WIB Australia Pty Ltd v Bi - [2023] NSWDC 571 - NSWDC 2023 case summary — Zoe

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WIB Australia Pty Ltd v Bi

[2023] NSWDC 571

District Court of NSW|2023-10-31|Before: The J

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At a glance

Source facts

Court

District Court of NSW

Decision date

2023-10-31

Before

The J

Catchwords

(1983) 151 CLR 447 Croucher v Cachia [2016] NSWCA 132 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12
(2018) 261 CLR 544 Jones v Dunkel [1959] HCA 8

Source

Original judgment source is linked above.

Catchwords

(1983) 151 CLR 447 Croucher v Cachia [2016] NSWCA 132 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12(2018) 261 CLR 544 Jones v Dunkel [1959] HCA 8

Judgment (27 paragraphs)

[1]

Solicitors: SMB Law (Plaintiff) Legacy Legal (First and Second Defendants) File Number(s): 2022/00161536 Publication restriction: No

[2]

JUDGMENT

In these proceedings, the plaintiff, WIB Australia Pty Ltd ("WIB"), sues the defendants for the recovery of moneys said to have been advanced by it pursuant to loan agreements entered into in June 2015. WIB says that it entered into separate loan agreements with each of the defendants and advanced moneys pursuant to the loan agreements following the receipt of drawdown notices. It pleads that it has not been repaid anything by either of the defendants. It seeks to recover the moneys advanced together with contractual interest. The defendants deny that they are liable to repay any of the moneys sought by WIB and claim in their Amended Defence either that they did not sign the relevant loan agreement (first defendant) or did not sign the drawdown notices under the agreements (both defendants). The defendants also raise a number of defences in relation to the claims of the plaintiff.

[4]

Amended Defence

Three Defences have been filed by the first and second defendants in the proceedings. The last version filed was an Amended Defence filed on 20 October 2023. In relation to the claims in the Statement of Claim, the following is pleaded: 1. The second defendant says that she does not recall signing the loan agreement or any drawdown notice. In her affidavit, the second defendant seems to accept that she did sign documents but is not aware of what documents she signed; 2. The first defendant denies signing the loan agreement or any drawdown notice; 3. Both defendants claim that they lacked commercial experience, were financially vulnerable, were housewives, never spoke to any representative of the plaintiff, did not obtain independent financial or legal advice in relation to the documents, received no financial benefit and were not provided with copies of any documents; 4. The second defendant pleads that she suffered from a special disadvantage due to her limited understanding of English; 5. Both defendants say that the loan agreements are unenforceable and void for uncertainty; 6. Both defendants plead the benefit of a Deed of Settlement and Release entered into by the plaintiff in 2022. In evidence was a Deed of Settlement and Release entered into between WIB and JurisBridge Pty Ltd trading as JurisBridge Legal, arising out of Supreme Court proceedings commenced by WIB against its former solicitors for losses asserted to have arisen as a result of commercial documents entered into in 2015, including the loan agreements with each of the defendants. Under the Deed, JurisBridge agreed to pay to WIB the sum of $295,000 in settlement of the Supreme Court claims. 7. It is asserted that the loans claimed to have been entered into by the first and second defendants were discharged by moneys advanced by the plaintiff under an invoice financing facility assigned to WIB by Bibby Financial Services Australia Pty Ltd ("Bibby") pursuant to a Deed of Assignment dated 23 June 2015; 8. The defendants claim that by virtue of the provisions of the Contracts Review Act 1980 (NSW) and ss 12CB and 12CC of the Australian Securities and Investments Commission Act 2001 (Cth), the Court should refuse to enforce the loan agreements; and 9. The defendants claim the loan agreements are unconscionable and should not be enforced by the Court.

[5]

Background facts

The affidavit, documentary and oral evidence establishes a number of background facts. Unless otherwise indicated in these reasons, what follows are the Court's findings in relation to a number of the background facts.
At all relevant times, Mr Jianqiang (Sean) Shen was the sole director of the plaintiff company, WIB. He was born in China, migrated to Australia in 2013, established WIB and commenced a business of lending and investment relying on family funds.
The evidence does not make clear the extent of Mr Shen's previous financial experience. However, I am satisfied that he relied heavily on accounting and legal advice in Australia to assist him in WIB's commercial activities.
The evidence establishes that at all relevant times, Mr Mohammed was the sole director of Tranzhire, Crane and Hypoct. On 15 October 2014, Crane and Tranzhire entered into an invoice discounting agreement with Bibby which, in substance, appears to have been a factoring agreement. Whilst entry by Crane and Tranzhire into this agreement may indicate some financial issues with those companies, there is no direct evidence in relation to their financial position at the time. On 23 June 2015, Bibby entered into a Deed of Assignment with WIB as well as Crane, Tranzhire, Hypoct and Mr Mohammed pursuant to which Bibby transferred to WIB all of its rights and benefits under the invoice discounting agreement and WIB was substituted for Bibby and was taken to be a party in place of Bibby. Thereafter, various funds were advanced by WIB to at least Crane and various repayments were made as set out in Mr Shen's affidavits.
Some time in early 2015, Mr Wayne Ding approached Mr Shen and indicated to him that he may be able to refer potential clients to WIB who were looking to borrow money with property assets as security. He indicated to Mr Shen that the clients needed the money "quicker than going through the bank process". Why that was so was not clear. It eventuated that the clients were Crane, Tranzhire, Hypoct, Mr Mohammed and allegedly Mrs Begum and Ms Bi. Various security was offered including a Brookwater Queensland property registered in the name of Ms Bi and an Abbotsbury in Sydney property registered in the name of Mrs Begum. I accept that Mr Shen understood that Mr Mohammed was the director of Crane.
Mr Vijay Thummala was the financial controller of Crane. He was involved in email correspondence relating to the various loan agreements in issue in the proceedings. See for example Mr Thummala's email to Mr Ding copied to Mr Mohammed dated 4 June 2015 at Exhibit B, Court Book ("CB"), page 384; see also the email dated 12 June 2015 at CB 310. Mr Thummala also appears to have been copied into emails from Mr Mohammed relating to the borrowing process. See Mr Mohammed's email signed over the title of managing director of Crane and Tranzhire dated 5 June 2015 at CB 460.
I am satisfied from the evidence that Mr Ding entered into email correspondence with Mr Mohammed about borrowing moneys from WIB and put forward various properties as security. Mr Ding informed Mr Shen of the addresses of the properties and stated that Mr Mohammed had agreed to charges on all of the properties. See the emails dated 27 May 2015 at CB 42. Of course, Mr Mohammed was not the registered proprietor of the Brookwater or Abbotsbury properties which were registered in the names of his wife and his mother, respectively. It seems, however, that Mr Mohammed was confident that he would be able to provide some security over those properties for advances to be made by WIB.
Mr Shen, on behalf of WIB, retained Mr Nolan Qin, Solicitor, at JurisBridge Legal at this time to assist him with the proposed transactions and advancement of moneys by WIB. Mr Qin prepared various caveats, consent forms and draft loan agreements. Some of these were provided on 4 June 2015 (CB 45) with other documents provided later that day in similar form. In due course, executed loan agreements were returned, signed by Mr Mohammed and by Hypoct (by its director Mr Mohammed). Also, loan agreements were returned purportedly signed by Ms Bi and Mrs Begum.
Mr Thummala returned signed copies of the loan agreements to Mr Ding on 4 June 2015 at 7pm (CB 384). He asked why security was needed over the various property assets for a funding of only $200,000 and sought confirmation that $200,000 would be transferred that evening having regard to the executed documentation attached.
Issues were raised by Mr Qin in relation to some of the documentation in an email sent on 5 June 2015, which apparently frustrated Mr Mohammed. Some new documentation was prepared including a consent to caveat, and a new loan agreement and drawdown notice allegedly signed by Mrs Begum on 5 June 2015. However, much of the documentation appears to be in precisely the same form as had been returned on 4 June 2015. The loan agreements purportedly entered into by Ms Bi and Mrs Begum and entered into by Mr Mohammed and Hypoct were in a similar form. There are issues in relation to the loan documentation purportedly signed by the two defendants as personal pronouns are used in the agreements suitable for corporate entities and there is a reference to Ms Bi and Mrs Begum in their agreements requesting loans up to the Maximum Amount in the agreements for the purpose of funding "its business operation in Australia". There is no clear evidence Ms Bi or Mrs Begum were themselves undertaking any relevant business operation in Australia at this time. Mr Ding forwarded the various agreements to Mr Shen for his review and indicated that he had requested the originals to be sent back to Mr Qin.
The following matters should be noted in relation to the respective loan agreements, related drawdown notices and collateral documentation: 1. In relation to the documentation purportedly signed by Ms Bi: 1. The loan agreement is stated to be between WIB and Ms Bi; 2. It is dated 4 June 2015; 3. Ms Bi is described as the borrower and WIB as the lender; 4. Mr Mohammed, Mrs Begum and Hypoct are stated to be guarantors. No claim was made against Ms Bi or Mrs Begum in relation to the purported guarantees signed; 5. The amount under the loan agreement which was the Maximum Amount to be borrowed was stated to be $100,000 (Clause 1.1); 6. The loan agreement provided that the borrower was to apply the proceeds of any advance for the Approved Purpose which was Ms Bi's "business operation in Australia" (Clause 2 and Recital A); 7. A Drawdown Notice was required for an advance and was irrevocable (Clause 4); 8. The facility would terminate in various circumstances including one year from the first Drawdown Date; 9. The borrower was obliged to repay all amounts outstanding on the termination of the agreement (Clause 8); 10. The agreement provided for the borrower to consent that the lender lodge a caveat on the Security Property, which was the Brookwater property registered in the name of Ms Bi; 11. There is a signature purportedly of Ms Bi witnessed by Mr Thummala. The evidence establishes that Mr Thummala has returned to India. No Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 at 320-1 inference should therefore properly be drawn against either party through failing to call him. The loan agreement is also executed by Hypoct and apparently by Mr Mohammed and Mrs Begum (witnessed by Mr Thummala) as guarantors; 12. Also returned was a drawdown notice dated 4 June 2015 in the amount of $200,000 (double the Maximum Amount under the agreement) with a direction for WIB to pay the sum to an account said to be in the name of Ms Bi but which all the evidence establishes is the account of Crane. The drawdown notice is also signed in blue pen purportedly by Ms Bi; 1. In relation to the documentation of Mr Mohammed: 1. There is a loan agreement dated 4 June 2015 in similar terms to that purportedly signed by Ms Bi with a Maximum Amount of $100,000. Mr Mohammed is said to be the borrower and Ms Bi, Mrs Begum and Hypoct are said to be guarantors; 2. The loan agreement appears to be signed by Mr Mohammed and witnessed by a named solicitor. Mr Mohammed also appears to have executed the agreement on behalf of Hypoct as guarantor. There are also signatures apparently as guarantor on the agreement purportedly of both Ms Bi (in blue pen) and Mrs Begum both witnessed by Mr Thummala; 3. There is a drawdown notice dated 4 June 2015 in the sum of $200,000 (twice the Maximum Amount under the loan agreement) signed by Mr Mohammed with a direction for that sum to be paid into an account in his name which the evidence establishes is the account of Crane. A consent is given signed by Mr Mohammed for Hypoct for a caveat to be lodged on a Queensland property; 1. In relation to documentation executed on behalf of Hypoct: 1. There is a loan agreement in a similar form to the other two loan agreements. Hypoct is said to be the borrower with WIB the lender. Mr Mohammed, Ms Bi and Mrs Begum are said to be guarantors. The Maximum Amount under the Hypoct agreement is $200,000 with a security property being offered at Richlands in Queensland; 2. The loan agreement is executed for Hypoct by Mr Mohammed. The signatures of the alleged guarantors are on the document, being Mr Mohammed, Ms Bi and Mrs Begum. The signature of Mr Mohammed has been witnessed by a solicitor, Mr Johnson. The purported signatures of Ms Bi (in blue pen) and Mrs Begum have been witnessed by Mr Thummala; 3. There is a drawdown notice dated 4 June 2015 in the amount of $200,000 with a direction for the amount to be forwarded to the account of Hypoct. However, it appears that this is the same account of Crane; 1. In relation to the documentation purportedly signed by Mrs Begum: 1. There is a loan agreement in a similar form to the other three loan agreements. The Maximum Amount under the agreement is $100,000. The security referred to in the loan agreement is the property at Abbotsbury registered in Mrs Begum's name. Mrs Begum is said to be the borrower with WIB the lender. The guarantors under the agreement are purportedly Mr Mohammed, Ms Bi and Hypoct. The loan agreement is purportedly signed by Mrs Begum and witnessed by Mr Thummala and by Mr Mohammed for Hypoct. Mr Mohammed's and Ms Bi's signatures (in blue pen) are purportedly witnessed by Mr Thummala; 2. There is a drawdown notice dated 4 June 2015 in the amount of $200,000 which is twice the Maximum Amount under the loan agreement. The direction is to pay that sum to the account of Mrs Begum but it appears to be the account of Crane.
Also in evidence is a drawdown notice dated 5 June 2015 in the amount of $100,000 under the loan agreement between WIB and Mrs Begum with a direction to pay the $100,000 to the named account of Crane (CB 624). See also at CB 75. There is also a further loan agreement dated 5 June 2015 (CB 614). It is alleged by WIB that a new loan agreement and drawdown notice were executed by Mrs Begum on 5 June 2015. An issue is raised how the 5 June 2015 loan agreement and the 5 June 2015 drawdown notice purportedly for Mrs Begum in the sum of $100,000 are to be treated in the light of the earlier loan agreement and the earlier drawdown notice dated 4 June 2015 in the sum of $200,000. Presumably, it was intended to replace the 4 June 2015 agreement and drawdown notice. This was the effect of the submission of WIB: written submissions in chief paragraph 7. If it is established that Mrs Begum signed all the documents in question, this submission is logical having regard to the dates on the documents and I accept it.
Caveats have been lodged on behalf of WIB on the titles of the properties registered in the names of Ms Bi at Brookwater and Mrs Begum at Abbotsbury (CB 108, CB 110).
I refer to paragraph 13 of Mr Shen's affidavit dated 10 August 2023. Mr Shen annexes to his affidavit a general consent to lodge a caveat apparently executed by Ms Bi on 4 June 2015 in the presence of a Justice of the Peace, Mr Dallas Tunnah. This may be found at CB 306. The signature purporting to be that of Ms Bi is similar to the signatures on the loan agreement and drawdown notice which have been referred to above. The general consent includes the following: "The party identified in item 3 consents to the registration of the instrument/document identified in item 2" [this is a caveat and the consenting party is Ms Bi]. Witnessing officer must be aware of his/her obligations under section 162 of the Land Title Act 1994".
There is then the signature of Mr Tunnah with the date 4 June 2015 and the purported consenting signature of Ms Bi. A stamp is placed on behalf of Mr Tunnah as a Justice of the Peace with a particular number. Section 162(1) of the Land Title Act 1994 (Qld) provides as follows: "162 Obligations of witness for individual (1) A person who witnesses an instrument executed by an individual must - (a) first take reasonable steps to verify the identity of the individual and ensure the individual is the person entitled to sign the instrument; and (b) have the individual execute the instrument in the presence of the person; and (c) not be a party to the instrument."
The plaintiff WIB sought to draw the inference that Mr Tunnah as a Justice of the Peace would not have witnessed a person's signature unless he was satisfied of the identity of Ms Bi and that Ms Bi was the person entitled to sign the instrument in Mr Tunnah's presence.
There was evidence before the Court that Mr Tunnah had no remaining records relating to his certification of Ms Bi's signature (CB 637).
Also in evidence were documents produced on subpoena by Mr Peter Walsh, Solicitor, of GLG Legal Springfield which in 2015 appeared to trade as Springfield Legal Service & Springfield Conveyancing. The documents include: 1. A letter from Andrea Fung on behalf of Springfield Legal Service & Springfield Conveyancing to WIB care of JurisBridge Legal attaching a caveat form and loan agreement which appear to be the documents relating to Mrs Begum; 2. An email dated 5 June 2015 apparently from Mr Thummala to a person at Springfield Legal providing the address to post original documents to; 3. Photocopies of the driver's licence for Mrs Begum; 4. A caveat apparently signed by Mrs Begum; 5. A file note dated 5 June 2016 of a conference with the time of one hour apparently between Mr Walsh and Mrs Begum which records the following: "Client came into office W/O appointment and wanted docs for loan for $100K signed ASAP. Loan to son's company caveat on her home in NSW need. Told her that if son's coy doesn't pay then the lender can sell her house in NSW. She said that she understood this but she wanted to help her son"; 1. There is a letter dated 9 June 2015 from Mr Walsh of Springfield Legal Service to Mrs Begum at an address in Queensland relating to an advance from WIB to Crane which included the following: "We confirm that you attended on our office on 5 June 2015 without an appointment to have documents witnesses [sic] for a loan and caveat on your house. We note the loan is to the above company and that Vijay who accompanied you advised us that the above company would meet our expenses. We confirm that we did not give you any legal advice as to this loan agreement and caveat but merely witnessed your signature and then emailed and express posted these to the lender"; 1. This letter dated 9 June 2015 does not fully reflect the file note in which Mr Walsh apparently gave some advice about the risks involved. The caveat referred to Mrs Begum's house in Abbotsbury.
There is also in evidence an email from Mr Thummala to Mr Qin dated 10 June 2015 arranging access to Mrs Begum's house for the purposes of valuation and providing her phone number (CB 549-552).
In paragraphs 19(a) and 20 of his first affidavit, Mr Shen gives certain evidence in relation to the advances by WIB. In paragraph 5 of his third affidavit he said that this evidence was incorrect. He provided replacement evidence of advances said to have been made to Ms Bi, Mrs Begum, Mr Mohammed and Hypoct in paragraph 6. The amounts referred to total $411,000. The Deed of Variation relating to Hypoct dated 14 June 2015 referred to in paragraph 7 of Mr Shen's third affidavit and exhibited to his affidavit appears to make clear that $231,000 had been advanced by WIB to Hypoct. If the sum of $231,000 is subtracted from the amounts referred to in paragraph 6 of Mr Shen's affidavit, this indicates a remaining amount of $180,000. Paragraph 6 therefore indicates that $180,000 was advanced by WIB to Ms Bi, Mrs Begum and Mr Mohammed. Considering the various drawdown notices purportedly signed by these persons, the drawdown notice for Ms Bi was in the sum of $200,000, the drawdown notice for Mr Mohammed was in the sum of $200,000 and the later drawdown notice for Mrs Begum was in the amount of $100,000. An issue arises in relation to the proper attribution to the borrowers of the advances referred to in Mr Shen's third affidavit in paragraph 6.
Proceedings in negligence and for breach of retainer were commenced by WIB against JurisBridge Legal in the Supreme Court of New South Wales by Statement of Claim filed on 6 May 2020. As indicated above, a Deed of Settlement and Release was entered into in 2022 pursuant to which a settlement sum of $295,000 "inclusive of interest and costs" was agreed to be paid by JurisBridge to WIB. In his third affidavit in paragraph 26, Mr Shen indicates that WIB received this on 30 March 2022 and it was paid to WIB's parent company, Alliance Investment Holdings Pty Ltd.

[6]

Affidavits relied on by the plaintiff

The plaintiff relied on four affidavits by the sole director of WIB, Mr Jianqiang Shen (also known as Sean Shen) affirmed 27 April 2023, 8 August 2023, 25 October 2023 and 1 November 2023.
In his first affidavit dated 27 April 2023, Mr Shen: 1. States that he is the sole director of WIB; 2. Indicates that in Australia he is known by the name of Sean Shen; 3. States that he was born in 1982 in China and emigrated to Australia in 2013; 4. States that when he arrived in Australia he was introduced to a Mr Wayne Ding who referred him to various business opportunities; 5. Indicates that after arrival in Australia he engaged Mr Qin, a solicitor with JurisBridge Legal, to set up a family trust and to act for him on commercial matters; 6. States that in December 2014 with the help of his accountant he caused WIB to be incorporated for the purposes of business and investment secured by real property and assets.
Mr Shen states in his first affidavit that in early 2015 Mr Ding introduced a business opportunity to him which involved advancing funds to six related borrowers being Crane, Tranzhire, Hypoct, Mr Mohammed, Mrs Begum and Ms Bi. Various properties, including properties owned by Ms Bi and Mrs Begum referred to above, were to be provided as security. Mr Qin of JurisBridge Legal acted for WIB on the various transactions.
Mr Shen annexes to his affidavit various emails and agreements including an email dated 4 June 2015 attaching caveats, consent forms and one loan agreement. In due course, copies of loan agreements entered into by Ms Bi, Mrs Begum, Mr Mohammed and Hypoct were received. In his affidavit, Mr Shen states that he was provided a drawdown notice dated 4 June 2015 requesting an advance of $200,000 signed by Ms Bi and the next day he received a drawdown notice signed by Mrs Begum requesting an advance of $100,000. Both drawdown notices indicated the account for the moneys to be paid into. The Bi drawdown notice indicated the account name was that of Ms Bi whereas the Begum drawdown notice indicated the same account number was in the name of Crane.
Mr Shen refers to various advances made by WIB and attaches receipts for payments. He corrected paragraphs 19 and 20 of his first affidavit in his third affidavit.
Eventually, the corporate borrowers all became under external administration and WIB took action to recover the amounts advanced. Mr Shen gives evidence that WIB has not received any of the principal or interest owed by Mrs Begum or Ms Bi under the loan agreements. He refers to the Deed of Settlement entered into which he says was on 4 March 2022 with JurisBridge Legal which resolved the Supreme Court proceedings involving allegations of negligence and breach of retainer by JurisBridge Legal relating to the various loan agreements entered into.
In his second affidavit dated 10 August 2023, Mr Shen responds to the affidavits filed by Ms Bi and Mrs Begum.
In the second affidavit, Mr Shen refers to the fact that WIB advanced a further approximately $2,070,000 under the invoice financing agreement which had been assigned to WIB from Bibby.
Annexed to his second affidavit are various documents entered into apparently by Ms Bi and Mrs Begum prior to the events in question involving other transactions. Mr Shen asserts that the signatures on the various documents appear to be similar to those on the agreements in question.
In his third affidavit dated 25 October 2023, Mr Shen corrects paragraphs 19(a) and 20 of his first affidavit and in paragraph 6 gives evidence that the moneys advanced to Ms Bi, Mrs Begum, Mr Mohammed and Hypoct were made in various advances on various dates totalling $411,000. Also annexed to the affidavit is the 14 August 2015 Deed of Variation entered into between Hypoct, WIB and Mr Mohammed varying the loan agreement with Hypoct to acknowledge that WIB had advanced $231,000 in total to Hypoct. That therefore appears to leave $180,000 remaining of the advances referred to in paragraph 6 of the Shen affidavit. The relevance of the Deed of Variation to the plaintiff's claims will be considered further below.
In paragraphs 9-19 of his affidavit, Mr Shen refers to the signing of the loan agreements, drawdown notices and other documents in June 2015 and outlines attempts taken by his solicitors, without success, to obtain the originals of the loan agreements which appear to have been destroyed by JurisBridge Legal.
In paragraphs 20 and following, Mr Shen outlines the moneys advanced by WIB under the invoice financing facility to Cranes and Tranzhire and the recovery of various moneys. He outlines the shortfall of moneys recovered.
Mr Shen exhibits to his affidavit the various agreements in issue in the proceedings. These have been referred to above.
The fourth affidavit of Mr Shen dated 1 November 2023, provides evidence of the costs incurred by WIB in the sum of $94,934.15 in respect of recovery action under the invoice discounting agreement with Bibby. The amount of $94,934.15 is stated by Mr Shen to be not all of the amounts incurred. He states that additional amounts have been paid to the accounting firm Hall Chadwick but the figure referred to comes from a ledger kept by him during the recovery process to keep track of costs.
The plaintiff also read an affidavit of Stefan Briggs dated 1 November 2023. Mr Briggs is the solicitor on the record for WIB in the current proceedings and also acted for WIB in the JurisBridge Legal proceedings. Mr Briggs gives evidence that in respect of the JurisBridge Legal proceedings WIB incurred approximately $133,823.19 in legal costs. A schedule sets out a description of the various invoices for legal costs concerning the proceedings.

[7]

Affidavits of the defendants

The first defendant, Ms Bi, relied on an affidavit of hers affirmed 14 June 2023.
In her affidavit, Ms Bi: 1. States that she was born in Fiji in 1983, completed education up to Grade 12 in high school and married Mr Mohammed in 2005. Ms Bi describes her occupation in her affidavit as a "stay at home mum"; 2. States that during their marriage, she understood Mr Mohammed had previously been involved in a trucking type business that was quite large but she had limited knowledge of it and described herself as not being very smart with financial management or technology; 3. Claims that she did not sign the loan agreement, agree to any of the particularised terms of the loan agreement and believes that she does not owe any money to the plaintiff. She also asserts that she did not sign the drawdown notice purporting to have her signature attached to it. She notes that the bank account referred to in the drawdown notice, although it states that it belongs to her, was not her account. She said that she did not receive the amount referred to of $200,000 on or around 4 June 2015; 4. States that prior to the commencement of proceedings she had no knowledge of the existence of WIB or Mr Shen; 5. Claims that she has not at any time agreed to be a borrower in relation to any loan agreement with the plaintiff; 6. Accepts that she is the registered owner of a property at Brookwater in Queensland and claims that she has never agreed to give any security charge over that property. Similarly, she claims that she never agreed to provide any caveat over the property.
The second defendant relied on an affidavit of hers affirmed on 12 July 2023.
In the affidavit, Mrs Begum: 1. States that she was born in March 1963 in Fiji and completed education up to Grade 10 in high school. Mrs Begum states that she married in 1981 and gave birth subsequently to three children, one of whom is Mr Mohammed. Mrs Begum said she is a widow and lived as a housewife taking care of and raising her children until 1994 when she migrated to Australia with her children; 2. Asserts that prior to the commencement of these proceedings she had no knowledge of the existence of WIB or of its director, Mr Shen; 3. Claims that at no point has she ever agreed to be a borrower in relation to any loan agreement with WIB; 4. Agrees that she is the registered proprietor of a property in Abbotsbury in Sydney but asserts that she never agreed to provide any security charge over that property; 5. Claims that although she originally believed that she had never seen the loan agreement said to have been signed by her, recalls that a Mr Thummala contacted her in 2015 and took her to an office in the Brisbane area to get certain documents witnessed by a lawyer. Mrs Begum said that this was the only time that she met Mr Thummala. The documents in evidence seem to establish that Mr Thummala was the financial controller of corporate entities related to Mr Mohammed in 2015 and was involved in the execution of certain documents with WIB at that time; 6. Claims that the drawdown notice apparently with her signature is not her signature and she has never seen it before. Mrs Begum also states that the bank account on the notice is not her bank account and she does not know whose bank account it is; 7. Claims that she did not receive any of the alleged fund advances referred to in the drawdown notice; 8. Claims that she does not owe any money to WIB.

[9]

Oral evidence of Mr Shen

It should be noted that no daily transcript was ordered by the parties and these reasons were prepared without the benefit of a transcript.
After Mr Shen's first three affidavits were noted in evidence in chief, Mr Shen was subject to a detailed cross-examination by counsel appearing for the defendants.
Mr Shen struck me as an intelligent and careful witness who was doing his best to give accurate evidence to the Court to the best of his ability.
In his evidence in cross-examination, Mr Shen confirmed that he was the sole director of the plaintiff WIB and that the series of loans in question the subject of the proceedings were the first loans which WIB had undertaken in Australia. He confirmed that he had received assistance in relation to the transactions from Mr Wayne Ding but that he (Mr Ding) would not be giving evidence in the case. Mr Shen confirmed his understanding that Mr Ding had engaged in communication with the people behind Tranzhire, Crane and Hypoct and that he (Mr Shen) had had no communication with them at the time of the transactions. He confirmed that he had not received any emails either personally or to WIB from either defendant.
Mr Shen confirmed that Mr Ding was in Sydney and could give evidence. Having regard to his detailed involvement in the transactions, in my view it is appropriate to draw a Jones v Dunkel inference (first type) that Mr Ding's evidence would not have assisted WIB. There was clearly a deliberate decision not to call Mr Ding as a witness. Whilst there is no obligation on a judge to draw a Jones v Dunkel inference, in my view it is appropriate in the present case due to the involvement of Mr Ding in introducing the borrowers and assisting in the completion of the transaction: see Newell; Muraniti v De Costi [2018] NSWCA 49 at [79]-[80]. There is no evidence to suggest that Mr Ding could be regarded as not being in WIB's "camp". Further, WIB would be the party which would be expected to call Mr Ding as a witness: see Payne v Parker [1976] 1 NSWLR 191 at 201-202.
Mr Shen was then cross-examined in relation to errors in his affidavits concerning the advances made allegedly to Ms Bi and Mrs Begum. See in particular paragraphs 5-7 of Mr Shen's third affidavit. Paragraph 5 of the third affidavit corrected errors in Mr Shen's first affidavit. Mr Shen confirmed that paragraph 6 of his affidavit set out various moneys which he asserted were advanced to Ms Bi, Mrs Begum, Mr Mohammed and Hypoct.
Mr Shen was then taken to an affidavit sworn by him in the JurisBridge proceedings in the Supreme Court where in paragraph 20 he gives evidence of certain advances made to Crane amounting to $150,000.
Mr Shen confirmed the Deed of Variation in relation to advances to Hypoct at Court Book 347-349 where the amount of the loan agreement to Hypoct was varied so that the Maximum Amount was increased to $231,000 as a result of the acknowledgement of parties to the Deed of Variation that WIB had already lent Hypoct $231,000 pursuant to the loan agreement with it. After some cross-examination, Mr Shen confirmed that the Supreme Court affidavit contained errors in that some of the moneys said to have been advanced to Crane were in fact referred to in the Deed of Variation as having been advanced by WIB to Hypoct. He also accepted that certain moneys said to have been advanced to Hypoct were instead advanced to the account of an entity called Nexus Collections and to another recipient which was unknown (two payments on 14 August 2015 for $20,000 and $10,000). After further cross-examination based on the bank documents, Mr Shen accepted that payments said to have been made to Hypoct were in fact made to Crane.
Mr Shen then accepted that the amounts at Court Book 347-348 in the Deed of Variation totalled $231,000. He also accepted that the amount at paragraph 6 of his third affidavit totalled $411,000 and when the Hypoct amounts were subtracted from $411,000 that the remaining amount was $180,000. Following on from this, Mr Shen accepted that if the payments to the unknown person and to Nexus Collections were subtracted, the amount remaining was $100,000.
Importantly, after this cross-examination, Mr Shen agreed that there was nowhere in his affidavits that he could point to which indicated which person or entity received the amounts referred to in paragraph 6 of his third affidavit.
It is to be noted that paragraph 6 of Mr Shen's third affidavit does not distinguish between which of the four persons and entities referred to, received the amounts set out totalling $411,000 in that paragraph.
Mr Shen was then provided with a summary of the drawdown notices in evidence under the various loan agreements. He agreed that the total added up to $1,131,000. He also agreed that it was not the case that $1,131,000 had been advanced by WIB to Ms Bi, Mrs Begum, Mr Mohammed and Hypoct. This concession was relied on by counsel for the defendants in submissions.
Mr Shen was then asked about the appointment of receivers to Hypoct. He could not explain why in paragraph 8 of his third affidavit he referred to two sets of receivers being appointed to Hypoct or the Deed of Variation at Court Book 347 being dated after the appointment of the first set of receivers referred to in paragraph 8(a) of his third affidavit. Mr Shen said that he did not recall the detail of the appointment of the receivers to Hypoct.
Mr Shen was then asked a number of questions about paragraph 26 of his third affidavit concerning WIB receiving, on 30 March 2022, $295,000 in settlement of its Supreme Court proceedings against JurisBridge. He confirmed that on his direction as the sole director of WIB, that amount was paid to Alliance Investment Holdings Pty Ltd, the shareholder in WIB, and that he was the director and sole shareholder in Alliance. Mr Shen said that WIB did not have a bank account at the time or now and that WIB today had no capacity to pay any moneys unless they were funded. Mr Shen confirmed that the $295,000 settlement funds were paid directly to Alliance and he allocated $247,746.68 of those moneys to the amount outstanding in relation to the invoice discounting facility which had been assigned to WIB by Bibby: see paragraph 29 of Mr Shen's third affidavit. Mr Shen confirmed that this was his decision and was made voluntarily by him. He confirmed he could have paid the $295,000 in settlement moneys to reduce any amounts allegedly owing by Ms Bi, Mrs Begum, Mr Mohammed or Hypoct.
Mr Shen was then asked further questions about outstanding claims by Crane against debtors which may involve an expectation of more money being returned to WIB. Mr Shen confirmed that there was nothing in his affidavit in relation to that. Mr Shen was taken to the security properties referred to in Recital A to the Deed of Settlement and Release with JurisBridge (CB Page 797) and confirmed that his affidavits contained no information in relation to the receipt by WIB of any proceeds of sale of the properties referred to in (ii) and (iv) of Recital A in circumstances where the sale of the property referred to in (iv) was expected to involve equity above the relevant security amount.
Mr Shen was then asked a number of questions about the difference between the $100,000 figure referred to in the loan agreement of Ms Bi (CB 466) compared to the amount referred to in the drawdown notice dated 4 June 2015 for Ms Bi of $200,000 (CB 476). He agreed that his affidavits did not explain the difference between the amount in the loan agreement and amount in the drawdown notice. He accepted that the account referred to in the drawdown notice, said to be signed by Ms Bi, was the account of Crane and that, accordingly, any amount was not paid to Ms Bi herself.
Mr Shen was then asked a number of questions about the preparation of the loan agreements of the various parties. He confirmed that he had seen the documents before they were signed although he trusted his solicitor. Mr Shen agreed that he had reviewed the agreements and was happy with them and told his solicitor that he was happy with them.
Mr Shen was asked a number of questions about the loan agreements entered into allegedly by Ms Bi and Mrs Begum. In relation to the phrase "its business operation" in Recital A in both agreements, Mr Shen gave evidence that he understood that all of the parties in the loan agreements were related parties, all running the business together involving a number of corporate entities and that is why the other borrowers were guarantors in the various documents. Mr Shen said that he thought the parties had a combined business.
In relation to the various drawdown notices, Mr Shen confirmed that the borrowers did not provide a completed and signed drawdown notice substantially in the form of the annexure to the loan agreements at least five business days before the drawdown date in accordance with Clause 4.1(a) of the various loan agreements. Mr Shen agreed that WIB did not give any borrower a notice that any debt was to be paid to a particular account or on a particular date relating to any amount said to be owed to WIB. Mr Shen confirmed that WIB had not told Ms Bi or Mrs Begum that it wanted the money paid back alleged to have been advanced or to be paid to a particular bank account.
Mr Shen confirmed that he was not present when the loan agreements were purportedly signed by Ms Bi or Mrs Begum.
When asked about the Bi and Begum drawdown notices, Mr Shen could not assist as to whose handwriting was on the notices (see CB 439 and CB 624). In relation to Mrs Begum's two drawdown notices (CB 439 and CB 624), Mr Shen stated that he received them but did not recall what he did in relation to the drawdown notices. Importantly, Mr Shen said he did not pay either $100,000 or $200,000 to Mrs Begum or at her direction following receipt of the drawdown notices in that exact amount. Mr Shen on further questioning, agreed that neither amount was paid exactly as had been requested. Mr Shen conceded that WIB did not pay either $100,000 or $200,000 to Mrs Begum or at her direction and that the two drawdown notices did not reflect what actually had happened.
In relation to the drawdown notice purportedly signed by Ms Bi (CB 476), Mr Shen did not know whose handwriting was on the document but accepted the account was not that of Ms Bi but was the bank account of Crane. He agreed that there was a difference between a sum of $100,000 in the Bi loan agreement (CB 466) compared to the sum of $200,000 in the drawdown notice (CB 476) but he did not correct that as had been corrected with the Deed of Variation with Hypoct.
Mr Shen was then asked some questions about earlier District Court proceedings commenced on 4 June 2021 by WIB against Ms Bi and Mrs Begum (CB 803). He agreed that these proceedings had been commenced but had lapsed. He could not say why that was the case but agreed that in the Statement of Claim a different sum was claimed in relation to Mrs Begum under the same contract.
There was no re-examination in relation to the evidence of Mr Shen.
Overall, as stated above, while I found Mr Shen to be an honest witness, he appeared to have limited recollection in relation to the specifics of the loan and drawdown documents and who had been paid what at various times as set out in principally paragraph 6 of his third affidavit.

[10]

Oral evidence of Ms Shainaz Bi

Oral evidence was given in the proceedings by Ms Shainaz Bi. As stated above, Ms Bi is the daughter-in-law of the second defendant Mrs Begum. She is the wife of Mr Mohammed who ran various businesses through companies including Crane.
Counsel for the defendants elicited further oral evidence in chief from Ms Bi without objection. She was taken to her affidavit dated 14 June 2023 and confirmed that the contents of that document were true and correct.
Ms Bi stated that her role in life in 2015 was as a stay-at-home mother looking after her three children. Ms Bi was taken to paragraph 6 of her affidavit and stated that she had a limited knowledge of the business that her husband was involved in but knew it was the business run by Crane and it was involved in transport having more than 50 employees in 2015. She denied having any role in the business. When taken to her bank records which were in evidence, Ms Bi confirmed that she was paid money by the business to cover the day-to-day expenses of herself and her children, which was organised by her husband. These amounts were paid weekly in 2015 and she understood they were organised by her husband with the company's accountants.
Ms Bi said that from time to time she was called in to the business and instructed to sign documents for the business but at no time was a director of the business.
Ms Bi was asked some questions about tax returns that she submitted for the years ending 30 June 2015 and 30 June 2016, which were in evidence. The return for 2015 (CB 695) indicated her occupation as being "Administrator - Office" with an income of $225,505 in that financial year before deductions. Ms Bi gave evidence that the tax return for 2015 was prepared by external accountants and she did not give instructions to them. She said the return was brought home by her husband who instructed her to sign it. She said she did not read the draft return as she believed it was correct. Ms Bi later gave evidence that she was not employed as indicated in the return as an office administrator.
Ms Bi was taken to the loan agreement purportedly between her and WIB (CB 464) and said that she did not know whether she had seen it before. She said at the time (June 2015) she did not run any business in Australia of her own. When taken to the execution page for the loan agreement at CB 474 where there is a purported signature of hers in blue pen, Ms Bi said that it did not look like her signature and she did not recall signing it. She accepted that it was possible that she may have signed it. She was then taken to the drawdown notice at CB 476 and denied that the handwriting on the document was hers or that it was her account number. Ms Bi then gave evidence that the signature on the drawdown notice dated 4 June 2015 looked like her signature but she could not recall signing it. In relation to the purported witness to her signature, Vijay Thummala, at CB 474, Ms Bi said that she did not know a Mr Thummala. She said she could not recall signing documents in front of him. She then stated that she may have signed documents in front of Mr Thummala in the company office. When asked why she said that, Ms Bi said that was because she understood the signature occurred "in the office".
She confirmed that the signature at the bottom of CB 474 was that of her husband, Mr Mohammed.
Ms Bi confirmed that she did not owe any money to WIB, Mr Shen or Mr Ding. She also denied ever giving instructions to WIB or Mr Shen or Mr Ding to pay money to anyone. Whilst accepting that she had a personal bank account, the records of which were in evidence, she said she did not have a business of her own in 2015 or at the time of giving evidence.
In cross-examination, Ms Bi confirmed that her husband was in court and that he had been present in court over the last few days. Mr Mohammed did not give any evidence in the proceedings and it is appropriate, in my view, that a Jones v Dunkel inference should be drawn that any evidence from him would not have assisted the defendants as he is clearly "in their camp" and was available to give evidence. I accept the submission of WIB on this point: written submissions in chief paragraph 25.
Ms Bi was then cross-examined about her evidence in chief that she did not have a business of her own. She gave evidence that she had an Indian designer clothing business in 2010 which was run by her sister and that she was just a director of a company. She said she was a director for about three years and had no involvement in the business other than serving in the shop now and then, which she later confirmed to be about once a month. Records in evidence show that she was in fact a director of the relevant company for six years (see Exhibit D page 118) not three years. The company search showed that the shareholders of the company, Desi Gurl Australia Pty Ltd, were Ms Bi and her husband, Mr Mohammed. Despite this, Ms Bi described her role as "just a director".
Ms Bi was taken to extracts from her Facebook page which were in Exhibit D where she describes her status as "Business Owner at Desi Runway 24 September 2017 to present" (Exhibit D page 2). Ms Bi confirmed this was her Facebook page and when asked about the description as her as being a business owner, she said it "could be wrong". When asked whether it was a lie, Ms Bi confirmed that it was. Ms Bi confirmed that despite no longer being a director, she would still describe herself as an owner even though the business was currently not up and running. Why that was so is unclear.
Ms Bi was then taken to the Facebook page for the business "Desi Runway" (Exhibit D page 28). One of the pages shows a fashion event. Ms Bi confirmed that she had helped "a bit" in organising the event and that sponsors of the event were Crane and other companies associated with Mr Mohammed. She denied organising the corporate sponsors. When taken to Facebook posts for 2020, Ms Bi said that she had outfits which were at home left to sell.
In cross-examination, Ms Bi confirmed that she was employed by Crane from about 2008-2009 to 2015 but had no role in the company. She said she was not able to say what job she was employed in at the company but accepted that it was not true she worked in administration. She did not recall submitting her 2015 tax return to the Australian Taxation Office. She seemed to accept that she was paid $225,505 by Crane in the financial year ending 2015 (CB 696) in circumstances where she had no role in the company at the time. She said she only went to Crane's business premises three to four times a year. She denied ever having met Mr Thummala personally and was not aware that he was the financial controller of Crane.
Ms Bi accepted that there was no mention of a work history in her affidavit or that she had been a director of Desi Gurl or received a wage from Crane, after initially claiming there was a mention in her affidavit of receiving money from Crane.
Ms Bi was taken to the Amended Defence which states that she denied signing the loan agreement and the drawdown notice. Ms Bi confirmed that she could not recall signing the documents but accepted that it was entirely possible that she signed them without caring about their contents. Ms Bi said that she did not remember what documents she had signed.
After being taken to paragraph 11b of her affidavit where she stated that the signature on the loan agreement was not her signature, Ms Bi confirmed this and did not wish to change her evidence. When taken to the loan agreement at CB 474, Ms Bi said that it did not look like her signature but accepted that the signature on the drawdown notice dated 4 June 2015 (CB 476) did look like her signature. Ms Bi confirmed that she had signed a General Consent to a Caveat (CB 305-306). It is noted that the signature at CB 306 was witnessed on the face of the document by Mr Tunnah, a Justice of the Peace in Queensland. Ms Bi also confirmed that her signature was on Item 2 of the General Consent to Caveat at CB 306. Ms Bi said that she did not know she was signing a caveat when she did so or that she was giving her consent to caveat.
Ms Bi confirmed that she understood what a mortgage meant and initially said that she had not given mortgages before. However, when the mortgagee was referred to and she was taken to mortgage documents, she confirmed that she had signed two mortgages previously in 2014 with Toyota Finance Australia Ltd and with Westpac Banking Corporation (CB 258, CB 303).
Ms Bi was asked whether she separated from her husband in June 2015 but denied it. She later inconsistently confirmed that she had separated from her husband and agreed that the evidence she had given previously was false. She then stated that she had been separated for three months. Ms Bi was taken to a decision of the Administrative Appeals Tribunal which indicated that she had ceased being married to her husband from June 2014. When questioned further on this, Ms Bi confirmed that she had at some stage ceased to be her husband's spouse but when pressed as to the time, said that it was in about 2014-2015.
Counsel for the plaintiff then put a number of propositions to Ms Bi. It was suggested to her that the signatures in blue on the loan agreement and the drawdown notice at CB 464 and CB 474 in blue were her signatures and Ms Bi said that they did not look like her signatures. She said she could not recall signing the documents. Ms Bi said that she did not know the bank account referred to in the drawdown notice was that of Crane despite receiving payments from them for six years. She denied being involved in the business of Crane despite her tax return. She said she had no role in the company.
When asked whether she was aware that Crane was in financial trouble in 2015, Ms Bi said she became aware of this the day before the liquidator was appointed. She said she was not aware that Crane was in need of money in 2015 and denied being happy to help Crane to obtain finance. She agreed that her household received benefits from Crane, and she had an interest in keeping the company running but said she did not recall signing the documents in question.
In re-examination, Ms Bi said she had a limited role with the business of Desi Gurl. She also confirmed that her bank account statements reflected payments from Crane and that she received no other payments from Crane except as shown in her bank statements.
I viewed Ms Bi carefully while she was giving her evidence and, in particular, her evidence relating to her involvement with Crane and her purported execution of the loan agreement and the drawdown notice. Ms Bi appeared to me to be an intelligent although somewhat reluctant witness.
Having considered her evidence carefully, I was not impressed with it. In my view, Ms Bi took every opportunity to attempt to limit any commercial experience which she had and to deny any knowledge or involvement concerning Crane. I think it likely that she was aware that her tax return for 2015 denoted a very significant salary and she was willing to sign that document suggesting she had an active and senior role in the company. Initially, Ms Bi denied having been separated from her husband but then confirmed that she had been and that she had given false evidence. I think it very likely that if Ms Bi had been separated from her husband for any period in 2014-2015 (as she admitted), that she would have been particularly concerned to know what documents she was signing at the request of anyone linked to her husband's business, including her husband or his sister.
Ms Bi indicated a willingness to incorrectly summarise her status as a business owner on her Facebook account. She gave incorrect evidence about the number of years she had been a director of Desi Gurl, although later accepting that it had been for a longer period.
Although I will consider later the central issue whether Ms Bi signed the loan agreement and the drawdown notice, I note that the signatures on those documents are very similar to the signatures on other documents which she accepted contained her signatures, including mortgages. Clearly people have variations in their signatures. However, Ms Bi accepted that her signatures were on the Consent to Caveat document (CB 306) which bore the same date as the date of the loan agreement and the drawdown notice. This is a relevant factor to take into account.
Overall, I found Ms Bi to be an evasive and generally difficult witness who attempted to give evidence limiting her knowledge and role. I do not accept that she should be regarded as a witness of truth particularly on the central issues relating to the execution of documents and her knowledge. I consider it highly likely, and I find, that she would have questioned any documents sought to be executed by her particularly in the context of her admitted separation from Mr Mohammed in the 2014-2015 period. Her affidavit was contrary to aspects of her oral evidence in relation to the various documents including the consent to caveat: see affidavit paragraphs 10b and 11c. In my view, caution should be exercised before accepting her evidence on the central issues unless it is confirmed by other independent or contemporaneous evidence.
Of course, a court in determining its factual findings in a matter, is not bound to accept any of the evidence which a particular witness attests to and similarly may accept part only of a particular witness's evidence. Similarly, it does not follow from the fact that part of the evidence of a witness is rejected that other aspects also have to be rejected even if it is found that the witness was lying: Sangha v Baxter [2009] NSWCA 78 at [155]-[156] and Croucher v Cachia [2016] NSWCA 132 at [129].

[11]

Oral evidence of Mrs Shabnum Begum

Oral evidence was given in the proceedings by the second defendant, Mrs Shabnum Begum. Mrs Begum, as stated above, is the mother of Mr Mohammed and the mother-in-law of Ms Bi.
In paragraph 2c of the Amended Defence filed on 20 October 2023, it is pleaded that Mrs Begum "could not have entered into" the loan agreement with the plaintiff as she suffers from a special disadvantage due to an inability to understand English and being incapable of reading and writing in English. This defence should not have been raised by Mrs Begum in the pleading. She disavowed English language difficulties in her oral evidence. She gave evidence without an interpreter and her affidavit did not indicate that it had been interpreted for her. She was able to read documents in English in the course of her evidence. It is clear that Mrs Begum does not suffer any special disadvantage due to language difficulties. There is no indication that the position was any different as at June 2015. I accept the plaintiff's submissions on this issue: written submissions in chief paragraph 18.
Mrs Begum also gave evidence about health problems which she had in 2015 continuing to the present. These included a "by-pass", blood pressure, diabetes and what appeared to be described as some "dementia". Mrs Begum gave evidence that for the last three years she had problems with her memory due to her illness. There was no independent medical evidence before the Court establishing any of these illnesses or disabilities. One would have expected some independent medical evidence to be tendered in relation to the claim of mild "dementia". In giving her evidence, Mrs Begum appeared to be an intelligent and perceptive witness who was readily able to answer questions both in chief and in cross-examination without difficulty. In the absence of independent evidence, I do not accept it has been established that Mrs Begum had any cognitive disabilities in 2015.
Mrs Begum gave evidence that in 2015 she was a pensioner on Centrelink benefits with no funds in the bank. She said she was no longer a pensioner and started a business in 2016 which she said paid her wages.
Mrs Begum gave evidence that she was the shareholder and only director in a transport business called Tranz Logistics. She said she made the decisions for the company with her accountant. The accountant was her daughter Farina who she had granted the power to run the business under a power of attorney due to Mrs Begum's health. Mrs Begum gave evidence that the company transported steel for various other companies and leased trucks for that purpose. Mrs Begum gave evidence that her brothers had run truck companies over an extensive period and she had been a part shareholder with her brothers. Paragraph 2b of the Amended Defence pleads that Mrs Begum was "bereft of any business acumen or knowledge" and "without financial nous".
I found Mrs Begum to be an intelligent witness with a commercial background and obvious capacity to start a transport business in more recent times. I find that at the relevant time in June 2015 she could not, as pleaded, be considered to be bereft of any business acumen or knowledge. This was confirmed in cross-examination where Mrs Begum conceded that she was currently a director of several companies and had been a director of Rahiman's Transport Company Pty Ltd since 1993 (Exhibit D page 185). Mrs Begum agreed that Rahiman was the name of her brother and that she had run a transport company with her brother in which she attended to administration tasks and banking. Mrs Begum also agreed that she had run a spice company selling Indian spices on a retail basis where she worked in the shop in the 1990s. Mrs Begum confirmed that she made no mention of her commercial history in her affidavit (CB 138). Mrs Begum agreed that she had been involved in the trucking industry since the 1990s but said she had nothing to do with Crane and rejected the suggestion that she was involved in the business of Crane. In the end, Mrs Begum conceded in cross-examination that she used to have considerable experience in business. None of these matters were referred to in her affidavit dated 11 July 2023.
Mrs Begum then gave considerable evidence about the circumstances in which certain documents were signed by her as referred to in paragraph 10 of her affidavit. She gave evidence that prior to discovery being given by the plaintiff, she believed she had never seen the relevant loan agreement but confirmed in paragraph 10(b) of her affidavit that the signatures on the document appeared to be her signatures. She gave evidence about the circumstances in which Mr Thummala contacted her to arrange for documents to be signed. The evidence in relation to how this contact was initiated was given at various stages in the examination in chief and cross-examination of Mrs Begum.
In chief, Mrs Begum gave evidence that her daughter Farina called her and stated that Mr Thummala would be coming to her house to collect her to sign various paperwork for "the business". Mrs Begum stated that she had never met Mr Thummala before but confirmed that she asked her daughter who he was and was told that he was working for Crane Trucks. At that time, Mrs Begum said she was living with her daughter at Springfield Lakes in Brisbane. Later in her evidence in chief, Mrs Begum said that her adult daughter had told her that the paperwork was for the business, and she trusted her daughter as she was working in the business as an accountant. In cross-examination, Mrs Begum added that her daughter had told her words to the effect "you have to sign paperwork as we need money". She understood that the paperwork was to enable the company to get money. She said that her daughter did not say the amount of money that was needed.
Mrs Begum said that Mr Thummala said to her words to the effect that they should go and sign papers at the solicitors. She said she had not seen the papers before and was driven by Mr Thummala to solicitors at Springfield. She said that Mr Thummala went inside for a few minutes and she remained in the car and then he came out and collected her and she went back in to sign the documents. Mrs Begum said that a photocopy of her licence and identification was taken and the solicitor, who she identified in her evidence as being Peter Walsh, showed her the documents and instructed her where to sign. She said she did not recall how many documents were there to be signed but it was more than one and she did not read them before she signed them. She said that Mr Thummala remained in the room when she saw the solicitor.
Mrs Begum was taken to the file note appearing at CB 625 and the agreed transcription of it which was Exhibit A. Mrs Begum said that Mr Walsh did not say the words attributed to him in the file note to her on 5 June 2015. Mrs Begum said that Mr Walsh simply told her where to sign and said nothing in relation to the caveat. He also did not explain the paperwork including in relation to each document before she signed it. She did not recall how many documents she signed. They then left the office and Mr Thummala took the papers which had been signed.
Mrs Begum gave evidence that she had never met with Mr Shen or Mr Ding and did not know of WIB.
Mrs Begum was then taken to various signatures on the alleged loan documents. In relation to the signature purportedly witnessed by Mr Thummala on the loan agreement between Mrs Begum and WIB at CB 515, Mrs Begum said it was not her signature even though she accepted that she had attended the solicitor's office with Mr Thummala. She also denied that the signature on the drawdown notice dated 4 June 2015 at CB 517 was her signature. Mrs Begum accepted that she had signed the documents in 2015 at Mr Walsh's office but did not recall the date. In relation to the drawdown notice dated 5 June 2015 at CB 624, Mrs Begum denied that was her signature on it and said she was not aware whose handwriting appeared on the document. When asked about the document and the signature at CB 622, Mrs Begum confirmed that perhaps that signature was hers although she could not remember. It is noted that the witness for that signature is recorded as being Mr Walsh.
In relation to the reference in Recital A of the loan agreement with Mrs Begum to "its business operation in Australia", Mrs Begum said she did not have a business operation in Australia at that time and had not been involved in a business since 2010.
In cross-examination, counsel for the plaintiff took Mrs Begum to various documents including those which had been produced on subpoena by Mr Walsh, the solicitor who Mrs Begum had seen on her evidence. Mrs Begum confirmed that her signature was on the caveat at CB 610 to 611 which provided her consent to a caveat over her Abbotsbury property. Mrs Begum was then taken to the signature on the loan agreement at 622 and confirmed Mr Walsh signing a document next to her signature. In relation to the drawdown notice at CB 624, Mrs Begum accepted that this involved an advance of $100,000 to Crane and that she knew that Crane was her son's company in 2015, although she said she did not know the account number referred to. She maintained that it was not her signature on the document at CB 624 and said she did not think she signed that document in Mr Walsh's office. Upon questioning from the Court, Mrs Begum confirmed her signature on the Consent to Caveat at CB 611 but denied her signature on the drawdown notice at CB 624 and said she believes she did not sign a drawdown notice despite these documents all being produced by Mr Walsh in his file on subpoena. She accepted that one of the documents that she signed could have been a drawdown notice.
Mrs Begum rejected the proposition that the solicitor Mr Walsh explained to her that if her son's company did not repay the lender the amount borrowed that he could sell her house in New South Wales. She denied that she understood this was the position but wanted to help her son. She said she would help him if he was in trouble but did not know that the company could have receivers appointed to it. Mrs Begum described her knowledge as knowing that her son's company needed money but not knowing how bad the financial position of it was.
In re-examination, Mrs Begum was taken again to Mr Walsh's file note dated 5 June 2016 (this is likely to be an inaccuracy and the year should be 2015). Mrs Begum said that she disagreed with the contents of the file note. In relation to the letter at CB 626, Mrs Begum agreed that this was her address at the time but denied receiving the letter. She said the letter was consistent with her recollection of the conference with Mr Walsh in that no advice was given in relation to any document.
As stated above, Mrs Begum impressed the court as an intelligent and perceptive witness. As indicated above, the pleading in paragraph 2c of the Amended Defence that she had a special disadvantage through a language barrier, was clearly not justified. She appeared to have reasonably good English and gave her evidence without an interpreter. I formed the view that Mrs Begum was seeking intentionally to downplay her background commercial experience. I have found the allegation that she was bereft of any business acumen or financial nous as pleaded in paragraph 2bb of the Amended Defence to be incorrect. Mrs Begum seemed to have considerable background commercial experience, although apparently not in the few years before the 2015. I have also found that her alleged illnesses were not established by independent medical evidence before the Court and did not appear to be reflected in any difficulty in her in giving her evidence.
It took some questioning before Mrs Begum revealed the full extent of the conversation with her daughter on 5 June 2015. I think it very unlikely that Mrs Begum would have proceeded with Mr Thummala to sign documents unless she was given some background to why she needed to sign the documents and particularly would have been hesitant in giving a Consent to Caveat concerning a property registered in her name.
I will deal with the questions of whether she signed the relevant loan agreement and drawdown notices further below as well as the issue of what occurred in the conference with the solicitor Mr Peter Walsh. Overall, I formed the view that Mrs Begum was intentionally downplaying her commercial experience, and her knowledge of the documents at the time. For these reasons, in my view some caution should be exercised in accepting evidence from her on any matter central to the issues without support from independent and reliable evidence. I accept the plaintiff's written submissions on that aspect: written submissions in chief paragraph 12.

[12]

Submissions of the parties

Orders were made for the provision of written submissions at the request of the parties.
The plaintiff submitted, in general summary, as follows: 1. The court should accept that Ms Bi signed the loan agreement and drawdown notice dated 4 June 2015 and the consent to caveat on 4 June 2015. Any evidence by her contrary to this should be rejected; 2. Whether or not a signature is genuine on a document is a question of fact to be determined having regard to the evidence, both oral and documentary, lay and expert. The court may make its own comparison of handwriting, although attention should be paid to any expert evidence on the issue; 3. The Court should find that Mrs Begum signed the loan agreement and drawdown notice dated 4 June 2015. However, these documents were rejected by the plaintiff's then solicitor. The Court should find that Mrs Begum signed the loan agreement and drawdown notice dated 5 June 2015 in the presence of Mr Walsh. The Court should also find that Mrs Begum signed the consent to caveat. Having regard to the later documents, the Court should find that the 4 June 2015 dated documents were withdrawn and replaced by the 5 June 2015 dated documents; 4. On the evidence, the Court should reject any denials from Mrs Begum regarding her signature on the various documents; 5. Ms Bi and Mrs Begum were willing to affirm affidavits which unequivocally stated the relevant documents were not signed by them, although in oral evidence they ultimately accepted the possibility that they signed some of the documents. For the reasons given in the plaintiff's written submissions, the Court should treat the evidence of Ms Bi and Mrs Begum with caution; 6. In particular, the overall effect of their evidence is such that the Court should have serious reservations about accepting any part of their evidence where it is not corroborated by some other evidence; 7. There is no evidence before the Court that any person associated with the plaintiff, whether that be Mr Shen, Mr Ding or Mr Qin, had any knowledge of the circumstances of either defendant at the time they entered into the loan agreements; 8. Between 4 June 2015 and 5 June 2015, the plaintiff entered into four separate but identical loan agreements with Ms Bi, Mrs Begum, Mr Mohammed and Hypoct. Each of those parties was a borrower on one agreement and a guarantor on the other agreements. The parties' commercial intention was to create a "pool of debtors" who were jointly and severally liable for any advances, although the loan agreements did not achieve this end because of the guarantees not being effective. There is no evidence at the time of the advance, the plaintiff had any regard to which particular borrower would be primarily liable under the loan agreements for each advance. That is understandable in the context. The agreement should be given a businesslike and commercial construction. In the light of the execution of the loan agreements and the drawdown notices, it should be held that the plaintiff made the payments indicated totalling $300,000. In doing this, the plaintiff fulfilled its obligations under the loan agreements and the defendants were indebted to the plaintiff; 9. It does not matter that the plaintiff had not internally allocated each drawdown to a specific borrower at the time of the advance. The defendants requested the money to be advanced to Crane and the plaintiff did that. There is no reason why the defendants are not indebted to the plaintiff for the amount stated in the drawdown notices and to find the contrary would be to grant the defendants "an undeserved windfall"; 10. The defences raised by the defendants under the Contracts Review Act 1980 (NSW) and the Australian Securities and Investments Commission Act 2001 (Cth) should be rejected. The defendants must satisfy the Court that they are entitled to the relief pleaded. The legislation does not apply because neither defendant adduced any evidence which might establish a defence to the plaintiff's claim under those Acts; 11. No benefit should be given to either defendant in relation to the money received in settlement of the Supreme Court proceedings against JurisBridge Legal; 12. For those reasons judgment should be given in favour of the plaintiff with interest from 22 June 2015.
The defendants submitted, in general summary, as follows: 1. The defendants accepted in the written submissions that there was evidence which could be supportive of a number of findings that either or both defendants executed the documents entitled Loan Agreements or Drawdown Notices as well as the caveats. It was also submitted that it was open for the Court to find that some, or all, of the signatures were not what they appear to be (paragraphs 1.1-1.2); 2. The Court should find that there was insufficient evidence of a meeting of the minds to create an enforceable contractual relationship between the plaintiff and either defendant because of the absence of knowledge of the detail by either Mr Shen or Ms Bi or Mrs Begum; 3. The diary note of Mr Walsh, the solicitor, is contrary to the letter he sent allegedly to Mrs Begum; 4. Even if the Court accepts that all the signatures on the documents in question are those of the defendants, the real question is, what was the true contractual position between the plaintiff and each of the defendants; 5. There was limited evidence about the commercial experience of Ms Bi and Mrs Begum and the involvement of the latter in her son's business; 6. While it is accepted that there were issues which may cause the Court to have reservations about the defendants' evidence, any anomalies will be seen as secondary because of legal problems with the plaintiff's case; 7. There is not sufficient evidence of an advance of moneys by WIB to any of the four identified recipients being Hypoct, Mr Mohammed, Ms Bi and Mrs Begum. The Court cannot be satisfied that either defendant was advanced a finite sum or owes any calculable sum to the plaintiff in the light of Mr Shen's evidence. The documents even suggest one payment by Mr Shen personally and not the plaintiff: paragraphs 3.1-3.3; 8. No reason was given for the absence of Mr Ding in giving evidence. A Jones v Dunkel inference should arise from his failure to give evidence. He was an advisor and consultant to the plaintiff and was in Sydney and could give evidence clarifying the interaction with representatives for the borrowers; 9. On the evidence of the plaintiff, it would be inherently unsafe for the Court to give judgment for an award of any sum against either defendant. There are numerous issues raised in relation to the contractual relationship between the parties: paragraphs 4.1-4.4 of the defendants' submissions; 10. There are many issues in relation to the form of the loan agreements. Each loan agreement was also a "stand alone" agreement. There is no provision in the Bi agreement or the Begum agreement which in any way renders either to be dependent upon, or related to, other transactions, or that performance is in any way intertwined with other commercial relationships. The quantum of debt and entitlement to recovery against the defendants has not been established to the requisite standard. In particular, it cannot be established that moneys advanced were linked to any particular drawdowns: paragraphs 4.5-4.6 of the defendants' submissions; 11. Mr Shen was not able to assist in relation to clarifying who was advanced what money at what time: paragraph 4.10 of the defendants' submissions; 12. There was no proper accounting for the payment of $295,000 recovered from the negligence claim in the Supreme Court against the solicitors who drew the loan agreements: paragraphs 4.11-4.13; 13. The defendants are entitled to relief under the Contracts Review Act 1980 and the Australian Securities and Investments Commission Act 2001 (Cth); 14. There is no evidence whatsoever which identifies what sum, if any, either defendant owes relating to any particular drawdown notice. The evidence of Mr Shen treats the indebtedness of all who signed documents as "globally" indebted which is not the case; 15. The proceedings were commenced on the last day before expiry of the limitation period. This delay should result in interest being refused or only allowed at the statutory rate from the date of service of the proceedings on the defendants; 16. In oral submissions, counsel for the defendants submitted that the Court could not be satisfied on the balance of probabilities that any amount was advanced by WIB in relation to the drawdown notices (if signed) by Ms Bi and Mrs Begum. This aspect had not been proven by direct evidence from Mr Shen and no inference could properly be drawn as to the advances in favour of WIB against either of the defendants; 17. The proceeding should be dismissed with costs.
In response, the plaintiff submitted as follows: 1. The defendants appeared to concede in their submissions that the evidence establishes the defendants executed the loan agreement, drawdown notice and caveat; 2. Accordingly, the starting point is that, subject to the operation of equity and beneficial statutory provisions, the defendants are bound by the provisions of the loan agreements they have signed. Subjective intentions of the parties are irrelevant; 3. The objective circumstances evince an intention by the defendants to be bound by the documents executed; 4. Weight should be given to the contemporaneous note prepared by Mr Walsh, solicitor, relating to the conference on 5 June 2015. Mrs Begum understood she was signing documents that would see $100,000 being loaned to her son's company, Crane, and that she would be ultimately responsible for that loan; 5. There is appropriate evidence of the advance by the plaintiff to the four borrowers. There is evidence before the Court that the plaintiff advanced a total of $411,000 under the loan agreements. In any event, there is no sensible dispute that Crane received funds in the hundreds of thousands of dollars from the plaintiff at the request of the defendants. The defendants should not escape liability for payments they promised to repay; 6. The payment made in Mr Shen's name was made on behalf of the plaintiff; 7. There is no explanation for WIB advancing funds to Crane save for the four loan agreements. The absence of a demand by WIB is irrelevant; 8. In the absence of the defendants, or the hypothetical payee for that matter, nominating the account to which they wish the payment should be allocated, the right to appropriate reverts to the plaintiff. The plaintiff is entitled to appropriate the settlement sum arising from Supreme Court proceedings in whatever way it sees fit; 9. The defendant's submissions do not include any identification or analysis of how the operation of equitable principles or the Contracts Review Act 1980 or the Australian Securities and Investments Commission Act 2001 are said to relieve the defendants from any liability under the loan agreements; 10. Mr Shen originally treated the indebtedness of all four borrowers as a global amount. Had the loan agreements contained effective guarantees, there would have been no issue; 11. The rule against double recovery is not breached in the present case by the Supreme Court settlement sum. Further the case against the solicitors in the Supreme Court was in negligence whereas the plaintiff's claims against the defendants are in debt. The relief sought is not the same; 12. There is no reason to limit the interest payable because of the delay by the plaintiff in filing until the end of the period before the limitation period arose; 13. The plaintiff wishes to be heard on costs following the result of the hearing.

[13]

Whether Ms Bi signed the loan agreement and the drawdown notice

I find that Ms Bi signed the relevant loan agreement and drawdown notice in question dated 4 June 2015 and that her signature on the loan agreement was witnessed by Mr Thummala (see CB 396, CB 398, CB 474 and CB 476). I also find that Ms Bi signed the General Consent to Caveat document dated 4 June 2015 (CB 306). I accept the plaintiff's written submissions on this issue.
The Court did not have before it any expert evidence from a handwriting expert. Accordingly, the Court had to undertake a comparison of the signatures which were accepted to be those of Ms Bi compared to those over which there was some doubt. There are of course natural variations in any person's signature and this was the case with the signatures in dispute. Ms Bi accepted that her signatures appeared on the mortgage signed on 22 May 2014 (CB 258), the mortgage signed on 19 June 2014 (CB 303) and in two places on the General Consent to Caveat at CB 306. It is noted that the date of the Consent to Caveat at CB 306 is 4 June 2015, the same date as on the other disputed documents.
A Justice of the Peace, Mr Tunnah, is listed as the person witnessing Ms Bi's signature. He required evidence of identification under s 162 of the Land Title Act 1994 (Qld). A witness of the General Consent to Caveat was required to be of a certain status such as a legal practitioner or Justice of the Peace. Ms Bi's signature is in a distinctive blue pen in the documents under review. The loan agreement and drawdown notice are both dated 4 June 2015, the same date as the Consent to Caveat which is suggestive that the other documents were signed on the same day. There is a similar signature in blue pen from Ms Bi in the purported guarantees given in the loan agreement to Mr Mohammed (CB 489). See also the loan agreement to Hypoct at CB 503 and relating to Mrs Begum at CB 516. There were issues in relation to some of the documents which gave rise to the emails at CB 460. Ms Bi accepted that it was possible that she may have signed the documents in dispute.
The two relevant documents were signed at about the time that the email exchanges were occurring and the day before Mrs Begum purportedly signed her documents.
Whether a person signed a document is a question of fact. The Court is entitled to form its own conclusion on the matter, particularly where there is no expert evidence on the issue: Lazarus v Director of Public Prosecutions (NSW) [2015] NSWSC 426 at [67]-[71].
Comparing all of the signatures and taking into account the matters I have mentioned, I am satisfied, in the circumstances, that it is more likely than not that Ms Bi did sign the documents in question. The accepted signatures and the questioned signatures are very similar and were all made on the same day.
This finding raises further concerns in relation to the accuracy of the evidence of Ms Bi. I think it highly likely and I find that Ms Bi was aware that she had signed all the disputed documents in question. In my view, she would have been very hesitant in agreeing to sign the consent to caveat over her property without requiring an explanation of its relevance.

[14]

Whether Mrs Begum signed the disputed documents

I find that Mrs Begum signed the disputed documents in issue. Such documents include the loan agreement dated 4 June 2015 (CB 437), the drawdown notice dated 4 June 2015 (CB 439), as purported guarantor on other loan agreements (CB 425, CB 397), the loan agreement dated 5 June 2015 (CB 622) and the drawdown notice dated 5 June 2015 (CB 624). Mrs Begum confirmed that it was her signature at CB 622. She confirmed that she signed various documents in the presence of Mr Walsh. She accepted that she had signed the Consent to Caveat at CB 611. The signature on a mortgage at CB 316 was not apparently disputed. Having regard to the material produced by Mr Walsh, Solicitor, from his file, I have no reason to doubt that the loan agreement and drawdown notice dated 5 June 2015 were signed by Mrs Begum. This is confirmed by a comparison of accepted and potentially disputed signatures. I accept the submissions of the plaintiff on this issue: written submissions in chief paragraphs 7-11.
There is an issue about the advice which was allegedly given by Mr Walsh to Mrs Begum on 5 June 2015. The file note is dated with an incorrect year but I think it likely that it was made on 5 June 2015 having regard to the contents in the context of the other documents. Mrs Begum does not recall receiving the letter dated 9 June 2015 (CB 626) but I think it likely that it was sent and received by her. This was her address at the time. There is no evidence that she disputed anything to do with the matter upon receipt of the letter which she denied receiving in her oral evidence.
In relation to the file note, it is said to relate to a conference of an hour. I think it likely that some time would have been taken by Mr Thummala explaining to Mr Walsh that his legal services were required. Some further time would have elapsed in Mr Walsh looking at the documents. In my view, it is likely that the conferences took in total something approaching one hour. I reject Mrs Begum's evidence to the contrary. I also reject the submissions of the defendants to the contrary.
Mrs Begum disputed the contents of the file note. In my view, words to that effect were likely stated by Mr Walsh to Mrs Begum. I reject her evidence on this issue. It is not surprising that comments were made by Mr Walsh to the effect indicated at CB 625 having regard to the fact that a Consent to Caveat was provided. I also do not consider that the file note is completely inconsistent with the letter at CB 626. It does not appear to be in issue that Mr Walsh did not give "any legal advice as to [the] loan agreement" as that would have required much more comprehensive advice on the terms and nature of the agreement. However, in the light of the file note, I think it inaccurate in the letter to say that no legal advice was given in relation to the caveat. The file note indicates that it was. The recorded response "she said that she understood this but she wanted to help her son" is consistent with the accepted factual scenario at the time and seems a likely response which would have been given. I find that Mrs Begum was told by her daughter that the company needed money and she was willing to sign the documents and the Consent to Caveat in those circumstances to assist a company which employed her son and daughter and provided the means to support her son's family. I reject Mrs Begum's evidence that Mr Walsh did not say the words to the effect set out at CB 625.
These findings made by me impact my consideration of the accuracy and reliability of Mrs Begum's evidence. Mrs Begum appeared to be an intelligent and perceptive person. In my view, she would have been well aware that she signed the documents in question. I also saw no indication of memory difficulties in the course of her giving her oral evidence.

[15]

The knowledge of Mr Shen at the time

Neither Mr Qin nor Mr Ding gave evidence at the hearing. As Mr Qin, through JurisBridge was sued by WIB, it is difficult to see why he should be regarded as being in WIB's camp for Jones v Dunkel inference purposes. However, as indicated above, I accept that a Jones v Dunkel inference (first type) is appropriate in relation to Mr Ding. I accept the defendants' submissions on this point: paragraph 3.5 of responsive submissions.
In relation to Mr Shen, he gave evidence that he thought all the borrowers were related parties involved in the same business. I accept that evidence given by Mr Shen. He struck me as an honest witness who was clearly inexperienced at the time in relation to commercial lending. The transactions all emanated from Mr Ding and were involved in the same series of funding. There is nothing to indicate that the parties were not related in business.
I think it likely and I find that when Mr Qin prepared the documents in draft for the various loans that all the drawdown notices directed moneys to be paid to the account name of the borrower. The account number for Crane was then inserted and in the case of the 5 June 2015 drawdown for Mrs Begum, was amended to specifically refer to Crane.
In my view, there was nothing strange about the handwritten changes. If Mr Shen had enquired, he would likely have been told that all the parties were directly involved with the senior management of Crane, including Mrs Begum. Mrs Begum was aware that the money was for the purpose of her son's company.
In my opinion, there was nothing which indicated anything untoward to Mr Shen. I find further that there was nothing to indicate that the parties were vulnerable or ill-advised or ignorant of the purpose of the lending. It is true that there were no certificates from a solicitor indicating that the transaction documents had been explained. That is a factor to be taken into account. Overall, having seen Mr Shen give evidence, I do not accept that there was any indication to him that there were any concerns with the lending from the point of view of the individual borrowers. Further, it is noted that the surnames of Ms Bi and Mrs Begum were different to the surname of Mr Mohammed. It was not suggested to Mr Shen in evidence that he was aware that Ms Bi was the wife of Mr Mohammed or that Mrs Begum was the mother of Mr Mohammed.

[18]

What moneys were advanced, if any, to Ms Bi and Mrs Begum

A strongly contested factual issue between the parties was the question of what moneys were advanced by the plaintiff WIB following the entry into the respective loan agreements and the signing of the respective drawdown notices.
In paragraph 8 of its reply submissions dated 23 November 2023, the plaintiff raises a pleading point in relation to the lack of a denial by the defendants of indebtedness. First, this was only belatedly raised in the reply submissions. The case was run by the defendants at the hearing on the basis that there was no indebtedness. Secondly, no objection was taken to cross-examination of Mr Shen relating to the destination of the payments made by WIB. Thirdly, it was never really in issue during the hearing that the defendants denied any liability to the plaintiff for the sums claimed.
In his third affidavit in paragraph 6, Mr Shen states that money was advanced to Ms Bi, Mrs Begum, Mr Mohammed and Hypoct by a number of advances which he sets out which total $411,000. The Deed of Variation dated 14 August 2015 (CB 347) states in Clause 1 that $231,000 had been advanced to Hypoct. If that is the case (and there is no reason on the evidence why WIB should not be regarded as having entered that agreement to record the accuracy of the matters in it), then that would only leave $180,000 to have been advanced to the other three borrowers. I reject any submissions of the plaintiff contrary to this. The Deed of Variation is important as WIB purported to record and agree what had occurred. It is true that Ms Bi and Mrs Begum were not parties to the Deed of Variation and there is thus no agreement between them with WIB. However, why would WIB agree that it had advanced $231,000 to Hypoct if that was not the case? The Deed is compelling contemporaneous evidence of the fact.
Documents in evidence suggest that $50,000 was advanced to Nexus Collections Pty Ltd (CB 344). However, this sum was within the Hypoct amount of $231,000. It was unclear who $30,000 was advanced to on 14 August 2015 (CB 345). Mr Shen appeared to accept that it was unclear who the moneys were advanced to. In final submissions, counsel for the plaintiff effectively conceded that WIB could not establish this $30,000 was paid to Crane as directed in the Bi/Begum drawdown notices. Accordingly, the sum of $180,000 remaining is reduced to $150,000.
Mr Shen also advanced some monies from his own account to Crane but it seems on behalf of WIB (I accept the plaintiff's submissions on that matter).
Exhibit 3 suggests that $331,000 in total had been advanced by WIB through drawdowns up to 27 July 2015. Exhibit 3 does not indicate how the advances related to the drawdowns. Exhibit 3 is generally consistent in relation to the drawdowns with paragraph 6(a)-(h) of Mr Shen's third affidavit. In his oral evidence, Mr Shen agreed that WIB did not pay $100,000 or $200,000 to Mrs Begum or at her direction pursuant to the two drawdown notices which I have found were signed by her, and the drawdowns did not reflect what actually happened. He also agreed that he could not point to anywhere in his affidavits where he states which entities received the payments referred to in paragraph 6 of his third affidavit.
With the $180,000 remaining after the removal of the $231,000 in payments in the Deed of Variation with Hypoct (which in my view should occur), paragraph 6 of Mr Shen's affidavit states that the moneys were advanced to Ms Bi, Mrs Begum and Mr Mohammed. I accept the evidence of Ms Bi and Mrs Begum that they did not receive any payments from WIB. All payments seem to have been made to other entities including Crane. As stated above, the plaintiff conceded in oral submissions that the $30,000 should be deducted. It was not advanced to Crane.
An email in evidence from Mr Thummala, copied to Mr Mohammed and his sister Farina Mohammed, dated 4 June 2015 appears to attach copies of loan agreements and concludes: "Finally, please confirm if $200K will be transferred tonight as the attached documentation is now organised". No reply to this email was in evidence. It appears the money was not advanced as requested on that day for that amount. An email from Mr Qin dated 5 June 2015 was relied on by WIB in oral submissions (CB 538) however this refers to a "$30,000 loan to your client" and not the Begum drawdown notice amount. The responses to the email are vague (CB 538). It is unclear who the "client" is referred to in this email.
None of the loan agreements was expressly stated to be dependent on any other loan agreement or other commercial advance. However, each loan agreement contained guarantees which on their face were of little value. Rectification of the loan agreements was not sought at any stage by the plaintiff. I accept that all loan agreements were entered into at about the same time and apparently for the same purpose of providing funds to Crane.
In my view, the legal onus rests upon the plaintiff to establish on the balance of probabilities that moneys were advanced to either Ms Bi or Mrs Begum or at their direction to Crane as a result of the drawdown notices signed by them. It is noted that Mr Mohammed also signed a drawdown notice in the amount of $200,000 on 4 June 2015: CB 490. The question therefore arises as to whether the Court can infer and find that moneys were advanced to Crane (or anyone else) as a result of the drawdown notices which I have found were signed by Mrs Begum and Ms Bi. One would have expected correspondence between WIB and either or both of those persons (or at least a statement of record) if such moneys had been advanced to Crane as a result of their drawdown notices.
As stated above, the plaintiff submitted in its written submissions in chief as follows: 1. WIB entered into four separate but identical loan agreements with Ms Bi, Mrs Begum, Mr Mohammed and Hypoct; 2. Each of the parties was intended to be a borrower in one agreement and a guarantor in the other agreements; 3. The original intention of the parties was to create a "pool of debtors" with joint and several liability for advances made; 4. Whilst the loan agreements did not achieve the commercial purpose because of the defective guarantees, the context of the agreements establishes the commercial purpose and the intention of the advances made; 5. There is no evidence that the plaintiff had any regard to which particular borrower would be primarily liable under the loan agreements for each advance at the time the advances were made; 6. Neither defendant made any repayments; 7. No authority could be located dealing with how an advance should be allocated by the plaintiff to a particular borrower; 8. The loan agreements and drawdown notices requested certain advances be made; 9. The advances made should be regarded as responding to the drawdown notices signed by Ms Bi and Mrs Begum; and 10. To find the contrary, would be to give the defendants an undeserved windfall which commercially was not intended.
In my view, this analysis raises some issues and has some difficulties: 1. Whilst the objective commercial purpose may have been to have parties as both borrowers and effective guarantors that was not achieved legally; 2. The drawdown notices were specific to each borrower and differed in amount (Mrs Begum's 5 June 2015 drawdown notice was only for $100,000); 3. Paragraph 30 of the plaintiff's submissions in chief states that the moneys were advanced "in response to those [the Bi and Begum] drawdown notices" but it is not completely clear that was the case or was intended by Mr Shen for WIB; 4. The question arises why the remaining $150,000 paid was not to be regarded as in response to Mr Mohammed's drawdown notice dated 4 June 2015 for $200,000 as opposed to the Bi and Begum drawdown notices. Similarly, it may have been only in response to a drawdown notice from one of the defendants. A substantial degree of speculation is arguably involved. In oral submissions, counsel for the plaintiff had difficulty responding to the issue of how the $150,000 remaining should be reflected in any judgment against each of Ms Bi and Mrs Begum. A proportionate attribution relying on equitable principles of co-ordinate liability was not pleaded by the plaintiff; 5. There is no correspondence from WIB linking any particular advance to the Bi and Begum drawdown notices as opposed to the Mohammed drawdown notice; 6. The loan agreements treat each loan amount separately and have a specific procedure to be adopted for drawdowns under each agreement; 7. Whilst there was no internal allocation of any advance to a particular borrower (submissions paragraph 33) there was also no external allocation to a particular borrower (through agreement as with Hypoct or through correspondence).
It is accepted that the terms of the various loan agreements must be understood objectively, and in their context, by what a reasonable businessperson would have understood them to mean: Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12. However, the fact is unavoidable that there were four separate agreements, each contemplating its own drawdown notices and advances. Caution must be exercised in determining objective commercial purpose in a contract or series of contracts: The J & P Marlow (No 2) Pty Ltd v Joseph Haynes [2023] NSWCA 117 at [78]-[79].
After considering all the evidence, I am unable to find that any moneys were on the balance of probabilities advanced to either Mrs Begum or Ms Bi or at their direction to Crane or any other entity as a result of the drawdown notices which I have found were signed by them on 4 and 5 June 2015. The moneys could well have been advanced responding to the drawdown notice of Mr Mohammed. The fact counsel for WIB in oral submissions could not provide a reasoned submission as to the appropriate amount in any judgment against each of Ms Bi and Mrs Begum (other than it being at the plaintiff's choice) shows the difficulty with the plaintiff's submission.
Further, if I am in error on that conclusion, in the light of the Hypoct Deed of Variation and the $30,000 advances where the recipient was unclear, any advances would be limited to $150,000 at the most. This was the sum remaining after the $231,000 advances were made to Hypoct recorded in the Deed of Variation (CB 347) and the deduction of the $30,000. Consideration would then have to be given as to how the $150,000 was to be allocated in the light of the differing drawdown notices from Ms Bi, Mrs Begum and Mr Mohammed.
This seems to be a significant finding in the case. The plaintiff must establish, in order to be successful in its claims, that moneys were advanced as a result of the drawdown notices signed by Mrs Begum or Ms Bi (or both) and not as a result of any other drawdown notice. In my view, it has failed to do so.

[21]

Unconscionability and other defences

It is clear that if a lender engages in unconscionable conduct or what has been described as "naked asset lending", that a court can set aside a transaction or find that the borrower is not liable to repay moneys advanced or interest incurred: see Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41; Kowalczuk v Accom Finance Ltd [2008] NSWCA 343; Caterjian v Parfit Investments Pty Ltd [2023] NSWCA 178 at [81]. As was made clear by Leeming JA in Wu v Ling [2016] NSWCA 322 at [7]-[11]: 1. Equitable intervention is based upon a precise examination of the particular facts and a scrutiny of the exact relations established between the parties. The question is evaluative. Circumstances attracting equity's intervention are of great variety and cannot be satisfactorily classified; 2. The absence of immoral or dishonest motives is not sufficient to preclude equitable intervention. Nor is it necessary to establish that the defendant actively sought to procure the assent of the other party; 3. One fact which may be relevant is whether a loan has been made at a high interest rate to the borrower; 4. Another factor is whether the lender simply closed their eyes to the vulnerability of the borrower and any disability which adversely affected them; 5. An important issue is whether a party seeks to take surreptitious advantage of the weakness or necessity of another; 6. Borrowers undertake foolish things. Knowledge or belief of a plaintiff's foolishness alone is not sufficient to affect the defendant's conscience. One issue is whether the conduct of the lender was dishonest through unconscious manipulation which was calculated to induce and in fact induced an improvident transaction; 7. Significantly, the principle on which equitable intervention is based is the concern to prevent victimisation of the weaker party by the stronger.
In Nitopi v Nitopi [2022] NSWCA 162 the New South Wales Court of Appeal held that the requisite knowledge for a claim of unconscionable dealing in equity was not actual knowledge, but constructive knowledge is sufficient when the party knows or ought to know or has an appreciation of the special disadvantage or vulnerability of the borrower or guarantor. The Court of Appeal held that the High Court decision in Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 stands for the proposition that constructive notice is insufficient. However, it held it does not stand for the proposition that constructive knowledge of a special disadvantage is also insufficient. In Nitopi Justice Ward held that once a lender's knowledge of a special disadvantage and improvidence of a transaction is established then there is at least an evidentiary onus on the stronger party to show that the transaction was fair, just and reasonable: at [150]-[153].
In the present case, in my view there was no unconscionable conduct established on the part of WIB. Ms Bi and Mrs Begum had different family names to Mr Mohammed. Mr Shen gave evidence, which I accept, that he thought that they were all related parties in a business. There is no evidence that Mr Shen or any representative from WIB was aware or had knowledge that the transaction was improvident or that Ms Bi or Mrs Begum suffered from any special disadvantage. There is no suggestion in the evidence that Mr Shen or any agent for WIB acted in a predatory fashion or with a predatory state of mind or exploited any disadvantage or ignorance of Ms Bi and Mrs Begum. The interest rate charged was high but not exorbitant and there was no evidence on this issue.
For these reasons I find that unconscionability in equity has not been established by the defendants.
The defendants also relied on ss 12CB and 12CC of the Australian Securities and Investments Commission Act 2001 (Cth) in their Amended Defence. Even assuming that the loans in the present case involved the provision of a financial product or a financial service within those sections (see also ss 12BAA and 12BAB), I do not consider that WIB has engaged in conduct that is, in all the circumstances, unconscionable for the same reasons. In coming to that conclusion I take into account the matters referred to in s 12CC. In all the circumstances, the provision of caveatable security registered in the names of Ms Bi and Mrs Begum and the provision of advances to Crane could not be considered to be unconscionable. No undue influence or pressure was exerted on behalf of WIB and similar transaction documents were used in relation to Mr Mohammed and Hypoct. WIB was not aware of the background of Ms Bi and Mrs Begum. The claim under the Australian Securities and Investments Commission Act therefore fails.
A claim is also made under the Contracts Review Act 1980 (NSW). Under s 7 of the Contracts Review Act, if a court finds a contract or a provision of the contract to have been unjust in the circumstances relating to the contract at the time it was made, the court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, take a number of actions including deciding to refuse to enforce any or all of the provisions of the contract or make an order varying, in whole or in part, any provision of the contract. The matters for the court to take into account are set out in s 9 of the Contracts Review Act.
As was noted by Bell P (as he then was) (with whom Macfarlan and Payne JJA agreed) in Magann v The Trustees of the Roman Catholic Church for the Diocese of Parramatta [2020] NSWCA 167 at [47], a failure to make out a case under the Contracts Review Act will generally, although not necessarily, mean that success under the equitable doctrine of unconscionability is unlikely. In my view, the opposite is usually also the case. In considering whether a contract is unjust under the Contracts Review Act, the Court undertakes an evaluative decision based on the totality of relevant circumstances: see Magann at [48].
The relevant principles to be applied were stated by Gleeson JA in Lauvan Pty Ltd v Bega [2018] NSWSC 154 at [283]-[285] which were confirmed by the Court of Appeal in Magann at [50]. Of relevance is the significance of the absence of independent legal advice, although it will be of particular significance if the party seeking to enforce the contract is actually aware that the advice has not been given or has not been understood. I accept that the contract with Ms Bi and Mrs Begum was in the interests of WIB but in my view it was not in any sense unreasonable even though it may not have been in the direct interests of either to have entered into it. The contracts were clearly entered into to provide assistance financially to Crane which was the company associated with Mr Mohammed and which provided financial support to Ms Bi. There is no suggestion in the evidence in my view of dishonesty, trickery or any other form of predation in the case of WIB. Mr Shen was not asked as to whether he assumed Ms Bi and Mrs Begum had obtained legal advice. Taking into account all of the matters set out in s 9 of the Contracts Review Act in my view the Court should not grant any relief as sought. It was clearly up to Ms Bi and Mrs Begum whether they would execute the drawdown notices. There is no suggestion that either could not have sought to decline to enter into the loan agreements or through Mr Mohammed to have sought some alteration to the contracts. I find that both Ms Bi and Mrs Begum had some background commercial experience and were intelligent women. I find that there was no undue influence, unfair pressure or unfair tactics exerted on them by WIB.

[23]

The settlement amount

I have referred above to the Deed of Settlement and Release entered into between WIB and JurisBridge Pty Ltd trading as JurisBridge Legal following the Supreme Court proceedings commenced by WIB. The proceedings, which were commenced by a Statement of Claim filed by WIB on 6 May 2020, also concerned the loans entered into by Ms Bi and Mrs Begum (see paragraph 13 at CB 759 and paragraphs 42-43 at CB 768-9 of the Statement of Claim). Recital A of the Deed of Settlement and Release makes clear that the Deed was to resolve the claims of WIB against JurisBridge including relating to the loans to Mrs Begum and Ms Bi. There was no evidence before the Court as to how the settlement sum referred to in the Deed was arrived at, particularly whether it had been calculated based on certain claims or losses.
In his third affidavit, Mr Shen makes clear that the proceedings were settled by the receipt by him of $295,000 on 30 March 2022 which he chose, in his discretion, to pay to the parent company of WIB, Alliance Investment Holdings, and to allocate $242,746.68 of the $295,000 to the principal owed under the invoice discounting facility: third affidavit paragraphs 23-29. It is not suggested in the evidence that Crane owed less than this sum in principal at the time it was allocated. Paragraph 24 of the third Shen affidavit provides that interest owed on the invoice discounting facility as at 30 March 2022 was $82,214.82. The balance of the $295,000 received ($295,000 - $242,746.68 = $52,253.32) was allocated to interest said to be owing under the invoice discounting facility. This did not pay all the interest owed under the invoice discounting facility: third Shen affidavit paragraph 29.
It is argued by the defendants that it cannot solely be at the discretion of Mr Shen for WIB to determine how the settlement funds were allocated.
It is not apparent from the loan agreements precisely how the settlement funds should be treated - there was no clause in the loan agreements dealing with this issue. I was not referred to any direct authority dealing with this type of issue. The plaintiff submits that it should be ignored or not taken into account, as there has been no double recovery: plaintiff's written submissions in chief paragraph 42. The defendant points to cases relating to the need to avoid double recovery where several defendants are involved. It was submitted that a plaintiff can never, merely because "his claim may be against more than one person, recover more than the total sum due": responsive written submissions paragraphs 8.1-8.4.
The plaintiff referred me to a number of authorities in paragraphs 37-53 of their submissions in chief. The facts there were somewhat different to the present facts. Here, Jurisbridge was sued in tort and contract for losses said to be relating to all the borrowers including Ms Bi and Mrs Begum. The settlement moneys received concerned claims relating to all the loans.
The defendants submit that to regard the settlement moneys as irrelevant would be to give WIB a windfall. It would also have allowed Mr Chen to decide which borrower should get the benefit of the moneys received. There was no provision in the loan agreement contractually permitting Mr Shen to do what he did. Reference was also made to Boncristiano v Lohmann [1998] 4 VR 82 at 88-90.
In my view, despite these matters, there is force in the submissions in chief on behalf of the plaintiff. I accept the submissions in paragraphs 50-53, in particular, of the plaintiff's submissions. In my view: 1. The settlement sum received appears to be a collateral payment as it was as a result of legal proceedings brought against the former solicitors for negligence (whether in tort or for breach of retainer) arising from several commercial debts. It therefore was not subject to the rule against double satisfaction: Misan v Markham Real Estate Partners (KSW) Pty Ltd [2023] NSWCA 51 at [8]; 2. In relation to Boncristiano, above, the payment there was in the context of a concurrent claim concerning the same damage (at page 88.7) and the solicitors were parties in the same hearing; 3. The wrong of the Jurisbridge party was a separate and distinct wrong and is different to the alleged debts in the present case. It is not as though they were separate tortfeasors sued for the same loss; 4. There was also no breach of the rule against double satisfaction (even if it did apply) due to the allocation of the settlement funds by Mr Shen which still, after application to the invoice financing facility, did not make the plaintiff "whole" in relation to the debt under that facility (see the Shen third affidavit paragraphs 23 and 29). That is because there was still outstanding interest owed to WIB under the invoice discounting facility. The plaintiff therefore did not recover more than it was owed at the time on the evidence.
A further point is that it is unclear how the settlement sum of $295,000 was arrived at or calculated. There was no evidence before the Court on this point.
For the above reasons, in my view the sum of $295,000 received as a result of the settlement does not need to be taken into account in assessing any amount owed by the defendants to WIB.
It is necessary to undertake the exercise of calculating the plaintiff's loss if I am in error. It would have to be assessed on $150,000 as stated above (considered in the light of the drawdown notice also of Mr Mohammed). Interest will need to be calculated at 20%. How judgment would be entered is unclear. If WIB's oral submissions are accepted, WIB asserts the right to seek judgment against either defendant.
I reject the submission of the defendants that some account should be taken in the calculation of interest of the plaintiff's delay in bringing the proceedings. The plaintiff was entitled to bring proceedings as it thought fit, particularly in the light of the various recovery actions being taken by liquidators and receivers. I accept the written submissions on behalf of the plaintiff on this issue.
In relation to the question from when any interest should first be calculated, the approach of the plaintiff to the calculation of any interest at 20% per annum from the date of the last drawdown (written submissions in chief paragraph 37), appears reasonable and should be adopted.
There was various cross-examination of Mr Shen in relation to other potential recoveries by WIB. The evidence was not sufficiently clear to enable me to take into account any recoveries which would appear to be speculative. In relation to excess equity in the properties provided as security, there was simply no evidence as to what had occurred with these funds. The matter was not taken further in any detail in the cross-examination of Mr Shen.

WIB Australia Pty Ltd v Bi

At a glance

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Judgment (27 paragraphs)

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Legislation Cited (3)

Cases Cited (27)

Cited By (1)