantifies the total funds required as $15.3m, of which Fiducian would contribute $10m and MVGDD would contribute $5.3m, also stating that "$1m will be used for the administrative costs of future project operation and some miscellaneous expenses". The document also states that the land "needs to be settled" on July 22, 2014, although it is not clear how that statement is consistent with the earlier reference to payment having previously been made for the six plots; states that the "shortage of land funds and project-related taxes, the intermediary fees and professional fees" are to be borrowed from a third party fund company for about half a year; refers to Mr Fong's having contacted several banks that had expressed interest in the project and states that: "When the pre-sale reaches about 70 sets the bank's loan is available, we will be able to pay off the third party fund company's loan. As Lane Cove's project is going well, the bank is willing to continue to cooperate with us. Therefore, getting this loan is relatively easier than Lane Cove's." The document then references the timing of the project, the sale of 20 units to date, work that was being done to develop a sales plan, and the potential use of the builder of the Lane Cove Project in the Turramurra Project.
6. Mr Mitchell submits that the Turramurra Introduction document contains information as to matters including who owns the Turramurra land, who will run the development, and whether there was security. That document in fact places significant emphasis on the desirability of Turramurra as a suburb and the quality of nearby schools. Much of the information which Mr Mitchell contends is disclosed in it is addressed only obliquely and there is no clear disclosure as to the risks of development generally or the risks of the Turramurra Project in particular. There is similarly no disclosure of the risks of a loan to Quantum as a proprietary company associated with Mr Lin which would be on-lent to a proprietary company associated with Mr Fong, who was a prospective participant in the Turramurra Project.
7. On 14 July 2014, Mr Zheng suggested an amendment to the Turramurra Information document and Mr Lin sent him an amended document (Lin [88]-[90]; Ex D1 93-98, 99). There are disputes as to conversations in July 2014 between Mr Wang and Mr Lin (Wang [21]-[27]; Lin [187]-[192]); a conversation toward the end of July 2014 between Mr Zheng and Mr Lin regarding the payment of money into Quantum's bank account (Zhen [18]-[19]; Lin [164]-[165]); and a conversation between Mr Xu and Mr Lin on 14 July 2014 as to why money was being transferred to a company account (Xu [41]-[42]; Lin [152])
8. On 15 July 2014, Mr Xu asked for an amendment to the loan agreement with MSD to include an additional payment to MSD and MSD remitted $499,988 to Quantum (Lin [92]-[93]; Ex D1, 23). On 16 July 2014, Mr Lin sent an amended loan agreement to Mr Xu (Lin [94]; Ex D1, 126, 127-129). On 17 July 2014, Mr Lin sent an amended loan agreement to Mr Wang which reflected a correction to Mr Wang's address (Lin [95]-[96]; Ex D1, 130). On 18 July, Mr Wang and Ms Qian transferred $400,000 to Quantum from their joint account (Lin [99]; Ex D1, 23). On 21 July 2014, Mr Lin signed the loan agreement (although that agreement is dated 15 July 2014) and sent a scanned copy to Mr Xu (Lin [101]; Ex D1, 140-143, 144; Xu [43]). Also on 21 July 2014, Mr Zheng transferred $300,000 to Quantum, which was received on 22 July 2014 (Zheng [20]; Lin [106]; Ex D1, 23); and Mr He transferred a further $100,000 to Quantum on behalf of Ms Luo, also received on 22 July 2014, completing Ms Luo's loans to Quantum (He [30]; Luo [11]; Lin [106]; Ex D1 23)
9. In late July 2014, a meeting took place at Mr Lin's house attended by, inter alia, Mr Zheng, Mr Shen (although this is disputed by Mr Lin) and Mr He (Ms Luo's husband), at which Mr Lin handed draft loan agreements to attendees. Mr Mitchell contends that the draft loan agreement and the Turramurra Introduction document are the "best evidence" of what was said at the meeting in late July 2014. I do not accept that submission, and the fact that those documents were handed over says little as to what might have been said orally at that meeting; however, it is not necessary to address that matter further, as the Plaintiffs no longer rely on that meeting for their representational claims, where it post-dated the payment of the funds by Mr Zheng, Mr Shen and Ms Luo (through Mr He) to Quantum and had no causative effect in respect of the representational claims (Zheng [21]-[24]; He [21]-[29]; Lin [113], [166], [198]-[199]).
10. On 27 July 2014, Mr Lin emailed Mr Zheng a copy of the loan agreement with Quantum signed by Mr Lin (Lin [123]; Ex D1 209, 210-215). On 31 July 2014, Mr Zheng signed the loan agreement with Quantum. On 10 August 2014, Mr Lin attended Mr Shen's business and they exchanged signed counterpart loan documents (Shen [28]; Lin [118]; Ex D1 155-156,157-158). Ms Luo and Mr Wang and Ms Qian did not sign loan agreements with Quantum until 17 October 2014.
11. In late August 2021, Quantum executed a loan agreement with MVGDD as borrower and Mr Fong as guarantor (Ex J1, 400), which contemplated an advance of $3.5 million by Quantum to MVGDD; interest payable at a lower rate of 30% per annum and a higher rate of 35%, in excess of the interest payable by Quantum to the Lenders; a loan term of 2 years; and that Quantum would obtain a registered second mortgage over the Turramurra properties. It appears, from a letter dated 15 October 2017 from Quantum to the Law Society of New South Wales (Ex J1, 462), that before that loan agreement was executed, Quantum had provided two bank cheques totalling approximately $2.35 million to MVGDD's solicitors, one made out to the solicitors' trust account and the other to the vendors of one of the Turramurra properties; third party proceedings then delayed the settlement of the purchase of the Turramurra properties, and MVGDD novated its interest in those properties to a third party; and Quantum's cheques were subsequently deposited to the firm account of MVGDD's solicitors and the trust account of MVGDD's solicitors on 24 July 2014 and 4 September 2014 respectively. There is no further evidence as to the purpose of those transactions, although MVGDD complained to the Law Society in respect of them, and there is no evidence as to the outcome of that complaint.

Affidavit evidence

1. I now turn to the affidavit evidence. In assessing this evidence, I must have regard to the fallibility of human memory which increases with the passage of time, particularly where disputes or litigation intervene: Watson v Foxman (1995) 49 NSWLR 315 at 318-319; Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [41]; Varma v Varma [2010] NSWSC 786 at [424]-[425]. I also have regard to the fact that objective evidence, where available, is likely to be the most reliable basis for determining matters of credit that arise as to the affidavit evidence: Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 at 57; Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 at [10] ("Colorado").
2. The principles applicable to assessing claims for representations in oral form were also helpfully summarised by Slattery J in Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd [2010] NSWSC 963 at [87] as follows: "The principal conduct of the defendants that [the plaintiff] alleges was misleading or deceptive was the speaking of words in the course of a series of conversations. Special considerations apply when assessing alleged misleading and deceptive conduct in such a context. It is necessary that the words spoken be proved with a degree of precision sufficient to enable the Court to be reasonably satisfied that they were in fact misleading in proved circumstances: Watson v Foxman (1995) 49 NSWLR 315 at 318 per McLelland CJ in Eq In assessing whether spoken words were misleading the Court may have to examine relatively subtle nuances flowing from the use of one word, a phrase or a grammatical construction rather than another or the presence or absence of some qualifying word, phrase or condition: Watson v Foxman (1995) 49 NSWLR 315 at 31. The fallibility of human memory and the overlaying of memory with perceptions of self interest leading to sub conscious reconstruction are all hazards of ordinary human experience to which a Court must be alert in assessing whether particular spoken words are misleading or deceptive: Watson v Foxman (1995) 49 NSWLR 315 at 319. Ultimately each element of the cause of action must be proved to the reasonable satisfaction of the Court which means that the Court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not obtained or established independently of the nature and consequences of the fact or facts to be proved", including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712." I also note the observations of Hammerschlag J (as his Honour was then), dealing with the assessment of spoken words in the context of a contractual dispute, in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [95]: "Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319."
3. I have here drawn on my summary of the applicable principles in Re Atlas Advisors Australia Pty Ltd [2022] NSWSC 705 ("Atlas") at [5] and No 1 Victoria Dragons Pty Ltd v AEN Developments Pty Ltd [2022] NSWSC 1345 ("Victoria Dragons") at [53]-[57]. I also bear in mind that, as Mr Mitchell points out, the Lenders' (and also Mr Lin's) evidence is given nearly seven years after the relevant conversations took place, and this would likely have adversely affected the reliability of their recollections.
4. The Second Plaintiff, Mr Zheng, relies on his affidavits dated 28 May 2021 and 16 September 2022. Mr Zheng is a computer technician and owns a computer repair business at Lane Cove, NSW. Mr Zheng recalls being introduced to Mr Lin by Mr Shen in or around May 2014 (Zheng [3]) and he refers to a discussion with Mr Lin concerning the Lane Cove Project about that time (Zheng [6]-[8]). Mr Zheng also gives evidence (Zheng [9]-[10) of a second meeting with Mr Lin in June 2014 in relation to a new project at Turramurra, where Mr Lin told him that there would be three "shareholders" in the land; that "[w]e are going to buy the lands in Turramurra" and build 104 units and that Mr Lin would be "running the whole project". Mr Zheng also recounts the following exchange at that meeting: Zheng: "How much money can be made from this project? Lin: "We guarantee you 20% interest per year for any money that you invest. We only need the money for 2 years and 6 months and guarantee to return your money after that time." The reference to a "guarantee" in this conversation, which of course has been translated from Mandarin to English, does not seem to me to refer to a "guarantee" in respect of any promise by a second party to meet the obligations of a first but instead to be a promise or warranty of payment of the principal and interest.
5. Mr Zheng's evidence (Zheng [11]) is that he was then handed a document in Chinese which contained introductory information concerning the Turramurra Project, which was Annexure B to his affidavit. He was plainly mistaken as to the suggestion that that particular document was provided to him in June 2014, since it was dated early July 2014, although I accept it is possible that he was provided an earlier version of that document. His evidence in cross-examination (T89-90) was that "This [Annexure B to his affidavit] was given through the email to me, but he handed to me another document, a different document"; that "before he gave to me English document. And so I believed it was the same" and "it was definitely before July. So, in the middle of June sometime. Because the one he gave me was English. Later he has printed out in Chinese"; and "before [the document in the form of Annexure B], there was an - a document similar to this that we discussed. And then we gave money…".
6. Mr Zheng's evidence (Zheng [11]) is also that he said that he had only $300,000 to invest; Mr Lin said that he needed $3,000,000 and suggested that Mr Zheng could "ask [his] friends if they want to invest … on the same terms" and suggested a meeting between Mr Zheng, his friends and Mr Lin to discuss matters. Mr Zheng's evidence is that a conversation then took place: [Zheng]: "Is there any risk in losing my money?" [Lin]: "No, once we buy the land there is no risk because it doesn't matter if we develop or not, the land is worth the money. If we want to build, we still need to borrow from the bank." On balance, I accept Mr Zheng's evidence that this question was asked and answered in this way, and do not accept Mr Lin's contrary evidence that he pointed out the risks of a loan in respect of the project. Mr Zheng then refers (Zheng [13]) to his showing Mr He, who is the husband of the Fourth Plaintiff, Ms Luo, the document that Mr Lin had given him, and to his asking Mr He whether he wished to invest, and Mr He responding that he would invest $500,000 but it would be in his wife's name. Mr Zheng also says (Zheng [14]) that he contacted three other persons who no longer pursue claims in these proceedings and refers (Zheng [15]) to a further conversation with Mr Lin, who said: [Lin]: "We need total $3 million, but we only have $2.5 million. Try and find some more investors."
7. Mr Zheng says (Zheng [16]) that he then again spoke to Mr He and told him that another $500,000 was needed "to make the purchase of the land". It is not apparent that that additional observation was based on anything that he says that Mr Lin had told him, although Mr Zheng may then have assumed that the funds were to be applied only to the purchase of the land. Mr Zheng's evidence (Zheng 18.5.21 [18]-[20]) is that Mr Lin then requested that he transfer the money before a written agreement was signed to allow the purchase of the land and Mr Zheng agreed to that course, subsequently paying $300,000 into Quantum's bank account. Mr Zheng recognised that the money was being transferred to Quantum and was told by Mr Lin that Quantum was his company and that Mr Lin was using it for the project.
8. Mr Zheng refers (Zheng [21]ff) to a third meeting at Mr Lin's house in July 2014, about one week after he had transferred the $300,000 to Quantum. The discussion at that meeting plainly had no impact on the transfer of funds by Mr Zheng, which had previously occurred, and the Lenders no longer rely on it for their representational case. His evidence is that several Lenders were handed loan agreements signed by Mr Lin, in Quantum's name, on that day, although he does not recall any of the Lenders signing the agreements on that day. He gives evidence that Mr Lin explained the terms of the agreement to him in Mandarin, as Mr Zheng did not read or write English, and said that the loan amount was $300,000 and that he would receive 20% interest per year for two and a half years. Mr Zheng's evidence (Zheng [25]) is also that he invested in the Turramurra Project because Mr Lin told him, inter alia, that Mr Lin had done many projects in the past and had a lot of experience in the development industry. He also says that Mr Lin told him his money "[would] be secure because of the value of the land, even if the construction did not occur".
9. By a second affidavit dated 16 September 2022, Mr Zheng denies aspects of Mr Lin's affidavit evidence, and also refers to a further meeting in June 2014 at a coffee shop in Lane Cove, where Mr Lin gave him a "project assessment schedule", which he said he did not understand because it was then in English. It appears that a subsequent version of that document was partly translated into Chinese.
10. Mr Zheng was cross-examined, and he appeared to have a basic understanding of English and sufficient business expertise to enter into basic commercial transactions in relation to his computer business, but had paid little attention to the documents which were provided to him in respect of the Turramurra Project, some of which were then in English so that he could not read them. The statements that he recalled were of a simple character and, on balance, I accept his recollection of them was generally reliable despite the passage of time. Mr Zheng was cross-examined to seek to establish that he and other witnesses had discussed their affidavit evidence in a manner that undermined its integrity. It seems to me that matter was not established. It is unsurprising that the Lenders would have had at least a general discussion of their losses suffered in respect of the project, where they needed to coordinate in order to bring these and previous proceedings, but it did not seem to me that the cross-examination supported any finding that they had not given their evidence of their interactions with Mr Lin independently and without collusion.
11. I now address aspects of Mr Mitchell's submissions in respect of Mr Zheng's claim, before turning to the particular representations on which Mr Zheng and other Lenders rely and the question of causation below. Mr Mitchell points out that Mr Zheng has no contemporaneous record of the alleged oral representations and submits that it is inherently unlikely that a person who places importance on oral representations would not make some kind of record of them. I do not accept that submission, since that is a common situation in representational claims by individuals, and hardly surprising where the significance of a representation may not be apparent at the time it is made. Mr Mitchell also points to Mr Zheng's reference in cross-examination to a WeChat group involving the Lenders and that no records from that group were put into evidence, and he submits that the Court should infer that any such records would not assist Mr Zheng. I proceed on that basis, where such records are not in evidence, although that does not, of course, support any inference adverse to Mr Zheng. Mr Mitchell also points to the absence of any written demand by Mr Zheng under the guarantee alleged to have been given by Mr Lin. I give limited weight to that matter, where Mr Zheng's evidence is that he and others "often asked" Mr Lin to "give us back the money" (T95-96). Mr Mitchell also submits that the contents of the feasibility assessment provided to Mr Zheng on 18 June 2014 and the information contained in the Turramurra Introduction document disclosed "multiple risks" affecting the Turramurra Project. I do not accept that submission, where there is no reason to think that the former would be comprehensible to Mr Zheng and I have addressed the content of the Turramurra Introduction document above. Mr Mitchell also submits that there is no connection between Mr Lin's conduct and Mr Zheng's decision to loan money to Quantum. I do not accept that submission, where the representations that I will find were made were calculated to induce the making of the relevant loan, and the inference is readily drawn that they did so. Mr Zheng's lack of attention to the feasibility assessment and Turramurra Information document reinforce, rather than exclude, that inference.
12. By his affidavit dated 21 May 2021, the Third Plaintiff, Mr Shen, who owns a panel beating business, gave evidence (Shen [5]ff) that he had invested money into the Lane Cove Project in 2011 and had then introduced some of his friends to Mr Lin, including Mr Zheng in about May 2014. He refers (Shen [8]-[9]) to having attended a site meeting at the Lane Cove Project with Mr Lin which was followed by a meeting with Mr Lin and Mr Zheng at the latter's computer shop in Lane Cove in May 2014. He also refers to having received a telephone call from Mr Lin several weeks later in relation to the need for funding of the Turramurra Project.
13. Mr Shen's evidence (Shen [12]ff) is that he then attended a meeting at Mr Lin's Eastwood house in June 2014 with about five other people, including Mr Lin and his wife and Mr Zheng. He refers to Mr Lin's introducing himself, and explaining his experience in development projects and his work with Mr Fong on the Lane Cove Project. Mr Shen's evidence is that Mr Lin there said (Shen [17]) that he would be in charge of the Turramurra Project and would be managing it from "start to finish" and that: "This project is guaranteed to make money and there will be no risk because the money loan will be secured using the land that is purchased in Turramurra." and: "I own some properties myself so I will guarantee to return the money that you loan."
14. Mr Shen also refers (Shen [19]) to being then handed a document which provided general information in respect of the project and also refers to a "report in the English language", which may have been the financial projections for the project. Mr Shen's evidence (Shen [21]) is that Mr Lin also said words in Mandarin to the effect that: "There is no risk because the land is still there, the price in the land is still there. For sure there is no loss because in 2 years the price will go up not down."
15. Mr Shen's evidence as to the June 2014 meeting, which he says was attended, inter alia, by Mr Zheng, Mr Lin and Mr Lin's wife is inconsistent with Mr Zheng's evidence, which dates the relevant meeting in late July 2014 and refers to Mr Shen's attendance at it. It is also inconsistent with Mr He's evidence of a similar meeting in late July 2014, and with Mr Lin's evidence which arguably dates the meeting as occurring later than the date indicated by Mr He.
16. Mr Shen refers (Shen [22]) to his decision to loan $190,000 made shortly after the meeting which he says took place in June 2014 and gives evidence that he also transferred the funds before a loan agreement was executed, at Mr Lin's request. It is not necessary to determine whether I could accept Mr Shen's account of what was said at that meeting, given the passage of time, because that does not assist him. It is plain that he is mistaken as to the date of that meeting which did not occur until mid or late July (rather than June) 2014, after and not before Mr Shen made a payment of $190,000 to Quantum on 7 July 2014, so any statements there made had no causative effect on his making that payment. Mr Shen does not identify any other occasion on which Mr Lin made any relevant representation to him before he made that payment to Quantum, and his making the loan is explicable without inferring such representations where he had previously invested in the Lane Cove Project. By a second affidavit dated 16 September 2022, Mr Shen denies aspects of Mr Lin's affidavit evidence in the proceedings.
17. Mr Katsoulas points out that Mr Shen was cross-examined at length as to the financial projection included with the Turramurra Introduction document and does not appear to have paid any real attention to that document and refers to Mr Shen's evidence that he was told that there was "no risk at all." I have considered whether that evidence is sufficient to make good Mr Shen's representational case, but the timing of such a conversation is again unclear, and I address the difficulty in establishing causation in respect of the alleged "No Risk" representations below. Mr Shen's evidence in cross-examination was also that "I gave the money to him [Mr Lin], but, to be honest, I didn't really take too much interest in it and I didn't even consult much about it" (T109). Mr Shen accepted (T110), unsurprisingly, that the promise of 20% interest played an important role in his decision: "Q. … Was the reason that you loaned $190,000 into this investment because you were going to get a 20% per annum return? [Shen]: So, at that time, that was one of the reasons. It was also because Mr Lin said that he couldn't find investors into this, so - to get me to introduce other friends to be able to do this. At the time, I said I would give 200,000. But then I didn't; I only gave 190,000. So he said that he would also put in 10,000 for me. I also introduced some other friends to him."
18. Mr Shen's cross-examination again did not establish that there was any collusion between Mr Shen and other Lenders in respect of the preparation of their affidavits.
19. I now address aspects of Mr Mitchell's submissions in respect of Mr Shen's claim, again before turning below to the particular representations on which Mr Shen and other Lenders rely and the question of causation. Mr Mitchell rightly recognises that a finding that the meeting on which Mr Shen relies took place in late July 2014, which I have reached, is inconsistent with Mr Shen's oral representational case, because "it would be impossible for any representation made at the meeting to have affected Mr Shen's earlier decision to loan money and transfer that money to Quantum". He points to the likely deterioration of Mr Shen's recollection with time, and I recognise that this likely contributed to his error as to the date of the late July 2014 meeting. He submits that Mr Shen was also provided with the feasibility assessment of the Turramurra Project and the Turramurra Introduction document. I do not accept Mr Mitchell's further submission that those documents disclose the relevant risks, but that does not assist Mr Shen where the representations on which he relies post-dated his loan to Quantum. I need not address several other submissions made by Mr Mitchell in respect of Mr Shen's claim, where it will not be established for that reason. Mr Katsoulas in turn points to Mr Lin's acceptance in cross-examination that he had told Mr Shen that the funds loaned by Quantum to MVGDD would be secured against the land (T216). However, that does not assist Mr Shen where there is no basis to find that that statement, or the other statements on which Mr Shen relies, was made before he paid out the relevant monies rather than at the meeting that only occurred after he had done so, although before a loan agreement was executed.
20. The Fourth Plaintiff, Ms Luo, reads her affidavit dated 21 June 2021 and she was not required for cross-examination. Her evidence is that she migrated to Australia from China in October 2013 and does not speak, read or write English, and that her husband, Mr He, controls all of the family's business, while she controls all the finances. Her evidence is that Mr He told her he was investing in a building project in Turramurra in June or July 2014; she gave authority to Mr He to negotiate to enter into an agreement with Mr Lin, although that perhaps overstates the formality of the process; and all of the negotiation relating to the Turramurra Project was undertaken by Mr He, who ultimately made the decision to make the investment. She refers to the transfers of the RMD equivalent of AUD$500,000, AUD $400,000 and AUD$100,000 on 4, 7 and 21 July 2014 respectively from her bank account in China to an account provided by Mr He. She also refers to having signed the loan agreement in September or October 2014.
21. It is now common ground that the decisions in relation to Ms Luo's loan to Quantum were made by Mr He, who is a businessman now working with plastic recycling in Australia. Mr He gave affidavit evidence and was cross-examined at some length. His evidence (He 21.6.21 [3]ff) is that he migrated to Australia from China in 2013 and his ability to read and speak English is poor. He met Mr Zheng, who is a distant relative, late in 2013 or early in 2014, and Mr Zheng told him about Mr Lin in about June 2014 and also told him of the construction project in Lane Cove. Mr He's evidence is that Mr Zheng then told him about the Turramurra Project in late June 2014 and that when he asked whether there was an opportunity to invest, Mr Zheng told him that: [Zheng]: "They are looking to raise some funds to purchase the properties, they guarantee 20% return per year on the investment." (He 21.6.21 [8])
22. Mr He's evidence is that he was provided with a document in Chinese which provided him with information about the Turramurra Project in late June 2014; it is again apparent that that is not the document annexed to his affidavit which is dated early July 2014, although it is possible that an earlier version of that document existed. Mr He was cross-examined as to that matter and, as Mr Katsoulas points out, his evidence there was that "at the end of June, the beginning of July that I got information about this project" (T36-37) and, after the 11 July 2014 date on document in evidence was drawn to his attention, he stated "[t]he information I received with was the same. The exactly the same information" (T36), although that does not address the possibility that the earlier version was in English only rather than in English and Chinese. Mr He's evidence (He 21.6.21 [12]) is also that he was then undecided about making an investment, although he was interested to hear more about the project because of his history of business in China, which appears to have involved investment in property; his interest in the property market in Australia; and because a "20% guaranteed return on investment was very attractive".
23. Mr He indicates (He 21.6.21 [13]) that Mr Zheng conveyed further information concerning the Turramurra Project several days later, repeating that it had a 20% return per year and saying that Mr Lin needed the money for two to three years and that "[t]here is no risk because worst case scenario, your investment is safe in the land", Mr Lin "will pay you back"; and "[t]his developer will make money, any project with this developer always makes money". It is not apparent that those latter two statements had their origin in any statement made by Mr Lin to Mr Zheng. Mr He's evidence is that Mr Zheng also explained that Mr Lin would use the money only for the Turramurra Project; would build 100 units; would borrow the money for two to three years; and would pay 20% interest per year. Mr He's evidence is that he caused the amount of $500,000 to be transferred to Quantum's account, and had thought that Mr Lin and his company "are one in the same" [sic]. Unfortunately, that understanding does not reflect the position in Australian law.
24. Mr He refers (He 21.6.21 [19]-[20]) to a subsequent conversation with Mr Zheng a few days after 4 July 2014, after he had made the first payment to Quantum, when Mr Zheng told him that Mr Lin "needs an extra $500,000 to make the deal happen" because "some people decided not proceed". Mr He then offered to pay an extra $500,000 and subsequently transferred the further amount of $400,000 (rather than $500,000) to Quantum's account on 7 July 2014. These transactions took place prior to the meeting at Mr Lin's house in mid-July 2014, which can have had no impact upon them. Mr He refers (He 21.6.21 [21]ff) to Mr Lin's account of his background at that meeting and to having been handed a general description of the project (in Chinese) and a loan agreement (in English), telling Mr Lin that he could not read English properly, and Mr Lin then offering to explain the loan agreement to him. His evidence (He 21.6.21 [30]ff) is that he transferred a further $100,000 to Quantum's bank account on 21 July 2014 and that his wife signed the loan agreement in September or October 2014, and that the loan agreement was in English and he was unable to understand it before his wife signed it.
25. Mr He was also cross-examined at some length, and I formed the view that he was a credible witness who had genuinely held the somewhat naive view that investment in Australian property held little or no risk. His evidence on cross-examination included that: "[He] So according to my experience, as long as the money was used on real estate - like, building houses - then even if there was interest, it would definitely good. You'd be able to make money. I was given that promise. Mr Lin said that this money was, like, a special fund for that purpose. Q. Did [Mr Zheng] say anything else to you? [He]: And that as long as the money was used for property development, there wouldn't be a loss. You'd definitely be able to pay it off and make money." [T42] "Q. Did you have any other conversations with [Mr Zheng] about the investment in the development? [He]: Investment - what development? Q. Investment in the Turramurra project. [He] Yeah, we had lots. So, at the time I'd just come to Australia I wanted to buy property, so even if I thought if I had to spend a million, I knew that property was a secure investment, just as they said that there would be no risk. So, at the time I didn't really understand okay about how many units, 100, or exact cost or profit. I just knew that with real estate you can make money." [T43] "Q. Did you ask him in writing? [He]: No, not writing. I always believed that the money was safe because the - the flats were there, or the property was right there." [T44] "Q. … Is it the case that the reason you loaned money into the Turramurra development was because you knew that the market was good at the time, that real estate was a good guarantee, or a secure type of opportunity, and that you thought that there was an opportunity and you'd be very willing to get involved? Isn't that the reason why you invested in the Turramurra development? [He]: So, yes, that was the reason that I knew the market was good but also, as I stressed, that even if we didn't build the houses, we still would not lose the value." [T52]
26. Mr He was also cross-examined as to a complex financial projection of the project (Ex D2, A002 to A009) but that cross-examination did no more than demonstrate that the document might have been reason for caution, had Mr He analysed it as closely as Mr Mitchell did in cross-examination. No doubt, there would be fewer misleading and deceptive conduct cases if all plaintiffs were as careful or incisive in their review of financial projections as Counsel. I accept Mr Katsoulas' submission that Mr He had relied on information provided by Mr Lin, as conveyed by Mr Zheng, rather than any information drawn from a careful analysis of that document.
27. It seems to me that the statements that Mr He recalled in his affidavit evidence were of a simple character and, on balance, I accept his recollection of them was generally reliable despite the passage of time. He was also cross-examined to seek to establish that the Lenders had "pooled" or coordinated their recollection of events. While I recognise that some of them had discussed the events that had occurred, at least in general terms, and they plainly had to discuss steps to be taken to bring these proceedings, I am not persuaded that there had been any pooling of their evidence that would degrade the quality of that evidence. Mr Katsoulas submits that Mr He was a credible witness, who did his best to assist the Court in understanding the events of June to July 2014, to the extent that the cross-examination dealt with those topics. It seems to me that Mr He was a credible, although relatively unsophisticated, witness whose recollection of events was largely not successfully challenged on cross-examination.
28. I will again address aspects of Mr Mitchell's submissions in respect of Ms Luo's claim, relying on Mr He's evidence here, before turning to the representations on which the Lenders rely and questions of causation below. Mr Mitchell repeats his submissions relating to Mr Zheng's claim, since Mr Zheng is alleged to have conveyed the relevant representations to Mr He who made the decisions relating to Ms Luo's loan. I have addressed those submissions above. Mr Mitchell also points out that Mr He did not keep any contemporaneous record of statements made by him to Mr Zheng and again submits that that omission is unlikely if such representations were important. I do not accept that submission for the reasons noted above in respect of Mr Zheng. Mr Mitchell submits that Mr He's dating of the representations to June 2014 must be incorrect, if he was shown the Turramurra Introduction document at the same time, where that document was not created until 11 July 2014. I do not accept that submission, given the several Lenders' evidence that an earlier version of that document, in English rather than both English and Chinese, existed.
29. Mr Mitchell also emphasises that Mr He, in cross-examination, did not place particular focus upon the representations identified in his affidavit evidence. While there is force in that submission, it seems to me to reflect, first, the difficulties of cross-examination through an interpreter and, second, the fact that Mr He was not seeking to advocate his case in cross-examination, and that does not undermine his affidavit evidence. Mr Mitchell also submits that any "misapprehensions" arising from representations to Mr He were displaced by the Turramurra Introduction document, which Mr He says he was shown by Mr Zheng in late June 2014. I do not accept that submission, in the absence of any clear risk disclosure in that document. Mr Mitchell also points to Mr He's confidence in the property market; however, that does not displace a finding that Mr He invested as a result of the relevant representations, so far as it would leave him potentially vulnerable to misleading representations that took advantage of his interest in investing in property.
30. Mr Wang and Ms Qian rely on Mr Wang's affidavit dated 31 May 2021. Mr Wang's evidence (Wang [3]ff) is that he has a doctorate in electrical engineering at the University of Technology Sydney, where he was introduced to Mr Lin and where their relationship developed before Mr Wang moved to Adelaide in early 2011 for work. Mr Wang's evidence (Wang [8]ff) is that he previously lent money to Mr Lin and Mr Fong in relation to the Lane Cove Project. He refers (Wang [18]) to a conversation in early July 2014 in which Mr Lin invited him to provide funding for the Turramurra Project, as follows: [Lin]: "Lane Cove is almost finished and I have a new opportunity. I have some land at Turramurra for construction and I have put together a proposal for it. I will be doing this project in my name because I now have enough experience to do it and want to take more responsibility and make a bigger return from this project. I need to organise some funding for it, are you interested to make some money?" [Wang]: "How much money can be made?" [Lin]: "For Lane Cove, I am going to give you 15% interest per year because it was towards the end of the project cycle. For this one because you will be an early investor so I can give you 20% interest per year." [Wang]: "I don't have much money, you will need to talk to my wife."
31. Mr Wang also refers (Wang [20]) to Mr Lin having sent him an email on 11 July 2014 headed "Turramurra Project Introduction" which Mr Wang then forwarded to Ms Qian. He refers to subsequent conversations with Mr Lin, in which he says that Mr Lin said "this project is low risk, your money will be secure". Mr Wang's evidence (Wang [26]), admitted with a limiting order under s 136 of the Evidence Act 1995 (NSW) as his understanding, was also that, at that point, presumably in mid-July 2014: "Me and my wife were still a bit hesitant … as there was no guarantee that the money will be returned to us." That proposition, if accepted, suggests that Mr Wang was not fully reassured by either the reference to "low risk" or to his money being "secure".
32. Mr Wang then refers (Wang [26]) to a further conversation in which Mr Lin said: "I have some properties in my own name and will be receiving one unit from the Lane Cove Project once it is completed. In the worst case I have these properties to secure your loan. I guarantee you to get your money back." There is evidence that Mr Lin in fact had other properties and the reference to his obtaining a property in the Lane Cove Project is consistent with what occurred. Mr Wang's evidence (Wang [28]ff) is that he and his wife then decided to loan $500,000 toward the Turramurra Project. He refers to having later received a loan agreement from Mr Lin and to having raised with Mr Lin why that agreement had no guarantor, to which he says Mr Lin responded: "Don't worry I am guaranteeing this. I have 2 properties and this company is my company so don't worry. I can pay you out." It seems to me that the reference to a "guarantee" in these conversations, and particularly the second of them, does amount to a representation that Mr Lin personally guaranteed the loan and that Mr Lin would pay Mr Wang out if Quantum did not do so. Mr Wang also refers to later conversations with Mr Lin in relation to difficulties with the Lane Cove Project and the sale of the Turramurra Project to a third party.
33. Mr Wang was cross-examined and presented as an intelligent and honest witness, whose plain lack of expertise in property development was not inconsistent with his intelligence or postgraduate education in engineering. He was cross-examined as to several documents relating to the Turramurra Project and, as Mr Katsoulas points out, that cross-examination emphasised his lack of understanding of them in July 2014, and possibly even now. His lack of focus on those documents was explicable by the fact that he thought of his wife and himself as lenders and not the developers of the project (T145), although a more experienced lender would have recognised the relationship between the performance of the project and the likely performance of the loan. His evidence in cross-examination was that: "Q. Do you accept now that this was a high-risk investment? A. Okay, two things: I - I agree from what you just mention and the project, how it goes, I understand this is a high-risk project. And then but there's not a investment I - in terms of juggling that investment, it's his decision. I just lend my money to him. So that's a reason. Since 2014 I don't have much visibility on who is the builder and how the sales is going because I just focus on him, so - cause I leant money to him. Q. When you say you "leant the money to him", the money was paid to Quantum Investments, wasn't it? A. Yes."
34. Mr Katsoulas submits that Mr Wang was an honest witness who did his best to assist the Court. I accept that his recollection was generally reliable despite the passage of time, and I accept his evidence as to contested matters in preference to Mr Lin's evidence.
35. I will again address aspects of Mr Mitchell's submissions in respect of Mr Wang's claim here, before turning to the representations on which the Lenders rely and questions of causation below. Mr Mitchell submits that it is unlikely that Mr Wang would recall the details of relevant conversations without a written record, given the time that has passed since the representations were alleged to have been made in July 2014. While I accept that his memory will likely have dimmed over that period, this was plainly a significant matter for Mr Wang and his wife, and it seemed to me that he had a genuine recollection of events, when cross-examined. I address Mr Mitchell's submissions as to whether the statements that Mr Wang claims Mr Lin made to him were capable of establishing the relevant representations below. Mr Mitchell again relies on the Turramurra Introduction document as disclosing the risks associated with the project and excluding causation. I do not accept that submission for the reasons that I have addressed above, and the fact that Mr Wang's wife worked as an accountant does not have the consequence that risks which were not clearly disclosed by that document would have been apparent to her.
36. MSD relied on the affidavit dated 21 May 2021 of Mr Xu, who is the sole director and shareholder of MSD. He refers (Xu [8]ff) to having been introduced to Mr Lin in about 2003 and to his having lent money to Mr Lin in relation to the Lane Cove Project and later having been informed by Mr Lin, in about June 2015, that that project went to "liquidation". He refers (Xu [30]) to a conversation in May or July 2014, when Mr Xu was in China, in which Mr Lin told him of the proposed Turramurra Project and in which Mr Lin said: "It is a very good project, fixed 20% return per annum and I will give you a bonus 5% lender introduction fee. I am not giving the bonus to anyone else." Mr Xu's evidence is that Mr Lin also said the project would be completed in two years.
37. Mr Xu also refers to having received an email from Mr Lin attaching the "Turramurra Project Introduction" on 11 July 2014 and another email providing him with bank details for Quantum to which payment could be transferred and a loan agreement. He was cross-examined as to a financial projection enclosed with that document and I address that cross-examination below. Mr Xu also refers (Xu [34]) to a subsequent conversation where Mr Lin said words to the following effect: [Lin]: "We need a loan of $500,000, I promise to use those funds only for the Turramurra Project. We need 2 years to pay it back and will pay interest of 20% per year plus the 5% bonus introduction fee. I will bear all of the economic and legal risks involved in the project."
38. Mr Xu also refers to subsequent conversations and attributes reasonably lengthy statements to Mr Lin relating to the success of the Lane Cove Project, his ownership of the company that will "own" the Turramurra Project, the growth of the Sydney real estate market and the location of the Turramurra Project (Xu [35]). Mr Xu also says (Xu [36]) that Mr Lin told him that: "I personally have two properties, one in Earlwood and one in North Ryde so there is no risk for you to get repaid. I will be responsible for all risks in the Turramurra [P]roject. If there is a risk I promise to sell my properties and ensure safety for your loan."
39. Mr Xu in turn refers to reasons he made the decision to lend $500,000 based on the "Turramurra Introduction Document", his "personal trust" in Mr Lin and Mr Lin's educational status. Mr Xu also refers to a request from Mr Lin that he transfer the amount of $500,000 before the loan agreement was signed, which he did on 14 July 2014 (Xu [41]-[42]). Mr Xu's evidence is that he was "not given the opportunity" to have the loan agreement translated or to obtain advice in relation to its contents because Mr Lin was "very pushy". I do not accept that evidence, where Mr Xu has substantial business experience in China and was not likely to be pushed into a course he did not wish to take. By his second affidavit dated 1 April 2022, Mr Xu took issue with aspects of Mr Lin's evidence in the proceedings.
40. Mr Xu was also cross-examined, through an interpreter, at some length. He often did not directly respond to the questions asked and was somewhat argumentative, although I accept that that may partly be the result of difficulties in translation and partly the result of lack of familiarity with Australian court procedure. His cross-examination emphasised his disinterest in the financial detail of the project. For example, his evidence in cross-examination (T164), in relation to the financial projection for the project included with the Turramurra Introduction document, was: "Q. Did you speak to anyone about this document, before paying money to Quantum? [Xu]: I did not. This was just one on one, directly between me and [Mr Lin]. I don't know how many people were involved in it, or what was the exact finance or anything, or the investment in the - in this - in the table. I don't know. It's just between me and him."
41. When he was asked about construction costs recorded in that document, he responded: "So are you saying as regards to this 30 million who would pay it? I don't know. I just know that Jack Lin told me there was an investment to be done, I was to give - could give like 500,000, he gave me an introduction to, Chinese, I understood. All of the other details I did not know." (T165)
42. His accepted that a promised 20% return was the most important factor in his decision to proceed with the transaction and also said that: "This was obviously the first reason, was to do with the 20% return. This is a business. This is to do with business. You put in an investment, then you would get a return, and the return was good. And the other reason, because [Mr] Lin told me about this." (T169)
43. The conversations set out in Mr Xu's affidavits have a somewhat formulaic character, but I recognise the possible impact of translation in this respect and I also recognise that Mr Lin had economic incentives to seek to persuade Mr Xu and MSD to make the relevant loan. Although with a degree of hesitation, I am satisfied on the balance of probabilities that Mr Lin made statements to the general effect of those set out in Mr Xu's evidence to Mr Xu.
44. I again address aspects of Mr Mitchell's submissions in respect of MSD's claim here, before turning below to the representations on which MSD and other Lenders rely and questions of causation. Mr Mitchell points, with some force, to the fact that Mr Xu's evidence in cross-examination referred to statements by Mr Lin which were of a different character to those relied on in the Lenders' case, including that Mr Lin had said "he was the manager of the [Turramurra] Project, he would repay the loan" (T167) and had said that the Turramurra Project was a "great project", leading Mr Xu to think that he did not need anything in writing (T169). I accept that the language there used by Mr Xu is significantly less formal than the statements which he attributed to Mr Lin in his affidavit evidence. Mr Mitchell also refers to reasons given by Mr Xu in his affidavit evidence for making the relevant loan, including the information contained in the Turramurra Introduction document and his personal trust in Mr Lin. Those matters do not exclude Mr Xu's and MSD's reliance on the representations.
45. Mr Lin in turn relies on his lengthy affidavit dated 31 January 2022. Mr Lin there refers (Lin [7]ff) to the circumstances in which he met Mr Shen, and subsequently Mr Xu and Mr Wang, and to his introduction to Mr Fong, who had initially been a builder and had been engaged in property development since 2010. Mr Lin also refers (Lin [15]ff) to conversations with Mr Fong in relation to his making a loan to the Lane Cove Project and to his subsequent introduction of Mr Shen, Mr Xu and Mr Wang to the Lane Cove Project.
46. Mr Lin also refers (Lin [30]) to an early conversation with Mr Fong and Mr Shen, in January 2014, in relation to a possible investment in the Turramurra Project, and to Mr Shen having referred to Mr Zheng's interest in property development and in "potential projects to invest in" at that meeting. He also refers to the circumstances in which Mr Wang and his wife invested in the Lane Cove Project, and he claims to have advised Mr Wang of the risk of investment in property development at the time and to have raised the possibility that Mr Wang and his wife could invest a lesser amount (Lin [36]). I approach that evidence with scepticism.
47. Mr Lin also refers (Lin [40]ff) to a meeting with Mr Zheng in mid-April 2014, and claims that he again said in that conversation that: [Lin]: "There are always risks in the property development business, and there will often be some uncertainties and unexpected things during the developments." Mr Lin claims that Mr Zheng also indicated in that conversation that he had "no problem with English", having lived in Australia for many years, and managed many businesses and he refers to a subsequent meeting between Mr Zheng and Mr Fong in mid-April 2014.
48. Mr Lin says (Lin [43]ff) that Mr Zheng asked him to attend a meeting with Mr Fong and some of his friends concerning the Turramurra Project in mid-May 2014, and he attended a meeting at Mr Zheng's house at that time, which was attended by several persons who did not pursue claims in these proceedings. Mr Lin sets out a lengthy conversation between Mr Fong, himself and Mr Zheng, which seems to me to have the character, at best, of a reconstruction. Mr Lin says (Lin [45]) that he then said that he had no money to invest in the Turramurra Project and did not wish to join it at that meeting, and that Mr Fong requested him to manage the communication between Mr Zheng's friends and Mr Fong, and that Mr Zheng supported that position. Mr Lin says that a conversation then took place: [Lin]: "Why should I assist as that's really not a matter for me and I have made my decision not to get involved?" [Zheng]: "My friends and I agree to let you have some bonuses for your involvement" [Fong]: "I also wish to have someone, such as you, who can collect these people's money in one place and then lend it to me all together, rather than having bits and pieces to me from them. I will only talk to you over the project generally. When the project finishes, I will pay the money back plus the promised return. How you divide it up after that is your business." [Zheng]: "Look, as long as our return is 20% per annum, my friends and I are happy. Whatever return you get on top of the 20% return, you can keep as your reward for helping us. But you need to be the person who manages the communication in the project between us and Victor [Fong], and gives us the relevant information when needed. This means you will need to be updated on the progress of the matter from Victor [Fong] and pass the information onto us when it is needed. Also, if we have any questions about the project, you will need to respond or you will need to obtain answers from Victor [Fong] and pass it onto us? [Lin]: "Does this involve personal liability? I don't want to be personally responsible for anything relating to this project. I do not want [to] get involved. I do not want all money to be paid to me and be responsible for your money." [Fong]: "Don't you have a company called Quantum Investment? Use that company to collect the money from those investors and then on-lend to me so that you are not personally responsible." [Zheng]: "OK, you get involved by using the company as the platform so you are not personally responsible." [Lin]: "Let me think about it."
49. I am not persuaded that a conversation took place in those terms, since it is highly unlikely that, absent hindsight, Mr Lin would have immediately focussed on minimising his personal liability in respect of the proposed transaction or proceeded with it if that was the most important issue to be addressed in respect of it. In any event, little turns upon Mr Lin's wish to minimise his liability so far as the Plaintiffs' representational case is concerned, since, if Mr Lin made representations personally, he can be held liable for them under the statutory regime in respect of misleading and deceptive conduct, irrespective of whether a corporate vehicle was also involved in the transactions.
50. Mr Lin also refers (Lin [46]) to a further meeting at Mr Zheng's house two or three days later, likely also in May 2014, when he attributes a statement to Mr Zheng as follows: "Your company is to get involved so that you are not personally liable. We are happy to put money into your company with an interest of 20%. Your company will then lend the money to Victor [Fong]. When the [Turramurra] Project makes the return, your company can pay us 20% and you keep the rest." I am also not persuaded that Mr Zheng made a statement in those terms, with its particular focus on immunising Mr Lin from personal liability.
51. Mr Lin says (Lin [47]ff) that he then became aware, at a meeting with Mr Fong and Mr Zheng of contention in relation to the development of the Turramurra Project, and then advised Mr Zheng that the project "involves arguments and complicated relationships" and that Mr Zheng should "give it up to avoid potential issues". I am not persuaded that statement was made, where there is no obvious explanation as to why Mr Zheng would have been so attached to this project that he would have disregarded that advice if it was given. Mr Lin's evidence (Lin [50]) is that he was then called by Mr Zheng many times in the first half of 2014, seeking to persuade him to become involved in the Turramurra Project.
52. Mr Lin's evidence (Lin [52]ff) is that on 17 June 2014 he received documents from Mr Fong, who requested that he share them with Mr Zheng. When Mr Lin subsequently did so, he also had a conversation with Mr Zheng in which he agreed to act, in effect, as an intermediary between Mr Fong, Mr Zheng and his friends, but once again said: "My company Quantum is the platform. I won't be personally responsible or liable for anything." Mr Lin claims that he also raised the "issues or disputes" that Mr Fong had mentioned with Mr Zheng, and Mr Zheng referred to Mr Fong's advice that the disputes had been resolved. I am not persuaded those conversations occurred.
53. Mr Lin then refers (Lin [56]ff) to a further meeting he attended with Mr Zheng and Mr Fong in Lane Cove at the end of June 2014, in which he again sets out a very lengthy conversation concerning, inter alia, the payment that would be made to him for his involvement in the Turramurra Project. That conversation is also said to include a comment by Mr Zheng that Mr Lin's company, Quantum, would be "getting the funds pooled" but Mr Lin "is not responsible" so a guarantor would be needed, and an offer by Mr Fong to provide such a guarantee. It seems to me that that conversation is also a self-serving reconstruction and I am not persuaded that it occurred in those terms. Mr Lin then sets out a further conversation with Mr Wang at the end of June 2014 (Lin [57]) in which he says that he again emphasised that he "won't be personally liable for your money and that Mr Fong would be the guarantor and Mr Wang accepted that arrangement. Again, I am not persuaded that a conversation took place in those terms and I prefer Mr Wang's evidence to Mr Lin's evidence in this regard.
54. Mr Lin also sets out a conversation with Mr Xu at the end of June 2014 (Lin [59]) and further conversations with Mr Zheng at that time, and I am also not persuaded by Mr Lin's evidence of those conversations. Mr Lin then sets out (Lin [65]) a conversation with Mr Zheng on or about 1 July 2014, where he once more insisted that "[y]ou have to understand that I am not going to be personally liable for anything". I am also not persuaded that a conversation took place in those terms. Mr Lin then addresses subsequent steps, including the receipt of some payments from the Lenders, and refers to a further conversation with Mr Xu on 9 July 2014, who had spoken to Mr Fong and been promised a return of 20% per annum on the project and who would be investing $500,000. He also refers to a conversation with Mr Zheng on 11 July 2014 (Lin [81]) which referred to an agreed payment of $20,000.00 per annum and Mr Zheng's claim to a payment of $100,000 as he had introduced his friends to the project and Quantum was to obtain a profit on the transaction.
55. Mr Lin's evidence (Lin [82]) is that he then prepared the Turramurra Introduction document which he says was based on information provided to him by Mr Fong, and that he referred to himself as project manager in that document as he had "told the investors that [he] would be involved in the management and operation with the aim to have better communication between Mr Fong and these investors". I do not accept that evidence, which does not seem to me to be consistent with the ordinary usage of the term "project manager" or the meaning which it has in the context of that document.
56. Mr Lin then refers to subsequent correspondence and (Lin [88]) to a request by Mr Zheng on 14 July 2014 that the Turramurra introduction document be amended to include Mr Zheng's name as a consultant, and to address matters as to expenses of the project and a right to inspect tax invoices, and to Mr Lin's having then amended that document in that manner. Mr Lin claims that, on 14 July 2014, Mr Xu in turn requested a change to the loan agreement with MSD to provide for a fee of $25,000 and Mr Lin agreed to change the agreement to include that fee. Mr Lin also refers to further dealings with the Lenders and to payments made by Quantum to MVGDD's solicitors at the point of settlement, to which I have referred above, and a conversation with Mr Fong and a solicitor employed by MVGDD's solicitors. He then refers (Lin [113]ff) to a subsequent meeting between Mr Zheng, Mr He and other persons who have not pursued these proceedings at his house on 27 July 2014, where he handed them draft loan agreements and claims to have said: [Lin]: "The money is loaned to Quantum. It is not loaned to me personally. The money is then on-loaned to MVGDD for development."
57. Mr Lin also refers (Lin [117]) to a conversation with Mr Shen in early August 2014 in which Mr Shen indicated his investment in the project would be limited to $190,000. His evidence (Lin [125]ff) is that MVGDD subsequently failed to repay the amounts advanced by Quantum under its loan agreement with MVGDD and that he was not paid the amount promised to him by MVGDD or Mr Fong. He also refers (Lin [127]ff) to the transactions involving MVGDD's solicitors of 4 July 2014 and September 2014 and to Quantum's complaint to the Law Society of New South Wales in mid-October 2017, to which I referred above. His evidence is that he has not received a response from the Law Society of New South Wales, although no attempt was made to obtain production of documents as to any investigation which it had undertaken by the issue of a subpoena in the proceedings. Mr Lin also refers (Lin [132]) to proceedings subsequently brought by Quantum against MVGDD and Mr Fong, and I refer below to an amount recovered by Quantum in those proceedings and distributed, in part, to the Lenders. Mr Lin also takes issue (Lin [133]ff) with aspects of Mr Xu's, Mr Zheng's, Mr Shen's, Mr Wang's and Mr He's affidavit evidence in that affidavit.
58. Mr Lin was cross-examined, and appeared to have a good understanding of questions asked in English, which he was usually able to answer in English, although he took the opportunity to have some questions and answers translated for him. It seemed to me that generally occurred not because those questions where any more complex than other questions that Mr Lin had understood and answered in English, but because the answers to them might potentially undermine his position in the proceedings. It seemed to me that Mr Lin's evidence in cross-examination was less implausible than his affidavit evidence, but I approach that evidence with caution, and generally prefer the evidence of the Lenders as to disputed matters over Mr Lin's evidence.

The Lenders' representational claims

1. I now turn to the applicable legal principles in respect of the Lenders' representational claims. Mr Katsoulas points out that s 18(1) of the Australian Consumer Law, as contained in sch 2 to the Competition and Consumer Act 2010 (Cth), ("ACL") provides that: "A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive." He points out that s 4 of the ACL applies to misleading representations concerning future matters, and that s 236(1) of the ACL provides that an action for damages arises where a person suffers loss or damage "because of the conduct of another person" and that conduct contravenes, inter alia, s 18 of the ACL, and that loss or damage may be recovered against that other person or against "any person involved in the contravention."
2. I outlined the applicable principles in a claim for misleading and deceptive conduct in Re Australian International Yacht Club Pty Limited [2021] NSWSC 586 at [99]-[100], to which Mr Katsoulas refers, and then in Changizi v Rizaie [2021] NSWSC 613 at [93]-[94] as follows: "The approach to be adopted in assessing whether conduct is misleading or deceptive was summarised by Gordon J in Australian Competition and Consumer Commission v Telstra Corporation Ltd (2007) 244 ALR 470; [2007] FCA 1904 at [14]-[15], in a passage which Griffiths J followed in Forty Two International Pty Ltd v Barnes (2014) 97 ACSR 450; [2014] FCA 85 at [446] and which I followed in Re Colorado Products Pty Ltd (in prov liq) [(2014) 101 ACSR 233; [2014] NSWSC 789 ] at [86], as follows: The relevant legal principles have been well traversed by Australian courts. A two-step analysis is required. First, it is necessary to ask whether each or any of the pleaded representations is conveyed by the particular events complained of … Second, it is necessary to ask whether the representations conveyed are false, misleading or deceptive or likely to mislead or deceive. This is a 'quintessential question of fact'… [citations omitted] Conduct is misleading or deceptive or likely to mislead or deceive if it is capable of inducing error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 . It is not necessary for [the plaintiff] to establish that [the defendant] intended to mislead or deceive and the relevant question is whether, viewed objectively, the relevant conduct was misleading or deceptive or likely to mislead or deceive: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197 per Gibbs CJ, 216 per Brennan J; [1982] HCA 44; Australian Competition and Consumer Commission v Jewellery Group Pty Ltd (2012) 293 ALR 335; [2012] FCA 848 at [66]. Conduct is likely to mislead or deceive if there is a real and not remote chance or possibility that a person is likely to be misled or deceived, and this is so even though the possibility of that occurring is less than 50 per cent: Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [112] per McHugh J; Colorado Products above at [87]; Redmond Family Holdings v GC Access Pty Ltd [2016] NSWSC 796 at [49] ff."
3. I also recognise that, to the extent that the representations alleged to have been made by Mr Lin were representations as to future matters, whether he had reasonable grounds for making them must be assessed at the date of the representation: Pramoko v Grande Enterprises Ltd (2016) 108 ACSR 469 at 481. In a claim under s 18 of the ACL, s 4 provides that Mr Lin bears an evidentiary burden to demonstrate some reasonable ground for making a representation and, if some evidence is led, the Lenders bear the onus of proving that he did not have reasonable grounds for making the representation. I also bear in mind the observation of Bell ACJ in Ireland v WG Riverview Pty Ltd [2019] NSWCA 307 at [33]-[34], to which Mr Katsoulas refers, that: "… there will be cases where a statement made by a person honestly believing it to be true will give rise to liability, notwithstanding that person's honest belief in its truth because, to the target audience, that statement has presented as one of fact, and not of opinion or belief: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197; [1982] HCA 44. In this sense, liability for misleading or deceptive conduct is sometimes described as strict (in that it does not require any fault or intent on the part of the representor to be established: see, for example, Heydon at [160.250]) Where, however, it is established that a statement or representation is or must have been understood by its target audience as one of opinion or belief, even though presenting at one level as one of fact, liability will not be strict; rather, it will generally depend upon an assessment as to whether or not the belief or the opinion was honestly held and "perhaps" … whether or not the maker had a reasonable basis for the belief or opinion. Other than in cases of statements as to future matters (where the statutory presumption is engaged: see, for example, Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, s 4), it will be for a plaintiff to establish the lack of reasonable basis for belief if misleading or deceptive conduct is to be established."
4. In Atlas at [211], I accepted Counsel's summary of the matters relevant to whether misleading and deceptive conduct is established as follows: The case law on misleading conduct is legion. However, the principles governing the matters in issue in the present case are likely to be uncontroversial. Relevantly: - Whether conduct is misleading or deceptive is a question of fact to be determined objectively, by reference to all of the relevant circumstances … It is uncontroversial that misleading conduct can be established where a misrepresentation was but one of a number of factors which induced a loss-making decision… It is sufficient if the misrepresentation in question is a though not the cause of loss, and that it materially contributed to the claimant's loss: … Contravention of the provisions does not require proof of intention on the part of the representor … The question for the Court will be whether loss has been caused "by" contravening conduct; thus, third parties may rely upon the conduct of a misrepresentor … The Court is required to determine what the conduct gives the complainant to understand or what is to be taken from such conduct … A representation may be misleading, although apparently true, if it masks an underlying falsity …" [citations omitted] [emphasis in original]
5. In dealing with this claim, I also bear in mind the observation of McHugh J in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [109], approved by the majority in Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [102] that: "The question whether conduct is misleading or deceptive or is likely to mislead or deceive is a question of fact. In determining whether a contravention of s 52 [of the then Trade Practices Act] has occurred, the task of the court is to examine the relevant course of conduct as a whole. It is determined by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. It is an objective question that the court must determine for itself. It invites error to look at isolated parts of the corporation's conduct. The effect of any relevant statements or actions or any silence or inaction occurring in the context of a single course of conduct must be deduced from the whole course of conduct. Thus, where the alleged contravention of s 52 relates primarily to a document, the effect of the document must be examined in the context of the evidence as a whole. The court is not confined to examining the document in isolation. It must have regard to all the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document." [citations omitted]
6. In addressing the Lenders' representational case generally, Mr Mitchell submits that, where the "Financing Representations" are pleaded in identical terms, the Lenders must contend that the same statement was made by Mr Lin to all of the Lenders at the same time and in identical circumstances. I do not accept that submission and the SFACLS, as particularised, sufficiently identifies the claim that representations to substantially the same effect were made to the several Lenders, although not every representation to all of them, at different times. This is hardly a unique situation in respect of a representational case involving several plaintiffs.
7. Mr Mitchell also points out that the period in which the respective payments were made by the Lenders overlaps with the period in which the alleged Financing Representations were made; that is plainly the case, and causes difficulty for the Lenders' previous reliance on, for example, representations made at the meeting in late July, but not for statements made before the relevant funds were advanced. Mr Mitchell in turn submits that there is evidence of collusion between the Lenders in their preparation of their affidavit evidence, referring to Mr He's evidence in cross-examination (T44) on the first day of the hearing. I do not accept that submission, which I have addressed in dealing with the Lenders' affidavit evidence above.

The alleged Success, Purchase Use and Funding Use representations

1. As I noted above, the Lenders did not press the first pleaded representation (SFACLS [18(a)]) as to the success of the Turramurra Project. Their second and third pleaded representations (SFACLS [18(b)-(c)]) were that monies loaned to Quantum would be used to fund the purchase of the land for the purposes of the Turramurra Project ("Purchase Use Representation") or alternatively would be used to fund the purchase and development of the land for the Turramurra Project ("Funding Use Representation"). Mr Katsoulas indicated in closing submissions that the claim in respect of these representations is not pressed and I need not address them further.

The alleged Security Representation

1. The Lenders' fourth pleaded representation (SFACLS [18(d)]) is that monies loaned to Quantum would be secured against the land upon disbursement ("Security Representation").
2. In the Lenders' Closing Schedule (Ex P3), Mr Zheng relies in support of this representation on his evidence that Mr Lin said that there would be "no risk" that Mr Zheng would lose his money because "it doesn't matter of if we develop or not, the land is worth money" (Zheng [11]) and that his money would be "secure in the land" (Zheng [12]). Mr Zheng also relies on a statement that the land could not be purchased without the Lenders' money (Zheng [18]) and evidence that he was told by Mr Lin that his money "will be secure because of the value of the land, even if the construction did not occur" (Zheng [25(c)(iii)]). On balance, I am not persuaded that those statements gave rise to a specific representation that monies loaned by Mr Zheng to Quantum would be secured over the land, where the value of the land could reduce the risk of the Turramurra Project without Quantum giving security to the Lenders generally or Mr Zheng specifically over the land, including by Quantum taking security in its own favour over the land.
3. Mr Lin accepted in the course of his cross-examination that he told Mr Zheng that the money advanced by Quantum, implicitly to MVGDD, would be "secured against the land" or "secured on the land": "Q. Now, I'm only asking about what you said at this point of time, Mr Lin. Is it correct that in around June or July 2014, you told Mr Zheng that any funds advanced by Quantum would be secured against the land comprising the Turramurra project? A. [Lin]: Yes, I said. I repeated Victor's words. Victor's words. Q. Now, do you recall what words you said to Mr Zheng? A. [Lin]: Yeah. Q. What were those words? A. [Lin]: The money will be secured on the land." (T214)
4. Mr Lin also gave evidence in further cross-examination that: "Q. You gave evidence earlier today that you told Mr Zheng that the monies to be advanced would be secured against the land comprising the Turramurra project, is that correct? A. [Lin]: Yes, I said so. And I was just repeating what Victor told me." (T221)
5. I am also not satisfied that this evidence establishes a representation that monies loaned by Mr Zheng or the Lenders generally to Quantum would be secured against the land. In the first exchange, Mr Lin accepted that he told Mr Zheng that "funds advanced by" rather than to Quantum would be "secured against the land" and the second exchange, in which Mr Lin reaffirmed his earlier evidence that "the monies to be advanced would be secured against the land", should be understood in the same light. These statements seem to me to be directed to whether Quantum would take security for monies it advanced to fund the Turramurra Project, as distinct from whether it would give security for monies it borrowed from the Lenders. Mr Zheng fails in this claim because the alleged representation is not established.
6. In the Lenders' Closing Schedule, Mr Shen relies on his evidence of a representation by Mr Lin made at the meeting which he says took place in June 2014 that security would be given over the land (Shen [17], T109) and other, less direct, evidence supporting such a representation. I am not satisfied that such a meeting took place at that time, and it seems to me that Mr Shen is here referring to the later meeting that took place in mid or late July 2014, after Mr Shen had made his payment to Quantum, and he identifies no basis on which a statement made after the event can have caused any relevant loss to him. His claim in this respect must fail.
7. In the Lenders' Closing Schedule, Ms Luo relies on Mr He's evidence (He [13]) that he was told by Mr Zheng that "your investment is safe in the land. [Mr Lin] will pay you back". This statement is also not sufficiently specific to support the alleged representation, because it does not represent that monies loaned to Quantum would be secured over the land, but only that the land had value or because Mr Lin would be able to repay the loan. Mr Wang and Ms Qian also rely, in support of this representation, on statements made by Mr Lin in July 2014 to Mr Wang to the effect that "I have some lands at Turramurra for construction and I have put together a proposal for it. I will be doing this project in my own name because I now have enough experience to do it and want to take more responsibility and make a bigger return" (Wang [18]) and that "[the Turramurra Project] is low risk, your money will be secure" (Wang [21]). It seems to me that these statements are also not sufficiently specific to convey a representation that monies loaned to Quantum would be secured against the land, although they do convey a representation as to the lack of risk or as to the safety of the project. MSD does not identify any evidence to support a representation to this effect made to it and I need not address any claim by it in this respect.
8. I have concluded that the Lenders have not established that this representation was made. I note, for completeness, that the Lenders contend (SFACLS [20]-[21]) that this representation was a continuing representation and a representation as to a future matter made without reasonable basis and SFACLS [24(C])) that it was made in trade and commerce and was misleading and deceptive contrary to s 18 of the ACL because the sums were not secured against the land (or at all) upon their disbursement. The Lenders also seek to falsify this representation (SFACLS [24(J) - (K)]) on the basis that Quantum did not obtain title in the land and/or security over the land or the benefit of each of the Lenders and Mr Lin had no reasonable basis for representing that the Lenders would obtain security over the land in the future, or at all. Had I found this representation was made, I would have been satisfied that Mr Lin did not have a reasonable basis for that representation where, at best, he had only Mr Fong's statement that MVGDD would accept the grant of security, likely to Quantum rather than to the Lenders themselves, and no basis to believe that MVGDD's co-venturers would accept that approach.
9. The Lenders also contend (SFACLS [18A]) that, in making the Security Representation, Mr Lin represented to them that Quantum was to obtain title of and/or security over the land in their favour. That claim is expressly derivative of the making of the Security Representation (as defined in SFACLS [18(d)]) and cannot succeed where the Lenders who have not established that representation was made. It would otherwise not alter the outcome of the proceedings, where Mr Zheng, Ms Luo, Mr Wang and Ms Qian and MSD succeed on other grounds, Mr Shen cannot succeed because he advanced relevant funds before he claims the representations were made to him.

The alleged Guarantee Representation

1. The Lenders' fifth pleaded representation (SFACLS [18(e)]) is that Mr Lin "guaranteed" the repayment to the Lenders of monies loaned to Quantum for the purposes of the Turramurra Project and was guarantor to the Lenders of monies they may loan to Quantum ("Guarantee Representation"). This claim depends upon an alleged statement by Mr Lin to each of the Lenders (SFACLS [10(m)]) that "Mr Lin would bear all risks in relation to monies loaned to Quantum and personally guaranteed the repayment of monies loaned to Quantum". Read in in its context and together with that representation, this claim amounts to an allegation that Mr Lin had represented he offered a personal guarantee of loans made by the Lenders to Quantum.
2. In the Lenders' Closing Schedule, Mr Zheng does not identify any evidence on which he relies in support of this representation, and it seems to me that his evidence of a "guarantee" by Mr Lin related to an assurance of repayment (which is the subject of claimed separate representations, the "Guaranteed Repayment Representation" and the "Second Guarantee Repayment Representation" which I address below) and not a statement that Mr Lin was a guarantor of Quantum's liability to Mr Zheng.
3. In the Lenders' Closing Schedule, Mr Shen relies on his evidence (Shen [17]) of a statement made by Mr Lin, at the meeting which he says took place in June 2014, that "I own some properties myself so I will guarantee to return the money that you loan". However, that meeting did not take place until mid July 2014, after Mr Shen had made his payment to Quantum, and he identifies no basis on which a statement made after the event can have caused any relevant loss to him. His claim in this respect must fail.
4. In the Lenders' Closing Schedule, Ms Luo relies on Mr He's evidence (He [13]) that Mr Zheng told him that Mr Lin would pay him back. That evidence is not sufficient to support a representational claim against Mr Lin, where I have held above that Mr Zheng's evidence (Zheng [11]) of what Mr Lin said to him was directed to an assurance of repayment, rather than a statement that Mr Lin was guarantor of Quantum's liability to the Lenders. Ms Luo's claim against Mr Lin based on information conveyed by Mr Lin to Mr Zheng and then by Mr Zheng to Mr He cannot rise above what was originally said by Mr Lin to Mr Zheng.
5. Mr Wang and Ms Qian rely on Mr Wang's evidence (Wang [26], [29]) that Mr Lin referred in July 2014 to a guarantee that they would get their money back. I am persuaded that amounted to a representation that Mr Lin was guarantor of Quantum's liability to Mr Wang and Ms Qian, as distinct from merely an assurance of repayment and they establish this representation on that basis.
6. MSD relies on Mr Xu's evidence (Xu [34], [36]) that Mr Lin told him, relevantly, that "I will bear all of the economic and legal risks involved in this project" and "… there is no risk for you to get repaid. I will be responsible for all risks in the Turramurra [P]roject". On balance, I have accepted above that a representation of this general character was made to MSD through Mr Xu, which at least amounted to Mr Lin accepting that he was responsible for the repayment of a loan made by MSD to Quantum, and this allegation is established in respect of MSD.
7. I do not accept Mr Lin's evidence denying that such statements were made, although I recognise that there would be an oddity in Mr Lin introducing a corporate borrower so as to avoid personal liability for the borrowing and then making promises of repayment to the Lenders.
8. The Lenders contend (SFACLS [20]-[21]) that this was a continuing representation and was also a representation as to a future matter made without reasonable basis. They also contend (SFACLS [24(D)]) that it was made in trade and commerce and was misleading and deceptive contrary to s 18 of the ACL because if it was not a term of the loan agreement that Mr Lin was a joint borrower or guaranteed the repayment of the principal and the interest to the Lenders, he did not guarantee that repayment. This representation was misleading and deceptive, where it was made to Mr Wang and Ms Qian and MSD, where Mr Lin did not then or later personally guarantee Quantum's liability to the Lenders in the loan agreement or otherwise. I address the question of causation in respect of this representation below.

The alleged No Risk Representation and Low Risk Representation

1. The Lenders' sixth and seventh pleaded representations (SFACLS [18(f)-(h)]) is that their providing loans to Mr Lin or his related entities in order to fund the Turramurra Project had no risk ("No Risk Representation") or had minimal or low risk ("Low Risk Representation").
2. In the Lenders' Closing Schedule, Mr Zheng relies on his evidence (Zheng [11]) that Mr Lin told him that, once the land was bought, there was no risk because it did not matter if the land was developed, since the land was worth the money. I will assume, without deciding, that Mr Lin made a representation that the loan or the Turramurra Project had minimal or low risk to Mr Zheng, where it is not necessary to decide that matter given the conclusion that I reach below
3. In the Lenders' Closing Schedule, Mr Shen relies on a representation at the meeting that he says took place in June 2014 (Shen [17], [21]; T109) that there would be no risk because of the security over the land. As I have noted above, that meeting did not take place until mid July 2014, after Mr Shen had made his payment to Quantum, and he identifies no basis on which a statement made after the event can have caused any relevant loss to him. His claim in this respect must fail.
4. In the Lenders' Closing Schedule, Ms Luo relies on Mr Zheng's statement to Mr He (He [13]) that there was "no risk" because the investment was "safe in the land" and Mr Lin would pay him back. I will assume, without deciding, that Mr Lin made a representation that the loan or the Turramurra Project had minimal or low risk to Mr Zheng and, through Mr Zheng, to Mr He and Ms Luo, where it is not necessary to decide that matter given the conclusion that I reach below.
5. In the Lenders' Closing Schedule, Mr Wang and Ms Qian rely on Mr Wang's evidence (Wang [22]), which I accept, that Mr Lin said in July 2014 that "this project is low risk, your money will be secure", although that was not then sufficient to reassure Mr Wang and Ms Qian as to the transaction until further representations were made, and appears to be directed to the risk of the Turramurra Project rather than the risk of a loan to Quantum or to Mr Lin.
6. In the Lenders' Closing Schedule, MSD relies on Mr Xu's evidence (Xu [34], [36]) that Mr Lin told him that Mr Lin would "bear all of the economic and legal risks involved in the project" and also that Mr Lin said that "there is no risk for you to get repaid. I will be responsible for all risks in the Turramurra [P]roject". I have, with hesitation, accepted above that a representation to this effect was made to Mr Xu and, through him, to MSD and this is consistent with the pleaded representation that there was no risk in the loan, although it implicitly assumes that such risks existed in the Turramurra Project.
7. The Lenders contend (SFACLS [20]-[21]) that these were continuing representations and were representations as to a future matter made without reasonable basis. I do not accept that submission since it seems to me that the alleged representations should be read as directed to the risk attached to the loan or the Turramurra Project as assessed at the time it was made, although that would be assessed by reference to the then possibility of future events in respect of the loan. The Plaintiffs also contend (SFACLS [24(E)-(G)]) that these representations were made in trade and commerce and were misleading and deceptive contrary to s 18 of the ACL on the basis that their advancing funds to Quantum and/or Mr Lin attracted risk and that risk materialised, or attracted great risk, or on the basis that Mr Lin had no reasonable basis for making the No Risk Representation or the Low Risk Representation.
8. I am satisfied that, if these representations were made, they would be misleading or deceptive or likely to mislead or deceive since the Lenders were exposed to the risk that (1) Quantum (and indeed, Mr Lin, even if the loan was treated as made to him personally) would not be able to repay the loans without being repaid the loan that it proposed to make to MVGDD; (2) MVGDD was not an entity of substance and would not be able to repay the loan unless the Turramurra Project was a success; and (3) the Turramurra Project might not be a success, whether for reasons associated with that particular project or MVGDD and its co-venturers in the project, or for reasons relating to the risk of property development generally. Mr Lin, in his evidence, did not seek to contend that a loan to him or Quantum in respect of the Turramurra Project had either no or minimal risk; instead he contended, in evidence that I do not accept, that he had repeatedly warned the Lenders (or at least Mr Zheng) against participating in the project, while never recording that warning in writing and omitting it or any reference to risk from the Turramurra Introduction document. I address the question of causation in respect of these representations below, and these claims fail because causation is not established in respect of these representations.

The alleged Guaranteed Repayment Representation and the Second Guarantee Repayment Representation

1. The Lenders' eighth pleaded representation (SFACLS [18(h)]) is that the principal loaned by the Lenders and any interest thereon payable to them was guaranteed to be repaid to them ("Guaranteed Repayment Representation"). The ninth pleaded representation (SFACLS [18(i)]), on which only Mr Zheng relies, was that the principal and interest was guaranteed to be repaid regardless of the outcome of the Turramurra Project ("Second Guarantee Repayment Representation").
2. In the Lenders' Closing Schedule, Mr Zheng relies on his evidence (Zheng [11]) that Mr Lin had said "[w]e guarantee 20% interest per year" and "guarantee to return your money" after the 2 year 6 month period for which it was required. On balance, I am persuaded that a representation to that effect was made. Mr Zheng also relies on a further representation that "my money will be secure because of the value of the land" (Zheng [25(c)(iii)]) and his belief that "I would really make a lot of money", but these matters do not support this representation.
3. In the Lenders' Closing Schedule, Mr Shen relies on his evidence (Shen [17], T109) that Mr Lin referred, again at the meeting that he says took place in June 2014, to a "guarantee" that the project will make money and that Mr Lin "guarantee[d]" to return the money that Mr Shen loaned. As I noted above, that meeting did not take place until mid July 2014, after Mr Shen had made his payment to Quantum, and he identifies no basis on which a statement made after the event can have caused any relevant loss to him. His claim in this respect must fail.
4. In the Lenders' Closing Schedule, Ms Luo relies on Mr He's evidence (He [8]) of a guarantee of the "return" (or interest) rather than principal, relayed by Mr Zheng. That does not support the claim that she brings in this respect, which is directed to a guarantee of the principal and interest. However, Ms Luo also relies on Mr He's being told by Mr Zheng (He [13]) that Mr Lin would pay him back and that is sufficient to support an representational claim, where that statement by Mr Zheng is consistent with the representation made by Mr Lin to Mr Zheng with the apparent intent that he convey it to other Lenders.
5. In the Lenders' Closing Schedule, Mr Wang and Ms Qian rely on Mr Wang's evidence (Wang [26], [29]), which I accept, that Mr Lin referred in July 2014 to a guarantee that Mr Wang and Ms Qian would get their money back, although referring to other properties that he owned to support that guarantee.
6. In the Lenders' Closing Schedule, MSD relies on Mr Xu's evidence (Xu [36]) that Mr Lin said: "I personally have two properties, one in Earlwood and one in North Ryde so there is no risk for you to get repaid. I will be responsible for all risks in the Turramurra [P]roject. If there is a risk I promise to sell my properties and ensure safety for your loan." I have, with hesitation, accepted above that a representation to this effect was made to Mr Xu and, through him, to MSD.
7. By contrast with the fifth pleaded representation, these representations refer, at least in part, to a "guarantee" in the sense of an assurance of repayment and are of a more general character than the alleged representation that Mr Lin personally guaranteed Quantum's liability under loans made by the Lenders to it. The Lenders contend (SFACLS [20]-[21]) that these were continuing representations and were representations as to a future matter made without reasonable basis. They also contend (SFACLS [24(H)]) that they were made in trade and commerce and were misleading and deceptive contrary to s 18 of the ACL on the basis that Mr Lin had no reasonable basis for making them. I am satisfied that these representations were misleading and deceptive, where the risks attached to the loans were such that there was plainly no basis for Mr Lin to "guarantee" a return for the Lenders, in the sense of an assurance that they would be repaid. Mr Zheng, Ms Luo, Mr Wang and Ms Qian and MSD succeed in this claim, subject to causation and quantification which I address below. Mr Shen fails in this claim.

The Lenders' other claims

1. As I noted above, several of the Lenders initially contended that the representations relating to the use of the monies loaned to Quantum and the Security Representation were also made by Mr Lin in the loan agreements. Those claims have the first difficulty that Quantum, rather than Mr Lin, was party to the loan agreements and the second and larger difficulty that the Lenders variously advanced the funds before the relevant agreement was provided, even in draft; gave evidence that they could not read English and therefore did not understand the agreement or, by extension, any representation made in it; and in any event give no evidence of focussing on those in a manner that was causative of their loss. Mr Katsoulas rightly did not press these claims in closing submissions and I need not address them further.
2. The Lenders also contend (SFACLS [19]) that Quantum made the Financing Representations to the Lenders and Mr Lin was involved in making them. That position is arguable so far as representations were made in the Deeds of Loan Agreement, but I need not decide this claim where the funds were advanced prior to entry into those Deeds and the entry into them had no causative effect in respect of the Lenders' loss of those funds.
3. For completeness, the Lenders also seek (SFACLS [24(I)]) to falsify the several representations on the basis that Mr Lin did not correct the Lenders' understanding of and reliance upon the Financing Representations. I bear in mind the observation by the High Court of Australia in Miller & Associates Insurance Broking Pty Ltd (ACN 089 245 465) v BMW Australia Finance Ltd (ACN 007 101 715) (2010) 241 CLR 357; 270 ALR 204; [2010] HCA 31 in respect of s 52 of the Trade Practices Act 1974 (Cth) and again by Sackville AJA in Fabcot Pty Ltd v Port Macquarie-Hastings Council [2011] NSWCA 167 at [209] in respect of s 42 of the Fair Trading Act 1987 (NSW) that, in general, the prohibition on misleading and deceptive conduct "does not require a party to commercial negotiations to volunteer information which will assist the decision-making of the other party. A fortiori, [the relevant section] does not require a party to volunteer information in order to avoid the careless disregard of its own interests of a party of equal bargaining power and competence …"; see also Traderight (NSW) Pty Ltd v Bank of Queensland Ltd [2015] NSWCA 94 at [192] and by Gleeson JA (with Macfarlan and Leeming JJA agreeing in OXS Pty Ltd v Sydney Harbour Foreshore Authority [2016] NSWCA 120 at [178]. It is not apparent how this claim could succeed, if the Lenders' positive misleading and deceptive conduct claim fails, since its premise is the Lenders' understanding and reliance on the pleaded Financing Representations. It is also not apparent what the Lenders would have done, had Mr Lin not made the alleged representations but had nonetheless known what "understanding" they held and sought to correct it, and this claim fails.
4. The Lenders also contend (SFACLS [24A]) that Mr Lin engaged in conduct that contravened s 18 of the ACL in that the Deeds of Loan Agreement proffered to the Lenders by Mr Lin were inconsistent with the Financing Representations; they did not contain a personal guarantee to each of the Lenders; they did not contain a clause providing security for the monies advanced against the land; they described the monies loaned to Quantum as "Security Monies" but did not in fact provide security; and the wording of the Deeds was such that they intended to, and did, represent to the reader that security was granted over the land. Mr Katsoulas indicated in closing submissions that this claim was not pressed as a separate representation, but as a matter falsifying the representations to which I have referred above. To the extent this claim is directed to falsifying any earlier oral representations, it cannot succeed if those representations are not established, and it otherwise adds nothing to the claims that I have addressed above. To the extent this claim is directed to any representation made in the Deeds of Loan Agreement, it does not assist the Lenders because their monies had been advanced before those documents were provided in draft or executed.

Summary as to representational claims

1. In summary, none of the Lenders established that the Security Representations (SFACLS [18(d)]) were made; Mr Wang and Ms Qian and MSD established that the Guarantee Representation (SFACLS [18(e)]), in the sense that Mr Lin was responsible for repayment of Quantum's borrowing from them, was made to them but other Lenders did not; even if the No Risk Representation and Low Risk Representations (SFACLS [18(f)-(h)]) were made, they had no causative effect for the reasons noted below; Mr Zheng, Ms Luo, Mr Wang and Ms Qian and MSD have established the Guaranteed Repayment Representation and the Second Guarantee Repayment Representation (SFACLS [18(h)]) and Mr Shen cannot succeed in respect of that representation.

Causation

1. The Lenders contend (SFACLS [25]) that, absent any, or alternatively any two or more of the Financing Representations, they would not have entered into the Loan Agreements and provided the loans and contend that they have suffered loss and damage in the amount of their loans.
2. Mr Katsoulas refers to the observations made by Wilson J in Gould v Vaggelas (1985) 157 CLR 215 at 236: "1. Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case. 2. If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation. 3. The inference may be rebutted, for example, by showing that the representee, before he entered into the contract, either was possessed of actual knowledge of the true facts and knew them to be true or alternatively made it plain that whether he knew the true facts or not he did not rely on the representation. 4. The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract."
3. The principles applicable to causation in a misleading and deceptive conduct case were also set out by the Full Court of the Federal Court in Sutton v AJ Thompson Pty Ltd (in liq) (1987) 73 ALR 233 at 240-241, followed by Roberts-Smith J in SDS Corporation Ltd v Pasdonnay Pty Ltd [2004] WASC 26 at [400]. Mr Katsoulas also refers to my observation in Colorado above at [111]-[112] that: "The Plaintiffs therefore need to establish a causal connection between the alleged representations and the loss for which they seek compensation: Wardley above at 525-526; Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 at 469-470 [17] (Gleeson CJ), 480 [61] (Gaudron J), 488-489 [94] (McHugh J with whom Gummow J agreed)) and 508-509 [159]-[160] (Hayne J with whom Gummow J agreed); Carey v Freehills [2013] FCA 954; (2013) 303 ALR 445 at [411] per Kenny J. In a claim for misleading or deceptive conduct constituted by representations, acts done by the person to whom the representation was made in reliance upon the misrepresentation will "constitute a sufficient connexion to satisfy the concept of causation": Wardley above at 525; Carey above at [412]. A material representation, in the sense of a representation that is "objectively likely" to act as an inducement to act in a particular way, will be a cause of the relevant loss or damage if it contributed to the loss or damage in some way, even if "other factors or conditions … played an even more significant role in producing the loss or damage": Henville above at 493 [106] (McHugh J, with whom Gummow J agreed), 509 [163] (Hayne J, with whom Gummow J also agreed); Carey above at [412]. The Plaintiffs also rely on the well-established principle that, in a proper case, reliance may be inferred: Shears v Chisholm [1994] 2 VR 535 at 648; (1994) 9 ACSR 691 per JD Phillips J; Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357; (1999) 43 IPR 545 at [11] per Wilcox J, and at [45] per Kiefel J, where her Honour noted that: "The question of causation can sometimes be resolved not by direct evidence as to what part a misrepresentation played in the process of entry into contract, but by a court determining what effect must be taken to have resulted. Indeed this course may sometimes be preferable to one which rested solely on evidence later given on the point. In Gould v Vaggelas [(1985) 157 CLR 215 at 236; 62 ALR 527; [1985] HCA 75] Wilson J held that if a material representation is calculated (which is to say, objectively likely …) to induce the representee to enter into a contract and the person in fact enters into a contract, a fair inference arises that the representation operated as an inducement, adding that it need not be the only cause … That part of Wilson J's judgment was not stated to be an exhaustive rule, but is to be seen as a guide to a question of fact which may arise. A conclusion of inducement may then be reached where a combination of factors, including the quality of the representation itself, goes unanswered. In relation to the representation itself it would need to be of a kind likely to provide that inducement and such that "… commonsense would demand the conclusion that the false representations played at least some part in inducing the plaintiff to enter into the contract."
4. Applying these principles, I am not satisfied that causation is established in respect of the alleged No Risk and Low Risk Representations. I have had regard to the decision in Taylor & Anor v Gosling & Ors [2010] VSC 75, to which Mr Katsoulas referred, in this respect. However, I also bear in mind the sensible view taken by White J in Dawson v LNG Holdings [2008] NSWSC 137, relating to an investment promising marginally higher returns than these loans, that: "No-one investing money at 25 percent per annum interest in a property development which required the obtaining of a construction certificate, the building of townhouses or apartments, and the sale of the townhouses or apartments, could reasonably expect that there were no risks attached and that return of their money was assured." I also addressed somewhat similar issues in Atlas at [206]ff. I recognise that White J's observation was directed to the risk of a property development and, here, the representations and evidence were at least partly directed to the risk of loans to Quantum, as distinct from a direct investment in the Turramurra Project. However, that distinction was not clearly or consistently made in the evidence and may be of lesser significance where, as I note below, Quantum's (or Mr Lin's) capacity to repay the loans would likely be adversely affected by the failure of that project.
5. While I accept that the Lenders may have been over-optimistic as to the benefits of investment in Australian property and likely also placed weight on the prospect of high returns, I am unable to accept that they could reasonably have understood that a loan to a proprietary company (or to Mr Lin as an individual), generally made before a loan agreement was executed, which was then to be lent to another proprietary company which was one of several participants in a property development in respect of land which had not yet been acquired and as to which security had not yet been given, which was to pay a return of 20% per annum (and more in the case of MSD, which was offered an additional fee, and Mr Zheng, who sought an additional payment) was either without risk or had minimal risk, so as to establish causation in respect of these representations.
6. I would readily have found that causation was established for the other representations, had they been established, because they would have been calculated to induce investment in the Turramurra Project and likely would have done so. In particular, I am satisfied that the Lenders to whom the Guarantee Representation was made (namely Mr Wang and Ms Qian and MSD), to whom the Guaranteed Repayment Representation was made (namely Ms Luo, Mr Wang and Ms Qian and MSD) and to whom the Second Guarantee Repayment Representation was made (Mr Zheng) could reasonably rely on them, although I have held above that they could not reasonably rely on the alleged "No Risk" or "Minimal Risk" representations. Obviously enough, a promoter of a transaction (here, the loans to Quantum to be on-lent to MGVDD for the development) can represent its result although there is a risk that result will not be achieved. That does not depend on any proposition that the transaction has no risk or minimal risk, since it amounts to the promoter assuming the risk that the outcome would otherwise not be achieved.

Quantification

1. Mr Katsoulas refers to Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; [1998] HCA 69 and to Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1; [1986] HCA 3 as authority that, in quantifying the amount of damages, a comparison must be made between the position which the person who suffered loss or damage is in and the position the person would have been in had there been no contravention. I bear in mind the observations of Ward CJ in Eq (as the President then was) in Stav Investments Pty Ltd v Taylor [2022] NSWSC 208 at [541] ("STAV Investments") as to the nature of a "no transaction case", and that the plaintiffs in such a case should: "… be put in the position where they are compensated for the entirety of their investment in … (Wyzenbeek v Australasian Marine Imports Pty Ltd (in liq) (2019) 272 FCR 373; [2019] FCAFC 167 ). As I said in Xu v Lindsay Bennelong Developments Pty Ltd [2020] NSWSC 1692 at [460] , an award for damages in a "no transaction" case in a suit for misleading and deceptive conduct requires the court to be satisfied that, "but for" the conduct at issue, the plaintiff would not have entered into the transaction, and so would not have suffered the loss."
2. It seems to me that several of the Lenders, namely Mr Zheng, Ms Luo, Mr Wang and Ms Qian, and MSD have here succeeded in establishing their claims on a "no transaction" basis. Mr Shen has not succeeded for the reasons noted above.
3. Mr Lin relies, in defence, on a claim that companies associated with Mr He have received certain funds; Mr Shen, Mr Zheng and Mr He have received certain funds; and those funds were paid to them out of money owed by Quantum to Ms Luo as a result of advances made to Quantum by Ms Luo, Mr Shen and Mr Zheng. The Lenders belatedly admitted (SFACLS [26]) that, on 29 April 2020, Quantum repaid them $480,184.88 which was distributed between them, together with several Plaintiffs who no longer press their claims, and that admission is expanded in a document headed "Admissions by the Plaintiffs" (Ex P1). It is not necessary to address amounts received by those Lenders which have not established their claims. Of those Plaintiffs who would otherwise succeed, Mr Zheng admits he received $131,257.83, Ms Luo admits she received $109,381.52, Mr Wang and Ms Qian admit they received $54,690.76, and MSD admits that it also received $54,690.76. Where these are admissions and Mr Lin did not accept they could be treated as agreed facts, they establish the minimum amounts by which judgment in favour of Mr Zheng, Ms Luo, Mr Wang and Ms Qian, and MSD for the amounts they lent to Quantum should be reduced, but do not presently allow the amount of the judgment in their favour to be determined.
4. It will be consistent with s 56 of the Civil Procedure Act 2005 (NSW) and the just resolution of the proceedings to allow Mr Zheng, Ms Luo, Mr Wang and Ms Qian and MSD a brief opportunity to establish that these are also the maximum amounts they received, and hence the maximum amounts to be deducted from their judgments, although this may need no more than documentary evidence and affidavits verifying the calculations. I will hear the parties as to the orders to be made to deal with that matter, and defer the question of costs until it is resolved.

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