Zhao v Luxury Way Pty Ltd ACN 648 728 849

File Number(s): 2024/396843

Publication restriction: Nil

JUDGMENT

1. The plaintiffs in this matter, Mr Dian Zhao and China Post Pty Ltd (“China Post”), bring proceedings against Luxury Way Pty Ltd (“Luxury Way”) and Mr Ziyao Zhou in relation to a contract (“the car sale agreement”) for the purchase of a 2020 Mercedes Benz AMG G63 FL (“the Mercedes”). It is alleged that the sum of $280,000 is due and owing under the car sale agreement.

2. The plaintiffs further claim from the defendants the sum of $10,000 which they allege is due and owning under the financing arrangements made between the parties for the purchase of the Mercedes.

3. At the trial of the matter, the plaintiffs relied upon the affidavit of Mr Zhao of 4 April 2025 and Mr Zhao was cross-examined. The defendants relied upon the affidavit of Mr Zhao of 15 May 2025 and Mr Zhou was cross-examined. An affidavit of Mr Zhou in a different action, being District Court action 2024/00435030, was produced by the defendants in response to a Notice to Produce and tendered in the plaintiffs’ case. Mr Zhou was cross-examined on it. The defendants tendered two records of the withdrawal of money from Westpac and a single page of a police docket dated 16 June 2025.

Facts

4. Mr Zhao arranged the purchase of the Mercedes, in March 2021, for $300,000, with the benefit of a loan to China Post from the ANZ Bank for $290,000. The Mercedes was registered in the name of the second plaintiff, China Post.

5. Mr Zhao met Mr Zhou in early 2021 at an event arranged by a Mercedes Benz owners’ club.

6. In May 2024, Mr Zhao entered into an oral agreement with Mr Zhou pursuant to which Mr Zhou, through his company, Luxury Way, was to sell the Mercedes on behalf of Mr Zhao and China Post, for at least $300,000, on the basis that Mr Zhou would be paid commission in the sum of $5,000 for a sale at the price of $300,000 or, if a higher price was achieved, the larger figure of the amount by which the sale price exceeded $300,000 or $5,000.

7. In his affidavit, Mr Zhou said that he and his wife purchased Luxury Way in about April 2023, but that his wife was “recorded as the sole director of the company” because Mr Zhou “could not be registered as the director due to my visa status”. Mr Zhou said that Luxury Way operated a “car filming and styling business”.

8. On about 31 May 2024, Mr Zhao drove the Mercedes to the premises of Luxury Way on Princes Highway, St Peters, and left the vehicle there for Mr Zhou to sell. Mr Zhao then went to China for a month.

9. When Mr Zhao returned to Sydney, on about 3 July 2024, he contacted Mr Zhou and Mr Zhou told him that the Mercedes had not been sold.

10. In his affidavit, Mr Zhao said that, at about the same time, Mr Zhou told Mr Zhao that he had a client who wanted to purchase a Lamborghini Huracan. Mr Zhou said that he did not have a Lamborghini Huracan in stock, but that another car dealer, First Motors Group Pty Ltd (“First Motors”) had the precise model that Mr Zhou’s client wanted to buy. Mr Zhou proposed to trade the Mercedes in to acquire the Lamborghini from First Motors. Mr Zhou proposed that Luxury Way purchase the Mercedes from Mr Zhao for the sum of $280,000 in order to trade it in for the Lamborghini.

11. In his affidavit, Mr Zhou told a different story from Mr Zhao. Mr Zhou said that, in about mid-June 2024, he told Mr Zhao that he had a potential buyer for a Lamborghini Huracan for $370,000 and that the buyer had paid Mr Zhou the “first deposit” in May 2024.

12. In cross-examination, Mr Zhou said that the buyer’s name was Mr Xue and the deposit he paid was $50,000. Mr Zhou also said that he returned the deposit to Mr Xue when Mr Xue decided not to proceed with the purchase.

13. In his affidavit, Mr Zhou said that, in his mid-June 2024 conversation with Mr Zhao, Mr Zhou spoke of the Lamborghini then held at First Motors and suggested that he and Mr Zhao trade in the Mercedes for the Lamborghini and then sell the Lamborghini to the buyer, or to another future buyer, with Mr Zhao taking $280,000 from the proceeds of sale and Mr Zhou taking the balance of the proceeds in either event. Mr Zhou said that he proposed that, if the Lamborghini sale took time, he and Mr Zhao could rent out the Lamborghini for around a month, and should generate about $30,000 from that.

14. Luxury Way and Mr Zhao entered into a written contract, called, on the first page “Car Sales Agreement” (the car sale agreement) on 4 July 2024. In cross-examination, Mr Zhou agreed that it is his signature on the car sale agreement on behalf of the buyer, Luxury Way. The car sale agreement provided for the sale of the Mercedes by Mr Zhao to Luxury Way for the sum of $280,000. The car sale agreement also said:

Seller funds will clear in one month to one and half month in buyers account.

In both the plaintiffs’ and the defendants’ case, these words have been taken to mean that, within one to one and a half months, the buyer (i.e. Luxury Way) will have available, in its account, cash funds to pay the seller (i.e. Mr Zhao) for the Mercedes. I accept this interpretation of the contract. In other words, the car sale agreement provided for settlement to take place on the purchase of the Mercedes within one to one and a half months of the date of the agreement, being 4 July 2024, so that settlement was to be between 4 August 2024 and 19 August 2024.

15. In his affidavit, Mr Zhou said, in effect, that his purpose in having Luxury Way enter into the car sale agreement was to show First Motors that Luxury Way was the owner of the Mercedes and could trade it in.

16. An affidavit of Mr Zhou, dated 9 May 2025, in District Court action No 2024/00435030 (“the other action”), was tendered in the plaintiffs’ case (Exhibit P3). Leave was granted to the plaintiffs to rely upon Exhibit P3 in this matter, releasing them from any Harman undertaking in relation to Exhibit P3. The plaintiffs are not parties to the other action and obtained Exhibit P3 from the defendants under a Notice to Produce. The truth of the evidence given in Exhibit P3 is not being relied upon by the plaintiffs in this action; what is relevant is simply that Mr Zhou affirms a version of events concerning the Lamborghini in Exhibit P3 which varies in critical ways from the version given in his affidavit in the present matter. The interests of justice clearly favour the release of the plaintiffs from any Harman undertaking because Exhibit P3 contains sworn evidence of Mr Zhou about the Lamborghini which is a subject of both actions. Mr Zhou is the first defendant in the other action and the plaintiff is Mr Shi. In Exhibit P3, Mr Zhou says:

85. Mr Shi further proposed that his investment into Luxury Way would be made through a combination of his existing vehicles, new acquisitions, and financial contributions from funds purportedly sourced through his father in China. The Lamborghini EVO 2016 was one such vehicle identified for acquisition in the name and for the benefit of the joint business enterprise.

86. Between 13 and 14 March 2024, Mr Shi and I exchanged several messages via WeChat in relation to the purchase of a vehicle for Luxury Way. We were considering the Lamborghini EVO and a Mercedes-Benz G-Class, and Mr Shi was actively involved in evaluating their market appeal and rental viability. …

87. In response to paragraph 81 of the Shi affidavit, at no point did I represent that I personally owned or controlled the Lamborghini EVO 2016. Nor did I receive any funds from Mr Shi in my personal capacity. To the extent that funds were delivered to Luxury Way’s business premises, they were treated as capital contributions by Mr Shi toward the purchase of the Lamborghini for inclusion in Luxury Way’s fleet.

88. In response to paragraph 82 of the Shi affidavit, I acknowledge that Mr Shi contributed a total of AUD $122,700 toward the purchase price of AUD $370,000 for the Lamborghini EVO 2016, with the remaining funds contributed by LW and its investors. …

…

90. In response to paragraphs 83 and 84 of the Shi affidavit and I deny [sic] their contents in full. Mr Shi’s claim that he lacked awareness or control over the Lamborghini EVO is inconsistent with the substantial involvement he had in both the procurement and subsequent commercial use of that vehicle. Following its acquisition on 6 July 2024, Mr Shi frequently drove the Lamborghini for personal purposes or agreed for it to be rented out by third-party operator Udrive, consistent with the terms of our joint venture. On 8 August 2024, Mr Shi was caught and subsequently fined by ticket officer whilst driving the Lamborghini. ..

…

110. In relation to the 2016 Lamborghini EVO, I am informed that the vehicle was reported stolen by Udrive during a rental in or about September 2024. The incident was reported to New South Wales Police on 19 September 2024 under Event Number E97042160. …

17. I note that Mr Zhou affirmed Exhibit P3 on 9 May 2025, six days earlier than he affirmed his affidavit in this matter on 15 May 2025.

18. In cross-examination, Mr Zhou agreed that a Lamborghini Huracan EVO is a model of Lamborghini Huracan. Mr Zhou further agreed, in cross-examination, that the Lamborghini being discussed in the context of this action is the same Lamborghini which is mentioned in Exhibit P3 which is quoted from above at [16].

19. In his affidavit, Mr Zhou said that he delivered the Mercedes to First Motors on about 6 July 2024.

20. On 12 July 2024, Mr Zhou provided Mr Zhao with the invoice, dated 6 July 2024, for the trade-in transaction involving the Mercedes and First Motors Group. The invoice stated the price of the Lamborghini to be $320,000 including GST. The invoice recorded the trade-in of the Mercedes, as part of the settlement of the purchase.

21. In cross-examination, Mr Zhou said that he paid $370,000 to First Motors for the Lamborghini. When it was pointed out to him that the First Motors invoice said that the price for the Lamborghini was $320,000, Mr Zhou said that he paid $50,000 of the purchase price in cash and agreed that it was “off the books”. There is no documentary evidence to support Mr Zhou’s assertion that the true price of the Lamborghini was $370,000.

22. Mr Zhao, in his affidavit, said that, on 12 July 2024, Mr Zhou asked Mr Zhao for a loan of $100,000 to help him settle the trade-in with First Motors Group. Mr Zhou said that he would repay Mr Zhao within a week. Mr Zhao agreed to lend him $50,000. Mr Zhao borrowed $50,000 from a friend. On 12 July 2024, Mr Zhao transferred $40,000 to First Motors, as instructed by Mr Zhou. On 13 July 2024, Mr Zhao transferred a further $10,000 to First Motors, in accordance with Mr Zhou’s instructions. Receipts of these transactions are in evidence.

23. Mr Zhou claimed that he mentioned Luxury Way in the context of this loan, and that the loan was for Luxury Way. Mr Zhao denies this.

24. Mr Zhou told Mr Zhao that the ANZ loan Mr Zhao had arranged when he purchased the Mercedes had to be discharged. The figure owing was $159,691.73. Mr Zhao borrowed money from friends and discharged the loan in three transactions: $50,000 on 19 July 2024, $100,000 on 22 July 2024 and $9,691.73 on 22 July 2023. Mr Zhao sent Mr Zhou screenshots of the transfers to ANZ.

25. Mr Zhao also provided Mr Zhou with the details of the bank account into which Mr Zhou was to repay the $50,000 loan. It was the bank account of the friend of Mr Zhao who had loaned him the $50,000.

26. In his affidavit, Mr Zhou’s version of events was that Mr Zhao agreed, in a conversation over WeChat, to contribute $50,000 by payment to First Motors to facilitate the trade-in arrangement. He said that Mr Zhao subsequently asked for “advance repayment” of the $50,000 because he had borrowed it from a friend.

27. On 22 July 2024, Mr Zhao contacted First Motors and was told that Luxury Way and Mr Zhou had purchased and collected the Lamborghini. Mr Zhao said that he sought repayment of the loan of $50,000 from Mr Zhou.

28. On 25 July 2024, Mr Zhou repaid $40,000 of the $50,000 paid by Mr Zhao in two separate deposits, one of $30,000 and the other of $10,000. The balance of $10,000 remains outstanding.

29. In cross-examination, Mr Zhou was taken through the figures relevant to the acquisition of the Lamborghini. It was pointed out to him that he affirmed, in Exhibit P3, that Mr Shi had contributed $122,000 to the purchase price (the figure in Exhibit P3 was $122,700 (see [16], above) but it was referred to often in cross-examination and re-examination as $122,000). Mr Zhao had contributed $250,000 by trading in the Mercedes. The total contributed by Mr Shi and Mr Zhao taken together was $372,000 (or $372,700) for a car which, on the documents, cost $350,000, but on the evidence of Mr Zhou cost $370,000, $50,000 of which was “off the books”. Mr Zhou was asked why he requested an extra $50,000 in cash from Mr Zhao, given that he already had more than the price of the Lamborghini. Mr Zhou did not give a coherent or consistent answer. In re-examination, Mr Zhou said that portion of the $122,000 given to him by Mr Shu was used for setting up a website, paying a photographer and was “also related to the social media operation” for the benefit of Luxury Way. This is directly contrary to his words in Exhibit P3 (see [16], above)

30. On 25 July 2024, Mr Zhao called Mr Zhou to ask when he would complete the purchase of the Lamborghini with his client. Mr Zhou said that the client was having financial difficulties, and Mr Zhao suggested that he find another buyer.

31. Mr Zhao sent Mr Zhou a WeChat message on 31 July 2024 seeking repayment of the $280,000 price due under the car sale agreement and the outstanding $10,000 of the personal loan. Mr Zhou messaged back “OK, working on it”.

32. In early August 2024, Mr Zhou told Mr Zhao that he had not found a buyer for the Lamborghini at the price of $300,000, and that he was considering “renting it out” so that he could make partial payments to Mr Zhao.

33. It is plain, and I find, that the Lamborghini for which the Mercedes was traded in is the same Lamborghini which is the subject of the paragraphs of Exhibit P3 which are set out above.

34. In his affidavit, Mr Zhou says that he told Mr Zhao that he had delivered the Lamborghini to U-Drive Luxury Car Rentals (Udrive) to obtain rental income. Mr Zhao denies this. In cross-examination, Mr Zhou said that he delivered the Lamborghini to Udrive on 17 August 2024.

35. Throughout August 2024, Mr Zhao communicated with Mr Zhou once or twice each day to enquire about the sale of the Lamborghini. Mr Zhou kept saying that no buyer had been found.

36. It was put to Mr Zhou, in cross-examination, in effect, that, in August 2024 he was in a joint venture with Mr Shi to rent out the Lamborghini for income at the same time that he was telling Mr Zhao that he was seeking a buyer for the Lamborghini. Mr Zhou said that he was looking for a Lamborghini 2020 for Mr Shi to substitute for the Lamborghini at that time. He said that, once he found a Lamborghini 2020, the proceeds of sale of the Lamborghini would have been shared between Mr Shi and Mr Zhao. Mr Zhou agreed that Mr Zhao did not know anything about Mr Shi.

37. By the end of August 2024, the payment of the price for the Mercedes, $280,000, had fallen due. The payment was not made.

38. On 8 September 2024, Mr Zhou called Mr Zhao and told him that the Lamborghini had been rented out and the GPS signal had been lost. Mr Zhou said that he was looking for the Lamborghini.

39. In mid-September 2024, Mr Zhou told Mr Zhao that his “Lebanese business partner” had located the Lamborghini “at another car dealer”. Mr Zhou said that he was “negotiating” to retrieve the Lamborghini.

40. In his affidavit, Mr Zhou said that he saw the Lamborghini advertised “at a third-party car rental shop”. Mr Zhou said that he reported “the stealing of the Lamborghini” to the police on about 19 September 2024.

41. Neither Mr Zhao nor China Post has received the purchase price of $280,000 for the Mercedes, and nor have either of them received the outstanding $10,000 from the cash loan.

42. In cross-examination, Mr Zhou agreed that Luxury Way had taken out an insurance policy to cover the Lamborghini. Mr Zhou also agreed that Luxury Way had made a claim under that insurance policy. It was put to Mr Zhou that he had never told Mr Zhao about the insurance policy and he said that he had, but that he had not put that in his evidence because “at that time, we already broke up with each other”. Then he said that Mr Zhao disagreed with his proposal to claim an insurance payment. I do not believe that Mr Zhou told Mr Zhao about the insurance policy or the claim under the insurance policy (see [44] – [52] below).

43. Mr Zhou said, in cross-examination, that he did not, at the time of the events the subject of this matter, hold a Motor Dealers Licence.

Credibility

44. It is plain from his evidence that Mr Zhou was not frank with Mr Zhao during their discussions from May 2024. On the basis of his evidence under cross-examination, Mr Zhou was, on the interpretation of his evidence most favourable to him, negotiating two separate arrangements having the Lamborghini as their subject matter with two unrelated parties, namely Mr Shi and Mr Zhao. Mr Zhao was unaware of the arrangement that Mr Zhou was negotiating with Mr Shi.

45. On Mr Zhou’s account of events, Mr Zhou brought about the acquisition of the Lamborghini by Luxury Way at a time when he was in possession, for that purpose, of either $122,700 or $122,000 of Mr Shi’s money and $250,000 from the trade-in of Mr Zhao’s unencumbered Mercedes. Mr Zhao did not know of Mr Shi’s contribution to the purchase of the Lamborghini. Despite having more than he needed to buy the Lamborghini, Mr Zhou sought a further $50,000 from Mr Zhao, $10,000 of which has not been repaid.

46. Mr Zhou said, in his affidavit, that the price of the Lamborghini was $370,000 being $320,000 plus a cash deposit of $50,000. However, the tax invoice from First Motors dated 6 July 2024 says that the sale price is $290,909.09 plus $29,090.91 GST). There is no mention of any additional deposit.

47. Mr Zhou further says, in his affidavit, that he told Mr Zhao in a conversation over WeChat, that he had contributed the $50,000 deposit towards the Lamborghini, but $70,000 was still owing. Mr Zhou said that he told Mr Zhao that he would put in a further $20,000, and asked Mr Zhao to contribute the remaining $50,000. However, under cross-examination, it became clear that Mr Zhou was in possession of at least $122,000 at this time from Mr Shi, at least some of which was given to him to purchase the Lamborghini.

48. Mr Zhou said that he planned, in the future, to sell the Lamborghini and buy a Lamborghini Huracan EVO 2020, which, he said, was the model Mr Shi wanted. Mr Zhou said that, had his plan eventuated, he would have repaid Mr Zhao and Mr Shi from the proceeds of the sale of the Lamborghini. Obviously, the flaw in this scheme is that it does not include any funds to purchase the desired Lamborghini Huracan EVO 2020, and may also not cover the debts to Mr Zhao and Mr Shi.

49. Mr Zhou’s evidence is unreliable. Under cross-examination, he gave several different accounts of the financing of the Lamborghini and produced explanations which do not appear in his affidavit. He has clearly not been open and honest with Mr Zhao.

50. In his affidavit in this action, Mr Zhou gave an account of the events the subject of the pleadings which was misleading and omitted critical information.

51. Mr Zhao’s evidence was consistent and clear. The transactions he relied upon were substantiated by documentary evidence.

52. Where Mr Zhou’s evidence is in conflict with Mr Zhao’s I prefer and believe the evidence of Mr Zhao.

Alleged breach of the car sale agreement

53. Mr Zhao alleges that Luxury Way is in breach of the car sale agreement because it has failed to pay the price of the Mercedes it acquired under the car sale agreement, which was $280,000.

54. Mr Zhou claims that the car sale agreement was only part of the arrangement between the parties, and that there were, in addition, oral terms to the contract which involved the parties forming a joint venture to purchase the Lamborghini, using the Mercedes as a trade-in, with a view to leasing the Lamborghini out to obtain income until a third party purchase could raise sufficient funds to purchase the Lamborghini for $370,000. Upon settlement, Mr Zhao would be paid $280,000 and Luxury Way would be paid the balance of the price paid.

55. I reject Mr Zhou’s evidence. I am satisfied, on the balance of probabilities, on the basis of Mr Zhao’s evidence, that the car sale agreement involved only the sale of the Mercedes by Mr Zhao, on behalf of China Post, to Luxury Way, in exchange for the payment of the sum of $280,000, to be paid on or before 19 August 2024. The objective meaning of the car sale agreement is clear on the face of the document and there is no reason to go beyond the terms of that document (see Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [46] – [52]).

56. I am satisfied that no common intention ever arose between Mr Zhao and Mr Zhou to make the obligation to pay the sale price for the Mercedes contingent upon the ultimate sale of the Lamborghini. The car sale agreement is the entire agreement between Mr Zhao and Luxury Way, or Mr Zhou, in relation to the sale and purchase of the Mercedes.

57. Luxury Way is indebted to Mr Zhao in the sum of $280,000 under the car sale agreement.

Loan

58. Mr Zhou admits that he borrowed $50,000 from Mr Zhao, who borrowed it from a friend. I reject the suggestion that this loan was part of any joint venture. At the time when Mr Zhou borrowed $50,000 from Mr Zhao, Mr Zhao knew that Mr Zhou had requested the loan on the basis that he needed more money to acquire the Lamborghini. Mr Zhao, however, had no direct interest in that transaction. No part of the sale of the Mercedes hinged on the fate of that transaction.

59. The identity of the parties to a contract is to be determined, objectively, from all of the relevant evidence (see Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 at [54] per Campbell JA, with whom Beazley and Basten JJA agreed).

60. I find, on the balance of probabilities, that Mr Zhao loaned the $50,000 to Mr Zhou, who requested it, and paid it to the account Mr Zhou nominated, which was the account of First Motors. This conclusion arises from the account of Mr Zhao of the conversation which gave rise to the loan, which I accept, and the surrounding circumstances. I find that it was never suggested to Mr Zhao that Luxury Way was the borrower.

61. Mr Zhou repaid $40,000 of the $50,000 loan by payment to the account of Mr Zhao’s friend, in accordance with Mr Zhao’s instructions. Mr Zhou said, in his affidavit, that he paid a further $1,000 to Mr Zhao directly in December 2024 because Mr Zhao’s requests for payment were becoming so insistent. From the plaintiffs’ written submissions, it is clear that this further payment of $1,000 has been accepted.

62. Mr Zhou is indebted to Mr Zhao for the sum of $9,000 outstanding from the loan advanced on 12 July 2024.

Conclusion

63. The plaintiffs have been wholly successful in their claim.

64. The following orders will issue:

65. Judgment for Dian Zhao against Luxury Way Pty Ltd ACN 648 728 849 in the sum of $280,000.

66. Judgment for Dian Zhao against Ziyao Zhou in the sum of $9,000.

67. I will hear the parties in relation to interest and costs.

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