FEDERAL COURT OF AUSTRALIA Xu v Salter Brothers Asset Management Pty Ltd [2025] FCA 89 VID122 of 2022 File numbers: VID123 of 2022 VID124 of 2022 Judgment of: MCELWAINE J Date of judgment: 19 February 2025 FINANCIAL PRODUCTS - misleading or deceptive conduct concerning the terms of complying investments of at least $5 million as required to be made by applicants pursuant to the Significant Investor Visa Program- ss 12 DA and 12DB of the ASIC Act and 1041H of the Corporations Act- trial of three separate claims- oral and written representations relied on. MISLEADING OR DECEPTIVE CONDUCT - whether oral representations as contended were made- whether written representations were made in context of documents provided in English to applicants fluent only in Mandarin- whether conduct was in any event misleading or likely to mislead or deceive-relevance of ability of applicants to have documents translated and or to take independent financial advice before making financial investments-whether core claims that complying investments could be redeemed after four years made out. Catchwords: STATUTORY UNCONSCIONABLE CONDUCT -s 12CB ASIC Act-whether respondents engaged in unconscionable conduct in providing Information Memoranda for financial products only in English to a Mandarin speaking class of prospective applicants- whether applicants were vulnerable- whether unconscientious advantage taken-relevance of ability of applicants to obtain translations. CAUSATION - whether applicants relied on misleading conduct as alleged-whether reliance on conduct is a necessary element-distinction between direct and indirect causation-whether causation is established in circumstances where applicants at the time made alternative complying investments with similar risks. DAMAGES - whether failure of applicants to establish that investments as made have no current value precludes alternative claims raised at a late stage-methodology for calculation of damages when redemption of investments is delayed- whether refund orders may have been made pursuant to s 12GM of the ASIC Act. CONTRIBUTORY NEGLIGENCE - whether if claims had otherwise succeeded, any amount of damages should be reduced on account of any failure by the applicants to take reasonable care. Australian Securities and Investment Commission Act 2001 (Cth) ss 12AC, 12BB, 12CB, 12CC, 12DA, 12DB, 12GF, 12GF, 12GM,12GP, 12GR Competition and Consumer Act 2010 (Cth) sch 2 ss 16, 21, 22 Corporations Act 2001 (Cth) ss 601KA(5), 601KA(6), 761G, 769C, 1041H, 1041I(1B), 1041(2), 1041L, 1041N, 1230H Legislation: Evidence Act 1995 (Cth) s 140 Federal Court of Australia Act 1976 (Cth) ss 37AF, 37AG, 37M, 37N Trade Practices Act 1974 (Cth) ss 52, 82 Migration Regulations 1994 (Cth) rr 1.03, 5.19B(2) Federal Court Rules 2011 (Cth) r 16.02 ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65; (2014) 224 FCR 1 Akron Securities Ltd v Iliffe (1997) 143 ALR 457 Alati v Kruger [1955] HCA 64; (1955) 94 CLR 216 APIR Systems Ltd v Donald Financial Enterprises Pty Ltd [2009] FCAFC 45 Ashby v Slipper (2014) 219 FCR 322 Astley v AusTrust Ltd [1999] HCA 6; (1999) 197 CLR 1 Australian Competition and Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114 Australian Competition and Consumer Commission v Employsure Pty Ltd [2021] FCAFC 142; (2021) 392 ALR 205 Australian Competition and Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17 Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2023] FCAFC 45 Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd [2021] FCAFC 40; (2021) 285 FCR 133 Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196; (2016) ALR 647 Australian Medic-Care Company Ltd v Hamilton Pharmaceutical Ltd [2008] FCA 1979 Australian Securities and Investments Commission v BPS Financial Pty Ltd [2024] FCA 457 Australian Securities and Investments Commission v Dover Financial Advisers Pty Ltd [2019] FCA 1932; (2019) 140 ACSR 561 Awad v Twin Creeks Properties Pty Ltd [2012] NSWCA 200 Bale v Mills (2011) 81 NSWLR 498 Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191 Berry v CCL Secure Pty Ltd [2020] HCA 27; (2020) 271 CLR 151 BHP Billiton Olympic Dam Corporation Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338 Bird v DP [2024] HCA 41 Briginshaw v Briginshaw (1938) 60 CLR 336 Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 Cargill Australia Ltd v Viterra Malt Pty Ltd (No 28) [2022] VSC 13 CCL Secure Pty Ltd v Berry [2019] FCAFC 81 Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367 Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 Culligan v Aco Pty Ltd [2009] NSWCA 290 Delaney v Delaney [2021] VSC 365 at [443] Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Elanor Funds Management Ltd v Alceon Group Pty Ltd [2024] FCAFC 121 Equuscorp Pty Ltd v Glengallen Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (Reg) [1997] HCA 8; (1997) 188 CLR 241 Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3; (1986) 160 CLR 1 Google Inc v Australian Competition and Consumer Commission [2013] HCA 1; (2013) 249 CLR 435 Gulic v Boral Transport Ltd [2016] NSWCA 269 Hanave Pty Ltd v LFOT Pty Ltd (formerly Jagar Projects Pty Ltd) [1999] FCA 357; (1999) 43 IPR 545 Cases cited: Harvard Nominees Pty Ltd v Tiller [2020] FCAFC 229; (2020) 282 FCR 530 Harvey v John Fairfax Publications Pty Ltd [2005] NSWCA 255 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (New York Deli case) (1988) 39 FCR 546 Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640 Hughes-Holland v BPE Solicitors [2018] AC 599; [2017] UKSC 21 Hunt & Hunt Lawyers (a firm) v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613 In Digi-Tech (Australia) Ltd v Brand [2004] NSWCA 58; (2004) 62 IPR 184 Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526 John Holland Pty Ltd v Kellog Brown & Root Pty Ltd [2015] NSWSC 451 Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 Kazal v Thunder Studios Inc (California) [2023] FCAFC 174 Kuligowski v Metrobus (2004) 220 CLR 363 Lantrack Holdings Pty Ltd v Yammine [2023] FCAFC 156 Lehrmann v Network Ten Pty Ltd (Trial Judgment) [2024] FCA 369 Mayfair Wealth Partners Pty Ltd v Australian Securities and Investments Commission [2022] FCAFC 170; (2022) 295 FCR 106 Paciocco v Australia and New Zealand Banking Group Ltd (2015) [2015] FCAFC 50; (2015) 236 FCR 199 Palmer v McGowan (No 5) [2022] FCA 893; (2022) 404 ALR 621 Paper Express Ltd v Pfankuch Maschinen GmBH, 972 F. 2d 753 (1992) Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 Placer (Granny Smith) v Thiess Contractors Pty Ltd [2003] HCA 10; 196 ALR 257 Potts v Miller [1940] HCA 43; (1940) 64 CLR 282 Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2024] HCA 27; (2024) 98 ALJR 1021 Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2023] FCAFC 54; (2023) 297 FCR Punchbowl Casual Dining Pty Ltd v Rashays Cafes & Restaurants Pty Ltd [2024] FCA 1265 Ramadan v ACN 098408 176 Pty Ltd [2023] SASCA 91 Re Atlas Advisors Australia Pty Ltd [2022] NSWSC 705; (2022) 162 ACSR 509 Re HIH Insurance Ltd (in liq) [2016] NSWSC 482; (2016) 335 ALR 320 Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; (2023) 277 CLR 186 Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 42 FLR 331 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 TPT Patrol Pty Ltd v Myer Holdings Ltd [2019] FCA 1747; (2019) 293 FCR 29 Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 Wardley v Western Australia [1992] HCA 55; (1992) 175 CLR 514 Warwick Entertainment Centre Pty Ltd v Alpine Holdings Pty Ltd [2005] WASCA 174; (2005) 224 ALR 134 Water Board v Moustakas [1980] HCA 12; (1988) 180 CLR 491 Watson v Foxman (1995) 49 NSWLR 315 Wingecarribee Shire Council v Lehman Brothers Australia Ltd (in liq) [2012] FCA 1028; (2012) 301 ALR 1 Wyzenbeek v Australian Marine Imports Pty Ltd (in liq) (2019) 272 FCR 373 Zonia Holdings Pty Ltd v Commonwealth Bank of Australia Ltd (No 5) [2024] FCA 477 Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 1293 3 – 7, 11 – 14, 17, 18, 25 – 28 June 2024 Date of hearing: 8, 24 – 26 July 2024 5, 6 August 2024 Counsel for the Plaintiff in VID 122 of 2022 Mr M Pearce SC with Mr A Aleksov and Mr P Donovan Solicitor for the Plaintiff in VID 122 of 2022 Roberts Gray Lawyers Counsel for the Plaintiff in VID 123 and 124 of 2022 Ms E.A Bennett SC with Ms H. Aprile Solicitor for the Plaintiff in VID 123 and 124 of 2022 Corrs Chambers Westgarth Counsel for the Defendant in VID 123 and 124 of 2022, and the First, Second and Fourth to Sixth Defendants in VID 122 of 2022 Mr J.W.S Peters AM KC with Mr H.C Whitwell Solicitor for the Defendant in VID 123 and 124 of 2022, and the First, Second and Fourth to Sixth Defendants in VID 122 of 2022 Minter Ellison Counsel for the Seventh Defendant in VID 122 of 2022 Mr M Meng Solicitor for the Seventh Defendant in VID 122 of 2022 Vstar Lawyers ORDERS VID 122 of 2022 BETWEEN: LI XU Plaintiff SALTER BROTHERS ASSET MANAGEMENT PTY LTD First Defendant AND: SBII INVESTMENT PTY LTD Second Defendant ROBERT SALTER (and others named in the Schedule) Fourth Defendant order made by: MCELWAINE J DATE OF ORDER: 19 February 2025 THE COURT ORDERS THAT: 1. Pursuant to ss 37AF and 37AG of the Federal Court of Australia Act 1976 (Cth) and on the ground that it is necessary to prevent prejudice to the administration of justice, the publication of paragraphs [111]-[124] in their entirety, the final sentence of paragraph [128], and the portions of the first sentence of paragraph [129] immediately following "evidence" and preceding "I am satisfied" and immediately following "documents" and preceding "each investor" of the reasons for judgment in this matter are suppressed, save for publication to the parties and their legal representatives, until 31 March 2025 or further order, as those paragraphs reference commercially confidential information. 2. The proceeding is dismissed. 3. Any application for costs, with any affidavit evidence in support, is to be made in writing filed and served by 4pm within 14 days. The submissions in support must not exceed 10 pages. 4. If an application for costs is made, it is to be responded to in writing filed and served within 14 days of the date of service pursuant to order (3), limited to a submission not exceeding 10 pages plus any affidavit in support. 5. Any reply submission is to be filed and served within 7 days of the date of service pursuant to order (4), limited to 5 pages. 6. Subject to any further order, any costs application will be determined on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ORDERS VID 123 of 2022 BETWEEN: JINGYI LI Plaintiff AND: SALTER BROTHERS ASSET MANAGEMENT PTY LTD Defendant order made by: MCELWAINE J DATE OF ORDER: 19 february 2025 THE COURT ORDERS THAT: 1. Pursuant to ss 37AF and 37AG of the Federal Court of Australia Act 1976 (Cth) and on the ground that it is necessary to prevent prejudice to the administration of justice, the publication of paragraphs [111]-[124] in their entirety, the final sentence of paragraph [128], and the portions of the first sentence of paragraph [129] immediately following "evidence" and preceding "I am satisfied" and immediately following "documents" and preceding "each investor" of the reasons for judgment in this matter are suppressed, save for publication to the parties and their legal representatives, until 31 March 2025 or further order, as those paragraphs reference commercially confidential information. 2. The proceeding is dismissed. 3. Any application for costs, with any affidavit evidence in support, is to be made in writing filed and served by 4pm within 14 days. The submissions in support must not exceed 10 pages. 4. If an application for costs is made, it is to be responded to in writing filed and served within 14 days of the date of service pursuant to order (3), limited to a submission not exceeding 10 pages plus any affidavit in support. 5. Any reply submission is to be filed and served within 7 days of the date of service pursuant to order (4), limited to 5 pages. 6. Subject to any further order, any costs application will be determined on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ORDERS VID 124 of 2022 BETWEEN: ZHENG XU Plaintiff AND: SALTER BROTHERS ASSET MANAGEMENT PTY LTD Defendant order made by: MCELWAINE J DATE OF ORDER: 19 february 2025 THE COURT ORDERS THAT: 1. Pursuant to ss 37AF and 37AG of the Federal Court of Australia Act 1976 (Cth) and on the ground that it is necessary to prevent prejudice to the administration of justice, the publication of paragraphs [111]-[124] in their entirety, the final sentence of paragraph [128], and the portions of the first sentence of paragraph [129] immediately following "evidence" and preceding "I am satisfied" and immediately following "documents" and preceding "each investor" of the reasons for judgment in this matter are suppressed, save for publication to the parties and their legal representatives, until 31 March 2025 or further order, as those paragraphs reference commercially confidential information. 2. The proceeding is dismissed. 3. Any application for costs, with any affidavit evidence in support, is to be made in writing filed and served by 4pm within 14 days. The submissions in support must not exceed 10 pages. 4. If an application for costs is made, it is to be responded to in writing filed and served within 14 days of the date of service pursuant to order (3), limited to a submission not exceeding 10 pages plus any affidavit in support. 5. Any reply submission is to be filed and served within 7 days of the date of service pursuant to order (4), limited to 5 pages. 6. Subject to any further order, any costs application will be determined on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT A. SYNOPSIS [1] B. DRAMATIS PERSONAE AND GLOSSARY [11] B. 1 Salter Brothers [11] B. 2 Li Xu proceeding [20] B. 3 Jingyi Li proceeding [34] B. 4 Zheng Xu proceeding [36] C. COMMON BACKGROUND MATTERS [37] C. 1 The Significant Investor Visa (SIV) Program [38] C. 2 Salter Brothers Group Funds [44] C. 3 Hotel Group [67] C. 4 The Information Memoranda and Application Documents [76] D. REDEMPTIONS AND AN IPO OF TWO ENTITIES [91] E. LEGAL PRINCIPLES [130] E. 1 Misleading or deceptive conduct principles [130] E. 2 Statutory unconscionable conduct principles [138] E. 3 The effect of the contractual documents [156] E. 4 General approach to the assessment of the evidence [161] F. THE CASE OF LI XU [170] F. 1 Issues on the pleadings [170] F. 2 The witnesses [211] F. 3 Misleading conduct case [228] F. 4 The Han representations [230] F. 5 The Jin representations [260] F. 6 The Fan representations [287] F. 7 Consideration and findings [299] F. 8 The Michael Gu, Hannah Zhu and Robert Salter representations [347] F 8.1 Michael Gu representations [348] F 8.1.2 Pleaded case [348] F 8.1.3 Evidence [350] F. 8.1.4 Consideration and findings [361] F. 8.2 Hannah Zhu and Robert Salter representations [375] F. 8.2.1 The issues [375] F. 8.2.2 The evidence [379] F. 8.2.3 Cross-examination of Li Xu [398] F. 8.2.4 Evidence of Robert Salter [405] F. 8.2.4.1 Evidence-in-chief [405] F. 8.2.4.2 Cross-examination [407] F. 8.2.5 Evidence of Hannah Zhu [410] F. 8.2.5.1 Evidence-in-chief [410] F. 8.2.5.2 Cross-examination of Hannah Zhu [421] F. 9 Consideration and findings [446] F. 9.1 Robert Salter representations [446] F. 9.2 Hannah Zhu representations [456] F. 10 Conclusion on the representation case [515] F. 11 Were the representations misleading or deceptive [517] F. 12 Causation [541] F. 12.1 How the case is put [541] F. 12.2 The counterfactual [561] F. 13 Loss and damage [576] F. 13.1 Damages in a no transaction case [576] F. 13.2 The accounting and expert valuation evidence [582] F. 13.3 Li Xu's damages claim [602] F. 13.4 A new damages claim [630] F. 13.5 Reduction of damages on account of failure to take care [664] F. 13.6 The refund remedy [677] F. 13.7 Other issues in the proceeding [685] F. 13.8 Overall result [694] G. THE CASE OF JINGYI LI [695] G.1 The pleaded issues [695] G. 2 The witnesses and the evidence [747] G. 3 The IM Representation case [764] G. 4 Jingyi Li evidence and Jun Chen evidence [767] G. 4.1 Events to 30 August 2016 [768] G. 4.1.1 Evidence of Jingyi Li [768] G. 4.1.2 Jun Chen evidence [781] G.5 Were the IM Representations misleading or deceptive? [796] G. 5.1 What is the relevant class? [797] G. 5.2 The class question: Were the IM Representations misleading? [803] G. 5.2.1 Context [803] G. 5.2.2 The Four-Year Investment Representation [808] G. 5.2.3 Investment Assessment Representation [811] G. 5.2.4 The Conflict Representation and the Structured Investment Representation [814] G. 5.2.5 The Diversification Representation [833] G. 5.3 Conclusions regarding the IM Representations [837] G. 5.4 The WeChat Representations [838] G. 5.5 The March 2017 meeting [841] G. 5.6 An email of 19 April 2017 [845] G. 5.7 An email of 31 July 2018 [856] G. 5.8 Jun Chen's knowledge as at September 2018 [862] G. 5.9 The September 2018 WeChat messages [863] G. 5.9.1 Were the WeChat Representations made? [867] G. 5.9.2 The construction issue [883] G. 5.9.2.1 Submissions [883] G. 5.9.2.2 Consideration [896] G. 5.10 Conclusions as to the meaning of the WeChat Representations [926] G. 5.11 Were the WeChat Representations misleading or deceptive? [927] G. 5.11.1 The entire course of conduct [929] G. 5.12 Submissions [957] G. 5.13 Consideration [964] G. 5.14 Conclusions as to the misleading conduct case [990] G. 6 Causation [991] G. 6.1 The pleaded case [991] G. 6.2 The direct evidence [996] G. 6.3 Submissions [1005] G. 6.4 Consideration [1010] G. 7 Unconscionable conduct [1025] G. 7.1 What is in issue in this case? [1025] G. 7.2 Consideration [1059] G. 8 Damages and other relief [1082] G. 8.1 What is the claim? [1082] G. 8.2 Consideration [1115] G. 8.3 The failure to take reasonable care defence [1123] G. 8.3.1 Submissions [1123] G. 8.3.2 Consideration [1132] G. 9 ASIC Act s 12GM refund claim [1137] H. THE CASE OF ZHENG XU [1138] H. 1 The pleaded issues [1138] H. 2 The witnesses and the evidence [1166] H. 3 The IM Representations case [1178] H. 4 Were the IM Representations misleading? [1179] H. 4.1 The evidence [1179] H. 4.2 Agency is not established [1222] H. 5 Conclusion as to the misleading conduct case [1224] H. 6 Causation [1225] H 6.1 The pleaded case [1225] H. 6.2 Reliance evidence [1229] H. 6.3 Causation submissions [1233] H. 6.4 Consideration [1235] H. 7 Unconscionable Conduct [1236] H. 8 Damages and other relief [1261] H. 9 Did Zheng Xu fail to take reasonable care? [1277] H. 10 Section 12GM refund claim [1288] H. 11 Other matters of defence [1289] H. 12 Overall conclusions in the Zheng Xu proceeding [1291] MCELWAINE J: A. SYNOPSIS 1 The Salter Brothers Group is a private equity business which owns and operates hotels and acts as a fund manager for high-net-worth investors. The corporate structure is relatively complex where all pathways ultimately lead to the founding brothers, Paul and Robert Salter. Of the many corporate entities in the Salter Brothers Group, those of primary relevance to these proceedings are Salter Brothers Asset Management Pty Ltd, Salter Brothers Immigration Investment Pty Ltd, Salter Brothers Property Opportunity Fund Ltd, Salter Brothers Hotel Company Ltd, and various similarly named corporations with distinguishing numbers commencing with Salter Brothers Hotel Company No 1 Pty Ltd. For some assets, where ownership and trading operations are separated, the trading entities adopt the names of well-known hotels: a good example of which is Salter Brothers (Rialto) Hotel Pty Ltd which is situated at 495 Collins Street, Melbourne. 2 Commencing in 2012, the Commonwealth established the Significant Investor Visa (SIV) Program, the effect of which was to enable complying foreign investors to obtain a temporary visa and, subject to satisfying certain criteria, the opportunity of making an application for a permanent visa. A condition of the grant of either visa required the applicant to make and maintain a complying investment in Australia of at least $5 million for a period of four-years. There were other criteria, which varied depending on whether an application was made before 15 July 2015, between 15 July 2015 and 30 June 2021 or after 1 July 2021. These proceedings concern visa applications made by Li Xu in proceeding VID122/2022 (who applied on 3 September 2014), Jingyi Li in proceeding VID123/2022 (who applied on 15 June 2016) and Zheng Xu in proceeding VID124/2022 (who applied on 4 June 2015). At the time, each plaintiff was a citizen and resident of the People's Republic of China and whose native language was Mandarin. 3 This is not, however, a case about migration law. Each application was successful, in that each plaintiff made complying investments and thereafter migrated with family members to Australia having secured a temporary visa. In differing ways, each plaintiff now contends that they were misled into making their investments and they claim damages or alternatively a refund of the amounts invested against Salter Brothers Asset Management Pty Ltd, which is the primary defendant. 4 Salter Brothers Asset Management Pty Ltd at all material times acted as the Trustee of various compliant investment funds designated by the letters A, B, C, D, E, F, K and L. Each fund invested in a designated class of asset. Some funds were liquid, and others were not. The illiquid funds offered a higher rate of return. The trusts were unit trusts in which investors were the unit holders. The primary investment of some of the funds were stapled securities in the related SB&G Hotel Group. Salter Brothers Immigration Investment Pty Ltd acted as the authorised representative and appointed manager of each fund. 5 Each proceeding was case managed and heard concurrently as there is a significant overlap of issues. That said, there are important differences. Li Xu's claim is that oral representations were made to her to the effect that she could redeem her investment after four-years and that the investments did not carry risk. In reliance thereon she invested a total of $2.5 million in three funds operated by Salter Brothers Asset Management Pty Ltd. Later in March 2017, she consolidated her investments into a single fund, which she contends was and is illiquid. Her claim is that the representations on which she relied were misleading. She further contends that the representations amounted to contractual warranties which have been breached. She made a further investment of $50,000 in March 2018, again believing in consequence of the representations that she could redeem upon expiry of the initial four-year term. Despite redemption requests, none of her investments have been redeemed. Li Xu's claim joined seven defendants. Two were deleted as the claim progressed. During the trial she compromised with one defendant, Austar Group Migration Pty Ltd, and the claim against it was dismissed. In closing submissions, she abandoned her claim against another defendant Kevin Fan. 6 Jingyi Li confines her claim to Salter Brothers Asset Management Pty Ltd. In September 2016, she invested $5 million into a fund which invested in term deposits held with Australian financial institutions. This investment was liquid. Her claim is that she was (largely) provided with documents in English, particularly an Information Memorandum dated 1 September 2015, which she did not read and could not comprehend. The Information Memorandum conveyed five representations that were misleading or deceptive on which she relied. 7 Between July and September 2018, Jingyi Li contends that various oral and written misleading representations were made to her which ultimately induced her to transfer her investments into other property funds with higher rates of return. In reliance thereon in February 2019, she resolved to and applied to reallocate her investment into two different funds which she did not understand at the time to be illiquid and which decision she would not have made but for those representations. Her requests to redeem her investments have been unsuccessful. 8 Zheng Xu also confines her claim to Salter Brothers Asset Management Pty Ltd, and in material respects it mirrors that of Jingyi Li. She contends that in June 2016, she was provided with a brochure which outlined the funds and Jeanetta Jin made oral representations to her that "reinforced" the representations made in writing in an Information Memorandum dated 1 February 2016. She does not recall receiving a copy of the Information Memorandum, but nonetheless pleads that it was in English and that it contained the same five representations as pleaded in the case of Jingyi Li. In reliance on the representations, she invested $3 million on 15 June 2016 into a property fund. She contends that in late 2017, Hannah Zhu, a representative of Salter Brothers Asset Management Pty Ltd "repeated and reinforced" the representations made in the Information Memorandum (though it is not said that Zheng Xu relied on that distinct representation in any particular manner). 9 Separately, Jingyi Li and Zheng Xu contend that Salter Brothers Asset Management Pty Ltd engaged in statutory unconscionable conduct in that each was in a position of special disadvantage (an inability to read or comprehend English) which Salter Brothers Asset Management Pty Ltd took advantage of by only providing the Information Memoranda and other important documents in English, which could not be read or comprehended. 10 For the reasons that follow, I have concluded that each claim fails for multiple reasons. I have not employed the device of judicial economy by only deciding the determinative issues. In each proceeding I have resolved each primary issue: "a judge should determine all issues …to assist the appeal process and obviate recourse to a new trial": Gulic v Boral Transport Ltd [2016] NSWCA 269 at [7], Macfarlan JA. In each case I have concluded that the claims fail on the liability issues. However, I have proceeded to determine the questions of causation, damages and reduction on account of a failure to take reasonable care. The causation cases fail as do the damages claims on the particularised contention that the investments have no present value. However, an alternative basis for the assessment of damages is open on the evidence of the expert witness for the Salter Brothers parties. Had I awarded damages on the alternative calculations, I would have reduced the quantum of each claim to amounts that I consider to be just and equitable having regard to each claimant's share of responsibility for the loss or damage caused. B. DRAMATIS PERSONAE AND GLOSSARY B. 1 Salter Brothers 11 At the outset to avoid confusion, the following entity names and roles, which evolved over time, must be understood. Where entities are referred to in contemporaneous documents the former name is used. 12 Salter Brothers Asset Management Pty Ltd was until 14 September 2017, known as MAP Capital Pty Ltd. Where contemporaneous documents reference it, I refer to it as MAP Capital. Otherwise, I adopt the parties' nomenclature of SBAM. It acted as the Trustee of each fund, and it is often convenient to simply refer to it as the Trustee. 13 Salter Brothers Immigration Investment Pty Ltd was until 2 March 2020 known as Atlas Capital Group Pty Ltd. It acted as the Investment Manager, appointed to that role by the Trustee. It is referred to in contemporaneous documents as the Investment Manager. Otherwise, I also adopt the parties' nomenclature of SBII. 14 Atlas Capital was the generic name assigned to the Significant Investor Visa Funds. Each fund is variously referenced in the documents as an Atlas Capital Fund. 15 SB&G Hotel Group is the former name of the Salter Brothers Hotel Group or simply Hotel Group, which at all material times has included SBAM, SBII and Salter Brothers Hotel Company Ltd. Which in many contemporaneous documents is referred to as Hotel Company. The Hotel Company is the consolidated reporting entity comprising Salter Brothers Opportunity Fund Ltd and entities controlled by it. It is variously referenced as Property Opportunity Fund or POF. It invests in stapled securities in the Hotel Group and property developments in Australia and the USA. 16 Collectively, the entire group of companies is commonly referred to as Salter Brothers or Salter Brothers Group. 17 SBAM as the Trustee of the relevant funds holds units in the Salter Brothers Hotel Company Trust which was known as the SB&G Hotel Company Trust. SBAM is also the Trustee of the Salter Brothers Hotel Company Trust. This is often referred to in evidence as the Hotel Trust. 18 Each fund in issue is an unregistered managed investment scheme open only to wholesale clients. Each was established for the purpose of facilitating the making of a complying investment by a prospective SIV Program applicant. Each of the funds holds units in the Hotel Trust and shares in Hotel Company which are stapled. The Hotel Company holds units in the Salter Brothers Hotel Company No 2 Trust, which in turn holds units in a series of trusts which own the real property assets. The Hotel Company holds shares in Salter Brothers Hotel Company No 2 Pty Ltd, which holds shares in a series of companies which conduct the hotel businesses and own the business assets. 19 I intend no disrespect to any individual by not including the title for each person who has given evidence or is referred to in the evidence. Those persons and their roles for each proceeding are as follows. B. 2 Li Xu proceeding 20 Li Xu is the plaintiff. She is married to Dian Wang. Each is a citizen of the People's Republic of China, and each has permanent resident status in Australia. 21 Enda Stankard is the Managing Director of MA Financial Group, which was previously known as Moelis Australia. Moelis also offered complying forms of investment for prospective SIV Program investors. 22 Rhys Roberts is the solicitor for Li Xu. He gave limited evidence about an attempt by Li Xu to sell her units in in early 2024, which is relevant to the damages claim. 23 SBAM and SBII are the first and second defendants respectively. Menghong (Michael) Gu was named as the third defendant until deleted as a party upon the filing of an amended statement of claim on 10 October 2023. He was a director of SBII between 17 September 2013 and 4 April 2019. 24 Robert Salter is the fourth defendant. He is a director of SBAM and the CEO of the Salter Brothers Group. 25 Fuyin (Kevin) Fan is the fifth defendant. The claims against him were not pressed in closing submissions. He is a non-executive director of SBII. 26 Hannah Zhu is the sixth defendant. She is a director of Salter Brothers Capital Pty Ltd and was employed by SBII. 27 Austar Group Migration Pty Ltd (Austar Melbourne) was the seventh defendant until the proceeding against it was dismissed by consent on 7 June 2024. There are other corporations referred to with the name Austar and prominent amongst them is Suzhou Austar Private Entry-Exit Consulting Service Co Ltd (Austar Suzhou). It is part of the Austar Group of companies, based in the People's Republic of China. It acted as an immigration agent. 28 Xiaoyan (Jeanetta) Jin was named as the eighth defendant. She is a resident of the People's Republic of China. She was deleted as a party due to an inability to effect service. She was engaged as an SIV Investment Director with Austar Suzhou. 29 Lixia Han was named as the ninth defendant. She was also deleted as a party because she could not be served. She was a representative of Austar Suzhou based in China. 30 Many of the witnesses for Salter Brothers gave evidence in each of the three proceedings. 31 Paul Salter is the Managing Director of SBAM and Hotel Company. He is the CEO of SBII. He is also a director of Property Opportunity Fund. 32 Peter Hamilton is the Chief Financial Officer of the Salter Brothers Group. 33 Dawna Wright is a Chartered Accountant and specialist forensic accountant. She gave independent expert witness evidence for Salter Brothers on the damages issue. B. 3 Jingyi Li proceeding 34 Jingyi Li is the plaintiff. She is married to Jun Chen. Even though Jun Chen was the primary decision-maker he was not named as a party. 35 Hui (Natalie) Liao is engaged as a contractor to Salter Brothers Capital Pty Ltd and is currently the Executive-Investment Advisory. She is the only additional witness for the Salter Brothers parties in this proceeding. B. 4 Zheng Xu proceeding 36 Zheng Xu is the plaintiff and the only witness in her case. C. COMMON BACKGROUND MATTERS 37 An order was made on 9 May 2022 to the effect that each proceeding would be managed and heard together, with the evidence received in one proceeding being, to the extent relevant, evidence in each other proceeding. To reduce the prospect of an unwieldy trial, other case management orders were made which required attendance before a registrar to settle and agree a chronology, a statement of facts and a list of issues for determination. Those orders were complied with. C. 1 The Significant Investor Visa (SIV) Program 38 At relevant times, the SIV Program was open to eligible applicants willing to invest a minimum amount of $5 million in complying Australian investments and maintain the investment for a minimum period of four-years. Units in the SIV Funds have at all material times been 'financial products' within the meaning of Chapter 7 of the Corporations Act 2001 (Cth) and section 12BAA of the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act). Each fund was established for the purpose of satisfying the requirements for a complying investment for the purpose of raising funds from foreign citizens who sought to participate in the SIV Program as a pathway to the grant of a visa. 39 The statutory scheme of the SIV Program may be briefly summarised as set out in the Migration Regulations 1994 (Cth). The SIV Program was inserted by amendment commencing on 24 November 2012. A complying investment must consist of one or more of the categories of investment specified at r 5.19B(2) of the Regulations. The categories include government bonds, direct investments in proprietary companies that meet specified requirements and investments in managed funds. Managed funds were defined as managed investment schemes within the meaning of the Corporations Act: r 1.03 of the Regulations. 40 The scheme was amended from time to time and other types of complying investments were specified by legislative instruments, but nothing in these proceedings turns on that. 41 Typically, the process operated as follows in these cases. A Chinese citizen seeking to migrate to Australia will contact a China based migration agent. A contract is entered into with the agent to assist with the application process. The agent prepares the documentation. The documentation includes notification of the appointment of the agent to an Australian sponsor. The applicant, through the agent, submits an expression of interest to participate in the SIV Program. If the expression of interest is accepted, the investor is invited to apply for sponsorship, in the form of a nomination by a relevant State or Territory government agency. If the application is approved, the agent will receive all correspondence from the Department of Immigration and Border Protection addressed to the applicant. Correspondence from the Department will advise that the application has reached the stage whereby the applicant is invited to select and make a complying investment of at least $5 million in Australia to qualify for the grant of a temporary visa. From the information provided by the applicant, the assets that may be used for that purpose are identified. The applicant is instructed to complete and submit a deed of acknowledgement, undertaking and release, make the complying investment and having done so, provide evidence of that fact to the Department. 42 The applicant considers a range of complying investments from information provided by the migration agent. Investment managers, such as Salter Brothers, provide information to migration agents. This information is sometimes composed in the Mandarin language, but in these cases most of it was written only in English. Having selected the preferred investment, the applicant signs and submits an application form to the selected fund manager. If the application is approved, the necessary funds are transferred and upon evidence of that fact having been provided to the Department the temporary visa is issued. Having secured the temporary Subclass 188 Visa, the investor may then apply for the permanent Subclass 888 Visa. 43 Unsurprisingly, the investment application forms and the accompanying Information Memoranda are replete with warnings about the risks of investment and contain detailed disclaimers and statements that the applicant should consider taking his or her own independent financial and/or legal advice. For Salter Brothers this key documentation was only provided in English. C. 2 Salter Brothers Group Funds 44 There are common agreed facts about the corporate defendants, the relevant funds and aspects of the Salter Brothers Group operations. As the trial progressed, the points of difference narrowed. 45 SBAM was at all material times, the Trustee of various SIV Funds, including: (a) The Salter Brothers Series A (Large Cap) Fund (which was previously known as the Atlas Capital Series A (Protected Equities) Fund) (Fund A); (b) The Salter Brothers Series B (TMT) Fund (which was previously known as the Atlas Capital Series B (Active Investment) Fund) (Fund B); (c) The Significant Investor Visa Series C Fund (Fund C); (d) The Significant Investor Visa Series D Fund (Fund D); (e) The Salter Brothers Series E (Property) Fund (which was previously known as the Atlas Capital Series E (Property) Fund) (Fund E); (f) The Significant Investor Visa Series K Fund (Fund K); and (g) The Significant Investor Visa Series L Fund (Fund L). 46 SBAM has at all material times held an Australian Financial Services Licence (AFSL: 308971) in respect of the operation of the funds. 47 Each of funds A, B, C, E, K and L have at all material times operated as an unregistered managed investment scheme and were established by SBAM for the purpose of raising funds from foreign investors intending to participate in the SIV Program. 48 SBII has at all material times acted as the Investment Manager of the SIV Funds. It is and was at all material times the authorised representative of SBAM within the meaning of Division 5 of Part 7.6 of the Corporations Act. 49 Hotel Company has at all material times had its shares stapled to units in the Hotel Trust. Hotel Company and the Hotel Trust own and operate a number of hotels. The Hotel Group (formerly the SB&G Group) has at all material times included SBAM and SBII. 50 On 27 January 2015, Atlas Capital Group entered into a referral agreement with Austar Group Ltd. On 17 November 2015, MAP Capital entered into a referral agreement with DH Global Investment Ltd. 51 Fund A was established by a trust deed dated 25 September 2013, and later amended by a deed of variation dated 5 April 2016. This fund invests predominantly in shares of corporations listed on the Australian Securities Exchange (ASX). 52 Fund B was established by a trust deed dated 25 September 2013 and was also amended by a deed of variation dated 5 April 2016. This fund predominantly invests in companies in the technology, retail, internet, media, entertainment and telecommunications sectors that are either small capitalisation companies listed on the ASX or companies that expect to list on the ASX. 53 Fund C was established by a trust deed dated 25 September 2013 and was also amended by a deed of variation dated 5 April 2016. This fund invests in term deposits with Australian banks. 54 Fund D invests in the Hotel Group and in Property Opportunity Fund. The form of investment in the Hotel Group comprises stapled securities being a share in a hotel company and a unit in the corresponding Hotel Trust. Investments in Property Opportunity Fund comprise an allocation of 100 fully paid ordinary shares and a specified number of convertible notes. Each convertible note converts into one share in Property Opportunity Fund upon the happening of one or more specified events. One of those events is the listing of Property Opportunity Fund on the ASX. 55 Fund E was established by a trust deed dated 3 March 2015 and was amended by a deed of variation dated June 2015. This fund invests in the Hotel Group and in Property Opportunity Fund. The Fund E assets, including indirect investments, comprise stapled securities in property development projects (one in Victoria and the other in North Carolina), a majority interest in a hotel in Maryland in the United States and a minority interest in the Salter Brothers Social Infrastructure Property Fund, which owns a childcare centre in Victoria. Over time, this fund has also held an investment interest in a townhouse development in Victoria. 56 Fund K was established by two trust deeds each dated 24 August 2015. The trust investments comprise stapled securities in the Hotel Group, units in the Hotel Trust and units in another fund known as Fund K2 (which is also a complying SIV Fund). This fund was described in evidence (the Information Memorandum dated 1 September 2015) as investing in Australian property and infrastructure, with the fund mandate focused on investments in yielding property and infrastructure investments that include commercial, industrial, retail, hotel and other yielding property and infrastructure assets. 57 Fund L was established by a trust deed dated 18 September 2017. Investments in this fund comprise stapled securities in the Hotel Group and convertible notes in Property Opportunity Fund. The key difference between Fund L and Fund K is that Fund L invests in Property Opportunity Fund and Fund K does not. A further difference is that investors in Fund L are entitled to receive a preference return in the minimum amount of 6% per annum and if there are insufficient funds, the difference must be met by SBII returning a proportion of its management fees, subject to the fees being exhausted. 58 The trust deeds are in materially the same form. As examples, I reference the deed for Fund E which is central to the claims of Li Xu, and Fund K which is common to the claims of Jingyi Li and Zheng Xu. 59 The Fund E deed poll (amended in accordance with the June 2015 Deed of Variation) relevantly provides (CB 4236, 4295): (1) This trust deed binds the Trustee and each Unitholder and former Unitholder: cl 2.2; (2) The Trustee holds the Trust Assets on trust for the Unitholders in accordance with the terms of the trust deed: cl 3.1; (3) The beneficial interest in the Trust Assets is divided into a changeable number of Units which may be issued by the Trustee at any time and, subject to rights, obligations and restrictions attaching to any particular Unit, all Units rank equally with each other: cl 4.1; (4) The Trustee may allot and issue Units to any person on any terms at any time and in any numbers and attaching thereto such rights, restrictions and obligations as the Trustee thinks fit in its absolute discretion: cl 4.2; (5) The Trustee may, in addition to Units, allot and issue any Financial Product to any person on any terms at any time and in any number as the Trustee thinks fit in its absolute discretion: cl 4.5; (6) A Unitholder is not entitled to and waives any right it may otherwise have to require any Trust Assets to be transferred to the Holder, other than in accordance with clauses 9.8 or 24.5: cl 5.1; (7) Units must only be issued at the Issue Price determined in accordance with clause 8.1: cl 8; (8) Except as provided in clause 9, a Unitholder has no right to withdraw from the Trust and the Trustee has no obligation to redeem any Units or cause any Units to be redeemed: cl 9; (9) While the Trust is Liquid, a Unitholder may make requests of the Trustee to redeem some or all of the Units and within 60 Business Days of the making of such request, the Trustee in the Trustee's discretion may redeem the number or value of Units specified in the Withdrawal Request, purchase or arrange for another person to purchase the number or value of Units specified in the Withdrawal Request at a price per Unit no less than the proceeds of withdrawal or satisfy the Withdrawal Request in part in each of those ways: cl 9.2; (10) Liquid has the meaning given for the purposes of the Corporations Act (cl 1.1), which, is one where liquid assets account for at least 80% of the value of the scheme property, respectively comprising money in an account or on deposit with a bank, bank accepted bills, marketable securities or property of a prescribed kind: s 601KA(5). Any other property is a liquid asset if the responsible entity reasonably expects that the property can be realised for its market value within the period specified in the constitution for satisfying withdrawal requests while the scheme is liquid: s 601KA(6). In the case of a sub-fund for a corporate collective investment vehicle, similar definitions apply at s 1230H (it is perhaps surprising that the definitions for managed investment schemes are incorporated into the Fund E unregistered scheme, but no party submits that this is a matter of significance); (11) The Trustee may extend the time by which a withdrawal request must be satisfied if, inter alia, in the opinion of the Trustee sufficient Trust Assets cannot be realised at an appropriate price or on adequate terms or otherwise due to one or more circumstances outside the control of the Trustee: cl 9.2(3)(a), (d), and 9.2(3); (12) The Trustee may in its absolute discretion redeem some or all Units held by a Unitholder regardless of whether or not the Trustee has received a Withdrawal Request and may do so whether or not the Trust is liquid: cl 9.15; (13) The income of the Trust for any Financial Year is the distributable income for each Unitholder immediately prior to the end of the last day of each distribution. At that time a vested and indefeasible interest in, and a present entitlement to receive, the income is conferred. This is the distributable amount, which is to be calculated according to a formula: cl 10.1 and 10.2; (14) The Trustee may distribute to Unitholders any amount of the capital of the Trust: cl 10.7; (15) Where Units are redeemed in accordance with cl 9, the Trustee is to determine the Redemption Entitlement to be paid for each Unit in accordance with a formula: cl 10.10; (16) Units are transferable by a Unitholder in such form as the Trustee may require from time to time: cl 11; (17) The Trustee has the usual powers of investment and management: cl 12, and may appoint agents and delegates to exercise or perform any of the duties, powers, discretions and obligations of the Trustee in connection with the Trust: cl 12.5; (18) The Trustee may cause any of the Trust Assets to be valued at any time and may calculate the Net Asset Value of the Trust at any time in each case in its absolute discretion: cl 14.1; and (19) The Trustee is entitled to be paid a range of fees in the form of an establishment fee of up to 2% of the Issue Price per Unit received by the Trustee for each application for units (capped at a maximum of $100,000 for each application), an administration fee of 0.5% of the Gross Asset Value of the Trust and is entitled to be indemnified for all expenses incurred in the proper performance of the Trustee's duties: cl 21. 60 Prior to amendment, cl 10.10 had conferred power upon the Trustee to transfer trust assets to a unitholder rather than pay cash in satisfaction of all or part of the payment of the distribution of income or capital without the consent of the unitholder who is to receive the trust assets. 61 There are two trust deeds for Fund K - the Atlas Umbrella Trust Deed and the Trust Formation Deed, each dated 24 August 2015 (CB 4460, 4465). The Umbrella Trust Deed provides that trusts may be constituted under it, but it does not establish any trusts: cl 2.2. It contains the detailed regulating provisions and by cl 2.3 permits the Trustee to form other trusts. The Trust Formation Deed operates as supplemental to the Umbrella Trust Deed and pursuant to it, the Trustee established the Yield Asset Trust. The Umbrella Trust Deed applies to each trust and binds the holders in the trust and the Trustee: cl 2.7. 62 The Umbrella Trust Deed relevantly provides: (1) The beneficial interest in each trust is divided into units: cl 4.1; (2) A Unit in a Trust confers on the Holder an undivided beneficial interest in the Trust as a whole, subject to Trust Liabilities and not in parts or single assets: cl 4.2; (3) The Trustee must use the Net Trust Value of the Trust to determine the net value of the Trust Property (cl 7.2) which means the total value of all Trust Property less all Trust Liabilities of the Trust as determined by the Trustee in accordance with Australian Accounting Principles: cl 1.1; (4) The value of any Trust Property is the market value, the net fair value or other value appropriate to the nature of the Trust Property: cl 7.3; (5) The Issue Price of Units in a Trust for the Initial Issue of Units is one dollar per Unit and for each subsequent issue of Units the sum of the Net Trust Value of the Trust plus any Application Transaction Costs: cl 8.1; (6) A Holder of Units may transfer Units in the manner as the Trustee from time to time prescribes: cl 10.1; (7) A Holder of Units can, prior to termination of the Trust, make Redemption Requests in a form specified by the Trustee: cl 11.2(b) and the Trustee may, but is under no obligation to, redeem the Units the subject of the Redemption Request at the Redemption Price from capital, and if insufficient, the Trust Income: cl 11.2(c). These provisions apply where the trust is a registered managed investment scheme and is liquid or is not a registered scheme; (8) The Redemption Price is calculated in accordance with a formula, being the Net Trust Value as at the last Valuation Time less any Redemption Transaction Costs divided by the number of Units on issue at the Valuation Time: cl 11.4; (9) Where the Trust is not liquid, the Redemption Price per Unit is calculated as the sum of the Net Trust Value of the Trust as at the time specified in the withdrawal offer less any Redemption Transaction Costs of the Trust divided by the number of Units on issue in the Trust at the Valuation Time: cl 11.5; (10) In specified circumstances, the Trustee may suspend the redemption of Units or the payment of proceeds of redemptions for up to one year if, amongst other things, the Trustee reasonably considers that it is in the interests of the holders in relation to the Trust: cl 12.1; (11) The Trustee has the usual powers of management of the Trust at cl 13, including an ability to appoint agents to act on its behalf: cl 13.3. Separately, the Trustee is responsible for the management of each Trust and may engage advisers in connection with the performance of the Trustee's duties: cl 14; (12) The Trustee is entitled to certain fees, described as an Entry Fee of 2% of the consideration payable on an application for Units in the Trust, a management fee of 2% per annum of the total value of all Trust Property, a Performance Fee of 20% of the amount of any change in the net value of the Trust less the amount of any change in net value which would have occurred if the net value of the Trust had changed in accordance with the ASX 200 Accumulation Index and an Exit Fee of 0.5% of the Redemption Price payable on the redemption of Units in the Trust: cl 25; and (13) The Trustee is entitled to reimbursement for all expenses reasonably and properly incurred in connection with the performance of the Trustee's duties: cl 27. 63 The audited accounts for 30 June 2023 for Funds E, K and L disclose the following. 64 For Fund E (CB 6787), the primary investments were in the Hotel Group and Property Opportunity Fund. The operating loss was $4.474 million, compared with a loss in the previous financial year of $1.7 million. The net assets attributable to the unit holders were $76.54 million, compared with the previous financial year of $81 million. The investment income received by way of distributions was $260,000, which was then offset by a negative movement in investments carried at fair value of $1.668 million. The deduction of expenses of $3.066 million produced the net operating loss. The liquid assets comprised cash and cash equivalents of $9,000. Primarily, the assets were investments at fair value in the amount of $83.866 million. The corresponding notes to the accounts disclose that this investment comprised only listed units in unit trusts in the Hotel Group of $5.116 million and convertible notes in Property Opportunity Fund of $78.75 million. 65 For Fund K (CB 6759), the primary investments were in the Hotel Group and other funds which have an investment in the Hotel Group. The net operating loss was $18.25 million, compared with a loss in the previous financial year of $8.7 million. The net assets attributable to unit holders were $206.16 million, compared to $224.32 million in the previous financial year. Distribution income received comprised $7.873 million, offset by a negative movement in investments carried at fair value of $19.739 million producing a total investment loss of $11.862 million. The deduction of expenses of $6.389 million produced the net operating loss. The balance sheet recorded cash and cash equivalents of $6,000 and investments carried at fair value of $215.857 million. The corresponding note to that figure discloses that the investments comprised unlisted units in the Hotel Group of $155.105 million, unlisted units in the Salter Brothers Hotel Fund of $59.217 million and unlisted units in the K2 Fund of $1.535 million. 66 For Fund L (CB 6773), the primary investments were in the Hotel Group and the Property Opportunity Fund. The operating loss was $742,000, compared with a profit of $15,000 in the previous year. Distribution income received comprised $356,000, offset by a negative movement in investments carried at fair value of $851,000. The deduction of expenses of $248,000 produced the net operating loss. Cash and cash equivalents amounted to $2,000. The primary asset is recorded as investments carried at fair value of $15.322 million. The corresponding note to that figure discloses investments in unlisted unit trusts in the Hotel Group of $7.017 million and in convertible notes in Property Opportunity Fund of $8.305 million. C. 3 Hotel Group 67 As noted, the Hotel Group was known as the SB&G Group. It is useful to set out an overview of the Hotel Group and the operation of relevant corporations within it. What follows are my findings based on the evidence of Peter Hamilton, whose evidence addressed the Salter Brothers Group structure as at May 2024. The primary entities are Hotel Company (the ultimate holding company of the trading entities), SBAM as trustee for the Hotel Trust (the asset owning entities) and as trustee for the SIV Funds (and the respective entities they control). Another member is Property Opportunity Fund and its controlled entities. 68 SBAM as the Trustee of the Hotel Trust invests primarily in the Hotel Group, which was initially established to facilitate investment by wholesale Australian investors. 69 Corporations controlled by Property Opportunity Fund own the hotel businesses. SBAM as the Trustee of the Hotel Trust, and several sub trusts, own the hotel premises. The shares in Hotel Company are stapled to units in each of the Hotel Trusts. 70 Each relevant SIV Fund holds stapled securities in the Hotel Group. Fund E holds 354,536 stapled securities. Fund K holds 10,748,551 stapled securities. Fund L holds 486,297 stapled securities. 71 The Hotel Group owns the assets and operates the businesses of a portfolio of seven hotels comprising: Crowne Plaza Melbourne, Intercontinental Melbourne, Crowne Plaza Canberra, Crowne Plaza Coogee Beach, Voco Gold Coast, Hyatt Regency Brisbane and Holiday Inn Potts Point. The Hotel Group also owns a property on Flinders Lane in Melbourne. 72 For the Hotel Group to 30 June 2023, it held total assets of $1.0877 billion, less liabilities of $641.558 million and net assets of $446.178 million. 73 The Property Opportunity Fund has 100 fully paid ordinary shares on issue and Fund E is the sole shareholder. It also has 64,639,321 convertible notes on issue (each note convertible into one share) that are held by Fund E, Fund L and other Salter Brothers Group entities together with a small number of other entities and individuals. Each convertible note is capable of being converted to shares at a specified point in time. Fund E presently holds 36,515,727 convertible notes and Fund L holds 3,850,727 convertible notes. 74 The assets of Property Opportunity Fund comprise stapled securities in the Hotel Group and wholly owned shares in a number of subsidiary companies concerned with various projects in Australia and the USA. 75 The primary asset of the Hotel Fund is stapled securities in the Hotel Group. It presently owns 6,314,211 stapled securities. The Hotel Group unit price as at 30 June 2023 was $14.43 per unit. The value of this investment is recognised as an asset in the balance sheet of the Hotel Fund recorded at $91,116,089. C. 4 The Information Memoranda and Application Documents 76 As might be expected, a range of Information Memoranda were issued between 2015 and 2020. In evidence, there are references to at least ten such documents. They are in relatively common form in respect of the clauses that are of most importance in these proceedings. The Information Memoranda of particular relevance to each proceeding are dated 3 March 2015 and 1 February 2016 (Li Xu proceeding), 1 September 2015 and 22 August 2018 (Jingyi Li proceeding) and 1 February 2016 (Zheng Xu proceeding). I set out relevant clauses from the Information Memorandum of 1 September 2015, as the example (CB 8325). I refer to this as the September 2015 Information Memorandum. Where there are differences that affect issues in each of the cases, I address those matters separately. 77 The document was issued by MAP Capital and is in English. It commences by disclosing that MAP Capital is the Trustee of each complying SIV Fund, which operates as an unregistered unit trust. It discloses that Atlas Capital Group is the appointed Investment Manager for each SIV Fund, the Trustee is a subsidiary of Salter Family Holdings Pty Ltd, the Information Memorandum is not investment advice and has been prepared without taking into account individual investment objectives, the financial situation and particular needs of a prospective investor. It further states that it is important that "you read the entire Information Memorandum before making any decision to invest in a SIV Fund" and "it is important that you consider the risk factors that could affect the financial performance" of an SIV Fund. Next follows a disclaimer which includes the following (CB 8326): This Information Memorandum is intended for distribution to investors who are in (sic) Australia. By accepting this Information Memorandum, the recipient agrees to be bound by the following terms and conditions. … This Information Memorandum has been prepared on the basis that prospective investors in the SIV Funds are wholesale clients within the definition in section 716G of the Corporations Act 2001 and therefore any offer or issue made under or in connection with this Information Memorandum does not require disclosure to investors… This Information Memorandum is not a product disclosure statement and does not contain all the information which would be required in a product disclosure statement prepared in accordance with the requirements of the Corporations Act. Each recipient of this Information Memorandum represents and warrants that it is and at all times will be a Wholesale Client, for the purposes of the Corporations Act. …No financial product advice is provided in this Information Memorandum and nothing in it should be taken to constitute a recommendation or statement of opinion that is intended to influence the person or persons in making a financial product decision. Any advice given by the Trustee, the Investment Manager or their associates or representatives in connection with a SIV Fund or in this Information Memorandum is general advice only. This Information Memorandum does not purport to be complete, accurate or contain all information which its recipients may require to make an informed assessment of whether to invest in the SIV Funds. This Information Memorandum does not take into account the objectives, circumstances (including financial situation) or needs of any particular person. Before acting on the information contained in this Information Memorandum or making a decision to invest in the SIV Funds, potential investors should make their own enquiries and seek professional advice (including financial product advice from an independent person licensed by ASIC to give such advice) as to whether investment in a SIV Fund is appropriate in light of their own circumstances. Neither the Trustee, the Investment Manager or any other person or entity guarantees any income or capital return from the SIV Funds. There can be no assurance that the SIV Funds will achieve their investment objectives. This Information Memorandum has been prepared to the best of the knowledge and belief of the Trustee. It comprises statements of intent and opinion, many of which may or may not be realised or be accurate. Whilst the Trustee believes (sic) the information in this Information Memorandum including statements of intent and opinion is based on reasonable assumptions, neither the Trustee nor any other person makes any representation or warranty that any statement, whether based on fact or opinion, projection or forecast is true, complete or accurate. The Trustee, the Investment Manager and their agents, directors, officers and employees: * do not warrant or represent the accuracy, completeness or currency of, or accept any responsibility for errors or omissions in, this Information Memorandum or any related information (whether oral or written); and * disclaim and exclude all liability (to the maximum extent permitted by law) for all losses and claims arising in any way out of or in connection with this Information Memorandum or any related information (whether oral or written), including by reason of reliance by any person on this information. … 78 The next section is "SIV Funds at a Glance", including a list of the investment objectives for each of the funds from Fund A through to Fund K with a short statement of the primary investment mandate and risk profile of each fund. For the funds relevant to these proceedings: Fund A (predominantly ASX 200 stocks and derivatives and related investments), Fund B (ASX small cap stocks and/or companies that are expected to list in the next 12 months), Fund C (term deposits with Australian "Big 4" banks), Fund E (property and related investments), Fund K (commercial, retail, industrial, hotel and other yielding property and infrastructure assets). The Information Memorandum predates the establishment of Fund L. Within this section the following appears (CB 8329): Who should invest? The SIV Funds may be suitable for long-term (at least 4 years) investors who are seeking a yield (Series C & D SIV Funds) and an actively managed portfolio (Series A, B, E, F, G & K SIV Funds). Risks Each of the Series A, Series B, Series C, Series D, Series E, Series F & Series K Funds have different investment mandates and risk profiles. You should be aware that there are risks associated with an investment in each SIV Fund which may affect the value of your investment, including but not limited to: share market risk, volatility risk, concentration risk, company specific risk, manager risk, liquidity risk, and fund risk. Please refer to page 26 for a more detailed explanation of these risks. 79 There is a description of the Trustee of the SIV Funds, together with a short biography of each of the directors of the Trustee, including Robert Salter and Paul Salter. There is a similar description for the Investment Manager, its director Michael Gu and some senior personnel. The next relevant section sets out a brief description in diagrammatic form of the structure of the funds. 80 In the September 2015 Information Memorandum (though not in later versions) the next section provides a summary of the key features of the SIV Program including (CB 8335): The purpose of the Significant Investor Visa is to provide a boost to the Australian economy and to compete effectively for high-net-worth individuals seeking investment migration to Australia. Investors will be required to invest at least $5 million into complying investments for a minimum of four-years before being eligible to apply for a Business Innovation and Investment (Permanent)Visa (Subclass 888 Visa) (subject to meeting certain residency and other requirements). 81 There is then a "brief indicative guide to the steps involved in applying for" the SIV Visa, including point 10: Investor may apply for a Subclass 888 Visa i.e. "permanent residency": At the earliest after the 4th anniversary of the grant of the Subclass 188 Visa, or after any one of 2 allowable extensions of 2 years. 82 Under the heading Investment Objective and Philosophy, the following relevantly appears (CB 8337): The SIV Funds aim to provide a positive excess return over the long-term (at least 4 years). Within this general objective, the individual Series Trusts, have different risk/return objectives: * SIV Fund A: The ATLAS Dividend Performance Strategy ("ADPS") has been designed to maximise the yield and capital growth opportunities presented by high-quality ASX stocks… The ADPS offers an exposure to the anticipated price appreciation of the selected stocks, with a conservative approach to leverage where available and/or appropriate. In order to facilitate this strategy this SIV Fund A may invest in funds operated by third-party managers with comparable SIV compliant mandates… * SIV Fund B: The TRiMET Absolute Return Strategy ("TMTARS") has been developed to take advantage of TRiMET investing using historically favoured thematic strategies, as innovation repeatedly remakes the landscape in favour of those able to exploit the rapid pace of evolution in the sector. The Investment Manager will seek to exploit the situation by taking an active role with investee ASX listed companies via seeking board seats combined with an active M&A involvement to drive growth in the value of our investments. * SIV FUND C: An investment in an Australian bank term deposit product. The term deposit will be held with an Australian "big four" bank, being Commonwealth Bank of Australia (however Atlas reserves the right to change to another "big 4" bank… where the available rates are materially better. … * SIV Fund E: An Investment in Australian property. The mandate of SIV Fund E is necessarily broad so that the Investment Manager can allocate capital to the most attractive property investment opportunities available at a particular time. The mandate of potential investments include direct property investment (both debt and equity), LICs operating in the property sector, listed property companies, REITs, and property funds operated by third-party managers. … * SIV Fund K: An investment in Australian yielding property and infrastructure. The mandate of SIV Fund K is focussed on investing in yielding property and infrastructure investments in Australia, that can include commercial, industrial, retail, industrial (sic), hotel and other yielding property and infrastructure assets. This may be achieved via direct property and infrastructure investments, LICs operating in the property and infrastructure sector, listed property and infrastructure companies, REITs, and property and infrastructure funds operated by third-party managers. 83 Digressing from this Information Memorandum for a moment, Fund L was established on 18 September 2017. It is referred to in the Information Memorandum dated 1 November 2018 (CB 4512). The short description of its investment strategy refers to "exposure to property and infrastructure assets with initial exposure to hospitality and tourism related property assets". A more detailed description within the Investment Objective & Philosophy section is (CB 4524): SIV Fund L and SIV Fund LII: Funds L and LII aim to provide Investors with a preference return through an underlying exposure to the Australian property and infrastructure sectors. The Manager will allocate capital to the most attractive, risk adjusted, yield based property and infrastructure investment opportunities available at any particular time. The mandate of potential investments includes direct property and infrastructure investments, LICs or ETFs operating in the property and infrastructure sectors, listed property and infrastructure companies, REITs, and property and infrastructure funds operated by third-party managers. The initial investment of the Fund will be an exposure to the SB&G Hotel Group. … 84 Each Information Memoranda contains a glossary. An LIC is a listed investment company, REIT is a real estate investment trust and ETF is Exchange Traded Fund. 85 Returning to the September 2015 Information Memorandum, there is a detailed description of the investment objectives, investment process and investment policies for the funds. As no plaintiff complains about investments in Fund A, Fund B or Fund C, it is not necessary to delve deeper into the features of each. Commencing with Fund E, the Information Memorandum relevantly provides (CB 8334): THE STRUCTURE OF THE SIV FUNDS Like most managed funds, each of the SIV Funds is a unit trust. Unit trusts are vehicles which enable investors to pool their money with that of other investors. You may invest in one or more SIV Funds. Following receipt of your application money, the Trustee will issue you with Units in the relevant SIV Funds. Your Units in a SIV Fund are your proportionate share of that SIV Fund and reflect the value of your investment in that trust, which will change over time as the value of the net assets of the relevant SIV Fund rises and falls. Certain rights (such as a right to any income and a right to vote) attach to your Units. You may also have obligations in respect of your Units. Units won't give you an interest in any particular part of a SIV Fund's assets or investments, or an entitlement to exercise any right or power in respect of any such asset or investment, or an entitlement to participate in the management or operation of a SIV Fund (other than through unitholder meetings). 86 For Fund K, the Information Memorandum relevantly provides (CB 8350): SIV FUND K – YIELD ASSET FUND Investment Objective An investment in property and infrastructure related assets in Australia. In order to facilitate this strategy this SIV Fund may: 1. invest in property or infrastructure funds operated by a third party manager; or 2. invest in direct property or infrastructure investments that are presented to the Investment Manager; or 3. invest in a LIC, Australian REIT or LIT that have a mandate for yielding property or infrastructure assets. SIV Fund K Allocation Process The objective of the allocation process employed by the Investment Manager is to deliver competitive results, even during difficult markets. Under this approach, the Investment Manager identifies attractive relative value opportunities for SIV Fund K by: * Monitoring risk adjusted expected returns. The Investment Manager analyses the potential returns presented by the various sectors and individual investments across the property and infrastructure landscape. * Optimizing third party fund allocation. The Investment Manager will, based on prevailing risk adjusted expected returns optimise the percentage of the funds allocated to the various investment alternatives available. The default investment of the capital will be a fund, or funds operated by third party managers. Where any of the following opportunities meet the investment criteria of the Investment Manager, the Investment Manager will reallocate funds from the third party fund(s) to invest in these opportunities: 1. direct property or infrastructure investment; or 2. listed investment companies operating in the property or infrastructure sectors or REITs; or 3. a LIC (or to be listed LIC) that has a mandate for property or infrastructure related assets; In this way the Investment Manager may maximise the investment returns with funds not sitting idle in term deposits (or like investments). However, the Investment Manager may choose to remain in cash or cash equivalents should it consider it appropriate. The Investment Manager believes that either direct property or infrastructure investment or a LIC that has a similar mandate for property or infrastructure related assets (or a combination of both) will generate higher risk adjusted returns in the medium term (i.e. 3 to 5 years) compared to unlisted funds operated by third party managers. As a result the Investment Manager will favour such investments, where the opportunities present. Direct investment – Internal Investment Process & Policies Investment Process The Investment Manager will follow a structured five-step investment process when considering direct investments (not via a third party fund). The objective of this process is to help deliver competitive returns, even during difficult markets. The five-step investment approach encompasses: * Asset identification: The Investment Manager (and Investment Adviser) will seek to access assets on attractive 'off-market' terms wherever possible by leveraging its diverse network of industry relationships. * Initial investment feasibility: The Investment Manager (and Investment Adviser) will clearly define the investment strategy of the opportunity by undertaking an initial feasibility covering: * Asset SWOT analysis, * Market analysis, * Preliminary modelling, valuation and returns analysis. * Investment: The Investment Manager, supported by the Investment Adviser, will conduct a detailed due diligence program: * Third party due diligence – The Investment Adviser will prudently engage and manage third parties to deliver any independent expert services required including financial, design, technical, legal, town planning and environmental. * Finance – The Investment Manager's corporate finance team will engage closely with debt capital partners to ensure an optimal capital structure is secured. * Investment analysis – The Investment Adviser will execute a robust internal economic benefit review of the asset. * Investment strategy and planning – Based on due diligence findings, the Investment Manager will refine the investment strategy and develop an investment strategy implementation plan * Manage: The Investment Manager will actively manage acquired assets utilising the Investment Manager and Investment Adviser's extensive asset management experience. The Investment Manager will look to add value and improve income streams by tenant remixing, lease extensions, targeted upgrade and refurbishment capex, identification & creation of additional income streams and maximising value through usage changes. * Exit: The Investment Manager, supported by the Investment Adviser, will ensure timely exit of investments by: * Continually monitoring the market to determine optimum exit timing, * Determining best method for exit (e.g. On market campaign, Off market campaign, pre-sales (for development), * Transaction management (qualifying purchasers, terms negotiation, legal documentation and settlement). This investment process applies no matter whether the SIV Fund K is investing in real property or infrastructure assets. 87 For Fund L the Information Memorandum of November 2018 relevantly provides (CB 4544): SIV FUND L – PREFERENCE YIELD FUND Investment Objective To provide exposure to property and infrastructure related assets in Australia. In order to facilitate this strategy this SIV Fund may: 1. invest in property or infrastructure funds operated by a third party manager; or 2. invest in direct property or infrastructure investments that are presented to the Investment Manager; or 3. invest in an LIC, ETF, Australian REIT or LIT that has a mandate for yielding property or infrastructure assets. SIV Fund L Investment Process The objective of the allocation process employed by the Investment Manager is to deliver competitive results, even during difficult markets. Under this approach, the Investment Manager identifies attractive relative value opportunities for SIV Fund L by: * Monitoring risk adjusted expected returns. The Investment Manager analyses the potential returns presented by the various sectors and individual investments across the property and infrastructure landscape. * Optimising third party fund allocation. The Investment Manager will, based on prevailing risk adjusted expected returns optimise the percentage of the funds allocated to the various investment alternatives available, in order to achieve a 6% p.a. return to investors. The default investment of the capital will be a fund or funds operated by third party managers. Where any of the following opportunities meet the investment criteria of the Investment Manager, the Investment Manager will reallocate funds from the third party fund(s) to invest in these opportunities: 1. direct property or infrastructure investment; or 2. LICs or ETFs operating in the property or infrastructure sectors or REITs. The initial investment shall be an exposure to the SB&G Hotel Group; or 3. an LIC (or to be listed LIC) or ETF that has a mandate for property or infrastructure related assets. In this way, the Investment Manager may maximise the investment returns with funds not sitting idle in term deposits (or like investments). However, the Investment Manager may choose to remain in cash or cash equivalents should it consider it appropriate. The Investment Manager believes that either direct property or infrastructure investment or an LIC or ETF that has a similar mandate for property or infrastructure related assets (or a combination of both) will generate higher risk adjusted returns in the medium term (i.e. 3 to 5 years) compared to unlisted funds operated by third party managers. As a result, the Investment Manager will favour such investments, where the opportunities present, in order to achieve a 6% p.a. return to investors. Direct Investment – Internal Investment Process & Policies Investment Process The Investment Manager will follow a structured five-step investment process when considering direct investments (not via a third party fund). The objective of this process is to help deliver competitive returns, even during difficult markets. The five-step investment approach encompasses: * Asset identification: The Investment Manager (and Investment Adviser) will seek to access assets on attractive 'off-market' terms wherever possible by leveraging its diverse network of industry relationships. * Initial investment feasibility: The Investment Manager (and Investment Adviser) will clearly define the investment strategy of the opportunity by undertaking an initial feasibility covering: * Asset SWOT analysis, * Market analysis, * Preliminary modelling, valuation and returns analysis. * Investment: The Investment Manager, supported by the Investment Adviser, will conduct a detailed due diligence program: * Third party due diligence – The Investment Adviser will prudently engage and manage third parties to deliver any independent expert services required including financial, design, technical, legal, town planning and environmental. * Finance – The Investment Manager's corporate finance team will engage closely with debt capital partners to ensure an optimal capital structure is secured. * Investment analysis – The Investment Adviser will execute a robust internal economic benefit review of the asset. * Investment strategy and planning – Based on due diligence findings, the Investment Manager will refine the investment strategy and develop an investment strategy implementation plan. * Manage: The Investment Manager will actively manage acquired assets utilising the Investment Manager and Investment Adviser's extensive asset management experience. The Investment Manager will look to add value and improve income streams by tenant remixing, lease extensions, targeted upgrade and refurbishment capex, identification & creation of additional income streams and maximising value through usage changes. * Exit: The Investment Manager, supported by the Investment Adviser, will ensure timely exit of investments, in order to achieve a 6% p.a. return to investors by: * Continually monitoring the market to determine optimum exit timing, * Determining best method for exit (e.g. on market campaign, off market campaign, pre-sales (for development)), * Transaction management (qualifying purchasers, terms negotiation, legal documentation and settlement). This investment process applies no matter whether the SIV Fund L is exposed to real property or infrastructure assets. 88 The September 2015 Information Memorandum gives prominent attention to significant risks of investing in an SIV Fund, commencing with a summary table (CB 8352): 89 Those risks are then explained in detail including, as relevant to these proceedings, liquidity risk and the effect of significant redemptions, as follows (CB 8354): Liquidity risk Exists when particular investments are difficult to purchase or sell, preventing a SIV Fund from exiting a position or rebalancing within a timely period and at a favourable price. While every effort is made for a SIV Fund to be able to satisfy all redemption requests, the nature of the underlying assets may mean that, in certain circumstances, we may not be able to meet all redemption requests when they are received. Under the Trust Deed, Investors' rights to redeem Units may be suspended while a SIV Fund is not liquid. This may lead to satisfaction of the redemption requests and payment of the redemption proceeds to Investors being deferred until a SIV Fund is liquid or the Trustee forms the view that it is in the best interests of all Investors to meet the outstanding redemption requests and pay out the redemption proceeds. Effect of Significant Redemptions A risk exists that a significant number of requests for withdrawal of Units in a SIV Fund will be received. In such an event, it may not be possible to liquidate a SIV Fund at the time that such withdrawals are requested, or it may be possible to do so only at prices which the Trustee believes do not reflect the true value of such investments, resulting in an adverse effect on the return to Investors. Further, under the Trust Deed the Trustee may suspend redemptions in certain situations. In addition, although it is expected on termination of a SIV Fund to liquidate all of a SIV Fund's investments and distribute only cash to the Unit Holders, there can be no assurance that this objective will be attained. 90 There is attached to the Information Memorandum an application form. It contains details to identify the investor, the fund or funds selected, the amount of the investment and a number of acknowledgements and declarations. The following provisions are relevant (CB 8371-8375): You must read the Information Memorandum before completing and signing this form. … … If a document is in a language other than English it must be translated by an accredited translator. … … 1.5 DECLARATION AND SIGNATURES * I/We hereby declare that I/we have received a copy of the Information Memorandum dated 1 September 2015 issued by MAP Capital Pty Ltd (ABN 33 119 833 760, AFSL 308 971) in its capacity as Trustee of Atlas Capital Significant Investor Funds (SIV Funds) * I /We have detached this Initial Application Form from the IM and declare that all details given in this Initial Application Form are true and correct. * I /We have read the IM and agree to hereby be bound by the terms and conditions of the IM and the provisions of the SIV Fund's Trust Deed (as amended from time to time). * I /We declare that I/we have the legal capacity and power to make an investment in accordance with this Application. * I /We acknowledge that none of the Atlas Group, including the Trustee, its related entities, directors or officers have guaranteed or made any representation as to the performance or success of the SIV Funds, or the repayment of capital from the SIV Funds. Investments in the SIV Funds are subject to investment risk, including delays in repayment and loss of income or principal invested. * I/We acknowledge that the Trustee and Investment Manager do not guarantee that I/we will be granted a Significant Investor Visa. * I/We acknowledge that I/we has or expects to receive approval from DIBP to make an investment in the SIV Funds. * I/We acknowledge that the Trustee and the Investment Manager make no representation or warranty, express or implied as to my/our eligibility for a visa in relation to an investment in the SIV Funds and I/we agree to make my/our own assessment as to my/our eligibility for a visa and will be responsible for ensuring that I/we satisfy any eligibility requirements for a visa. * I /We hereby agree not to hold the Trustee or its employees liable for any inaccurate information on its website and agree to the terms and conditions as set out on the website. * I /We agree and acknowledge that, where appropriate, I/we have obtained my/our own independent financial advice prior to investing in the SIV Funds. * The Trustee can provide information on the status of my/our investment to my/our nominated Financial Adviser. * I /We will not do anything to put the Trustee in breach of the AML/CTF Laws. I/We agree to promptly notify the Trustee if I/we am/are aware of anything that would put the Trustee in breach of AML/CTF Laws. D. REDEMPTIONS AND AN IPO OF TWO ENTITIES 91 It is common ground that dividends have not been paid from the relevant property funds since 31 December 2019. It is also common ground that despite requests by Li Xu, Jingyi Li and Zheng Xu, their investments have not been redeemed. In each case, Salter Brothers contends that the funds are not sufficiently liquid to meet redemption requests and that a major reason why is the effect of restrictions imposed in response to the COVID-19 Pandemic. 92 In closing, Mr Peters AM KC for Salter Brothers submitted that there is no evidence that redemption requests were not met prior to the onset of the COVID-19 Pandemic. The World Health Organisation declared an Emergency of International Concern on 30 January 2020 and a Pandemic on 11 March 2020. There is in evidence redacted ledgers, some partial, for Funds C, D and K (CB 11709-11729) which evidence satisfied redemption requests in each of those funds between August 2016 and September 2019. Some of the redemptions were for the purpose of switching from the lower yield Fund C to Fund K. 93 The accounts for the funds to 30 June 2019 evidence liquid assets (cash and cash equivalents) for Fund E (CB 22731) of $96,000, Fund K (CB 22812) of $3.536 million (down from $13.103 million in 2018) and Fund L (CB 22960) of $105,000 (down from $1.443 million in 2018). 94 I am satisfied in accordance with this evidence that despite the discretion reposed in the Trustee, prior to the onset of the COVID–19 Pandemic it was the case that redemption requests in Funds C, D and K were as a matter of practice met. There is no evidence as to whether they were met or not in Fund E or Fund L. 95 As explained in the affidavit evidence of Paul Salter, a plan had been conceived by late 2015 to list the Hotel Group on the ASX as "one means" of satisfying redemption requests (by 2019) in Fund E and Fund K. That evidence was challenged. Some of it is the subject of confidentiality and non-publication orders that I made during the trial, which explains why some of what follows has been redacted from the public version of my reasons. 96 I deal first with the impact of the COVID-19 Pandemic. Paul Salter stated in his affidavit: The onset of the COVID-19 pandemic had a major impact on the hotel and hospitality sector within Australia (and, indeed, globally). The financial impact on the Hotel Group was almost immediate. Capital markets were frozen, many hotels were used as quarantine facilities, and there was material uncertainty about the short- and medium-term viability of the hotel sector. Accordingly, the execution of the plan to list the Hotel Group on the ASX was put on hold. 97 That evidence is consistent with correspondence from SBII to Li Xu dated 21 February 2022 (CB 1424) where in part it is stated: In order to provide unit holders with liquidity, we formulated a plan to transfer certain hotel assets into, and then list, an Australian Hotel REIT. These plans were well advanced and the IPO was scheduled for the second quarter of 2020. Unfortunately, the ongoing COVID-19 pandemic has caused us to delay these plans, both because there has been a temporary freezing of capital markets and because of the severe impact that the pandemic has had on the hotel sector. Given the material uncertainty surrounding current and future earnings, any listing of an Australian Hotel REIT would be unlikely to succeed in the near term. However, it is the Manager's current belief that the capital markets and the uncertainty surrounding the hotel sector should normalise sometime in the second half of 2022, and it is our hope that the conditions might exist to reinstate plans for the listing of the Australian Hotel REIT at that time. Accordingly, we plan to achieve the liquidity needed to provide redemption opportunities to unitholders, including yourself, by establishing a listed Australian Hotel REIT as soon as market conditions allow and it is in the interests of investors to do so. Our hope is that this will be the case by the end of calendar year 2023. We must stress, however, that this is an estimate only and that the timing is necessarily uncertain given the broader uncertainties we face around the pandemic, the economic situation and the hotel sector. Further, should the Manager, in consultation with the Trustee, determine that this liquidity strategy is no longer viable, we will consider alternative strategies (including, potentially, realising assets by other means). The Manager will continue to keep you updated of any redemption opportunities. 98 The year-end financial accounts for Fund E, signed by Paul Salter on 20 April 2020, include a contemporaneous note about the impact of the COVID-19 Pandemic (CB 22743): Significant events after the balance date The outbreak of COVID-19 and the subsequent quarantine measures imposed by the Australian and other governments as well as the travel and trade restrictions imposed by Australia and other countries in early 2020 have caused disruption to businesses and economic activity. The Fund considers this to be a non-adjusting post balance sheet event and accordingly the financial effects of COVID-19 have not been reflected in the Fund's financial statements at 30 June 2019. Our unlisted investments are carried at fair value and are measured using valuation models and techniques. At the date of issue of these financial statements it is not practicable for the directors to reliably determine the value of the unlisted investments and accordingly the financial effects of the economic impacts of COVID-19 on the Fund's financial statements as it relates to these investments cannot be reasonably estimated. Nevertheless, the COVID-19 outbreak is expected to affect the fair value of these investments. No other matter or circumstance has occurred subsequent to year end that has significantly affected, or may significantly affect, the operations of the Fund, the results of those operations or the state of affairs of the entity in subsequent financial years. 99 It is not seriously in dispute that travel restrictions imposed in response to (and the economic impacts of) the COVID-19 Pandemic had an adverse effect on the operation of the hotel businesses and the performance of the property funds. The territory of dispute concerns whether the property funds would ever have had sufficient liquidity to meet redemption requests absent a successful IPO of the underlying assets. The primary evidence was given by Paul Salter. A very large component of his affidavit evidence dated 12 May 2024 is concerned with the attachment of underlying documents and transactions that are not in issue. His evidence-in-chief about the IPO plans of the Salter Brothers Group may be summarised as follows. 100 In late 2015, following the establishment of Fund E and Fund K, he formed the view that it would be desirable for the Hotel Group to be listed on the ASX. He contemplated a timeframe of approximately four-years, that is, towards the end of 2019. He did not consider a listing at an earlier point in time to be advantageous because, amongst other things, his intention was to grow the value of the Hotel Group portfolio to in excess of $1 billion and to implement a management strategy of acquiring further hotels and developing existing properties to increase their value. Although not his primary motivation at the time, he was at least of the view in late 2015 that an IPO would provide a means of satisfying redemption requests in Fund E and Fund K, in that upon listing of the Hotel Group the stapled securities held by SBAM would permit redemption requests to be satisfied by an in specie transfer of securities in the listed entity. The investors could then trade those shares on the ASX. 101 The objective of listing the Hotel Group was recorded in a security holders deed dated 22 December 2015, as amended and restated on 19 August 2019 (CB 4674). The parties included MAP Capital and Property Opportunity Fund. Clause 9 records the liquidity strategy and the implementation mechanism. By clause 9.1, the parties agreed to use reasonable endeavours to investigate the possibility of the completion of a Liquidity Event prior to 30 June 2024, or such other date as may be extended in accordance with the deed. A Liquidity Event is defined as including an IPO. Clause 9.2 commences with an acknowledgement that "the group was established with a liquidity objective of achieving an IPO at a future date". Clause 9.3 requires cooperation and in the event that a resolution is passed to progress the IPO, clause 9.6 in part provides: If the Stapled Entities do not complete a liquidity event by 30 June 2028, they must procure that the Investment Manager issues a notice in writing to the Securityholders inviting Securityholders to submit a request in writing to the Investment Manager should they wish to redeem their stapled securities by 30 June 2029 (Redemption Request). Following receipt of the Redemption Requests, the Stapled Entities must direct the Investment Manager to commence a sell down of assets held by the Group in the amount required in order to fund the Redemption Requests by 30 June 2029. 102 The reference to the Stapled Entities is to Hotel Company and the Hotel Trust. This objective is recorded in other contemporaneous documents including an Information Memorandum for the SB&G Hotel Fund of 25 July 2016 (CB 4740), and a document dated September 2016 titled: Strategic Platform from Acquisition to IPO 2015 to 2020 (CB 4807). 103 By mid-2017, the Hotel Group had commenced discussions with investment banks with a view to supporting the IPO. Discussions were first held with Credit Suisse. 104 In September 2017, Fund L was established. It has always invested in the Hotel Group. It was always the intention of Paul Salter that, as with Fund E and Fund K, one way of meeting redemption requests could be by in specie transfer of securities in the Hotel Group to the investor. 105 In November 2018 a formal request for a proposal was sent to investment banks which contemplated an ASX listing by mid-2020 at the latest, with a strong preference for listing in the calendar year 2019 (CB 4815). That document contemplated a pre-IPO capital raising of $50 million and an IPO capital raising of $150 million. For the pre-IPO capital raising, it specified a minimum investment of $5 million by acquiring stapled securities in the Hotel Group. The IPO offer also contemplated stapled securities in the Hotel Group. Paul Salter's evidence is that the contemplated timelines reflected his intention that the ASX listing be achieved at some time in 2019. 106 Credit Suisse responded in January 2019 (CB 4882). At the time, Credit Suisse believed that an appropriately sized and priced pre-IPO equity raising was between $100 and $150 million, which would take approximately four months to execute, and that an IPO of greater than $300 million was recommended. It also advised that the listing should be delayed until mid-2022 to enable additional time for refurbishment and redevelopment of various hotel assets to maximise the capital to be raised. Paul Salter accepted that advice and on 20 February 2019 (CB 4939) confirmed the appointment of Credit Suisse as co-lead manager along with UBS. 107 By September 2019, the Hotel Group had completed a pre-IPO capital raising of in excess of $100 million. A further capital raising of $126 million was planned for the end of 2019 but was temporarily delayed before commencement of the COVID-19 Pandemic. From January 2020, the IPO plan was put on hold because of the COVID–19 Pandemic. 108 By 12 May 2024, Paul Salter had formed the view that the hotel sector had sufficiently recovered from the impacts of the COVID–19 Pandemic that the Hotel Group and Property Opportunity Fund could proceed with the IPO proposals. 109 The present plan is to proceed with a listing of the Property Opportunity Fund and the Hotel Group in that order. If the listing of Property Opportunity Fund is achieved, the convertible notes held by Fund E and Fund L will convert into shares in the listed entity. Fund K does not hold convertible notes in Property Opportunity Fund and thus there will be no automatic conversion into shares in the listed entity. However, upon listing, Property Opportunity Fund will acquire further stapled securities in the Hotel Group from SBAM as Trustee for Fund K. Property Opportunity Fund will provide consideration for the acquisition for those stapled securities in the form of a mix of shares in Property Opportunity Fund and cash. SBAM will then offer to unit holders an in-specie transfer of shares or cash payments in satisfaction of redemption requests. 110 The next series of paragraphs are redacted conformably with the confidentiality orders as they concern confidential and highly sensitive information as to the current state of play for the IPO proposals. I am satisfied that it is necessary to suppress this evidence and prohibit publication (save to the parties and their legal representatives) until 31 March 2025 or further order: ss 37AF and 37AG Federal Court of Australia Act 1976 (Cth). 111 [PARAGRAPHS 111-124 REDACTED] 112 [PARAGRAPHS 111-124 REDACTED] 113 [PARAGRAPHS 111-124 REDACTED] 114 [PARAGRAPHS 111-124 REDACTED] 115 [PARAGRAPHS 111-124 REDACTED] 116 [PARAGRAPHS 111-124 REDACTED] 117 [PARAGRAPHS 111-124 REDACTED] 118 [PARAGRAPHS 111-124 REDACTED] 119 [PARAGRAPHS 111-124 REDACTED] 120 [PARAGRAPHS 111-124 REDACTED] 121 [PARAGRAPHS 111-124 REDACTED] 122 [PARAGRAPHS 111-124 REDACTED] 123 [PARAGRAPHS 111-124 REDACTED] 124 [PARAGRAPHS 111-124 REDACTED] 125 That concludes the confidential evidence of Paul Salter. 126 Separately, there is also a proposal to list the Hotel Group on the ASX in late 2025. Paul Salter's evidence-in-chief was: [I]f, contrary to what the Hotel Group expects, the listing is not achieved by the end of the final quarter of calendar year 2025, the Hotel Group will seek to be listed by the end of the first quarter of calendar year 2026. If a listing of the Hotel Group is not achieved by the first quarter of calendar year 2026, then having regard to the time it will take for the financial statements of the Hotel Group for the year ending 30 June 2026 to be prepared, the Hotel Group will seek to be listed by the final quarter of calendar year 2026. To the extent that redemptions in respect of funds E, K and L do not occur by the methods associated with the listing of [Property Opportunity Fund] – contrary to what I expect – and to the extent that redemptions have not been met by secondary market sales (which I discuss below), then redemptions in respect of those funds will occur upon the listing of the Hotel Group. All three of funds E, K and L invest in the Hotel Group. Upon the listing of the Hotel Group, to the extent it is necessary to do so, those three funds will be able to transfer securities in the listed Hotel Group in specie to unit holders in satisfaction of redemption requests. 127 Paul Salter then dealt with the secondary market sales option, being a sale of units in the funds to an institutional investor or wealth manager. The cash would then be used to satisfy redemption requests. He first conceived of this idea in 2015. It was put on the shelf due to the COVID-19 Pandemic. Institutional investors during the pandemic, and thereafter, were reluctant to pay for units in funds underpinned by real estate assets. As at May 2024, however, Paul Salter has noticed that institutional investors are "gradually becoming more willing to purchase units in such funds without a significant discount". Another pathway to liquidity is to generate cash from the acquisition of units by a new investor in the relevant fund. Paul Salter did not give any detailed explanation of how, why or when that may occur. 128 No application has been made, since I reserved my decision on 6 August 2024, by Salter Brothers to adduce new evidence as to the satisfaction of the IPO requirements. Despite the uncertainty of confidently predicting the future, I am required to be satisfied that the degree of probability of achieving the IPO, having sufficient cash as consideration for the convertible notes and then issuing the shares is more likely than not. Paul Salter gave his evidence confidently and with the benefit of many years of experience in managing the operation of the Hotel Group. [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED]. 129 Although a final decision by the ASX had not been communicated by the conclusion of the evidence [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED], I am satisfied in accordance with his evidence (which I accept and find according to) and my consideration of the related confidential documents [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED], each investor in Fund E and Fund L will be in possession of an equivalent number of shares in exchange for the units that were held in each of the funds. It will then be a matter for the individual investor to decide whether to convert those shares into cash by trading them on the ASX, or by holding those shares in anticipation of the receipt of future dividends or favourable movements in the share price. As for Fund K, I am also satisfied that it is likely that on the listing of Property Opportunity Fund, it will acquire stapled securities in the Hotel Group from SBAM and in consideration will provide a mix of shares and cash, which SBAM will then offer to the unit holders to satisfy redemption requests. Each is the practical mechanism which I have concluded will most likely be implemented to meet the redemption requests of Li Xu, Jingyi Li and Zheng Xu. E. LEGAL PRINCIPLES E. 1 Misleading or deceptive conduct principles 130 In combination, the proceedings reference s 1041H of the Corporations Act and ss 12DA, 12DB(1)(e) and (i) of the ASIC Act, which relevantly provide: Corporations Act s 1041H (1) A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive. ASIC Act s 12DA (1) A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive. ASIC Act s 12DB (1) A person must not, in trade or commerce, in connection with the supply or possible supply of financial services, or in connection with the promotion by any means of the supply or use of financial services: … (e) make a false or misleading representation that services have sponsorship, approval, performance characteristics, uses or benefits; … (i) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including an implied warranty under section 12ED). 131 The plurality reasons of Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; (2023) 277 CLR 186 at [80]-[83] summarised the well-established principles in respect of s 18 of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law) (a provision presently indistinguishable for present purposes): The principles are well established. Determining whether a person has breached s 18 of the ACL involves four steps: first, identifying with precision the "conduct" said to contravene s 18; second, considering whether the identified conduct was conduct "in trade or commerce"; third, considering what meaning that conduct conveyed; and fourth, determining whether that conduct in light of that meaning was "misleading or deceptive or ... likely to mislead or deceive". The first step requires asking: "what is the alleged conduct?" and "does the evidence establish that the person engaged in the conduct?". The third step considers what meaning that conduct conveyed to its intended audience. As in this case, where the pleaded conduct is said to amount to a representation, it is necessary to determine whether the alleged representation is established by the evidence. The fourth step is to ask whether the conduct in light of that meaning meets the statutory description of "misleading or deceptive or ... likely to mislead or deceive"; that is, whether it has the tendency to lead into error. Each of those steps involves "quintessential question[s] of fact". The third and fourth steps require the court to characterise, as an objective matter, the conduct viewed as a whole and its notional effects, judged by reference to its context, on the state of mind of the relevant person or class of persons. That context includes the immediate context – relevantly, all the words in the document or other communication and the manner in which those words are conveyed, not just a word or phrase in isolation – and the broader context of the relevant surrounding facts and circumstances. It has been said that "[m]uch more often than not, the simpler the description of the conduct that is said to be misleading or deceptive or likely to be so, the easier it will be to focus upon whether that conduct has the requisite character". That said, the description of the conduct alleged and identified at the first step should be sufficiently comprehensive to expose the complaint, because it is that conduct that will ultimately, as a whole, be determined to be or not to be misleading or deceptive. Where the conduct was directed to the public or part of the public, the third and fourth steps must be undertaken by reference to the effect or likely effect of the conduct on the ordinary and reasonable members of the relevant class of persons. The relevant class of persons may be defined according to the nature of the conduct, by geographical distribution, age or some other common attribute, habit or interest. It is necessary to isolate an ordinary and reasonable "representative member" (or members) of that class, to objectively attribute characteristics and knowledge to that hypothetical person (or persons), and to consider the effect or likely effect of the conduct on their state of mind. This hypothetical construct "avoids using the very ignorant or the very knowledgeable to assess effect or likely effect; it also avoids using those credited with habitual caution or exceptional carelessness; it also avoids considering the assumptions of persons which are extreme or fanciful". The construct allows for a range of reasonable reactions to the conduct by the ordinary and reasonable member (or members) of the class. (citations omitted) 132 The first step requires identification of the alleged conduct with precision: Google Inc v Australian Competition and Consumer Commission [2013] HCA 1; (2013) 249 CLR 435 at [89]-[93] (Hayne J). The provision is not limited to misrepresentations, but conduct is not misleading unless in all the circumstances it induces (or is capable of inducing) error. That proposition extends to conduct that has a tendency to lead into error: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 at 198 (Gibbs CJ); Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 at [39] (French CJ, Crennan, Bell and Keane JJ); Google Inc at [92] (Hayne J). See also Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 at [108]-[109], McHugh J (albeit in dissent in the result, but not as a matter of principle). 133 The "likely to" is engaged where there is a "real or not remote chance or possibility regardless of whether it is less or more than fifty per cent": Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 42 FLR 331 at 346, Deane J; Australian Competition and Consumer Commission v Employsure Pty Ltd [2021] FCAFC 142; (2021) 392 ALR 205 at [89], Rares, Murphy and Abraham JJ. 134 Li Xu relies on s 12BB of the ASIC Act and s 769C of the Corporations Act for certain representations which she contends concern future matters: broadly, six statements made between an unidentified date in 2014 and March 2017 to the effect that an investment with Atlas Capital could be, would be or was guaranteed to be redeemable after the initial term of four-years. Her pleading is that each representation was as to a future matter, the representor did not have reasonable grounds for making it and in consequence the representation is taken to be misleading. 135 The Salter Brothers parties deny that each representation was made but, if contrary to such denials they were made, it accepts they were as to future matters where that is pleaded by Li Xu. 136 The provisions are not uniform, which is unfortunate as they overlap in their application to the same conduct. The meaning and effect of s 12BB was recently, comprehensively and pellucidly, summarised by Downes J in Australian Securities and Investments Commission v BPS Financial Pty Ltd [2024] FCA 457 at [232] – [246]. I need not essay the provisions in detail as the Salter Brothers parties accept that if the contended representations were made, they were as to future matters and there is not pleaded reliance on reasonable grounds. 137 However, something should be said about the irrelevance of considering what later becomes known by reference to the decision of the Full Court in Australian Competition and Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114, Gilmour, McKerracher and Gleeson JJ. As the Court explained at [101] – [102], later proof of truth is irrelevant: It matters not that it transpires, in due course, that the fact represented is true. That may simply be serendipitous. The representation, "I have reasonable grounds" for making the representation of fact is a discrete representation, indeed one which is likely to reinforce in the representee the reliability of the representation of fact." Moreover, the reasonable grounds representation is also one of fact. It is not directed to grounds which may become known but are not then known. Consumers should be protected against such conduct where, in fact, objectively assessed, there were no reasonable grounds known to the representor. E. 2 Statutory unconscionable conduct principles 138 Jingyi Li and Zheng Xu also rely on unconscionable conduct in connection with financial services contrary to s 12CB of the ASIC Act, which relevantly provides: (1) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of financial services to a person; or (b) the acquisition or possible acquisition of financial services from a person; engage in conduct that is, in all the circumstances, unconscionable. … (3) For the purpose of determining whether a person has contravened subsection (1): (a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and (b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section. (4) It is the intention of the Parliament that: (a) this section is not limited by the unwritten law of the States and Territories relating to unconscionable conduct; and (b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and (c) in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract may include consideration of: (i) the terms of the contract; and (ii) the manner in which and the extent to which the contract is carried out; and is not limited to consideration of the circumstances relating to formation of the contract. 139 Section 12CC provides for a non-exclusive list of matters to which regard may be had in determining whether s 12CB has been contravened. To the extent relevant in the pleaded cases of Jingyi Li and Zheng Xu they are identified as the relative strength of the bargaining positions and the inability to read and comprehend documents provided in English. In closing submissions, the pleaded cases were sought to be departed from, which I address in detail in Part G.7 of these reasons. 140 It is not a necessary element that there be some form of pre-existing vulnerability, disadvantage or disability: Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd [2021] FCAFC 40; (2021) 285 FCR 133 at [78], Allsop CJ, Besanko and McKerracher JJ. 141 The High Court published reasons in Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2024] HCA 27; (2024) 98 ALJR 1021 after I reserved my decision. The Court dismissed an appeal from the decision of the Full Court of this Court, which in turn upheld the decision of the primary judge, that the appellant had engaged in unconscionable conduct contrary to s 21(1) of the ACL. The provisions of the ASIC Act relied on in these proceedings are relevantly indistinguishable. 142 Productivity Partners concerned a claim that a provider of online private vocational and training education services targeted to overseas students engaged in unconscionable conduct by implementing a system through the engagement of career advisors to recruit students where the provider was aware that the system was open to abuse, in that the recruiters (who received commissions) were prone to enrolling students for courses for which the students did not receive a benefit, but incurred a corresponding liability in the form of a debt due to the Commonwealth. In earlier years, the college put in place a system designed to control abuse of that character. The controls were removed in September 2015 during a period of substantial decrease in revenue. 143 Three issues were before the Court: (1) whether the conduct was unconscionable within the meaning of s 21 of the ACL where the primary judge did not expressly reference each of the matters in s 22; (2) the relevance of intention; and (3) what is required for an individual to be knowingly concerned in a contravention. In these proceedings the third issue does not arise. The Court published six sets of reasons, from which I distil the following propositions noting that Steward J generally agreed with Gordon J; Gleeson J generally agreed with Gageler CJ, and Jagot J; and Beech-Jones J agreed with Gordon J. 144 The list of relevant factors at s 22 does not confine the scope of s 21. Rather the list of non-mandatory inclusive matters provides guidance as to the content of the statutory norm of conduct: Gageler CJ and Jagot J at [50], [53], Gordon J at [99] –[101], Edelman J at [234] – [235], Steward J at [282], Gleeson J at [314] – [317] and Beech-Jones J at [340]. 145 The list at s 22 does not operate as a checklist in that it "does not require a court to evaluate impugned conduct by reference to the presence or absence of the circumstances that provision specifies irrespective of the relevance of those circumstances to the impugned conduct or to the cases as put by the parties to the court": Gageler CJ and Jagot J at [11], [57] and [58] – [59] and [63]. To the same effect see Gordon J at [99] and [103], Edelman J at [234] – [235] and [249] – [251]. 146 An allegation that unconscionable conduct has been engaged in is a serious matter requiring a precise factual analysis and avoidance of "too loose or diffuse a construction": Gageler CJ and Jagot J at [61]. 147 The obligation is to consider all relevant matters and the conduct in question as a whole informed by the values which underlie the matters in s 22: Gageler CJ and Jagot J at [63], Gordon J at [101] – [103] and Gleeson J at [315]. 148 The statutory standard is not confined by the equitable principles. Chief Justice Gageler and Jagot J at [60] stated: The normative standard set by s 21(1) is tethered to the statutory language of "unconscionability". While that term is not defined in the legislation and, in its statutory conception, is "more broad-ranging than the equitable principles", it expresses "a normative standard of conscience which is permeated with accepted and acceptable community standards", and conduct is not to be denounced by a court as unconscionable unless it is "outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience". The items listed in s 22(1)(a)‑(l) are matters that the legislation requires to be considered, in the overall evaluation of the totality of the circumstances to be undertaken for the purpose of s 21(1), if and to the extent those matters are applicable. This is why both "close attention to the statute and the values derived from it, as well as from the unwritten law" and "close consideration of the facts" are necessary. (citations omitted). 149 Justice Gordon at [100] referenced what Allsop CJ had said in Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199 at [296] that the norms and values include "certainty in commercial transactions", honesty, the absence of "trickery or sharp practice, fairness when dealing with customers, the faithful performance of bargains and promises freely made" and the "protection of the vulnerable." Her Honour continued at [101]: As was explained in Stubbings v Jams 2 Pty Ltd, the s 22 factors "assist in 'setting a framework for the values that lie behind the notion of conscience identified in [s 21]'". The s 22 factors "assist in evaluating whether the conduct in question is 'outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience'". (citations omitted). 150 Further, at [105] her Honour described the evaluative task that is involved in determining whether conduct is outside acceptable community standards as: The legal norm of conduct created by s 21 should not be confused with the factual evaluation of its satisfaction. The factual context – the totality of the circumstances – is vital to understand "what, in any case, is required to be done or not done to satisfy the normative standard". The court makes an evaluative judgment as to whether conduct is, in all the circumstances, unconscionable. This evaluative judgment is not confined to or arrived at by the "mere balancing" of the factors identified in s 22(1). Nor should it be approached mechanistically by way "of deductive reasoning predicated upon the presence or absence of fixed elements or fixed rules". Such an approach is the antithesis of the mode of analysis engaged in by Courts of Equity, which has been recognised as the appropriate mode of analysis where a court is performing the task of determining whether a statutory prohibition against unconscionable conduct has been contravened. Assessing statutory unconscionability "calls for a precise examination of the particular facts". It requires a comprehensive view that "looks to every connected circumstance that ought to influence [the court's] determination upon the real justice of the case". (citations omitted). 151 Justice Edelman at [233] was critical of how a court is to determine community values, observing in part: The difficulty with the application of the values of Australian common law and statute is that they apply at such a high level of generality, and can point in so many different directions, that the concept of unconscionability has been said to be no more useful than the category of "small brown bird" to an ornithologist. 152 Nonetheless, his Honour accepted the matters at s 22 inform the values of the community to be considered with all relevant circumstances ([234] – [235]) and the Full Court was correct to conclude that the primary judge had considered all relevant circumstances: "a judge is [not] required to articulate a laundry list of the absence of each and every potentially relevant matter and value in the precise terms set out in s 22": [250]. 153 Justice Steward agreed with the "general expression of principle" by Gordon J as to the "normative standard of conscience" at [282] but concluded that moral obloquy or moral turpitude "is an essential attribute of unconscionable conduct" ([283] and [302]). His Honour was alone in that view. 154 Justice Gleeson, whilst agreeing with Gordon J, emphasised at [320] the need for incremental development: the provision "is not limited by the unwritten law [but] it is important to recognise that it is not untethered from that law" and continued: By invoking the unwritten law but without being limited by it, s 21 requires some justification for its extension to a case or category of case that would not attract an equitable remedy pursuant to the unwritten law. By way of example, a principled extension, based upon the express provision for application of s 21(1) to systems of conduct, might concern a system that is designed to take unfair or unconscientious advantage of a consumer who is likely to be at a special disadvantage in relation to a supplier of goods or services. Such an extension would recognise the significance of special disadvantage, and the unconscientious taking advantage of that special disadvantage, for characterising conduct as unconscionable under the general law, in applying s 21(1) to a system as contemplated by s 21(4)(b). 155 Her Honour further stated at [323]: If a plaintiff were to contend that the unconscionable character of the defendant's conduct is demonstrated by reference to standards that are not derived from the unwritten law of unconscionable conduct or the terms of s 22, it would be necessary to explain how the relevant standards are enforced by s 21 as an aspect of statutory unconscionability. E. 3 The effect of the contractual documents 156 I turn now to the effect of the documents in issue. Each plaintiff signed an application form in English for their initial investments and Li Xu and Jingyi Li signed further application forms when they switched their investments to Fund E, Fund K and Fund L respectively. Each application form set out several declarations and acknowledgements including that a copy of an Information Memorandum had been received and the applicant had read the Information Memorandum and agreed to be bound by the terms and conditions contained therein and the provisions of the applicable Trust Fund Deed. A completed application form once submitted to and accepted by the Trustee resulted in a contract between the investor and the Trustee, a term of which was that the Trust Fund was required to be held for the benefit of the investors by the Trustee upon the terms of each unit trust deed. 157 It matters not that relevant documents were not provided or executed in Mandarin. Each plaintiff having signed an application form agreed to be bound by the terms of each contract upon acceptance of their applications for units. No plaintiff contends that they were induced to enter into a contract with SBAM by fraud, mistake or other form of contractually vitiating conduct. The misleading conduct and unconscionable conduct claims each accept that contracts were entered into and there is no claim that they should be set aside by reason of a defect in formation. The plaintiffs are bound by the contracts: Equuscorp Pty Ltd v Glengallen Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 at [33]-[35] (Gleeson CJ, McHugh, Kirby, Hayne, and Callinan JJ); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at [41]-[49]. It matters not that the plaintiffs did not read or did not have the capacity to comprehend what terms they were agreeing to. That is so whether the party is illiterate or not fluent in the language of the contract. The last point was well made by the United States Court of Appeals for the Seventh Circuit in Paper Express Ltd v Pfankuch Maschinen GmBH, 972 F. 2d 753 (1992) at 757 (the clauses were in German): We live in a global economy and contracts between parties of different nationalities, and speaking different languages, are commonplace. But a party who agrees to terms in writing without understanding or investigating those terms does so at its own peril. (Citations omitted) 158 The plaintiffs do not dispute these principles. Rather, their claims focus on the effect of pre-contractual conduct as affording a remedy despite the contractual terms. These are no transaction cases: Hughes-Holland v BPE Solicitors [2018] AC 599; [2017] UKSC 21; Wyzenbeek v Australian Marine Imports Pty Ltd (in liq) (2019) 272 FCR 373 at [105]-[109] Rares, Burley and Anastassiou JJ). In short, but for the contravening conduct, the investments in question would not have been made. 159 It does not follow, however, that the contractual terms are irrelevant to determination of each claim for statutory relief. Although a disclaimer or exclusion clause is incapable of operating inconsistently with the statutory provisions, they are relevant to the characterisation of the conduct (where the impugned conduct is modified) and consideration of all of the circumstances to determine whether a claimant was induced into error: Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [29], French CJ; Butcher at [39], [157], McHugh J. As stated by Gleeson CJ, Hayne and Heydon JJ in Butcher at [39]: In applying those principles, it is important that the agent's conduct be viewed as a whole. It is not right to characterise the problem as one of analysing the effect of its "conduct" divorced from "disclaimers" about that "conduct" and divorced from other circumstances which might qualify its character. Everything relevant the agent did up to the time when the purchasers contracted to buy the….land must be taken into account. 160 However, in a no transaction case the terms of a contract entered into in consequence of misleading or deceptive conduct cannot operate to determine the rights of the parties: Cargill Australia Ltd v Viterra Malt Pty Ltd (No 28) [2022] VSC 13 at [5236]-[5331], Warwick Entertainment Centre Pty Ltd v Alpine Holdings Pty Ltd [2005] WASCA 174; (2005) 224 ALR 134 at [58]- [59], Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (New York Deli case) (1988) 39 FCR 546 at 561, Lockhart J, Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367 at 371-372, Sheppard J. E. 4 General approach to the assessment of the evidence 161 I approach each proceeding mindful of and in accordance with the following principles. First, s 140 of the Evidence Act 1995 (Cth) requires me to find the case of a plaintiff proved if satisfied on the balance of probabilities which, in the case of oral representations, as explained by Hammerschlag J in John Holland Pty Ltd v Kellog Brown & Root Pty Ltd [2015] NSWSC 451 at [94], "must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or existence", by reference to the well-known judgment of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362. 162 Second, in general, disbelief in the account of a witness does not establish to the contrary or that a witness giving a contrary account must be believed: Kuligowski v Metrobus (2004) 220 CLR 363 at [60]: Lehrmann v Network Ten Pty Ltd (Trial Judgment) [2024] FCA 369 at [131], Lee J. Further, as Lee J explained in Lehrmann at [132], if the Court is unable to make a finding one way or another as to what actually happened, it is open to decide the issue on the basis that the party who bears the burden of proof on the issue has failed to discharge the burden, and that a civil onus of proof is not discharged by mere disbelief in opposing evidence. 163 It is wrong to proceed on the basis that rejection of part of an account of a witness of an event must mean that all aspects of the account must be rejected: Lehrmann at [136]. Consistently with ordinary human experience, some witnesses may incorrectly recall or lie about some things but tell the truth about others and it would be simplistic to proceed on the basis that this means that the Court must reject everything that the witness has to say: CCL Secure Pty Ltd v Berry [2019] FCAFC 81 at [94]. In Kazal v Thunder Studios Inc (California) [2023] FCAFC 174 the Court (Wigney, Wheelahan and Abraham JJ) observed at [272]: People sometimes tell lies when giving evidence. What is significant is not the mere fact of the untruthfulness, but its relevance to the issues in dispute. A finding that a witness has lied about a matter need not lead to the rejection of all of the evidence of that witness, but may affect the degree of satisfaction of the existence or otherwise of a fact in issue to which the witness's evidence was directed. 164 Third, in a case that depends on establishing that representations were made, there must be evidence that supports a finding that each of the pleaded representations were in fact made. In a case that relies on oral representations said to have been made some years before evidence is given as to who said what and when, "the words alleged to have been spoken are required to be proved with a degree of precision sufficient to enable the Court to be reasonably satisfied that they were in fact misleading in the proved circumstances": Lantrack Holdings Pty Ltd v Yammine [2023] FCAFC 156 (Lee, Button and Jackman JJ) at [269] per Jackman J. See further at [277] his Honour's approval of Watson v Foxman (1995) 49 NSWLR 315 at 318-319. Justice Lee concluded that the primary judge erred in finding that damage had been suffered based on a lost opportunity, which case had not been run. Justice Button generally agreed with the conclusion of Jackman J that the primary judge erred in finding that an oral representation had been made with "sufficient precision to be actionable" ([30]). Her Honour also reasoned on the narrower basis that the evidence was ambiguous at [31]-[37]. 165 In these proceedings considerable oral evidence was adduced about disputed conversations, some of which were said to have taken place up to 10 years previously. In this Court, Jackman J has been critical of witnesses who depose in affidavits that conversations occurred by quoting the words used or the effect of the words: Punchbowl Casual Dining Pty Ltd v Rashays Cafes & Restaurants Pty Ltd [2024] FCA 1265 at [27] – [33]. I need not enter the territory of that debate. In my view there is a practical solution. It is a matter for solicitors and sometimes counsel to determine how the client's instructions are expressed in admissible form in a witness statement or affidavit. In this Court case management orders are routinely made which require witness statements or affidavits to be filed and served in advance of the trial. The practice is designed to focus attention on what is material and to ensure that a case is openly disclosed. In the case of disputed conversations, I consider it preferable to excise that material from adopted statements or affidavits and to require the evidence to be led orally. In this regard I share the view of Lee J in Lantrack at [24]-[25]. 166 This is not a universal rule. In some cases, it may work a disadvantage to the inarticulate or where a person's first language is not English. To address that particular issue in these proceedings interpreters were used and I ensured that frequent concentration breaks were afforded to each of the plaintiffs (and their witnesses who were not fluent in English) when giving their evidence, that questions were succinct and simply expressed, and that each witness had adequate time to reflect on each question and to seek clarification before answering. 167 The last point leads to another issue. Plainly, the degree of precision in expression in the evidence of each plaintiff and their witnesses when given through an interpreter was not, and could not expected to be, of the standard of other witnesses who were fluent in English. I have made allowance for that in my assessment of the evidence. I have also allowed for the fact that often there is not a precise or even an approximate way of expressing in Mandarin certain English concepts and technical words and phrases. 168 Fourth, the cases of Li Xu primarily (and Jingyi Li and Zheng Xu in part) rely on oral representations made many years before the relevant evidence was given and where there is no, or no sufficient, contemporaneous note of what was said. The cases raise the well-understood fallibility of memory over time: Foxman at 318-319, McLelland J. The passages are well known, but bear repetition as having present relevance. His Honour was concerned with misleading conduct contrary to s 52 of the Trade Practices Act 1974 (Cth). In part, his Honour said: In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. … Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration. 169 Fifth, much of the evidence is uncontroversial, is documentary (about which there are no authenticity disputes) or is otherwise common between the parties. Indeed, very few evidentiary objections were taken during the trial. In what follows, to avoid tedious repetition of the phrase "I find accordingly" when referencing the evidence, where I refer to evidence that is not assessed and analysed, then I find according to it. Where there is an assessment and analysis, I separately state my findings or, in some cases, I explain why I am not able to find a contended fact based on the evidence. F. THE CASE OF LI XU F. 1 Issues on the pleadings 170 Li Xu's case is set out in her Further Amended Statement of Claim dated 10 April 2024 and her Reply of 7 May 2024. At the close of the trial, I directed that an amended statement of claim be filed to identify matters that were no longer pressed. This was done in the form of the Updated Further Amended Statement of Claim filed on 5 August 2024. Issue is joined by the first, second, fourth, fifth and sixth defendants (the Salter Brothers parties) in the Further Amended Defence of 3 May 2024. That document was also updated at the close of the trial in a further version dated 3 June 2024. I do not separately address the defence where matters are not in issue. 171 In 2015, Li Xu was a citizen and resident of the People's Republic of China. She contends that at all material times, SBAM and SBII "engaged the Austar Group of companies to promote investments offered" by them (where that is a reference to Austar Group Migration and Austar Suzhou). She further contends that the Austar Group Migration, Austar Suzhou and "other companies within the Austar Group" are and were parties to a "a common enterprise which assisted Chinese businesspeople to migrate overseas for business and investment purposes", which the Salter Brothers parties dispute. The agency engagement contention is denied by the Salter Brothers parties who rely on the referral agreements of 27 January 2015 (SBII and Austar Group Ltd) and 17 November 2015 (SBAM and DH Global Investment Ltd). 172 On or about 3 September 2014, Li Xu engaged Austar Suzhou to assist her in the making of an application for a Subclass 188 Visa. The engagement is in writing. On or about 21 May 2015, Li Xu received an invitation from the Department to select and make a $5 million complying investment pursuant to the SIV Scheme. 173 Before making that investment, Li Xu contends that several oral representations were made to her. The first, referred to as the Han representations, said to have been made in Suzhou China is pleaded as: In or about the first half of 2014, Lixia Han said to [Li Xu] words to the following effect: (a) any Complying Investment made by [Li Xu] could be redeemed at [Li Xu]'s option at the end of four-years; (b) Australian law required the company receiving the Complying Investment to have sufficient cash available to redeem the investment six months prior to maturity. 174 In making the Han representations, Li Xu pleads that Ms Han was acting for and on behalf of SBAM and SBII. 175 The Salter Brothers parties dispute these contentions and plead that at the time of the alleged Han representations, neither SBAM nor SBII was party to any agreement with Lixia Han or any Austar entity, in particular Austar Suzhou. 176 Li Xu next pleads that subparagraph (a) of the Han representations was a representation as to a future matter and relies upon s 12BB of the ASIC Act and s 769C of the Corporations Act to contend that Lixia Han did not have reasonable grounds for the representation and therefore it is taken to be misleading or deceptive. If that representation was made, the Salter Brothers parties admit that it was as to a future matter, but do not know and therefore cannot admit that Lixia Han did not have reasonable grounds. 177 As to subparagraph (b) of the Han representations, Li Xu pleads that it was false or misleading "because there never has been any requirement under Australian law that the counterparty in respect of any complying investment the purposes of the significant investor visa have ready, six months prior to maturity, sufficient cash to redeem the investment". The Salter Brothers parties admit the effect of Australian law as there pleaded, but otherwise do not know and therefore do not admit the balance of this pleading. 178 Li Xu contends that the Han representations contravened ss 12DA(1) and 12DB(1)(e) of the ASIC Act and s 1041H(1) of the Corporations Act, which is denied by the Salter Brothers parties. 179 The Salter Brothers parties rely on a number of positive defences to this, and other, allegations made by Li Xu. As to the allegation of contravention of s 1041H of the Corporations Act, the defence is that the conduct did not occur "in this jurisdiction" and hence this claim is not maintainable. Detailed defences are pleaded by reference to the application form signed by Li Xu on or about 8 July 2015, pursuant to which she applied to make an investment of $2.5 million. The application form comprised a part of an Information Memorandum dated 3 March 2015 which it is said Li Xu had at some time prior to the making of her application. Reliance is placed on the many statements therein (which are not materially different from the portions of the September 2015 Information Memorandum that I have set out) about investment risks, non-reliance on other representations and the series of declarations and acknowledgements that Li Xu made when submitting her application. 180 The second oral representation, referred to as Jin's representation, is said to have been made by Jeanetta Jin in Shanghai, China is pleaded as: On or about 2 June 2015, Xiaoyan Jin said to [Li Xu] words to the effect that any funds invested in the Trust Funds would certainly be available to be redeemed at the end of four-years. 181 In making the Jin representation, it is said that Jeanetta Jin was acting on behalf of SBAM and SBII, the representation was made as to a future matter, there were not reasonable grounds for making it and therefore it is taken to be misleading. 182 The Salter Brothers parties do not know and therefore cannot admit the making of the Jin representation, admit that if made, it was as to a future matter, but cannot admit whether there were no reasonable grounds. They deny that Jeanetta Jin acted as the agent of SBAM and SBII. The Salter Brothers parties also plead that if the Jin representation was made, then it did not amount to conduct "in this jurisdiction" within the meaning of s 1041H(1) of the Corporations Act. 183 The third oral representation, referred to as the Fan representation, is said to have been made by Kevin Fan on or about 12 June 2015 during a telephone conversation, as follows: On or about 12 June 2015, Kevin Fan said to [Li Xu] words to the following effect: (a) In respect of Complying Investments offered by the Fund Trustee: (i) the investment would be returned to the investor at the end of four-years; and (ii) the Australian Government closely monitors the Funds offered by the Fund Trustee and so there is no risk. 184 In making the Fan representation, it is said that Kevin Fan was acting for and on behalf of SBAM and SBII, that the representation concerning redemption at the end of a period of four-years was a representation as to a future matter, he did not have reasonable grounds for making it and therefore it is taken to be misleading. 185 The Salter Brothers parties deny that the Fan representation was made, deny that Kevin Fan was acting as the agent of SBAM or SBII, admit that if the Four-Year Investment Representation was made, it was as to a future matter but otherwise deny that Kevin Fan did not have reasonable grounds for making it. They also plead that Kevin Fan is not and has not at any material time been an Australian citizen or a person ordinarily residing within Australia and was not in Australia at the time of the alleged representation. The consequence is he does not have personal liability for a contravention of ss 12DA(1) or 12DB(1)(e) of the ASIC Act and nor was his alleged representation conduct "within this jurisdiction" within the meaning of s 1041H(1) of the Corporations Act. 186 Li Xu, in answer to the conduct outside of Australia defences, relies on a consent pursuant to ss 12AC(2) and (3) of the ASIC Act given by the Assistant Treasurer on 31 May 2024 for alleged conduct as "described and particularised in" the amended statement of claim. By the point of closing submissions, this was no longer a live issue. 187 Separate reliance by Li Xu is pleaded in the same terms for each of the Han representations, the Jin representation and the Fan representations, commencing with the contention that each amounted to a contravention of ss 12DA(1), 12DB(1)(e) and 12DB(1)(i) of the ASIC Act and s 1041H(1) of the Corporations Act, and that in consequence she: (a) on or about 8 July 2015, completed an application form to acquire $500,000 of units in SIV Fund A, $500,000 of units in SIV Fund B and $1.5 million of units in SIV Fund E from SBAM; (b) on or about 9 July 2015, transferred $2.5 million to SBAM to acquire units in each fund; (c) entered into an agreement with SBAM for the acquisition by her of units in each fund, which agreement was partly written and partly oral. To the extent that it was in writing it comprised the application form and to the extent that it was oral, "it was comprised of" the Han representation, the Jin representation and the Fan representation. 188 In her Updated Further Amended Statement of Claim, Li Xu abandons reliance on the Han representation. 189 Reliance is denied by the Salter Brothers parties and several detailed positive defences are pleaded. In essence the terms of the application form and its acknowledgements, as accepted when Li Xu signed that document, together with the incorporation of the relevant provisions of the Information Memorandum relating to the significant risks of investment. Specific mention is made of the disclosed information about fund liquidity, liquidity risks, redemption risks, that investors may only redeem where liquidity permits and where a fund is illiquid, that units may only be redeemed in certain limited circumstances and that investors should take their own financial advice. The defence sets out the terms of the acknowledgements and representations above the signature of Li Xu on the application form and the consequences that flow from the fact that Li Xu entered into an agreement with SBAM pursuant to which, not only did she agree to be bound by the terms of the fund trust deeds, but also that she was aware of the terms and conditions of her investments, that each was made subject to her declarations and acknowledgements and that in the circumstances she did not rely on any prior representation. 190 Pausing there, to satisfy the minimum $5 million investment requirement, on or about 7 July 2015 Li Xu separately invested $2.5 million into funds operated by Moelis. 191 Li Xu was granted a Subclass 188 Visa on 30 July 2015. In August 2015, she migrated to Australia and has resided in Melbourne. On or about 4 March 2016, she contends that she had a conversation with Michael Gu in Sydney at which time she advised him that she wished to redeem the whole of her investments with SBAM and transfer the Funds to Moelis. The Salter Brothers parties do not know and cannot admit the advice that Li Xu claims to have conveyed to Michael Gu. 192 Next, Li Xu pleads that on or about 25 July 2016, she had another conversation with Michael Gu at which time she advised him that she wished to redeem the entirety of her investments with Salter Brothers and transfer the money to Moelis. During that meeting, Li Xu contends that Michael Gu recommended to her that she should transfer her investments in Fund A and Fund B to Fund E, rather than effect a transfer to Moelis and said words to the effect that: (a) her investment in SIV Fund E would be available to redeem in cash at the end of four-years from the date of her original investments, being 9 July 2019; and (b) the money invested in SIV Fund E was guaranteed by the Australian Government. 193 In making those representations, it is said that Michael Gu was acting for and on behalf of SBAM and SBII, that the first statement was a representation as to a future matter, Michael Gu did not have reasonable grounds for making it and therefore it is taken to be misleading. The representations made by Michael Gu, on Li Xu's case, amounted to contraventions of ss 12DA(1), 12DB(1)(e) and the second statement was made in contravention of s 12DB(1)(i) of the ASIC Act. Separately, it is contended that the second statement was false or misleading in that "the Australian Government did not provide any guarantee for any money invested in SIV Fund E". 194 The Salter Brothers parties do not know and therefore cannot admit these allegations, but if the representations were made, it is accepted that the first was a statement as to a future matter, they do not know whether there were reasonable grounds for making the statement and they also rely upon several positive defences. One, that if Michael Gu did make the representations, he was not authorised to make them with the actual (express or implied) or ostensible authority of SBAM or SBII. It should be recalled that it is not in issue that Michael Gu was a director of SBII between 17 September 2013 and 4 April 2019. Another, that Li Xu is the person who provided the instruction to reallocate her investments from Fund A and Fund B to Fund E because of her assessment of the relative performance of the Funds, which decision was conveyed at a subsequent meeting between Li Xu, Hannah Zhu and Robert Salter on 21 February 2017. 195 The next component of Li Xu's pleading concerns oral representations said to have been made by Hannah Zhu and Robert Salter in February and March 2017. The pleading is: On or about 21 February 2017, [Li Xu] told Robert Salter and Hannah Zhu that she wished to redeem the whole of her investments in the Trust Funds and transfer all investments to Moelis. On or about 6 March 2017, [Li Xu] again told Robert Salter and Hannah Zhu that she wished to redeem the whole of her investments in the Trust Funds and transfer all investments to Moelis. At either or both of the two meetings on 21 February 2017 and 6 March 2017, Robert Salter recommended that [Li Xu] transfer her investments in SIV Fund A and SIV Fund B to SIV Fund E rather than effect a transfer to Moelis and said to [Li Xu] words to the effect that [Li Xu] would receive her money back in 2019 (Salter's Representation). At either or both of the two meetings on 21 February 2017 and 6 March 2017, Hannah Zhu recommended that [Li Xu] transfer her investments in SIV Fund A and SIV Fund B to SIV Fund E rather than effect a transfer to Moelis and said to [Li Xu] words to the following effect: (a) [Li Xu] was guaranteed to receive her money back at the conclusion of a further two years, being in 2019; and (b) the Complying Investments offered by the Fund Trustee (including SIV Fund E) were designed so that investors received their money back after four-years (collectively, Zhu's Representations). 196 The meetings are admitted, the representations are denied. It is not in dispute that Robert Salter and Hannah Zhu were agents of SBAM and SBII. Certain of the representations are contended to relate to future matters for which the representor did not have reasonable grounds and are therefore taken to be misleading, which is denied by the Salter Brothers parties. Li Xu then pleads contravention of ss 12DA(1) and 12DB(1)(e) of the ASIC Act and s 1041H(1) of the Corporations Act and moves to reliance which is pleaded as: In reliance on Salter's Representation and Zhu's Representations, [Li Xu] did not redeem the whole of her investments in the Trust Funds and transfer all investments to Moelis and instead on or about 6 March 2017, [Li Xu] completed redemption and application forms, marked "Switch to E" directing the Fund Trustee to: (a) redeem the whole of her investments in SIV Fund A and SIV Fund B; and (b) issue $1,000,000.00 worth of units in SIV Fund E. 197 The Salter Brothers parties answer these contentions as follows. At the meeting on 21 February 2017, Li Xu stated that she understood that she had applied to switch her investments in Fund A and Fund B to Fund E in July 2016 and wanted to know why that switch had not occurred. On 1 March 2017, Li Xu sent an email to Kevin Fan which included words to the effect that: "I don't think I need to make any decisions now because my decision was already made and signed last July 2016 to move A, B to E". At the meeting on 6 March 2017, Li Xu was provided with a copy of an Information Memorandum dated 1 February 2016. Li Xu signed and returned a redemption request form that each of her investments in Fund A and Fund B be redeemed and that her funds (in total $1 million) be invested in Fund E. That application form contained an acknowledgement that she had received a copy of the Information Memorandum and set out above her signature, declarations and acknowledgements which were not materially different from those contained in the September 2015 Information Memorandum that I have set out. 198 The defence continues to the effect that on 10 March 2017, Li Xu's investments were switched in accordance with her instructions. On or about 8 March 2017, SBAM paid to Li Xu an amount of $5913.11 as compensation for the distribution she would have received had she transferred her investments in July 2016 (net of the distributions she received from her investments in Fund A). In those circumstances, Li Xu was aware of the terms and conditions applicable to her investments, namely that investments were made subject to her declarations and acknowledgements and that the switch of her investments was not made in reliance on any prior representation. 199 Further defences are pleaded in response to the reliance claim. Apart from denying that the Salter representations and the Zhu representations were made, the Salter Brothers parties contend that Li Xu made the decision to transfer her investments "at some time prior" to the meetings because the performance of Fund E was superior to that of Fund A and Fund B. 200 Li Xu made a further investment with SBAM in the amount of $50,000 on or about 29 March 2018 to Fund E, which she initially contended occurred in reliance upon the Han, Jin, Fan, Gu, Zhu and Salter representations (together with others relevant to the claim against Austar Group). She abandoned reliance on the Han representations in her Further Updated Amended Statement of Claim. 201 The Salter Brothers parties accept that Li Xu applied to invest a further amount in Fund E by an application dated 29 March 2018, but contend that Li Xu attended the offices of SBAM on 5 April 2018 to sign the application form, at which time she was provided with a copy of an Information Memorandum dated 15 September 2017. Reliance is again placed on the (now familiar) terms of the Application Form and the Information Memorandum as containing substantially the same disclosures as the February 2016 Information Memorandum. 202 In those circumstances, the Salter Brothers parties deny the reliance claim and positively contend that Li Xu was aware that this investment was made in accordance with her declarations and acknowledgements and not upon any prior representation. 203 Li Xu also pleads that the Jin, Fan, Gu, Salter and Zhu representations constituted contractual warranties, which the Salter Brothers parties deny. 204 On 26 June 2019, 5 April 2020, 16 April 2020 and 21 January 2022, Li Xu contends that she made written requests to redeem the whole of her investment in Fund E. It is not in dispute that her investments have not been redeemed, but there is dispute about whether Li Xu made a redemption request in June 2019, and whether the request made on 16 April 2020 was effective. 205 Turning to damage and damages, Li Xu pleads that she suffered loss and damage by reason of the contravening conduct calculated as the difference between the amounts invested and the current value of her investments with adjustments for actual and hypothetical distributions and capital losses. The particularised figure is approximately $2.7 million which is primarily derived by ascribing a nil value to her units. 206 The same amount is claimed for breach of contractual warranties. The alternative relief sought by Li Xu against SBAM is an order pursuant to s 12GM of the ASIC Act for a refund of her investments of $2.55 million "on the return" by her of all her issued units. 207 These claims are denied. The Salter Brothers parties rely on expert evidence as to the value of Li Xu's investments. Li Xu does not rely on competing expert evidence. In addition, the following defences are relied on. First, a failure to take reasonable care within the meaning of s 1041I(1B) of the Corporations Act and section 12GF(1B) of the ASIC Act, particularised as: (CB 29165) (a) [Li Xu] was advised to read an Information Memorandum when applying to invest in or switch to one of the First Defendant's SIV funds; (b) [Li Xu] warranted to the First and Second Defendants that she had read the applicable Information Memorandum prior to entering the First Agreement and Second Agreement; (c) [Li Xu] had the ability to read or procure a translation of the March 2015 Information Memorandum, February 2016 Information Memorandum and September 2017 Information Memorandum and/or obtain independent advice as to their contents and the financial risks involved in making an investment in one of the SIV Funds; (d) [Li Xu] knew or ought to have known that she should have read the March 2015 Information Memorandum, February 2016 Information Memorandum and September 2017 Information Memorandum in order to understand their terms and the respective obligations of the parties; (e) [Li Xu] claims to have applied for units in Fund E without apparently: (i) having read or procured a copy of the most recent information memorandum available at the time; (ii) having read or procured a translation of any such information memorandum and/or obtained independent advice as to its contents and the financial risks involved in making an investment in Fund E; and (iii) without knowing or considering whether the investment met her requirements. … 208 In reply, Li Xu pleads that s 12GF(1B) of the ASIC Act does not apply to a breach of s 12DB, and otherwise denies these allegations. 209 Second, the Salter Brothers parties rely on statutory apportionment pursuant to s 12GP of the ASIC Act and s 1041L of the Corporations Act on the ground that the defendants who are not the Salter Brothers parties are persons whose acts or omissions caused, independently of each other or jointly, loss or damage that is the subject of the apportionable claim and that the liability of the Salter Brothers parties is limited to an amount reflecting the proportion of the loss or damage claimed that the court considers just, having regard to the extent of each of their respective responsibilities for the loss or damage such that judgment may not be given for a greater amount pursuant to s 12GR of the ASIC Act and s 1041N of the Corporations Act. 210 Third, that in part Li Xu's claims are statute barred to the extent that they relate to the Jin and Fan representations by reason of the six-year limitation period at s 12GF(2) and or 12GM(5) of the ASIC Act and s 1041(2) of the Corporations Act. Proceeding from the orthodox proposition that a cause of action accrues when loss or damage is first suffered, the Salter Brothers parties contended that Li Xu first suffered damage by reason of the representations when, on 9 July 2015, she first invested in Fund A, Fund B and Fund E instead of investing in the Moelis Funds. In reply, Li Xu answers that defence by contending that the earliest she suffered loss or damage was 26 June 2019, being the date of her first attempt to redeem her investments with SBAM. She further contends that this defence was not raised until after she had filed her evidence-in-chief, which denied her the opportunity to adduce evidence of the value of her investments as at 9 July 2015 and on that basis the Salter Brothers parties "should not be permitted to rely" on the limitation defence. Without saying so, it would appear that this is an estoppel defence. F. 2 The witnesses 211 I commence with some preliminary observations about the witnesses. 212 Li Xu was the primary witness in her case. She was born in 1973 in the People's Republic of China. She is married to Dian Wang, and they have one daughter who was born in 2001. Mandarin is her native language. She studied Japanese between 1991 and 1999. Between 1998 and 2004, she worked as assistant to a general manager in a sanitary ware company. In 2004 she commenced employment with an optical technology company and was responsible for production. 213 Between 2008 and 2009, Li Xu and her husband acquired four properties in China with a combined value of approximately AUD $5 million. Since migrating, she has acquired further real property in Australia and set up a primary produce export business and a weight loss business. She has also made significant investments, commencing in 2019, in Austar real estate funds through the device of development trusts. Her business experience prior to June 2015 gave her an understanding of business risk and what it means to be bound by the terms of a contract. 214 Accepting the difficulties that flow from the fact that English is not her native language, and her evidence was given with the assistance of a Mandarin interpreter, does not explain her unsatisfactory evidence on material issues. On very many occasions in cross-examination she did not give straightforward answers to direct questions and gave implausible evidence. I address these matters in detail below. For now, the examples include her denial that she was not aware of the advice from the Department in the letter of 21 May 2015 that the Australian Government does not approve of or endorse complying investments, and with it her claim only to have read that letter as far as the first line on page two, thus avoiding that advice (T 184-188). That she noticed the disclaimer in Mandarin in the Atlas Capital document at CB 456 but did not accept it, which was immediately contradicted by stating "I saw it now" and not in 2015 (T 199-200). Her implausible evidence that Jeanetta Jin told her that the return of her investment was guaranteed after four-years "regardless of the conditions" about which she claimed to recall the precise words spoken during a conversation in June 2015 unassisted by a contemporaneous note (T 205-206) and her implausible evidence that when signing the application form Jeanetta Jin told her it was just like a bank deposit form (T 208-209). 215 These matters alone or in combination might not have caused me to have reservations about her recollection from actual events, rather than her reconstruction directed to the issues in her case, but there is another matter that is foundational to my conclusion that her evidence was not reliable, save where consistent with that of other witnesses or contemporaneous documents. It concerns the Han representations. Although this aspect of her case was abandoned during the trial, her evidence nonetheless is adverse to her credit. When cross-examined by Mr Meng for Austar Melbourne, Li Xu embellished her case beyond her pleadings, stepped outside of her evidence-in-chief and purported to give an extraordinary account of the June 2015 discussion with Lixia Han (T 244-252), which I have concluded was a reconstruction. This evidence is considered in detail later in these reasons. 216 Dian Wang gave very limited evidence that he attended a meeting in May or June 2015 with Jeanetta Jin in Shanghai. His recollection of what was discussed was, very understandably, poor. I have no reservation about the honesty of his limited recollection or the credibility of his evidence generally. 217 Enda Stankard gave straightforward uncontroversial evidence about the performance of the Moelis funds, primarily by reference to business records. I have no reservations about his evidence. I find that the pleaded particulars of damages concerning distributions that would have been received if an additional $2.5 million had been invested with Moelis are made out; a total distribution of $554,840 and a capital loss of $114,805. 218 Rhys Roberts is the managing director of Roberts Gray Lawyers, who acts for Li Xu. He was obviously unwell when he gave his evidence. This affected his recollection about some matters that were put to him in cross-examination. I do not have reservations about his evidence. 219 Dealing next with the witnesses for the Salter Brothers parties, Paul Salter primarily gave evidence in this proceeding relevant to the intended IPO of the Hotel Group and Property Opportunity Fund. Contrary to the submissions of Mr Pearce SC, I have not concluded that his evidence lacks credibility. He was cross-examined at length, and over non-consecutive days, in considerable detail. The issue that founds Mr Pearce's submission concerned his evidence about the receipt of complaints and the maintenance of a complaints register (T 839-840), when questioned by Ms Bennett. 220 The complaints register was produced in answer to a call and was admitted into evidence (CB 29457). He said initially that he was not aware of the receipt of complaints by other investors about not receiving an Information Memorandum or that it was not provided in Mandarin to potential investors. He said there was an internal process whereby a complaint may ultimately be taken to the board of SBAM (T 839). Following production of the complaints register, he was questioned about a lawyer's letter sent on behalf of a number of investors dated 24 November 2023 (T 1008), about which objection was taken, and he was asked to leave the Court. On resumption it was put to him that he had given inconsistent evidence concerning his knowledge of this complaint (T 1024-1025), which he denied. The tender of the letter was not ultimately pressed, likely in consequence of the discussion in his absence (T 1009-1014). 221 I am not satisfied that Paul Salter gave clearly inconsistent evidence and in any event the submission of Mr Pearce rests on the letter which is not in evidence. 222 Robert Salter was an impressive witness and I have no reservations about his evidence. 223 Hannah Zhu is the subject of very adverse criticism by Mr Pearce, which I address in detail below. There are some unsatisfactory aspects of her evidence, but these have not caused me to conclude that she was evasive, untruthful or contradictory. She is fluent in English. 224 Kevin Fan presented as a straightforward, articulate and convincing witness. He is fluent in English and did not require an interpreter. I reject Mr Pearce's submission that I should find his evidence unreliable, which rests on evidence about his ability to recall conversations that favour the Salter Brothers parties' case (or is neutral) and his confident evidence that matters adverse to that case were not said (T 939, 954, 989, 996-997). Mr Pearce submits this is textbook reconstruction. I do not agree. I analyse this evidence in detail below. The cross-examination was put in the form of submissions that Mr Pearce intended to make that I should find him to be untruthful. Quizzing a witness about the "connecting features" that harmful evidence is denied in comparison to favourable or neutral evidence and extracting the obvious concession that viewed in that way his evidence was "very convenient" (T 997) does not found the untruthfulness submission. It also ignores the contemporaneous documents and my consideration of all of the relevant evidence. 225 There is also his evidence about affixing the Australian Coat of Arms to some promotional material (T 1000-1001). I reject the submission that Kevin Fan gave unconvincing evidence as to why he did this because I have accepted his evidence in re-examination that he did so innocently to distinguish the Australian SIV program from that of other countries with similar programs. 226 I accept the entirety of Peter Hamilton's evidence which was uncontroversial. 227 I was very impressed with Dawna Wright, a very well qualified, thorough and independent expert witness for the Salter Brothers parties. F. 3 Misleading conduct case 228 I begin with identification of the misleading conduct relied on and whether the evidence establishes that conduct. Li Xu pleaded six oral representations as having been made by six individuals between the first half of 2014 and February 2017. She abandoned the first during the trial, but her evidence about it remains relevant to the assessment of her credit. Each is pleaded separately as amounting to misleading conduct on which there was reliance, and that damage was suffered in consequence. Although primarily each falls for separate consideration it would be wrong to ignore her written submission that "similar representations were made to [her] by different persons at different times is more likely a reflection of a common practice within the defendants and their agents rather than any fabrication by [her]." Of course, the counterpoint consideration, relied on by the Salter Brothers parties, is the apparent implausibility that similar representations would be made by different persons over a period of seven years, and more so if I find that one or more of those persons knew the representation to be contrary to the facts. 229 In my view the Han representations, the Jin representations and the Fan representations should be considered together as each predates the initial investments made by Li Xu on 8 July 2015 and the case is that each was relied on in determining to make those investments. F. 4 The Han representations 230 The pleaded case is that in the first half of 2014, Lixia Han said words to the effect: (1) any complying investment could be redeemed at her option at the end of four-years; and (2) Australian law required the company receiving the complying investment to have sufficient cash available to redeem the investment six months prior to maturity. 231 In reliance, Li Xu applied for units in Fund A ($500,000), Fund B ($500,000) and Fund E ($1.5 million). 232 The Han representations were pleaded in the case against the Austar Melbourne and the Salter Brothers parties. As I have noted, on 7 June 2024 the Austar Melbourne claim was dismissed by consent without adjudication on the merits, which happened to be two days after conclusion of the cross-examination of Li Xu. Li Xu pressed the Han representations case against the Salter Brothers parties on the ground that Lixia Han acted as their agent until the point of her opening submissions when this case was "not pressed" which I take to be a polite way of abandoning it. Nonetheless, Mr Pearce accepted that whether the Han representations were made remains relevant to the context of the pleaded representations, and also to reliance (T 1531-1532). In my view the relevance goes beyond context and extends to matters of credit and whether Li Xu's evidence, viewed as a whole, is plausible as the product of genuine recollection rather than reconstruction. 233 The evidence is as follows. On 3 September 2014, Li Xu entered into a written agreement with Austar Suzhou in Mandarin for the provision of "intermediary services" and assistance in obtaining a Subclass 188 Visa for entry to Australia. In part that agreement provides (where Party A is Li Xu and Party B is Austar Suzhou) (CB 328): I. Party A's Responsibilities 1. Confirming the country and visa type entrusted to Party B for application, and accepting the visa for that country after successful application with Party B's assistance. 2. According to the requirements of Party B, providing all the application materials required for travelling to the country in a timely manner, and guaranteeing the authenticity and validity of the materials. 3. Making all payments on time in accordance with the payment terms set out in this Contract. 4. Applying for her passports on her own in accordance with the regulations of the State Administration for Entry and Exit. 5. Upon obtaining a visa to travel to a country and travelling to that country within the validity of the visa. II. Party B's Responsibilities 1. Party B is responsible for providing Party A with the following services: (1) Instructing Party A to prepare the application materials for the state sponsorship and assisting Party A to apply for the sponsorship from the state government; (2) Instructing Party A in the preparation of visa application materials and submitting the visa application on Party A's behalf; (3) Providing interview coaching to Party A; 2. Party B shall handle the refund procedures for Party A in accordance with the provisions on refund matters in this Contract. 3. Party B shall be responsible for keeping Party A's information confidential. III. Party A's payment rates, payment procedures. In order to complete this entrusted consulting service, Party A shall deliver the payment listed below on schedule in accordance with the following procedures. 1. The total cost includes: application fee (correspondence fee, postage charges) RMB 3,000 Yuan (non-refundable). Agency service fee: RMB 60,000 Yuan (fully refundable if the visa application is unsuccessful). 2. When signing this consulting service entrustment contract, the application fee and 50% of the service fee shall be paid, which is RMB 33,000 Yuan. 3. All fees shall be settled after receiving the pre-approval notice. 4. The agency service fee charged does not include notary fee, medical examination fee, translation fee, investment plan fee, audit fee, visa fee, passport processing fee, property/asset appraisal fee, English training fee, air ticket fee, interview accompanying fee and other costs, if any of the above costs are incurred, it shall be borne by Party A. 5. If Party A requests Party B to provide more services, such as overseas airport pick-up, finding accommodation, company registration, application for permanent residence after 2 years, etc., the fees will be negotiated separately. … Client's Statement: * I have carefully read this entrustment agreement, been aware of respective responsibilities of Party A and Party B, and clearly understand the basic situation of the country I am travelling to and I am willing to accept the provisions on refund matters in this agreement and bear the corresponding risks. * I make it clear that Party B has told me not to make any preparations to go abroad, including not to stop school, give up my job and business, sell my property and business, etc., before I have obtained an official visa from the government of the country I am travelling to. Party B will not be responsible for any losses incurred as a result. * Party B shall not be responsible for any liabilities arising from the various contracts and agreements signed between the applicant and third parties during the execution of this Contract. 234 Li Xu gave viva voce evidence-in-chief as follows (from T 141). She met with Lixia Han in the first half of 2014 (during spring in the northern hemisphere) at a seminar conducted by Austar Suzhou in China. She has a general recollection that Lixia Han introduced herself as a representative of Austar Suzhou, there was a discussion about her daughter's schooling needs and desire that she should study overseas. Lixia Han suggested that she and her husband should consider migrating overseas as this would present better educational and career prospects for her family. She was informed that Austar Suzhou was a global study abroad and immigration company with thousands of successful applicants worldwide. There was a discussion about the professional services that Austar Suzhou could provide and various statements to the effect that Austar worked closely with contacts in overseas domestic markets so as to ensure a successful integration of accepted applicants into a foreign country. An arrangement was made to meet formally at the offices of Austar in Suzhou. 235 The meeting occurred and was attended only by Li Xu and Lixia Han. Her evidence as to what was discussed was: (T143-144) THE INTERPRETER: We discussed that I – how I will go and immigrate using the policy set out in 188C visa – SIV visa and, also, we discussed about my child to go study abroad. MR PEARCE: Right. What did Lixia Han tell you about the 188C visa? THE INTERPRETER: General manager Han said – but – for immigration, I need to invest in Australian compliant fund for – for the amount of $5 million and for the duration of four-years and, after the four-years, under their instruction, I will be able to obtain the visa 188C and, subsequently, 888 visa. MR PEARCE: Did you ask Lixia Han anything about the $5 million investment for four-years? THE INTERPRETER: Okay. I did ask. I said to General Manager Han that $5 million was a quite big sum for me and for me also to invest in Australia that is a company – that is a country that is quite strange to me, so how will I know for sure, after four-years, I will be able to get my money back from the compliant fund. MR PEARCE: And what did Lixia Han say to that? THE INTERPRETER: So General Manager Han said, "You will get your money back after four-years, from a compliant fund. You will be able to get your initial investment back." Because in Australia, the government placed quite tight control on this type of investment, and by law, the investment – the fund management company are required to set aside a pool of funds and – for six month prior. So, they should run it – they would run a timeline as well, in terms of when the fund – when the investment will mature. And the longest time I have to wait was about six months, but generally in two to three months I will be able to get my money back. 236 This evidence was not traversed in cross-examination by Mr Peters for the Salter Brothers parties. It was by Mr Meng for Austar Melbourne. 237 Li Xu initially said that her evidence that the meeting with Lixia Han occurred in the first half of 2014 was incorrect (from T 236). On the corrected version, the meeting occurred shortly before signing a contract with Austar Suzhou on 3 September 2014. However, when pressed further, Li Xu disclosed that there had been several in person meetings and telephone discussions with Lixia Han before the contract was signed. Ultimately, Li Xu conceded that she did not know when the meeting, at which Lixia Han is said to have made representations, occurred. Despite that, Li Xu's evidence was that she was still able to remember what was said at the meeting (T 242). 238 Mr Meng then put a timeline to Li Xu (which she did not dispute) commencing that she met Lixia Han at a seminar at some time before July 2013, contrary to her affidavit evidence that the meeting occurred in the spring of 2014 (T 236). At some time after the seminar, Lixia Han sent an email to Li Xu and attached to it certain "migration materials" (T 234). Then followed a series of meetings and telephone discussions. At that time, Li Xu's main reason for considering migration to Australia was to provide her daughter with an overseas education. That topic was discussed at the meeting during which it is said that Lixia Han made the representations. Lixia Han asked Li Xu questions about the value of her assets, to which Li Xu responded that they exceeded $5 million AUD. Li Xu and Lixia Han discussed a list of assets, and Lixia Han advised Li Xu that a valuation would need to be undertaken. Li Xu accepted that she could not tell Lixia Han exactly the value of her assets at that time, but they were "roughly about $5 million or just a little over $5 million" (T 244). 239 The cross-examination continued (from T 244). Lixia Han asked Li Xu questions about the source of her assets and was advised that they comprised property investments. Lixia Han told Li Xu that she would firstly need to invest an amount for a period of four-years. She also advised Li Xu as to other requirements applicable to the application for the visa in order to obtain permanent residency in Australia. As to those requirements, Li Xu accepted that Lixia Han told her that it was necessary to satisfy the four-year investment requirement and each of a number of other requirements before she would be eligible to apply for a visa and thereby obtain permanent residency. Lixia Han further told Li Xu that there was the possibility of choosing to extend the temporary visa for a further period of two years, which extension could be undertaken twice. Li Xu stated that she did not need to make an extension application (T 245). 240 Li Xu stated that it was her "understanding" that when she satisfied the four-year requirement for an investment, and satisfied each other requirement, she would then obtain permanent residency and thereafter would have the option of continuing her investment "with the investment company" (T 246). Li Xu further confirmed that it was her understanding that she would only be able to apply for permanent residency if she satisfied all the requirements of her temporary visa. When pressed as to whether it was Li Xu's understanding that: "you will get your money back after four-years, regardless of what happens", Li Xu accepted that unless she met each requirement of the visa, she would be required to maintain her investment (T 246). 241 At that point, Li Xu's evidence expanded somewhat significantly from the evidence that she had given in her examination-in-chief (from T 247). Li Xu, when questioned as to her personal understanding that if she satisfied all relevant visa requirements, she could then redeem her investment after four years, disclosed for the first time that "four scenarios" were discussed with Lixia Han. Pausing there, in cross-examination Mr Meng put to Li Xu that there were four scenarios and Li Xu agreed. A careful reading of the transcript (T 247-248) reveals only three. She listed them as: (1) when four years is up if all other requirements were satisfied and the investment is redeemed; (2) if after four years, having satisfied all other requirements, she decided to maintain her investment; and (3) if all other requirements were not met by the four-year mark, in which case she would be required to maintain the investment. 242 She accepted that her evidence-in-chief, given the previous day, had not been "complete" (T 248). 243 It was next put that it is not correct that Lixia Han said that she would "definitely get your money back after four-years" (T 250), but Li Xu insisted that this had been said. She confirmed her understanding that there were other requirements that would need to be met under the SIV scheme. When asked to explain just what her understanding at the time was, Li Xu said (T 250): THE INTERPRETER: My understanding was – when I say, "my understanding", it was because when Ms Han said that, I actually asked her, "Are you sure? Are you sure that will satisfy all the requirements?" And she said, "Yes. We have foreign lawyers looked into this, and it was all confirmed that's the case." So, my understanding was that if I do as she asked me to do, then I will get PR. 244 The cross-examination then continued (from T 250). Li Xu confirmed that Lixia Han had not only guaranteed the return of her investment after four years but also guaranteed that she would achieve permanent residency. When asked how she could be so sure of this, she answered because there were foreign lawyers who had looked into the matter and to whom Lixia Han had spoken. 245 Li Xu then accepted that she had been told that there were "a bunch of requirements" (T 251) that were required to be satisfied under the SIV Program, one of which was maintenance of an investment in a compliant fund of four-years and that Lixia Han explained to her that "it was only if you satisfied all those requirements that you would get your permanent residency" (T 251). The cross-examiner took the last point further (from T 251): MR MENG: So, the – your ability to request your investment back was contingent on a number of requirements being satisfied; correct? THE INTERPRETER: Yes. MR MENG: And it was your personal understanding, and not what Ms Lixia Han said, that you thought, "Yes, I will be able to satisfy those requirements." THE INTERPRETER: That's our common goal. MR MENG: So that was a goal, but it wasn't a promise, was it? THE INTERPRETER: It's a promise as well, regardless it would be four-years or six years. But our goal was for four-years. MR MENG: So - - - THE INTERPRETER: Or maybe five years or maybe longer. MR MENG: So maybe four-years, maybe five years, maybe longer. THE INTERPRETER: I will just repeat the question. MR MENG: Well, I'm just repeating what she said. THE INTERPRETER: Yes. MR MENG: I'm getting her to confirm that. THE INTERPRETER: But, for us, it's four-years. Our goal was four-years. MR MENG: But you've just said five years or more. THE INTERPRETER: Yes. So, if – that – that was because, if there were other requirements – were not met or another scenario was – other requirements were met, but the person decided to invest a bit longer. So that could be possible as well, but what we discussed was four-years. 246 This evidence was not traversed in re-examination. 247 It took some while for Li Xu to take steps to progress her application pursuant to the SIV Program. On 21 November 2014, she received an email from Cindy Zhang of Austar Suzhou, which attached an agent appointment form (in Mandarin), whereby Li Xu authorised Austar Suzhou to act as her agent in relation to her visa application for nomination by the Victorian Government. She promptly signed the documentation and returned it. In doing so she acknowledged and agreed to 11 nomination conditions, including: (CB 336) 8. I agree and undertake not to change the investment choice detailed in my nomination application without the express approval of the Victorian Government. I understand that failure to notify the Victorian Government of my intention to change investment may result in the cancellation of my visa nomination. 9. I acknowledge that the Victorian Government strongly recommends that I obtain professional independent financial and legal advice before making any investment in relation to this visa. 10. I understand that the Victorian Government does not recommend or provide advice regarding investments or business activity, either expressly or by implication. I agree that the Victorian Government is not liable for any loss, cost or expense whatsoever in any way resulting from or in connection with investments made or business activity undertaken for the purpose of, or in any way related to, this visa or otherwise. 248 Li Xu did not say in her evidence that she failed to read or understand this document. 249 Li Xu's evidence-in-chief continued to the effect that in early 2015, she had a telephone discussion with Lixia Han who advised her that two Austar Suzhou representatives, Dulcie Du and Jeanetta Jin, would contact her about making a complying investment. On 22 May 2015, Dulcie Du emailed her (in Mandarin) as follows (CB 341): Dear Ms XU I have summarised the 188C products that more customers choose more at present: Fixed Income Category Product 1 State Government Bonds Investment target: state government bonds of different Australian states Expected net income: 1.8% Advantages: locked-in Interest Disadvantages: Interest rates are the lowest in its class in fixed income categories with poor liquidity Liquidity: Can be redeemed after 1 year, if the Reserved Bank of Australian raises the interest rate, there will be a risk of principal discount when selling in the secondary market Product 2. Bank Termed Deposit Investment target: Term deposits of Australia's big four banks Expected net income: 2.25% Advantages: 30-day to 1-year fixed deposit Disadvantages: The RBA interest rate in Australia is currently at its all-time low, and term deposits are also at their all-time low Liquidity: can be redeemed once a month with 0.5% buy-sell spread Product 3. Bank Bond Fund Investment target: 100% invested in the bonds of Australia's big four banks (Commonwealth Bank of Australia, Westpac, ANZ Bank, National Australia Bank) Expected net income: 3.5% Advantages: conservative and stable, stable yields Disadvantages: Australian interest rates are currently low and as a product of all fixed income categories, yields will not be very high Liquidity: can be redeemed once a month, redemption fee of 1% if redeemed within 2 years Product 4. Currency and Bond Funds Investment target: AA to BBB-rated bank bonds, notes plus corporate bonds issued by Australian banks and Australian listed companies Expected net income: 4.0% Advantages: Stable yields, will fluctuate with Australian interest rates, more flexible than term deposits, interest rates are slightly higher Liquidity: can be redeemed once a month, redemption fee of 1% if redeemed within 2 years Non-fixed income categories Product 5. Commercial Real Estate Leasing Fund Investment target: Australian commercial real estate, relying on stable rental returns and project land appreciation as fund income Income: Target income 8-10% (cash dividends 5%-5.5% per annum, value-added dividends 3%-5% per annum distributed to investors' accounts in the final year of the investment redemption period) Advantages: Stable returns, high returns, higher risk than fixed income categories but lower than equity class funds Liquidity: No liquidity, lock-in for a period of 4 years Product 6. Residential Real Estate Development Fund Investment target: mixed Australian residential and commercial real estate Income: Target income 13%-15% (cash dividend 5% per annum, final project return paid at the end of the project cycle, generally 12-30 months) Advantages: The fund enters the market in the form of a mezzanine loan, uses land as collateral, the project risk is controllable, the return is high, with medium long project cycle Liquidity: No liquidity, lock-in for a period of 12-24 months Product 7. Equity Fund With three types being basic construction, listed real estate REITZ, and large-cap stocks Advantages: Good liquidity Cons: High market risk, high volatility, the Australian stock market ASX200 is currently at 5600- 5700 points, the all-time high was 6300 points Loan-based compliance products can still be recognised by Immigration Department as one of the compliant product options for those who submitted EOI applications before 24th April 2015 Investment Target: The investor invests in a government bond fund, which invests in Federal and State government bonds at a fixed interest rate. After completing the investment, investors can choose to take out a loan equivalent to 100% of the investment amount invested in the government bond fund for re-investment in Australia. Should you have any queries in regard to the above products, please contact us directly. 250 Li Xu's reply was brief (CB 419): Do you have product details or catalogues? If so, could you please send them to me as an attachment? … 251 On 23 May 2015, Dulcie Du responded and provided four documents, each in Mandarin: (1) Introduction to Atlas Fund- Bank Deposit Term Deposit Fund; (2) Introduction to Moelis Fund- Bank Bond Fund; (3) Introduction to Atlas Fund- Currency Bond Fund; and (4) Introduction to Commercial Real Estate Leasing Fund (Moelis) (CB 373). 252 In document (1) the investment target is described as: term deposit products issued by the Australian "big four banks", as providing a relatively stable investment income with a target rate of return of 2.75% and as an "ultra-low risk investment" where investors can enjoy the flexibility of switching investment at any time (CB 377). In document (2) the investment target is described as bank bonds issued by Australian banks, with a target rate of return net of expenses of 3.50% being an "extremely robust low risk investment" (CB 379). Document (3) describes the investment target as AA-BBB corporate bonds issued in Australia, being bonds with high credit ratings with an expectation of achieving higher returns in the medium to long-term compared to risk-adjusted returns of bank deposits with a target rate of return of 4% described as an "extremely robust low-risk investment" (CB 382). Document (4) describes the investment as direct investment in established commercial real estate in Australia, industrial, retail and service properties, with the objective of only investing in "non-speculative properties with high-quality tenants and long-term stable leases, which is a safe and secure low-risk investment" with a projected revenue distribution of 5% and as having low risk (CB 386). Considerable detail is provided for individual properties. 253 On 25 May 2015, Li Xu received an email from Cindy Zhang attaching a letter from the Department which invited her to make a complying investment as a necessary condition of the grant of a temporary visa. The letter is dated 21 May 2015 and is in English. It is an important document in this case and omitting formal parts, provides in part (CB 411): Dear Li XU Complying Investment for the Business Skills (Provisional) (class EB) visa in the Significant Investor Stream. I wish to advise that your application has reached the stage where you are invited to select and make a Complying Investment of at least AUD5 million in Australia. Assets to be used to make your Complying Investment You stated in your application that you would use the following asset(s) to make the investment: Real estate properties located respectively at: - Room 02, Building 48, Mingcheng Garden, Hi-tech & New District, Suzhou City, Jiangsu Province, P.R.China; - Room 905, Building 1, No.215 Binhe Road, Hi-tech & New District, Suzhou City, Jiangsu Province, P.R.China; - Room 1703, No.100 Shishan Road, Hi-tech & New District, Suzhou City, Jiangsu Province, P.R.China; - Room 3B2, Building 1, Guidu Bldg, Industrial Park, Suzhou City, Jiangsu Province, P.R.China; - Room 1803, Building 1, No.88 Shishan Road, Hi-tech & New District, Suzhou City, Jiangsu Province, P.R.China; - Room 1805, Building 1, No.88 Shishan Road, Hi-tech & New District, Suzhou City, Jiangsu Province, P.R.China; - Room 1805, Building 1, No 88 Shishan Road, Hi-Tech & New District, Suzhou City, Jiangsu province, PR China - Room 103, Building 29, Zhonghai Garden, Industrial Park, Suzhou City, Jiangsu Province, P.R.China. Use the above assets to make your Complying Investment If you still intend to use the above assets to make your investment, you should complete the following steps: 1. Select a Complying Investment. It is your responsibility to obtain all necessary information from the Australian State or Territory government agency, the fund manager or the Australian proprietary company. Please note that the Commonwealth of Australia does not approve or endorse those investments, or provide advice on their performance, and will not accept any liability whatsoever, whether for negligence or otherwise, for any loss you may suffer as a result of making a Complying Investment. 2. After you have selected your Complying Investment, complete a Form 1412 Deed of Acknowledgement, Undertaking and Release, which is available on our website at www.immi.gov.au/myvisa/form1412 If you have chosen to make any part of your Complying Investment in managed funds, you should also forward a Form 1413 Declaration in relation to managed funds to the responsible fund managers to complete and return to you. The form is available on our website at www.immi.gov.au/myvisa/form1413 3. Make your Complying Investment. 4. After making your Complying Investment, you must provide evidence of having used those assets listed above to make your investment to this office. This may include evidence of sale of assets, transfer of funds or other documentation. This evidence needs to clearly show the steps from liquidation of each asset to investment of the funds in a Complying Investment. You also need to return form 1412, and if applicable, form 1413 to this office, together with any evidence of you having made the Complying Investment. Documentation may include evidence of purchasing and holding a bond investment, a managed fund investment or an Australian proprietary company investment. Use different assets to make your Complying Investment If you no longer wish to use the above listed assets, and intend to use other funds to make your investment, you should not make the investment until: 1. You have provided evidence to this office that the assets you now wish to use: a) are legally and personally owned by you and/or your spouse or de facto partner b) are unencumbered c) have been lawfully acquired. and 2. You have received confirmation from this office that the alternative assets can be used to make the Complying Investment. Withdrawing funds If for any reason you are unable to migrate to Australia after making your Complying Investment, any decision to withdraw funds from that investment prior to its maturity will be subject to the conditions agreed between you and the relevant State or Territory government agency, managed fund or Australian proprietary company. This may include a condition that may prevent you from withdrawing your funds before maturity, or the imposition of financial penalties for early redemption. You must respond to this invitation within 28 days after you are taken to have received this letter. This means that you need to complete the last step required from you within this timeframe. As this letter was sent to you by email, you are taken to have received it at the end of the day it was transmitted. Please note that if the required documentary evidence is not provided to this office as requested above, or if your response is unsatisfactory or incomplete, then in accordance with legislation, your application may be decided based on the information available to us. If you believe the timeframe specified should be extended due to compelling and compassion reasons, please contact your processing officer via the contact details listed below in the footer. … 254 Considerable cross-examination focused on this document, in particular the statement that the Commonwealth does not approve or endorse complying investments. Although Li Xu attached this letter to her affidavit, she did not say whether she read it at the time. Initially in cross-examination she accepted that she understood at the time the terms and conditions applicable to the making of a complying investment for the purposes of the visa (T 184). She confirmed that her understanding included the paragraph numbered (1) on the second page of the letter about the steps required to select a complying investment (T 184). However, when pressed as to that understanding, Li Xu stated that she did not understand at the time that the Commonwealth did not approve or endorse those investments (T 184-188). 255 Li Xu accepted that she knew it was her responsibility to obtain all necessary information from the sponsoring agency and the fund manager. She contended that she did not read the entirety of the letter, "only the top bit, but not the following parts". In explaining why, she said that Austar Suzhou "said" she could go to Shanghai, which she did, and for that reason she did not look more carefully at the letter. She accepted that she should have been more careful at the time and her evidence continued (from T 185): THE INTERPRETER: The fact was, I saw the letter, and I saw the letter listed the properties that I had, and then I can – I could go to Shanghai. The thing – the thing is, I didn't translate the letter from English to Chinese. I asked Austar for instructions, and they said that I can go to – I could go to Shanghai now, and so I went to Shanghai. MR PETERS: You make no complaint in your claim that Austar misled you about the terms of this letter. THE INTERPRETER: Sorry, could I - - - MR PETERS: You make no complaint in your claim that Austar misled you about the terms in this letter. THE INTERPRETER: I trusted – I trusted Austar. MR PETERS: Do you understand you haven't answered my question? THE INTERPRETER: You mean, I didn't complain about this letter? MR PETERS: Yes. THE INTERPRETER: No, I didn't. MR PETERS: Which is the top bit of the letter that you read? What part to what part? THE INTERPRETER: Up to where my properties were, and I had a look, and these were my properties. MR PETERS: Do you mean commencing from 21 May 2015, at the top of the page? THE INTERPRETER: Yes. MR PETERS: And down to where? What was the last part of the letter that you say you read? THE INTERPRETER: To the next page, to that room – to that sentence, where it says room 103. Up till there. MR PETERS: All right. Did you not want to know what you had to do to obtain your visa? THE INTERPRETER: I would like to know. MR PETERS: Yes. And do you acknowledge now that paragraph 1 of that letter clearly states – and could you read these words, from: Please note that the Commonwealth of Australia does not approve or endorse those investments. Down to: Making a compliant investment. THE INTERPRETER: I don't know. MR PETERS: Do you understand that this letter told you that the government did not approve or endorse any investment you might make into – in a SIV fund for the purpose of your visa? THE INTERPRETER: Do you mean the government will not endorse for the loss? MR PETERS: Yes, won't guarantee the loss. THE INTERPRETER: I don't know. MR PETERS: You don't know? THE INTERPRETER: Yes, I – that's correct. MR PETERS: Ms Xu, you can translate English into Mandarin, can you not? THE INTERPRETER: You mean in 2015? MR PETERS: No, I mean now. THE INTERPRETER: When I look at this now, I could understand about half of it. So – but it's not very precise. MR PETERS: You attached to this to your affidavit as an exhibit, did you not? THE INTERPRETER: Yes. MR PETERS: In business, you sought many guarantees from suppliers and purchasers, haven't you? THE INTERPRETER: Yes. MR PETERS: And you understand, from that paragraph 1, the government is not going to guarantee your investment in a SIV fund. THE INTERPRETER: Yes. Yes, I now know. MR PETERS: Can I – well, I want to suggest you knew at the time you got this letter. THE INTERPRETER: That's not right. MR PETERS: All right. If you look at the bottom of that page, there's a paragraph numbered 1 with two subparagraphs, (a) and (b); do you see that? THE INTERPRETER: Yes. MR PETERS: And did you agree to that term? THE INTERPRETER: So I will translate. Sorry, your Honour, can I ask an explanation for the unencumbered, just to make sure that I translate correctly? HIS HONOUR: Not charged, like a mortgage. THE INTERPRETER: Okay, yes. Yes, now I know. MR PETERS: What about back in 2015? THE INTERPRETER: I didn't know. MR PETERS: Are you saying you had no knowledge of the process that you had to undertake and comply with to – which involved making a $5 million investment and a major change in the life of your family? THE INTERPRETER: I trusted Austar will sort that out. MR PETERS: But you had to undertake the steps; you must have known what you had to do. THE INTERPRETER: Yes, there was steps, and each steps were taken, because Austar has given us a plan. MR PETERS: But see if you agree to this: do you agree that this was a letter from the government, telling you what the government required you to do and what the government would do in return? THE INTERPRETER: Now I know. MR PETERS: You knew it in 2015, in May 2015, didn't you? THE INTERPRETER: I didn't know. 256 On that evidence, Li Xu was capable of reading and comprehending English to a considerable extent in May 2015. She read the entirety of the first page and onto the first and second lines of the second. She provided no satisfactory evidence as to why she did not read further into the letter, beyond repeatedly stating that she "trusted Austar" to sort matters out for her. She did not say that having read the letter to the level of her comprehension of English, that she considered it necessary to have her agent interpret or explain any part of it to her. 257 On 26 May 2015, Li Xu received another email from Dulcie Du which attached in Mandarin a document described as a catalogue of the Moelis Australia products, which is a response to Li Xu's request for "more products" of 25 May 2015 (CB 419). The attachment is not in evidence, and this was not explored in cross-examination. 258 Li Xu arranged to meet with Jeanetta Jin in Shanghai on 2 June 2015. She attended the meeting with her husband Dian Wang. 259 Lixia Han did not give evidence. She did provide an affidavit of evidence intended to be adduced for Austar Melbourne, which became otiose when the proceeding against it was dismissed. F. 5 The Jin representations 260 The pleading is that on or about 2 June 2015, Jeanetta Jin said to Li Xu, words to the effect, that any funds invested in the trust funds would certainly be available to be redeemed at the end of four-years. 261 In her viva voce evidence-in-chief, Li Xu when asked what was discussed at the meeting said (T 145): THE INTERPRETER: Yes. So we discussed quite a few things, and first of all was the process of investment and also the investment timeline. Then, we discussed about compliant funds, and mainly Atlas but also talk about Moelis, as well. Then, we discussed about the application form and about signing the application form. That's the main points of discussion. MR PEARCE: All right. Now, just going back to the discussion about the Atlas company; can you remember what Ms Jin said about Atlas? THE INTERPRETER: She said Atlas is a – Atlas was a compliant fund in Australia, and it's compliant to investment for SIV 188C visa. MR PEARCE: Did you ask her any questions about making an investment with Atlas? THE INTERPRETER: Yes. MR PEARCE: And what did you ask her? THE INTERPRETER: I asked, "If I invest for four-years, after the time is up, will I be able to get my money, get my principal, back?" MR PEARCE: And what did she say? THE INTERPRETER: She – okay. She said, "Yes, not only you will get your investment amount, the principal, back; you will get quite lucrative dividends. MR PEARCE: And you said there was also some discussion about Moelis. What did Ms Jin say about Moelis? THE INTERPRETER: She said Moelis was also a very good company and was also an Australian compliant fund. 262 Li Xu was then taken to the application form that she signed to invest in the Atlas Capital funds and which is dated 8 July 2015. Her evidence was that she signed the form at the meeting on 2 June 2015 and that apart from her signature, none of the handwriting on the form is hers. Her evidence continued (T 147-148): MR PEARCE: Now, could you tell his Honour, please, what Ms Jin told you about this document? THE INTERPRETER: So Miss Jin said to me that this document is just like a deposit slip when you deposit money into a bank. The terms and conditions in the document are set – cannot be changed. MR PEARCE: Did you ask her any questions about the document? THE INTERPRETER: I did ask. I said it was all in English. I couldn't really understand the contents. There might be information in there that was not – not in my favour. MR PEARCE: And did she say anything in response to that? THE INTERPRETER: She said the contents in the documents were fair and were confirmed. It's just like a bank deposit slip. MR PEARCE: And why did you decide to sign this document? THE INTERPRETER: Because I ask – sorry, because I ask her, what does this IM mean? And she said, IM means information of the fund. 263 Finally, Li Xu said that she did not read the document before she signed it "because it was all in English, I couldn't understand" (T 148). 264 The application form (CB 425-429) contained the declarations and acknowledgements that I have set out relating to receipt of an Information Memorandum dated 3 March 2015 issued by MAP Capital. It also contained confirmation that the document had been read, that no guarantee had been given or representations made as to the performance or success of the funds or as to the repayment of capital and that investments are subject to investment risk, including delay in repayment and loss of income or principal. 265 I turn now to the cross-examination. Li Xu was directed to a document that summarised the Atlas Capital SIV funds (in Mandarin), which was provided to her by Jeanetta Jin and before she made her investments with Atlas Capital (from T 192). Li Xu confirmed that she read this document at the time and made many handwritten notes on it. Amongst other notes, Li Xu circled the reference to real estate funds, explaining that she wished to compare the property fund with other funds and made notes on a table which summarised the primary features of six Atlas Capital SIV funds. I reproduce the table and the notes to it, but omit therefrom the annotations made by Li Xu (which I address by reference to her evidence) (CB 463): Target net income means the return of the fund after all fund fees (other than performance fees) have been collected Real estate fund includes commercial real estate acquisition and real estate development projects, which have different target returns Redemption fees vary according to the investment period. For details, please refer to the Information Memorandum of the Fund. In the case of no liquidity, the real estate fund will not be redeemed in advance For specific information about the Fund please refer to the Information Memorandum 266 As explained by Li Xu she annotated the table as follows (from T 193): (a) She understood the table as summarising the investment objects, Target net income, account fees, annual fees and performance fees for each of the funds; (b) She annotated the ASX fund with the 500, representing an intended investment in that fund of $500,000; (c) For the bond fund, she again annotated it with the numeral 500; (d) For the E property fund, she marked $1.5 million; (e) On the left-hand side of the document, various questions were written down being: "does net income mean take-home gains? Or do you have to remove taxes on top of that?", details of the management team personnel by timeline were requested, "if part of the fund (AA - BBB) is used to buy a house, does this count towards the investment ($5m)?" and "how/when does the dividend payout take place?" 267 Li Xu accepted that she studied the document "very carefully to determine whether to make those investments", and that she read the entire content of the document (T 195). In particular she noted that the target income for the property fund was between 8% and 15% per annum, which she accepted was a high rate of return and with "the usual risk that a high return comes with" (T 196). She further accepted that she compared the Atlas Capital funds with the Moelis Fund. Li Xu was then taken to the notes to the table, in particular the reference to the real estate fund not being redeemed in advance if there is no liquidity. It was put to her that she was aware that there was a liquidity risk in this fund, to which she responded: "Yes. Within the four-years, and it's locked in for four-years" but then denied that her understanding was that redemptions were a function of market forces (T 198). Li Xu accepted that on redemption, the price of her units may have increased or decreased depending on market forces (T 198-199). 268 She was next taken to the following series of disclaimers in the document in Mandarin (CB 484, from T 199): This presentation has been prepared by Atlas Capital Group (hereinafter referred to as "ACG"). ACG assumes that all material in this presentation is accurate and complete. Accordingly ACG has not, and does not intend to, unilaterally verify any such information. Except as required by law, ACG, its associated agencies and other affiliates, their respective representatives, officers, employees, consultants and agencies (the "Group") make no representations or warranties as to the accuracy, completeness, timeliness, fairness or reliability of the information contained in this presentation. To the fullest extent permitted by law, any member of the Group shall not be liable for any loss arising from or in connection with the use of this presentation (including but not limited to liability arising from the fault or negligence of any member). This presentation may contain forward-looking statements, forecasts, estimates and prospects ("forward-looking statements"). Neither the Group nor any member of any independent third party has reviewed the reasonableness of any forward-looking statement or its assumptions. No member of the Group represents or warrants that any forward-looking statement shall be fulfilled or justified or that the assumptions on which it is based are reasonable. A fund's past performance is no guide to future returns. Sometimes the principal may not be recovered. This presentation is for reference only. Any recipient of this document shall give due consideration to all other facts, opinions and his/her own opinion before making an independent decision. ACG assumes no duty to promptly inform anyone of any inaccuracies, omissions or changes in the information contained in this presentation or in any other information provided by such person, and is under no obligation to provide any person with further information. The information contained in this presentation is confidential and may not be retransmitted, distributed or reviewed without the express written permission of ACG. If the recipient of this presentation is not the intended recipient, you are hereby notified that any retransmission, distribution or reproduction of this document is strictly prohibited and you must destroy or return this document to ACG. ACG does not provide tax, accounting or legal advice. The recipient should consult its own tax, accounting, legal and other professional advisors in connection with any transaction described herein. This presentation is not intended as an offer to sell or a solicitation of an offer to purchase any securities or other financial instruments. This presentation is not a commitment to any securities underwriting, capital loan or investment. Map Capital Advisors provides merger, acquisition, restructuring and other advisory services to clients and their affiliated managed private investment partners. Its staff may make contrary statements or provide contrary opinions on the information contained in this material. Our owner's rights may conflict with yours. ACG may at times own or trade in the financial products referred to in this presentation. Map Capital Advisors either has, or intends to, or will in the future, provide advisory services and investments in the companies referenced in the presentation. The asset photos in this presentation are symbolic only and are not the assets of the Fund. 269 When questioned about these disclaimers, Li Xu acknowledged having read each at the time, but then contended that she did not accept them (T 199). She did however acknowledge that she was aware at the time that she should consult her own taxation, accounting, legal and other professional advisers in connection with an intended investment (T 200). When it was directly put to her that she was also aware at the time that there was no promise of the guarantee of the investment by the Australian Government, Li Xu responded: "no, I didn't know" and stated that it was "not right" that her understanding was that there was no promise that she would always receive a return of her investment (T 200). 270 Turning next to her meeting with Jeanetta Jin, Li Xu confirmed that she requested an application for the Moelis funds, which were provided to her in Mandarin and English. What she received in Mandarin was the Moelis Australia SIV Funds S1 Information Memorandum January 2015 (CB 19713 English and CB 19772 Mandarin). Li Xu must have had the Moelis Information Memorandum at some time before she emailed Jeanetta Jin on 4 June 2015 with a detailed list of questions, some of which concern statements in the Moelis Information Memorandum (CB 491). Like the Atlas Capital Information Memoranda, the Moelis Information Memorandum contains information about the various funds operated by Moelis and which were compliant with the SIV Program. It begins with a statement of Important Information in Mandarin, including the following (CB 19716): … The SIV Funds are intended for Investors who are aware of and understand the risks attaching to an investment in a collective investment vehicle, such as the SIV Funds. The SIV Funds will invest in a variety of different asset classes but as at the date of this Memorandum none of the Investments have been selected. … This Memorandum is provided on the basis that each prospective investor will make its own assessment of the SIV Funds independently and without reliance on any of Moelis, the SIV Funds, the Trustee, the Manager or any of their respective affiliates, agents and advisors. In particular, prospective investors should conduct their own independent enquiry, investigation and analysis of the SIV Funds and the business of Moelis as described in this Memorandum and make their own independent decision about the SIV Funds prior to investing in a Fund. Prospective investors should not construe the contents of this Memorandum as legal, tax or investment advice. Accordingly, the acquisition of Units in a Fund by any person shall be solely at the risk of that person. … The statements contained in this Memorandum that are not historical facts are forward-looking statements. These forward-looking statements are based on current expectation, estimates and projections about the industry and markets in which Moelis or the Fund, as the case may be, operates or will operate. Words such as "expects", "anticipates", "should", "intends", "plans", "believes", "seeks", "estimates", "projects" and any variations of those words or similar expressions, are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. Actual outcomes and results may differ materially from, and be significantly less favourable than, what is expressed or forecast in forward-looking statements. No representations, warranties or other assurances are made as to the accuracy, completeness or reasonableness of any forward-looking statements, which should not be relied upon as indicative of, or as a guarantee of, any future value or future result. The factors that could cause actual outcomes and results to differ materially from what is expressed or forecast in forward-looking forecasts are contained in section 10 (Additional information). Units are only transferable or redeemable in accordance with the Trust Deed. As with any other investment, the value of Units can go down as well as up. Past performance is not indicative of future returns. The target pre-tax IRR figures presented on a gross basis do not take into account any taxes or any of the Manager's fees and expenses including the Establishment Costs, Base Fee, expenses and taxes borne by investors, and the target pre-tax IRR figures presented on a net basis do not take into account any Establishment Costs, all of which will reduce returns and, in the aggregate, are expected to be substantial. 271 In the Executive Summary (CB 19720), "Risks" appears as a heading followed by: The performance of the particular SIV Fund depends upon a number of general and specific investment risk factors. Investors should review the Fund Agreements and consider the risk factors outlined in this Memorandum (including those discussed in section 10 (Additional Information") and seek professional advice and conduct their own due diligence before determining whether an investment in an SIV Fund is suitable. 272 Part 5 of the document, entitled "Risk Factors", commences with the statement that (CB 19734): All investments, including an investment in the SIV funds, are subject to some level of risk that an amount invested may lose all or part of its value. 273 Next follows a general summary of risks under various headings including economic factors, market risk, partial or total loss of capital commitments, currency risk, timing risk, default risk, taxation, accounting standards, valuation risk, changes in law and government policy, reliance on key personnel, counterparty risk and evaluation. Under the heading "Liquidity Risk" (CB 19735) is this statement: Other than as set out in the Fund Agreements, neither the Trustee nor the Manager has any obligation to purchase, buyback or redeem Units held by any Investor in an SIV Fund. The Units are not able to be transferred without the prior written consent of the Manager (which it may withhold in its absolute discretion). Investments may be difficult or impossible to sell, either due to factors specific to that security, or to prevailing market conditions. Liquidity risk may mean that an asset is unable to be sold or a Fund's exposure is unable to be rebalanced within a timely period and at a fair price, potentially resulting in delays to redemption processing, or even the suspension of redemptions. If the Trustee is required to process a large redemption or application, the exposure of the SIV Funds to particular investments, sectors or asset classes may be altered significantly due to the security sales or purchases required. This risk may be higher for particular types of investments, such as shares of companies with small realisations, direct property and some debt/credit instruments. 274 Under the heading "Property Risk" the following appears (CB 19737-19738): The real estate sector may experience price fluctuations as a whole which may affect the valuation of real estate Investments. Fluctuations of prices in the real estate sector may be influenced by, among other things, economic conditions, changes in interest rates or changes in bank lending practices. During periods of slow economic growth, demand for property may also fall and prices may in turn also fall accordingly. There are risks associated with direct property ownership including a decline in property values, increases in operating expenses, changes in interest rates, competition or vacancies, reduction in rental prices and fluctuations in rental income, overbuilding, risks related to general and local economic conditions, changes to zoning or building regulations, changes to environment regulations, changes in neighbourhood values and increases in property and/or other taxes. There are other particular risks associated with investing in real estate development, which, as a result of the nature of the investment, carries a higher degree of risk than investments in built and tenanted properties. These risks include factors relating to the planning and development process, environmental issues, industrial relations disputes, inflation and escalating construction costs, delay in completion or delivery of the property, property market risks, failures by third parties, interest rate risks, variations to construction specifications, inability to sell or tenant the development on completion, changes in the law or government policy, taxation treatment, insurances, due diligence and other risks beyond your control. The yields available from investments in real estate depend (amongst other things) on the amount of income and capital appreciation generated by property. If the property does not generate sufficient income to meet operating expenses, including, where applicable, borrowings, tenant improvements, third-party property management fees and other capital expenditures, the income from the property will be adversely affected. Real estate assets are typically illiquid assets, so it may be difficult for the Manager to sell a direct property asset in the Property Fund and thereby affecting the ability of the Manager to obtain the Investor's required price. 275 In section 9, there is a "Summary of Terms" for the investments. For "Redemption of Units", the document states (CB 19752): The minimum collective redemption from an individual or collective SIV Funds is $500,000. This minimum redemption amount may be waived or varied by the Manager at its absolute discretion. The minimum remaining balance for each Investor after redemption is $500,000, if acceptance of a redemption request would result in you holding less than the minimum balance amount specified above, we may treat the redemption request as relating to your entire holding. The minimum balance amount may be waived or varied by the Manager at its absolute discretion. The redemption price per Unit will be equal to the net asset value of the relevant SIV Fund less Redemption Transaction Costs attributed to the relevant SIV Fund divided by the number of Units on issue for that Fund (all calculated as at the last time that the net asset value of the Fund is calculated and less any applicable amount of tax). 276 Li Xu signed an application form to invest $2.5 million with Moelis. That document is not in evidence. Li Xu in her affidavit of 9 February 2024, at [29] states she signed it in the Austar Suzhou office in the presence of Jeanetta Jin , adding "we did not spend too much time talking about the Moelis application form because it was in dual English and Chinese". On the same day, she signed the Atlas Capital application which is dated 8 July 2015 (CB 429). When challenged about this evidence in cross-examination, it was put to her that over a period of nine years, that was a detail that she would have difficulty recalling with clarity, Li Xu answered: "but I remember this important thing" (T 204). 277 Accepting that evidence, what is also known is that on 4 June 2015, Li Xu emailed a list of questions to Jeanetta Jin. Her covering email reads (CB 491): How are you! Thank you for your professional and warm reception last time! For the two companies that were recommended, we have some questions as shown in the attached, could you help to answer them? At the moment, we are considering the ratio of the investment, so we require the answers as basis for our decision. Thank you! Looking forward to the email reply. 278 The attachment, together with the answers provided by Jeanetta Jin later that day provides (CB 492): Questions Re Fund Companies Atlas and Moelis 4th June 2015 (Thu) NO Questions Answers 1 Does the "target net income" in the fund companies materials refer to the net income into the investor's hands? If not, are there any taxes yet to be deducted? Fees? What will the rate of these be? Target net income refers to the income before tax but after fees. If 188C customers do not reside in Australia for 183 days or more each year, they are classified as non-tax residents, the tax rate of interest and dividends is generally 10%, stock dividends and real estate fund dividends are taxed at 15%, the funds withhold tax at this rate; if reside 183 days or more, will automatically become a tax resident, subject to tax at the tax resident rate, the fund will not withheld, customers are to self-declare (the Australian financial year starts on 1st July ends on 30th June). 2 What taxes are payable from the investor's income (e.g. taxes similar to income tax), what would the rate of these be? As above 3 What everyday expense invoices can be used for tax deduction? To achieve reasonable tax avoidance. As a non-tax resident, generally 10% / 15% is the minimum tax rate, with basically no more deduction; after becoming a tax resident, you can find an accountant to help you reasonably avoid taxes, for example, the interest on the home loan can be used for deduction. 4 If we see a real estate property and like it, would we be able to redeem the invested amount from the AA to BBB Bond Fund to purchase the property? In other words, can the purchase amount of the property be considered as part of the amount invested. Using the 5 million investment fund to directly purchase real estate, this is non-compliant, if you want to use this fund to buy a real estate property, you can activate the investment fund in the form of fund loan, then to purchase the real estate; you first invest the AA to BBB Bond Fund, after redemption, cash in the funds through specific fund loan products, this is ok, and has loan net cost expenditure. 5 How will the dividend be paid (e.g. timing)? The fund pays dividends 6-monthly, i.e. within two months after 30th June and 31st December, the dividends will be direct credited to the customer's personal account, or you can choose to directly reinvest the dividends. 6 Would you be able to give us detailed information of members of the Atlas Fund Management Team? (e.g. using a timeline to explain their career trajectory etc) Will later ask the Fund to send you the introduction directly 7 Have people from Moelis visited Director Jin, had any in-depth conversation? Moelis is also one of the platforms we worth with more, each platform has its own feature products, Moelis' Real Estate Rental Fund is the product of choice for some of our customers, its income is more stable amongst non-fixed income, the biggest risk is that the investment period is relatively long, at least four years. 8 If we are to set up a company in Australia, would we be able to use the invested funds as collateral to borrow from a bank? If so, what would be loan interest rate be? What do we need to declare each month to prove that my company is running normally and efficiently? Similar to question 4, it is actually to cash in the funds for your own business or other investment purposes. It cannot be used to invest in any other funds as collateral, it can only be done through specific fund loans. The cost will be deducted as a 4-year lump sum, and the cost is annualised at 2.75%. 9 People from the Moelis Company's management team have stellar CVs, would their company be more capable of achieving high returns than Atlas? More Robust? (As the introductions of Atlas company's staff are too simple, judgment cannot be made? I would like to hear what Director Jin thinks.) Generally, the background of all investment bank managerial staff is not bad. This is not directly related to the rate of return of a product. Their products have entirely different focuses. In Australia, Moelis is like a branch set up in Australia by its US headquarters. Atlas is under MAP CAPITAL, it's a series of compliant funds for SIV 500. MAP CAPITAL in Australia is a company that focuses on local fund investment. Personally I think industries the local fund company involved in are deeper http://www.mapcapitaladvisors.com.au/ 10 Does the Investment Confirmation Day (as recognised by the Immigration Department) refer to the date when money has been paid into the Australian bank? Or is it the date when money has been paid to the fund company? Or is it the date when money has been paid to the project purchased? In other words, what does Investment Confirmation Day mean? The pre-approval letter of the Immigration Department stipulates that the investment is to be completed within 28 days, which refers to the time to complete the currency exchange and invest in the fund to obtain the investment report. Generally, we can help the customer apply for another 28-day extension. For example, if your pre-approval was issued on 21st May 2015, the first 28 days to 18th June, and the second 28 days to 16th July. The investment should be completed before16th July and the investment report submitted to the Immigration Department. 11 As exchange rate fluctuates, if the home loan limit from Industrial Bank (our lending bank) do not reach 5 million Australian Dollars on the investment day due on the exchange rate, would the Immigration Department agree to use funds for other purposes to make up the difference? We recommend borrowing a little more at the current exchange rate when applying for loans, leaving room for exchange rate fluctuations. If the investment does not reach 5 million Australian dollars on the day of investment, you can use additional funds to make up a little, there is not set amount, but it is still recommended to leave enough room when borrowing. 279 Many of the questions posed by Li Xu could only have arisen from a detailed consideration of the Atlas Capital Fund with the Moelis Fund, which document must by then have been in her possession. I find that she did read the Moelis Information Memorandum. 280 Li Xu was next questioned about her evidence-in-chief that Jeanetta Jin told her that at the conclusion of the four-year investment, she would be able to redeem her principal and "quite lucrative dividends". She gave the following evidence (T 206): MR PETERS: So are you saying that you were told you would get your principal back plus lucrative dividends back after four-years? THE INTERPRETER: Yes. MR PETERS: You agree with me, don't you, that you understand, as a woman of business, that there are always risks in earning income? THE INTERPRETER: Not necessarily. MR PETERS: I didn't say "not necessarily", I said – let me ask it differently. You didn't understand Ms Jin to be saying, "You are guaranteed to get your money back, no matter what happens in the economy, no matter what happens in world affairs." THE INTERPRETER: That's not correct. Ms Jin guaranteed, and regardless the condition, I will get the money back. MR PETERS: Regardless the condition of what? THE INTERPRETER: She just said she – she's – she guaranteed that the money will be back. MR PETERS: Regardless the condition of what; did she say those words? THE INTERPRETER: She said regardless what happens, the Atlas fund was like a bank. She said, "You can just treat Atlas fund as a bank, just like you would put money in a bank, and the banks are safe." 281 A series of questions were then put to Li Xu about the rates of return offered by the Atlas Capital funds. Li Xu confirmed her understanding that lower rates of return reflected less investment risk and that she was "not interested" in the bank deposit fund "because the return looked to be low" (T 207). She understood that Fund E, the property fund, offered a significant rate of return and with it "a higher degree of risk" (T 208). She was then challenged on her evidence that Jeanetta Jin had told her that the property fund was just like a bank deposit (T 208-209): MR PETERS: Atlas is obviously not like a bank in respect of the E property fund, was it? THE INTERPRETER: Now, I look at it, no, but Ms Jin said it was just like a bank. MR PETERS: But you knew, when you made your markings on court book page 463, that it was a very different proposition, the E fund, to a bank deposit fund, didn't you? THE INTERPRETER: Yes. MR PETERS: And I want to suggest to you that Ms Jin did not say that Atlas was like a bank. Do you agree? THE INTERPRETER: I don't agree. She did say. MR PETERS: And she didn't say that you get your principal and lucrative dividends, no matter what, after four-years, did she? THE INTERPRETER: She did say that after four-years I will get my money back as – as well as my – my principal back as well as lucrative dividends. MR PETERS: You knew, as an astute woman of business, that such a proposition was simply ridiculous. THE INTERPRETER: No. I don't think it was ridiculous. MR PETERS: Did you bother to check the Information Memorandum that Atlas referred to in the application that you signed? THE INTERPRETER: I never received the Information Memorandum. That's why I didn't read it. MR PETERS: You did see the words "Information Memorandum" on the application, did you not? THE INTERPRETER: I did see "IM". I did see that. MR PETERS: And you knew that meant Information Memorandum. THE INTERPRETER: In 2015, I didn't know, and also I asked Ms Jin, and Ms Jin said it was fund information and means "information". MR PETERS: Fund information and - - - THE INTERPRETER: It meant "information". MR PETERS: Yes. Ms Jin said that, did she? THE INTERPRETER: Yes. That's what Ms Jin said. MR PETERS: All right. Now, are you prepared to accept that your memory might be faulty to the effect that Ms Jin is unlikely to have said a highly returning property fund is like a bank deposit, and you are guaranteed of your principal and interest back? THE INTERPRETER: No. I've got good memory. 282 The next series of questions concerned the Atlas Capital application form in English that Li Xu signed to make her investments. She was questioned about the declarations and acknowledgements that appear above her signature. The third declaration provides that the applicant had read "the IM and agree to hereby be bound by the terms and conditions of the IM and the provisions of the SIV Fund's Trust Deed" (CB 429). Li Xu confirmed that at the time she noticed the letters "IM", but not the words "Information Memorandum", explaining that it was "quite simple" for her to recognise in English the capitalised letters, but not the full text (T 209-210). Li Xu was then reminded of her evidence-in-chief that she had asked Jeanetta Jin what the letters "IM" mean, and she was told it was a reference to the information of the fund. Li Xu insisted that all that she was told was that the letters were a reference to the information of the fund, and not to the Information Memorandum. When questioned more carefully on this topic, her evidence was (T 210-212): MR PETERS: All right. Can we agree that she was pointing out to the fact that there were terms that you were agreeing to? THE INTERPRETER: Yes. MR PETERS: And you knew by putting your signature on this document, you were agreeing to the terms in the IM. THE INTERPRETER: That's not right. MR PETERS: What did you think your signature meant? THE INTERPRETER: She signed because Ms Jin told me it was just like a bank deposit slip. It has fixed wordings and standard wordings and has been looked over by a foreign lawyer, and all the terms were fair and just. All the other investors have signed it, so I signed it. MR PETERS: All right. You knew you were investing in a property fund, not a bank deposit, didn't you? THE INTERPRETER: Yes. MR PETERS: And you knew that, by signing the document, you might be agreeing to material that was not in your favour. THE INTERPRETER: I didn't know. MR PETERS: You didn't know that there might be information in the document that's not in your favour, but you signed it. THE INTERPRETER: I don't know. MR PETERS: Okay. She said – did she tell you the contents of the document were fair? THE INTERPRETER: Yes, she did say that. MR PETERS: And when she said they were fair, she was saying they're the sort of terms that most of the suppliers of these products agree to. THE INTERPRETER: Suppliers? MR PETERS: Most of the people who offer these SIV products, they were fair by comparing them to other funds, non-Atlas funds. THE INTERPRETER: I don't know. MR PETERS: What did you think? How did you think they were fair without a comparison to something else? THE INTERPRETER: Because, when she said it was fair and I thought it was just like when I deposit money into a bank, then I need to sign on the bank slip. And, as she said, it was just like a bank slip that you sign when you deposit money into the bank, and that's what she – that's what she meant. I didn't think she meant anything else. MR PETERS: Did you think you were depositing money in a bank? THE INTERPRETER: Yes. MR PETERS: Right. For how long was the deposit to last? THE INTERPRETER: Four-years. MR PETERS: And what sort of return did you want from it? THE INTERPRETER: Eight to 15. MR PETERS: And what was the bank to do with that money? THE INTERPRETER: I don't know how the bank is going to do with this money. MR PETERS: You asked all these questions comparing Salter Brothers to Moelis. You must have had some idea what an investment in the E-Fund with Salter Brothers involved. THE INTERPRETER: Yes, I did know what they do with the E-Fund. MR PETERS: Well, why would say you didn't know what they do with it? THE INTERPRETER: Okay. Because, when you said what Atlas will do with the money, that was a little bit too broad a saying. So I didn't know exactly what you were talking about. MR PETERS: What did you think the E-Fund involved. Tell me the enterprise you were investing in, as you understood it. THE INTERPRETER: I didn't know in 2015. MR PETERS: Are you putting $1.5 million into a commercial transaction, and you did not know what the Salter Brothers planned to do with it? THE INTERPRETER: That's correct; I didn't know. When I was signing the paper, I didn't know. 283 The cross-examination then moved to the meeting with Kevin Fan on or about 12 June 2015 (from T 212). 284 Li Xu's husband, Dian Wang also gave evidence about the meeting with Jeanetta Jin as contained in his affidavit. Apart from confirming his attendance, his evidence was that he could not recall the specifics of the discussion save the fact that Atlas Capital and Moelis were each mentioned as offering compliant investments. His evidence was that Jeanetta Jin provided two "brochures" at the meeting, one for Atlas Capital and the other for Moelis. He also recalls Li Xu receiving an application form that was in English. 285 His cross-examination, understandably, did not traverse his lack of memory, but rather focused upon his experience in and knowledge of commercial matters (from T 270). He did, however, confirm that he and Li Xu undertook a comparison of the Atlas Capital and Moelis funds, they did not "agree entirely" as to which fund to invest in and that it was not his decision to split the investment between the Atlas Capital and Moelis funds (T 274). He said that he had no knowledge about the performance of either fund since migrating to Australia in August 2015. Further, he had no knowledge about property investments undertaken by Li Xu with Austar in Australia since September 2019. On his evidence, Li Xu "deals with the business side" of the affairs of the family (T 275). 286 Jeanetta Jin did not give evidence. F. 6 The Fan representations 287 The pleading is that Kevin Fan during a telephone conversation with Li Xu, said words to the effect that: In respect of Complying Investments offered by the Fund Trustee: (i) The investment would be returned to the investor at the end of four-years; and (ii) the Australian Government closely monitors the funds offered by the fund trustee and so there is no risk. 288 At the time Kevin Fan and Li Xu were each in the People's Republic of China. 289 In her viva voce evidence-in-chief, Li Xu said that Kevin Fan initiated the call and introduced himself as the client manager for the Australian Atlas Capital funds. When asked as to what was discussed during the conversation, Li Xu's evidence was (T 149): THE INTERPRETER: So we discussed if I will be able to get my money back; if I invested in Atlas Fund after four-years, will I get my money back; and what sort of situation for – with the dividends of Atlas Fund; and what sort of funds should I invest it in Atlas? MR PEARCE: And what did Mr Fan say about those topics? THE INTERPRETER: Mr Fan said Atlas fund is a compliant fund. It's the fund – will be able to get my money back after four-years, to get my principal investment back, and, also, it's a compliant fund that is approved and endorsed by the government. He also said Atlas fund was a fund that's specially designed for clients who want to get SIV188C visa. 290 The cross-examination on this conversation commenced with an open question: "What did Mr Fan tell you about the Atlas fund" and Li Xu's evidence then was (T 213): THE INTERPRETER: He said Atlas fund was a compliant fund; it was a fund with very good performance, and it was a safe fund, and it was a fund that will return my money after four-years. MR PETERS: Are you sure? THE INTERPRETER: Yes, I'm sure. MR PETERS: That's everything you remember? THE INTERPRETER: Sorry? MR PETERS: That's everything you remember? THE INTERPRETER: Not just that. I remember other things, as well. MR PETERS: Tell me what you remember. THE INTERPRETER: I remember that I asked what would be his suggestion for the fund that I should invest in. MR PETERS: All right. Hadn't you already decided that when you marked up the document we went to before, with 500,000 in Fund-A and 500,000 in Fund-B and one and a half million in Fund-E? THE INTERPRETER: This was decided after the conversation with Mr Fan. MR PETERS: All right, okay. Well, you've told his Honour everything you remember? THE INTERPRETER: Yes. 291 Kevin Fan's evidence-in-chief (from T 939) was that he recalled the telephone conversation with Li Xu. He said that it was a conversation to answer questions that Li Xu might have about the Atlas Capital funds. He said that he did not recall much about the detail of the conversation, only general questions about the SIV Program and whether the Atlas Capital funds were compliant. A series of direct and leading questions were then put to him as to the evidence given by Li Xu. Kevin Fan denied that he told Li Xu that she would get her money back after four-years, stating that such was contrary to his understanding of the investments at the time. He said that he did tell her that the Atlas Capital funds were compliant but did not say that they were approved and endorsed by the Australian Government, stating that he was not aware of any such approval or endorsement at the time. He said that he told her that the Atlas Capital SIV funds were specifically designed for applicants pursuant to the 188C Visa Program. He also stated that he told her that the Atlas Capital funds "had good performance", but denied saying that they were safe funds, because safe "is not the right word to describe any investments" (T 940). 292 Following the discussion, Kevin Fan sent an email to Li Xu at 4.51 pm on 12 June 2015 (CB 3213). He attached, in English, a Salter Brothers Group presentation document dated June 2015. He stated that it was a pleasure to speak with her and described the attachment as "a brief introduction to the entire Salter Brothers Group, sorry we do not have any material in Chinese as yet." He then provided biographical details for each of the directors of the Group. He concluded by stating that if Li Xu had any further questions, she should contact him. 293 Kevin Fan was significantly and vigorously challenged on his evidence in cross-examination (from T 988). He commenced by confirming that he did not have a clear recollection of the matters discussed with Li Xu. He confirmed that he was the author of the Atlas Capital fund summary document that Li Xu received from Jeanetta Jin (that is the document on which Li Xu made handwritten notes). He confirmed that he provided this document to Austar Suzhou in Mandarin. He confirmed that it was part of his job to explain prospective investments to applicants and to answer their questions but denied that it was also his function to "sell the investments" (T 991). He did not receive a commission. He only dealt with approximately 10 prospective investors in the first half of 2015. 294 Kevin Fan was then reminded of the evidence that he gave in chief, that he did not have much recollection of the matters discussed with Li Xu. It was then directly put to him that he was not being truthful about the specific evidence of Li Xu, where he denied that he said that Li Xu would get her money back after four-years, the funds were approved or endorsed by the Australian Government and that the funds were safe (T 995-997). The evidence was: MR PEARCE: All right. So there's a reference there to a conversation that you had with Ms Xu?---Yes. And what I'm putting to you is that you have a memory of that conversation but not the contents of it?---That's right. And when Mr Peters yesterday asked you some questions about that conversation, he said to you: As best you can recall, can you tell your Honour what happened in the telephone conversation? And your answer to him – I'm reading from transcript 939, line 30: It was just a conversation to answer questions of Ms Li Xu that she might have some questions about Atlas fund. Can you recall anything more about the conversation?---Nothing much. It's very general questions about SIV program, about Atlas funds, if they're compliant and that's all. Now, if things had stopped there, Mr Fan, I would be telling his Honour that you're telling the truth. You've given truthful answers, you have a general recollection of the phone call, but you don't remember the details of the phone call, okay? But the difficulty is, Mr Fan, is that my learned friend, Mr Peters, then put a number of propositions to you, a number of statements, that it is alleged by Ms Xu that you said, and then when they were put to you, you may still remember them. This suggests, Mr Xu, that you're not telling the truth about those statements. Do you have a response to that?---Is there – is there a question? I'm putting to you that you're not telling the truth about the specific statements that Mr Peters put to you because it's inconsistent with the evidence you gave that you have no recollection of the contents of the conversation?---I don't agree with that. All right. There were six specific statements that were put to you. Do you recall that? One was whether you said to Ms Xu that she would get her money back after four-years, and you said, you did not say that. Do you remember that?---Yes. Then it was put to you that you said that the funds were compliant, and you agreed that you did say that?---I do. All right. It was then put to you that you had said that the funds were approved and endorsed by the Australian Government, and you denied saying that?---That's correct. It was then put to you that you said the funds were specifically designed for SIV investors, and said that you did say that?---That's right. And it was put to you that you said the funds had a good performance, and you agreed that you did say that?---Yes. And it was put to you that you said the funds were safe, and you denied saying that?---That's right. All right. Now, of the six specific statements that you either agree you did say or you deny you said, three of them are affirmative. That is, you agree that you did you say certain statements. And these are that the funds are compliant, that the funds are specifically designed for SIV investors and the funds have a good performance, and you maintain your evidence that you did say those things to Ms Xu in that telephone conversation?---That's right. All right. Now, there's a connecting feature between all those three statements, Mr Xu – sorry, Mr Fan. Do you know what that connecting feature is?---You can tell me. Yes, I will. All of these statements are neutral or harmless to the defendant's case. You agree with that?---I agree with that. Yes. Let's then look at the negative statements, the denials, the things that you specifically denied that you did say. And there's three of them. The first is that Ms Xu would get her money back after four-years, the second is that the funds were approved and endorsed by the Australian Government, and the third is that the funds are safe. Now, can you work out the connecting feature of those three statements?---Yes, I can. Yes? They're all harmful to the defendant's case, aren't they?---They are all out of my knowledge back then. Well, I will come to that in a minute, but I want you to agree with this proposition first. It's interesting you raise that unprompted, but I will come to that. All of them are harmful to the defendant's case, are they not?---They are. Yes. So you remember the things, you remember saying the things that are neutral or harmless, and you deny saying the things that are harmful?---That's correct. It's very convenient, that sort of evidence, isn't it, Mr Fan?---Very convenient. Yes, you agree?---I agree. 295 He was then taken to the summary document which he authored which bears a reproduction of the Australian Coat of Arms (T 1000-1001). He confirmed that he placed the Coat of Arms on the document and acknowledged that he did not have permission from the Commonwealth of Australia to do so. He accepted that it is "a serious matter" to place a Coat of Arms on the document but denied that in doing so he intended to create the impression of approval and endorsement by the Australian Government. 296 Kevin Fan could not recall whether Li Xu asked him whether her investment would be so endorsed but denied that he had an interest in telling her that it would be. Towards the end of the cross-examination (T 1002), Kevin Fan accepted that it was in his interest to deny making statements to Li Xu that were adverse to Salter Brothers and that it was in the interests of Salter Brothers for him to maintain those denials. When informed by counsel that a submission would be put that those interests are "the surest guide to what you did and did not say back in 2015", he replied that he did not have anything in response to say to that (T 1003). 297 In re-examination, Kevin Fan stated that he did not attend Court with the intention of giving misleading evidence, that prior to his discussion with Li Xu he had read the Information Memorandum, stated that he would be subject to a "sanction" by his employer for misdescribing product information about the funds and emphasised that by training and experience he understood that he was required to "make sure all information delivered" is accurate (T 1003-1004). 298 As to his affixing of the Australian Coat of Arms on the summary document, he stated that it was prepared by him to provide to migration agents including Austar Suzhou, but there were other agents in other countries such as the USA, Canada, the European Union and Singapore. He affixed the Coat of Arms to distinguish this document from similar SIV Programs offered by other countries (T 1005). He said that he was familiar with the standard form letter issued by the Australian Government to successful applicants. He said that his role was to provide information about the structure of the complying investments, which information he would provide based on his knowledge of the content of relevant information memoranda and communication with management (T 1006). F. 7 Consideration and findings 299 I am not satisfied (in that I have not reached a state of actual persuasion having considered all the evidence) that Li Xu has established that each of the Han, Jin and Fan representations were made to the effect pleaded, or to similar effect. Of course, the Han representations are no longer pressed as a cause of action against the Salter Brothers parties, but as I have explained they are relevant to the background and the context of the Jin and Fan representations and to the overall plausibility of Li Xu's evidence. 300 First, Li Xu does not have a contemporaneous note, email or WeChat record which records the making or the substance of the Han, Jin or the Fan representations. To the extent that she does have a contemporaneous document, there is her email of 4 June 2015 to Jeanetta Jin and Dulcie Du which makes no reference to the representations she says were made to her by Lixia Han "in the first half of 2014" (or indeed at any other time in that year) or to the representation she says was made two days earlier by Jeanetta Jin on 2 June 2015. Mr Pearce is correct to submit that applying for the 188C visa and making the required complying investments was a matter of great moment and significance for Li Xu and her family. But it does not follow that I should accept her evidence as an account based on true recollection as distinct from a reconstruction of what Li Xu believes must have been said some eight or nine years prior to giving her evidence. 301 On such important matters central to Li Xu's decision-making to invest a total sum of $2.5 million in the Atlas Capital funds, and in circumstances where Li Xu denies comprehension of the terms of her investment as set out in the 3 March 2015 Information Memorandum as expressly referenced in her application form, it is implausible that Li Xu did not make a contemporaneous note recording the fact that her complying investments "could be", "would certainly be available to be" or "would be returned" at the conclusion of the four-year period. Similarly, it is implausible that Li Xu did not confirm any of those representations to each of the three persons who are said to have made them in an email to that effect or did not seek written confirmation from those individuals. 302 Li Xu received a university education, studying Japanese, from 1991 to 1999. Prior to her investment decision, she held various employment positions in the People's Republic of China in managerial roles. She was an experienced property developer, having acquired at least four properties in China with a total value of between $5 and $6 million between 2008 and 2009. She understood contracts, contractual terms and the importance of reading and comprehending contracts. She was not an unsophisticated individual about which it may be concluded that she placed blind trust in three oral representations that were made to her about the terms of very significant investments in a foreign country and based on contractual documents that were not provided to her in Mandarin. 303 The same observations apply to the second component of two representations: either that Australian law "required" the manager of a complying investment scheme to have sufficient cash available to redeem six months prior to maturity or that the Australian Government "closely monitors" the funds with the result that "there is no risk" to investors. 304 Second, Li Xu's evidence given in cross-examination to questions put by Mr Meng undermines the plausibility of her case about the Jin and Fan representations (and as I explain the later representations as well). Li Xu was not able to state when, or approximately when, the meeting at which the representations were made occurred. Her evidence about the timing of the meeting was confusing, vacillating between the northern Spring of 2014 to shortly before signing the agency agreement with Austar Suzhou on 3 September 2014. She claimed that there were, contrary to her evidence-in-chief, several in-person meetings and some telephone conversations commencing after she attended a seminar in July 2013 at which she first met Lixia Han. She claimed she also received some information about the subject matter by email following the seminar, prior to the in-person meetings and some telephone conversations with Lixia Han (T 242). Li Xu does not now recall how many conversations were had with Lixia Han. 305 On her evidence considerably more was discussed between her and Lixia Han at the meeting at which it is said the representations were made, than disclosed in her evidence-in-chief. She said that Lixia Han asked questions about the source of funds to be used for a complying investment and the need to obtain some valuations. There was discussion about numerous other requirements applicable to the application for the SIV visa with the objective of obtaining permanent residency in Australia. Li Xu was advised that satisfaction of the four-year investment requirement was not of itself sufficient to apply for permanent residency. There was a discussion about extending the temporary visa for further periods. 306 At some point in the meeting, Li Xu understood that it was only upon satisfaction of each requirement of the SIV Program, including maintenance of a complying investment for a period of four-years, that she would then be eligible to apply for permanent residency. Li Xu significantly qualified her earlier evidence, to the effect that she would get her money back after four-years, by accepting that this depended upon meeting each of the other visa qualification requirements. At that point in the cross-examination, Li Xu accepted that she had not been given an "absolute guarantee" that she would be able to have her investment returned as this depended on meeting several other requirements. She then explained that "a few scenarios" were discussed, numbering three in all. Li Xu did not satisfactorily answer why only one of those scenarios had been given in answer to an open question from her counsel in evidence-in-chief. She frankly accepted that her evidence had been incomplete. 307 Li Xu insisted Lixia Han said that she would "definitely" get her money back after four-years, but did so by reference to further assurances that she said were conveyed to her and which had not been earlier disclosed in her evidence. They were the engagement of foreign lawyers who had looked into the matter and had apparently confirmed that she would satisfy all of the requirements of the temporary visa and that the four-year time frame was a common goal. That evidence is implausible. Li Xu's case shifted in evidence from two oral representations at one meeting, without contextualising all the matters discussed, to an expanded discussion of four scenarios (some of which would not permit redemption of a complying investment after four-years) to a guarantee of permanent residency and refund of the investment. 308 That evidence does not make out a basis to find that the pleaded representations were made by Lixia Han for several reasons. 309 In the pleaded case there has been obvious cherry picking of some things that Li Xu contends were said by Lixia Han, without disclosure of all that was said in the context of a broader discussion that occurred somewhere between July 2013 and 3 September 2014 and in more than one meeting interspersed with telephone conversations. I have no confidence that what is pleaded as a single representation at one meeting and initially supported by the evidence-in-chief is not the product of a reconstructed blending of several conversations in person and by telephone. 310 Nor am I satisfied that the most recent version given in cross-examination is the true recollection of Li Xu. As a general finding, some parts of her evidence may be true as the product of genuine recollection. However, without the context of individual discussions, the topics discussed at each, the questions that were asked and the answers given (with or without qualifications), I am not satisfied that that her evidence was other than a stitched together reconstruction focused on her primary assertion of assurance that her investment could be redeemed after four years. 311 More particularly, I am not satisfied that the first part of the representation relied on, redemption at the option of Li Xu, is what was discussed. What we now have is a reconstructed account that three options were discussed each of which were subject to the other requirements of the SIV Program, that redemption was conditional on satisfaction of each visa requirement and that Li Xu was not told, and did not understand, that she had the option of redemption upon satisfaction only of the four-year time period. Further, on Li Xu's account, Lixia Han explained that if all temporary visa requirements had not been satisfied within the four-year period, to permit the making of an application for permanent residency, Li Xu had the opportunity to extend her temporary visa for two consecutive periods of two years. Added to this is the evidence that Lixia Han guaranteed permanent residency and return of the investment at conclusion of the four-year period. Not only is that implausible, but in my view, it is the product of reconstruction. In short, I reject her evidence. 312 The evidence does not support a finding that the second component of the representation is made out. The evidence of Li Xu is not that she was told it was a requirement of Australian law that the company that receives complying investment money must have sufficient cash to permit redemptions. Whilst Li Xu did say in chief she was informed that in Australia the government retains tight control of complying investments and must set aside a pool of funds six months before maturity, that is not the evidence later given in cross-examination (which was confusing) by reference to the engagement of foreign lawyers, who had investigated the requirements. I find this evidence to be reconstructed and I reject it. No mention of the engagement of foreign lawyers and assurances apparently provided by Lixia Han is to be found in the pleadings or the evidence-in-chief. 313 Third, Li Xu's evidence is not consistent with the summary Atlas Capital brochure (in Mandarin) that Jeanetta Jin provided to her and on which Li Xu made handwritten notes. I find that this document was carefully studied and considered by Li Xu (and likely also in conjunction with Dian Wang) and it was used to compare the Atlas Capital funds with the Moelis funds. It was comprehensively read. Li Xu accepted in cross-examination that Jeanetta Jin gave that document to her and her evidence is that there was only one meeting with Jeanetta Jin. I am satisfied that the document was given to Li Xu at the meeting on 2 June 2015. I have set out relevant portions of it above, which are not consistent with the making of inconsistent oral representations by Jeanetta Jin at that meeting. In particular: (a) The statement in the disclaimer that: Fund past performance is no guide to future returns. Sometimes the principal may not be recovered (CB 484); (b) Another statement in the disclaimer that the recipient: Should consult their own tax, accounting, legal and other professional advisers in connection with any proposed transaction; (c) The notes to the fund comparison table, on which Li Xu made notes, which in the context of redemption states: in the case of no liquidity, the real estate fund will not be redeemed in advance (CB 463); (d) The statements concerning the real estate fund that the redemption requirements were: invest for a minimum of four-years (CB 476); and (e) The introductory statement that: investors can choose the right fund to make investment according to their own investment return needs and investment risk appetite (CB 462), when read with the summary of each investment and the likely returns in the table that I have referenced. 314 If Jeanetta Jin had represented to Li Xu to the effect that an investment in the trust funds (that is to say any of the trust funds that were SIV compliant) would certainly be available to be redeemed at the end of four-years then it is implausible that Li Xu did not notice the discrepancy between that representation and the text of the document that she carefully studied. It is also implausible that she did not query the inconsistency with Jeanetta Jin. After all, Li Xu was then considering a very significant financial investment in a foreign country as a component of a life changing decision for herself and her family to migrate to Australia. 315 Mr Pearce submits that the 'no liquidity, no redemption in advance' reference in the Atlas Capital brochure should be understood as conveying no more than a restriction on redemption prior to expiry of the four-year minimum term, with the implication that after it there was no such restriction. I do not accept that submission. Mr Peters is correct to point out the implicit artificiality that if a lack of liquidity means that redemption within the four-year period is not open, it does not follow that it is open at four-years and one day, despite the liquidity position. 316 Fourth, relatedly to the last point, there is the email to Jeanetta Jin of 4 June 2015 which attached a detailed list of questions following consideration by Li Xu and Dian Wang of the Atlas Capital and Moelis funds (CB 487). Tellingly, there is no question about the alleged oral representation made two days earlier and no query about any inconsistency between it and the Atlas Capital brochure. Detailed questions were asked about net income, taxation, fund expenses, redemption of the AA and BBB Bond Funds to purchase real estate, the timing of dividend payments and the ability to use invested funds as collateral to support borrowings from an Australian bank. Notably, the redemption question was limited to the bond funds and not the real estate funds. The answer given to question seven disclosed that, for the Moelis real estate fund, "the biggest risk is that the investment period is relatively long, at least four-years" which, if it had been represented that there was certainty in the ability to redeem a real estate investment in the Atlas Capital Fund at the end of the four-year period, is a matter that I find Li Xu would most certainly have queried. She did not. 317 Fifth, I find that Li Xu well understood the risk/return ratio in June 2015, which is clear from many answers that she gave in cross-examination, despite at times her assertions that she was assured her money would be returned at the conclusion of four-years, which evidence I reject. She understood the different projected returns of the Atlas Capital funds were based on relative risk. Bank deposits offered an unattractively low rate of return compared to the higher projected returns of the property funds. Li Xu accepted that her notes on the Atlas Capital brochure reflected her careful comparison of the Atlas Capital and Moelis funds. One of the notes references an investment risk appetite, which Li Xu confirmed that she understood. Li Xu annotated the document, allocating $500,000 to each of the Atlas Capital Fund A and Fund B and $1.5 million to Fund E. Li Xu confirmed that she carefully studied the document before making that decision. She accepted that her reason for investing the largest sum in Fund E was that its target rate of return exceeded that of the other funds. She confirmed her understanding that there is a higher degree of risk which accompanies a higher rate of return (T 208). 318 This evidence is to be understood in the following context. Li Xu on 22 May 2015, received a detailed email from Dulcie Du which compared the relative risks of state government bonds, bank deposits, bank bonds and currency bonds, commercial real estate funds, residential real estate funds and equity funds. On 23 May 2015, Li Xu received further documentation from Dulcie Du comprising four documents in Mandarin that addressed in detail the analysis of the comparative risks of investment in four different types of complying funds (CB 419-422). On or about 2 June 2015, Li Xu received from Jeanetta Jin the Atlas Capital brochure in Mandarin replete with information about the risk factors for investment in property funds. Li Xu accepted in cross-examination that she studied the brochure, made notes upon it and then formulated her questions that she sent to Jeanetta Jin on 4 June 2015. She understood that "the usual risk" attends a projected higher rate of return, in that case between 8% and 15% for Fund E, into which Li Xu ultimately invested $1.5 million. Later in cross-examination, she denied her general knowledge that investment in a real estate property fund carried with it a liquidity risk, contending that the only risk was that her investment would be "locked in for four-years". She further denied her knowledge at the time that whether she would be able to redeem after that period was a function of market forces. I regard this evidence as selective and implausible considering the detailed consideration that Li Xu gave to the Atlas Capital brochure and her subsequent list of questions addressed to Jeanetta Jin. I reject this evidence. 319 I further find Li Xu's elaboration of this evidence-in-chief in cross-examination, that Jeanetta Jin informed her that at the end of the four-year period she would receive a return of her investment principal plus "quite lucrative dividends" as implausible in the context of the evidence that she gave in cross-examination that Jeanetta Jin gave a guarantee of return of her principal, no matter what happens in the economy or world affairs (T 206) : That's not correct. Ms Jin guaranteed, and regardless the condition I will get the money back. 320 To which she added: She said regardless what happens, the Atlas fund was like a bank. She said, "you can just treat Atlas fund as a bank, just like you would put money in a bank, and the banks are safe." 321 That is an extraordinary statement for Jeanetta Jin to have made given her careful and considered answers to the list of questions from Li Xu on 4 June 2015, the objective implausibility that these are the words that would have been spoken at the time and the fact that clearly Li Xu understood the difference between the relative risk of bank term deposits and other forms of investment as evidenced by her study of the Atlas Capital brochure. Further it is implausible that Jeanetta Jin would frame her advice in the form of an oral guarantee and equate the property fund investment to a bank deposit when each is inconsistent with the terms of that brochure. 322 I make these findings conscious that Jeanetta Jin did not give evidence and Mr Pearce submits that I should draw a Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 inference against the Salter Brothers parties, which was put on the basis that she is a witness in the "camp" of those defendants. Mr Pearce further objects to leave being granted to the Salter Brothers parties to reopen their case (in closing submissions) to rely on an affidavit made by Li Xu's solicitor in October 2023 which deposed as to the difficulty of locating Jeanetta Jin to serve her with the originating process and pleadings. In consequence, leave to discontinue against her was sought and granted on 9 October 2023. 323 I decline to draw the inference, and it is unnecessary to determine the application to reopen. As correctly submitted by Mr Peters, the inference does not arise unless the failure to call a witness is unexplained. Here, Li Xu pleads that Jeanetta Jin in making the representation was acting on behalf of SBAM and SBII, which those parties deny. Further, the Salter Brothers parties plead that the claim is apportionable within the meaning of s 12GP of the ASIC Act and s 1041L of the Corporations Act, that each defendant is a person whose acts or omissions caused the damage claimed and in consequence the Salter Brothers parties rely on a defence of proportionate liability. In those circumstances, that is a sufficient explanation for those parties not calling Jeanetta Jin as a witness. 324 Sixth, the evidence of Li Xu lacks the degree of precision necessary for me to be reasonably satisfied that the pleaded case is made out. Starting with the Han representations, for the detailed reasons given, and although they are no longer pressed as a cause of action against the Salter Brothers parties, I am not satisfied that Li Xu's account of the meeting is a reliable basis to conclude that the pleaded representations were made. This necessarily impacts the level of confidence that I have in accepting her account of the later conversations with Jeanetta Jin and Kevin Fan. 325 As to the Jin representations, the pleaded case is emphatic: Jeanetta Jin spoke words to the effect that there was a certainty that any invested funds would be available to be redeemed at the end of four-years. As I have set out, Li Xu's evidence-in-chief did not correspond with the pleaded certainty: that is to say, in answer to the question "after the time is up", in the context of "will I be able to get my money, get my principal, back?", Jeanetta Jin answered: "yes" adding that "not only will you get your investment amount, the principal, back; you will get quite lucrative dividends." If that was the extent of the evidence, it may have been open to find (consistently with the pleaded case) that Jeanetta Jin represented that return of the principal investment was certain at the end of the four-year period. 326 However, a little later in her evidence-in-chief Li Xu stated that Jeanetta Jin told her that the document was "just like a deposit slip when you deposit money in a bank", which answer was considerably pursued in cross-examination in combination with a direct challenge to her account as to what was said about the return of principal. Li Xu's evidence then transformed, not by unremarkable gradation, to a positive assurance: a guarantee that her money would be returned, no matter what happens in world affairs, unconditionally as equivalent to the safety of a bank deposit because "the banks are safe". That evidence considerably departs from the pleaded case. There is no doubt that there were other discussions between Li Xu and Jeanetta Jin during their meeting amounting to no more than context, or peripheral, to the central allegation of misleading conduct. However, this evidence is not of that character: it is the central misleading conduct that Li Xu ultimately framed in her evidence. It sits well beyond the parameters of the pleaded case that certain words were spoken "to the effect" of the pleaded contention and throws into considerable doubt whether representations were made by Jeanetta Jin to that effect. I reject this evidence as I am not satisfied that it is the product of genuine recollection rather than reconstruction. 327 Dealing next with the Fan representations, the first component contends that Kevin Fan spoke words to the effect that complying investments offered by SBAM would be returned to the investor at the end of four-years. Li Xu in her evidence-in-chief did say that Kevin Fan told her that the Atlas Capital Fund is compliant and that she "will be able" to redeem after four-years. In cross-examination when invited openly to state what was said, her evidence was he said that the Atlas Capital Fund was compliant, had very good performance "and it was a fund that will return my money after four-years". Viewed in isolation, her evidence at least supports a finding that this representation was made by Kevin Fan. However, as my reasoning demonstrates, there are many counterbalancing considerations in assessing the whole of Li Xu's evidence. One, that is particularly pertinent to this aspect of the case, is evidence-in-chief in Kevin Fan's affidavit of 10 May 2024, which was not excised and given viva voce nor challenged in cross-examination. The effect of this evidence is that in June 2015, he understood that the ability of an investor to redeem units in an Atlas Capital fund was subject to the liquidity of the fund at the time of the request, because he had read and was familiar with the Information Memorandum of March 2015. I accept that evidence and it follows that it is unlikely he would have made an oral statement directly contrary to his state of mind at the time on a question of significance concerning the terms on which investments were open to be made. 328 As to the second component of the Fan representation, Li Xu did not give evidence that words were spoken by Kevin Fan to the effect that the Australian Government closely monitors the funds offered by SBAM so that there is no risk in making a complying investment. The furthest her evidence-in-chief went was that Kevin Fan told her that "the Atlas Fund is a compliant fund". She did not give evidence that he said anything about government monitoring connected with investment risk. That representation is not made out. 329 Seventh, the evidence given by Li Xu about the Jin and Fan representations raises the question whether the objective meaning of what is alleged to have been said supports that the words were in fact spoken. I accept that this is usually a matter considered at the third step of the misleading conduct inquiry, but in the circumstances of this proceeding it is a matter that warrants attention in assessing whether I am satisfied that the evidence supports a finding of fact that each of the oral representations were made. 330 Let me explain why. Mr Pearce in his oral closing submissions eschewed any case that Li Xu's claim is that the representations were to the effect that the certainty of return of invested funds were representations that there would not be a loss of principal. He accepted that a return of principal was not contended to be certain, was subject to market fluctuations that affect the value of assets and, as he put it, the risk case advanced by the Salter Brothers parties (T 1537): "[D]oesn't mean no risk absolutely. It means practical certainty that in the ordinary course of human experience, you will get your money back. So it doesn't mean, for example, you will get your money back if there is a pandemic that paralyses the world economy. Nobody's saying that." 331 In further elaboration of the case, Mr Pearce accepted that "in simple terms, this is a lockout case" in that Li Xu was not able to redeem after four-years. In writing, Mr Pearce submits "so far as they were to the effect that there was no risk of an inability to redeem [they] must be seen as applying a concept of no practical risk (rather than literally no risk at all)". Reliance is placed on Mayfair Wealth Partners Pty Ltd v Australian Securities and Investments Commission [2022] FCAFC 170; (2022) 295 FCR 106, Jagot, O'Bryan and Cheeseman JJ. That case concerned written representations in brochures made available to the public at large concerning investments in promissory note schemes. The representations were summarised in the declarations made by the primary judge, reproduced at [5] in the decision of the Full Court. Relevantly, that the investment products "were comparable to, and of similar risk profile to, bank term deposits" when in fact the products exposed the investors to significantly higher risk. Further, at maturity the principal would be repaid, when in fact repayments might not be made due to an insufficiency of funds or a contractual right to elect to extend the repayment date. 332 In addressing an argument that the representations were not misleading or deceptive because no ordinary and reasonable consumer "would understand that the notion that an investment would be repaid in full involved a 100% guarantee of repayment" (at [121]) the Court reasoned at [122] that the ordinary and reasonable consumer to whom the representations were marketed: [W]ould not consciously turn their mind to the obvious proposition that nothing in life is certain (except death and taxes as Benjamin Franklin would have it). The ordinary or reasonable consumer to whom the marketing was directed must be taken to operate on the basis of the ordinary and reasonable human standard of certainty, which can mean only practical certainty, not absolute certainty. The proposition that the "principal investment would definitely be repaid in full at maturity", in the overall context of the primary judge's findings, means that, according to the ordinary and reasonable human standard of practical certainty, the principal would be repaid. 333 And further at [124]: We are not in the realm of scientific absolutes, but practical certainty. In this context, the No Risk of Default Representations could not mean that it was impossible for there to be any default in the payment of interest or repayment of principal in respect of any investment in the Mayfair products. That would be inconsistent with ordinary human experience of the degree of practical certainty which humans assume to apply in ordinary human affairs. The No Risk of Default Representations, properly construed, mean that the Mayfair products were specifically designed for investors seeking certainty and confidence in their investments and (relatedly), according to the ordinary and reasonable human standard of practical certainty, carried no risk of default. 334 Self-evidently that was a factual finding about whether the representations were misleading or deceptive in the context of that case. That said, what is in issue in this case is whether I am satisfied that the representations were made. In assessing the evidence of Li Xu about what was said, it is relevant to consider the inherent implausibility of oral representations having been made as to what will happen in the future, when the future is always uncertain. 335 The evidence of Li Xu is not that there was a statement to the effect that redemption may be permitted (which implies some uncertainty) in recovery of the entire amount of the principal sum invested, calculated according to the valuation mechanism applicable to her units at the end of the four-year period. Rather her evidence is that unequivocal assurances were made to her by Jeanetta Jin and Kevin Fan respectively that her "investment amount" and her "money" would be returned upon redemption. This evidence extends well beyond her lockout case in that there is a lack of precision as to what she was told in the context of her intended investments and whether distinction was drawn between any loss of principal after four-years and her ability to redeem her investment without restriction and in whatever sum was then calculated to be the value of her units. 336 Mr Pearce in closing submissions criticised the Salter Brothers parties' submissions as "based on the fallacy" that Li Xu contends that she was misled about the market risk of her investments. I accept that is how the case is put in submissions, but the difficulty is that it does not focus on the evidence given by Li Xu of unequivocal assurances that her principal would be returned at the conclusion of the four-year term (adding to that in the case of the Jin representation "plus quite lucrative dividends"). That is evidence that the investment would not be at risk: not a more confined "no lockout" case. 337 Eighth, Dian Wang was unable to corroborate Li Xu's evidence about her meeting with Jeanetta Jin. Despite his limited recollection of what was discussed, if Jeanetta Jin had made a representation of certainty, it is surely something he would have recalled. 338 Ninth, I do not accept the evidence of Li Xu about the extent that she read and comprehended the letter from the Department dated 21 May 2015. It will be recalled that her evidence was (following her initial ambiguous evidence that she read the letter, perhaps entirely) that she limited her reading to the first page and the first two lines on the second. That demonstrates her comprehension of English at the time enabled her to read the heading, the advice that her application had reached the stage of an invitation to select and make a complying investment and the detailed listing of her assets that would be used to make the investment. Li Xu's explanation that she could not or did not read further into this important correspondence because she could travel to Shanghai and "ask Austar for instructions" is implausible. The first full paragraph numbered (1) on the second page (which Li Xu said she did not read) states that it is the responsibility of Li Xu to obtain all necessary information from, amongst others, the fund manager about her complying investment. Li Xu said that she knew this was her responsibility at the time, responding: "Yes, it's written like that." She could only have known that if she had read further into the letter. 339 The last point was confirmed in re-examination, when Li Xu said she did not take the letter with her to Shanghai to discuss it with an Austar representative or to have it translated and that she did not receive an explanation, from anyone, about its content (T 254). How Li Xu knew that she was required to select a complying investment, complete the required forms, provide them to the responsible fund manager and provide evidence of having used the approved assets to the Australian Government, is unexplained on her evidence. Objectively, Li Xu must have acquired this knowledge by reading further into the letter or she gave false evidence that no person explained the content of the letter to her. 340 Moreover, her evidence about reading the letter was distinctly unsatisfactory. Li Xu initially accepted that she understood the terms and conditions that applied to her application, including the paragraph numbered (1) on the second page. But when questioned more specifically about her knowledge that the Commonwealth of Australia does not endorse complying investments, Li Xu claimed no knowledge of that statement in the letter. Her evidence then altered course: that she travelled to Shanghai under the instruction of Austar Suzhou (there is an obvious transcript error which refers to "introduction") and then said in a contradictory answer that concurrently she did not read the letter but then only read the "top bit but not the following parts", giving as her reason that she intended to travel to Shanghai. When confronted with the inconsistency in her answers, she said that she was "just giving a statement of fact": explaining further that she "saw" that the letter listed her properties and that "I can- I could go to Shanghai." There is no logical connection in this confusing evidence. Li Xu did say that she spoke with an Austar Suzhou representative about the next steps upon receiving the letter, limited to speaking with Dulcie Du in the last week of May 2015 to arrange to meet Jeanetta Jin in Shanghai on 2 June 2015. Why Li Xu arranged to speak with Jeanetta Jin was not stated by Li Xu, but logically it must have been about taking the steps necessary to progress her application for a visa by first selecting and making a complying investment. Those steps follow from the letter and Li Xu could only have known of the requirements at that time if she had read this section of the letter, well beyond the first two lines in the second page. 341 Li Xu attached the letter to her affidavit. She did not then state that it was not read or not entirely read by her. On such an important matter that omission is troubling when part of her representation case is that she was misled about Australian Government monitoring of funds offered by SBAM with the consequence that investments were not at risk. 342 Li Xu also evaded, more than once, simple questions about her reading of the letter and gave several unresponsive answers as revealed in the transcript extract. The transcript does not reveal the pauses and hesitation or the demeanour of Li Xu in answering questions about reading the letter. Of course, demeanour is not a satisfactory basis to reject evidence where a witness is unfamiliar with the formality of giving evidence and, in this case where English is not the person's first language, but it is a relevant matter to consider in my overall assessment of this aspect of her evidence. 343 Tenth, the Salter Brothers parties submit that adverse inferences should also be drawn from other documents. On 1 February 2022, Li Xu signed a very detailed letter, which was obviously prepared on her behalf by a lawyer, addressed to SBAM and SBII and which she confirmed that she read before attaching her signature. The letter is a little over six pages in length. On the first page there is this paragraph (CB 1417): I was led to believe, by Atlas Capital, that upon the expiry of the 4-year investment period, I would be able to redeem my investment. By 2019, distributions from the E Fund had diminished and in July 2019 I made it known to Atlas Capital that I wish to redeem my units in the E Fund as soon as the investment period had expired. 344 Li Xu did not state that she had been misled about her ability to redeem on the multiple occasions and by different individuals that now form the basis of her claim. Most of the letter is taken up with a complaint about management of the underlying investments of the funds, with 90 detailed questions to that effect. There is no reference to having been misled in oral conversations. Similarly, when Li Xu first commenced her proceeding in March 2022, the concise statement makes no mention of a claim for misleading and deceptive conduct by making the oral representations now relied on. In closing submissions, Mr Pearce made the valid point that it is not open to draw an adverse inference of recent invention because Li Xu did not waive her legal professional privilege as to what instructions were given to her lawyers at that time (she engaged new lawyers in November 2022), that sometimes lawyers fail to fully appreciate their instructions, or fail to ask appropriate questions, and soon after the engagement of new lawyers, the oral representation claim was formulated and prosecuted. 345 I accept the submissions of Mr Pearce, and I do not draw any adverse inference from the form in which the concise statement was drafted. For similar reasons, I do not draw any adverse inference from the fact that the oral representation claims were not prominently set out in the letter of 1 February 2022. 346 However, my acceptance of these submissions does not displace the conclusions that I have reached based on my assessment of the entirety of the evidence. That is, I am not satisfied that the Jin representation or the Fan representations are made out. F. 8 The Michael Gu, Hannah Zhu and Robert Salter representations 347 These representation claims are appropriately considered together as each relates to the decision made by Li Xu on 6 March 2017 not to redeem the whole of her investments and transfer her funds to Moelis, choosing instead to complete redemption and application forms to switch her investments in Fund A and Fund B to Fund E. It will be recalled that Li Xu and her family moved to Australia in August 2015 and established a principal place of residence in Melbourne. F 8.1 Michael Gu representations F 8.1.2 Pleaded case 348 Li Xu pleads that on 4 March 2016, she told Michael Gu that she wished to redeem the whole of her investments and transfer to Moelis, during a conversation in his office in Sydney. It is not said that any actionable representation was made by Michael Gu at that meeting. 349 At a further meeting with Michael Gu in his office in Sydney on 25 July 2016, Li Xu contends that Michael Gu recommended that she should transfer her investments in Fund A and Fund B to Fund E, rather than transfer all her investments to Moelis and in doing so said words to the effect that: (a) Her investment in Fund E would be available to redeem in cash at the end of four-years from the date of her original investments, being 9 July 2019; and (b) The money invested in Fund E was guaranteed by the Australian Government. F 8.1.3 Evidence 350 Li Xu's viva voce evidence as to these meetings varied from her pleaded case. At the first meeting, she said that they discussed her "desire to transfer from Fund A and B to Moelis" and (T 149): THE INTERPRETER: Mr Gu said there was no need to transfer the money from A and B to Moelis. You could, in fact, transfer from A and B to the Atlas K-Fund. MR PEARCE: Can you tell his Honour why you were thinking of transferring from Atlas to Moelis. THE INTERPRETER: Okay. There is a few reasons. First of all, I haven't received any dividends from my Fund B and, also, up until 1 May, I haven't received my first dividend from Atlas yet. And, also, the last reason being that I have already received the dividend from Moelis into my account. Because while I was in Shanghai, Ms Jin said, usually, it will be – usually, it will take two to three for the dividend to hit my account. 351 When asked to recall the second meeting, her evidence was (T 150): MR PEARCE: And what was discussed at that meeting? THE INTERPRETER: Discussed about transferring the fund from A and B to Moelis. MR PEARCE: Yes. And what did Michael Gu say about that? THE INTERPRETER: Okay. Michael Gu said there was no need to transfer from A and B to Moelis, "You should transfer from A and B to the Atlas Fund-E," and the Atlas Fund-E was a very good fund. He also said, in future, the Fund-E holdings will increase and – in value – and – also it was a fund that's guaranteed by the Australian Government and it can't be wrong. And also I will get my money back after four-years. MR PEARCE: After that meeting, what did you decide to do? THE INTERPRETER: At the meeting, I decided to transfer from A and B to E. 352 Li Xu was not cross-examined on this evidence. 353 There are some contemporaneous documents, including a WeChat conversation between Li Xu and Michael Gu between 4 March 2016 and 19 October 2016 (English translation from CB 583). The early part of the WeChat conversation, until 14 April 2016, concerns a complaint by Li Xu that she had not received the dividend payments for her investments, the reason being that the payments were transferred to an incorrect bank account number. Li Xu confirmed on 20 April 2016, that the payments had been received by her. The conversations do not record the discussion with Michael Gu on 4 March 2016. 354 On 13 April 2016, Li Xu received this email from Kevin Fan (errors in original) (CB 603): Ms Xu, how are you, We heard that you have decided to rearrange your current Atlas portfolio, to switch your Series A fund investments to Series K. To do so, we need your cooperation to complete two steps: 1) sign the attached Series A Redemption Application Form, and 2) sign the Series K Additional Investment Application Form after we confirm the actual amount of your redemption (we will send it to you after determining your redemption amount). After you signing the attachment, please send through a scanned copy of the document, we will process it as soon as possible. Thank you! 355 Two documents were attached: a redemption form for Fund A and an application to invest in Fund K. Li Xu noticed the absence of a redemption form for Fund B and in consequence had a telephone discussion with Michael Gu (CB 304-305). She queried why she had only been provided with a redemption form for Fund A. He responded to the effect that Fund A could be redeemed immediately and that Fund B had a maturity period of one year, such that it could not then be redeemed. Li Xu considered this explanation reasonable and, as the performance of Fund A and Fund E at that time were not materially different, Li Xu decided to proceed with the suggestion of Michael Gu and wait until June 2016 to switch her investments, which explains why she did not sign the redemption for Fund A in April 2016. 356 The WeChat conversations record that Li Xu arranged to meet again with Michael Gu on 25 July 2016 at his office in Sydney. The post meeting conversations do not record a discussion to the effect of the Gu representations (CB 592-600). 357 In an internal email of 25 July 2016 from Kevin Fan to Karen Bomford it is recorded (CB 2455): Pls see attached. Client Li Xu intends to redeem all her units in A and B, and invest the full redemption amount into E. We will ask her to update the form and fill in another Additional Investment Form. But before everything, she wants to know the current unit price of A, B and E, so that she can understand her redemption benefit and the unit price she will be subject to for E investment. Thanks. 358 The attachment can only be the redemption form signed by Li Xu dated 25 July 2016, the effect of which was to redeem each of her investments in Fund A and Fund B. There is a handwritten note which reads: "Request to E". On 4 August 2016, Li Xu sent a WeChat message to Michael Gu as follows (CB 593): There was a mistake made with the account number during the last dividend distribution, I asked to transfer A out, but have never received the financial statement that I talk to you about, that is to know what the proportion that was transferred out, I have not be contacted for half a year, this wasn't transferred out, now there are losses in this, I have lost a lot of money inside out. 359 Michael Gu replied that he would "go to the company tomorrow" and then provide Li Xu with an explanation (CB 593). 360 On 9 August 2016, Karen Bomford replied to Kevin Fan in the form of a question: "is this client going ahead with her switch?" (CB 2455). No reply of Kevin Fan is in evidence. What is known from subsequent events is that the switch of investments was not then effected, which matter Li Xu subsequently took up at her meetings with Hannah Zhu and Robert Salter in February and March 2017. F. 8.1.4 Consideration and findings 361 Despite not cross-examining Li Xu about the Michael Gu representations, and in the absence of any evidence from Michael Gu, Mr Peters submits that "the remarkable thinness" of Li Xu's evidence is insufficient for me to find as a fact that each of the representations were made. It is further submitted that Li Xu's evidence that the Australian Government guaranteed investments in Fund E is absurd and, in any event, directly contrary to the letter from the Australian Government to Li Xu of 21 May 2015. 362 To the contrary, Mr Pearce submits that Li Xu's unchallenged evidence is clear, that I should draw a Jones v Dunkel inference against any evidence that Michael Gu may have given to assist the Salter Brothers parties and there is nothing absurd about the guarantee representation, particularly in the context of what Kevin Fan had earlier said and the depiction of the Australian Coat of Arms on the investment brochure. 363 I accept that this is a case for drawing a Jones v Dunkel inference, and I draw it accordingly. Doing so does not however displace the burden of proof that Li Xu must discharge. It does not follow that I must accept the uncontested evidence of Li Xu. There are two general principles. They were identified by the Full Court in Ashby v Slipper (2014) 219 FCR 322 at [77] – [78], Mansfield, Siopis and Gilmour JJ: The second aspect, critical to this appeal, relates to the weight or cogency of the evidence: that is, as a general proposition, evidence, which is not inherently incredible and which is unchallenged, ought to be accepted: Precision Plastics Pty Limited v Demir [1975] HCA 27; (1975) 132 CLR 362 at 370-371 (per Gibbs J, Stephen J agreeing, Murphy J generally agreeing). The evidence may of course be rejected if it is contradicted by facts otherwise established by the evidence or the particular circumstances point to its rejection. As Samuels JA observed in Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 at 587-588, it may be "wrong, unreasonable or perverse to reject unchallenged evidence" and if an appellate court concludes that it were so, in the particular circumstances of a given case, it may overturn the decision of the primary judge on the basis of an error of fact, rather than an error of law. However, as his Honour observed at 588, there is no rule of law in this country that a Court must accept unchallenged evidence. 364 I accept that Li Xu met with Michael Gu at his office in Sydney on 4 March 2016. The evidence of Li Xu, viewed in the context of the limited contemporaneous documents, supports a finding that there was a discussion at that meeting about transferring from Fund A and Fund B to Fund K. The oral evidence of Li Xu is to that effect and is supported by the email from Kevin Fan to Li Xu of 13 April 2016. I am further satisfied that Li Xu and Michael Gu at least discussed a desire on the part of Li Xu to transfer her investments in Fund A and Fund B. That is consistent with the redemption form that was attached to the email from Kevin Fan of 13 April 2016. However, that finding does not extend to, and the evidence of Li Xu is insufficient, to support a finding consistent with the pleading that Li Xu advised Michael Gu that she wished to redeem all of her investments in the Atlas Capital funds and transfer to Moelis. 365 In any event it should not be overlooked that Li Xu does not plead an actionable representation arising from the meeting of 4 March 2016. Despite that, Li Xu again embellished her evidence to elide with her case theory. Her pleaded case is that the Gu representation was made during the 25 July 2016 meeting. It is not said that it was made during the 4 March 2016 meeting. But when Li Xu gave her viva voce evidence-in-chief, she claimed he told her in March there was no need to transfer from Fund A and Fund B to Moelis and instead she should transfer all investments to Fund K (note not Fund E) with Atlas Capital. 366 Turning to the meeting with Michael Gu on 25 July 2016, I am satisfied that there was a discussion about Li Xu transferring her investments in Fund A and Fund B to the Atlas Capital Fund E. I make that finding because it is consistent with the email of 25 July 2016 from Kevin Fan to Karen Bomford. 367 What is more difficult is whether Li Xu told Michael Gu that she wished to transfer those investments to Moelis and in response he advised that they should be transferred to the Atlas Capital Fund E because it "was a very good fund", that in the future the holdings will increase in value, that Fund E is guaranteed by the Australian Government so that her investments "can't be wrong" and, in addition, that Li Xu would receive her money back after four-years. I am not actually persuaded that this is what was said by Michael Gu nor as to the context of the alleged conversation for several reasons. 368 Li Xu did not in her contemporaneous WeChat messages record the advice claimed to have been given to her by Michael Gu. On 4 August 2016, Li Xu complained in the WeChat conversation that half a year earlier she had requested to transfer out of Fund A, which had not been actioned and that she had suffered a loss in consequence. It will be recalled that Fund A was low yielding in comparison with the property funds. Li Xu was well aware of that fact by reason of her careful study of the document provided to her in June 2015 and her subsequent list of questions to Jeanetta Jin of 4 June 2015. Had Michael Gu dissuaded her on 25 July 2016 from transferring her investments in Fund A and Fund B to Moelis, and instead to transfer those investments to the Atlas Capital Fund E, one would expect some reference to that as part of the complaint that half a year earlier Atlas Capital failed to action her request to transfer out of Fund A and in the context that Atlas Capital should be held liable for this mistake. It is telling that there is not. 369 It is not logical that Michael Gu would have told Li Xu at a meeting on 25 July 2016 that she would receive a return of her investments after four-years, when at that point in time there were three years left to run in accordance with the minimum term for a complying investment. In any event, Li Xu's oral evidence is not consistent with the pleading that Michael Gu said words to the effect that an investment in Fund E would be available to be redeemed in cash at the end of four-years from the date of the original investment. Li Xu's evidence was that she was told that she will receive her money after four years. 370 In her oral evidence Li Xu elaborated upon what was said at the meeting, and which is not the subject of the pleaded case: that Fund E was a very good fund and that its holdings will increase in value. Logically, if that had been said, it would have formed part of her pleaded case. This is an integral component of the representation, not some peripheral matter. 371 This aspect of her evidence is also to be considered with my analysis that Li Xu stepped considerably outside of her pleaded case and evidence-in-chief concerning the Han representations. My adverse findings on that matter reflect overall in my assessment of Li Xu's credibility as a witness as a person who is not to be relied on to give evidence from actual recollection. 372 Then there is the evidence about an Australian Government guarantee and that in consequence the investment "can't be wrong". That evidence is directly contrary to the letter from the Department of 21 May 2015, and my findings that Li Xu read this correspondence and must have understood the clear statement that the Australian Government did not provide any guarantee or assurance to that effect. It is implausible that Michael Gu would say such an absurd thing. He was a director of SBII at the time which was the Investment Manager. I do not accept that, in that capacity, he would state the Australian Government guaranteed Fund E, a privately run unregistered managed investment scheme. 373 Her evidence must also be considered with my earlier findings that it is implausible that in 2014 and 2015, Li Xu was told by Lixia Han and Jeanetta Jin that there was an absolute guarantee, or a guarantee regardless of the conditions, that her investments in Atlas Capital would be returned after four-years. I reject that three people in separate conversations spread over a period of up to two years, would make the same or substantially the same representations to Li Xu. 374 Viewed as a whole, Li Xu's evidence about the Michael Gu representation is inherently implausible and is inconsistent with contemporaneous documents and what Li Xu knew from the Department's letter of 21 May 2015. I conclude that this evidence is a reconstruction and I reject her account of the conversations. F. 8.2 Hannah Zhu and Robert Salter representations F. 8.2.1 The issues 375 There are two meetings in issue, which SBAM accepts took place. What was said during each is in dispute. The meetings occurred on 21 February and 6 March 2017 at the offices at SBAM in Melbourne at which Robert Salter and Hannah Zhu were present. At each, Li Xu contends she said she wished to redeem the whole of her investments and transfer to Moelis and at either or both of those meetings two representations were made. First, Robert Salter recommended to Li Xu that she transfer her investments in Fund A and Fund B to Fund E rather than effect a transfer to Moelis and said to her words to the effect that she would receive her money back in 2019. This is referred to as the Salter representation. 376 Second, separately Hannah Zhu, at either or both of the meetings, recommended to Li Xu that she should transfer her investments in Fund A and Fund B to Fund E, rather than effect a transfer to Moelis and said words to the effect that she was guaranteed to receive her money back at the conclusion of a further two years (in 2019) and that the complying investments offered by the Trustee were designed so that investors received their money back after four-years. This is referred to as the Zhu representation. 377 In reliance on these two representations (together with the Han, Jin and Gu representations), Li Xu on or about 10 March 2017, entered into an agreement with SBAM to redeem her investments in Fund A and Fund B and invest in Fund E. 378 SBAM denies that either representation was made and pleads positively that at the meeting on 21 February 2017, Li Xu stated that she understood that she had applied to switch her investments in Fund A and Fund B to Fund E in July 2016 and wanted to know why that had not occurred. On 6 March 2017, Li Xu attended for the purpose of signing a redemption request form and an additional application form to give effect to her request by investing a further sum of $1 million in Fund E. In so doing, she made certain declarations and statements as contained on the application form, written in English. At one of the meetings, a copy of the 1 February 2016 Atlas Capital Significant Investor Information Memorandum was provided to her, the receipt of which was acknowledged when Li Xu signed the application form. Further, on or about 8 March 2017, Li Xu accepted from SBAM the sum of $5913.11 as contribution for the distributions she would have received had she transferred her investments in July 2016, net of the distributions that she received from her investments in Fund A. F. 8.2.2 The evidence 379 Li Xu in her viva voce evidence-in-chief stated that at her second meeting with Michael Gu on 25 July 2016, she decided to transfer her investments in Fund A and Fund B to Fund E. By February 2017, she had not received confirmation of this alteration. On 9 February 2017, Hannah Zhu sent her an email, introducing herself as the client relationship manager of Atlas Capital and in so doing wished her and her family a happy Chinese New Year. Hannah Zhu invited Li Xu, if she had queries about her investments, to make contact. There were several telephone discussions between Li Xu and Hannah Zhu either on or shortly after 10 February 2017, during which an arrangement was made to attend in person at the office of Atlas Capital in Melbourne. 380 Without distinguishing between the first and second meeting, Li Xu's evidence was (T 150-151): MR PEARCE: And what was discussed at these meetings? THE INTERPRETER: At the time we discussed my desire for transferring from A and B to Moelis, because – therefore I asked Hannah Zhu that if my fund still in A and B, if they were in fact still there, then I would like to transfer to Moelis. Because after my conversation with Michael Gu, I haven't – I was yet to receive any confirmation that my money has been transferred from A and B to Moelis. MR PEARCE: And what did Hannah Zhu and Robert Salter tell you about that? THE INTERPRETER: So Hannah Zhu said, let me go have a look. So she went to the back office and checked, and then she came back and said to me A and B – my money was still, in fact, in A and B. Then I said, look, in that case, I would like to transfer it to Moelis. But after that, they said, no, you should transfer it to Fund E. MR PEARCE: Did they say anything about Fund E? THE INTERPRETER: They said E-Fund was a very good fund with great performance. In future, will increase – E-Fund will increase in value in its holdings. And also, after four-years, I will be able to get my money back. Then I said I would still like to transfer my funds to Moelis, because the Moelis dividends are much better. But then they said because when you were in Sydney and had a meeting with Michael Gu, you have already confirmed that you want to switch to E, therefore you need to stay with E, and we will give you compensation. MR PEARCE: And what did you decide to do? THE INTERPRETER: Then I decide in the end that I will transfer from A and B to the Atlas E-Fund and stay with Atlas. MR PEARCE: Now, in these two meetings in February and March 2017, what language were you speaking? THE INTERPRETER: I was speaking Chinese. MR PEARCE: What language was Mr Robert Salter speaking? THE INTERPRETER: English. MR PEARCE: And how did you communicate with Mr Salter in that - - - THE INTERPRETER: It was done through Hannah Zhu, who was the interpreter. MR PEARCE: When you communicated directly with Hannah Zhu, what language did you speak? THE INTERPRETER: I spoke Chinese. 381 There are relevant contemporaneous documents, commencing with WeChat messages at 6:37 pm on 21 February 2017, which relevantly include (CB 2349): Zi Jin (Xin Er) 6:37 pm Just to confirm, the information you gave me today is the report for 2016.7.1-12.31? Hannah Zhu 6:58 pm No, it's not. Hannah Zhu 6:58 pm The report is not ready yet, I will email you as soon as it comes out in the next few days. Hannah Zhu 6:59 pm Today's information focuses on what SB&G does. Zi Jin (Xin Er) 7:13 pm Ok, my A and B should have been converted to E in July last year, please confirm this for me tomorrow. 382 Next follows a discussion about whether Li Xu had supplied the correct details for her bank account, the historic non-receipt of dividends in a timely manner and whether Li Xu was an Australian resident for taxation purposes. After that confirmation, on 23 February 2017, the following WeChat messages were exchanged: Zi Jin (Xin Er) 11:04 am Haina, can you also confirm whether the AB to E conversion was done last July? I signed it in Sydney. Hannah Zhu 1:00 pm Yes, this is also being followed up and confirmed, once everything is confirmed, I will get back to you with the results. Don't worry.[Smile] ----- 2017-3-2 ----Hannah Zhu Zhu 9:36 am Good morning Lili! Are you free for a call now? Or I can call you later when you are free? [Smile] Zi Jin (Xin Er) 9:44 am Haina, you can now call - Zi Jin (Xin Er) 9:12 pm Haina, I was a bit impatient today, sorry- Zi Jin (Xin Er) 9:18 pm Thank you! If I don't make your company understand before the dividend payment that AB has been converted to E and I am already a tax resident, it will be even more annoying to go through the hassle after the dividend payment. Anyway, we should cut through all this as quickly as possible, I'll come and sign it on Monday. It's much easier to have someone like you to be in charge of it. Thank you! Hannah Zhu 10:08 pm Oh Lili oh Lili, but you're too kind, I am the one who feels sorry. We both treat each other as friends, so we're thinking of each other and putting ourselves in the other's shoes, we can talk about this in person. I appreciate the trust you have placed in me, and I will do my best to take care of your issues. It was so touching to see your WeChat message. [Joyful] Thank you. [Rose] 383 On 1 March 2017, Kevin Fan emailed Li Xu "in response to your request" and provided information about the net value of Fund A, Fund B and Fund E when "you requested the switch in July 2016" (CB 609). 384 On 14 March 2017, the WeChat exchanges included (CB 2354): Zi Jin (Xin Er) 5:43 pm Haina, got you. I received two payments, one: 27221.76; one: 10218.47 Thank you for your help so I can get my dividends sooner. Hannah Zhu 5:52 pm You're welcome, it's my duty [Joyful] The total number of dividends is correct. The difference is that the adjusted tax return has been split up for you, so you can do the maths and the numbers should be correct. Zi Jin (Xin Er) 6:01 pm The total amount is right, it doesn't matter, but this performance is still a long way from other companies, whether it's dividends or principal, it's not your fault, you've done a good job- Hannah Zhu 6:22 pm Thank you, Lili, my commitment to you will never change [Tongue] ----- 2017-3-22 ----Hannah Zhu Zhu 4:17 pm Hello Lili! Did you receive the correct investment certificate afterwards? Hannah Zhu 4:19 pm I've just emailed it to you, so if you've received it before, don't worry about it. If not, the attached certificate can be proof. [Smile] Zi Jin (Xin Er) 5:04 pm Haina, email received. That means when I converted in March, I lost over $4,000 in principal, is that right? Zi Jin (Xin Er) 5:05 pm Can you tell me the unit price of the two products per share at the time of the March conversion? 385 There is also internal Salter Brothers correspondence. The context as stated by Robert Salter is that he was concerned to understand why the switch of investments had not occurred earlier, that is in April 2016. On 22 February 2017, Tim Lamb emailed Karen Bomford and queried whether Li Xu had switched her investments from Fund A to Fund K on 15 April 2016, because he could not locate an executed application form to that effect. Karen Bomford replied a few hours later stating that she had no record that "the client gave us the go-ahead to switch", and despite her follow-up emails with Kevin Fan, she did not receive any confirmation to implement the change. In the email series, there is one from Robert Salter to the group where in part he said (CB 2457): She came in yesterday in Melbourne office – I saw her with Hannah. She was a little vague about the switch – she said she thought she'd done it but wasn't sure. Email trail suggests we had it in process but looks like care but was still discussing w client. Can you/Kev remember if she executed docs? 386 That question was answered by Michael Gu as follows (CB 2457): I remembered speaking to the client and she insisted to get it changed last year and I thought it was done. 387 And by Kevin Fan (CB 2456-2457): Remember signing all the switch… but the unit price the client understood then was different from what the unit price really was… so ask clients to confirm… then no more feedbacks. 388 Before turning to the cross-examination, there is other relevant evidence that should be mentioned. Li Xu signed a redemption form for Fund A and Fund B on 6 March 2017. It contains a handwritten note: "switch to Fund E". Hannah Zhu gave evidence that she "helped" Li Xu to complete this form. The evidence does not reveal who made that notation. Li Xu also signed an application to invest $1 million in Fund E on 6 March 2017. 389 On 23 October 2017, Li Xu in a WeChat message with Hannah Zhu expressed appreciation that her capital investment had increased to $3,082,198 and that her profit amounted to $617,624 (CB 3195). 390 On 29 March 2018, Li Xu determined to invest a further $50,000 in Fund E. Her evidence is to the effect that she had become friends with Hannah Zhu and did so to assist her in her employment. She transferred the funds on 5 April 2018. 391 Commencing in September 2019 Li Xu made significant investments in funds managed by Austar, comprising $200,000 in the Wentworth Falls Loan Trust and $150,000 in the North Kellyville Loan Trust each in September 2019, $300,000, in the Tallawong Road Loan Trust and $150,000 in the Orchard Crescent Trust each in March 2020, and $200,000 in the Boyd Street Trust in July 2020. As at 30 November 2023, Li Xu held in credit in an account with the Bank of China in excess of $1 million. She accepted in evidence that between 2019 and 2023 she had significant investments or money at call in bank accounts which could be utilised for her day-to-day needs. See generally T 177-178 and CB 21028-21029, 19513, and 19560. 392 On 5 April 2020, Li Xu emailed Hannah Zhu and relevantly stated (CB 1342): I want to sign with your company to redeem all shares of my investment in SIV E. Could I please sign tomorrow (Monday, 6 April)? As you know, my investment period concluded last July, and I talked to you about my redemption request, as I needed to buy a house so that my child could go to school. After listening to your persuasion to wait a little longer, there are overseas institutions coming in, December is to go public, et cetera, and considering the good personal relationship with you, plus liking and appreciating your personal charisma, ability and kindness, also to support your work as a friend, I accepted your suggestion. Now that our child is attending school in Sydney and boarding in a suburb that's far away from school. I see her and squeeze in with the host family, it's very inconvenient. We desperately need to purchase a house and have no choice but to ask for the redemption of all my shares of my investment in SIV E and to sign the redemption form. I think there may be people waiting in line for redemption, but my investment as long concluded and out of goodwill I have supported you and your company for another 7 or 8 months, so I hope for the sake of my long-term support, you will be able to process my request as soon as possible. 393 In April 2020, Li Xu received a redemption form for Fund E. She signed it on or about 16 April 2020. It was not immediately processed due to a requirement that Li Xu obtain a certified copy of her passport. On 15 December 2021 she emailed Leo Zhang and Hannah Zhu, attached a signed redemption form and inquired whether a certified copy of her passport was still required. It was. On 18 December 2021, Li Xu provided that document. In that email, she stated, amongst other things (CB 1400): Time flies, another year and a half has passed since the application for redemption in April 2020, while waiting for your company to make contact, my passport expired and renewed, as attached. 394 Li Xu received a response on 23 December 2021 (CB 1401). Amongst other things she was advised: Please be advised that all pending, complying redemption requests are treated with equal priority regardless of the date of submission. For the avoidance of misunderstanding, for example, a request made in April 2020 has the same priority as one made in December 2021. 395 On 21 January 2022, Li Xu again emailed Leo Zhang and Hannah Zhu questioning when the funds would be transferred to her bank account and in doing so stated: "I urgently need money and have no money on hand." She also requested, "[c]ould I trouble your company" to send a copy of the "redemption policy" which she required in order to determine whether a certified copy of her passport was actually required (CB 1413): 396 Having not received a satisfactory response, on 1 February 2022, Li Xu signed a detailed letter addressed to Salter Brothers containing 90 questions (CB 1417). There is no reference to having been orally misled about the terms of her investments. There is no reference to any assurance having been provided to her that the investment forms were just like bank deposit slips. Question 31 asks: What is the Trustees understanding of the phrase "investment mandate" as used in the Information Memorandum issued by Atlas Capital group on 1 February 2016 (and subsequent Information Memorandum issued in March 2019 and February 2020). 397 On the face of it, that question assumes earlier knowledge of the Information Memoranda. F. 8.2.3 Cross-examination of Li Xu 398 The questions relevantly commenced with acceptance by Li Xu that, considering the substantial investments made by her in Austar funds and her cash at bank, she could, between 2019 and 2023, call on those resources to meet her day-to-day financial needs. That evidence was then contrasted with her statement in her email of 21 January 2022, that she urgently needed money and had none on hand (T 178-179). 399 Li Xu denied that Hannah Zhu provided her with an Information Memorandum at either meeting, despite a pleading to the effect that she had in her Concise Statement dated 15 March 2022 (T 216). As to the meetings in February and March 2017, it was put that she did not recall what was said at each meeting and by whom, which she denied (T 221), with the qualification: "the two meetings were very close together and talk about the same topic, yes". Li Xu denied that her evidence about the statements made by Robert Salter and Hannah Zhu at either of those meetings was incorrect (T 221). She also denied that she had no recollection of who said what. She did however accept that at the first meeting there was a discussion between her and Hannah Zhu about her daughter's schooling, and at a later point Robert Salter joined the meeting (T 221). She accepted that she "negotiated with Mr Salter about the position of the switch you had discussed with Michael Gu", but denied they discussed a transfer of the investments in Fund A and Fund B into Fund E. (T 221-222). On her evidence, they discussed a transfer of all investments to Moelis. 400 Li Xu accepted that she was aware by the end of the first meeting that her investments had not been earlier transferred into Fund E (T 222). She denied authoring emails before the first meeting concerning a switch from Fund A and Fund B to Fund E (T 222). No email to that effect is in evidence. However, there is the WeChat message from Li Xu to Michael Gu of 4 August 2017 that she had "asked to transfer A out", had not received a financial statement in confirmation and had not been contacted as to that "for half a year" which places the request at about the time of the meeting with Michael Gu in March 2017 (CB 594). 401 Li Xu denied that at the second meeting she was concerned to know as to why her investments were still held in Fund A and Fund B, had not been switched to Fund E and in consequence wanted "some compensation" (T 222-224). She accepted however that she received a payment of compensation in consequence of the second meeting but could not recall how that proposal was presented to her. 402 Li Xu denied that Robert Salter and Hannah Zhu did not recommend that she transfer her units to Fund E, which was entirely her decision. She also denied that she had not asked to withdraw all of her investments in the Atlas Capital funds (T 223-224). 403 The questions then turned to the additional investment of $50,000 that Li Xu made in March 2018 into Fund E. She accepted that at that time she was satisfied with the way in which her investments had been improving in value. She accepted that there was "quite a deal of capital appreciation" in Fund E. She accepted that on 5 September 2019 in a WeChat conversation with Hannah Zhu she suggested recommending products offered by Atlas Capital to her friends and be paid a commission for doing so (T 224). 404 It was not put to Li Xu in cross-examination that her email of 5 April 2020 contained untruthful statements. F. 8.2.4 Evidence of Robert Salter F. 8.2.4.1 Evidence-in-chief 405 Robert Salter gave the following evidence of the meeting on 21 February 2017 (T 1353-1354): MR PETERS: Now, Mr Salter, in early 2017, do you recall meeting with Ms Li Xu, X-u?---I do, yes. All right. Can you tell his Honour how that meeting – or can you tell his Honour how you first came to meet with Ms Li Xu at that time?---I was asked by Hannah Zhu, Hannah Zhu Xu, to come into a meeting with a client, and – because the client had an issue she wanted to bring up with – with me. All right. And what was the issue, as you understood it?---That she had asked to switch some investments, so she had a number of investments with us into three different Funds, and she had asked to switch them last year, and – and she thought the switch had happened, but nothing had been done. Okay. And can you recall what the switch was to be from and to that you asked for?---Yes. There was a share Fund A and a B Fund, which was a – also more an equity-based fund, into a E Fund, which was our property – one of our property funds. All right. Okay. All right. Now, how did you come first to speak with Mr Li Xu in these meetings?---So I came into the meeting, was introduced to Lily. By whom?---By Hannah. And by "Lily", you mean - - -?---Sorry. Li Xu, yes. Yes, thank you. And keep going. Tell us, as best you recollect, what happened?---Yes. And Lily asked if we could speak English in the meeting because she was practising her English, and she apologised that her English wasn't great, and I said, "No, it's fine," and I said, "I'm happy to speak English and help you practise," and then – so we had some – some discourse in English, and then we – I – I, basically, asked what – what her issue was, and then she went and told me about the – the – the switch not happening, and most of that was probably in Mandarin. All right. Are you able to give his Honour any indication of the type discourse in English and the type of discourse in Mandarin?---It was probably more pleasantries in – in English, and probably, the – the guts of the problem, if you like, in – or the issue in Mandarin. All right. And did she discuss the problem with you, the guts of the problem?---She – well, it was in Mandarin, so Hannah Zhu translated. All right. What did Hannah translate to you?---She said that she had – had switched or had authorised a switch from her – the A and B Funds into E Fund last year and that it doesn't seem to have happened, and, you know, she would like that effected, essentially. All right. And do you recall anything else being said at the meeting?---Not really. It was basically just highlighting the issue, and I – I, sort of, said, "I will get back to you. I will look into it, and I will get back to you." 406 Robert Salter then explained the inquiries that he put in place as evidenced by the internal emails that I have set out. He satisfied himself that Li Xu had earlier requested the switch of her investments, which had not been actioned due to an error by Salter Brothers. He was then questioned about the second meeting and his evidence was (T 1355-1356): Okay. Now, well, what happened at the second meeting?---The second meeting, we proposed to Lily that we would, effectively, honour the switch that she had wanted from last year. It resulted in a net benefit to her to do so. And we said that we would effectively make good that difference for her. And how did you make good the difference?---So, we gave her additional E Fund units as if – with the prevailing price at the time the previous year, as if she had made the switch at that time. Atlas, the manager, paid the bill for that. And then, if she had been switched in 2016, there was a difference of dividend – $5,000 – so we paid her that in cash as well. Atlas also paid that. And can you recall why Atlas did that?---We – it was goodwill, basically. We accepted the client had wanted to do what she wanted to do, and so we said, "We'll put you in the position that had you – had we executed your wishes at that time, that's where you would have been." All right. And did she respond to that offer?---Yes, she was very happy. She checked the prices first – like, previously – to make sure there was a benefit and then – I imagine – and then – but yes, at the meeting she – it was basically the paperwork and getting it done. All right. Okay. Now I want to ask you what you say to some things that have been said in this proceeding to date?---Yes. At transcript page 150 and following, Ms Li Xu said, at either of the meetings, she said that she wanted to transfer investments to Moelis. Do you recall her saying that - - - No. Did she say it?---No. Okay. She also says that you said, "No, you should transfer it to Fund E." Did you say that?---No. Okay. Did you hear anyone else say it?---No. She said that either you or Ms Zhu said E Fund was a very good fund with great performance. Did you discuss that?---I don't recall discussing the performance of E Fund at that meeting. All right. She says that either of you or Hannah Zhu said in future it will increase in value in its holdings, and also "after four-years I'll be able to get my money back". Do you recall that being discussed?---No. Was it discussed?---No. All right. And then she said, at some stage in these meetings – she says, "I said I would still like to transfer my funds to Moelis, because the Moelis dividends are much better." Did she say that?---No. And then she says either you or Hannah Zhu said, "Because you were in Sydney and had a meeting with Michael Gu, you've already confirmed that you want to switch to E; therefore you need to stay with E, and we will give you compensation"?---No. All right. Okay. Did you discuss compensation at either of the meetings?---No. The first meeting was pretty much, "I'll make sure what the issue is," and the second meeting – it was effectively a fait accompli, in terms of – we were prepared to give – make up the difference for her. F. 8.2.4.2 Cross-examination 407 Robert Salter was challenged as to his ability to recall these conversations, in the context of the large number of meetings that he has on an average working day and the absence of a contemporaneous note of the meetings with Li Xu. Understandably, Robert Salter said that he does not recollect all meetings or the terms of individual conversations but does recall the substance of his meetings with Li Xu because she had raised a complaint and his memory was assisted by the contemporaneous internal emails. 408 The questions then focused upon how much of the discussion at each meeting occurred in Mandarin between Li Xu and Hannah Zhu. Robert Salter understands only "a couple of words" of Mandarin. He denied that there was a "dispute" about the failure to implement the switch of the investments at an earlier point in time, characterising it as a discussion as to why Li Xu's instruction had not been implemented. He confirmed that the only matters that he recalls having been discussed at either meeting were why the switch of investments had not been earlier implemented and the steps that would be taken to implement it. He denied that the offer of the payment of money was intended as an inducement to cause Li Xu to transfer her money to Fund E, describing it as compensation for the earlier failure to implement her instructions. He explained that the sum was calculated as an amount intended to compensate Li Xu for the position that she ought to have been in. He had no recollection of Moelis being discussed at either meeting. 409 Robert Salter was adamant in his evidence that there was no discussion to the effect that Li Xu would have her money returned in four-years, explaining that "you can't promise what you can't promise" (T 1374). F. 8.2.5 Evidence of Hannah Zhu F. 8.2.5.1 Evidence-in-chief 410 Hannah Zhu had a very clear recollection of each meeting. She gave a detailed account of each without interruption and without reference to contemporaneous documents. A summary of her evidence as to what was said at each meeting would insufficiently convey the minutiae of detail in her recollection, which was the subject of vigorous cross-examination. Hence, I reproduce the relevant passages. 411 When asked about the first meeting, Hannah Zhu said: (T 1057-1058): THE WITNESS: On 10 February 2017 I made a call to Ms Xu to introduce myself as her newly assigned relationship manager. And at that call Ms Xu told me that her daughter, Winnie, was going in to study VCE at year 10. And I told Ms Xu I completed VCE study in Australia. If it's helpful, I'm more than happy to share my experience. 16 February 2017, Ms Xu sent me a WeChat message ask me if I would be in the office around 2.30 on 21 February 2017 she would like to meet me in person to discuss about her daughter's schooling. I confirmed the appointment with her and also I told her that the group CEO, Mr Rob Salter, would be joined the meeting after our discussion about her daughter's schooling. Ms Xu happily accept the meeting and look forward to meeting Rob and myself in the office. On 21 February 2017, in the morning, former CEO Mr Tim Lamb sent me a copy of Atlas Fund Information Memorandum and I print this Information Memorandum, brought that to the meeting in the afternoon with Ms Xu. When Ms Xu arrived in the office at the beginning of the meeting – and was just Ms Xu and myself – because the Mandarin was our native language. So we were just talking in Mandarin. We shared about Ms Xu's new life in Australia, her daughter – Winnie's schooling and also I shared a bit of my experience in Australia. The conversation actually went quite long. It was over an hour. And to us, the meeting – the conversation turned to Ms Xu's investment. I told Ms Xu, because I had just newly joined the organisation, I would now leave the office to invite Rob come to join the meeting to ensure her question about the investment will be answered. Then I temporarily left the meeting room and invite Rob to the meeting room. When we both came back to Ms Xu, I introduced Rob to Ms Xu. And Ms Xu spoke in English to Rob directly. She told Rob her English name is Lili, and she had enrolled in MBA course with MIT. And although her English is not perfect, she would take the opportunity to practice her English, hope Rob doesn't mind. I encourage Lili and I say, oh, Ms Xu, don't worry, because English wasn't my native language. So don't get shy. And Ms Xu told Rob, well not the subject in the ..... study as she wanted to interview a business owner in Australia. And she hope Rob would be helping her to complete this interview and complete her subject. And Rob was very encourage. They would sit down, have a first conversation. Rob introduced Ms Xu about the group structure, the senior management team. And at some point of the conversation, Ms Xu told Rob and myself she made a request in July 2016, when she met Michael Gu in Sydney office to switch all her investment in Series A Fund, Series B Fund to Series E Fund. She believe this switch had already been executed, but she wasn't sure because she hadn't received any confirmation; she want us to check. Rob wasn't aware of this switch, and I just newly joined him; I didn't have any information about Ms Xu's investment. And then Ms Xu raised another query, and it say she had become Australian tax resident. She also want us to check if her tax file number recorded in the system to make sure the upcoming distribution, ending December 2016, she will be treated as an Australian tax resident. So the meeting ended; Rob and I tell her we will need to do a further investigation, and when we have answer for both of her query we will come back to her. And at the end of the meeting, I just pull out the Information Memorandum with the SB&G Group instruct into the envelope and I pass to Ms Xu. And in the evening after the meeting, Ms Xu sent me a WeChat text message to follow me up, and she say, "My A and B should already switch to E in July 2016. Please confirm with me or check with me tomorrow." So that was what happened the day. 412 On the evening of 21 February 2017, Li Xu sent a WeChat message to Hannah Zhu confirming receipt of the "information you gave me today" and questioned whether it was a report for 2016 (CB 2349). Hannah Zhu responded that it was not (that report was not yet prepared and would be provided "in the next few days") and the report earlier provided "focuses on what SB&G does". Li Xu then stated: "Ok, my A and B should have been converted to E in July last year, please confirm this for me tomorrow", to which Hannah Zhu responded: "Ok, no problem" (CB 2350). 413 There is a contemporaneous record made by Hannah Zhu as to what was discussed at the meeting. On 22 February 2017, Hannah Zhu sent an internal email to the finance manager at 12:36 pm and said (CB 2452): Rob and me met Li XU yesterday. Client has two enquires about her investment that I need your kind assist to find the answer so can reply her today. 1. Tax Status-Do we have her TFN in record? Initially she signed up the investment as a foreign investor in July 2015. She changed her tax status later and provided the TFN in July 2016. At the same time, she requested to reimburse her WHT and believed until now we have not yet reimburse any WHT to her CBA account. WHT $676.16 is showing on 30 June 2016 report, I can't find the distribution report in Dec 2015. Can you please assist to check the status of her reimbursement request and ensure for Dec 2016 payment, she is recognised as an Australian tax resident. 2. Investment Holdings In Mater report, she has $500,000 in Series A and $500,000 in Series B and $1,500,000 in Series E, the same records in A,B,E report. Client mentioned she did switch in 2016. Then I found a transaction on 15 April 2016 from Series A to Series K recorded in switch report. I can't find any record in K report about this client and no unit certificate or switch application form can be found in M2. Can you please help me to confirm her current investment holdings with unit price so we can update her holdings in M2? We better update her holdings in M2 before giving the portal access. Please let me know if you need more information. Happy to discuss. … 414 Hannah Zhu received a response later that day to the effect that no record could be found about Li Xu's request to switch her investments (CB 2451). 415 The WeChat messages between Li Xu and Hannah Zhu continued. At 5.55 pm there commenced an exchange in which Hannah Zhu said (CB 2350): Hannah Zhu 5:55 pm Lili, today I followed up on some of the questions and feedback you gave yesterday, and I haven't told you the results because I don't have the exact information yet. However, I'll tell you what I know first, and I'll continue to follow it up tomorrow. Hannah Zhu 6:03 pm As for the previous dividend going to the wrong account, because at first the dividend system was not yet fully functional, so it was done manually one by one, you know better than I do what happened afterwards. Now it's all done by the computer system, so the same problem won't happen again, so I'm really only sorry about this bad experience. [Whimper] Hannah Zhu 6:14 pm You said that you have changed your status to Australian tax resident, but the colleague concerned did not find your tax file number and registration, do you remember how you gave us your tax file number? But it's not a problem, so please let me know your tax file number and tomorrow I will tell my colleagues that the December coupon and all future coupons should be treated as Australian tax resident. As for the withholding tax for FY16, since it has already been reported to the tax office, all you need to do is tell your accountant to ask the tax office for the withholding tax, which we can discuss next time you are available. The most important thing now is that we need your tax file number for this coupon payment 416 In summary, the two discussed an error which caused a dividend payment to be credited to an incorrect bank account and Hannah Zhu could not locate any record of a tax file number for Li Xu, which explained why withholding tax had been deducted from her income for the financial year 2016. Hannah Zhu explained that upon provision by Li Xu of her tax file number, withholding tax would no longer be deducted. On 23 February 2017, at 11.04 am Li Xu sent this WeChat message to Hannah Zhu: "Haina, can you also confirm whether the AB to E conversion was done last July? I signed it in Sydney." Hannah Zhu responded: "Yes, this is also being followed up and confirmed, once everything is confirmed, I will get back to you with the results. Don't worry." (CB 2351). 417 On 2 March 2017, there was a telephone discussion between Li Xu and Hannah Zhu, but what they discussed was not revealed in the evidence. However, later that evening there were further WeChat messages, commencing with Li Xu who said: "Haina, I was a bit impatient today, sorry" and the conversation then continued (CB 2351): Li Xu: Thank you! If I don't make your company understand before the dividend payment that AB has been converted to E and I am already a tax resident, it will be even more annoying to go through the hassle after the dividend payment. Anyway, we should cut through all this as quickly as possible, I'll come and sign it on Monday. It's much easier to have someone like you to be in charge of it. Thank you! Hannah Zhu: Oh Lili oh Lili, but you're too kind, I am the one who feels sorry. We both treat each other as friends, so were thinking of each other and putting ourselves in the other shoes, we can talk about this in person. I appreciate the trust you have placed in me, and I will do my best to take care of your issues. It was so touching to see your WeChat message. 418 On 6 March 2017, Li Xu met with Robert Salter and Hannah Zhu. Hannah Zhu gave the following evidence-in-chief (T 1058-1059): THE WITNESS: Yes. So after meeting Ms Xu on 21 February 2017 and receive her follow-up message at night, on 22 February 2017, I send an email to the finance manager Sarah and ..... to inquire two things Ms Xu raised on 21 February. The first is about Ms Xu's tax status, and the second is about the switch. This email was forward to several staff in the different team to investigate what happened, and later it came to me to understand although Ms Xu complete a form in Sydney – at Sydney office in July 2016, but Ms Xu had sent query about the unit price. So at that time Atlas Capital was waiting for Ms Xu to confirm her instruction; that's why the switch didn't happen. But when we were doing those investigation, Ms Xu sent me another follow-up WeChat message on 23 February 2017, say "What's – could you please check for me to confirm tomorrow my A and B should already switch to E Fund, and I send the paperwork in July in Sydney – in July last year in Sydney." And the meeting of 6 March 2017 actually request by Ms Xu. On 2 March 2017, Ms Xu sent me the third follow-up WeChat message, and she say was, "If your company – if not let your company to know that the A and B already switch to E, and I already become the Australian tax resident before the distribution payment. To fix this issue after the distribution will be more troublesome. I want to get it done as soon as possible. I will come to your office next Monday" – Monday is 6 March – "to complete the form, and now I have a responsible person like you make things much easier." So on 6 March 2017, Ms Xu came to office to meet Rob and myself. The meeting did not go very long; Rob just confirmed the bases to explain to Ms Xu what Atlas Capital propose to execute her switch, and he also write down all the calculation on a piece of paper to show Ms Xu, and Ms Xu agreed. Then, I helped Ms Xu to complete the form for the switch; it was a redemption for additional investment form for the switch, and also another form – change of contact details form – to update her tax file number. After the meeting, I keep the original form to process further, and I make a copy of those, sign the form, pass a copy to Ms Xu. And in the evening after the meeting, Ms Xu sent me a WeChat text message to thank me helping her solve a series of issues… 419 Direct questions were then put to Hannah Zhu about aspects of the evidence of Li Xu as to what was said at each meeting. Hannah Zhu denied that Li Xu was advised that she would be able to get her money back upon expiry of the four-year period, that there was a discussion about Li Xu's desire to transfer her investments from Atlas Capital to Moelis or that Li Xu was advised that she should transfer all of her investments in Fund A and Fund B into Fund E. 420 On the evening of 6 March 2017, the WeChat conversations continued as follows (CB 2352): Li Xu: Hello Haina! Thank you for your help with solving a range of issues. Hannah Zhu: Lili, you are too kind. You are so understanding, and I should thank you on behalf of the company. I will follow-up your issues for you, don't worry. Anyway, work-wise, if you invest here and I am at the company, you can call me for anything. I will do my best to assist you. On a personal note, I am really grateful that this job has allowed me to meet you, it's not easy to meet a friend in Australia who shares the same sentiments. [Joyful] F. 8.2.5.2 Cross-examination of Hannah Zhu 421 Hannah Zhu maintained her evidence-in-chief and on several occasions restated it. Her evidence was vigorously challenged, and her credit was put in issue to the extent that she had made up aspects of her evidence and lied. 422 Counsel initially focused on what document was provided to Li Xu at the meeting on 21 February 2017, and it was put to her that in fact a document containing information about the Salter Brothers Group was provided rather than an Information Memorandum. In denying that proposition, Hannah Zhu stated that two documents were placed into an envelope: an Information Memorandum for the "Atlas SIV Fund" and an "SB&G Group intro deck." In more detail, her evidence was (T 1073): THE WITNESS: I put two documentation in an envelope at the end of the meeting, pass to Ms Zhu. One was the Atlas SIV Fund IM and the other was the SB&G intro deck. What I didn't mention here for Ms Zhu is – like what Ms Zhu understanding the document she received was the fund report. It wasn't. And because Ms Zhu is an existing SIV investor, she already familiar with the Information Memorandum, so I thought she meant it's the new document. It's called SB&G Group intro deck. And in the meeting room, introduce her Atlas Capital was part of SB&G Group. That's nothing new to Ms Zhu. So I only confirmed the document as talk about what SB&G is doing. HIS HONOUR: I'm having trouble understanding your evidence, Ms Xu. Are you now saying you gave her two documents at that meeting? THE WITNESS: I say that this morning here. I say the two document – I put it in the envelope, pass to Ms Zhu. You can check. 423 Initially counsel passed over that evidence. When the topic was revisited Hannah Zhu gave evidence as follows. She could not recall from where she had obtained the SB&G Group document and could not produce a copy of it. When it was drawn to her attention that this document was not mentioned in her affidavit and directly put to her that the second document evidence was a recent invention and deliberately misleading, Hannah Zhu responded that she did not accept that there was an inconsistency between her oral and affidavit evidence. She reasoned that because Li Xu in her affidavit only stated that she did not receive the Information Memorandum and made no reference to the SB&G Group document, in preparing her affidavit, she responded only to that contention (T 1117-1118). 424 Hannah Zhu was further pressed on this evidence. Her affidavit only refers to the Information Memorandum as provided to Li Xu at the meeting. The WeChat message exchange of 21 February 2017, commencing with that sent by Li Xu at 6:37 pm, references a single document and Hannah Zhu's response at 6:59 pm does not mention an Information Memorandum but rather states "today's information focuses on what SB&G does" (T 1119). 425 Hannah Zhu did not accept that prior to giving her oral evidence, she realised that there was "a problem" being the inconsistency between her affidavit evidence and her contemporaneous WeChat message (T 1118-1119). She denied the direct proposition that she determined to "solve that problem" by inventing a second document. Hannah Zhu explained that only one document was referenced in the WeChat messages because she thought Li Xu "was referring to the new documentation", being the SB&G Group document, rather than the Information Memorandum. Counsel warned her that he intended to submit that her evidence was deliberately misleading. She did not accept any inconsistency between her oral and affidavit evidence, because her affidavit was responsive to the evidence of Li Xu who claimed not to have received an Information Memorandum. Her explanation for drawing that distinction was (T 1119): The documentation I gave to her, so I thought she was referring to the new documentation because Atlas SIV IMs something she familiar with. So when I answer her question, I only refer to the new document. I didn't in that WeChat message to particular say Atlas IM. Mr Pearce: Her message at 6.37 only refers to one document, doesn't it? Report for 2016, 7. Hannah Zhu: Yes, my understanding is her queries about a document she never seen. So I only answer the query about the document new to her, and it's not a report. 426 Hannah Zhu was unable to produce a copy of the second document. 427 I return to an earlier part of the cross-examination which concerned the English proficiency of Li Xu during the meetings of February and March 2017. As to Hannah Zhu's evidence that Li Xu, at her encouragement, conversed in English with Robert Salter, save for when "she didn't pick up anything" (when Hannah Zhu would translate for her) she was taken to a series of WeChat messages commencing on 13 October 2017 (from T 1106). I set out the messages in full (CB 3194): Zijin (Xin'er) 13:56 Haina, can you help me ask VLS, the public language school where VCE classes are held on the weekends in the city? When is the deadline for 2018VCE Unit1&2 registration? Do you need any proof from the day school when you register? Hannah Zhu 14:15 Received your message, I'll get back to you later, Lili [Joyful] Zijin (Xin 'er) 14:24 Ok~ Zijin (Xin'er) 14:27 Is there any activity in the Buddhist temple tomorrow? I want to visit and study. Zijin (Xin'er) 14:27 I passed the English L6 test. The study for L7 will start next Monday. Hannah Zhu 14:36 About VSL, are you asking about studying Japanese on weekends? Hannah Zhu 14:37 I remember the teacher said the last time that the registration was in November and All it needs to be done is to pay the registration fee online, and no proof is required. Hannah Zhu 14:39 Lili, it is so great! English is constantly improving, you can communicate directly with Rob next time, so I'll just be lazy and have tea [Grin] Zijin (Xin'er) 14:39 It's German Zijin (Xin'er) 14:41 Conversation and listening are not good – I [Cry] 428 Hannah Zhu denied that this evidence implied that Li Xu could not freely converse in English in February or March of that year. It was bluntly put to her that either she was not telling the truth in her evidence or did not tell the truth in her WeChat message. An open question was then put: So which is it? Hannah Zhu answered (T 1098-1099): THE WITNESS: So for the direct communication, and in here, because it's encouraging for Ms Xu, her English language was continuously improving. So saying the next time direct, it means she can do better and better. It doesn't mean the first time wasn't direct communication. MR PEARCE: Well, then you - - - THE WITNESS: Like, they don't direct speak in English, like together. MR PEARCE: If that were true, Ms Zhu, you would have said, you can communicate more directly with Rob next time, or better. But what this implies is that she could not communicate directly with Rob in English last time, doesn't it? THE WITNESS: The text, the writing can read a bit confused, but Ms Xu had ability to speak to – speak in English to Rob directly for the first meeting and ongoing meeting. 429 Hannah Zhu was next taken to a series of voicemail messages that Li Xu left for her on 28 March 2017, which were played in Court. Fortunately, certified translations were produced which Hannah Zhu accepted were reasonably accurate. The recordings commenced with (CB 29059): So, I feel right now the most important thing is to rapidly improve my English. (If I can) understand around 50 – 60%, then participating in these events would be very interesting. 430 Hannah Zhu could not recall, but did not dispute, that Li Xu left that voicemail message for her. There are three other voicemail messages on the same topic. None were disputed by Hannah Zhu. In sequence: Now I only just finished my class at noon. Ahh, I was thinking, the things that were taught at school by the teachers, I could understand all of it, that was all okay. However, to listen in on those meetings with special topics, I feel I still need to lift the level of English, to exercise more from within. That's how I feel. Hannah, Hannah, your suggestions are very good, but they all speak in English in their meetings, so I couldn't understand. So sometimes it's very embarrassing to be there. This, I would really like to go too. I went a few times. I had a try, I mean I went to listen to what they have, have to say. However, the speed of their speech was very fast. I couldn't even understand 10%. I couldn't understand most of it, so sometimes I felt very embarrassing. 431 Hannah Zhu disputed that each of these messages were "entirely inconsistent" with her evidence that for the most part English was spoken at the meetings of 21 February and 6 March 2017 (T 1273). She was not permitted to explain why by the cross-examiner. 432 The inconsistency question relating to the voice messages was addressed in re-examination. When invited to explain her answer that the audio recordings were not inconsistent with her evidence, Hannah Zhu said (T 1273): THE WITNESS: Yes, At the first meeting, Ms Xu speak to Rob in English directly. And I – so from those – the voice message, I see that Ms Xu had no problem at school. So her English – she has capacity for her English level. And just some specific topics, she may need to improve. So actually, I remember it was another WeChat message, Mr Pearce say Ms Xu say – I say something like, next time you can speak to Rob directly. I can have tea and coffee. Because at the first meeting, Ms Xu could talk to Rob directly, but still sometimes she will need me to translate for some particular words. And there I was addressing when her English improving, I can just have tea and coffee. So without me, Ms Xu will complete it with ease to communicate with Rob. 433 Returning to the cross-examination, the questions next focused on what was said at the meeting of 21 February 2017. Hannah Zhu accepted that there was a discussion to the effect that Li Xu stated that she thought her funds had been transferred from Fund A and Fund B to Fund E, at an earlier point in time, but she wasn't sure as to whether this had occurred. She maintained her denial that she was advised that she should effect the transfer. She accepted that there was a discussion about compensating Li Xu for loss that she suffered by reason of not effecting the switch of her investments in July 2016. She denied however that compensation was offered to induce her to make the switch in 2017 (T 1110). When permitted to elaborate on that evidence, Hannah Zhu said (T 1110): THE WITNESS: We didn't have discussion to give – instruct or tell Ms Xu to switch from A, B to E because her decision had already made in July 2016, and she thought it's a internal error that we didn't execute her switch. So the conversation was applied to if she already made the – the switch happen in July 2016, that is the amount she's supposed be receiving for her distribution and also the units will be issued to – to her as the E Fund. So we processed just what she instruct to switch in July 2016, what – if it happened. So if you say it's a compensation, it wasn't a – it's a compensation for it has not happened, and ..... made it happen to match what she instruct to us in July 2016. MR PEARCE: She was offered an inducement to make the switch, wasn't she? THE WITNESS: No. 434 Hannah Zhu maintained that denial, despite sustained further questioning which at times became argumentative (T 1110-1111). Within this part of the cross-examination, Hannah Zhu confirmed her earlier evidence that, at the meeting of 6 March 2017, Robert Salter wrote down and handed to Li Xu a series of calculations to explain how he derived the quantum of the compensation. Hannah Zhu stated that Li Xu took that document away with her (T 1120). There is no reference to it in the affidavit evidence of Li Xu, or in any of the documents that were tendered. 435 The questions then turned to a different meeting with Li Xu at the Gong De Lin restaurant on 24 June 2019 (from T 1120). She accepted that she was very familiar with the details of Li Xu's investment at the time, in particular the requirement to maintain a complying investment for a minimum of four-years, although she did not know the precise date when that period was due to end. She explained that she did not have an occasion to check the date, as she considered the lunch to be for social purposes only. I should mention that answer was non-responsive and given in relation to a series of questions, which is a pattern that I observed on frequent occasions during her cross-examination (T 1125-1129). 436 Eventually, after I intervened and reminded Hannah Zhu that she should confine her answers to the questions put, she accepted that she was aware "of the details" of Li Xu's investment when she attended the lunch but denied that this extended to knowledge of the expiry date of the four-year term (T 1128- 1129). She further denied that her evidence as to the extent of her knowledge was deliberately false (T 1129). Hannah Zhu accepted that there was a discussion about future business proposals by Li Xu, but did not accept that this was put as a reason for wishing to redeem her investments with Salter Brothers. She emphatically denied that Li Xu had requested her, during an earlier telephone conversation, to bring a redemption form to the lunch, that one was brought or that it was signed that day. She denied that there was a discussion about a proposal for an IPO and that she advised Li Xu to delay her redemption until that event (T 1131-1137). 437 Although Hannah Zhu could not precisely recall, she accepted that she may have spoken to Li Xu about an IPO sometime in 2018, though in that context she maintained her denial that the subject was discussed at the lunch. The topic then moved to a telephone discussion with Li Xu in July 2019 and whether Li Xu had been told that her Salter Brother investments were safe. Hannah Zhu answered that she could not recall as to whether this was said (T 1138). Her attention was drawn to a series of WeChat messages commencing on 10 July 2019, in the context that Li Xu was concerned about a public announcement that a similarly named corporation to Atlas Capital had suffered financial difficulties (CB 18661). In one answer, Hannah Zhu stated: "your investment is all normal". Eventually, Hannah Zhu accepted that she was not able to deny that at some time she had told Li Xu that her investments were safe. 438 The course of the cross-examination then moved to whether Hannah Zhu had ever said to Li Xu that her investments with Salter Brothers were guaranteed (from T 1139-1144). Hannah Zhu did not directly answer that question. She gave overly long answers. In the first, she said that she could not say "exactly" whether she had used the word guarantee because there are many words that can have the same meaning, especially when translated. She also stated that she could not recall, but did not dispute that she may have used phrases such as "I'm sure". It will be recalled that the first component of the representation relied upon is that Hannah Zhu stated to Li Xu that she was guaranteed to receive her money back after a further period of two years. An audio recording was then played of a WeChat message left by Hannah Zhu for Li Xu on 24 May 2017. Mandarin and English translations were produced. The English version is (CB 29061): Lily, there's another thing I want you to know. It is about a fund investment [opportunity]. Because Rob told me just now that he has very, very good news about our hotel fund, because there will be a huge appreciation in the next couple of months. I don't know…because of that fund of yours previously, I know, there were some unpleasant experiences. I don't know if you hold any, well, any other investments; or maybe you have some spare money, with which you are seeking some mid to long term investment [opportunities]. If this is the case, I can fully guarantee that the hotel fund is a very good product, however, it doesn't matter if you don't want to invest. I just feel like that since that is a good thing, I just let you know. If you want to know more, I will contact you. If you don't want to know, it doesn't matter. Just let me know. Thank you Lily. 439 Hannah Zhu accepted the accuracy of the translation, but then stated that she did not "mean fully guarantee". Then followed a series of questions focused on whether Hannah Zhu disputed the Mandarin translation. The endpoint of that evidence was that Hannah Zhu accepted that she used the word guarantee but did not mean to convey that the investment would be "fully" guaranteed (T 1143-1144). 440 The next series of questions related to a meeting with Li Xu on 6 September 2019 (from T 1144). This was described in evidence as the "moon cakes meeting", because Hannah Zhu invited Li Xu to pick up some Chinese moon cakes, as was the tradition at that time of the year. Hannah Zhu said that this was purely a casual conversation and denied there had been a discussion to the effect that Atlas Capital would be selling its hotel assets and that Li Xu would receive her money back and should be patient. Hannah Zhu was taken to further WeChat messages with Li Xu on 5 September 2019 (CB 3200). In the first message, Li Xu asked: "is there a commission if someone introduces customers to buy products in your company? [Smile]". In answer Hannah Zhu invited Li Xu to attend the office to collect moon cakes. Later in the day, Li Xu messaged: "[m]y dear, thank you for today's explanation". It was put to Hannah Zhu that this was a reference to a discussion that day, which included Robert Salter, about the status of her investments. Hannah Zhu maintained that it was not: the meeting was purely social (T 1148). 441 Hannah Zhu was then challenged about her evidence to the effect that the first occasion that Li Xu mentioned redemption to her was on 5 April 2020 in an email (CB 1342). 442 Understandably counsel focused attention on the words: "I talked to you about my redemption…" The questioning was intense (T 1148-1154). Hannah Zhu maintained this claim was incorrect, even though she did not take any step to disabuse Li Xu at the time. At that point the trial was adjourned for some days. On resumption, the cross-examination continued (from T 1205). Hannah Zhu confirmed again that she thought she had first discussed an IPO with Li Xu in 2018, but maintained her denial that the topic was not discussed at the Gong De Lin lunch in June 2019 or the moon cakes meeting in September 2019. 443 Another WeChat voice message of 25 December 2019 was played to Hannah Zhu (CB 29082). It is a message from Hannah Zhu to Li Xu. In it she referenced the intended listing of the Property Opportunity Fund. Hannah Zhu accepted that this message confirmed an earlier discussion about the IPO, but firmly denied that it confirmed an earlier discussion about redemption (T 1210-1211). On further questioning, Hannah Zhu affirmed her earlier evidence that, despite the content of the email of 5 April 2020, she had not earlier discussed with Li Xu the linking of the redemption request with the IPO. However, she accepted that at the time she understood that without liquidity in the funds, there could not be payment of redemption requests and the IPO was the "ultimate strategy" to that end (T 1216). In this sense, redemptions and the IPO were linked. 444 When questioned further to the effect that someone within Salter Brothers must have explained that link to her, Hannah Zhu stated that it was clearly set out in the Salter Brothers information "deck" that was provided to all investors in May 2019 (T 1217). Counsel's immediate riposte was that he did not think there was any evidence that Li Xu received the document. That is incorrect. The document is attached to the affidavit of Paul Salter and is marked with the document identification number as having been discovered by Li Xu (CB 5258). It is an attachment to an email sent by Cathy Zhang to Li Xu on 7 May 2019. That email is also marked with a discovery identification number from Li Xu. Within it, there are dot points under the heading: Material Outcomes in FY 19, which include references to advice that had been taken for an IPO in the calendar year 2019, the outcome of which was to delay the IPO until 2021/2022 "and instead access strong demand from institutional investors". There are Mandarin (CB 5288) and English versions of that document, each of which is marked with the discovery identification number for Li Xu. 445 The cross-examination then returned to the meeting of 21 February 2017. There were further questions which challenged Hannah Zhu's evidence that she handed two documents to Li Xu, an Information Memorandum and the SB&G deck. Hannah Zhu maintained her earlier evidence that she had (T 1217-1220). F. 9 Consideration and findings F. 9.1 Robert Salter representations 446 Robert Salter was an impressive witness and I have no hesitation in accepting his evidence as a truthful account. He gave evidence concisely, clearly and directly in answer to questions. His account of the February and March 2017 meetings is corroborated by the contemporaneous internal emails of 22 February 2017. I find according to his evidence. Robert Salter did not make the oral representation that is pleaded (or to like effect)– at either or both meetings – that he recommended to Li Xu that she should transfer her investments in Fund A and Fund B to Fund E rather than effect a redemption and a transfer to Moelis and on that basis would receive her money back in 2019. 447 What occurred is that Li Xu inquired as to why her investments with Salter Brothers in Fund A and Fund B had not been switched to Fund E in 2016, in accordance with her earlier request. There was some conversation between Li Xu and Robert Salter conducted in English, which may not have been entirely fluent for her and she apologised for that fact and gave as the reason that she wished to practice. There was considerable concurrent discussion between Li Xu and Hannah Zhu, which Robert Salter was incapable of understanding in Mandarin, but Hannah Zhu translated that discussion for him. Having understood the problem, Robert Salter advised Li Xu that he would investigate the matter and get back to her in due course. 448 At the conclusion of the meeting, Robert Salter put in train the internal email correspondence. He satisfied himself that Li Xu had earlier requested a switch of her investments, which he concluded had not been actioned due to an internal error. Armed with that information and conclusion, he attended the second meeting. He informed Li Xu that Salter Brothers would honour her earlier request and that she would be compensated for the differential between the dividend that she ought to have received and the dividend that she in fact had received. Li Xu was content with that proposal. Compensation was calculated and paid. 449 Li Xu did not say to Robert Salter in English, and Hannah Zhu did not translate from Mandarin to English, that she wished to transfer all of her investments to Moelis. Robert Salter made no recommendation that she should transfer her investments to Fund E, he did not say to her that Fund E would increase in value or that after four-years Li Xu would be able to get her money back; meaning to redeem her investments. 450 I do not accept the contrary evidence of Li Xu. She did not in her evidence-in-chief distinguish between who said what at the separate meetings. She gave rolled up evidence as to what was discussed at each. Her evidence lacked any introductory context from which one might logically conclude that Robert Salter made the representation that is alleged. She attributed what was said about Fund E to each of Robert Salter and Hannah Zhu. Her evidence was imprecise. 451 Li Xu's pleaded case is very specific: the Salter representation was made at one or each meeting by Robert Salter and, independently, at either or both of those meetings the Hannah Zhu representations were made. Her evidence fell far short of establishing that Robert Salter made the contended representation. Li Xu's evidence is inconsistent with the Salter Brother's internal emails. There is no mention in those emails of any request by Li Xu to transfer to Moelis. It is implausible that Robert Salter would have made an oral statement to the effect that Li Xu would receive a redemption of all her investments in 2019, when he clearly was aware at that time that the ability to meet redemption requests depended upon the liquidity of Fund E and was at the ultimate discretion of the Trustee. The asserted representation is in the form of a guarantee of full redemption at the conclusion of the initial four-year period. Not only would it have been most foolish for Robert Salter to make that oral representation, I do not accept that he did say it deliberately and in the knowledge that his statement was contrary to the terms of the trust deed for Fund E. 452 Li Xu's evidence is inconsistent with the WeChat message that she sent to Hannah Zhu on the evening of 21 February 2017 in which she sought confirmation as to whether her earlier request to transfer all her investments to Fund E had been actioned. If the point of the discussion earlier that day had been her instruction to transfer all her investments to Moelis, it is implausible that a statement to this effect was not included in that conversation. 453 Li Xu sought the same confirmation in a later WeChat message sent to Hannah Zhu on 23 February 2017. It is utterly implausible, if the point of the meeting on 21 February 2017 was a discussion about the desire of Li Xu to transfer all her investments to Moelis, that she twice requested confirmation that the switch of her investments had been actioned in July 2016. If her true intent was to transfer to Moelis, and if that is the request that she made on 21 February 2017, logically that is what she would have said in each of those WeChat messages. 454 There is also the WeChat response from Hannah Zhu to Li Xu on 22 February 2017, who advised that she had "followed up on some of the questions and feedback you gave yesterday" which was then set out as relating to the erroneous payment of a dividend to a wrong account number, the status of Li Xu as an Australian tax resident and the need to provide an Australian tax file number. It is telling that there is no mention of a request to transfer all investments to Moelis. 455 Thus, quite apart from the imprecise evidence given by Li Xu in June 2024 about an oral representation made in February or March 2017, which is well short of what is required to establish an actual persuasion that the Salter representation was made, the evidence of Li Xu is inconsistent with the evidence of Robert Salter and with the contemporaneous documents. I reject her evidence as false. F. 9.2 Hannah Zhu representations 456 There is a considerable contest on the evidence that requires resolution. The questioning of Hannah Zhu in cross-examination was probing, sustained and at times very direct. More than once Mr Pearce explained that he intended to submit that aspects of her evidence were deliberately false. This is not to criticise Mr Pearce. Dishonesty in evidence is a very serious matter and a grave finding for this Court to make. In closing submissions Mr Pearce contends that Hannah Zhu was a most unsatisfactory witness, her answers to questions in evidence-in-chief extremely rehearsed, her demeanour combative, that aspects of her evidence were a lie and that I should conclude that her evidence was unreliable. 457 Necessarily, I approach those submissions as required by s 140(2)(c) of the Evidence Act - the Briginshaw standard. I consider that I must assess and consider the whole of the evidence in determining whether the criticisms made by Mr Pearce are justified in light of the gravity of the submission that I should conclude that deliberately false evidence was given by Hannah Zhu. 458 The second component of the Hannah Zhu representation can be quickly dealt with. Li Xu failed to give evidence to the effect that she was told that complying investments offered by SBAM, including Fund E, were designed so that investors received their money after four years. That finding has another consequence. It is a serious matter to frame a case that an oral representation was made at one or two meetings in early 2017 (on which Li Xu relied in transferring an investment of $1 million into a property fund, rather than to a different trustee of an alternative fund of choice) and then fail to give any evidence supporting that finding. This weighs against the persuasiveness of the claim that a different representation, amounting to a guarantee of return of funds after two years, was made by the same person at the same meetings and which had the same inducing consequence. 459 The next matter is that my rejection of Li Xu's evidence as to what was said by Robert Salter materially affects the plausibility of her evidence as to what was said by Hannah Zhu. It is another serious matter to expressly plead and maintain a trial case that definitive oral representations were made in 2017, which her counsel in opening said were "categorical" (T 26) and amounted to a "guarantee" (T 38), when Li Xu failed to give clear and distinct evidence that Robert Salter made any such representation to her. That is compounded by my positive finding in accordance with his evidence that he made no such representations. I need not go so far as to find that Li Xu deliberately gave false evidence, but I am well satisfied that her account of this discussion was not the product of genuine recollection on her part. 460 I bear in mind my earlier findings as to why I have not accepted Li Xu's account of the oral representations said to have been made to her in 2014 by Lixia Han, in 2015 by Jeanetta Jin and Kevin Fan and in 2016 by Michael Gu. There are aspects of those findings that affect my overall assessment of Li Xu's evidence and its reliability as genuine recollection rather than the product of reconstruction. Further, that I have found her evidence as to these oral conversations unconvincing is a reason that tends against accepting her evidence as to later conversations with Hannah Zhu. The question for me is not binary: even if I disbelieve aspects or most of the conflicting evidence of Hannah Zhu, it does not follow that the positive case of Li Xu is made out against Hannah Zhu. 461 To recap, those matters are: (a) Her evidence-in-chief was materially incomplete as to the extent of and range of matters that she discussed with Lixia Han. Her evidence departed significantly from the two pleaded oral representations to an expanded list of three scenarios, some of which did not permit redemption at the conclusion of the initial four-year period of the investments that were discussed. Her pleaded case was selective; (b) Her evidence was not consistent with the summary of the Atlas Capital brochure that was provided to her in Mandarin by Jeanetta Jin, and on which she made handwritten notes which reflected careful study by her of that document; (c) Li Xu well understood the risk/return ratio in June 2015 and that projected returns were based on relative risk. She undertook an analysis of the various funds then on offer by Atlas Capital. She invested the largest amount in Fund E because of her assessment of the target rate of return and well understood at that time that this investment carried a higher degree of risk. What she did at the time is inconsistent with her claim that there was an assurance, a certainty, that redemption would be available at the end of the four-year period; (d) Her evidence that Jeanetta Jin guaranteed return of her investments "regardless of the conditions" is an implausible reconstruction. The transformation of her pleaded case from return of her investments after four-years to her evidence of being assured that the fund application form was just like a bank deposit form, coupled with a guarantee that the invested funds would be returned regardless of world affairs and the equating of the property fund with investment in a bank deposit, is implausible and a reconstruction. I reached similar conclusions in relation to the Fan representation; (e) My rejection of the evidence as to the extent that she read and comprehended the letter from the Australian Government dated 21 May 2015. The evidence was evasive, unresponsive and false; and (f) My rejection of Li Xu's evidence that the Jin, Fan and Gu representations were made. 462 Li Xu's evidence-in-chief is that at one of the meetings there was a collective discussion involving three participants about her desire to transfer all her investments in Fund A and Fund B to Moelis. It will be recalled that in February 2017, her investments comprised $500,000 in each of Fund A and Fund B and $1.5 million in Fund E. Her case is that she advised Robert Salter and Hannah Zhu twice, once at each meeting, that she wished to redeem the whole of her investments and transfer all her money to Moelis. Her evidence-in-chief did not match that case: expressly she stated her desire to transfer from Fund A and Fund B to Moelis. She did not say that she required a transfer of all her investments to Moelis. 463 The use of the collective pronoun raises further difficulty to acceptance of the evidence of Li Xu. It masks the inherent imprecision in her evidence that separate representations, in part to like effect, were made by two individuals across two meetings. This casts doubt as to who said what and when, in what context and in response to what question or inquiry. 464 The tendency of Li Xu, earlier noted, to elaborate in her evidence beyond her pleaded case emerged again in dealing with the Hannah Zhu representations. Her evidence was that "they" said at each meeting that because she had "confirmed" the switch to Fund E with Michael Gu in Sydney (recall those discussions are said to have occurred in July 2016) "therefore you need to stay with E" resulting in compensation for an error by Salter Brothers. This evidence is inconsistent with the clear account of Robert Salter that at the first meeting he was informed of the complaint, said he would investigate the matter and revert with an answer. The internal Salter Brothers emails sent shortly after the first meeting establish that Robert Salter did not know at the time of the first meeting that there had been an earlier request to switch to Fund E, which Salter Brothers had failed to implement. 465 Li Xu in her WeChat message to Hannah Zhu on the evening of 21 February 2017, discloses that by the end of the first meeting she was still seeking confirmation that the switch had been effected in July 2016. There was no point in seeking that confirmation if, at the first meeting, "they" had earlier accepted that the instruction was given to Michael Gu. The same difficulty arises when confirmation was again sought by Li Xu in her WeChat message to Hannah Zhu of 23 February 2017. 466 In contrast to the imprecise evidence of Li Xu, Hannah Zhu gave very detailed viva voce evidence-in-chief as to the content of the discussion at each meeting. On her account she did not make the representations attributed to her. Acceptance of her evidence is fatal to Li Xu's case. Thus, her credibility is a central issue. 467 Hannah Zhu holds a Bachelor of Commerce from the University of Melbourne, a Diploma of Financial Services, is an accredited financial risk manager and has worked in the financial services industry since October 2010. She is fluent in English, Mandarin, Cantonese and Shanghainese. As a witness, she demonstrated a high degree of proficiency in English, although at times she had the assistance of an interpreter. 468 Mr Pearce submits that I should reject the evidence of Hannah Zhu, where it conflicts with that of Li Xu as unsatisfactory in multiple respects. I address the points seriatim. 469 The first concerns her having the assistance of an interpreter, when her affidavit was prepared without such assistance. There is no merit in that criticism. Hannah Zhu was cross-examined at length, often rapidly and with force. The number of occasions on which she resorted to an interpreter were relatively few. A careful reading of the transcript reveals that she did so to clarify certain questions, to seek more detail as to the content of a question, to assist with unfamiliar English words and to receive confirming translations of documents in Mandarin, (that had been interpreted by other persons into English). It was not put to her that she affirmed her affidavit without reading or comprehending it. 470 The second matter is that her evidence-in-chief was extensively rehearsed and betrayed that she had memorised key matters. That contention was not directly put to Hannah Zhu in cross-examination in Li Xu's proceeding (though it was put in a different form in the Zheng Xu proceeding). There are two responses. One is that, as a matter of fairness, to make that finding, Hannah Zhu should have been directly challenged to the effect now submitted. It was not put to her by Mr Pearce that she had rehearsed her evidence and that in consequence it was a reconstruction in whole or part. The other is that whilst I have reservations about the verbatim evidence given by Hannah Zhu in June 2024 concerning what was said in two meetings in February and March 2017, the gist of her evidence aligns with that of Robert Salter and the contemporaneous records as they exist, and what is in issue is whether Li Xu has discharged her onus of establishing that the pleaded representations, or ones to like effect, were made. 471 The third matter is that Hannah Zhu was unresponsive, argumentative and/or uncooperative in answering questions in cross-examination. The specific examples relied on commence with a series of WeChat messages of 2 March 2017, where Li Xu complained that her investments had not been transferred to Fund E conformably with her earlier request to Michael Gu in July 2017 (T 1089-1093). It was put to Hannah Zhu that this was the evidence of Li Xu. Hannah Zhu gave a non-responsive answer. Mr Pearce continued to cross-examine on this topic. In answer to the direct question whether Li Xu was expressing annoyance, Hannah Zhu gave a very long answer that was not responsive. That pattern continued for several pages of the transcript and descended into a debate as to whether the correct translation was "troublesome" rather than annoying. 472 There were further questions about different documents, to the effect of whether Hannah Zhu accepted that Li Xu had made complaints about the performance of her investments. Hannah Zhu did not accept that Li Xu was "constantly complaining" (T 1094) about performance. She gave further long answers by way of explanation. At one point I intervened and explained to her that if there were matters that required clarification, her barrister would address them in re-examination. I further explained to her the difference between closed and open questions. Thereafter in evidence, Hannah Zhu gave direct answers to the questions posed to her (from T 1095). 473 Another example concerned a series of questions about whether she accepted that a document shown to her contained general information about the Salter Brothers Group (from T 1062). I adjourned the evidence so that Hannah Zhu could have an opportunity to read the document. There were difficulties in the way the questions were first put to her in that the document speaks for itself. That difficulty aside, Hannah Zhu displayed some reluctance to answer direct questions about what the document contained, at least to her understanding. 474 Another example relates to whether in June 2019, Hannah Zhu was familiar with the details of Li Xu's investments (from T 1126). She did not, at least initially, respond to direct questions as to her knowledge about when the initial four-year term was due to expire. 475 Yet another example relied on is the evidence given about the email of 5 April 2020 from Li Xu which included the statement that redemption had been discussed the previous July. Over approximately five pages of transcript, at times her answers were non-responsive (T 1148-1153). 476 Finally, Mr Pearce also relies on a general submission that Hannah Zhu was evasive and upset that Li Xu brought the proceeding and had personally named her as a defendant (T 1086). 477 It is certainly true that on frequent occasions, Hannah Zhu did not directly answer questions that were put to her in cross-examination. But that is not a fair characterisation of the entirety of her evidence. As I have noted, the cross-examination was prolonged, probing and direct. Allowance must be made for the inevitable pressure that a witness is under in an unfamiliar environment in that context. Whilst I accept that there are many examples when Hannah Zhu did not answer direct questions, gave non-responsive answers and engaged in justification, in my assessment that is no reason to disbelieve her evidence generally. 478 The fourth matter is of more substance. It is whether Hannah Zhu gave Li Xu a copy of an Atlas Capital Information Memorandum at the meeting of 21 February 2017. In her affidavit made on 10 May 2024, her evidence was that on 21 February 2017, she received an electronic copy of the Atlas Capital Information Memorandum dated 1 February 2016. She then printed the document and provided it to Li Xu at their meeting later that day. In her evidence-in-chief, she said that she brought the printed document to the meeting and when the meeting concluded, she handed an envelope to Li Xu containing the Information Memorandum and an SB&G Group document (T 1057-1059). During cross-examination she confirmed to me that she provided two documents to Li Xu at the meeting (T 1073). 479 She was cross-examined with great intensity about that evidence (from T 1072). Her attention was directed to the WeChat exchanges of 21 February 2017 commencing at 6:37 pm, where she references a single document described as "today's information [which] focuses on what SB & G does". Hannah Zhu denied a series of questions that prior to giving her oral evidence, she noticed that there was a problem in that her affidavit was inconsistent with a WeChat message at CB 2349. She denied the proposition that she invented the second document to avoid the inconsistency. She did not accept any inconsistency in her evidence, explaining that her affidavit was drafted in response to Li Xu's affidavit, who had limited her evidence to non-receipt of an Information Memorandum. 480 The evidence of Li Xu was that she did not receive a copy of any Information Memorandum at either of the meetings. She made no reference to receipt of a general document about the SB&G Group. 481 The evidence does not explain why Hannah Zhu in her WeChat message only referenced a single document about "what SB&G does". I am not satisfied that Hannah Zhu provided a plausible reason why her affidavit varied from her evidence-in-chief and her cross-examination. In my view the WeChat message, which confirms the evidence of Li Xu, is correct. I find that Hannah Zhu did not provide a copy of an Information Memorandum to Li Xu during the meeting of 21 February 2017. 482 Of course, the submissions of Mr Pearce go much further. He invites a finding that Hannah Zhu attempted to mislead in her evidence. A finding of untruthfulness on this aspect of the evidence supports the broader submission that I should reject her evidence as to whether the representations were made. It is a serious matter to conclude that a witness has lied. I am not persuaded that I should do so. This is not a case where there is no explanation why Hannah Zhu did not mention two documents in her affidavit. Whether an Information Memorandum was handed over at the meeting did not form a component of the pleaded case and was not a matter that received detailed attention in the affidavit of Li Xu. It was not a central issue in the case when Hannah Zhu made her affidavit. The fact that there was a variation in her oral evidence is more likely the product of reflection on the evidence that she was required to give, and the progeny of reconstruction rather than a deliberate strategy to mislead. 483 However, even if I had concluded that Hannah Zhu lied in this aspect of her evidence, it does not follow that all her evidence must be rejected. As is evident from my summary, much of her evidence is corroborated by the evidence of Robert Salter. I did not form (and have not subsequently formed) the view, having carefully observed the entirety of her evidence given in sequence, that she was generally unreliable, evasive or unsatisfactory. 484 The fifth matter relates to Hannah Zhu's evidence that Li Xu mostly spoke in English with Robert Salter at each of the meetings in February and March 2017. In summary, Hannah Zhu said that when she was alone at the meetings with Li Xu, they conversed in Mandarin and when joined by Robert Salter the conversation was mostly English. When Li Xu "didn't pick up anything" (T 1096), Hannah Zhu would translate for her. On her account that did not happen very often. 485 The submission is that Robert Salter's evidence was that Li Xu's English "wasn't great", that "pleasantries" were discussed in English, but the substantive issues ('guts of the problem') were discussed in Mandarin (T 1354). It is further submitted that Hannah Zhu's evidence cannot be reconciled with Li Xu's voicemail messages of 28 March 2017 and with the WeChat messages of 13 October 2017. Mr Pearce submits that I should find that Hannah Zhu lied in giving this evidence. 486 Robert Salter and Hannah Zhu gave evidence in June 2024 about conversations in February and March 2017. It would be most surprising if their evidence had precisely correlated. Variation in recall is to be expected and does not establish defective recollection, reconstruction or dishonesty. Robert Salter's evidence was that Li Xu was capable of conversing in English at the first meeting. He stated that Li Xu asked if they could converse in English as she wished to practice. She was apologetic that her English "wasn't great". Robert Salter was content to converse in English to assist her. His evidence was also that there was "some discourse in English". The substantive issue was discussed between Li Xu and Hannah Zhu in Mandarin, with Hannah Zhu translating into English. Hannah Zhu translated the conversation about having earlier authorised a switch of her investments and the expression of concern by Li Xu as to whether her instruction had been implemented. On Robert Salter's evidence, not much else was discussed at the meeting. 487 Robert Salter did not give evidence as to the extent to which Li Xu conversed in English at the second meeting. 488 Hannah Zhu's evidence is that at the first meeting she conversed with Li Xu in Mandarin before Robert Salter joined them. They talked about Li Xu's new life in Australia, her daughter's schooling and Hannah Zhu shared her experience in Australia with her. They conversed for approximately one hour. When the conversation turned to business matters, Hannah Zhu left the room to locate Robert Salter. When she had, Li Xu spoke English to Robert Salter. She stated that she wanted to take the opportunity to practice in conversation with Robert Salter, which Hannah Zhu encouraged her to do. The conversation then turned to the SB&G Group structure, the management team and then to the discussion in July 2016 between Li Xu and Michael Gu. 489 That evidence does not establish a direct inconsistency between Robert Salter's recollection of the extent to which Li Xu conversed in English and that of Hannah Zhu. The conversation was a mix of English and Mandarin. The evidence of Robert Salter, that the "guts of the problem" was discussed in Mandarin, does not reveal the extent to which Li Xu spoke in Mandarin to Hannah Zhu, with Hannah Zhu translating, in his presence. 490 Dealing next with the voicemail messages of 28 March 2017, the evidence does not disclose the context in which those messages were left by Li Xu. There was no reference to these messages in the evidence-in-chief of Li Xu. Their existence only emerged during the cross-examination of Hannah Zhu. Initially, Hannah Zhu was handed a certified translation of the four messages and it was put to her that the first one would be audio played. Unfortunately, the document handed to the witness and to me was not in the same order. This caused confusion. I intervened and expressed my concern that Mr Pearce and Hannah Zhu had been at cross purposes (T 1102). 491 Following an adjournment, this line of cross-examination was commenced afresh (from T 1103). Each of the four audio messages were played in sequence with the questions being limited to whether Hannah Zhu accepted that she had received each and whether she disputed any of the certified English translations. Having established the authenticity of the audio messages, and acceptance of the translations as reasonably accurate, a global question was put to Hannah Zhu that "these messages are entirely inconsistent" with her evidence that at the meetings on 21 February and 6 March 2017, Li Xu "spoke for the most part in English" with Robert Salter (T 1106). Hannah Zhu said that she disagreed, but was not permitted to say why. Mr Pearce then moved to the WeChat messages of 13 October 2017. 492 When permitted to explain in re-examination why she did not accept the inconsistency, Hannah Zhu stated that at the first meeting Li Xu could speak with Robert Salter directly, but sometimes needed her assistance to translate particular words (T 1273). 493 I do not accept the inconsistency submission to the extent that it is based on the voicemail messages. What the messages reveal is that Li Xu sought to improve her English fluency so that she could understand more of what was discussed in her English classes and at unspecified meetings. Without the benefit of the context in which those messages were left, what events were being referred to and what was not able to be proficiently understood, I am unable to reach the conclusion that is urged. 494 As to the WeChat messages of 13 October 2017 (CB 3194), Li Xu's reference to having passed the L6 test and her anticipation that she would commence to study for the L7 test are each references to recognised proficiency by the English Language Testing System (IELTS). The levels are in evidence. They are (CB 29086): IELTS Band Score: 9 Skill Level: Expert * the test taker has fully operational command of the language. * their use of English is appropriate, accurate and fluent, and shows complete understanding. IELTS Band Score: 8 Skill Level: Very good * the test taker has fully operational command of the language with only occasional unsystematic inaccuracies and inappropriate usage. * they may misunderstand some things in unfamiliar situations. They handle complex and detailed argumentation well. IELTS Band Score: 7 Skill Level: Good * the test taker has operational command of the language, though with occasional inaccuracies, inappropriate usage and misunderstandings in some situations. * they generally handle complex language well and understand detailed reasoning. IELTS Band Score: 6 Skill Level: Competent * the test taker has an effective command of the language despite some inaccuracies, inappropriate usage and misunderstandings. * They can use and understand reasonably complex language, particularly in familiar situations. IELTS Band Score: 5 Skill Level: Modest * the test taker has a partial command of the language and copes with overall meaning in most situations, although they are likely to make many mistakes. * they should be able to handle basic communication in their own field. IELTS Band Score: 4 Skill Level: Limited * the test taker's basic competence is limited to familiar situations. * They frequently show problems in understanding and expression. IELTS Band Score: 3 Skill Level: Extremely limited * the test taker conveys and understands only general meaning in very familiar situations. * there are frequent breakdowns in communication. IELTS Band Score: 2 Skill Level: Intermittent * the test taker has great difficulty understanding spoken and written English. IELTS Band Score: 1 Skill Level: Non-user * the test taker has no ability to use the language except a few isolated words. 495 Li Xu received a certificate from IELTS on 21 July 2015 with a score of 3.5 for listening, 4 for reading, 5.5 for writing and 5 for speaking in English with an overall score of 4.5 (CB 536). In another certificate dated 8 February 2017, she scored 4 for listening, 4.5 for reading, 5 for writing and 6 for speaking with an overall score of 5 (CB 18456). In another certificate dated 13 June 2019, her overall score was 6 (CB 18457). 496 What this evidence establishes is that Li Xu was capable of conversing in English in February 2017 to the modest level - a partial command of English with the ability to cope with overall meaning in most situations, though likely to make many mistakes. By June 2019, she had reached a level of competency with effective command of the English language. 497 This background assists in understanding the evidence given by Hannah Zhu in cross-examination that Li Xu would be able to communicate "directly" with Robert Salter at the next meeting. She could, having achieved level 5 in the test certificate of 8 February 2017. This does not support the serious finding that Hannah Zhu gave false evidence that Li Xu spoke directly in English to Robert Salter, with translation assistance when required, at a time when her score was consistent with that level of proficiency in English. 498 For these reasons, I reject the submission that there is a direct contradiction in the evidence, that I should disbelieve Hannah Zhu or that these matters support an overall conclusion that Hannah Zhu was an unsatisfactory witness, and one who at times lied. 499 The sixth matter, characterised as "another unsatisfactory aspect" of Hannah Zhu's evidence, concerns when Li Xu first raised the question of redemption with her, which Hannah Zhu said was in the email of 5 April 2020. The submission is that Hannah Zhu could not give any plausible explanation why Li Xu stated in the email: "As you know, my investment period concluded last July, and I talked to you about my redemption request" (T 1148-1153, 1121-1123). The submission is taken further by reference to an audio message of December 2019 (in which Hannah Zhu mentioned the expected IPO date of early in 2020), which event was linked to the ability to meet redemptions (CB 29082). On that basis it is submitted that the only plausible reason for discussion of the IPO was that redemption had been earlier discussed. 500 The second aspect of that submission may be shortly dealt with. The IPO was addressed in the information (in Mandarin) attached to the email to Li Xu from Cathy Zhang on 7 May 2019. Hannah Zhu is correct in her evidence to that effect. 501 That leaves the content of the email of 5 April 2020. Hannah Zhu steadfastly maintained her evidence that the topic of redemption had not been earlier discussed with her. She gave as a reason that investors often deal with several staff, the implication being that Li Xu may have been mistaken in recalling who she raised the redemption request with. Against this, Hannah Zhu was the main point of contact with Li Xu. There is certainly an inconsistency in the evidence. I find that Li Xu did raise the question of redemption with Hannah Zhu at some time prior to 5 April 2020, which finding is based on the fact that Li Xu was not challenged in cross-examination about this statement in her email. The adverse weight of this finding is not however of significance. This finding is not to be confused with my earlier finding that this email does not support Li Xu's evidence that a redemption form was requested and signed at the Gong Di Lin lunch on 26 June 2019. The present issue is whether redemption was discussed at any time prior to 5 April 2020. In any event, when redemption was first requested does not shed much light on whether Li Xu said at the meeting of 21 February or 6 March 2017 that she wished to redeem all her investments. 502 The final matter concerns Hannah Zhu's evidence about the moon cakes meeting of 6 September 2019. The criticism is that I should reject Hannah Zhu's evidence that the meeting was purely social, as inconsistent with the follow up WeChat message that Li Xu sent later that day: "Thank you for today's explanation". Hannah Zhu stated in cross-examination that Li Xu had accessed an incorrect WeChat account to obtain corporate information about Salter Brothers. That evidence is quite plausible when all the WeChat messages for this day are considered (CB 3201-3202). The second message posted (one minute after the first) by Li Xu (before awaiting a response from Hannah Zhu) was: "I can't see the content in your circle of friends on WeChat [scream]". Hannah Zhu responded by referring Li Xu to her company WeChat account and Li Xu responded that: "Generally, I only read from this WeChat account of yours". Those messages clearly distinguish between the corporate and personal WeChat accounts of Hannah Zhu, which is consistent with the evidence she gave in re-examination that Li Xu had been unable to access the company "feed information" because she was not accessing the corporate WeChat account (T 1274-1275). 503 I find according to the evidence of Hannah Zhu. The meeting was social, and to the extent that any business-related matter was discussed, it was limited to an explanation that Hannah Zhu provided to Li Xu as to the difference between the information accessible pursuant to the corporate and personal WeChat accounts. 504 Thus, it is only in two respects (provision of the Information Memorandum on 21 February 2017 and discussion of redemption prior to 5 April 2020) that I reject the evidence of Hannah Zhu. In addition, as I have noted, there were times in her evidence when her answers were non-responsive. But these matters do not cause me to conclude that I should reject Hannah Zhu's evidence as to other matters. More specifically, I have not formed the view that she was generally an unsatisfactory witness, despite the many submissions of Mr Pearce to that effect. 505 I now deal with the evidence of Li Xu. I am not satisfied that it was given with sufficient precision to persuade me of the fact that at either or both of the meetings of February and March 2017, Li Xu stated that she wished to redeem the whole of her investments and transfer to Moelis and that in response Hannah Zhu recommended that she should transfer her investments in Fund A and Fund B to Fund E. Nor am I satisfied that Hannah Zhu said words to the effect that Li Xu was guaranteed to receive her money back at the conclusion of a further period of two years. The conclusion I have reached about Li Xu's evidence concerning the Salter representation applies equally to her evidence about the Zhu representation: i.e. she gave rolled up evidence without context. She made no attempt to isolate what she said from the responses provided respectively by Robert Salter and Hannah Zhu. Put at its highest, Li Xu's evidence as to the Zhu representation was that "they" said that "after four-years, I will be able to get my money back". That evidence falls short of a representation made by Hannah Zhu (to the effect) that Li Xu was "guaranteed to receive her money back at the conclusion of a further two years". There is an obvious conflation between the minimum investment period and what the investor may be able to do at the conclusion of that period. 506 Moreover, the evidence of Li Xu must be assessed in the context of the contemporaneous documents. Li Xu did not mention in her evening WeChat message of 21 February 2017 that she had attended the meeting for the purpose of redeeming all her investments but was persuaded because of statements made to her to maintain her investments with Salter Brothers. She did not mention that she had been advised to switch her investments from Fund A and Fund B to Fund E. She did not mention her desire to withdraw all her funds in her WeChat messages with Hannah Zhu on 22 February 2017, when the topic that was foremost in her mind at that time was the need to seek confirmation that the switch of her investments had occurred in July 2016. 507 There is also the internal email of 22 February 2017 that Hannah Zhu sent following the first meeting. The topics that she raised did not mention any desire on the part of Li Xu to withdraw all of her investments and transfer to Moelis. 508 To accept the case as to what Hannah Zhu said at the meetings also requires me to accept that Li Xu and Hannah Zhu carried on a discussion in Mandarin at either (or each) meeting (the content of which was not translated to Robert Salter and which concerned matters central to Li Xu's investment) by a relatively junior employee of Salter Brothers in the presence of one of the founding directors. What possible motivation would Hannah Zhu have had for doing that? The evidence does not offer an explanation. 509 The difficulty in accepting the account of Li Xu is compounded by my acceptance of the evidence of Robert Salter, which is substantially undermining, and by the six antecedent matters that affect the plausibility of Li Xu's case which I listed seriatim above. I also accept the gist of the evidence of Hannah Zhu as a generally accurate account of the matters discussed in each of the meetings, despite my rejection of some aspects of her evidence. Those matters do not cause me to doubt her evidence as a whole. 510 Having considered and weighed the entirety of the evidence, I find in accordance with the evidence of Robert Salter and Hannah Zhu as follows. The meeting of 21 February 2017 commenced with a general discussion between Hannah Zhu and Li Xu relating to her new life in Australia, her daughter's schooling and Hannah Zhu's experience of living in Australia. When the topic of the discussion turned to Li Xu's investments, Hannah Zhu stated that she would invite Robert Salter to join them. Having located him, he provided an overview of the Salter Brothers Group and management. Li Xu then discussed, partly in English and partly in Mandarin, that she had made a request to switch her investments into Fund E at a meeting with Michael Gu in July 2016. She expressed concern that her instruction had not been implemented: the reason being that she had not received formal confirmation to that effect. 511 Neither Hannah Zhu nor Robert Salter had knowledge of that request by Li Xu. She was informed that the matter would be investigated. There was also a discussion about Li Xu's status as an Australian tax resident and for that to be recorded for dividend purposes. At the conclusion of the meeting, Hannah Zhu provided one document to Li Xu being an information brochure about the Salter Brothers Group. 512 At the meeting on 6 March 2017, having investigated the switch of investment issue, Robert Salter told Li Xu that he accepted the switch of investments to Fund E should have been implemented in July 2016. He offered compensation, provided a calculation of the compensation amount and, being satisfied, Li Xu signed a form to redeem her investments in Fund A and Fund B and transfer her investments to Fund E. She also signed forms relating to her taxation status. 513 I am not satisfied on the evidence that the oral representations attributed to Hannah Zhu at either meeting were made. Although I am satisfied that Li Xu did discuss redemption with Hannah Zhu before 5 April 2020, that finding does not shed persuasive light on Li Xu's claim that redemption was discussed in February or March 2017. 514 To the extent that Li Xu gave evidence contrary to these findings, I conclude that it is based on a reconstruction of what she now believes was said, or must have been said, at the time. Her evidence is not credible, and I reject it. F. 10 Conclusion on the representation case 515 For these reasons, Li Xu has failed to make out her case on the Jin, Fan, Gu, Salter or Zhu representations. It follows that her contractual warranty claim based on the Jin and Fan representations also fails. 516 These conclusions require that the proceeding be dismissed. It is not strictly necessary that I proceed to make other findings. However, I may have fallen into error. Many more issues were argued before me. It is desirable therefore that I address other aspects of the claim and defence. Fortunately, I can proceed in a shorter form of reasons as the scope of factual findings that are required is considerably less. In doing so, I will assume contrary to my findings that the Jin, Fan, Gu, Salter and Zhu representations were made. F. 11 Were the representations misleading or deceptive 517 For certain representations or components thereof, Li Xu pleads they were representations as to a future matter so as to engage ss 12BB of the ASIC Act and 769C of the Corporations Act. The representations are: (a) The Jin representation; (b) The first part of the Fan representations (investment would be returned after four-years) (c) The first part of the Gu representation (would be able to redeem in July 2019); (d) The Salter representation; and (e) The first part of the Zhu representations. 518 The Salter Brothers parties accept that if any of these representations were made they were as to a future matter and they have not sought to make out an evidentiary case that the maker in each case had reasonable grounds. It follows that these representations are taken to be misleading. 519 That leaves for consideration the second component of the Fan representation (the Australian Government closely monitors the Trustee funds so there is no risk), the second component of the Gu representation (money invested in Fund E was guaranteed by the Australian Government) and the second component of the Zhu representation (complying investments offered by the Trustee were designed so that investors received their money back after four-years). 520 Li Xu pleads falsity as establishing the misleading conduct case. Respectively: (a) The Australian Government did not closely monitor funds operated by SBAM and there was risk to investing; (b) The Australian Government did not provide any guarantee for any money invested in Fund E; and (c) Fund E was not designed so that investors received their money back after four-years. 521 These representations were not made to the world at large, or to a particular class of persons. They were made to an individual. The question is whether, assuming they were made, what objective meaning was conveyed and whether in all the relevant circumstances it was misleading or deceptive or likely to mislead or deceive. The analysis proceeds by reference the characteristics of the individual and the objective circumstances: Campbell at [26], French CJ; Butcher at [37], Gleeson CJ, Hayne and Heydon JJ; Australian Securities and Investments Commission v Dover Financial Advisers Pty Ltd [2019] FCA 1932; (2019) 140 ACSR 561 at [99], O'Bryan J and Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2023] FCAFC 45, Mortimer, Lee and Halley JJ. Justice Edelman expressed the analysis with clarity in Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196; (2016) ALR 647 at [219]: [W]here the conduct is directed to a single person ...attention must be directed to the relationship between the two persons, the context in which the statement is made, the reasonably known characteristics of the recipient of the statement, and the effect on a reasonable person in the position of the recipient of the statement. 522 That statement of principle was approved by the Full Court in Mazda at [54]. 523 The reasonably known characteristics of Li Xu commence with the fact that on successive days in July 2015 she invested a total of $2.5 million with Atlas Capital and the same amount with Moelis. She did so to satisfy a mandatory requirement of the SIV Program. At the time she was 42 years old, married to Dian Wang and had a child. She was aware that a condition of the grant of her visa was that each complying investment was required to be maintained for a minimum of four-years. She was fluent in Japanese having studied at university between 1991 and 1999. Her employment history discloses the holding of managerial positions in businesses in the People's Republic of China, for which she received a comparatively large annual salary. She well understood the nature of contractual obligations that are imposed when a person signs a written contract. As I have noted, her IELTS score in July 2015 was 4.5, which sits equally between basic competence limited to familiar situations and partial command of the language despite some inaccuracies. She accepted that she could write "some English" in July 2015 (T 160). 524 In May 2015, she was the proprietor of her own business of providing weight loss services to individuals. Commencing in 2007, with her husband, she had acquired a portfolio of investment properties in the People's Republic of China. In 2009, the properties had acquired a value of between 20 and 30 million yuan. By February 2017, her overall IELTS score of 5 placed her as having a partial command of English with the ability to cope overall in most situations, with many mistakes. 525 Li Xu accepted that in her business dealings prior to 2015 she understood economic and contractual risks. On 22 May 2015, she received a document in Mandarin from Dulcie Du which summarised the risk of various complying investments, including the commercial real estate funds offering higher returns but with a higher risk. On 23 May 2015, she received further documents from Dulcie Du which addressed the risks of various types of investment. Li Xu received and read, to the level of her then comprehension of English, the entirety of the letter from the Department of 21 May 2015 which, on the second page, stated that it was her responsibility to obtain all necessary information before selecting a complying investment and that the Commonwealth of Australia does not approve or endorse complying investments. She did not ask Austar Suzhou to explain any part of the letter that she found challenging to read or understand. 526 She was able to obtain a translation of any document in English into Mandarin in 2015. She also understood that investments carry risk and investments that offer a higher rate of return carry greater risk than those with lower rates of return. With her husband, Li Xu studied in detail the document provided to her by Jeanetta Jin, made notes on that document reflecting her assessment of the risks and returns then projected for various types of investments offered by Atlas Capital. She understood that the property funds, which according to that document offered between 8% and 15% returns per annum carried a higher degree of risk. The Atlas Capital document (recall that it was provided to her in Mandarin) set out detailed disclaimers, which Li Xu read at the time. In particular, she was aware that the past performance of a fund "is no guide to future returns" and that "sometimes the principal may not be recovered". She was aware of the advice that she should make her own inquiries before making an investment. I do not accept her evidence that having read these disclaimers, she did not accept them. No question of acceptance arises. This is a document which highlighted the risks of certain types of investment and put Li Xu on notice of those risks. 527 Li Xu also understood liquidity risks at the time. She annotated the table in the Atlas Capital document that summarised six funds then on offer. The notes to the table expressly drew her attention to the Information Memorandum for redemption fees and for more specific information generally. It stated that in the case of no liquidity the real estate fund will not be redeemed in advance. Even if one accepts the distinction drawn by Mr Pearce between a redemption in advance and a redemption at maturity (which I do not), the fact is that Li Xu deliberately decided not to investigate the risks that she was assessing, or to understand the particular terms of investment and the explanation of risks in the Information Memorandum. When cross-examined about these notes, Li Xu would not accept that she understood that there was a liquidity risk save within the four-year period answering: "it's locked in for four-years" (T 190-191). Nor would she accept that whether money is returned after the four-year period is a function of market forces. I reject that evidence. As a relatively intelligent and successful investor at the time with a portfolio of real estate and with experience in business, who was then making a detailed assessment of the six types of investment on offer by Atlas Capital, who then posed a detailed list of questions following that assessment and where none of those questions touched on the return of the sum invested at the conclusion of the four-year period, her evidence is simply implausible. 528 On 2 June 2015, Li Xu was provided with the Moelis investment material by Jeanetta Jin, including the application form which also set out the various risks involved in making investments with Moelis. This was in Mandarin. I find that she was aware at the time, in accordance with those documents, that real estate investments may experience price fluctuations and that there were risks of investing in complying property funds which were illiquid assets. 529 Having carefully assessed the risks, Li Xu formulated 11 questions that she attached to her email of 4 June 2015 to Jeanetta Jin. Those questions reflect a detailed assessment by her, and her husband, of the risks associated with the investments she was considering with Atlas Capital and Moelis. This email is an important document viewed in the context of the relationship between the parties where it was reasonably known that Li Xu had carefully considered the information provided to her and was not unsophisticated in the making of investment decisions that carry risk. 530 Specifically, as to the Atlas Capital Fund E, Li Xu understood at the time that the comparatively higher rate of indicated return reflected a higher degree of risk. I have rejected her evidence that she considered that investment in this fund was just like an investment in a bank deposit. 531 When Li Xu signed the application form to invest with Atlas Capital, she noticed the letters "IM" as a component of the declarations and acknowledgements above her signature. I find that she was aware that "IM" meant Information Memorandum and that her investments were being made on the terms set out in the Information Memorandum. 532 Overall, I find that Li Xu in July 2015 was an experienced investor, who understood the risks of various forms of investment and, on assessment of those risks, decided to split her investments with Atlas Capital with the purpose of achieving a higher rate of return in Fund E, where the majority of her funds were invested. 533 When all the conduct to the time of the making of the investments on 8 July 2015, and then at the time of the switch in March 2017, is objectively considered through the lens of the known characteristics of Li Xu, I am unable to accept that the Fan, Gu and Zhu representations were misleading or deceptive or likely to mislead or deceive a reasonable person in the position of Li Xu at the time for several reasons. 534 First, the investments were economically significant transactions subject to investment risk which varied between the bank and bond funds and the property funds. A reasonable person in the position of Li Xu would have understood that. Objectively, the state of knowledge of the reasonable person would have been informed by careful study of the investments and investment return projections for the various Atlas Capital funds. The representations were not made to an unsophisticated investor. They were made to an investor with a history of investing in real property who understood the risk/return relationship. 535 Second, the representations were made to an investor who had been expressly informed by the Department in the correspondence that was central to the assessment of complying investments, that it did not endorse or approve any complying investment. Having that matter stated so clearly in writing, it was not objectively misleading to be orally told to the effect that the Australian Government closely monitors the funds offered by the fund trustee and so there is no risk, or that money invested in the fund was guaranteed by the Australian Government. Objectively, a person in the position of Li Xu at the time would not have understood those representations by a third-party as providing the very assurance that the representee knew was not provided by the Australian Government. There is no basis to find that the oral statements tended to lead into error when the correct position had been explicitly stated and understood. 536 Third, the three oral representations in issue must not be considered in isolation. The course of conduct leading to the initial investments in July 2015 includes the investment risks that a reasonable person in the position of Li Xu would have been aware of. Such investment risks included that an investment in a property fund offered a comparatively higher return than the investments in Fund A and Fund B and with it acceptance that an investment in a property fund was not as liquid. Objectively an oral representation to the effect that investments were monitored or guaranteed by the Australian Government cannot be reconciled with the risks that were disclosed in the Atlas Capital brochure (in Mandarin) and carefully interrogated by Li Xu. A government guarantee carries no such risk. A reasonable person in her position would have understood that. 537 Fourth, concerning the Zhu representation at the time of the switch to Fund E in March 2017, the surrounding circumstances then included that Li Xu had already decided to switch to Fund E well before the representation relied on. That decision had been made in July 2016. It was made because of the relatively low yielding performance of Fund A and Fund B compared to Fund E, as evidenced by the WeChat messages from Li Xu to Hannah Zhu on 14 March 2017. A reasonable person having made that decision would not have been led into the error that is contended. 538 Fifth, a reasonable person in her position at the time could not objectively have been misled by a representation as to the design of Fund E with the result that investors would receive their money back after four-years. That amounts to a guarantee, which is objectively absurd in the context of an informed investor who was aware of investment risks, understood the difference between the risks of bank deposits on the one hand and investments in property funds on the other, understood the risk/return ratio and who has determined to move funds from lower yielding investments to a higher yielding one. No informed objective investor in the position of Li Xu at the time would be likely to have been led into error by that representation at the time. 539 Finally, the reasonably known knowledge and experience of Li Xu as the representee, when assessed by reference to the effect of the representations on a reasonable person in her position, make it objectively implausible that the representations would have been understood at face value without qualification. Statements to the effect that the money will be returned (not may be or might be) at the conclusion of the four-year term for investment in the property funds would not likely lead into error. The more likely response of the reasonable representee in the circumstances of Li Xu at the time would have been: Yes, but it depends. It depends on the liquidity of the fund, whether capital loss has occurred and the general performance of property assets to the time of redemption. It would also depend on the number and quantum of redemption requests. 540 For these reasons I conclude that these three representations were not objectively misleading or deceptive or likely to mislead or deceive, assuming they were made. F. 12 Causation F. 12.1 How the case is put 541 Section 12GF of the ASIC Act applies where a person has suffered loss or damage by conduct of another person that contravenes a relevant provision. Where that is so, the person may recover the amount of the loss or damage. Section 12GM is concerned with other orders that may be made where the Court finds that a person has suffered or is likely to suffer loss or damage by conduct engaged in in contravention of a relevant provision. Section 1041I of the Corporations Act applies loss or damage suffered by conduct of another person in contravention of a relevant provision. 542 These are familiar provisions. Chief Justice Mason observed of the then equivalent requirement at s 82 of the Trade Practices Act that: ""By" is a curious word to use. One might have expected "by means of", "by reason of", "in consequence of" or "as a result of". But the word clearly expresses the notion of causation without defining or elucidating it": Wardley v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 525. 543 Li Xu carries the onus of proving that she suffered loss or damage by the misleading or deceptive conduct of one or more of the Salter Brothers parties. There are four aspects to the pleaded reliance case. First, that in reliance (which is pleaded separately) on the Jin and Fan representations, Li Xu in July 2015 completed the application form, transferred $2.5 million and entered into an agreement with SBAM to acquire units in Fund A, Fund B and Fund E. 544 Second, in reliance on the Gu representations, Li Xu did not redeem her investments with SBAM and transfer all her investments to Moelis in July 2016. 545 Third, in reliance on the Salter and Zhu representations, Li Xu did not redeem the whole of her investments and transfer her funds to Moelis, but instead on 6 March 2017, redeemed her investments in Fund A and Fund B and transferred to Fund E. 546 Fourth, on or about 29 March 2018, in reliance on the Jin, Fan, Gu, Salter and Zhu representations, Li Xu invested a further sum of $50,000 in Fund E. 547 The pleaded counterfactual is developed as follows. On or about 17 July 2015, Li Xu invested $2.5 million with Moelis split as to $1.5 million into the Moelis Australia Property Fund and $1 million into the Moelis Australia Bond Fund. If Li Xu did not make her initial investment of $2.5 million with Atlas Capital in July 2015, she would have made a further complying investment of $2.5 million in the same amounts with Moelis and split in the same way. 548 On or about 4 March 2016, Li Xu told Michael Gu that she wished to redeem the whole of her investments with Atlas Capital and transfer to Moelis. She repeated that statement to Michael Gu on or about 25 July 2016. She was then dissuaded from doing so because of the Gu representations. 549 On or about 21 February 2017, and again on or about 6 March 2017, Li Xu told Robert Salter and Hannah Zhu that she wished to redeem the whole of her investments with Atlas Capital and transfer to Moelis. She was dissuaded from doing so because of the Salter and Zhu representations. 550 Li Xu then relied on a combination of representations when she invested the further sum of $50,000 in March 2018, obliquely on the basis that but for those representations that money would also have been invested with Moelis. 551 Finally, at the end of the pleading, the contention is that Li Xu has suffered loss and damage by reason of the contravening conduct calculated as the difference between the amounts invested of $2,550,000 (plus and minus certain actual and hypothetical distributions and a capital loss) and then less the current value of investment in Fund E, which is said to be nil. 552 The essential distinction between damage and damages must not be blurred. This is a claim for economic loss. The kind of damage claimed to have been suffered must be identified "with some precision": Hunt & Hunt Lawyers (a firm) v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613; at [25], French CJ, Hayne and Kiefel JJ. In the way in which the case was pleaded and ultimately argued it lacked that precision. As Lord Hoffmann stated in Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191 at 211: Before one can consider the principle on which one should calculate the damages to which a plaintiff is entitled as compensation for loss, it is necessary to decide for what kind of loss he is entitled to compensation. 553 Unlike the misleading conduct inquiry, causation is concerned with the conduct of a particular claimant, with the benefit of hindsight informed by what happened: Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 at [124], Hayne J. Li Xu must establish a causal link by analysing the character of the conduct alleged and the whole of the circumstances "bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known": Butcher at [37], Gleeson CJ, Hayne and Heydon JJ. It is sufficient to establish that the conduct was a cause of the damage - it need not be the only or the substantial cause: Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 at [14], Gleeson CJ, [59] – [60], Gaudron J, [106] and [109], McHugh J, and [162] – [165], Hayne J. 554 To discharge its causation onus, Li Xu must satisfy me that she suffered damage by the impugned misleading or deceptive conduct on the entirety of the evidence. I must be reasonably satisfied on this issue on the preponderance of probabilities: Palmer v McGowan (No 5) [2022] FCA 893; (2022) 404 ALR 621 at [462], Lee J. Direct evidence from Li Xu as to what she would have done on the counterfactual assumption is unnecessary. The surrounding circumstances are usually sufficient to infer reliance on identified misleading or deceptive conduct. As put by Kiefel J in Hanave Pty Ltd v LFOT Pty Ltd (formerly Jagar Projects Pty Ltd) [1999] FCA 357; (1999) 43 IPR 545 at 555-556: The question of causation can sometimes be resolved not by direct evidence as to what part a misrepresentation played in the process of entry into contract, but by a court determining what effect must be taken to have resulted. Indeed this course may sometimes be preferable to one which rested solely on evidence later given on the point. In Gould v Vaggelas at CLR 236 Wilson J held that if a material representation is calculated (which is to say, objectively likely: Ricochet Pty Ltd v Equity Trustees Executor & Agency Co Ltd [1993] FCA 99; (1993) 41 FCR 229; 113 ALR 30; Henderson v Amadio Pty Ltd (No 1) [1995] FCA 1300; (1995) 62 FCR 1 at 166; [1995] FCA 1300; 140 ALR 391) to induce the representee to enter into a contract and the person in fact enters into a contract, a fair inference arises that the representation operated as an inducement, adding that it need not be the only cause. The latter point is now uncontroversial. It suffices for liability if a misrepresentation played some part in inducing entry into contract for the price agreed. That part of Wilson J's judgment was not stated to be an exhaustive rule, but is to be seen as a guide to a question of fact which may arise. A conclusion of inducement may then be reached where a combination of factors, including the quality of the representation itself, goes unanswered. In relation to the representation itself it would need to be of a kind likely to provide that inducement and such that "...commonsense would demand the conclusion that the false representations played at least some part in inducing the plaintiff to enter into the contract" (per Wilson J at CLR 238) ... 555 This is not to say that subjective counterfactual evidence is to be disregarded or afforded little weight and a priori assumptions about the unreliability or self-serving nature of such evidence should not be made: Elanor Funds Management Ltd v Alceon Group Pty Ltd [2024] FCAFC 121 at [291], Bromwich and Thawley JJ. 556 Finally, in Berry v CCL Secure Pty Ltd [2020] HCA 27; (2020) 271 CLR 151 at [65], Gageler and Edelman JJ observed: "Economic loss may take a variety of forms" all of which involve the identification of some "prejudice or disadvantage" that has occurred. Plaintiffs pursuing the statutory action are initially responsible for formulating how such loss or damage as they claim to have suffered is to be identified. The initial question must always be: "what loss or damage does the plaintiff allege"? The plaintiff then bears the legal onus of proving that the identified loss or damage has been suffered by the contravention of which they complain and of establishing the amount of that loss or damage. The plaintiff bears, in other words, the ultimate burden of establishing both the required connection with the contravention and quantum by inferences drawn from the whole of the evidence. That legal onus is constant. 557 The pleading does not distinctly identify the damage claimed to have been suffered when Li Xu made the decisions in reliance on the representations in issue. In opening submissions, Mr Pearce characterised this as a no transaction case in that the entire amount of the required investment would have been placed with Moelis. In closing submissions, Mr Pearce characterised it as an alternative transaction case. That distinction has been criticised: Hughes-Holland at [35], Lord Sumption; Banque Bruxelles at [218], Lord Hoffmann. 558 I pause at this point to observe that the pleaded case does not expressly characterise the damage suffered by Li Xu as "the detriment suffered by being bound to a contract unconscionably induced or that it includes the disadvantage of incurring contractual obligations which would not have been incurred but for the conduct complained of": Harvard Nominees Pty Ltd v Tiller [2020] FCAFC 229; (2020) 282 FCR 530 at [77], Lee, Anastassiou and Stewart JJ. However, by the time of closing arguments, Mr Pearce embraced that case in a submission that s 12GM of the ASIC Act "has been interpreted broadly so as to include prejudice or disadvantage and is not limited to the loss necessary for an award of damages." 559 The submission then proceeds to the power to make other orders at s 12GM of the ASIC Act "as the Court thinks appropriate…if the Court considers that the order or orders concerned will compensate the [plaintiff] in whole or part for the loss or damage …". That is all very well, but it is a necessary element of each of the statutory provisions relied on that identifiable damage must be proved before orders may be made. I accept though that the Court is not constrained by the assessment difficulties that can arise in calculating an award of damages. In any event, the formulation of the principle in Harvard Nominees, by reference to the earlier decision of the Full Court in Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31, expressly requires identification of detriment or disadvantage. That case is not expressly pleaded. 560 However, by careful study of the pleadings and the written and oral closing submissions, one can deduce the separation of the counterfactual that is relied on from the loss and damage that is claimed to flow from reliance on the representations. I address each separately. F. 12.2 The counterfactual 561 Mr Pearce places reliance on Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3; (1986) 160 CLR 1. The appellant contracted for a total disability insurance policy. It contained certain exclusion clauses that operated when he made a claim. He contended that but for the misleading conduct of an insurance agent which induced him to enter the policy, he would not have so entered and would have effected a policy with an alternative insurer to provide the benefit he sought without similar exclusion clauses. He failed in that contention. Emphasis is placed on the passage in the plurality reasons of Mason, Wilson and Dawson JJ at 13 that: If that reliance has deprived him of the opportunity of entering into a different contract for the purchase of goods on which he would have made a profit then he may recover that profit on the footing that it is part of the loss which he has suffered in consequence of altering his position under the inducement of the representation. This may well be so if the plaintiff can establish that he could and would have entered into the different contract and that it would have yielded the benefit claimed. 562 Reading beyond the passage emphasised (also at 13) reveals why the appellant failed: So, in the present case if the appellant were able to establish that, but for his reliance on Mr Rainbird's representation, he could and would have entered into policies of insurance containing a disability clause of the kind represented by Mr Rainbird, he might then succeed in obtaining an award of damages equal to the benefits which would have been payable under such policies less the premiums paid or payable in respect of them. 563 Fatally he did not adduce evidence that there was another insurance company that at the time offered the alternative policy contended for. 564 In this case there is evidence from Li Xu in her affidavit of 16 February 2024, that she would have invested all her funds into complying Moelis funds. Mr Pearce in closing submissions focused on that evidence, which he summarised as follows (noting that the evidence references the subsequently abandoned Han representations): (a) in July 2015 (affidavit [45]-[46]): (i) she made her initial investment with Atlas because of what she had been told by Lixia Han, Ms Jin and Mr Fan, instead of investing all her funds with Moelis as her husband had preferred; (ii) if she had not been told of the matters represented to her by Lixia Han, Ms Jin and Mr Fan, then she would have followed her husband's recommendation and invested the entire $5,000,000 with Moelis; (b) in July 2016 (affidavit [76]-[77]): (i) she switched her investments in Atlas funds A and B into Atlas fund E because Michael Gu had said that Atlas fund E would provide a better return, that her investment would be guaranteed by the Australian Government and that at the end of four-years her investment in Atlas fund E would definitely be available to be returned to her; (ii) if she had not been told of those matters by Michael Gu, she would have withdrawn all of her investments with Atlas and invested the proceeds with Moelis; (c) in February and March 2017 when it was revealed the proposed switch out of Funds A and B to Fund E had not occurred (affidavit [91]-[92]): (i) she maintained her earlier decision to switch her investments in Atlas funds A and B into Atlas fund E (which decision which had not been acted on) because Mr Salter and Ms Zhu had said that she would get her money back after 4 years (meaning in 2019); (ii) if she had not been told of those things by Mr Salter and Ms Zhu, then she would have withdrawn all of her investments with Atlas and invested them with Moelis. (d) in March 2018 (affidavit [98]-[99]): (i) she decided to invest a further $50,000 in Atlas fund E because of her desire to support Ms Zhu and because of what she had previously been told about Atlas, being that: (A) she would get back her principal investment at the end of four-years; (B) Australian law required the investment company to have ready, six in comparison with Fund E entirety of the investment; (C) The Australian Government closely monitored the fund and so there was no risk; (D) The Australian Government guaranteed Atlas fund E; and (E) the Atlas SIV funds were designed to be compliant SIV investments and that therefore she was guaranteed to get her money back at the end of the four-year period in 2019; (ii) if she had not been told of those matters, then she would not have invested the $50,000 in any other investment and would have kept the money in her bank account for general expenses. 565 There is also the evidence of Dian Wang that Moelis was his investment preference in July 2015, and if the decision had been his alone that is where all the funds would have been directed. 566 The evidence summary is correct so far as it goes (and it is also correct that this evidence was not directly challenged in cross-examination), but there is an omission. Li Xu in her second affidavit of 20 May 2024 at [21] – [24] sets out a different counterfactual (CB 2287): At paragraph 46 of My First Affidavit, I said that had I not been told the matters set out at paragraph 45 of My First Affidavit, I would have invested an additional $1,500,000.00 into the Moelis Property Fund and an additional $1,000,000.00 into the Moelis Bond Fund. In respect of the Moelis Bond Fund, I understand that in August 2016 Moelis introduced a successor fund to the Moelis Bond Fund I invested in and that investors were migrated to the successor fund at their choice. If given the choice and if recommended to do so by Moelis, I believe I would have migrated to the successor fund at or shortly after its commencement in August 2016. At paragraphs 46, 77 and 92 of My First Affidavit I said that if I had not been told of the matters I there refer to, I would have instead made investments with Moelis. If I had made investments with Moelis in any of these scenarios, I believe I would have redeemed half of my total investments with Moelis in July 2019. This was because, at that time, I wanted to start a business in beef exports and I estimate I would have needed about $2,500,000.00 to start that business. My daughter was due to finish high school at the end of 2019 and I thought once she entered university, I would have mor time to pursue the new business. I did end up setting up a beef business in 2021 (though I would have liked to set it up earlier). I set up a company called Ding Xuan Pty Ltd in March 2021, and registered a business name August 2021. I am a 50% shareholder in the company and the company is trustee of my family trust. The business name is "Australia I Ching Wagyu Group". The business purchases meat from abattoirs in Australia and exports the meat to China and we also breed cattle. Copies of ASIC searches for the company and business name are at pages 9 – 12 of LX-2. Copies of the business's licence to export meat and non-packer export accreditation are at pages 13 – 14 of LX-1. I have also located records of some of the expenses the business incurred in 2021, the year it was set up, being: (a) invoice for purchase of cattle (at page 15 of LX-2); (b) invoices for agistment (at pages 16 – 17 of LX-2); and (c) invoices for purchase of beef (at pages 18 – 35 of LX-2). I believe I would have redeemed the remaining half of my total investments with Moelis in early 2020 just before the COVID pandemic. This is because, at that time, my daughter had just started to attend university in Sydney and I wanted to purchase a house for my daughter in Sydney. I am willing to give an undertaking to surrender the units I hold in Fund E back to Salter Brothers if I am awarded damages in this proceeding on the basis that the value of the units to me is nil. 567 Li Xu redeemed the entirety of her Moelis investments on 21 October 2021 and received $2,282,666. 568 Mr Peters is critical of Li Xu's evidence. In summary, he submits that in her first affidavit, her hypothetical evidence was that she would have redeemed in September 2020 but in her second affidavit the hypothetical is she would have redeemed in mid-2019 or early 2020, prior to the onset of the COVID-19 Pandemic. In his submission, this is a major alteration to her case and affects Li Xu's credit. I do not accept the submission. There is no evidence in the first affidavit as contended. Each counterfactual is expressed by what Li Xu 'would have' done at [46]- July 2015, [77]- July 2016, [92]- March 2017 and [99]- April 2018. For convenience I refer to the last three dates as the missed opportunity dates. 569 This is not to say that Li Xu's subjective evidence is free of difficulty. Her case was pleaded and she adduced evidence that in reliance on the Han representations, she made her initial investment with Atlas Capital in July 2015. Subsequently, that case was abandoned. The submissions of Mr Pearce do not address the impact of abandonment on the causation case other than Li Xu need only prove that the remaining representations were a cause of loss. 570 However, that difficulty aside and proceeding in accordance with the subjective belief of Li Xu, the question is whether she has established on all of the evidence that but for the representations now in issue, she would have invested $2.5 million in a complying Moelis Fund that did not have the same or similar risks as the Atlas Capital funds, either initially in July 2015 or on any of the missed opportunity dates. 571 I have set out in Part F.5 of these reasons, relevant provisions of the Moelis Information Memorandum. I have found that Li Xu read it. I have identified the statements in it concerning investment risk and liquidity risk. It is worth repeating two paragraphs under the heading Liquidity Risk at (CB 19735): Other than as set out in the Fund Agreements, neither the Trustee nor the Manager has any obligation to purchase, buyback or redeem Units held by any Investor in an SIV Fund. The Units are not able to be transferred without the prior written consent of the Manager (which it may withhold in its absolute discretion). Investments may be difficult or impossible to sell, either due to factors specific to that security, or to prevailing market conditions. Liquidity risk may mean that an asset is unable to be sold or a Fund's exposure is unable to be rebalanced within a timely period and at a fair price, potentially resulting in delays to redemption processing, or even the suspension of redemptions. If the Trustee is required to process a large redemption or application, the exposure of the SIV Funds to particular investments, sectors or asset classes may be altered significantly due to the security sales or purchases required. 572 These are the same or similar risks that Li Xu claims in her counterfactual she would not have accepted but for the representations. Li Xu does not give evidence that she would have considered other SIV program complying investments that did not have the same or similar risks. Her case is she "would have" invested with Moelis. She "would have" in July 2015 invested $1.5 million in a Moelis Property Fund and $1 million in a bond fund. By July 2016, all her Moelis investments were in property funds. So, in July 2016 and March 2017, redemptions from the Atlas Capital Funds would have been invested into the Moelis Property funds. And those funds were subject to the detailed investment risks and liquidity risks disclosed in the Moelis Information Memorandum. 573 This is direct contemporaneous evidence of the risks that Li Xu did accept when she invested $2.5 million with Moelis, which she split as to $1.5 million in the Moelis Property Fund and $1 million in the Moelis Bond Fund. 574 In the events as they did occur, Li Xu applied to redeem all of her Moelis investments in September 2020 and received a payment of $2,882,666 on 21 October 2020, reflecting a not insignificant capital loss of some $114,000. It is not to the point however, for Li Xu to contend that this after the event fact establishes on her counterfactual that she suffered damage by in fact being worse off because she has not been able to redeem her units in the Salter Brothers funds. The issue is what would Li Xu have done at the time but for the misleading conduct? On her own evidence (and consistently with what was done at the time) invest in a complying fund with the same or very similar disclosed investment, liquidity and redemption risks. 575 Accordingly, I am not satisfied that Li Xu has established that she could and would have entered into an alternative form of complying investment that did not have the attendant risks of delayed redemption or loss of principal of which she now complains. That conclusion is fatal to the causation counterfactual as sought to be developed in closing submissions. F. 13 Loss and damage F. 13.1 Damages in a no transaction case 576 On the assumption that I may be in error on Li Xu's contravention and causation contentions, I address the damages issue. As I have noted, Mr Pearce submits that this is a no transaction case: but for the misleading conduct, Li Xu would not have invested her funds with Atlas Capital and instead would have invested $5 million with Moelis. 577 In BHP Billiton Olympic Dam Corporation Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338 at [540] the Court (Tate, Santamaria and Kyrou JJA) summarised the principles applicable to causation and loss pursuant to s 82 of the Trade Practices Act: (1) A plaintiff is entitled to recover as damages a sum representing the prejudice or disadvantage it has suffered in consequence of its altering its position under the inducement of the misrepresentations made by the defendant; (2) Under s 82(1) of the TPA, as under the common law, a plaintiff can only recover compensation for actual loss or damage incurred, as distinct from potential or likely damage; (3) In determining whether a plaintiff has suffered loss or damage under s 82(1), it is usually necessary to compare the position that the plaintiff is in having been misled, with the position it would have been in but for the misrepresentation; by undertaking this comparison a court can determine whether the plaintiff is worse off as a result of relying upon the misrepresentation made by a defendant; (4) Section 82 requires identification of a causal link between loss or damage and conduct done in contravention of the Act; the question of causation is relative to the purpose of s 82, applied to the circumstances of a particular case; (5) Determining the question of causation will often involve considering how much worse off the plaintiff is as a result of entering into the transaction which the representation induced it to enter than it would have been had the transaction not taken place. This entitles the plaintiff to all the consequential loss directly flowing from its reliance on the representation, at least if the loss is foreseeable; (6) Analysing the question of causation only by reference to what is, in essence, a 'but for' test has been found wanting in other contexts and it should not be treated as an exclusive test of causation under s 82 of the TPA either; especially where there is more than one cause of the loss; (7) It is relevant to ask what the plaintiff would have done had it not relied on the representation; (8) As the judge recognised here, there are cases where if the contravening conduct had not occurred which misled the plaintiff, the plaintiff would not have embarked upon the project or transaction at all (the 'no transaction cases '), and there are cases where if the plaintiff had not been misled it would still have embarked upon the project or transaction, but would have done so by entering into an alternative arrangement with the same party or a different party ('alternative transaction cases'); (9) A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted; (10) A court should not engage in speculation about multiple possibilities of past hypotheticals to which no specific evidence was directed; (11) Once the causal connection is established, there is nothing in s 82 of the TPA which suggests that the amount that may be recovered under that section should be limited by drawing some analogy with the law of contract, tort or equitable remedies; (12) If the defendant's breach has 'materially contributed' to the loss or damage suffered, it will be regarded as a cause of the loss or damage, despite other factors or conditions having played an even more significant role in producing the loss or damage. As long as the breach materially contributed to the damage, a causal connection will ordinarily exist even though the breach without more would not have brought about the damage; (13) In exceptional cases, where an abnormal event intervenes between the breach and damage, it may be right as a matter of common sense to hold that the breach was not a cause of damage. But such cases are exceptional. (Citations omitted) 578 In Wyzenbeek the Full Court considered in detail the purpose of an award of damages in a no transaction case. The claim concerned misleading conduct which falsely induced the purchase of a luxury yacht in the belief that it was suitable for extended ocean voyages. But for that conduct the yacht would not have been purchased. The primary judge found that the misleading conduct had been engaged in and that it induced the purchase, but was not satisfied that loss or damage had been established on the misleading conduct claim. A claim in contract (breach of warranty as to fitness for purpose) succeeded and damages were awarded assessed by reference to loss of the use of the yacht during an extended period of repair based on its depreciated value. The Full Court allowed the appeal and awarded damages pursuant to s 87 of the Trade Practices Act calculated as the difference between the total amounts expended to acquire the vessel, less depreciated value plus consequential losses. 579 In upholding the appeal, the Court accepted the no transaction case that the yacht would not have been acquired but for the misleading conduct. The Court explained that a no transaction case is "a legal construct" ([106]) that is applied when rescission of a transaction is not possible. The explanation why commences at [105]: In a "no transaction" case, the purchaser will have discovered, some time after becoming aware of the true position, that what he, she or it bought is not what the representor had asserted. In most cases, the asset purchased will have become impaired or less valuable because some event has revealed a flaw in it. But there can be cases where, after a time, the purchaser, having used the asset, realises that it is not what it was represented to be, even though it has retained its market value. Here, for example, if Mr and Mrs Wyzenbeek had realised a week after taking delivery of Cadeau that she could not undertake ocean voyages, but AMI had gone into liquidation, it could not be an answer to a claim under ss 82 or 87 for the other Marina parties to say that Mr and Mrs Wyzenbeek had suffered no loss or damage. They held an asset that they did not want because it was not what the Marina parties had represented her to be. Had they sold Cadeau immediately and sustained a loss, that would have been recoverable from the other Marina parties together with all the costs incurred in the acquisition and sale. 580 At [107], the Court referenced the well-known fraud case of Alati v Kruger [1955] HCA 64; (1955) 94 CLR 216 at 223 – 224, emphasising the passage that a court must do "what is practically just between the parties, and by so doing restore them substantially to the status quo" and continued at [108]: Likewise, in a no transaction case, if the court finds that the injured party would not have entered into the transaction, this enables the court to use its remedial powers available under ss 80, 82 and 87. Those powers are extensive enough to make orders appropriate to place that party in the position where, although he, she or it may still hold property the subject of the impugned transaction, the wrongdoer will be ordered to pay compensation or damages in a sum that, together with the value of what the innocent party still holds (or is "left in hand"), will "do what is practically just between the parties" so as to, in effect, restore him, her or it to the position that he, she or it would now obtain had the transaction not occurred: cf: Alati 94 CLR at 223-224. 581 On the pleaded case Li Xu contends her units have no value. By the time of the closing submissions, the position shifted to an alternative claim, that was not pleaded and was objected to, that the value is able to be derived from the expert evidence called for Salter Brothers, and which still results in a substantial award of damages. Li Xu did not adduce expert evidence on the value question. F. 13.2 The accounting and expert valuation evidence 582 The Salter Brothers parties called expert evidence from Dawna Wright who is the author of an extensive report dated 20 May 2024 (Expert Report). Dawna Wright has relevant and impressive qualifications in commerce, accounting and forensic accounting. She is a qualified Chartered Accountant and a Senior Managing Director and leader for Australia of the Forensic and Litigation Consulting practice at FTI Consulting. She provides forensic accounting, valuation and financial investigation services. She has more than 30 years of training and experience as an accountant and more than 20 years in the provision of forensic accounting services. She presented as a confident, considered and impressive witness. No point was taken about her expertise. I have no hesitation in accepting her evidence. 583 The year-end financial accounts for Salter Brothers are foundational to the methodology and opinions of Dawna Wright. Those accounts are attachments to the evidence of Peter Hamilton, who is the Chief Financial Officer of the Salter Brothers Group. He is a Chartered Accountant by education and experience. Amongst other things, he is responsible for overseeing the preparation of financial statements and auditing for the Salter Brothers Group. He explained the methodology for calculating the unit price in relevant SIV funds, which is uncomplicated. The unit price is calculated by dividing the net assets of the fund by the aggregate number of units on issue. The net assets are ascertained by reference to the annual audited accounts. In turn, for the purpose of preparing those accounts, valuations are obtained from qualified third-party valuers of the assets that comprise the portfolio of hotels and other assets in the Hotel Group. The assets are valued according to the Accounting Standards definition of fair value. In practice that means current assessed market value is reflected in the most recent valuation report for each asset. 584 Based on this data, Mr Hamilton summarised the unit prices for the various funds between 2016 and 30 April 2024 as follows (CB 6756): 585 Mr Hamilton was not relevantly cross-examined on any of his evidence. I accept it and find according to it. 586 Dawna Wright was instructed in each proceeding. In the case of Li Xu, her letter of instruction relevantly provided: You are instructed to provide an expert opinion in relation to: (a) the methodology set out in paragraph in paragraph 77 of the Li Xu Pleading as to the calculation of Ms Xu's alleged loss and damage, and in particular whether you agree based on that methodology that the 'true' or 'real' value of Li Xu's unit holding in Fund E is nil; (b) the current "true" or "real" value of Li Xu's unit holding - Li Xu currently holds 2,444,690 in Fund E; and (c) the calculation of Li Xu's alleged loss and damage under each of the scenarios set out below. If you consider there are further relevant counterfactual scenarios, please let us know. 587 Section 4 of the Expert Report explains her methodology. She accepted that in each case the plaintiff claims they were misled when investing in a particular Salter Brothers Fund and had they not been misled they would have managed their investments differently which requires assessment of: (a) The financial position that each Plaintiff is in because of investing in the Salter Brothers SIV funds (actual scenario); and (b) the hypothetical financial position that each Plaintiff would have been in had they not invested in the Salter Brothers SIV funds and managed their investment differently (but-for scenario). 588 Dawna Wright was instructed to assess the loss as at the date of the commencement of the trial – 3 June 2024. In doing so she did not discount historical lost cash flows to the date of the contravening conduct, but rather aggregated historical nominal lost cash flows to 3 June 2024. She discounted the expected future cash flows comprising the true or real value of any unit holding as at 3 June 2024. The calculations include a discount for the risk associated with expected future cash flows but is based on the instructed assumption that redemption of the investments will occur at one of the instructed redemption dates. Those dates are: (1) 30 November 2024; (2) 31 March 2025; (3) 30 November 2025; (4) 31 March 2026 and (5) 31 December 2026. 589 In the interpretation of her instruction to express an opinion about the true or real value of the units held in each fund, Dawna Wright adopted the investment value definition as set out in the International Valuation Standards: "Investment value is the value of an asset to a particular owner or prospective owner for individual investment or operational objectives. Investment value is an entity-specific basis of value. Although the value of an asset to the owner may be the same as the amount that could be realised from its sale to another party, this basis of value reflects the benefits received by an entity from holding the asset and, therefore, does not involve a presumed exchange. Investment value reflects the circumstances and financial objectives of the entity for which the valuation is being produced. It is often used for measuring investment performance. 590 Paragraph 4.4 9 of the Expert Report explains why this valuation standard was adopted: I am instructed to calculate the true or real value of each of the Plaintiffs' unit holdings in the Salter Brothers SIV Funds assuming that each of the Plaintiffs' redemption requests will be satisfied by the Instructed Redemption Dates. My instructions do not presume a sale or exchange of the SIV Fund units to a hypothetical third party, rather that the units are held by each Plaintiff and redeemed at a future date (being the Instructed Redemption Dates). Based on this instruction, in my opinion the 'investment value' is the appropriate standard of value, because it presumes that an asset is held rather than exchanged. 591 This approach requires that a valuation of the unit holdings be undertaken by calculating the present value of future redemption payments as at each redemption date to the valuation date of 3 June 2024: Expert Report 4.4.13. 592 The valuation analysis is explained in section 5 of the Expert Report. The liquidity of the units is central to the valuation (CB 22141): 5.2.1 [T]he Plaintiffs proceed on the basis that each fund does not have liquidity to meet redemption requests. The International Valuation Glossary defines liquidity as: "The ability to quickly or readily convert an asset, business, or investment to cash at minimal cost." 5.2.2. Distinct from liquidity, the International Valuation Glossary defines marketability as: "The ability to quickly or readily convert an asset, business, or investment to cash at minimal cost that reflects the capability and ease of transfer or saleability of that property. Marketability is affected by, among other things, the particular market in which the asset is expected to transact and the characteristics of the asset." 5.2.3. It is a generally accepted valuation principle that investors value liquidity and marketability. As such, investors will pay more for an asset that is liquid and marketable (i.e., can be sold or realised within a reasonable timeframe) compared to an otherwise identical asset that is less liquid or non-marketable. 5.2.4. Marketability reflects the concept that, when comparing otherwise identical assets, a readily marketable and liquid asset would have a higher value than an asset with a long marketing period or restrictions on the ability to sell the asset. For example, publicly traded securities can be bought and sold nearly instantaneously while shares in a private company may require a significant amount of time to identify potential buyers and complete a transaction. 5.2.5. Based on the definitions in the International Valuation Glossary, the definition of marketability incorporates the definition of liquidity. Therefore, a discount for lack of marketability (DLOM) would take into account the impact of illiquidity. The quantum of DLOM is subjective and highly dependent on the specific circumstance and there is no definite or widely accepted formula for its calculation. There is no precise manner to separate a discount for illiquidity and DLOM. 5.2.6. The following factors are generally considered in opining on a DLOM: (a) The existence of any form of market in which the unit holding could be traded; (b) Whether there are any prospects for the units to become readily marketable/more marketable or any restrictions on trading; (c) The prospects for sale and the number of identified buyers; (d) Any restrictive transfer provisions; and (e) The ability to sell the asset (e.g., redeem the units). (Citations omitted) 593 Dawna Wright disagrees that the units have no value, which she assumes is implicitly based on a market value definition (a hypothetical exchange between a willing and informed vendor and a purchaser). She explains why as follows (CB 22142): 5.3.6 Market value is based on a hypothetical transaction or exchange of an investment. However, market value is not the only measure of value. There is also value in holding the units and realising the cash flows generated from the units. This is defined in the IVS as 'investment value', as discussed at paragraph 4.4.6(c) above. 5.3.7. In my opinion: (a) The Plaintiffs have implicitly assumed a 100% discount for their units, assuming that they will never be able to redeem or sell their units because the respective funds will never have the liquidity to meet redemption requests or they will never identify a buyer; (b) Not being able to redeem or sell the units in the past and at present does not mean the units cannot be redeemed or sold at a future date; (c) The impact on value of an expected difficulty in redeeming or selling the units should be quantified either through adjusting the expected cash flows or by applying an appropriate discount; and (d) There are a number of valuation methods available to assess and calculate an appropriate discount. 5.3.8. For the reasons discussed above, in my opinion it is not appropriate to simply issue a $nil value of the relevant units. 5.3.9. Additionally, whilst the plaintiffs proceed on the basis that each fund does not have sufficient liquidity to meet redemption requests, I am instructed to assume that the plaintiff's redemption requests will be satisfied at certain dates in the future. 594 The importance of the last assumption is that Dawna Wright has not assumed that there will be an exchange/sale of the units in estimating the value of each unit. Rather, her approach is as explained at 5.4.2: Valuing the Plaintiffs' unitholding on the instructed assumption that the investment will be redeemed at the Instructed Redemption Date requires calculating the present value of the redemption payment to be made on the Instructed Redemption Date as at the Valuation Date. In effect, my instructions require me to have regard to the liquidity risk (or risk of illiquidity) associated with receiving redemption payments only at a date in the future. I have had regard to this risk by applying a discount. The discount takes into account the time value of money and the risk (including liquidity risk) associated with receiving the redemption payments at the Instructed Redemption Dates. 595 The valuation assessment that Dawna Wright undertook is explained in two steps at 5.6.3-5.6.4 of the Expert Report (CB 22144): In my opinion, the true value of each unit should be assessed by: (a) Starting with the redemption price (after Sell Spread); and then (b) Deducting a discount to take into account the time value of money and the risk (including liquidity risk) associated with receiving the redemption payments at the instructed redemption dates. I have first calculated the current value of the respective units before any discount. I then consider the appropriate discount to reflect the period to redemption and the risk associated with receiving the redemption amount based on the current value (including liquidity risk). 596 Dawna Wright agrees with the methodology for calculating the Hotel Group Unit Price, the POF Unit Price and the Hotel Fund Unit Price as set out in the affidavit of Mr Hamilton. The redemption price for each unit is the closing price, excluding distributions, of the previous month less a sell spread of 0.5%. 597 Paragraph 5.7.10 of the Expert Report explains that Dawna Wright was required to calculate the present value of the redemption amounts at determined future dates. It is outside her area of expertise to provide an opinion on the value of each SIV Fund at each redemption date. Additionally, she has not opined on future movements in the unit price at the redemption dates. With those limitations, she considered it reasonable to adopt the value of each SIV Fund, and the corresponding unit prices, as at 30 April 2024 "as an approximation for prices at future dates (to which I then apply a discount to account for risk in achieving the future redemption amounts)". At 5.7.12 - 5.7.15 of the Expert Report, she explains why she is satisfied that in the absence of any forecast future unit prices, she considers it reasonable to adopt the unit prices as at 30 April 2024 "as a starting point in estimating the amounts to be redeemed at future dates" which is then discounted in accordance with her analysis to reflect the risk of future redemption. 598 The selection of the discount rate is comprehensively analysed in section 5.8. Dawna Wright deploys a discount rate based on only DCF methodology which she explains at 5.8.7: [M]y preferred approach is to use a discount based on a DCF methodology calculated with reference to the net present value of the redemption proceeds, because it most directly quantifies the risk that I am seeking to take into account in the context of my instructed assumptions. I have therefore adopted this method, as set out in Section 5.9. To crosscheck my calculations, I have used the 'option pricing model' method. I have calculated the discount using an option model based on the volatilities of potentially comparable companies to the SIV Funds (rather than of the SIV Funds themselves). 599 Table 20 of the Expert Report summarises the ultimate discount rates that were adopted (CB 22149-22150): 600 The application of the selected discount rates to the unit prices is set out at the Table 22 (CB 22150): 601 Dawna Wright was cross-examined inter alia about the instructed redemption dates and whether her assumed method of redemption aligns with what is proposed by Salter Brothers to satisfy redemption requests. As I explain below, her opinions were adhered to and not undermined. F. 13.3 Li Xu's damages claim 602 Li Xu does not in her pleading, or in evidence, make out a case that the units acquired in July 2015, March 2017 or March 2018 were less valuable than the amounts paid: cf Potts v Miller [1940] HCA 43; (1940) 64 CLR 282. 603 Distinction is not drawn in her case between investments made in Fund A and Fund B in July 2015, where no redemption issue arises because each fund was liquid, in comparison with Fund E from which redemption has not been effected because it either was or became illiquid. No causal consequence flows from what was not done in July 2016, because the instruction relied on was not complied with. No attention was paid to causation difficulties that a plaintiff may face if only part of the causal hypothesis relied on is established: cf Campbell at [146] – [147], Gummow, Hayne, Heydon and Kiefel JJ; Culligan v Aco Pty Ltd [2009] NSWCA 290 at [73] – [83], Basten and Young JA, Sackville AJA. That problem may have been brought into sharp focus in this case where part of the reliance case turns on the Han representation which is not pressed against the Salter Brothers parties. 604 In any event, these points were not the focus of the closing submissions of Mr Peters. Rather, his submission is that Li Xu has elected to formulate her damages as the difference in value between the units held at the trial date and what she would have held but for the contravening conduct. He submits that case is not made out. 605 Li Xu's pleaded contention is that she suffered loss and damage by reason of all the contravening conduct of the Salter Brothers parties, particularised as: Item Number Description Amount A Amount initially invested $2,500,000 B Plus subsequent investment $50,000 C Plus distributions that would have been received on an additional investment in Moelis $554,840.37 D Less distributions received from the trust funds $261,473.16 E Less capital loss that would have been incurred on an additional investment in Moelis $114,805 F Less current value of investments $0 G Total $2,728,562.21 606 There is no controversy about items A, B or D. Items C, D and E are established in accordance with the evidence of Enda Stankard and the business records of Moelis about which there was no challenge by the Salter Brothers parties. 607 As to item F, Li Xu, in support of her contention that the current value of her units is nil, called evidence from her solicitor, Rhys Roberts, who placed an advertisement in the Australian Financial Review on 12 February 2024 advertising the units as available for purchase and which provided some basic information about Fund E. The result was that a limited number of inquiries were received, but no purchaser was identified at any price. His evidence is uncontroversial. He caused the advertisement to be published which briefly stated the number of units on offer in the Salter Brothers Series E Property Fund, the investment mandate, the exposure of the fund to assets in the Hotel Group and invited interested buyers to contact him. He received six initial email inquiries, provided certain limited responses but did not receive any offer to purchase the units. 608 He was cross-examined as to the effectiveness of his efforts. In summary, the advertisement was placed only on a single day, his responses to the queries received lacked content and he was not proactive (T 608-613). Clearly, he did not engage in a comprehensive marketing campaign supported by any independent assessment as to how to market the units, on what terms and with what price expectation. The inadequacy criticisms are valid. Ultimately, that is not dispositive because of the evidence from Dawna Wright, for reasons that I subsequently explain. 609 Returning to the recalculation of the damages claim, there was the following exchange in closing submissions (T 1592-1593): MR PEARCE: Your Honour, it just occurred to me going back to your Honour's question, have I proved any loss at all; Dawna Wright says there is loss. You will recall taking account of the values she ascribes to the units, that our loss, if there's a float – if there's a redemption in November 2024, is about $400,000. So that's – that's the defendant's evidence. If your Honour – you know, getting over the first hurdle of proving any loss, in that respect, we can rely on Dawna Wright's evidence. Her evidence is that we suffered loss on each of the – in respect of each of the dates - - - HIS HONOUR: So your causation case – I'm sorry to keep circling back to this - - - MR PEARCE: Sure. HIS HONOUR: - - - is that we're not seeking to prove that the units had a value less than the amount we paid for them on the day. What we say is we entered into a disadvantageous contract. MR PEARCE: Well, that's our contract case. Yes. HIS HONOUR: No, no. But is that your misleading conduct case as well? Your damage, rather than damages - - - MR PEARCE: Yes. HIS HONOUR: - - - is that you entered into a contract that you say was disadvantageous? MR PEARCE: Yes. And the loss that we can now calculate – the damage is - - - HIS HONOUR: I'm just trying to separate damage and damages. MR PEARCE: Okay. Yes. And I understand the distinction. It's an important one. The damage is that she has units of no value in her hand. That's the injury. HIS HONOUR: So your case is not - - - MR PEARCE: She was told she would get an asset that would be liquid after four-years. Five years later, it's still not liquid. The damage, if you like, is that – and this is a bit of a fundamental point about Dawna Wright's methodology. Dawna Wright says, correctly, "I've adopted the methodology of trying to assess compensation, which puts the plaintiff in the position she would have been in had the wrong not been committed". Now, had the wrong not been committed, in this case, Ms Xu would have invested $5 million with Moelis. And come July 2019, she would have had in her possession liquid assets. Because of the wrongful conduct, she does not have in her hand a liquid asset. And that is of less value to her than a liquid asset. There may be an argument about what that is, and that's what, you know, we've been talking about for several days, precisely what the loss to her is. But the loss is if you want to put her in the position she would have been in but for the wrong, you put in her hand a liquid asset. Dawna Wright – the problem with Dawna Wright's approach, Dawna Wright leaves her holding an illiquid asset. 610 Mr Pearce then referenced an uncontroversial passage in the Expert Report that the objective of compensation is to place the injured party in the financial position that it would have been in but for the conduct. The submission then continued (T 1593): Ms Wright's approach perpetuates the effect of the wrong by leaving her holding an illiquid asset until sometime in the future. And offering her, if you like, a consolation prize. It's a consolation prize. It does not put her in the position she would have been in. And that's why we say, first of all, that your Honour can be satisfied there is damage, injury ..... there is damage because she has not had in her possession a liquid asset since September 2019. 611 From that premise, Mr Pearce submits that Dawna Wright calculated that Li Xu had suffered a loss of at least $400,000, depending on which date is selected. The reference to a loss of about $400,000 with an assumed redemption date of November 2024 is not quite correct. The figure calculated by Dawna Wright for that date in scenario 1 (as I later explain) is $349,878. 612 Mr Peters submits that Li Xu must be held to her pleaded causation case as the difference between the value of the units as at the date of the trial and the value of investments that she would have made but for the contravening conduct. He relies on Berry at [67] – [72] and Zonia Holdings Pty Ltd v Commonwealth Bank of Australia Ltd (No 5) [2024] FCA 477 at [388] – [391], Yates J. On that basis, he submits that Li Xu has failed to discharge the burden of proving that the units as at the trial date were worthless. 613 It is fundamental to the pleaded damages claim that Li Xu must prove that her units in Fund E had no value as at the trial date (or some date reasonably proximate thereto). 614 Dawna Wright was instructed to assume these counterfactuals: (1) That Li Xu would not have made any investments with Atlas Capital and instead would have invested a sum of $5 million with Moelis; (2) That Li Xu would have switched her investments to Moelis in July 2016; and (3) That Li Xu would have switched her investments to Moelis in March 2017. 615 In the executive summary of the Expert Report, Dawna Wright sets out at Tables 4 and 5 her opinions as to the current value of units held by Li Xu in Fund E and a comparison of her calculations with Li Xu's particulars for scenario 1 (CB 22120): 616 Dawna Wright did not perform the same task for scenarios 2 and 3 in that part of her analysis (because neither is accommodated in Li Xu's particularisation of loss) but did address it in a more detailed section of her report at Table 34 (CB 22168): 617 By way of comparison, at Table 37 Dawna Wright compared her loss opinions with Li Xu's pleaded claim (CB 22170): 618 Dawna Wright then explained the reasons for the significant variation between her calculations and Li Xu's pleaded loss. The major reason is her disagreement that the current value of the units is nil. The value varies depending on the redemption dates, which will be observed from Table 37, is between $2,331,643 as at 30 November 2024 down to $1,755,000 as at 31 December 2026. Dawna Wright calculated those amounts based on the methodology set out in detail in section 4 of the Expert Report. In summary her opinions concern the investment value of the units and on the assumption that redemption will occur at some time in the future by reference to the assumed redemption dates. As I have summarised, her opinion determines the investment value, not the market value of the units. She adopted the DCF methodology and discounted from the future redemption dates to present values. 619 All her methodology is orthodox, and none of it was materially questioned in cross-examination save for her adoption of the unit price as at 30 April 2024. Questions were put to her about fluctuations in the unit prices commencing in October 2021. Factually, there have been variations. Dawna Wright accepted that the unit price for Fund E "has been in a steady downward trend for 18 months". She maintained her opinion however that this did not undermine the reasonableness of adopting the unit price as at 30 April 2024 (T 1397-1398). 620 Dawna Wright was cross-examined (from T 1395) about the assumptions she was instructed to make concerning the redemption dates. Her attention was directed to the methodology in the relevant trust deeds for calculating the redemption price which commences with the net asset value less the transaction costs and divides by attending number of units being on issue. Dawna Wright confirmed that this is the approach that she had applied. She also confirmed that she had assumed that there will be redemptions in accordance with the terms of the trust deed. She was then questioned as to her awareness of whether Salter Brothers propose that redemptions will be funded out of the proceeds of an IPO. Dawna Wright stated that she was not aware of that fact. Her attention was directed to the relevant paragraphs in the affidavit of Paul Salter. 621 Based on her instructions, Dawna Wright assumed that Li Xu (as well as Jingyi Li and Zheng Xu) will receive proceeds from redemption on the respective redemption dates and will not receive distributions relating to their current unit holdings to the date the redemption request is satisfied. The latter assumption was made on the basis that no distributions have been paid since February 2020. 622 Dawna Wright was taken to the affidavit evidence of Paul Salter concerning the intended IPO. She was asked to assume that what Salter Brothers has in mind for the redemption of units in Fund E is they will be redeemed by an exchange for shares in a listed entity. Dawna Wright denied that this was "a completely different exercise" to that which she had undertaken in her report (T 1399). She gave as her explanation that an exchange of shares would occur at the face value of the share, which in turn reflects the net value of the underlying assets. She accepted that there were aspects that make the listing proposals and the calculation of the listing price uncertain, but these matters did not materially impact on her opinion. In explaining why, she said that the scenario put to her in cross-examination was not inconsistent with her instructions because a redemption request of "for example two and a half million dollars on a particular day, that could still be satisfied with either cash or a cash equivalent or another liquid security that could be exchanged for cash" (T 1401). I accept that evidence and find that the assumption made about redemptions does not materially undermine her evidence. 623 Dawna Wright was also questioned about the relevance of market value and the steps taken on behalf of Li Xu to offer her units for sale in February 2024 (from T 1411). She disagreed with the proposition that this was evidence that the units did not have any value. She explained that although she considered the market value of the units, in her opinion investment value is the most appropriate measure of value based on the opinions that she was requested to express. In re-examination she was reminded of the questions that were put to her about the steps taken to sell Li Xu's units. When questioned about the relevance of the attempted sale to her investment value analysis, she gave the following evidence (T 1453-1454): And you said that the fact of an attempted sale may be relevant to market value, and you said to Mr Pearce that that was one of the data points that might be relevant?---Yes. What are the other data points that might be relevant if you're looking at market value?---Well, the expected future cash flows that would be derived from the investment are still relevant in market value in the same way they are in investment value, and I would be considering whether there are other market participants' hypothetical transactions. All right. Now, you denied there was a market value of nil?---Yes. Why did you say the market value would not be nil?---Well, just because the asset hasn't been sold doesn't mean there's not a market for it or that the market value is nil. Lots of assets are held and still have a market value. 624 I accept that evidence and find accordingly. 625 I mention also two answers that Dawna Wright gave in answer to questions from me, albeit during the cross-examination by Ms Bennett (which is of no moment as Dawna Wright expressed opinions as to each proceeding). It was put to her by Ms Bennett whether there is a correlation between increasing the prospect of no redemption and the discount factor that is applied in the DCF calculation (T 1446-1448). Dawna Wright answered that is so. She then accepted that if the chance of redemption is close to zero, does it follow that the risk must be discounted by 100%. She answered yes, mathematically. I sought clarification and the evidence was: (T 1451) HIS HONOUR: Sorry. I've got a question. I think what's being put to you is that, if the – if you've got no chance of redemption, it's not worth anything, but what if you're still getting dividends?---That would be factored into my cash flows. So I've – your Honour, I've plotted - - - Would that affect the discount rate? Would it still be zero?---Well, then I wouldn't consider there to be no – I wouldn't consider the discount to be 100 per cent if there was positive cash flows expected. 626 I accept that evidence and I find accordingly. 627 I am not satisfied that Li Xu has established that the current value of the units held in Fund E as at the trial date was or is nil. I am satisfied in accordance with the evidence of Mr Hamilton and Dawna Wright that the units in Fund E have a value that is calculated by dividing the net assets of the trust fund, at any point in time, by the number of units on issue at that time. This value is capable of being derived by relying on valuations provided by qualified valuers as to each of the assets held in the portfolio. That exercise is regularly undertaken at the time of preparation of the annual accounts, as set out in considerable detail in the evidence of Peter Hamilton which I accept. 628 Further, I am satisfied and I find in accordance with the evidence of Dawna Wright, that the units in Fund E held by Li Xu have investment value which is able to be determined by the recognised DCF methodology and the fact that the units were not able to be sold to a purchaser at a price determined in February 2024, it is not evidence that the value of the units was or is nil. 629 Accordingly, the pleaded damages case fails. F. 13.4 A new damages claim 630 By the time of closing submissions, Mr Pearce contended for two alternative methods of calculating Li Xu's damages, if her nil current value case is rejected. The first is that rejection of her pleaded case does not result in no award of damages. It is trite that if a plaintiff establishes a relevant contravention (here of statutory provisions about misleading conduct) and proves that some damage was suffered in consequence, then the fact that it may be difficult to assess the quantum of damages to be awarded to compensate for the damage suffered is no reason to refuse an award. The Court must do the best that can be done on the available evidence. The law does not require certainty in proof of loss: Placer (Granny Smith) v Thiess Contractors Pty Ltd [2003] HCA 10; 196 ALR 257 at [37]-[38], Hayne J. 631 Where the issue is one of assessing expert evidence to assist in the task of determining fair compensation by doing the best that can be done on the available evidence, the Court is not bound by the opinion of experts and may proceed, if necessary, by making adjustments and performing calculations: Elanor Funds at [460]-[463]. That case differs from the present in that the Court had the benefit of competing valuation evidence, a joint expert report and concurrent expert evidence. If the adjustments in this proceeding are a matter of mathematical calculation and or are otherwise established on the evidence, that distinction is not significant in my view. 632 Accordingly, Mr Pearce submits that if I conclude as a matter of principle that some damage was caused, but reject the Li Xu quantification, I may have regard to the opinions of Dawna Wright to assist in quantifying the amount to be awarded. Two approaches were formulated. The first is based on adjusting items C, D and E of the particularised claim conformably with the evidence of Dawna Wright given in cross-examination and which was ultimately reduced to a table of adjustments. The second involves inserting the calculated value of the units in accordance with the Expert Report into the particularised claim. 633 The two approaches may be summarised as follows. 634 The first adjusts items C, D and E by reference to the cross-examination of Dawna Wright. Those adjustments vary depending on three hypothetical scenarios. As summarised in a table provided by Mr Pearce (and as ultimately corrected orally): Pleaded particulars Scenario 1- no investment in Salter Brothers Scenario 2- switch to Moelis in July 2016 Scenario 3- switch to Moelis in March 2017 C $551,466 $605,191 $589,928 D $262,500 $262,500 $262,500 E $124,805 $269,654 $194,156 Totals (C-D-E) $164,161 $73,037 $133,272 635 If those adjustments are made to the particularised claim, the position is: (1) Scenario 1- $2,714,161; (2) Scenario 2 -$2,623,127; and (3) Scenario 3- $2,683,272. 636 The second is to award an amount consistent with the loss calculations of Dawna Wright without adjusting. On scenario 1, and depending on the redemption date, she calculates the investment value of the units in Fund E as having a current value within the range $1,755,000 to $2,331,000. This figure can then be "plugged into" Li Xu's particulars. 637 Mr Peters submits that it is not open to me to proceed in either way. He commences by emphasising that case management orders were made on 4 August 2023 for the delivery of expert evidence and for the experts in common fields to attend before a registrar acting as a facilitator pursuant to the Expert Evidence Practice Note (GPN-EXPT) for the purpose of conducting the joint conference with a view to the preparation of a joint report. Li Xu chose not to serve any expert evidence-in-chief. On 1 May 2024, Mr Pearce (having by then received Dawna Wright's report) in a case management hearing stated that the market had been tested, no buyer had been identified for the Fund E units, the market value is nil and that was the totality of the evidence that would be relied upon at the trial. 638 The submission of Mr Peters continues that the Salter Brothers parties prepared the case for trial on that basis. The updated apparently final particulars of damage were not provided to the solicitors for the Salter Brothers parties until the evening of 5 August 2024. There had not been sufficient time to consider the document. Acting conformably with the overarching purpose, the case management orders should have been complied with and evidence should have been delivered supporting the recalculation of the claim. More fundamentally, Li Xu should be held to her pleaded case and unfairness has been caused by permitting Dawna Wright to be cross-examined about different figures, which she did not have a proper opportunity to consider and about which there was no opportunity to properly brief her for the preparation of her evidence-in-chief. Mr Peters went so far as to say that if adequate notice had been given of the alteration in Li Xu's case from her fixed position that the units have no value, the Salter Brothers' case would have been differently prepared. His submission in answer to my question was (T 1669): HIS HONOUR: Do you go so far as to say that if you had been put on notice of this earlier, your expert evidence may have taken a different pathway? MR PETERS: Well, it must have, your Honour – it must have because she looked at the particulars of all parties, gave a report on that basis, and the night before she gives evidence, Li Xu's counsel-when she gives evidence – gives her a document and cross-examines her on the arithmetic… And today, after the evidence is closed, we're given another version by Jingyi Li and Ms Zheng Xu's counsel. There is a definite unfairness, your Honour, in allowing that to proceed. That's over and above the effect of the cross-examination – which was exposed in re-examination, it was right – but she couldn't form an opinion on any of this to assist your Honour. She could see the arithmetic on the table was right, but not about the assumptions. It's of no assistance to your Honour to allow any corrections to her evidence. 639 The plain effect of the submission is clear. Timely notice was not given of the intention to frame a radically different alternative case by departing from the nil value contention. The change of case causes prejudice. 640 When counsel for a party submits that a case might have been differently prepared, or other or different evidence might have been adduced (indeed if those were possible outcomes) if timely notice had been given of a departure from the opposing case as pleaded, that is usually fatal to any application to raise new grounds or arguments. The issue is one of prejudice. It frequently arises in appeals, for example Water Board v Moustakas [1980] HCA 12; (1988) 180 CLR 491 at 497; Bird v DP [2024] HCA 41 at [39] and, in late applications to amend, for example Australian Medic-Care Company Ltd v Hamilton Pharmaceutical Ltd [2008] FCA 1979 and Harvey v John Fairfax Publications Pty Ltd [2005] NSWCA 255. 641 Case management orders provided for the filing and service of expert evidence by each party. Li Xu did not do so. Her case was maintained to the point of closing submissions as including a central contention to her damages claim that her units have no value. Following delivery of the Expert Report of Dawna Wright on 21 May 2024, there was ample opportunity to reconsider that contention and to reformulate, as an alternative, particulars of damage calculated on the basis that was first revealed in the closing submissions. Proceeding in that way would have afforded proper notice of the change in the case. It would also have been open to Li Xu, by proceeding in accordance with orders made on 24 April 2024, to engage her own expert on the valuation question and to file and serve a report by 24 May 2024. If that had been done, the experts could then have proceeded to the joint expert conclave and the Court would then have had the benefit of a joint report. 642 Each consideration is a weighty matter against allowing Li Xu to recast her damages claim, even in circumstances where no formal application has been made to amend. 643 However, where the issue is one of assessing expert evidence to assist in the task of determining fair compensation by doing the best that can be done on the available evidence, I consider myself bound to proceed in accordance with Elanor Funds, subject to being satisfied that there is no procedural fairness issue. 644 The total value of the units, and the unit prices, held in the property funds is a matter of calculation and is set out in the evidence of Peter Hamilton at selected dates. Salter Brothers prepared its case on the basis that the nil value contention was plainly wrong. There is abundant evidence in the Expert Report that assists in making findings about the value of the unit holdings in Fund E and the loss suffered by reference to the assumed redemption dates. 645 Table 4 of the Expert Report is evidence of the current values at each redemption date. 646 Table 35 of the Expert Report calculates that Li Xu suffered a loss on the first but for scenario (redemption date 1) as $349,878. Table 36 calculates the loss on the second and third but for scenarios (respectively $247,461 and $305,210) at redemption date 1. At Table 37 Dawna Wright compares her loss calculations with the particularised claim and sets out the range of from $349,878 at redemption date 1 to $926, 521 at redemption date 5. 647 In my view it could hardly have been a surprise to Salter Brothers, following receipt and delivery of the Expert Report, that if Dawna Wright's evidence was accepted, the nil value contention would be rejected but also that she had calculated a present value of the units in Fund E which in her opinion resulted in a loss as at each of the five assumed redemption dates. Indeed, at paragraph 6.3.6 of the Expert Report it is said: If the Court finds the assumption that the units in SIV Fund E have $nil value to be incorrect, the loss calculated in the Li Xu pleading would decrease by the value of those units. 648 I have accepted the evidence of Dawna Wright as to current value of the units in Fund E (as at 3 June 2024- the assumed valuation date) for redemption date 2 (31 March 2025). It is a matter of mathematical adjustment to insert that figure into the claim as particularised. 649 I have decided that the prejudice claim is not a fatal objection to the second alternative recalculations because of the way in which Dawna Wright dealt with the nil value contention, determined the present value of the units in Fund E as at each redemption date and then calculated her opinion of the loss in investment value. I proceed on the basis that it is open to consider the recalculation as a basis for an award of damages. 650 Table 34 of the Expert Report sets out the loss opinion of Dawna Wright by reference to the first, second and third but for scenario. For Redemption Date 2 (31 March 2025), the range is between $347,747 and $450,164. The determination of which but for scenario is applicable requires further findings on the causation counterfactuals, which case I have rejected. It would be entirely speculative for me to engage in that exercise and I decline to do so. Viewed in the most favourable light, if I had found that the misleading conduct case was made out for one or more of the representations relied on and had concluded that one of the counterfactuals was established, Li Xu would have been entitled an assessment of compensation within that range. 651 The first alternative is more problematic and faces the dual hurdles of procedural fairness and non-compliance with the overarching purpose at ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) (FCA Act). 652 Dawna Wright was extensively cross-examined about adjustments by counsel for Li Xu by reference to the recalculation scenarios and tables produced as to each (from T 1414). In all a document with appendices A-F was put to her containing various assumptions and calculations. This manner of proceeding was not very satisfactory. The material had not been provided to Dawna Wright for her consideration in a timely way, was not the subject of any competing expert evidence and was not foreshadowed as a variation to the damages claim by way of an amendment to the particulars. 653 The cross-examination was objected to on the basis that the calculations were produced at a very late stage in the trial, after Li Xu had completed her evidence and without proper opportunity for the material to be considered by Dawna Wright (T 1434). I permitted it to continue, following an adjournment of some hours to afford an opportunity for consideration by Dawna Wright. On resumption, I made it clear to Dawna Wright that to the extent that she considered that the limited time afforded to her to consider the alternatives did not enable her to provide useful answers to assist me conformably with her role as an independent expert witness, then she should say so and I would require counsel to move to the next question (T 1436). 654 Dawna Wright was then asked detailed questions of matters of mathematical calculation for the purpose making good the proposition that Li Xu's methodology and that of Dawna Wright arrive at "very similar figures" (from T 1415). Dawna Wright accepted that the methodology of calculating the damages relied on by Li Xu was available, with the fundamental point of disagreement being the nil value contention of present value. Her evidence concerning the adjustments may be summarised as follows. 655 The current value of Li Xu's unit holding in the E Fund at Redemption Date 1, as calculated at Table 29 of the Expert Report was $2.331 million. This resulted in a loss calculation of approximately $394,000 in relation to the first 'but-for scenario', being no investment in Salter Brothers SIV Funds and investment instead in Moelis Property and Moelis Bond funds. Dawna Wright accepted these contentions (T 1415). 656 It was next put that if the current value of the unit holding at Redemption Date 1 was instead taken to be nil, the value of $2.331 million could be added back to calculate the loss. In that case, the loss figure would be approximately $2.681 million. The difference between that calculation and the figure pleaded by Li Xu is approximately $40,000. Dawna Wright was unable to accept that proposition without access to the underlying calculations (T 1415-1417). 657 Dawna Wright disagreed that the same calculation could not be undertaken for the second and third 'but-for scenarios', being initial investment in Salter Brothers SIV Funds and subsequent redemption and investment of the total redemption amount in the Moelis Property Fund on 25 July 2016 (second 'but-for scenario') and 6 March 2017 (third 'but-for scenario'). This was because the unit value figure of $2.331 million was not a component of her calculations for the second and third 'but-for scenarios' (T 1417). 658 From that point of disagreement, Dawna Wright could not accept the consequential propositions put to her by Mr Pearce as to the making of adjustments on the first and second but for scenarios: T 1427, 1437 and 1439. She did, however, accept that the methodology in the tables produced to her was one method of calculating the loss: T 1442. 659 For understandable reasons, Mr Peters was somewhat hampered in his ability to effectively re-examine Dwana Wright as to the recalculated figures that were not disclosed in a timely way consistently with obedience to the overarching purpose. As such, the re-examination was very brief at T 1454-1455. It included the obvious question, which I permitted over the objection of Mr Pearce: MR PETERS: As an expert, have you been able to form any opinion on the correctness, or otherwise, of annexures A to F?---Only to the extent that it agrees with my own calculations already set out in my own annexure E. And as to other matters where it doesn't agree?---I'm not able to identify the reason for that difference. All right. So by saying you're not able to identify the reason for that difference, my question is, have you been able to form an opinion about whether those matters are correct?---No. 660 I have concluded that it is not open to Li Xu to reformulate her damages claim in the form attempted. It represents a material departure from her pleaded claim that was maintained until Dawna Wright was cross-examined. Acting in obedience to the overarching purpose, Li Xu should have formulated the alternative claim before the commencement of the trial and applied to amend her particulars of loss, by expressing this as an alternative if her nil value case was rejected. 661 The raising of this new claim after Li Xu had completed her evidence was unfair and unsatisfactory. I accept the submission of Mr Peters that if proper notice had been given, the case for the Salter Brothers parties might have been conducted differently. Li Xu deprived the Salter Brothers parties of any fair opportunity to consider this new case. 662 Dawna Wright did not have a fair opportunity of considering the alternative calculations which in turn deprived me of the benefit of her independent assessment. And as her answers in re-examination reveal, she was unable to assess and form an independent opinion. 663 Moreover, I have not been assisted by the very unsatisfactory manner in which this aspect of the case was conducted and that is a further reason not to consider the recalculation as a basis for an award of damages. F. 13.5 Reduction of damages on account of failure to take care 664 Section 12GF(1B) of the ASIC Act provides: (1B) Despite subsection (1), if: (a) a person (the claimant) makes a claim under subsection (1) in relation to: (i) economic loss; or (ii) damage to property; caused by conduct of another person (the defendant) that was done in contravention of section 12DA; and (b) the claimant suffered the loss or damage: (i) as a result partly of the claimant's failure to take reasonable care; and (ii) as a result partly of the conduct referred to in paragraph (a); and (c) the defendant: (i) did not intend to cause the loss or damage; and (ii) did not fraudulently cause the loss or damage; the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant's share in the responsibility for the loss or damage. 665 Section 1041I of the Corporations Act is to like effect. 666 There is a preliminary issue. Mr Pearce submits that the ASIC Act provision is limited in its application to a claim for damages for conduct in contravention of s 12DA, not s 12DB and therefore has no application to this component of Li Xu's claim. For each representation claim, Li Xu adopts the unhelpful device of a rolled up plea: the conduct was a contravention of each of ss 12DA, 12DB(1)(e) of the ASIC Act and 1041H of the Corporations Act, despite that s 12DA is a general provision concerning misleading and deceptive conduct in relation to financial services and s 12DB(1)\(e) is targeted to particular types of misleading representations that are concerned with sponsorship, approval, performance characteristics, uses or benefits of a financial service. 667 Mr Pearce relies on Ramadan v ACN 098408 176 Pty Ltd [2023] SASCA 91 at [133], which confirms his construction. Actually, the primary authority is the decision of the Full Court of this Court in ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65; (2014) 224 FCR 1 at [1576]-[1579] and [1582]-[1590], Jacobson, Gilmour and Gordon JJ. Mr Peters makes a general submission that where there is overlapping conduct that is a contravention of each provision it would be "absurd" that a plaintiff who claims damages in contravention of overlapping provisions, is able to escape the contributory negligence net. Mr Peters does not refer to authority in support. I am bound to follow Bathurst with the result that contributory negligence need not be considered on the s 12DB(1) ASIC Act claim. 668 As to the s 12DA and s 1041I Corporations Act defences, Mr Peters submits that the case for "a very substantial reduction in damages" is made out because Li Xu accepted in evidence that she should have exercised more care and should have read the 3 March 2015 Information Memorandum before signing the application form. She noticed the letters IM on the application form, was told that it concerned the information of the fund but made no further inquiries. Moreover, she had the capacity to obtain a translation of all relevant documents and acting prudently to protect her own interests she should have obtained a translation before making a very substantial financial commitment. 669 Mr Pearce relies on Astley v AusTrust Ltd [1999] HCA 6; (1999) 197 CLR 1 at [30] and Wingecarribee Shire Council v Lehman Brothers Australia Ltd (in liq) [2012] FCA 1028; (2012) 301 ALR 1 at [1174]. Astley is best known for holding that a statutory defence of contributory negligence is not available in an action for breach of contract. It was further held that the provision is available in answer to a claim where the defendant is duty-bound to protect people within the class of which the plaintiff was a member: for example, breach of workplace statutory duty claims. Subject to that, the passage relied in the reasons of Gleeson CJ, McHugh, Gummow and Hayne JJ provides: A finding of contributory negligence turns on a factual investigation of whether the plaintiff contributed to his or her own loss by failing to take reasonable care of his or her person or property. What is reasonable care depends on the circumstances of the case. In many cases, it may be proper for a plaintiff to rely on the defendant to perform its duty. But there is no absolute rule. The duties and responsibilities of the defendant are a variable factor in determining whether contributory negligence exists and, if so, to what degree. In some cases, the nature of the duty owed may exculpate the plaintiff from a claim of contributory negligence; in other cases the nature of that duty may reduce the plaintiff's share of responsibility for the damage suffered; and in yet other cases the nature of the duty may not prevent a finding that the plaintiff failed to take reasonable care for the safety of his or her person or property. Contributory negligence focuses on the conduct of the plaintiff. The duty owed by the defendant, although relevant, is one only of the many factors that must be weighed in determining whether the plaintiff has so conducted itself that it failed to take reasonable care for the safety of its person or property. (citation omitted) 670 In Lehman Brothers, Rares J rejected a contributory negligence defence in circumstances where the plaintiff gave express instructions that it did not wish to invest in CDO instruments, which instruction was acknowledged. In that circumstance his Honour held that it would "be an affront to notions of what is just and equitable" to reduce damages claimed under s 12DA of the ASIC Act. 671 Mr Pearce submits in this case that Li Xu trusted Austar Suzhou to protect her interests, acted reasonably on the conduct of the Salter Brothers parties, was faced with the complexities of the immigration and financial systems of a new country and that in consequence "it would be beyond what is reasonable to expect [her] to go behind the statements made to her by those she trusted and undertake minute and detailed analysis of the various contractual documents and relevant trust deed applicable to her investment or have documents in English translated into Chinese". 672 To the extent that the submissions of Mr Peters rely on admissions made by Li Xu in cross-examination that, on reflection, she ought to have been more careful and ought to have arranged for translations, I give it no weight. The inquiry is not a retrospective one. What must be considered are the circumstances which prevailed at the time. 673 That said, a prudent individual in the position of Li Xu at the time who was then contemplating a life-changing decision to migrate with her family from the People's Republic of China to Australia, to leave all of their family connections behind and to embark upon a new life subject to a requirement to make a very substantial financial investment, would in my view have taken the step of having the Information Memorandum and with it the investment application form translated into Mandarin. That service was available from Austar Suzhou, who Li Xu appointed as her migration agent, for an additional fee. Li Xu had the financial capacity to pay the fee. Having taken that step, the ordinary and prudent individual would have studied the translated document to be properly informed about the contractual terms that would bind him or her upon the acceptance of an application for investment in a complying fund. Alternatively, another option that was open to a prudent investor at the time was to obtain independent legal or financial advice about the terms of the proposed investment and have those terms explained in language that could be comprehended to make an informed investment decision. There is no question that Li Xu had the financial capacity to seek such advice. 674 Either, or both, of these steps would not have imposed any significant financial burden upon the investor, especially having regard to the $5 million total sum that was required to be invested. There was sufficient time to do so within the timeframe advised by the Australian Government or, if that timeframe could not have been met there was the option of applying for an extension. 675 What is known is that Li Xu had the Moelis Information Memorandum in Mandarin and studied it before she made her Atlas Capital application on 8 July 2015. She was careless in not inquiring whether the Atlas Capital terms of investment were subject to the same or similar investment and liquidity risks as set out in the Moelis Information Memorandum. 676 Instead of taking these prudent steps, Li Xu relied entirely on oral representations made between 2014 and February 2017 that she did not confirm in writing, failed to read or have read to her the terms of the application forms signed by her in July 2015 and March 2017, and parted with very large amount of money incurious about the terms of the contractual arrangements she was entering into. Her failure to take simple steps to protect her own interests was substantial. If I had awarded damages pursuant to s 12DA of the ASIC Act or s 1041H of the Corporations Act, I would have reduced the quantum by 40% being the reduction that I would have considered as just and equitable having regard to Li Xu's share of responsibility. F. 13.6 The refund remedy 677 The alternative remedy claimed relies on s 12GM of the ASIC Act: the power to make other orders. Where contravention of a relevant provision is established, this Court may "make such order or orders as it thinks appropriate" including, by s 12GM(7)(d), an order directing the person who engaged in the conduct to refund money or to return property to the person who suffered the loss or damage. Mr Pearce submits that if I am against Li Xu on the nil value contention, the "simple expedient" is for her to surrender her units (which she undertakes to do) in return for a refund of her investments. 678 There is a variation to that submission to the effect that an award of damages may be made conditional on surrender of the units to avoid double compensation if the IPO succeeds and redemption requests are then met. 679 The discretion to make an order under s 12GM is not engaged unless the Court is satisfied that a person has suffered, or is likely to suffer, loss or damage caused by contravening conduct. I have concluded that Li Xu has failed to discharge her onus of proof to that end. 680 Notwithstanding, Mr Pearce submits that one reason why an order may be made under this provision is where there is difficulty in assessing damages: APIR Systems Ltd v Donald Financial Enterprises Pty Ltd [2009] FCAFC 45 at [54], Goldberg, Jacobson and Perram JJ. In that case however, the primary judge made orders pursuant to the equivalent power at s 1325 of the Corporations Act where he was satisfied that loss or damage had been suffered. 681 That said, the discretion is broad and falls to be exercised by "reference to the rule of responsibility in the statute that is directed against misleading and deceptive conduct": Awad v Twin Creeks Properties Pty Ltd [2012] NSWCA 200 at [43], Allsop P. See also Akron Securities Ltd v Iliffe (1997) 143 ALR 457 at 467-470, Mason P. The discretion, assuming favourably to Li Xu that it exists, falls to be exercised having regard to the particular facts and circumstances in her proceeding. Prominent amongst the relevant matters is that a refund order of the amount invested on surrender of her units eliminates all investment risk. That is distinctly at odds with her case that complains of being locked out of her funds for more than the initial investment of four-years. She does not, as I have set out, complain about any capital loss or loss of dividends. 682 There is no evidence that the price paid for her units in Fund E, at each acquisition point in time exceeded their value. A refund of the amount paid would effectively indemnify her for a case that she has not made. A refund would permit her to enjoy the benefit of the dividends received without the quid pro quo of maintenance of the investment as the essential criterion to qualify for dividends. 683 A refund would not take account of her counterfactual of investment with Moelis where she suffered a capital loss of some $114,000. 684 For these reasons, it would not be an appropriate exercise of the discretion to order a refund conditional on a surrender, had I otherwise concluded that Li Xu suffered damage by reason of the misleading conduct alleged. F. 13.7 Other issues in the proceeding 685 Mindful of the need for some judicial economy in these reasons, I deal briefly with some of the plethora of other issues, none of which affect my primary findings. 686 There is the question of attribution, which is a live issue on the Jin representations. Li Xu pleads that Jeanetta Jin acted for and on behalf of SBAM and SBII. As this representation is alleged to have been made outside of Australia, only s 12GH(2) of the ASIC Act is relevant. For it to apply to attribute responsibility to the corporate defendants, the conduct must have been engaged in on behalf of the corporate defendants by, relevantly, an agent within the scope of the person's actual or apparent authority or at the direction or with the consent or agreement of a relevant person of the body corporate. Mr Pearce submits there is evidence that Jeanetta Jin was acting within the scope of her apparent authority. He relies on the following: (a) Jeanetta Jin was held out as an employee of the Austar Group Ltd. Austar Group Ltd entered into a referral agreement with SBII in January 2015. The effect was that Austar was appointed as an agent; (b) Jeanetta Jin emailed Li Xu on 4 January 2015 using an austargroup.com email address and her signature block describes her position as SIV Financial Compliance Investment Director/Austar Group; and (c) When Jeanetta Jin made representations, she did so holding that position with the Austar Group and pursuant to the referral agreement. 687 I am not satisfied that Jeanetta Jin acted as an agent of either of the corporate defendants within the scope of her actual or apparent authority. There is no evidence of actual authority. The referral agreement appoints Austar Group Ltd. That is a different entity to Austar Suzhou which is the entity Li Xu appointed to act as her agent pursuant to the agreement of 3 September 2014. Dulcie Du acted on behalf of Austar Suzhou and put Li Xu in contact with Jeanetta Jin where they met in the Austar Suzhou office in Shanghai on 2 June 2015. At that meeting, Jeanetta Jin presented Li Xu with information concerning the products of Atlas Capital and Moelis. She plainly did so pursuant to the appointment of Austar Suzhou. There is no merit in reliance on the generic email addresses: Cathy Zhang and Dulcie Du used the same email account. 688 A complex submission is made by Mr Peters about attribution of conduct to SBAM as distinct from SBII. I need not resolve that issue as it is accepted that any representations made by Kevin Fan, Michael Gu, Robert Salter or Hannah Zhu are attributable to SBII. A submission is also made about the individual liability of Kevin Fan, Robert Salter and Hannah Zhu to the effect that it is insufficient to prove that an individual made a misleading statement. What must be established is that the individual was not simply acting as an agent of the body corporate, but in his or her own right: Re Atlas Advisors Australia Pty Ltd [2022] NSWSC 705; (2022) 162 ACSR 509 at [242] – [248], Black J. I accept the submission of Mr Peters that the evidence does not establish that fact for these individuals with the consequence that they have no personal liability. 689 Li Xu further contends that the Jin, Fan, Gu, Salter and Zhu representations were also contractual warranties. There is no merit in the claim. The representations were not promissory in form objectively made and accepted with an intention to be contractually bound. The representations are said to be oral contractual terms. The contract between Li Xu and SBAM was in writing as evidenced by the application forms that Li Xu signed in July 2015 and March 2017. The express terms included that Li Xu agreed to be bound by the terms of the respective Information Memoranda and the provisions of the relevant trust deeds. The application included the acknowledgement that the Atlas Group, including the Trustee, related entities, directors, or officers had not provided any guarantee or made any representation as to the performance or success of the funds or the repayment of capital and that all investments are subject to investment risk, including delays in repayment, loss of income or principal. 690 The trust deed for Fund E (including the deed as varied) at cl 5.1 provides that a unit holder is not entitled to and waives any right the holder may otherwise have to interfere with any rights, trusts, powers, authorities or discretions of the Trustee. By cl 9.1 the trust deed provides that the unit holder has no right to withdraw from the trust and the Trustee has no obligation to redeem any units or cause any units to be redeemed. Finally, by cl 9.2 the trust deed provides that when the trust is liquid, a unit holder may make a redemption request, which the Trustee was not bound to meet. The alleged oral terms cannot operate inconsistently with these express terms: Equuscorp at [36]. 691 Without a supporting pleading, without prior notice and at the end of the case in closing submissions, Mr Pearce formulated a claim in restitution for money had and received if the contract makes no provision for recovery of the funds invested. He made the somewhat bold submission that Li Xu was not required to support it by a pleading. I reject the attempt. A claim for money had and received is a separate cause of action. The factual basis for it must be pleaded: Bullen and Leake: Precedents of Pleadings (3rd ed 1868, Stevens and Sons) at 35-57 where the common indebitatus counts are set out with precedents. In this Court r 16.02 of the Federal Court Rules 2011 (Cth) requires a pleading to identify the issues to be resolved and to state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made. That was not done. Moreover, raising the argument in closing submissions is not consistent with Li Xu's obligation to conduct her case consistently with the overarching purpose at ss 37M and 37N of the FCA Act. 692 A limitation defence is relied on by the Salter Brothers parties. The Jin and Fan representations, if made, first caused Li Xu to suffer damage when she made her first series of investments in July 2015, instead of investing her funds with Moelis. This proceeding was not commenced until 11 March 2022, beyond the six-year period at ss 12GF(2), 12GM(2) of the ASIC Act and 1041I(2) of the Corporations Act. In my view Mr Pearce is correct to submit by reference to Wardley at 532 that Li Xu did not sustain actual damage at that time. Her loss was prospective, dependent upon the making of a redemption request and its non-fulfilment. If Salter Brothers had met one or more of the redemption requests made by Li Xu after expiry of the four-year term, Li Xu would not have suffered any loss. 693 Another defence is that the Jin and Fan representations were not made "in this jurisdiction": Corporations Act, s 1041H(1). There is no cause of action that Li Xu has under that Act for them. So far as these claims rely on the ASIC Act, there is a certificate of consent from the Assistant Treasurer and Minister for Financial Services dated 31 May 2024 to rely on the pleaded conduct outside of Australia for the purpose of claims under s 12GF and orders under s 12GM. F. 13.8 Overall result 694 Li Xu's claim fails and must be dismissed. G. THE CASE OF JINGYI LI G.1 The pleaded issues 695 The material facts are pleaded in Jingyi Li's Further Amended Narrative Statement of Facts and Explanation dated 26 April 2024, the Salter Brothers parties' Response filed 12 June 2024 and Jingyi Li's Amended Reply also filed on 12 June 2024. The reason for the late filing in each case is that I refused leave for the Salter Brothers parties to withdraw certain admissions and refused certain additional claims of Jingyi Li on 6 June 2024. Similarly with my analysis of the pleadings in Li Xu's case, I do not separately address the defence where matters are not in issue. 696 SBAM is the only defendant to this claim. 697 In 2016, Jingyi Li was a citizen of the People's Republic of China, fluent only in Mandarin. She invested $5 million in Fund C on 6 September 2016. On 20 February 2019, she signed an application form to transfer the entirety of that investment split as to $2.5 million to Fund K and the balance to Fund L. The transfer became effective on 25 February 2019. 698 Jingyi Li was and is married to Jun Chen, also a citizen and resident of the People's Republic of China, whose native language is Mandarin and who is not fluent in English. 699 In the introduction to her claim, Jingyi Li pleads that the SB&G Hotel Group was a non-diversified and illiquid investment and a long-term investment with a likely investment horizon to at least 2024. SBAM denies this claim. 700 There is no issue about the effect of certain terms of the trust deeds and their legal status for Fund C, Fund K and Fund L and which is set out in Part C.2. 701 On 9 August 2016, Jingyi Li was informed that she had been invited to participate in the SIV Program, conditional upon making a $5 million complying investment. On 28 August 2016 (CB 9113), Dulcie Du of Austar Suzhou emailed Jingyi Li, attaching: (a) A one-page extract of a PowerPoint presentation relating to the SIV C Fund prepared by SBAM, which document was in Mandarin; (b) A one-page extract of a PowerPoint presentation relating to the SIV Series D (Bonds) Fund prepared by SBAM, which document was in Mandarin; and (c) The September 2015 Information Memorandum in English. 702 On 30 August 2016, Jingyi Li signed an application form electing to invest $5 million in Fund C, which form was otherwise completed by a representative of Austar Suzhou. The application form was in English. 703 Jingyi Li pleads various facts relating to the promotion of the funds by SBAM, commencing with the allegation that it, from at least December 2015, promoted the SIV Funds for the purpose of and in the knowledge that the primary investment of money raised would be for investment in the Hotel Group. Further, at all material times, it promoted the funds through migration agents carrying on business in the People's Republic of China, including Austar Suzhou, and knew or ought reasonably to have known by virtue of its dealings with Austar Suzhou that: (1) The September 2015 Information Memorandum would be unable to be read, or properly understood, by persons who were unable to read English; (2) Prospective investors, such as Jingyi Li, were looking to make, and did make investments in its SIV Funds for the purpose of obtaining permanent residency in the Commonwealth of Australia under the SIV Program and that a four-year investment period was required for such investments; and (3) By virtue of Dulcie Du providing two of the documents to her on 28 August 2016, in the Mandarin language, it had created an expectation on the part of prospective investors, such as Jingyi Li, that important documents concerning investment in the relevant SIV Funds would be provided in Mandarin. 704 SBAM, whilst accepting that it established each fund for the purpose of raising money from investors who participate in the SIV Program, contends that: (1) Fund C was not promoted for the purpose of or with knowledge that any money raised would be invested in the Hotel Group; (2) In fact, the money raised in Fund C were not invested in the Hotel Group, but was invested in term deposit products made available by Australian banks; (3) The primary investment of Fund K is in stapled securities in the Hotel Group, but the investment mandate of Fund K allows for investment in other yielding property and infrastructure assets; (4) One investment of Fund L is in stapled securities in the Hotel Group (both through direct investment and through investments in other funds), the investment mandate of Fund L allows for investment in other property and infrastructure assets and it also invests in and has all material times invested in convertible notes in POF; (5) The primary investments of POF are or have included stapled securities in the Hotel Group and property developments located in Melbourne; (6) It provided Austar Suzhou with its current Information Memorandum relating to the relevant SIV Funds (as and when it was updated from time to time) so that Austar Suzhou could provide it to potential SIV investors; (7) From time to time, it provided Austar Suzhou with other material about the SIV Funds it offered; (8) It accepts that some investors in the SIV Funds invested for the purpose of obtaining permanent residency in Australia; (9) The application form was annexed to and formed part of the September 2015 Information Memorandum; and (10) On 15 August 2016, Dulcie Du sent an email to Jun Chen containing details of several SIV Funds which disclosed (in Mandarin) that investments were made in assets of the Hotel Group. 705 Returning to Jingyi Li's pleading, she contends that the September 2015 Information Memorandum made or conveyed five separate representations as follows (CB 143): (1) Under the heading "who should invest?" stated that the SIV Funds managed by SBAM were suitable for investments of four-years duration; may be suitable for long-term (at least 4 years) investors who are seeking a yield (series C & D SIV Funds) and actively managed portfolio (series A, B, E, F, G & K SIV Funds) (the Four-Year Investment Representation); (2) Stated the investment philosophy of the SIV K Fund was: "…. to provide investors with the opportunity to access investment opportunities in the Australian property and infrastructure sectors. The Investment Manager will allocate capital to the most attractive, risk adjusted, yield based property and infrastructure investment opportunities available at any particular time. The mandate of potential investments includes direct property and infrastructure investments, LICs operating in the property and infrastructure sectors, listed property and infrastructure companies, REITs, and property and infrastructure funds operated by third-party managers" (the Investment Assessment Representation); (3) That the capital in Fund K would be allocated by the Investment Manager based on identified criteria and that the "default investment of the capital will be a fund or funds operated by third-party managers" (the Conflict Representation); (4) That the capital in Fund K would be managed by the Investment Manager who would follow a "structured five-step investment process when considering direct investments (not via a third-party fund)" (the Structured Investment Representation); and (5) That the Investment Manager would operate within policy parameters aimed at ensuring that the composition and operation of the direct investments of SIV K Fund continue to reflect the investment objectives, including: (i) Sub class diversification, noting that the Investment Manager would seek assets in a broad range of real estate asset classes; and (ii) Geographic diversification, noting that Fund K's direct investment portfolio will consist of real assets throughout Australia predominantly in major capital cities" (the Diversification Representation). 706 Collectively these are referred to as the IM Representations. 707 SBAM now admits that the September 2015 Information Memorandum made each of the IM Representations. On 17 May 2024, shortly prior to commencement of the trial and without leave, SBAM filed and served a response to Jingyi Li's Further Amended Narrative Statement. In that document SBAM, in considerable detail, pleaded a number of statements as set out in the September 2015 Information Memorandum, including that the document was required to be read in its entirety, that according to Jingyi Li's own case she did not read or understand it, with the consequence that it could not have conveyed any representation to her and otherwise purported to withdraw an earlier admission about the five representations and to replace it with a denial. When this matter was raised at trial, I refused leave to withdraw the admission, but the other defences are in issue. 708 Jingyi Li next pleads her state of mind, as at 30 August 2016 when she determined to invest $5 million in Fund C. She: (1) Considered that it was likely that she would wish to redeem her investment in Fund C at the expiry of the four-year period required under the SIV Program; and (2) Was not aware of any limitation, restriction or material risk to her ability to redeem her investment in Fund C. 709 SBAM disputes that this was her state of mind and pleads that at all material times there were limitations upon redemption of investments in SIV Funds at the expiry of four-years, only two of which remained in issue by the close of the case: (1) Jingyi Li's ability to redeem her investment in Fund C was governed by the terms of the Fund E Trust Deed which provided that: (1) where the Fund was liquid the Trustee had 60 business days from receipt of a withdrawal request to satisfy the redemption request and could suspend the satisfaction of withdrawal requests if certain listed circumstances arose and; (2) where the Fund was not liquid, the only right of redemption was in accordance with the terms of the current withdrawal offer (where the trust was registered) or an approximation of that procedure with the trust was not registered; (2) The September 2015 Information Memorandum: (1) highlighted the significant risks associated with making an investment in one of the SIV funds; and (2) noted that SBAM could not eliminate all risks and cannot promise that the ways in which the funds will be managed will be successful, but a financial adviser can explain these risks in detail as well as tailor advice to suit client needs. Further, that Fund E and Fund K investors may only redeem an amount were liquidity permits and, that where an SIV Fund is illiquid, units can only be redeemed in certain limited circumstances. 710 Whilst accepting that Jingyi Li signed the first application form on 30 August 2016, SBAM pleads and relies upon the terms contained therein, which stated: "you must read the Information Memorandum before completing and signing this form". Further, certain details contained therein disclosed the occupation or business activity of Jingyi Li as "international trading", the main purpose of her investment as "capital gain & SIV Visa" and that the source of funds for her investment was "business income". Reliance is also placed on several declarations and acknowledgements (each expressed in English) that it says were given by Jingyi Li in making the first application. 711 Although the first application form contained an acknowledgement that Jingyi Li had received a copy of the August 2015 Information Memorandum, that was erroneous. The agreed fact is that Jingyi Li received the September 2015 Information Memorandum when it was emailed to her on 28 August 2016. 712 Nonetheless, Jingyi Li maintains that when she signed the first application form, it was in the English language and was unable to be read, was not read and was not understood by her. SBAM does not accept that Jingyi Li did not comprehend the first application form, but in any event, to the extent that her level of comprehension of the English language prevented her from doing so, she had the ability to procure a translation and to obtain independent advice as to the content of the document. 713 Jingyi Li further contends that she was not provided with a copy of the trust deed for Fund C before she made her application. That fact is accepted by SBAM, but with the qualification that the September 2015 Information Memorandum noted that investors could request that a copy of the document be mailed to them. 714 There is then an allegation that SBAM knew or ought to have known that the first application form had been completed by Austar Suzhou on behalf of Jingyi Li, in that the handwriting on the form was the same as that marked on forms submitted by Austar Suzhou to SBAM for other investors, which SBAM in part accepts to the extent that it was aware that the document was annotated by an Austar Suzhou representative. 715 Jingyi Li then pleads that SBAM knew or ought reasonably to have known by virtue of its dealings with Austar Suzhou, that: (1) The purpose of investing was to obtain permanent residency in Australia under the SIV Program; (2) The term of investment in a compliant fund was four-years; (3) It was likely that she would wish to redeem her investment at the expiry of that period; (4) Any limitation, restriction or risk to her ability to redeem her investment in a compliant fund would be material to her in deciding as to which compliant fund she would investing in; (5) She had not read, or understood, the September 2015 Information Memorandum or the Fund C trust deed; and (6) She had not read or understood the first application form, other than those parts relating to the identification of Fund C and the amount to be invested. 716 In response, SBAM says that at the time it received the first application form: (1) It understood that the purpose of the investment was to obtain a Subclass 188 Visa and also to make a capital gain; (2) The Regulations required a Subclass 188 Visa applicant to have a genuine intention to hold their investment for at least four-years, and if the holder wished to remain in Australia at the expiry of that period, they would either need to obtain an Extension Subclass 188 Visa (which required them to continue to hold their complying investment) or obtain a Subclass 888 Visa (which required them to have a realistic commitment to maintain business or investment activities in Australia); (3) It was not aware of Jingyi Li's intentions for her investment at expiry of the four-year period; (4) Jingyi Li had signed an acknowledgement to the effect that she had received an Information Memorandum, had read it and agreed to be bound by its terms; (5) Jingyi Li had not requested a copy of the relevant trust deed; (6) Jingyi Li could have obtained a copy of the relevant trust deed on request and did not do so; and (7) Otherwise, Jingyi Li's allegations are denied. 717 It will be recalled that in September 2016, Jingyi Li transferred $5 million to an account of SBAM relating to Fund C and on 9 September 2016, was issued 4,976,875 units in the Fund. If Jingyi Li had maintained her investment in Fund C, it is unlikely that she would have had any complaint because Fund C always has been liquid. However, in February 2019, she redeemed her investment in Fund C and reinvested in Fund K and Fund L. Why she did so is contentious. 718 On 31 July 2018, Cathy Zhang, a client services manager of SBAM, sent an email to Jingyi Li. It was in the form of an update sent to all SIV investors which attached a slide deck entitled "SB&G Group Opportunities" dated May 2018 in English and Mandarin. SBAM relies on several statements in that document to the effect that it disclosed that funds invested in the Hotel Group and development projects and contained a detailed portfolio list of the hotels and summarised the group "value-add strategy". 719 In September 2018, Jingyi Li became aware (Natalie Liao told her) that the SB&G Hotel Group intended to list on the ASX. Commencing on 11 September 2018, Natalie Liao engaged in an extended WeChat message conversation with Jingyi Li and her husband, Jun Chen, that concluded on 12 September 2018. Jingyi Li says that the WeChat messages made representations (the WeChat Representations) to the effect that: (a) An investor had a unilateral right to redeem their investment in Fund K and Fund L at any time after two years, upon notice to the fund; (b) There was no need to fix a further investment in Fund L for an additional period upon redemption; and (c) After Fund K had been listed, which was imminent, investors could hold shares directly and then redeem those shares at any time in the open market. 720 SBAM admits the WeChat messages (pleads a different English translation), denies the WeChat Representations and pleads the following contextual facts: (a) On 11 September 2018, Natalie Liao during the WeChat messages sent a document in Mandarin titled: "Atlas Complying SIV Deck Chinese" which document disclosed that the manager of Fund L would allocate investments initially in the Hotel Group; (b) Within that document there was the "Series L Fund Report" dated September 2018 which relevantly stated that Fund L aimed to provide exposure to property and infrastructure related assets in Australia and that it holds a significant underlying exposure to the Hotel Group which had provided a suitable yield; (c) The fund report detailed the portfolio as 77.1% yield assets, 12.8% development assets and 10.1% cash and other assets; and (d) As at September 2018, SBAM intended to list the Hotel Group (or a separate investment vehicle) which, if it occurred, would allow redemption requests in Fund K and Fund L to be satisfied. 721 Falsity and inducement is addressed in a rolled up plea which combines the IM Representations and the WeChat Representations (even though made at different times and in different circumstances), each concerning the ability of Jingyi Li to redeem her investments in Fund K and Fund L at the expiry of the remaining two year period, which she contends were: (a) False in a material particular or materially misleading in that they were directly contrary to the terms of the Fund K Trust Deed and the Fund L Trust Deed; (b) False in a material particular or materially misleading in that they did not take into account or disclose the illiquid nature and long-term investment horizon of Fund K and Fund L arising by each of those funds' primary investments in the SB&G Hotel Group; (c) Likely to induce her to invest in Fund K and Fund L; (d) Made in circumstances where SBAM did not care whether the representations were true or false and or knew or ought reasonably to have known that the representations were false in a material particular and were materially misleading in that they were directly contrary to the terms of the Fund K Trust Deed and the Fund L Trust Deed and did not take into account the illiquid nature and long-term investment horizon of the funds' primary investments in the SB&G Hotel Group. 722 These contentions are denied by SBAM. It further says that Fund K at no relevant time made direct investments in property and infrastructure assets. At all relevant times it invested in such assets indirectly by investing through the Hotel Group, the Salter Brothers Hotel Company Trust and the K2 Fund. 723 Jingyi Li contends that "based on" the WeChat Representations and the IM representations, on or about 20 February 2019, she determined to transfer her investment in Fund C to Fund K and Fund L and when she did she: (a) Considered that it was likely that she would wish to redeem her investments at the expiry of the remaining two-year period under the SIV Program; (b) Relied on the WeChat Representations; (c) Was not aware of any limitation, restriction or material risk to her ability to redeem her investment in Fund K or Fund L at the expiry of the remaining two-year period under the SIV Program; and (d) Had not been provided with an Information Memorandum dated 22 August 2018 or a copy of the trust deeds for Fund K and Fund L. 724 It is not in issue that on 20 February 2019, Jingyi Li signed an application form (in English) by which her unitholding in Fund C was redeemed and re-invested such that $2.5 million was invested in Fund K and the balance was applied to Fund L and which form contained a handwritten notation: Switch all Funds from C to K and L. *L invest for 2 years. 725 On 25 February 2019, Jingyi Li was issued with 1,895,970 units in Fund K for $2,500,000 and 2,458,512 units in Fund L for $2,843,345. 726 SBAM denies the reliance plea and further contends that, to the extent that it is based on the IM Representations, on Jingyi Li's own case at the time of the transfer she had not read or understood the September 2015 Information Memorandum. In consequence there is no causal nexus and there was no reliance on the representations said to have been conveyed by the September 2015 Information Memorandum. 727 SBAM further says that on 5 February 2019, Jingyi Li and Jun Chen attended an event organised by SBAM and advised Natalie Liao and Paul Salter that, having heard "positive things" from their friends about the performance of the property funds, they were interested in switching their investments to those funds. Further, and in some detail, SBAM pleads the content of a discussion on 18 February 2019 between Jingyi Li, Jun Chen, Natalie Liao and Paul Salter at which it is said that: (a) Jingyi Li inquired about the SIV property funds and the plans to list the Hotel Group; (b) Paul Salter provided information about the Hotel Group and its recent performance, explained the benefits of investing in one of the property funds in that they had stronger yields than Fund C, that it was expected that a material capital increase would be achieved by redevelopment of the Holiday Inn Potts Point and that a further improvement in liquidity would be achieved from the planned listing of the Hotel Group; (c) The risks of investing in Fund K and Fund L were discussed; and (d) Paul Salter provided an overview of the liquidity strategy for the Hotel Group, including an outline of the planned listing as the primary strategy to enhance liquidity. 728 In consequence of these matters, SBAM pleads that when Jingyi Li made her decision to switch her investment from Fund C to Fund K and Fund L, she knew or ought to have known each of the matters that were disclosed to her by Paul Salter, including that redemptions from Fund K and Fund L were dependent on liquidity. SBAM further says that when Jingyi Li signed the second application form to switch her investments, she accepted that she had read the Information Memorandum, agreed to be bound by it and the trust deeds, acknowledged that she was a wholesale client within the meaning of the Corporations Act, acknowledged that no representations as to the performance or success of the funds had been made to her and that "where appropriate" she had obtained her own independent financial advice prior to her investment decision. 729 Accepting that the documentation was in English, SBAM contends that to the extent that Jingyi Li's "level of comprehension" prevented her from reading or understanding the second application form, she was perfectly able to procure a translation of it or obtain her own independent advice as to its content. 730 SBAM accepts that at the time of signing the second application form, Jingyi Li had not received a copy of the trust deeds but contends she could have obtained a copy upon request. 731 Jingyi Li then turns to a knowledge plea that SBAM knew or ought reasonably to have known by virtue of its dealings with Austar Suzhou that: (a) Her application to transfer from Fund C to Fund K and Fund L was for the ultimate purpose of obtaining permanent residency under the SIV Program; (b) It was likely that she would wish to redeem her investments at the expiry of the remaining two-year period required by the SIV Program; (c) She was relying on the WeChat Representations; (d) She was not aware of any limitation, restriction or material risk to her ability to redeem her investment in Fund K or Fund L at the expiry of the remaining two-year period; (e) She had not read or understood the Information Memorandum dated 22 August 2018 or the trust deeds for Fund K and Fund L; (f) She had not read or understood the second application form, other than those parts relating to the identification of Fund K and Fund L and the amounts to be invested; (g) That SBII had already determined that the investments in Fund K and Fund L would primarily be in the SB&G Hotel Group which was a non-diversified illiquid investment and a long-term investment with a likely investment horizon of at least 30 June 2024. 732 SBAM denies these matters and further pleads: (a) Jingyi Li could have obtained a copy of the trust deeds upon request; (b) Jingyi Li did not in fact make a redemption request on or around the fourth anniversary of her initial investment (30 August 2020) and only made such a request on 13 January 2022; (c) Relevant requirements of the Regulations concerning the requirement for a temporary visa holder who wished to remain in Australia beyond the initial four-year term; and (d) It had advised Jingyi Li that the primary investment in Fund K and the main investment in Fund L was in the SB&G Hotel Group. 733 I pause at this juncture to note that Jingyi Li eschews any case of misleading conduct by silence (Closing Submissions [167]). 734 Jingyi Li pleads her causation hypothetical in two separate paragraphs, with considerable overlap. The first contention is that had she been informed of the restrictions, limitations or material risks to her ability to redeem her investments in Fund K and Fund L, or if SBAM had not made the IM Representations or the WeChat Representations, then she would not have invested in Fund K and Fund L and would have retained her investment in Fund C. Alternatively, if the investments in Fund K and Fund L had already been made, she would have re-transferred her investment to Fund C upon becoming so aware and before Fund K and Fund L ceased to meet redemption requests in early 2020. Jingyi Li does not say that she would have invested in an alternative complying fund which met the requirements of the SIV Program. 735 The second contention is that if she had been informed that the IM Representations and/or the WeChat Representations were not correct or had been informed of the restrictions, limitations or material risks to her ability to redeem her investments in Fund K and Fund L and/or that investments in Fund K and Fund L were not diversified and were illiquid and suitable only for a likely investment horizon of up to 30 June 2024, then she would have retained her investment in Fund C and would not have made the switch to Fund K and Fund L. Alternatively, she would otherwise have redeemed her investments in Fund K and Fund L upon becoming aware of these matters and would have retransferred her investments to Fund C prior to the date on which Fund K and Fund L ceased to pay redemption requests in early 2020. 736 SBAM denies each counterfactual, notes that Jingyi Li's case is not one of misleading conduct by silence or non-disclosure and, to the extent that the counterfactual turns on a failure by SBAM to inform Jingyi Li of restrictions, limitations or material risks, it is inconsistent with her liability case. As to the re-transfer counterfactual, SBAM says that it too is inconsistent with Jingyi Li's liability case in that there is no allegation of any contravening conduct after Jingyi Li made her decision to transfer her investments into Fund K and Fund L. 737 Jingyi Li next pleads by way of conclusions why the IM Representations and the WeChat Representations were misleading or deceptive or likely to mislead or deceive, or otherwise amounted to unconscionable conduct. Dealing first with the IM Representations she contends that: (a) Contrary to the Four-Year Investment Representation, Fund K and Fund L were illiquid and did not have sufficient liquidity to satisfy redemption requests in the four-year timeframe; (b) Contrary to the Investment Assessment Representation, investments in the Hotel Group were determined without formal consideration having been given to investments in all property and infrastructure investments and other property and infrastructure funds operated by third-party managers; (c) Contrary to the Conflict Representation, investments in Fund K and Fund L involved in investments in the Hotel Group; (d) Contrary to the Structured Investment Representation, investments in Fund K and Fund L were determined without the benefit of a five-step structured investment process and instead directed to the Hotel Group; and (e) Contrary to the Diversification Representation, Fund K and Fund L were each a non-diversified investment. 738 As to the WeChat Representations, it is said that they were misleading or deceptive or likely to mislead or deceive in that investments in Fund K and Fund L were not available for redemption upon notice from the investor after two years. 739 SBAM denies these matters and contends that the risks of investment, the limitations on the ability to redeem investments and the nature of the investments in each of Fund K and Fund L were disclosed to Jingyi Li in the September 2015 Information Memorandum, pursuant to the terms of the August 2018 Information Memorandum and at the meeting on 18 February 2019. 740 Jingyi Li pleads a statutory unconscionable conduct case, that all the conduct of SBAM that she relies upon was unconscionable "including because": (a) She was under a special disadvantage being her inability to fluently converse in or read documents in English and wished to obtain permanent residency in Australia under the SIV Program; (b) SBAM knew, or ought reasonably to have known, that she was only conversant and able to read documents written in Mandarin and had invested in the complying investments of SBAM for the purpose of obtaining permanent residency in Australia under the SIV Program; (c) SBAM provided documents concerning the SIV Funds in English, with only "a small number" of documents provided in Mandarin; and (d) SBAM otherwise took no steps to explain to her the matters set out in the documents that were provided in English. 741 SBAM denies these contentions and asserts that Jingyi Li has failed to identify the conduct that she relies on, as distinct from the circumstances that she contends makes that conduct unconscionable. 742 It is not in issue that Fund K and Fund L do not have sufficient liquidity to meet Jingyi Li's redemption requests, but SBAM denies that such illiquidity results from the non-diversified nature of the investments in the Hotel Group and further contends that it was disclosed to Jingyi Li, before she switched her investments, that the primary investment of Fund K is in the Hotel Group. 743 As to relief, Jingyi Li seeks a range of remedies including declarations as to contravening conduct, damages or, as an alternative to damages, a refund pursuant to s 12GM of the ASIC Act upon surrender by her of all her issued units. As to damages, she contends that the "real value" of her investments in Fund K and Fund L is nil and that in consequence her loss and damage is $4,938,528.69 being the face value of her redeemed investment in Fund C plus an amount of $9,929.38 being a difference between distributions that she would have received, and those in fact received. I have stated the damages calculation very simply: it is much more complex as set out in particulars of damage dated 15 April 2024, that is the subject of more detailed analysis in the relief section of these reasons. As might be expected, SBAM denies that Jingyi Li is entitled to any relief. 744 SBAM relies on additional defences. First, that Jingyi Li has failed to allege that she suffered loss or damage by reason of the alleged contravening conduct and that in consequence she has failed to disclose a cause of action under s 1041I of the Corporations Act or s 12GF of the ASIC Act or any basis for relief under s 12GM of the ASIC Act. 745 Second, that Jingyi Li failed to take reasonable care within the meaning of s 1041I(1B) of the Corporations Act and s 12GF(1B) of the ASIC Act, for which detailed particulars are given and which focus upon the importance of the information contained in each Information Memoranda, the declarations and acknowledgements that they had been read by Jingyi Li before making her investments, her failure to obtain independent advice as to the content of the documentation provided to her in English, her failure to seek a translation of relevant documents and that she knew or ought to have known of the importance of reading the documentation before deciding to make her investments. 746 There is a matter pleaded in reply by Jingyi Li that is material to the issues. It concerns the indirect investment point that SBAM makes for investments made by Fund K into the Hotel Group. Jingyi Li responds that the IM Representations failed to disclose the distinction between direct and indirect investments and the process applicable to each and were therefore misleading or deceptive and the failure of SBAM to disclose that Fund K would not be making direct investments was also misleading or deceptive. G. 2 The witnesses and the evidence 747 Jingyi Li is the primary witness in her case. She was born in the People's Republic of China in 1974. She is married to Jun Chen who was born in the People's Republic of China in 1976. They have one child. Jingyi Li has a degree in business management from Shanghai Jiao Tong University. She is an engineer by training. Her university education included study in subjects such as administration management, accounting and project management. Before moving to Australia, her understanding of English was limited. Since migrating to Australia, she has undertaken English language courses and has a good understanding of English. Despite that, she gave her evidence through an interpreter. 748 In 2011, Jingyi Li commenced to work at Jun Chen's family business in Shanghai, which was concerned with exporting and importing. 749 Jingyi Li and Jun Chen were keen travellers. They first conceived the idea of migrating to Australia in 2009. In 2014, they became aware of the SIV Program. 750 Jingyi Li accepted in cross-examination that in 2019 she was a very wealthy woman, who had the financial capacity to take advice about her investments from a financial adviser, to take legal advice from a lawyer and advice from an accountant (T 467). Neither Jingyi Li nor Jun Chen have ever had to borrow money to make any investments in Australia (T 467). 751 I have some reservations about the evidence of Jingyi Li. On occasions she did not answer questions directly and tended to argue her case from the witness box and made an affidavit without understanding each of the attachments. Examples are her evidence in cross-examination when asked to explain her understanding of a liquid investment (T 366-367, 369-371), whether she read and understood the various attachments to her affidavit, before making it (T 371, 375-376), whether she understood at the time that Fund K invested in the Hotel Group (T 407) and her determination to stay on message that she was assured before deciding to switch her investments that her investment was safe and would be redeemed at the end of four-years (T 415-416). 752 However overall, those matters have not caused me to conclude that her evidence was unreliable. What is clear is that Jingyi Li had very little knowledge of what she was investing in. She relied on assessments made and advice provided by her husband. 753 Jun Chen does not permanently live in Australia. He works in management and investment corporations and divides his time between Shanghai and Melbourne. He is the executive director and is responsible for the management of the finance, operations, administration, human resources and IT departments of the Shanghai Discovering Investment Management Company Ltd. He has relevant qualifications in finance from the Shanghai Finance College, which he described as like a TAFE qualification in Australia. He studied some English whilst in high school and describes his current level of fluency as quite poor. 754 Jun Chen is a shrewd and confident investor. What follows is a summary of his evidence in cross-examination (T 481-491). He has been very successful. In 1999 he joined the China National Metals and Minerals Import and Export Corporation, within which he worked for the Shanghai Pudong subsidiary company. He held the position of Manager of the Trading Department. It was a state-owned enterprise under the control of the central government. The parent company was responsible for approximately 60% of the total import and export volume of its subsidiary, which focused on the steel industry. Jun Chen received substantial reward in the form of his remuneration package. In March 2005, when he left the company, he was receiving approximately 500,000 yuan per annum. 755 In early 2005 he went to work at the Shanghai Xin Yi Tong Import and Export Company, which was his mother's family business. That business is now owned by Jun Chen and Jingyi Li. He was appointed as the general manager. During his term, annual revenues grew substantially. He no longer works for the company but remains a 50% shareholder with his business partner. As at 2019 the approximate annual revenue of the company was 100 million RMB and Jun Chen accepted a rough exchange equivalent rate of 5 yuan to 1 Australian dollar between 2014 and 2024. 756 Jun Chen ceased to be the general manager of that corporation in 2010 and then worked for Shanghai Discovery Investment Management Ltd. Its business is concerned with investing in secondary markets for stocks, futures and products. It is a listed corporation on a Chinese stock exchange. The primary responsibility of Jun Chen in that company is to engage in futures trading for commodities, such as steel and minerals. As is well understood, futures trading involves betting on the future price of commodities. As at 2024, Jun Chen was still working with the company, which he described as mainly management work such as IT, HR and administration. 757 In 2015, Jun Chen described that he, with Jingyi Li, had many types of investments. They invested in shares in companies listed on the futures exchange. In 2015 their joint assets exceeded $5 million. Jun Chen's futures trading history is set out in an account document from Minmetals Futures Co Ltd dated 15 April 2015, which covers a trading history commencing in December 2013 (CB 29494). In June 2012, Jun Chen started with an amount of 10,000 yuan. Due to his trading activity, by 31 December 2013 the equity in his account was 8.4 million yuan. Between December 2013 and March 2015, he withdrew 25.5 million yuan from the account. His overall success to the close of trading in March 2015 was approximately AUD $6 million. 758 By reason of his employment history, Jun Chen is familiar with contracts, contractual obligations, the effect of signing a contract and that all contracts carry a degree of risk. He is experienced in hedging contracts for commodities, which is another business area in which he has been very successful (T 493). There is no doubt that prior to investing with the SBAM funds, he had a very good understanding of the risk/return ratio (T 505, 631). 759 There are aspects of Jun Chen's evidence that I simply cannot accept as plausible or based on actual recollection. He tended to deflect direct questions on the central issues of his knowledge of investment in the Hotel Group, liquidity risk and whether he read documents provided in Mandarin. At times, his answers were long and non-responsive with the intention of avoiding an answer that he perceived damaging to his wife's case. 760 I provide the following examples. He clearly did know that the Atlas Capital property funds invested in the Hotel Group, despite his attempts to deny that knowledge (T 550, 576, 583). He avoided answering direct questions about the consequences of a financial crisis or meltdown. When pressed to answer, he gave implausible answers considering his financial experience and investment knowledge (T 617-625, 626- 627). He gave implausible evidence that he did not pay attention to the Information Memorandum, which is referenced in his wife's email of 30 August 2016 (T 520-521). On more than one occasion, Mr Peters warned him of the likely consequences of not answering questions or I pointed out that he had failed to answer (T 548, 583, 606, 628, 630-631). He also attached documents to his affidavit in English without it being explained to him what the documents were or what they contained (T 548-552). This led to an adjournment so that the documents could be translated for him (T 551-560). 761 However, I have not concluded that his evidence should be rejected as generally evasive or untruthful. This is primarily because near the end of his long cross-examination, he finally answered directly and contrary to Jingyi Li's interests, two central questions about his knowledge of liquidity risk and that redemptions in a property fund are dependent on fund liquidity (T 631). That said, I do not accept his evidence where he played down his level of investment sophistication. 762 There were no other witnesses for Jingyi Li. In particular, she did not introduce expert evidence. 763 The witnesses for SBAM were common to the Li Xu proceeding: Robert Salter, Paul Salter, Hannah Zhu, Peter Hamilton, Natalie Liao and Dawna Wright. My assessment of each that I have set out in the Li Xu proceeding was not affected by the separate evidence given in this proceeding. G. 3 The IM Representation case 764 A distinguishing feature from the Li Xu proceeding is that the IM Representations are confined to the terms of the September 2015 Information Memorandum prepared for, directed and provided to a particular class of persons, being prospective investors in the SIV funds as a necessary step of participation in the SIV Program. The IM Representations were not made, nor were they intended to be made, to identified individuals. Thus, on the misleading and deceptive conduct case, it is necessary to assess the effect of the conduct on the "ordinary and reasonable members" of that class: Self Care at [83]. 765 There is no issue on the pleadings that the IM Representations were made. The area of contest is whether they were misleading or deceptive or likely to mislead or deceive having regard to the totality of the conduct and the attributes of the class members by isolation of an ordinary and reasonable member "to objectively attribute characteristics and knowledge to that hypothetical person (or persons), and to consider the effect or likely effects of the conduct on their state of mind": Self Care at [83]. 766 Although Jingyi Li did not adduce direct evidence as to the characteristics of the relevant persons, it is not a difficult task to make relevant findings of fact based on the evidence of Jingyi Li, Jun Chen and the contemporaneous documents. G. 4 Jingyi Li evidence and Jun Chen evidence 767 What follows are my findings based on the evidence-in-chief and the cross-examination together with the contemporaneous documents, unless otherwise indicated. Unlike the Li Xu proceeding there is no significant contest to resolve about oral conversations. G. 4.1 Events to 30 August 2016 G. 4.1.1 Evidence of Jingyi Li 768 Jingyi Li became aware of the SIV Program at some time in 2014. She knew that it required a minimum investment of $5 million. On 7 April 2015, she appointed Austar Suzhou as her migration agent on a form prepared by the Victorian Department of State Development which was in English and Mandarin (CB 8272). Jingyi Li read the document before she signed it (T 351). It contains various acknowledgements. Ms Bennett submits that Jingyi Li did not distinctly say that she read the acknowledgements as distinct from the other portions of the document. I reject that submission. Jingyi Li stated that she read "the document" (T 353) before signing it. It includes this acknowledgement: I acknowledge that the Victorian government strongly recommends that I obtain professional independent financial and legal advice before making any investment in relation to this Visa. 769 On 13 April 2015, Jingyi Li entered into a separate engagement agreement with Austar Suzhou (CB 8277). Although there is no English translation in the Court Book, it is not controversial that one of the terms was to the effect that payment of the service fee did not include certain services, including translation of documents (T 355). Nor is it controversial that Jingyi Li could have engaged a translation service and certainly had the financial capacity to do so (T 355). There was no impediment that prevented her from having documents relevant to a life changing decision to migrate and to invest a significant sum of money translated so that she could fully comprehend what she was considering. 770 On 15 June 2016, Jingyi Li submitted her application to the Department to participate in the SIV Program (CB 8257 [16]). 771 On or about 9 August 2016, Jingyi Li was informed by Austar Suzhou that an offer to participate in the SIV Program had been received. That offer was set out in a letter from the Department dated 9 August 2016 (CB 8284). It is in English. It contains the same paragraph as the similar letter sent to Li Xu to the effect that the Commonwealth of Australia does not approve or endorse complying investments or provide advice on their performance. Jingyi Li could not read this letter (CB 8257 [17]) She passed it to Jun Chen. There is no evidence as to whether he read it. No translation was obtained. 772 On 15 August 2016, Dulcie Du from Austar Group emailed Jun Chen and attached information relating to complying investments offered by iProsperity Group and Atlas Capital (CB 9080). Despite stating in her affidavit that she received the email from Austar Group, she could only have received it from Jun Chen. That is a minor matter. Of greater substance is whether Jingyi Li read it and the attachments at the time, each of which were in Mandarin. The attachments included information about the Atlas Capital Hotel Opportunities Fund dated August 2015. Jingyi Li said she did not read the attachments before giving evidence. She claimed that Jun Chen read the documents (T 358). Jingyi Li denied that she was aware that one of the major investments of Fund K was in the Hotel Group. The Atlas Capital document commenced with a confidentiality and disclaimer notice. It included these statements (CB 9087): …Any information contained in or related to this document, whether oral or written, does not constitute a commitment, and Atlas Funds Management makes no guarantee as to the accuracy of the document, the expected returns, forecasts, or estimates. For such forecast information, Atlas assumes no responsibility. The purpose of this document is not to provide such information. … Past investment performance is not a guarantee of future performance. The forward -looking statements contained in this document involve subjective judgements and analysis, and are subject to significant uncertainty, risks, and unforeseen events, many of which are unknown and beyond the control of Atlas. Future actual results may differ significantly from the forward-looking statements and the assumptions based thereon. Given these uncertainties, you should exercise caution in your investments and avoid placing excessive reliance on these forward-looking statements. 773 When pressed in cross-examination to the effect that Jingyi Li should have been careful and should have read the documents when they were sent, she answered (T 359): THE INTERPRETER: All these documents sent to me, and they were financial investment related. I'm not good at this area. Once I received, I just passed on to my husband. MR PETERS: Did you expect your husband to tell you of any risk associated with these products? THE INTERPRETER: I trust my husband can evaluate all this. If anything important – he felt important, he would tell – he would tell me. 774 Jingyi Li also said that Jun Chen is a better judge of the risk of investments than she is, because he is more capable (T 351). Jingyi Li was aware that Jun Chen had engaged in futures trading and understood the attendant risks (T 348-350). She was asked whether it was her or her husband who made the initial decision to invest $5 million into Fund C in August 2016. She stated that the decision was made together but "mainly my husband" (T 360). I then asked whether it was Jingyi Li or her husband who made the decision to switch the investments into Fund K and Fund L in February 2019. She answered: "my husband made the decision" (T 360). 775 I find that Jingyi Li did not read the Atlas Capital Hotel Opportunities Fund document before she made her investment in August 2016. She did so as a matter of personal choice. Had she taken the time to read that document, she would have understood that an investment in the Atlas Capital Hotel Property Funds carried significant risk, including loss of principal. This risk was clearly disclosed. 776 These findings are inconsistent with a statement in Jingyi Li's affidavit that, in considering which investment option to choose: "safety of our investment was the most important factor". Her evidence continued:(CB 8258) … We wanted some safe investment options to invest in, so that our money would be safe to access again when we had completed our migration. Our primary goal was simply to obtain permanent residency in Australia, not to invest and obtain returns. Of course, within the options that were equally safe, we would favour an investment with higher returns. However, whether the interest rate was high or not, it was not the most important thing to us. 777 I reject that evidence. Not only, as I explain, is it inconsistent with evidence given by Jun Chen, but if the safety of investment was truly a matter at the forefront of Jingyi Li's mind, then it is inexplicable that she chose not to read the confidentiality and disclaimer notice in the Atlas Capital Hotel Opportunities Fund document. Or indeed read further into it to be informed about the types of complying investments on offer. 778 On 28 August 2016, Dulcie Du sent an email to Jun Chen and Jingyi Li (CB 9113). She attached four documents which comprised Atlas Capital information in relation to Fund C and Fund D (in Mandarin) and the Atlas Capital September 2015 Information Memorandum (in English). Jingyi Li in her affidavit stated that she did not specifically recall reading the Information Memorandum. She further stated that she did not do so because of her lack of fluency in English and that she did not understand at the time what the Information Memorandum was or its significance. In contrast, she did read the Fund C and Fund D documents as they were in Mandarin and used simple language that she could comprehend. Neither addressed liquidity risk. 779 The September 2015 Information Memorandum included the application form. Jingyi Li signed that document to invest $5 million in Fund C on 30 August 2016 (CB 9484). Certain details that had been handwritten on the form were not written by her. The only handwriting that is hers is her signature on the last page, below the declarations. In her affidavit evidence she said: (CB 8260-8261) I do not recall reading the document before I signed it, and it was not translated or explained to me before I did so. Austar emailed the form to me and said to sign where the crosses were marked and that is what I did. The first page of the application form refers to the Information Memorandum. I noticed this reference and asked Ms Du to send me a completed copy of the Information Memorandum via email, after she had sent me the application form… … Ms Du then sent me the Information Memorandum by email that same day… I do not recall reading the Information Memorandum. Because it was in English, I could not read a document of that length in full. 780 In cross-examination, her evidence as to receiving and signing the application form with the Information Memorandum was as follows (from T 343). Jingyi Li did not read the declarations immediately above her signature. She at least understood that the document was an agreement by which she applied to invest in a fund with other unit holders. She was not aware of how many other investors there were in Fund C. She was not aware of the quantum of the fund. She denied knowledge about rules governing the fund. She had limited knowledge that the fund would invest in bank deposits. Her limited understanding was in part derived by what Jun Chen told her (T 359). G. 4.1.2 Jun Chen evidence 781 Between 2009 and late 2018, as the result of his expertise in assessing and taking investment risks, Jun Chen and Jingyi Li had accumulated approximately $10 million in assets. In 2016, their combined assets exceeded $5 million. Jun Chen's knowledge of investment risks at the time included an understanding that external economic factors impact upon the ability to realise anticipated economic gains (T 506). He understood that an investment strategy may "prove to be wrong if market conditions change" (T 506). He understood the liquidity risks of investing in property and property related funds (T 507). 782 Jun Chen was aware by August 2016 that the Atlas Capital funds had invested in hotels but was not aware of the specifics as he was not at that time considering an investment in a property fund. He was further pressed as to which components of the documents received by email on 15 August 2016 he actually read at the time. The best answer that he gave was that he acknowledged receipt of the material, read some of it "but anything irrelevant, at that time, I did not read carefully" (T 512). He was unable to be more precise as to what he in fact read at the time. His attention was drawn to a statement in his affidavit to the effect that of the documents sent to him by Dulcie Du, the main things he focused on where the types of investments, savings and government bonds, the investment return and the liquidity. He was asked to explain what he meant by liquidity and answered (T 515): What I mean here is, once comply with term of the Australian Government requirement, when time was due, I can access to my fund any time. 783 He was pressed to disclose his knowledge about whether he understood that to be a future prediction. He accepted that it was. He disclosed knowledge that in the course of history, some banks have failed due to illiquidity. He understood that to be a risk with a bank deposit fund (T 515-516). 784 Jun Chen was taken to the Atlas Capital Fund Introduction in Mandarin (T 509). The document is labelled Hotel Investment Opportunities. Jun Chen said that he read some of the attachments being the product information for products that he was then considering as investments. He did not read the section titled: Important Notice – Confidentiality and Disclaimer and in particular the paragraph (CB 9087): The forward-looking statements contained in this document involves subjective judgements and analysis, and are subject to significant uncertainty, risks and unforeseen events, many of which are unknown and beyond the control of Atlas. Future actual results may differ significantly from the forward-looking statements and the assumptions based thereon. Given these uncertainties, you should exercise caution in your investments and avoid placing excessive reliance on these forward-looking statements. 785 When asked whether these risks were known to him for any investment in 2016, Jun Chen initially avoided a direct answer (T 510). When pressed further, he stated that the risks "existed in the email sent to me, but I – regretfully, I didn't read carefully the materials that – the investment project I was most interested in" (T 511). He was not further pressed to directly answer the question. 786 Jun Chen accepted that he was aware, during the entirety of 2018, that Salter Brothers had a division which managed hotels in Australia, although he was not specifically aware that Fund K or Fund L invested in those hotels (T 511). His attention was next directed to the email from Dulcie Du of 28 August 2016. He stated that some of the attachments were translated into Mandarin by the Migration Agency he had engaged, but he could not say which documents, or which pages of the documents were translated (T 516). 787 He was taken to the investment application form. He accepted that he understood at the time that it was an important document and that by signing it Jingyi Li would be bound by its terms (T 517). He understood that Jingyi Li was entering into a contract but could not read the document and did not have it translated. He accepted that he could have been more careful in permitting Jingyi Li to sign the document (T 517-518) However, he contended "all I need to know is what kind of funds I invested on, and if it was going to comply with government – government immigration program or not. I wasn't aware what kind of materials need to be translated" (T 517). 788 Jun Chen gave some evidence that he arranged for limited documents to be translated by Austar Suzhou. When pressed as to which documents he could not be specific but denied that the application form was one of them (T 518-519). He professed no knowledge as to what was meant by the words "SIV Funds" on the application form (T 519). That section of the form was then translated for him, which took approximately one and a half minutes, which establishes the ease with which documents could have been translated for him in 2016. 789 He accepted without qualification that he could have been "more careful" before committing his wife to sign the application form to make the initial investment (T 518). He said that the application form is not one of the documents that were translated into Mandarin, the agency did not offer a translation and nor did he require one. At the time he did not understand that the application form contained several declarations that were made by his wife together with warnings about investment risks (T 519). 790 Next, he was taken to the email from Jingyi Li to Dulcie Du on 30 August 2016, which was sent with his knowledge (T 520). It acknowledges receipt of the application form and relevantly provides (CB 9128): I've received your email. On the last page of the attachment, there are two blank spaces marked with "X" for signature. I have to sign the first blank space with my name, right? Also, I noticed that the attachment mentions an Information Memorandum. Could you please send me the complete Information Memorandum for the Atlas Capital Series C(TD) Fund that we are investing in? Thank you! 791 Jun Chen gave evidence that he did not notice at the time that the application form referenced the Information Memorandum stating: "I didn't pay attention on this detail; my wife did" (T 521). The answer is implausible, and I reject it. Jingyi Li repeatedly stated in her evidence that she left the consideration of the detail of the investment decision to her husband, he is the one who made the decision to make the first investment, and he is the family member who had significant investment and risk analysis experience at the time. 792 In relation to the emails from Dulcie Du of 15 and 28 August 2016, Jun Chen in his affidavit said he had some discussions with Dulcie Du about the investment options and that he said to her words to the effect that "the investment had to be safe, compliant with the SIV Program and that the principal had to be protected" (CB 9320 [21]). On receipt of the 1 September 2015 Information Memorandum, he said in his affidavit that he "did not really understand what it was. No part of it was in Chinese, and it was not translated or explained to me" (CB 9320 [22]). His focus at the time was on funds where the underlying assets were bank deposits or government bonds. He determined to invest in Fund C. Although he discussed his assessment with Jingyi Li "generally speaking, because of my experience in such matters" Jingyi Li would accept his recommendation. 793 In cross-examination, he accepted that Austar Suzhou could, for an additional fee, provide translations of English documents if he had requested translations (T 497-498). He was asked a series of detailed questions about investments, investment risks and his knowledge of investment risks (from T 506). Despite answering some questions with "it's possible", what is clear from his evidence is that he understood investment risks and liquidity risks. He has invested in many projects since 2009 and by doing so, he and Jingyi Li had accumulated joint wealth of approximately $10 million by 2016. 794 I find as follows. In August 2016, in the context of Jun Chen's extensive experience in finance, investing and his risk appetite as evidenced by his futures and hedge fund trading, he had a very good understanding that all investments were subject to investment risk. He was aware of the risk/return ratio. He was aware that bank deposits and bank bonds were a less risky form of investment than, for example, property investments. He well understood that he and Jingyi Li were about to make a very significant investment of $5 million in a foreign country. He could relatively easily have obtained Mandarin translations of the September 2015 Information Memorandum, but he chose not to. I find that he made that choice because he made his own assessment of the risks of investment. He was prepared to take the investment risk without informing himself of the terms of the investment that he decided Jingyi Li would accept by affixing her signature to the application form attached to the September 2015 Information Memorandum. 795 Further what is clear from the evidence of Jingyi Li and Jun Chen is that neither was aware of the IM Representations pleaded as conveyed by the September 2015 Information Memorandum, which is centrally relevant to their reliance case. G.5 Were the IM Representations misleading or deceptive? 796 It is first necessary to identify the relevant class and then objectively determine the effect on a hypothetical class member. G. 5.1 What is the relevant class? 797 The class comprised relatively wealthy Chinese citizens who were not fluent in English as their first language, who desired to take advantage of the SIV Program to migrate to Australia and who had the financial capacity and ability to take independent financial, accounting and legal advice about their intended investments. They also had the capacity (and it would not have been difficult) to obtain Mandarin translations of documents provided to them in English and on which they based their investment decisions. The class members comprise individuals who had acquired significant wealth because of their enterprise and skill in conducting businesses and who understood investment risks. 798 The class included sophisticated investors with substantial earnings far exceeding average weekly wages in China at the time with an appetite for risk. Jingyi Li and Jun Chen are two examples of that class. Their net assets, to qualify for the SIV Program, could not have been less than $5 million. These are assets which were at the disposal of the investors to make complying investments. Put another way, these assets were not required to be used for other purposes. The individuals within this class were aware that there was a risk of loss of capital in a complying investment and that the projected returns might not match the actual returns. They are also a class of persons who each received in English a letter from the Department which advised that their application had been successful and the next steps that were required to be undertaken to comply with the necessary criteria; primarily the making of a complying investment in a substantial sum and in a foreign country. 799 All of this was unchartered waters for the SIV applicants. Thus, the class members must have understood the need to proceed cautiously by having documents translated (if they could not be read or comprehended), to take independent financial advice, for example as expressly advised in this case by the Victorian Government Department of State Development, Business and Innovation (in the Appointment of Agent form) and that financial loss may be suffered as a result of making a complying investment (as stated by the Australian Government). 800 The hypothetical representative members must be taken to have had each of these characteristics in 2016 and 2019. The objective assessment task requires consideration of the effect or likely effects of the IM Representations upon the state of mind of those hypothetical individuals. 801 The error in Jingyi Li's case is to take certain statements from the September 2015 Information Memorandum out of context and without having regard to other statements made in that document which qualify, add or give context to the IM Representations. Her case fails to examine the whole of the conduct measured by what must be taken to have been known by ordinary and reasonable members of the relevant class. The context includes all that was objectively ascertainable by the content of the 1 September 2015 Information Memorandum, its provision to China-based agents, the engagement of class members of agents to assist in the application process, an understanding that the class members were relatively wealthy persons who were not unsophisticated and who had the capacity to procure translations of documents provided in English and to take independent advice. 802 I pause to observe that Jingyi Li pleads that she relied on the IM Representations and the WeChat Representations when she made the decision in February 2019 to switch the investment from Fund C to Fund K and Fund L. Accordingly, it is necessary to consider the misleading conduct question through two lenses. One the hypothetical class member to whom the Information Memorandum was directed. The other is an ordinary person with the knowledge and experience of Jingyi Li and Jun Chen and to whom the WeChat Representations were made. G. 5.2 The class question: Were the IM Representations misleading? G. 5.2.1 Context 803 The impugned representations must not be considered in isolation from the entirety of the September 2015 Information Memorandum. I have set out in detail in Part C of these reasons the relevant provisions. The Four-Year Investment Representation is said to be misleading or deceptive because Fund K and Fund L were illiquid and for that reason, could not satisfy redemption requests in the four-year timeframe. The words relied on at page three are critically that the "SIV Funds may be suitable for long-term (at least 4 years) investors" who seek an "actively managed portfolio." These statements appear in tabular form under the heading: THE SIV FUNDS AT A GLANCE. Textually this is no more than a brief summary as to the types of investors for whom the funds may be suitable. 804 This ignores other prominent statements in the document. Page 1 contains various statements to the effect that the information is not investment advice, considering the risk factors that could affect the financial performance of an SIV Fund is important and that prospective investors should carefully consider their particular investment objectives and financial circumstances and seek professional independent advice. There is the statement that, prospective investors should not construe the content as investment advice, no financial product advice is provided and nothing in it should be taken to constitute a recommendation or statement of opinion that is intended to influence a person in making a financial product decision. Further, there is no guarantee of any income or capital returns from the SIV funds and no assurance that the funds will achieve their investment objectives. Finally, to the extent the document comprises statements of intent and opinion, they may or may not be realised or be accurate and no warranty is given as to the accuracy or completeness of the information contained therein. 805 Within the summary at page three there is another statement that identifies risks. Liquidity risk is specified, and the prospective investor is directed to page 26 for a more detailed explanation. On page 26 there is a summary of "the significant investment risks" for each SIV fund. Liquidity is identified as a risk for each of Funds A-K and there is a more detailed explanation of that risk on page 28, explaining that liquidity risk exists "when particular investments are difficult to purchase or sell" which prevents a fund "from exiting a position or rebalancing." Next follows the explicit statement that an SIV Fund may not "be able to satisfy all redemption requests [where] the nature of the underlying assets" prevents all requests from being met when received, and that any right to redeem "may be suspended" when a fund is not liquid. 806 There are other references to the link between fund liquidity and the ability to satisfy redemption requests in the Fees and Costs section, in the Additional Information section under the subheadings Redemption of Units and Suspension of Redemption Requests (which specifically addresses the circumstances in which the Trustee may suspend for a reasonable period determined by it redemption requests if, inter-alia, there is insufficient cash or the assets cannot be realised at an appropriate price for adequate terms due to one or more circumstances outside the control of the Trustee). 807 And finally, there is the application form pursuant to which an investor acknowledges having read the September 2015 Information Memorandum and that the Atlas Group has not guaranteed or made any representation as to the performance or success of the SIV funds, as to the repayment of capital and that funds are subject to investment risk including delays in repayment and loss of income or principal. G. 5.2.2 The Four-Year Investment Representation 808 Dealing first with the Four-Year Investment Representation, in my view an ordinary and reasonable prospective investor of the identified class would not have been led (or likely led) into the contended error. A member of the class able to read the September 2015 Information Memorandum (or if not, one able to procure a Mandarin translation of it or engage a professional to have it explained) would have understood that the ability of the Trustee to meet redemption requests upon expiry of the four-year investment term was subject to a number of conditions, including that the Trustee had a discretion, that redemption requests were only able to be satisfied if the relevant fund was sufficiently liquid and that there were various risks associated with the making of investments, including loss of principal or delay in repayment. 809 A reasonable member of the class would not have taken in isolation the single clause relied on to make good the Four-Year Investment Representation. Moreover, the class member would have noticed that the words "may be suitable for long term (at least 4 years) investors" appeared in the introductory part of the document, was a high-level summary and was qualified and explained by the more detailed provisions concerned with the significant risks of investment. 810 Accordingly, the Four-year Investment Representation was not objectively conduct that was misleading or deceptive or likely to mislead or deceive. G. 5.2.3 Investment Assessment Representation 811 The Investment Assessment Representation focuses on words that appear on page 12 of the document. This section commences on page 11 under the primary heading Investment Objective & Philosophy for each SIV Fund. For Fund K, the disclosed objective is that the Trustee invests in Australian yielding property and infrastructure including commercial, industrial, retail, hotel and other yielding property and infrastructure assets. Page 12 is concerned with the Investment Philosophy. The claim focuses on the statement that the "Manager will allocate capital to the most attractive risk-adjusted, yield based property and infrastructure investment opportunities available at any particular time" and the concluding words "property and infrastructure funds operated by third-party managers". 812 These statements are contended to be misleading or deceptive in that the investments of Fund K and Fund L were determined without formal consideration having been given to investments in all direct property and infrastructure investments and property and infrastructure funds offered by third-party managers. 813 This representation was not objectively misleading or deceptive or likely to mislead or deceive members of the relevant class. The words relied on do not state, explicitly or by implication, that the Investment Manager would undertake a process of formal consideration or would not make investments directly or indirectly in assets held by the Hotel Group. Moreover, there is no reference to investments made by Fund L. G. 5.2.4 The Conflict Representation and the Structured Investment Representation 814 The Conflict Representation and the Structured Investment Representation are conveniently considered together as they raise the issue of what is meant by a direct investment. The Conflict Representation relies on words that appear at page 24 of the document under the heading SIV Fund K Allocation Process. The paragraph commences by stating the objective of the allocation process is "to deliver competitive results, even during difficult markets". To that end, the Investment Manager "identifies attractive relative value opportunities for SIV Fund K" by a process of monitoring risk adjusted expected returns and optimising third-party fund allocations. 815 The pleading selectively reads only the first sentence of the next paragraph. I have set out the entirety of this part of the document in Part C of these reasons. The opening sentence that "[t]he default investment of the capital will be a fund or funds operated by third-party managers" is just that. As the balance of this paragraph makes plain, where (amongst others) direct property or infrastructure investment opportunities meet the investment criteria of the Investment Manager, funds will be reallocated from the third-party fund to take up those opportunities with the effect that the Investment Manager "may maximise the investment returns with funds not sitting idle in term deposits (or like investments)". There is also the statement that the Investment Manager "believes that either direct property or infrastructure investment that has a similar mandate for property or infrastructure related assets will generate higher risk-adjusted returns in the medium term" compared to unlisted funds operated by third-party managers. In that event the Investment Manager will favour those investments. 816 The Structured Investment Representation is also at page 24 under the heading: Direct Investment- Internal Investment Process & Policies, where it is stated that the Investment Manager "will follow a structured five-step investment process when considering direct investments (not via a third-party fund). The contention is this statement was misleading or deceptive because the investments of Fund K and Fund L were each determined without the benefit of a five-step structured investment process and instead were directed to the Hotel Group. 817 The 1 September 2015 Information Memorandum does not define what is meant by a direct investment. It will be recalled that Fund K only invested in stapled securities in the Hotel Group, units in the Hotel Trust and units in Fund K2. Fund L is not referenced in the Information Memorandum because it did not exist as at 1 September 2015. 818 It is not controversial, and Paul Salter was quite open in his first affidavit, that Fund K was established to raise capital to invest in the Hotel Group and as such "formal consideration was not given to alternative investments at the time" (T 930). There is no evidence that the structured five step investment process was undertaken for Fund K. 819 Salter Brothers draw the distinction between a direct investment in property or infrastructure (i.e. an ownership or control interest such as being the registered proprietor) and indirect investments in property or infrastructure that were held through the stapled securities and trust units. Reliance is placed on the references in step three of the investment process- the engagement of independent experts for design, technical, legal, town planning and environmental and the implementation of an investment strategy and planning to "develop an investment strategy implementation plan". Reliance is also placed on step four-active management of the acquired asset including "tenant remixing, lease extensions, targeted upgrade and refurbishment capex." Step five is concerned with the exit strategy and references on and off market sales campaigns and engagement with purchasers. 820 Accordingly, Mr Peters submits that a member of the relevant class would have understood the Structured Investment Representation "to be directed to the process to be followed for direct investments, not all investments". In contrast, Ms Bennett submits that "there was no realistic way for an investor like [Jingyi Li] to understand the difference now sought to be drawn between direct and indirect investments". Objectively analysed, a member of the relevant class "would not have understood that this representation applied to direct investments only". 821 To the extent that these representations are pleaded as extending to Fund L, they are not made out as these statements are confined to Fund K. 822 I accept that read as a whole, the September 2015 Information Memorandum draws a distinction for Fund K between direct and indirect investments. That is made clear by the first sentence of the first paragraph which describes the investment process as applicable to direct investments "not via a third-party fund" which is then reinforced by the various statements in steps three, four and five that I have summarised. There is also the statement of Investment Objective for Fund K which distinguishes between three types of investment: funds operated by third parties, direct property or infrastructure investments as presented to the Investment Manager and investment in a listed investment company. 823 An ordinary member of the relevant class would have understood that distinction and would not have been led into the error of believing that the structured five-step investment process applied to indirect investments in property or infrastructure investments. 824 In the alternative, Jingyi Li pleads in reply that if the direct/indirect distinction is made out as a fact, it was not made clear by the terms of the document, or it failed to disclose that Fund K would not be making direct investments each of which amounted to misleading conduct. Those contentions are not made out. The document did not say that Fund K would not make indirect investments and drew a clear distinction in the statement of Investment Objective between three types of investments to achieve the strategy of investment in property and infrastructure related assets in Australia. An ordinary member of the relevant class would have understood this upon reading the whole of the September 2015 Information Memorandum and in particular the specific statements for Fund K. 825 For these reasons, the Structured Investment Representation is not made out. 826 Dealing next with the Conflict Representation, Mr Peters submits that the September 2015 Information Memorandum did not represent that Fund K would not invest in the Hotel Group. Reliance is placed on page 39 where there is the heading: Material Contracts & Related Party Matters. Within that section the following statements, amongst others, appear (CB 8365): Conflicts and Affiliate Transactions Conflicts of interest may arise between the Trustee, the Investment Manager, the investors, the investments and a SIV fund. Some of these potential conflicts of interest are outlined below. Conflicts Policy As set out in this section and elsewhere in the IM, Atlas group has various roles, both in relation to its involvement in the SIV funds and in respect of its broader business where its interests have the potential to conflict with the interests of investors in the SIV funds. Each SIV fund may also invest in entities in which Atlas group or its affiliates hold interests. In particular, a SIV fund may purchase from Atlas group investments that have been previously made by Atlas group and that are within the particular SIV fund's investment objectives. 827 The Glossary of Terms defines the Investment Manager as Atlas Capital Group Pty Ltd. 828 Ms Bennett submits that because the investments made by Fund K were in the Hotel Group it follows that the default investment of capital representation (into a fund operated by third-party managers) was misleading. 829 In my view, a member of the relevant class reading down to page 39 of the Information Memorandum would have clearly understood that the Trustee may choose to invest in related party assets and would not have been misled into believing that no investments would be made in related party assets, trusts or corporations. 830 However, that does not answer the contention of Jingyi Li that for Fund K, the class member (with the distinction between direct and indirect investments in mind) would also have understood that the default investment for Fund K would be to place the capital into property or infrastructure funds operated by third-party managers unless the Investment Manager identified opportunities as meeting the investment criteria. If so, the Investment Manager may then reallocate those investments from the third-party funds to direct property or infrastructure investments, investments in listed investment companies operating in the property or infrastructure sectors or listed investment companies with a mandate for property or infrastructure related assets to maximise the investment returns based upon the belief that higher risk adjusted returns in the medium term could be achieved. In this way the direct/indirect distinction displaces the generalised wording of the conflicts section of the Information Memorandum. The Information Memorandum carried the meaning that it was open to the Trustee to invest directly in related property and infrastructure assets, but otherwise the default investment would be in third-party managed property and infrastructure related asset funds. 831 It is no answer to that reasoning to imbue the hypothetical class member with the knowledge, which Jun Chen had, that Fund K did invest in the Hotel Group, which fact was disclosed in promotional material. It is the September 2015 Information Memorandum which is the primary document that potential investors were accepting by making an application. It was misleading for it to represent that the default investment was to place funds with third party managers when that was not the case. 832 It follows that the Conflict Representation was objectively misleading or deceptive or likely to mislead or deceive. Whether that has any consequence for what occurred when Jingyi Li made her investments in August 2016 in Fund C (and not Fund K) is a separate question. G. 5.2.5 The Diversification Representation 833 The Diversification Representation is at page 25 of the Information Memorandum and is not reproduced in Part C of these reasons. Jingyi Li's pleading is selective in reference to it. Her contention is that investments in Fund K and Fund L would comprise assets in a broad range of real estate with geographic diversification throughout Australia predominantly in major capital cities. Words to that effect may be found in the document, but that is hardly the complete picture. Jingyi Li simply contends that these representations were misleading because Fund K and Fund L were not diversified investments. The full text in issue is (CB 8351): Investment Policies The Investment Manager expects to operate within the following policy parameters to ensure the composition and operation of the direct investments of the SIV Fund K continues to reflect the investment objectives and strategy outlined above: * Investment size: While the Investment Manager believes that opportunity exists across a broad spectrum of assets, it is of the view that optimal risk adjusted returns are most likely achieved by strategic investment in differentiated or niche opportunities. * Sub class diversification: The Investment Manager will seek assets in a broad range of real estate asset classes, although predominately properties with commercial, retail, hotel and industrial uses. Other classes the Manager may seek to invest in include infrastructure, residential, child care, retirement and aged care provided they are consistent with the SIV Fund K's Investment Strategy. In terms of investment structure the Investment Manager expects to undertake investments mainly in the equity class of the capital structure (i.e. equity but unlikely to be mezzanine debt and senior debt). * Geographic diversification: SIV Fund K's direct investment portfolio will consist of real assets throughout Australia predominantly in major capital cities, although opportunities will be sought in other growth areas if it is in the best interests of Investors. * Co-ownership arrangements: The Investment Manager may seek or participate in joint venture opportunities with appropriate co-investors under co-ownership arrangements. * Borrowings: The Investment Manager proposes to maintain a loan to value ratio for the direct investments of the SIV Fund K (on a look through basis) of no greater than 80%. The loan to value ratio of the SIV Fund K "on a look through basis" refers to: * the total third party borrowings of the Fund and its sub-trusts and other investments vehicles (adjusted for the Fund's proportional ownership of the sub-trust or investment vehicle where relevant); divided by * The gross value of the assets of the Fund and its sub-trusts and other investment vehicles (adjusted for the Fund's proportional ownership of the sub-trust or investment vehicles, the gross value is calculated based on the gross value of the underlying assets of the sub-trust or investment vehicle). 834 Fund L may be put to one side as it is not referenced in the September 2015 Information Memorandum. Ms Bennett submits that the representation was misleading because investments in Fund K were confined to Salter Brothers assets. Whilst accepting that there was "a degree of geographic diversification" in the underlying assets, viewed overall that is not consistent with how "a reasonable investor would have understood the concept of diversification". 835 I am unable to accept that submission. An ordinary member of the relevant class would not have understood the document as making the Diversification Representation. It is framed as an expectation by the Investment Manager that Fund K would be operated within certain policy parameters and is expressly limited to the direct investments of the fund. Fund K did not make direct investments in property or infrastructure assets. 836 In any event, the representations would have been understood by an ordinary member of the class as expressed: an expectation about operation within certain policy parameters and not as a representation that all investments would be diversified or be misled into thinking that any investment in Fund K was a diversified investment. It is also the fact that Fund K invested in the Hotel Group, which owns a diverse portfolio of hotel assets in major capital cities. The falsity contention is simply not made out. G. 5.3 Conclusions regarding the IM Representations 837 It is only the Conflict Representation that was misleading or deceptive or likely to mislead or deceive. G. 5.4 The WeChat Representations 838 Although Jingyi Li's pleaded case commences with interactions with Cathy Zhang in July 2018, which led to the WeChat exchange between her, Jun Chen and Natalie Liao in September 2018, the course of relevant conduct commences in March 2017 and concludes when the switch decision was made in February 2019. The analysis requires a proper understanding of the role played by Jun Chen who is not a party to the proceeding. 839 Jingyi Li does not complain that she suffered loss by reason of the fact that she invested $5 million in Fund C in August 2016 and was issued with 4,976,875 units. Her case centres on the switch of her investment to Fund K and Fund L in February 2019 at which time she acquired 1,895,970 units in Fund K for a consideration of $2,500,000 and 2,458,512 units in Fund L for a consideration of $2,483,345. What is clear from her evidence is that Jun Chen was the decision-maker. He also confirmed that fact. 840 It might be thought that this presented a significant hurdle. Jingyi Li pleads that she is the person who relied on the WeChat Representations in making the decision to switch her investments. Her case is not pleaded to the effect that Jun Chen acted as her agent or that she suffered damage because of his reliance: cf Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (Reg) [1997] HCA 8; (1997) 188 CLR 241 at 252, Brennan CJ and Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526, Lockhart J. However, that difficulty may be overlooked because Mr Peters in closing submissions was content to proceed on the basis that Jun Chen was the alter ego of Jingyi Li and that his knowledge is to be attributed to her. Ms Bennett did not disagree. G. 5.5 The March 2017 meeting 841 On 31 March 2017, Robert Salter and Kevin Fan met with Jun Chen. Jun Chen does not have much recollection of what was discussed. His evidence was vague and insufficient for findings of fact to be made. In contrast, Kevin Fan sent an internal email to Robert Salter and Hannah Zhu dated 31 March 2017, which summarised the matters discussed. It relevantly provides (errors in original) (CB 29502): Client: Jingyi Li (husband: Jun Chen being the decision maker) Time & Place: 1030 am 31Mar17 Melbourne Office Attendee: Jun Chen, Rob Salter, Kevin Fan Contents: 1. Client asked about the calculation logics of return figures on the reports, KF explained. 2. Client gives us basic information about the family: 1 wife an 1 daughter of 11 years old, wife and daughter living in Camberwell while the husband travelled between Shanghai and Melbourne. The husband is familiar with investment and capital market, quite a sophisticated investor. 3. Client asked about overall manager's views towards asset classes in Australian. The client himself relatively pessimistic as due to the high asset prices and the cycle of interest going-up and tightened monetary policy. Rob agreed that all assets are expensive in general however they will be selective opportunities mainly in debt finance to property market (vehicle yet to be set up), hotel market (k Fund), micro-cap equity market (G fund) and project based advisory or co-investment opportunities. 4. Client complained about the bad experience with Austar in relations to the investment stage, saying no sufficient information obtained and no questions properly answered. And client thinks it's good for manager to set up the direct channels with clients. 5. Client asked for a list of information and will consider switch part of the investment to K Information to send 1. M2 username & password 2. C Fund IM & Constitution (if ok) 3. Hotel fund information 842 Jingyi Li did not mention that meeting in her evidence, which is no criticism as the email was not discovered until 6 June 2024. 843 When Jun Chen's attention was directed to the email he stated that it was "possible" that he attended the meeting but then somewhat inconsistently stated that he "can hardly recall about that meeting". When asked an open question to state his recollection of the matters discussed, he said (T 524): For this meeting – because after I made a $5 million investment, now I would like to have a physical visit of this company and make some inquiries. So it would be the case I had such a meeting. In the meeting, it's possible there are some opinions, or even discussion, about economy, but it's merely a visit out of courtesy. … So from my memory, I didn't remember very clearly about any key issues discussed. So maybe like the lawyer put it to me, "It might happen; it may not"; I really cannot be certain. 844 Kevin Fan said that he remembered the meeting but not the content of the discussion save for what he recorded in the email (T 940). I accept the summary as accurate. G. 5.6 An email of 19 April 2017 845 Kevin Fan sent further email correspondence to Jun Chen and Jingyi Li on 19 April 2017, and copied Robert Salter, Hannah Zhu and Michael Gu (CB 3301 Mandarin and 18662 English). That email was predominantly in Mandarin. The attachments are listed as: Atlas Capital Background April 2017 containing information on the terms of the trust deeds for Funds A-G and I-K, Atlas Capital Significant Risks of Investing in a SIV fund April 2017, Atlas Capital Series K Fund report December 2016, SBG USA Bond Fund IM January 2017 and SPG Hotel Group BKLN Autograph Investment Memorandum November 2016. The English translation of the email provides: (CB18662-18663) Hello Ms LI and Mr. CHEN, Thank you, Mr CHEN, for your recent visit to our company. It was a pleasure meeting you, and I hope to have the opportunity to meet Ms LI next time. Below is a brief summary of our last meeting along with some supplementary materials. If either of you are interested in any investments or have any questions, please feel free to contact me at any time. Thank you! Overall Market Due to several years of global monetary easing and a low-interest rate market, the overall market has been pushed to a high level. Prices for assets, such as cash, fixed income, equities, or real estate, have made the current investment market very challenging for investors. The overall yield risk curve has moved to the right, meaning that the risk of assets has increased for the same expected return. Passive investment in a single asset category is difficult to achieve an ideal risk-adjusted return. Fund Information and Risk Information Mr CHEN expressed interest in understanding the operational background and risk information on the funds. Please refer to Attachments 1 and 2 for fund background and key risk information. If you have any questions about any of this information, please feel free to discuss it further with us. Investment Opportunities in Australian Dollars 1. Our existing hotel investment portfolio has performed excellently, with profits before tax, amortisation, and depreciation increasing by about 2 million Australian dollars, reflected in an approximate increase in valuation by 40 million Australian dollars. The appreciation of these assets considers only the improvement in operational performance and not the property's real estate value appreciation. For example, locking in the vacancy rights at the Sydney Potts Point Holiday Hotel could significantly increase its value. The hotel portfolio may see a substantial valuation increase by 30 June, pending bank audit notice, with an opportunity for investors to participate in this investment opportunity beforehand. (Attached is the investment report for the ATLAS K Series Fund, which primarily invests in the SB&G Hotel Group, part of this Intercontinental Hotel investment portfolio, including detailed investment strategy information related to the SB&G Hotel Group.) 2. Credit market. As discussed in the meeting, due to institutional pullback from banks, there are attractive credit investment opportunities. Our fund is currently finalising this investment opportunity, and interested investors may contact us to lock in their investment shares. Investment Opportunities in US Dollars 1. As discussed in the meeting, due to our clients' needs for US dollar investments and our strong relationships with Intercontinental and other hotel management groups, we have entered the US market, focusing on the US hotel development market. We provide a platform-type fund investment opportunity, offering investors an annual return of 6%, targeting first-lien mortgage priority credit opportunities. (Attached is the fund's Information Memorandum) 2. Additionally, for mezzanine capital investments, we adopt a strategy of reviewing and fundraising for each individual project. We are currently preparing to participate in a project located in the Marriott AUTOGRAPH series hotel in the Brooklyn area of New York. For this special investment opportunity, we offer investors a 12-month return term of 15%. (Attachment for related information) Furthermore, regarding Mr CHEN's Enquiry about CRS, we are actively communicating with our lawyers. Once we have definite information, we will inform you as soon as possible. Thank you again for Mr CHEN'S visit. Should you have any questions, please feel free to contact us at any time. 846 It was not suggested to Kevin Fan that the email inaccurately summarised the matters discussed during the meeting of 31 March 2017. I accept the summary as accurate and I find accordingly. 847 In cross-examination, Jingyi Li acknowledged receipt of the email, stated that she only read the first paragraph, did not read any of the attachments and assumed that Jun Chen would deal with it (T 367-369). On closer questioning, Jingyi Li said that she had not read any of the attachments to the email prior to giving evidence. Her attention was directed to the first attachment and the stated requirements for redemption of units. There is a statement to the effect that if an SIV fund is not liquid, units may only be redeemed in accordance with the terms of any current withdrawal offer made by the Trustee. Jingyi Li stated that she did not really "understand all these words – terms. My husband was the one who read all this" (T 366). 848 Jingyi Li then became somewhat argumentative in her evidence, complaining that if redemption depended on liquidity, then Kevin Fan ought to have stated that fact in his covering email (from T 366). When further pressed as to her understanding about the ability of a unit holder to redeem in accordance with the terms of that document, it became clear that Jingyi Li had little understanding about the requirements for redemption (T 367-369). Her attention was redirected to the email from Kevin Fan under the heading: Fund Information and Risk Information, where Kevin Fan directed attention to the first and second attachments for "key risk information". Jingyi Li maintained her evidence that she did not read this part of the email. 849 Jingyi Li then gave somewhat unsatisfactory evidence about what she had said at [42] and [43] of her affidavit made on 28 February 2024 (from T 373). In those paragraphs she stated that she did not specifically recall the attachments, although did recall seeing a table in one of the attachments "at some stage". She further stated that she did not translate the table because she found it "quite difficult to do so". She did not recall reading the section contained within it that addressed the liquidity of investments. The table referred to appears under the heading: Significant Risks of Investing in an SIV Fund, of which liquidity risk is identified in respect of each fund followed by an explanation of liquidity risk in the same terms as I have set out from the September 2015 Information Memorandum in Part C of these reasons. Jingyi Li eventually said that she did not understand what was meant by the table. In answer to a question from me, Jingyi Li said that of the 1042 pages of attachments to her affidavit, for those printed in English, they were not translated for her before she made her affidavit (T 374-376). 850 Jun Chen was also questioned about this email. His attention was directed to the statement that reference should be made to the attachments "as key risk information". When asked to confirm that this was important information, Jun Chen avoided giving a direct answer by contending that these risks were not related to his investment (T 545). That answer is plainly incorrect in that the redemption of units information on the first page of the first attachment expressly applied to each of the Atlas Capital Funds. 851 Jun Chen attached the email from Kevin Fan and each of its attachments to his affidavit. He stated that the documents in English were not translated for him before he made his affidavit. In his view, because he did not consider the documents "important" there was no need to have them translated for him (T 546). In his affidavit at [25] he said: The main things I focussed on and translated in the documents sent to me by Ms Du, were the types of investments (ie. Savings and government bonds), the investment return and the liquidity. 852 Jun Chen accepted that the first attachment to the email of 19 April 2017 set out the significant risks of investing in an SIV fund, and particularly the liquidity risks. He denied however that he was aware of these matters at the time he made his affidavit (T 546). 853 It is clearly the case that he should not have made his affidavit in this proceeding whilst ignorant of the content of all the attachments thereto which reflects adversely on his credit and the plausibility of contentious matters in his evidence. During an adjournment the documents were translated for him. On resuming his evidence, he accepted that if the attachments had been translated in April 2017, he would have understood the risks identified therein (T 542-544). 854 Jun Chen could not recall whether he asked for information relevant to switching the investment from Fund C to Fund K. I find that he did, as evidenced by the content of the email of 19 April 2017 and each of its attachments. I also find that Jun Chen expressed interest in understanding the operational background and risk information of the funds. When pressed further about what was discussed at this meeting, Jun Chen accepted that there was a discussion "about the financial markets" (T 540) and that Kevin Fan introduced other Atlas Capital financial products. He maintained however that the attachments had no relevance to the fund that he had invested in, and for that reason he paid little or no attention to the attachments (T 541). 855 Mr Peters did not allow the evidence to rest with that answer (from T 542). The first attachment to the email is a background document for each of the Atlas Capital Funds dated April 2017 (CB 3302). On the first page there is printed information concerning the ability of a unit holder to redeem units. The distinction that I have earlier referenced between redemption when a fund is liquid and the inability to redeem when a fund is illiquid is set out. When asked whether he understood those matters, he answered that he did "now", maintaining that at the time no person translated the document for him and he did not really understand its content (T 543). He provided further answers which were not responsive (T 542-544). When directly pressed to give evidence about his understanding in 2017 of the redemption process, he said that "the immigration company was telling me that in four-years' time, I can redeem my C Fund and, if I meet another immigration criteria – that was all. Nothing else was explained to me" (T 543). He then accepted that if the document had been translated into Mandarin at the time, then he would have understood the risks attendant with redemption of units when a fund is illiquid. G. 5.7 An email of 31 July 2018 856 Jingyi Li was next taken to an email of 31 July 2018 from Cathy Zhang to her. The email and the attachment are not sequentially ordered in the Court Book. The email is at CB 6081, in Mandarin and English. It describes the attachment as: SBG China Seminar Deck. The attachment is at CB 5158 (English) and CB 5195 (Mandarin). The document is titled: SB&G Group New Opportunities May 2018. The email draws attention to the attachment as addressing the topics of a fund update for the Atlas funds, the SB&G Hotel Group's latest acquisition in Queensland and new opportunities for the group in Australia and the USA. Jingyi Li did not attach the email or the attachments to her affidavit. 857 The New Opportunities document is replete with references to the fact that Salter Brothers had a hotel investment strategy and that Fund K and Fund L invested with Salter Brothers. Despite this, Jingyi Li said that she was not aware of this fact because she did not read the attachments at the time: "When I received it, I opened the email, but because the topic was investment-related, so I did not finish reading. I forward it to my husband" (T 391). I do not accept that evidence. The covering email makes explicit reference in Mandarin to Atlas Capital and SB&G Group, to the current investments "both with Atlas Capital and the overall SB&G Group, especially an update on the SB&G Hotel Group". Jingyi Li at least admitted to having read the email, and it is not necessary to read into the text of the attachment to learn, by scanning the glossy photographs, that the business of Salter Brothers was all about hotels. 858 It is implausible that Jingyi Li was simply incurious to know where her $5 million was invested or would be if she decided to switch her investment. I find that Jingyi Li was aware of the link between Atlas Capital and investments in the Hotel Group by 31 July 2018. 859 When Jun Chen was questioned about the email of 31 July 2018 and its attachments, he accepted he was aware at that time that Salter Brothers was intending to invest in more hotels (T 576). He accepted that he "should have read" (T 577) the attachment being the SB&G Group – New Opportunities document dated May 2018 (provided in Mandarin). Later he gave ambiguous evidence as to whether he had in fact read the attachment, or at least parts of it (T 579-580). 860 In any event he accepted that he had read similar disclaimer notices as the one which appears on the second page of the document, for other financial products, prior to July 2018 (T 582). He stated that he did not, despite having the financial ability to do so, obtain financial, legal or taxation advice as to whether he should make further investments with the Salter Brothers Group after July 2018. He acknowledged that he did not take that course because of his employment history, his success in business and his experience in judging investment risk (T 496, 581). He understood in 2018 and 2019 that all investments are subject to investment risk. He accepted that he was aware that he could not be certain of "any specific rate of return that will be achieved or whether you will lose your capital or not" (T 582). 861 Jun Chen accepted that in July 2018 he was seeking a higher rate of return on the investment than had been achieved in Fund C. He was aware that Fund K and Fund L had different earnings profiles, that Fund K could increase in value because of an increase in the value of the underlying hotel assets, that in addition Fund K could also earn income and that each was dependent upon the "fortunes of its predominant investment, the Hotel Group" (T 586). Further, he was aware that Fund L had a fixed return of 6% and a default provision that if that earnings target was not met there was a provision for return of certain management fees and charges. G. 5.8 Jun Chen's knowledge as at September 2018 862 Overall, I find that prior to the commencement of the WeChat conversation on 11 September 2018, Jun Chen as the decision-maker had a sophisticated understanding of investments, investment risk, the risk/return ratio, that the performance of an investment cannot be guaranteed and that all investments are subject to future risk, by reference to a range of factors including external market forces. He felt no need to take independent financial or accounting advice because he trusted his own judgment. By mid-2018, he sought a higher rate of return than had been received from the investment in Fund C and knew that more risk was attendant with that financial objective. He was also aware that the ability to redeem an investment depended on and was directly related to the liquidity of the relevant fund. G. 5.9 The September 2018 WeChat messages 863 Jingyi Li pleads that the WeChat messages exchanged on 11 and 12 September 2018 were misleading or deceptive or likely to mislead or deceive because, contrary to what was conveyed, Fund K and Fund L "were not available for redemption upon notice from the investor after two years." It is not pleaded that the WeChat Representations were made as to future matters. 864 The pleading at [47A] characterises the WeChat Representations to the effect that: (a) The investor had a unilateral right to redeem their investment in Fund K and Fund L at any time after two years, upon notice to the fund; (b) There was no need to fix a further investment in Fund L for an additional period upon redemption; and (c) After Fund K had been listed, which was imminent, investors could hold shares directly and then redeem them at any time in the open market. 865 There is a further pleading at [48] that these representations were relevantly: (a) Materially false or misleading as directly contrary to the terms of the trust deeds for Fund K and Fund L; and (b) Materially false or misleading in that they did not take into account or disclose the illiquid nature and long-term investment horizon of each fund arising by reason of the primary investments in the Hotel Group. 866 The relevant exchanges were between Natalie Liao and Jun Chen. The first question is whether those representations were made, and if so whether they were misleading or deceptive or likely to mislead or deceive judged by the effect on a reasonable person in his position at the time assessed in context and by reference to the relationship. G. 5.9.1 Were the WeChat Representations made? 867 Jingyi Li pleads a translated version of the WeChat messages. It differs from the translated version that is an attachment to her affidavit of 28 February 2024. Each differs from the translated version Natalie Liao sets out in her affidavit. The versions pleaded by Jingyi Li and Salter Brothers also differ. A matter of controversy that arose during the hearing was whether the parties had agreed on a translated version. Ms Bennett and Mr Peters could not agree whether there was an agreement. More than once the interpreter and/or the witness expressed disagreement with certified translations of various documents in the Court Book. None of the certifiers were called as witnesses. What became clear during the entire course of the evidence is that there is no direct equivalent in Mandarin for some words and phrases in English. But that is not the end of the matter as the translations of the WeChat messages differ as to the placement and use of words, in the arrangement of phrases and in the construction of sentences. 868 The person or persons responsible for the translation which Ms Bennett submitted was agreed have not been identified. The document at CB 9137-9147 is described as: Extraction Report- Apple iPhone and bears the corporate logo: Cellebrite. There is no certification from a qualified translator on the document (as distinct from other certified translations in the Court Book). For convenience I refer to this as the Cellebrite translation. Jingyi Li at [46] of her affidavit references the Cellebrite translation as an extract of a WeChat message exchange. She does not say that it is a certified extract. She is not fluent to a high level in English. 869 In contrast, Natalie Liao, who is fluent in English, Mandarin and Cantonese, at paragraph [6] of her affidavit made on 10 May 2024, sets out the WeChat exchange as "a certified translation". In her evidence, Natalie Liao was articulate, forthright in her answers and evidenced a high proficiency in English and Mandarin. 870 I resolved the agreed translation impasse during the trial by ruling that I would allow Natalie Liao as the author of the document to give evidence as to what she had written and would leave it to Ms Bennett to pursue differences in cross-examination. Despite the number of variations between the evidence of Natalie Liao and the Cellebrite translation, none were traversed in cross-examination (T 1299-1344) 871 The differences for some statements in the WeChat exchange are not simply matters of grammatical nuance. There are differences which affect the meaning of the words used. To understand the differences, I arrange the WeChat messages as follows. Black font is the translation of Natalie Liao for each message which is then followed by the Cellebrite translation (with differences highlighted in red font) and the Jingyi Li pleading (with differences highlighted in blue font). 872 The WeChat messages are: 873 Three documents were shared during the exchange. The first is identified as: Atlas Complying SIV Deck Chinese (CB 9148 English, 8594 Mandarin). The full title is Atlas Capital Significant Investor Visa (SIV) Investment dated September 2017. It is in Mandarin. It contains general information for each fund, including Fund K and Fund L. For Fund K on page 88 of the document the following is stated as the fund overview (CB 9185): Series K Fund aims to provide Investors access to investment opportunities in the Australian property and social infrastructure sectors. The Fund Manager will allocate capital to the most attractive, risk adjusted, yield based property and infrastructure investment opportunities at any time. Potential investment scope of the Fund include direct property and social infrastructure investments, LICs operating in the property and infrastructure sectors, listed property and infrastructure companies, REITs, and property and infrastructure funds operated by third parties. The Fund currently consists primarily of investments in SB&G Hotel Group. 874 The investment strategy is stated as (CB 9185): The primary investment of the ATLAS K Fund, SB&G Hotel Group, is currently operating slightly better than expected. Meanwhile, the Investment Manager for the Hotel Group will continue to implement a range of value-added strategies with a view to achieving overall capital appreciation for the investment portfolio. The net value of the Fund was significantly improved due to the revaluation of the Holiday Inn Sydney Potts Point in the portfolio, which increased by A$12M. As Series K Fund continues to raise capital, the Fund Manager is seeking to appropriately diversify the investment portfolio. We are still looking for other yield assets, including retirement property, retail assets, etc. in Australia. We believe that the current hotel investment portfolio can still bring solid yield, and the Investment Manager of the Hotel Group will continue to focus on capturing multiple opportunities for appreciation of the investment portfolio. 875 Fund L is dealt with on page 89 (CB 9186). The fund overview is stated as: L Fund aims to provide Investors with a priority return through investments in Australian lower-level property and infrastructure projects. The Fund Manager will allocate capital to the most attractive, risk adjusted, yield based property and infrastructure investment opportunities at any time. Potential investment scope of the Fund include direct property and social infrastructure investments, LICs operating in the property and infrastructure sectors, listed property and infrastructure companies, REITs, and property and infrastructure funds operated by third parties. The initial investment project of the Fund will be the SB&G Hotel Group. 876 The preference yield is explained (CB 9186) as: L Fund aims to invest in risk-adjusted property and infrastructure sectors (see the chart below for the specific investment scope). The Fund Manager believes that this type of investment will bring investors an annualised risk-adjusted return of 6%, which is the target return of the Fund. Preference Yield Protection * Investment return buffer: The Fund Manager believes that the investments deployed in L Fund will provide a return buffer to the preferred return of 6% over the long term (i.e. long-term returns should exceed 6%). * Management fee refund: In addition to the investment return buffer, the Fund offers further yield protection with the refund of up to 2% of the management fee. 877 The investment portfolio of the Hotel Group is described at pages 91-93 and the hotel operations at page 96. There is a prominent disclaimer at page 99 including this (CB 9196): … This presentation may contain forward-looking statements, forecasts, estimates and outlooks (the "Forward-looking Statements"). Neither the Group nor any independent third party has reviewed the reasonableness of any Forward-looking Statement, or the assumptions made therein. Members of the Group make no representation or warranty that any Forward-looking Statements will materialise, will prove to be correct, or that the assumptions underlying the Forward-looking Statements will be reasonable. The Funds' past performance cannot be used as a reference for future returns. Sometimes principal may not be recovered. This presentation is for informational purposes only. Any recipient of this presentation should consider all other facts, opinions and its own insights before making an independent decision. The Manager assumes no duty to promptly advise of any inaccuracies, omissions or changes in the information contained in this presentation or to any other information provided by a person or to provide further information to any person. … This presentation is not intended to be an offer to sell or a solicitation of an offer to buy any security or other financial instrument. This presentation is not a commitment to underwrite any security, loan, or investment. The Manager provides clients and its affiliated private investment management partners with mergers and acquisitions, restructurings and other consulting services. Its personnel may make contrary statements or provide contrary opinions to the information contained herein. Our owner's interests may conflict with your interests. From time to time, the Manager may own or trade the financial instruments covered in this presentation. … 878 The second attachment is a screen capture of page 89 of that document for Fund L. 879 The third attachment is the Fund L report dated September 2018 (CB 3537). It is also in Mandarin. The English version is at CB 3536. There is a description of the Fund, that Paul Salter is the fund manager (with biographical details) and there is a commentary about the performance of the fund compared with the expected performance to 30 June 2018. Some key information is given about the value of the units in the fund. 880 In examination-in-chief, Natalie Liao was questioned about the entry at 4.20 pm on 12 September 2018. Her attention was directed to the original Mandarin version. Her evidence was that the reference is to a storm or crisis because the direct translation into English is "financial storm", which is not a common English phrase and for that reason she translated it to "financial crisis". She continued that there is a Mandarin word for "meltdown" which means a really extreme event (T 1282). I accept that evidence. 881 Ms Bennett did not cross-examine Natalie Liao as to any specific translation differences. 882 I regard the translation of Natalie Liao as the more reliable record of what is contained in the WeChat messages, essentially because she affirmed this version as correct in her affidavit, was not materially challenged as to her translation, is fluent in each language and is the author of more than one half of it (and hence the person best placed to translate what she said). My findings are based on her translation. G. 5.9.2 The construction issue G. 5.9.2.1 Submissions 883 Ms Bennett submits that in combination the WeChat Representations were made in clear and unambiguous terms and what is in dispute is whether they were to the effect pleaded at [47A]. On that issue the starting point is that the representations were contrary to the discretionary power of the Trustee under the trust deeds for Fund K and Fund L and each invested in illiquid assets. The long-term investment horizon of each fund was not disclosed. In August 2016, Jingyi Li invested $5 million in Fund C, which in turn invested in term deposits. It is not controversial that her investment would have been redeemed upon request after a period of four-years. In September 2018, Natalie Liao contacted Jingyi Li about the possible transfer of her investment to Fund K and/or Fund L. Natalie Liao emphasised that many clients had switched from bond funds to higher yielding funds. The very purpose of the WeChat conversation that followed was the investment that had been made by Jingyi Li and whether she should seek higher returns by investing in a different fund. 884 Ms Bennett's submission (in accordance with the Cellebrite translation of the exchanges on 12 September 2018) recognises the distinction drawn in the WeChat messages between the right to redeem an investment in each fund. For Fund K, her submission is the question at 3.49 pm and the answer at 3.51 pm clearly meant that an investor had a unilateral right to redeem after two years. For Fund L, the submission relies on the question at 3.46 pm and the consecutive answers at 3.46 and 3.47 pm and the further questions at 3.58, 3.59 and 4.00 pm and the corresponding answers at 3.58, 3.59 and 4.01 pm. 885 The submission continues that the WeChat messages directly addressed the ability of Jingyi Li to exit Fund K and Fund L, with an emphasis upon fixing the investment for a further two years, to coincide with satisfaction of the minimum four-year complying investment term. Thereafter, Jingyi Li could redeem "at any time" and all she needed to do was to inform the Trustee of that decision. The effect of that representation was reinforced when Jun Chen asked questions about Fund L and what would happen if the money was left in the fund after expiry of the further two-year period. The response was that he need not fix the investment for a further two-year period and could redeem it according to his plan. This was reinforced in the next message from Jun Chen who sought clarification of what was meant by redemption by reference to his plan, to which Natalie Liao responded that she meant he could redeem "at any time" after expiry of the two-year period by communicating that decision to the Trustee. Jun Chen went so far as to ask about the required notice period and was then told that "around one week" would be sufficient. It should be understood that Ms Bennett's submissions proceed by reference to the Jingyi Li Cellebrite version of the WeChat exchange, which does not precisely align with the Natalie Liao translation. 886 The submission continues that Natalie Liao did not say during that exchange that redemption from Fund L was conditional upon the exercise of any discretion by the Trustee or the liquidity of the funds. Ms Bennett emphasises the "dominant message" that the WeChat exchanges convey by reference to TPG at [52] where French CJ, Crennan, Bell and Keane JJ observed: It was common ground that when a court is concerned to ascertain the mental impression created by a number of representations conveyed by one communication, it is wrong to attempt to analyse the separate effect of each representation. But in this case, the advertisements were presented to accentuate the attractive aspect of TPG's invitation relative to the conditions which were less attractive to potential customers. That consumers might absorb only the general thrust or dominant message was not a consequence of selective attention or an unexpected want of sceptical vigilance on their part; rather, it was an unremarkable consequence of TPG's advertising strategy. In these circumstances, the primary judge was correct to attribute significance to the "dominant message" presented by TPG's advertisements. (citations omitted). 887 However, that case concerned a multimedia advertising campaign for broadband internet services run over more than a year and directed to the public. These observations are distinguishable from this case where the context of the representations is confined to one individual intelligent investor. 888 In any event, in combination, Ms Bennett submits there was a clear representation that Jingyi Li would have a unilateral right to redeem her investment in Fund K and Fund L at any time after expiry of the balance two-year period and, for Fund L, there was no need to fix an additional investment period of two years thereafter. The consequence is that the first and second representations are established for Fund K and Fund L. 889 Ms Bennett answers the investment risk evidence and arguments of Salter Brothers quite simply: the meaning of the representations "is to be distinguished from any arguments of the risk of the investment which may not come to pass. The core point is that the right to redemption said to be available was at the election of the investor." Once again, reading in context, it is clear that [Natalie Liao] was providing reassurance that no term beyond the initial two years was required, this was misleading or deceptive. 890 As to the third representation and Fund K, Ms Bennett submits that Jun Chen specifically inquired as to the investment term and the "exit" mechanism for this fund. He received the clear and unambiguous response that because it is a property fund, it could only be redeemed after two years but there was a plan to list the fund by the end of 2019, and upon the occurrence of that event, investors would hold shares directly and be able to redeem for cash on the open market. Objectively this was an assurance that no term beyond the further two-year period was required. 891 In written submissions, Ms Bennett makes the point that there was no plan to list Fund K: to the extent that there was a plan it was confined to the Hotel Group in which Fund K held some of its investments. In any event, that submission is relevant to falsity, not the meaning of the words used. 892 In contrast, Mr Peters submits that, as the conversation was with Jun Chen, the question is what a reasonable person in his position with his knowledge and experience would have understood to be conveyed. Emphasis is placed on the careful study of the information contained in the slide decks that Natalie Liao earlier provided to Jingyi Li during the WeChat conversation as informing the five questions posed by Jun Chen and the subsequent statement by Natalie Liao that the "terms are written in the product information." The submission emphasises the questions and answers from 4.18 pm on 12 September 2018 dealing with extreme circumstances and liquidation. 893 When considered as a whole, the submission is that a reasonable person with the knowledge and experience of Jun Chen would not have understood the WeChat exchanges to the effect that an investor in either of the funds had a unilateral right to redeem at any time after two years; that is without any restriction. Two matters are emphasised: that Natalie Liao said that it would be "at least two years" before a redemption request could be made for Fund K "because it is a real estate fund" and that redemption would not be available in the event of extreme circumstances; a financial crisis or a war. 894 For Fund K, the submission emphasises the answer at 3.51 pm, "requires at least 2 years before redemptions can be requested" and the general statement of the listing plan by the end of 2019. For Fund L the apparently plain meaning of the answer at 3.59 pm (after two years, when you need to redeem, just let us know) is acknowledged. However, reading further that answer was qualified by the "extreme circumstances" questions and answers that commenced at 4.18 pm. 895 Mr Peters submits that what is required to be determined is the pleaded effect of the representations and not some different case that may be discerned from text of the WeChat messages. G. 5.9.2.2 Consideration 896 As the WeChat exchanges distinguished between Fund K and Fund L, I commence by recalling the key differences. The primary assets of Fund K are stapled securities in the Hotel Group and convertible notes in the Hotel Trust. A stapled security in the Hotel Group is a share in Hotel Company and a unit in the Hotel Trust. Hotel Company has its shares stapled to units in the Hotel Trust. Companies controlled by Hotel Company operate the hotel businesses and Hotel Trust owns the hotel assets. 897 The primary assets of Fund L are stapled securities in the Hotel Group and convertible notes in Property Opportunity Fund, which in turn holds stapled securities in the Hotel Group and other development projects. 898 Fund K and Fund L were each established to invest in the Australian property and infrastructure sectors to derive investment yield. The difference is that Fund L offered preference units to investors to derive a 6% capped annual return, required to be paid in priority to the fees of the Investment Manager with the safety net that if that return was not achieved, the Investment Manager was obliged to rebate the fees to make up any shortfall, subject to a maximum cap. 899 When Jun Chen joined the WeChat conversation at 1:37 pm on 12 September 2018, he requested further product information about Fund L and posed five questions relevant thereto. The questions reveal careful study of the documents provided which incorporates the terms of the disclaimer. For example, his fourth question about "returning the management fee" reveals study by him of page 89 which refers to a "Management fee refund" of up to 2%. The questions evidence a nuanced understanding of the investments of Fund L and the investment risks attendant with a property fund. The underlying investments in the hotel assets are self-evidently illiquid property holdings, where liquidity is dependent on the performance of the fund, external market factors and the value of the real property assets from time to time. The answers of Natalie Liao that follow commence with the statement that Fund L had raised about $30 million since 2017 and "can invest" in Fund K "as well as other property projects". She continued to describe the long-term nature of the investments of Fund K, the acquisition of hotels in Queensland, with renovation costs and project timeframes set out. There is a reference to Fund K and Fund L as "open funds", where the invested amounts deployed will be used to acquire new assets and to renovate existing assets "so that investors could benefit from a long-term stable return". 900 At 3:46 pm on 12 September 2018, Jun Chen asked: "What is the investment term and exit mechanism for the L Fund". Natalie Liao provided two responses, each at 3.46 pm. The first is a continuation of the answer that commenced at 3.41 pm and relates to investor satisfaction with cash dividends received over the previous two years. 901 The second response directly answered the question: "L Fund is two years fixed term, redeemable at maturity." This answer was added to at 3.47 pm: "I noticed that the two-year period will coincide with the time you get your visa". Jun Chen moved to a different topic before returning at 3.49 pm to ask: "What is the investment term and exit mechanism for the K Fund". Natalie Liao responded at 3.51 pm: "The K Fund requires at least 2 years before redemptions can be requested because it is a real estate fund". She continued by explaining that "we expect" that by the end of 2019, the K Fund and the "assets package" will be listed then providing investors with shares that may be liquidated on the secondary market "at any time". 902 At 3.53 pm Jun Chen sought assistance to calculate the fee for redeeming the units in Fund C, "the fees for subscribing to the L Fund and the fees for exiting after 2 years" "if I want to buy the 'L' fund now". Natalie Liao responded at 3.56 pm and in part said: "There is no exit fee after two years, however, if you have no other plans for the capital, you can choose to remain in the L Fund after maturity with no additional charges". 903 The next relevant question was asked by Jun Chen at 3:58 pm, on the premise that if he maintained an investment in Fund L, whether after a period of two years, "does it mean that it will be renewed for another 2 years and cannot be switched or redeemed during this 2 years?" Natalie Liao responded: "No need to continue fixing for two more years. After two years, it can be redeemed according to your plans." At 3.59 pm Jun Chen asked: "What do you mean by planned redemptions" to which Natalie Liao responded: "Oh, sorry, I didn't express myself well, I mean, after two years, when you need to redeem, just let us know". 904 At 4 pm Jun Chen asked: "How much notice is required". Natalie Liao responded at 4.01 pm: "Around a week. This will allow our backend to do the calculations plus the time it takes for you to receive the money." The discussion then moved to the value of units in Fund L and the mechanism for calculating dividends. 905 Those questions and answers obviously form the basis for Jingyi Li's contentions that three misleading representations were conveyed. However, one must read further into the exchange, informed by the documents shared the previous day. 906 At 4.17 pm Natalie Liao asked Jun Chen whether he had any other questions about Fund L. He responded at 4.18 pm: "What will happen to L Fund under extreme circumstances?" 907 There is a translation dispute as to what Natalie Liao precisely said in reply. On her evidence she said: An extreme case would be a financial crisis or war, in which case the fund manager would freeze the fund. 908 The Cellebrite translation of this is: "The extreme situation refers to a financial meltdown or war. In this case, the Fund manager will freeze the fund". I have explained why I accept the translation of Natalie Liao as the most reliable evidence of what she said. 909 Jun Chen at 4.21 pm followed with a question about what would trigger a liquidation, to which Natalie Liao responded to the effect that there was no intention of winding up the funds "for the time being", the flow of funds in and out would continue and added the caveat: Unless we come across extreme circumstances and many investors are asking for redemptions, in the worst case scenario, the assets will be sold. But before going that far, there are many other options, for example, a Swiss bank's pension fund offered to buy 100 million shares in our fund a few months ago. But we don't need the money, so we will consider selling shares to superannuation companies when we list. 910 At 4.25 pm Natalie Liao qualified this answer to the effect that her reference to investor redemption requests was limited to Fund K, adding: "Because the L funds are all fixed term, we will always prepare the redemption for matured customers." 911 Jingyi Li does not frame her case by the ordinary meaning of the words in the WeChat exchange read in context to then contend that conduct was objectively misleading or deceptive or likely to mislead or deceive. Rather, the case is that the WeChat messages conveyed the three representations to the effect pleaded at [47A] of the Further Amended Narrative Statement. 912 I do not consider that the email and fund information that was provided by Kevin Fan on 19 April 2017 has a sufficient temporal nexus to displace the objective meaning of the specific questions and answers in the WeChat exchange of 11 and 12 September 2018. The information provided by Cathy Zhang on 31 July 2018, is more temporally connected with the WeChat exchange, but I do not consider that the general information then provided operated to displace the specific information sought and provided during the WeChat exchange. 913 The position is different for the Significant Investor Slide deck (in Mandarin) provided by Natalie Liao at 12.07 pm on 11 September 2018. Jun Chen did read this document, it formed the basis for his five questions and the disclaimer is contextually relevant to the answers provided by Natalie Liao, not as operating to disclaim or exclude the statutory norm of conduct, but as relevant to its characterisation: what meaning was conveyed by objective assessment of all of the conduct? Particularly in this case, that forward-looking statements and the underlying assumptions may not materialise, the investments are subject to risk and sometimes the principal may not be recovered. This is not consistent with a meaning to the effect that there is a unilateral right to redeem at a future time no matter what the circumstances may then be. 914 What is clear from the outset when Jun Chen asked his first question at 1.37 pm on 12 September 2018 is that he had studied the fund information provided the previous day and in consequence sought clarification from Natalie Liao. These were not generic inquiries. Natalie Liao provided detailed specific answers to each question. In doing so, in the context of answers about the assets and acquisitions of Fund K, it is Natalie Liao who at 3.44 pm on 12 September 2018 raised the issue of the fund term, albeit by reference to the receipt of income. That prompted Jun Chen in his next question to inquire about the investment term and exit mechanism for Fund L. The sequence of questions and answers between 3.46 pm and 3.47 pm convey the meaning that subject to the two-year period, an investor in Fund L could redeem the investment, not simply apply to do so. But that is to read the exchange selectively. The response for Fund K at 3.51 pm was qualified: it required "at least 2 years before redemptions can be requested". Thus, there is introduced the distinction between a right to redeem (contrary to the express terms of the trust deed which conferred a discretion in favour of the Trustee) and a request to do so which is further qualified by a time period of at least two years- conveying the meaning that it may take longer because Fund K invests in real estate assets which are illiquid assets. 915 For Fund L the investment term was revisited by Jun Chen at 3.58 pm. In her response Natalie Liao returned to the language of "can be" redeemed according to the plans of Jun Chen and all that was required was notice of intention to redeem of "around a week" to enable the back-office calculations to be undertaken. 916 If the exchanges had ceased at that point, I would have had no difficulty in concluding that Natalie Liao objectively made a representation conveying the meaning to the effect that the investor in Fund L had and may exercise the right to request redemption subject only to operation of the two-year period. Further, that upon exercise of that right on notice and within a period of approximately one week, the invested funds then owing (as calculated) would be transferred to the investor's nominated bank account. All of this could occur according to the timing of the investor's plan. Whilst the disclaimer within the information provided on 11 September 2018 was to the effect that investments carried risk, that forward looking statements may not be realised and that the principal may not be recovered, this generic information did not in my view qualify the specific answers subsequently provided. Similarly, the oblique reference at 3.26 pm to the terms as written in the product Information Memorandum did not displace or qualify the subsequent answers as Natalie Liao was then concerned with the responsibility of the manager, not with constraints on redemption. 917 The position is different for Fund K because of the way in which the messages distinguish it as a real estate fund, subject to an investment period of at least two years, and thereafter the text speaks to a request for redemption. This is not the language of a unilateral right; more so when read with statement of expectation about an IPO by the end of 2019 as the mechanism to meet redemption requests. 918 I turn now to the extreme circumstances exchange. Natalie Liao at 4.17 pm inquired whether Jun Chen had any other questions about Fund L and his extreme circumstances question is confined to it. Natalie Liao's first response refers to "the fund" being frozen by the manager which is a reference to the fund inquired about, not Fund K. Jun Chen was not specific in his next question about a trigger event for liquidation, but the answer from Natalie Liao at 4.21 pm references "both funds" to which she ties her extreme circumstances (financial crisis or war) where many investors "are asking for redemptions", in which case assets may be sold in "the worst-case scenario". However, this statement was later qualified at 4.25 pm- her statement about many redemption requests was confined to Fund K (as Fund L is for a fixed term and redemptions are always prepared for maturing investors). 919 The final statement by Natalie Liao is a representation that for Fund L, at maturity redemptions will be met. That meaning is conveyed despite the earlier reference (for each fund) to what may occur under extreme circumstances where many investors ask for redemptions where those events are conjunctively joined. That relationship was later severed by specifically confining it to Fund K. 920 In my view, it is a mistake to read the unilateral right reference in the first pleaded representation as not subject to the unlikely occurrence of an extreme circumstance which causes the manager to freeze either fund. A construction to that effect is pedantic and unwarranted. What is meant by the pleading is that the WeChat messages were contrary to the terms of the trust deeds and the discretion of the Trustee to delay or not meet a redemption request, which is the first matter of falsity pleaded at paragraph [48]. Thus, I do not accept one of the submissions of Mr Peters that it is necessary to find that the WeChat messages conveyed the meaning that there was a "categorical, undoubted, unilateral right to redeem" before this representation is made out. In my view the first pleaded representation meaning is made out for Fund L. 921 However, it follows from my analysis that I do not accept that distinction was not drawn between Fund K and Fund L. For Fund K the words used by Natalie Liao at 3.51 pm did not convey that an investor had a unilateral right to redeem. Jun Chen was informed that the fund required "at least" two years before redemptions "can be requested" because it is a real estate fund. The information about Fund K was further qualified at 4.21 pm and 4.25 pm that in the event of "extreme circumstances" causing many redemption requests to be made, there were at least two options: a significant new investor or sale of the assets as a last resort. 922 As to the second representation, it adopts the words used by Natalie Liao at 3.58 and 3.59 pm in response to the direct question of Jun Chen about any requirement to fix another two-year period, instead of redeeming an investment in Fund L. There is no ambiguity in her response, which is reinforced by the qualification in the answer at 4.25 pm to the effect that the extreme circumstances scenario where many investors request redemption refers only to Fund K: Fund L has a fixed term and preparations will always be made for maturing investors. I am satisfied that the second representation pleaded at [47A] is made out. 923 As to the third representation, the pleading turns on the contention that a listing of Fund K was "imminent". Textually Natalie Liao said no such thing. Her statement at 3:51 pm refers to a plan to list Fund K "by" the end of 2019. A plan to publicly list a corporate entity is not an assurance that the listing will be achieved and most certainly a further period of up to 15 months does not convey that the listing is likely to be achieved at any moment. 924 Ms Bennett's written submission then proceeds on a new path. There was never a plan to list Fund K. The only plan was to list Hotel Group, in which Fund K maintained investments. The proposed redemption is premised on the notion that Property Opportunity Fund will acquire the fund assets. 925 With respect, I am unable to accept the submission. The pleaded case is that a representation was made to the effect that after Fund K had been listed, which was imminent, investors could hold shares. The submission strays into the territory of why the representation was misleading. G. 5.10 Conclusions as to the meaning of the WeChat Representations 926 Jingyi Li has established that the WeChat exchange was to the effect that: (a) An investor in Fund L had a unilateral right to redeem at any time after two years, upon notice. (b) An investor in Fund L did not need to fix a further investment period upon redemption G. 5.11 Were the WeChat Representations misleading or deceptive? 927 No investment decision was made on 12 September 2018, or shortly thereafter. The course of conduct to be considered extends to 21 February 2019, when Jingyi Li completed an application form to switch her investment in Fund C to Fund K and Fund L. All that is relevant until that date is to be considered in determining whether the conduct was misleading or deceptive: Butcher at [109] where McHugh J stated: It is an objective question that the court must determine for itself. It invites error to look at isolated parts of the corporation's conduct. The effect of any relevant statements or actions or any silence or inaction occurring in the context of a single course of conduct must be deduced from the whole course of conduct. Thus, where the alleged contravention of s 52 relates primarily to a document, the effect of the document must be examined in the context of the evidence as a whole. The court is not confined to examining the document in isolation. It must have regard to all the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document. (citations omitted). 928 In that analysis later statements may relevantly be considered as modifying or replacing earlier ones: Australian Competition and Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17 at [106], Cooper, Kiefel and Emmett JJ. G. 5.11.1 The entire course of conduct 929 Jun Chen accepted in cross-examination that, at least from the email from Kevin Fan of 19 April 2017, he was aware that a key risk of investing with Salter Brothers Funds was that a restriction on the right to redeem would increase "the investment horizon" for the relevant funds (T 549-550). By September 2018 he was aware that Fund K and Fund L invested in the Hotel Group, though he was uncertain whether he then knew that the hotels were operated by related companies (T 550). 930 He was aware in September 2018 that the capital value of Fund K may increase due to an increase in the valuation of the underlying hotel assets, that it had potential to earn income and that each was dependent upon the fortunes of the underlying investment in the Salter Brothers Hotel Group (T 550, 586, 590-591). By mid-2018, he was interested in placing the funds that were invested in Fund C into a different fund in the expectation of receiving a higher rate of return. He was forthright in his acceptance of the proposition that when the investment was switched to Fund K and Fund L, he was aware that there is "no such thing as an investment which does not carry some risk" (T 493). He understood the type of disclaimer that was contained within the slide deck, in Mandarin, that Natalie Liao provided to him during WeChat conversation (T 580-581). He further understood from WeChat discussion, that for Fund K he would receive a capital appreciation return only if the fund was successful (T 596). He was aware that Fund K and Fund L were open pool funds, meaning that he understood that new investors would come in from time to time and increase the size of the fund (T 599). He was also aware that by the introduction of new investors, the funds may be used to purchase other assets or to renovate or improve existing assets (T 599-600). 931 Jun Chen was pressed as to his understanding from the WeChat exchange as to the likelihood of an IPO for Fund K. His evidence was (T 601-602): MR PETERS: Yes. Can we agree that your view at the time was there's no certainty that an initial public offering will succeed in two years' time? THE INTERPRETER: No, because Ms Liao told us that expected to happen in the end of the year next year. MR PETERS: Yes, but that would depend on market conditions, wouldn't it? THE INTERPRETER: I can't agree completely of what you said, because there are many more other elements. MR PETERS: Tell me the other elements that might affect an initial public offer and listing on a stock exchange being successful. THE INTERPRETER: I can't give you too much of the elements, but I can tell you that Ms Liao has already give us an expectations but without any specific time. MR PETERS: An expectation without any specific time? THE INTERPRETER: Yes, but it says that expected to be end of next year – at the end of next year. From my understanding, that should happen around – around at about that time. MR PETERS: All right. But do you agree with me that there are matters which may prove that expectation could not be fulfilled, such as poor market conditions? THE INTERPRETER: Yes, I agree with you. MR PETERS: Yes. And there are other factors that may create uncertainty about whether an initial public offering and listing on the stock market could or could not go ahead? THE INTERPRETER: Yes. 932 His attention was directed to WeChat message from Natalie Liao at 3:59 pm on 12 September 2018 to the effect that after two years he could redeem on notice. His evidence was (T 604): MR PETERS: And you wanted to know what would happen with the fund if there was a financial crisis. THE INTERPRETER: Yes. MR PETERS: Because you knew, if there was a financial crisis, you might not be able to get your money back. THE INTERPRETER: I can't agree with you completely. MR PETERS: Completely? Did you say "completely"? THE INTERPRETER: Yes, because even at the worst time of economy crisis, there are still many companies who can run normally, and it doesn't mean that it – that mean it's going to happen that way. MR PETERS: Yes, it depends on market conditions? THE INTERPRETER: This is a very complex question. Then, it cannot be answered by a simple answer. MR PETERS: I completely agree with you. To predict what will happen in two years' time or three years' time with the economy is a very difficult exercise, is it not? THE INTERPRETER: Yes, I agree. MR PETERS: And in your very successful period as a futures trader, I'm sure there were sometimes when your predictions weren't correct, even if they're only a few times? THE INTERPRETER: Yes. 933 When asked to explain what he meant by his reference to "extreme conditions" in the WeChat exchange, Jun Chen referred to earthquakes, wars, strikes and "unexpected extreme conditions" (T 605-606, 617). He disagreed that a financial meltdown could be a circumstance which would trigger a liquidation. He disagreed that a financial meltdown may be a circumstance which would inhibit redemption of an investment in Fund K or Fund L, although he acknowledged that he understood in September 2018 that there was a risk that he might not receive a return of all his investments in those funds. That was not a risk, however, that he contemplated would happen "to every company" (T 618-619). 934 When it was directly put to Jun Chen that his understanding from the WeChat conversation was that he was being told that there was no certainty that all redemptions would always be met, he answered (T 620): THE INTERPRETER: Yes. No. It was the other way around, because it says that, if under extreme – extreme circumstances, there are still a lot of other options. MR PETERS: I agree with you that there are other options, but those options would take time. You understood that, didn't you? THE INTERPRETER: In Ms Liao's message, in this message, she – Ms Liao is saying that they will try their best not to go towards the extreme conditions. She said that, before the extreme conditions are met, there are many other options. For example – for example, in the Swiss Bank pension, a few months ago, they did show their interest in buying about a $100 million of our unit in the – in the fund. MR PETERS: All right. What you understood her to be saying is that Salter Brothers would try their best to make sure your money could be redeemed. THE INTERPRETER: Yes. 935 The focus of the questions then moved closer to the period prior to the decision to switch the investments in February 2019. Jun Chen accepted that the return from Fund C was "quite low" in comparison to Funds K and L but denied telling Paul Salter and Natalie Liao that he decided to switch investments to obtain a higher rate of return (T 621-622). On 4 December 2018, Jingyi Li invested $500,000 in an Austar Cash Trust, at the direction of Jun Chen. This increased the total funds invested with Austar to approximately $2.1 million. That investment was made because Jun Chen sought a higher rate of return than offered by an investment in bank deposits (T 588-589). 936 Digressing for a moment from Jun Chen's evidence, the Austar investment was in a unit trust described as the CG Cudgegong Road Trust. The corresponding Austar Information Memorandum dated September 2018 describes the investment as: Selective Mortgage Trust (CB 18788). It is in English. Jingyi Li said that she did not read this document before making her investment. When questioned as to whether she was prepared to invest by taking the risk that distributions may not be received and capital may not be returned, she answered: "I did not know. My husband read it." The Information Memorandum that she had not read on the second page under the heading "NO GUARANTEE" clearly identified that risk. Jingyi Li made many other investments with Austar after December 2018, and into seven trusts in total. Jun Chen when asked about this investment, could not recall the Information Memorandum, even though he made the investment decision (T 503). 937 Commencing 4 February 2019, there was a further WeChat exchange between Natalie Liao, Jingyi Li and Jun Chen (CB 9231). Natalie Liao provided fund reports as at 31 December 2018 for Fund K and Fund L in Mandarin. Each document is quite brief. Each discloses that Fund K and Fund L held as their largest exposures investments in SB&G Hotel Group, and each is replete with information about the plans for further hotel acquisitions and redevelopments (CB 8723-8732.). Jingyi Li was vague in her evidence about whether she understood at the time the link between the Hotel Group and the invested funds (T 400). In contrast, Jun Chen was aware that each fund invested in the Hotel Group (T 550). 938 On 5 February 2019, Atlas Capital hosted an event at the Point Leo Estate Winery on the Mornington Peninsula. Jingyi Li and Jun Chen attended and sat at a table with at least Paul Salter and Natalie Liao. Jun Chen recalls attending the event but could not remember whether he asked questions about other investment options (T 621). Jingyi Li recalls the event, but not what was discussed (T 412). In contrast Natalie Liao gave evidence, which I accept, that Jun Chen stated that he wanted to learn more about other investment products, to which Natalie Liao responded to the effect that she would arrange a meeting at the office (T 1282-1293). 939 On 18 February 2019, Jingyi Li and Jun Chen met with Natalie Liao and Paul Salter. Two documents, created before the meeting, were provided to Jingyi Li. One, an income entitlement statement for the period 31 December 2016 to 30 June 2018 for Fund C (CB 8680) and the other portfolio summaries for a different investor (the name was redacted) as at 30 September 2018 (CB 8685). That summary concerned Fund E and Fund K. Of the total of $5 million invested, the investor derived a capital gain of approximately $2 million plus gross dividend distributions of approximately $500,000. The annualised return over the period was stated at 17.22%. 940 Paul Salter made handwritten notes during the meeting (CB 8681, 8683 and 8686). The notes were given to Jingyi Li. In her evidence-in-chief, she said "to be honest' she did not comprehend the "financial issues" that were discussed (T 327). Her most comprehensive evidence about the discussion was (T 326), commencing with "they would like us to transfer": THE INTERPRETER: Then they compared – they said the fund would develop very well, compared the fund I invested – the fund C and fund K. They suggested I should transfer to fund K or L. I also ask a question to Mr Liao because I already invest fund C for two years in order to meet the requirement of SIV visa. And I ask Mr Liao, if I transfer to Fund K and L, am I still going to comply with the requirement of the visa. Mr Liao – Ms – Ms Liao told us, yes, we can do – we could do that if we transfer the money from Fund C to Fund K and L, then leave it for another two years, then afterwards do the redemption, then that will meet the SIV visa requirement. I also recall Paul was introducing the funds – at the same time written down something, as well. That's what I remembered. That's all. 941 Jingyi Li said that Paul Salter made the notes while speaking. When cross-examined, she could not recall whether Paul Salter spoke about investment risk, but did recall some discussion about "the prosperity of the fund" as being "good" (T 414). Her evidence continued (T 414-415): MR PETERS: And it was good compared to fund C, which was a term deposit fund. THE INTERPRETER: He said those two funds will develop very well. MR PETERS: Yes. And he said they carried higher potential rewards than Fund C. THE INTERPRETER: Yes. MR PETERS: But he said with the higher rewards comes more risk than an investment in Fund C. THE INTERPRETER: I cannot recall. Maybe he said so. MR PETERS: And he said one of those risks was a liquidity risk. THE INTERPRETER: He didn't mention there is a risk to – about illiquidity, about redemption, no. MR PETERS: And did he discuss with you the plan to list the hotel group on the Australian Stock Exchange? THE INTERPRETER: I cannot recall. 942 She had a poor recollection of what was discussed. She could not recall if Paul Salter said there was no certainty that an IPO would occur (T 416). She had no real comprehension of what Paul Salter had written on his note. 943 Jun Chen recollects that at the meeting he asked a question about liquidity and return and his evidence-in-chief continued (T 473): THE INTERPRETER: In the meeting, mainly discussed about the investment – our investment with SB company, the saving type of fund – C Fund – the possibility to transfer money from C Fund to property funds. Roughly, Paul told me the return of fund C was very low. At the same time, the other property funds they managed had very good performance. The other SIV investors, like – like us – they obtained much better returns. He also told me there was a plan to publicly list this company, and if I'm able to transfer money before that happened, there's the ..... benefits. But if we transfer money after it was public listed, then it will be too late. They have already made arrangement for it to be public listed, but the time when – it was not certain when. 944 Jun Chen was not directly cross-examined on this evidence. 945 Natalie Liao said at the meeting she acted as an interpreter (from T 1283). Paul Salter commenced by introducing various products, especially Fund E, Fund K and Fund L. He explained that each fund invested in the hotel portfolio. He gave details about the past performance of each fund, and some forecasts of the hotel portfolio such as the listing plan and the redevelopment of the Holiday Inn Potts Point. She did not recall any discussion about redemption of the investments. She did however recall a discussion, and an agreement by Paul Salter, that he would reduce the investment period for Fund K and Fund L to two years. She subsequently made a notation to that effect on the application form, which Jingyi Li signed on 21 February 2019. Otherwise, her recollection of the matters discussed was poor (T 1284). 946 Paul Salter, in evidence-in-chief, had a relatively good recollection of what was discussed at the meeting, assisted by his contemporaneous note. He provided "some insight" into the Salter Brothers Hotel Group and some of the "upsides" of the property funds (T 796). His evidence continued (T 796-797): All right. Can you tell his Honour what happened at the meeting?---The meeting opening, Natalie came in with some documents. Those documents represented their existing investments in the C series Fund. It had some return numbers and some dividend numbers. She provided those across to the – to the investor, Ms Li, and there was a brief conversation about the returns in that fund and how they were no longer as high as they had been previously. That led to a conversation, then, where we discussed the returns that we were achieving in the – in the property funds, the various property funds, but, you know, noted that that was a different type of product and that it had different risks than – than what a – effectively a bank deposit fund had. Mr Chen asked about liquidity of the fund on the back of the risk conversation. There wasn't any discussion about any other particular risks. I noted that the – the liquidity of those funds, the property funds, were largely tied to the IPO of the Salter Brothers Hotel Group, and that we had at a board level just the previous week made a decision to appoint Credit Suisse and UBS as lead managers for that IPO, and as it turned out, a pre-IPO round, and that, you know, whilst we had what we thought was the best managers in place, like all things that are – that are – that – that are going to market, there can never be any certainty about how that – how that process will turn out and the time frames associated with it. 947 He was taken to his handwritten notes. In form they are somewhat cryptic. When asked to explain what he recorded his evidence was (T 797-798): This – this relates to the redevelopment of the site which currently has the Holiday Inn Potts Point asset, which is one of the hotels owned by the Hotel Group. It is effectively two bookmarks in terms of what the development potential on that site is: left-hand side is a compliant as of right development at a – at a FSR, which is a floor space ratio, of five to one, and on the right-hand side is what we believe the upper limit of the development opportunity on that site at a 12 to one FSR ratio was achievable on the – on that particular site. All right. And they're your notes, are they?---Yes. They are. Could we go to 8686. So that's coming up. Were these matters discussed at the meeting?---Yes. So I would be talking, I was writing the notes down and Natalie Liao would – would translate as we were going through. Okay. 8686: do you recognise those notes?---Yes. Could you tell his Honour what they represent?---We were talking about all of the property based funds that we had. The K Fund had 100 per cent exposure to the - the Hotel Group, but the E Fund was different, and this represents the exposure at that time of the E Fund. It had, as I mentioned earlier, a townhouse development, apartment development at Ivanhoe and then it had a large stake in the – in the Hotel Group, and at the base there it references a shareholding in the Hotel Group and a 100 per cent exposure to those development opportunities. All right. And could we go now to 8683. Is that your handwriting?---Yes. All right. Can you tell his Honour what that represents?---Once we had finished talking about what the upside in the – the Hotel Group was, Jun Chen noted that there could be material tax consequences as a result, or the gains associated with that, asked simply, "Is there – is there any way to deal with it?" I said, "I'm not qualified to provide advice or taxation advice," but I understood that some SIV investors had held their SIV investment via a – a family trust, and that, you know, if we had a – if there was a discretionary family trust, that that family trust could then be used to stream different types of income to the beneficiaries of that trust. If Jun Chen was offshore, then he would be potentially eligible to suffer only withholding tax as an impost on capital gain, as opposed to his wife and child who domiciled in Australia. 948 Paul Salter was not effectively challenged on this evidence, which he gave clearly and lucidly. I find in accordance with his evidence, which is corroborated by his contemporaneous note. I am not satisfied that Natalie Liao said words to the effect attributed to her by Jingyi Li, whose evidence as to what was said during the meeting was vague and imprecise. Her evidence is not corroborated by Jun Chen, and she did not make any contemporaneous written record of the discussion. 949 Specifically, I find there was a discussion about the comparative return of Fund C with returns derived from property funds. There was a discussion that the property funds had a different risk profile. Paul Salter advised that the liquidity of the property funds was largely tied to the intended IPO of the Hotel Group and that decisions had been taken to progress the IPO. Paul Salter also spoke about the intended redevelopment of the Holiday Inn at Potts Point, it being an asset owned by the Hotel Group. Jingyi Li and Jun Chen were specifically advised that Fund K invested exclusively with the Hotel Group and Fund E was a property fund concerned with other developments, but it too maintained a large stake investment in the Hotel Group. There was also a discussion about taxation and the use of discretionary family trusts. 950 On 20 February 2019, Jingyi Li received an email from Natalie Liao which attached an investment forecast spreadsheet for 2022/2023 that compared the anticipated returns of Fund C, Fund K and Fund L (CB 8749). Later that day Natalie Liao met with Jingyi Li and Jun Chen at their home. Jun Chen recalls that at the meeting, Natalie Liao produced an Excel spreadsheet which compared the expected fund returns. To his recollection Natalie Liao explained that Fund C "can only get very little return" but for an investment in the property funds "the return will be much higher" (T 474). 951 Jingyi Li also gave evidence that there was a discussion about the comparable returns for the funds and Natalie Liao produced for her signature the relevant forms for the transfer of the investment. She signed the forms, and Natalie Liao wrote at the top of the application form to make the investment in Fund K the words: "Switch all funds from C to K and L * L invest for 2 years" (CB 8754). When asked about that notation, Jingyi Li said it confirmed the discussion that she wished to redeem in two years' time. She elaborated that answer (T 330): Then two years later, I can redeem my money; that's what we agreed at the day before. Also, previously in the meeting in the office, we mentioned that, as well. 952 Natalie Liao, in evidence-in-chief, confirmed the evidence of Jingyi Li and Jun Chen, that her reference to the two-year period which she noted on the application form reflected the approval earlier given by Paul Salter that the investment period would be two, rather than four years (T 1298). The form was not signed by Jingyi Li on that day because she left it to her and Jun Chen to "decide how they allocate the investment" (T 1298). Natalie Liao denied that this notation reflected a discussion to the effect that she had been told that Jingyi Li wished to redeem the intended investments after two years – on her evidence this was discussed at the earlier meeting and not at their home in Camberwell (T 1299). 953 When Natalie Liao was cross-examined, she accepted that the notation reflected "the arrangement that she could redeem after two years" (T 1339). 954 I return to the evidence of Jun Chen. Towards the conclusion of his cross-examination, Jun Chen was asked a series of questions which returned to the topic of the references to an extreme situation of financial crisis or war in the WeChat messages (from T 624). He understood at the time that an economic financial crisis was like the global financial crisis of 2008 and the onset of the COVID-19 Pandemic. His understanding was that a crisis of that type is not one peculiar to a particular business. A series of questions were then put to him concerning a further WeChat conversation with Natalie Liao on 5 April 2020, which is relevant to the causation issue. However, the answers which he then gave are also relevant to his state of mind prior to the decision to switch the investment. One question that Jun Chen then asked Natalie Liao was whether she could "explain the conditions and time of redemption" (T 629). He did not say anything in that exchange about having been misled at an earlier point in time about the ability to redeem the investment in Fund K and Fund L after a further period of two years. 955 In one answer in that WeChat exchange, Natalie Liao stated (T 630): Regarding the redemption conditions: K fund is open-ended and has no minimum investment, So it's redemption mainly depends on liquidity. 956 He was asked whether that statement surprised him. The evidence was (T 630-631): MR PETERS: It wasn't a surprise to you that redemption depended upon the liquidity of the fund, was it? THE INTERPRETER: I can see Ms Liao's reply here, but it was different from the reply I received previously. MR PETERS: I will put the question again, [Mr Chen]. Your understanding from 2016 through to 2020 was that any redemption of an investment in a Salter Brothers fund could only occur in circumstances where the fund was sufficiently liquid. THE INTERPRETER: What Ms Liao told me that, you know, mainly depends on the liquidity, not saying that it must depend on the liquidity. MR PETERS: I'm going to ask – I've got to say to his Honour that you don't answer my questions. But I want to give you a fair opportunity to answer my question. Do you understand? I am asking you a question about your knowledge as a man of business between 2016 and 2020. Do you understand? THE INTERPRETER: Yes, I understand. MR PETERS: Your knowledge between 2016 and 2020 was that any investment in a Salter Brothers product could only be redeemed if liquidity permitted it. THE INTERPRETER: Yes, I understand. MR PETERS: During that period, you knew that there was a risk if a fund was illiquid, you could not redeem your moneys. THE INTERPRETER: Yes. MR PETERS: Now, can we go to the next entry, 5 April 2020, 6.58.53. You see that? THE INTERPRETER: Yes, I see that. MR PETERS: When you agreed to fix the L Fund investment for two years, you knew that redemption of that investment depended upon liquidity in the L Fund. THE INTERPRETER: Yes. G. 5.12 Submissions 957 Ms Bennett submits that the first and second representations relied on were misleading or deceptive because an investment in Fund K and Fund L was not available for redemption upon notice after two years and did not consider or disclose the illiquid nature and long-term investment horizon of the funds. 958 That redemption submission correctly summarises the discretionary power of the Trustee to meet requests at cl 11 of each Trust Deed. The ordinary and natural meaning of that representation exposes its misleading nature. Ms Bennett's submission continues that there is nothing in the sequence of events between the WeChat exchange of September 2018 and the making of the switch decision in February 2019, which qualified or displaced that meaning. 959 In contrast, Mr Peters' submission commences by correctly noting that Jingyi Li does not plead that the representations were made as to future matters and her claim contends that when the representations were made it was not possible for an investor to redeem units in Fund K and Fund L. Jingyi Li has not established that as at September 2018, redemptions were not possible. 960 Further, when all the conduct is considered, a reasonable person in the position of Jun Chen at the time, with his detailed investment knowledge and experience, would not have understood that an investor had a unilateral right to redeem. 961 Ms Bennett characterises the first submission as of no assistance: the entitlement to redeem was misstated. The discretion was not disclosed. As to the second submission, the course of conduct relied on by Salter Brothers did not displace the clear representation that the investment could be redeemed after a further two-year period. The Salter Brothers' case is criticised for failing to accurately or precisely identify what is said to contextualise, and thereby qualify or displace, the meaning of the representation. That submission is taken as far as a contention that there is some form of reverse onus which applies to a defendant, who asserts that misleading and deceptive conduct was not engaged in. No authority was cited for that proposition, and I reject it. The onus is on Jingyi Li to establish that the conduct was misleading or deceptive without the benefit of reliance on the representation as to future matters provisions. 962 In any event, Ms Bennett is critical of three matters of asserted contextualisation relied on by Salter Brothers: (a) The fact that Jingyi Li and Jun Chen possessed the September 2015 Information Memorandum at the time of WeChat conversation; (b) During the WeChat conversation, Natalie Liao provided a generic slide deck (in Mandarin) as at September 2017; and (c) At the meeting on 18 February 2019, Paul Salter referred to a potential IPO for the Salter Brothers Hotel Group. 963 None of those matters, on Ms Bennett's submission, operated to modify the impugned conduct as they do not address the clarity of WeChat Representations in the context in which they were made "being actual live discussions" about a decision to invest which was then in contemplation. Or, as I comprehend it, the WeChat conversation was specific to the circumstances in contrast to the generic information in the Information Memorandum and the slide deck. G. 5.13 Consideration 964 Where conduct is directed to an individual, the objective inquiry proceeds by considering the parties' relationship and the context of the conduct by reference to the reasonably known attributes of Jingyi Li and Jun Chen to determine the effect of the conduct on a reasonable person in their position at the time: Valve Corporation at [219], Edelman J. As the evidence revealed, it is Jun Chen who assessed the risks, examined the documents and was primarily responsible for the decision to switch the investment. 965 Conformably with my findings as to the meaning conveyed by the WeChat exchange, the effect of two require determination. One, whether the representation that there was a unilateral right to redeem after two years on notice for Fund L was misleading or deceptive or likely to mislead or deceive. The other, the no need to fix a further investment period for Fund L upon redemption representation. 966 I am not satisfied that either representation was misleading or deceptive or likely to mislead or deceive. 967 Jun Chen, for the reasons I have earlier set out, was objectively a sophisticated, experienced and shrewd investor. That was a known fact commencing with his first series of questions in the WeChat exchange. 968 At all times between the making of the initial investment in August 2016 and the decision to switch the investment in February 2019, it was objectively clear that Jun Chen was aware that all investments, including those proposed to be made with Salter Brothers, were subject to investment risks. Those risks extended to at least the impact of external economic circumstances, market fluctuations in the value of investments, financial crises and investment liquidity risk. He was an investor with an appetite for risk, including the significant risks of futures trading. Risks of that nature were not of concern to him because he knew what he was doing. Self-evidently, he made a detailed assessment of the assets, likely return and future risk of making an investment in Fund K or Fund L. He was aware that Fund K and Fund L invested in property assets of the Salter Brothers Group. He knew that property fund investments were made into illiquid assets. These were each objectively, that is reasonably, known characteristics of his, ascertainable from the WeChat messages and the subsequent meetings. 969 Jun Chen met with Kevin Fan and Robert Salter on 31 March 2017. The matters that he discussed on that day caused at least Kevin Fan to conclude that Jun Chen was familiar with investments and capital markets and was "quite a sophisticated investor". He asked questions about the asset classes in Australia then held or managed by Salter Brothers. They discussed the interest rate cycle and monetary policy. The discussion extended to debt financing in property markets, the hotel market (specifically for Fund K) and the equity market (Fund G). Jun Chen complained of his poor experience with Austar investments. He requested that further information be provided to him to consider a switch of the investment made by Jingyi Li in Fund C to Fund K. This was objectively conveyed information. 970 Kevin Fan provided further information to Jun Chen by email on 19 April 2017. The email in Mandarin referred to the easing of global monetary policy with the consequential increase in asset prices and the challenging environment for investors. It recorded that two of the attachments addressed a matter raised by Jun Chen at the earlier meeting concerning the operational background and risk information for the Atlas Capital funds. The existing hotel investment portfolio with the Salter Brothers Group was mentioned together with information about recent increases in the value of the assets. The attachments provided key investment risk information for the relevant funds, albeit in English. At the time Jun Chen had the capacity to have those key documents translated, but chose not to because he did not consider them "important". In making that decision, I find that he was content to proceed on his own assessment of the investment risks and without the guidance of the information that he had requested. 971 If Jun Chen had concerned himself sufficiently to have the first attachment to the email translated, being a background document for each of the Atlas Capital funds dated April 2017, he would have been informed by the information printed on the first page that redemption of an investment in a property fund was not assured and depended upon fund liquidity. Objectively the relationship at that time included the seeking of more detailed information by Jun Chen from Salter Brothers and its provision. The provider was entitled to assume that the requested information would be read, even if provided in English. A translation would not have been difficult to procure. 972 Jun Chen also received the email of 31 July 2018 from Cathy Zhang which attached a Salter Brothers new opportunities document dated May 2018 (in Mandarin). He did not read the attachments. Had he done so, he would have been informed of the explicit warning contained in the disclaimer notice on the second page that all investments are subject to risks, there can be no representation or guarantee that any specific rate of return will be achieved or that there will be no loss of the capital invested. Salter Brothers was objectively entitled to assume that he would read it. 973 Jun Chen was dissatisfied with the rate of return that had been received from the investment in Fund C. He disclosed that to Salter Brothers. He sought a greater return and understood that with it there was a greater risk. During the WeChat exchanges, he was provided with the Atlas Capital SIV investment document dated September 2017 in Mandarin. The prominent disclaimer within that document disclosed that forward-looking statements may not materialise or be correct, that the underlying assumptions may turn out differently, that past performance cannot be used as a reference for future returns and that sometimes the principal of an investment may be lost. The objective purpose of providing that information was to alert the recipient to investment risks. 974 Jun Chen was aware that in the event of a financial crisis, there was a risk that he would not receive a refund of principal invested in Fund K or Fund L, which might be caused by economic circumstances that were difficult to predict. This knowledge may reasonably be assumed where investment risk information is provided to reasonably sophisticated wholesale client. 975 Jingyi Li and Jun Chen attended a meeting with Natalie Liao and Paul Salter on 18 February 2019. There was a discussion about the comparative return of Fund C with returns derived from the property funds. The different risk profile was discussed. Each was informed at that meeting that the liquidity of the property funds was largely tied to the intended IPO of the Salter Brothers Hotel Group. 976 Ultimately Jun Chen accepted that between 2016 and 2020 he was aware that any investment in the Salter Brothers' product could only be redeemed, if liquidity permitted it. He further admitted that he was aware that there was a risk that if the fund was illiquid, that would prevent or delay redemption and that when he decided to make the investment in Fund L for a further period of two years, he knew that redemption was dependent upon the liquidity of the fund. These were reasonably known characteristics of Jun Chen. They were reasonably known to Salter Brothers because they were dealing with a shrewd investor with demonstrated ability to assess investment risks and to make informed choices. 977 When the entirety of the conduct is considered to the time when the switch decision was made on or about 19 February 2019, the unilateral right to redeem after two years from Fund L representation and the no need to fix a further investment in Fund L upon redemption representation would not have tended to lead a reasonable person in the position of Jun Chen into the error of erroneously believing that the investment could be unilaterally redeemed after a further period of two years despite the liquidity of the fund. Nor would that hypothetical person had been led into the error of believing that there was no need to fix a further investment period in Fund L upon redemption. The hypothetical reasonable investor must be taken to have sophisticated knowledge and investment experience and an appetite for investment risk. That person must be taken to have understood prior to 19 February 2019 that: (a) All investments, and in particular property investments, are subject to risk including the risk of delayed return or loss of the principal sum invested in whole or in part; (b) An investment in a Salter Brothers Property Fund carried a greater risk than investment in a Salter Brothers Bond or Bank Deposit Fund; (c) The ability of the Trustee of a Salter Brothers Property Fund to meet redemption requests was dependent upon several factors including the value of the fund at the time a redemption request is made, the number of requests received at any one point in time and, most importantly, the state of liquidity of the fund. Further, the ability to satisfy redemption requests may be impacted by external economic circumstances, such as in this case the onset of a global health emergency; and (d) Redemption of the intended investments in Fund K and Fund L after expiry of the two-year investment period was subject to fund liquidity. 978 I also find that the hypothetical reasonable investor would, acting prudently, have taken steps to understand the terms of investment, initially by procuring a translation of the September 2015 Information Memorandum prior to investing in Fund C in August 2016 and later the 22 August 2018 Information Memorandum. Upon taking those steps, the individual would have supplemented their own knowledge about liquidity risks and the link with redemption requests as set out in the Significant Risks of Investing in an SIV Fund sections. The information is set out to inform the potential investor, not to disclaim liability inconsistently and impermissibly with the statutory provisions. 979 That knowledge and those circumstances are antithetical to an objective finding of misleading or deceptive conduct. In my view a reasonable person in the position of Jun Chen would not have uncritically accepted either representation when considering an investment in Fund K or Fund L. He or she would have analysed the representations and concluded to the effect that: Redemption may be available at the option of the investor in two years, but it depends on whether the fund is liquid, the value of the underlying assets, how many redemption requests are submitted and in what amounts and the influence of external market forces beyond the control of the Trustee. All those matters are relevant to the risk that is being assessed when considering investment in a property fund. 980 As to the no need to fix a further two-year period on redemption representation, it was not misleading because there was no such requirement. The case is about the holding over of the investment caused by the inability to meet redemptions. 981 Jingyi Li did not have the knowledge or experience of Jun Chen, but that matters not. Jun Chen made the decisions and Ms Bennett accepts he is to be regarded as her alter ego. 982 There are other reasons why the conduct was not, or was not likely, misleading or deceptive. The key pleaded contention of Jingyi Li is that the WeChat Representations were misleading or deceptive or likely to mislead or deceive because Fund K and Fund L were not available for redemption upon notice from the investor after two years. There is no pleaded reliance on the future matters provisions and there is no evidence that redemptions were not available from either fund in September 2018. 983 Whilst it is correct that for Fund L, the unilateral right to redeem representation was contrary to the Trustee's discretion to meet a redemption request, it does not follow that it was misleading. The context is important. Jun Chen did not ask a for an explanation of the terms of the trust deed. He had considered the fund information as contained in the Slide Deck and the Series L Fund Report. He commenced by asking questions about Fund L concerned with the investment ratio, the fund size, the priority dividend and the management fees. He was provided with detailed responses. No questions were asked about the terms of the Fund L Trust Deed. The focus was on the assets of Fund L, the ability to invest in Fund K (which then led to the provision of information about its assets and development proposals), the dividend priority at 6%, market opportunities and that it was an open fund with the opportunity of acquiring more properties to ensure long term stable income returns. 984 Thereafter, Jun Chen inquired about the investment period and exit mechanism. Objectively he was not asking a question about the terms of the trust deed. The information sought related to the investments of Fund L and the ability to redeem at maturity in the ordinary course of the business of the fund. The answers were responsive in that context: they said nothing about the detail of the trust deed. 985 A reasonable person in the position of Jun Chen at the time would have understood that Natalie Liao was not being asked to provide an explanation of how the trust deed for Fund L operates. The reasonably known characteristics of Jun Chen were that he was assessing an investment choice to move from a low performing fund into a property fund with a higher expected rate of annual return fixed at 6%. Information was not sought about the trust deed at all. This was an investment/financial discussion where the focus was on the ordinary course of operation of Fund L. The inquiries related to the day-to-day practical operation of Fund L, not the strict legal position. 986 Further, the context was that as at September 2018 redemptions were being permitted in Fund K and there is no evidence they were not being permitted in Fund L. There is no evidence that redemptions in any property fund were by September 2018 being refused in the exercise of the Trustee's discretion. In this context the effect of the answers on a reasonable person in Jun Chen's position was such that they would not (or would not likely) have been led to the erroneous conclusion that there were no provisions in the trust deed inconsistent with the ability of an investor to redeem and that each and every investor could exercise a right to require their investment to be redeemed no matter what. 987 Whilst Jun Chen gave evidence that he understood from the answers that there was a right to redeem after two years, his subjective belief is relevant only to reliance, and not whether the conduct was misleading. 988 I return to Ms Bennett's submission (albeit framed on the construction issue) that a focus on investment risk distracts from the core point that the right to redeem was said to be at the election of the investor. Once it is understood that Jun Chen was seeking information about the practical operation of Fund L and was aware that redemption was not an unqualified right, the submission falls away because no reasonable person in his position at the time would have understood that the representations were statements of unilateral and unqualified right. The fund was pooled, it invested in financial instruments in other funds that held illiquid assets and operated for the common interests of many investors, not the singular interest of one. 989 Finally, although I have rejected the case that the WeChat exchanges conveyed the third representation, I would not in any event have concluded that it was or was likely misleading. Although Ms Bennett is correct to submit that the listing plan mechanism was materially different (Property Opportunity Fund is the intended first vehicle), the expectation expressed at 3.51 pm was a statement of the practical effect of the proposal. A reasonable recipient in the position of Jun Chen would have understood it in that way. G. 5.14 Conclusions as to the misleading conduct case 990 It is only that part of the IM Representations case, the Conflict Representation, that has been established. That finding limits the scope of the causation and damages claims. However, as with the Li Xu proceeding, I may be in error. For that reason, I consider each aspect of causation and damages. G. 6 Causation G. 6.1 The pleaded case 991 I have addressed the causation requirements of s12GF of the ASIC Act and s 1041I of the Corporations Act in Part F.12. I adopt my analysis when dealing with the Li Xu proceeding. However, there is a distinct difference with how Jingyi Li puts her case on the IM Representations. 992 Jingyi Li pleads her causation case in five ways in her Further Amended Narrative Statement of Facts and Explanation. First, at [49] that based on the WeChat Representations or alternatively the IM Representations, on or about 20 February 2019 she determined to transfer her investment in Fund C to Fund K and Fund L. This is elaborated at [50(b)] that in making that decision she relied on the WeChat Representations and at [50(c)] she was not then aware of any limitation, restriction or material risk to her ability to redeem an investment in Fund K or Fund L upon expiry of the remaining two-year period. 993 Second, at [59] if SBAM had informed her of the restrictions, limitations or material risks to her ability to redeem her investments in Fund K and Fund L (the Trust Deed terms which conferred a discretion in the Trustee), or otherwise had not made the IM Representations or the WeChat Representations, she would have retained her investment in Fund C and would not have switched to Fund K and Fund L or, if she had already invested in Fund K and Fund L, she would have "re-transferred her investment" to Fund C upon becoming so aware and at a point in time before redemption requests were not met, which she contends was in early 2020. 994 Third, at [67] if SBAM had informed her of the true position in relation to each of the five IM Representations or of the restrictions, limitations or material risks to her ability to redeem her investments in Fund K and Fund L, or of the "non-diversification and illiquidity of investment and likely investment horizon up until at least 30 June 2024" in Fund K and Fund L "arising from the investment in the SB&G Hotel Group" then she would have retained her investment in Fund C and would not have switched to Fund K and Fund L or would have redeemed her investments in Fund K and Fund L and re-transferred her investments to Fund C upon becoming aware of those matters. The pleading at [59] concerning when redemption requests were being met is then repeated. 995 Fourth and fifth, at [68] and [69] that if Fund K and Fund L is illiquid or has been at any time during which Jingyi Li held her units in those funds, that illiquidity results from the "non-diversification of investment" of those funds in the SB&G Hotel Group. G. 6.2 The direct evidence 996 Jingyi Li's evidence-in-chief as to those contentions was as follows. She does not "specifically recall" reading the 1 September 2015 Information Memorandum (which she received on 28 August 2016 from Dulcie Du), and that it was in English presented a barrier to her reading it and she did not have time to "underline and translate" the words in it that she did not understand (CB 8259). 997 He affidavit evidence included (CB 8259): I did not understand, at the time, what the Information Memorandum was, or the significance of it. I was not offered a translation or an explanation of the Information Memorandum. If the Information Memorandum had been in Mandarin, I could have understood it quickly, but because it was in English, I would have had to check most words in my dictionary and I did not have the time to go through all of them. The dictionary I used most was electronic and required me to paste each word, phrase or paragraph into the dictionary program. I do not recall engaging in this exercise in relation to the Information Memorandum and I do not believe it would have been possible to do so, because of its length. 998 She and Jun Chen decided to invest in Fund C because of their assessment that any investment in term deposit products with major Australian banks was more secure, predictable "and redemption at maturity was certain" (CB 8260). 999 After the meetings of 18 and 20 February 2019, and "based on" the investment forecast spreadsheet that Natalie Liao emailed on 20 February 2019 (which compared the returns between Fund C, Fund K and Fund L) "we" "thought it was credible to transfer the funds" because "we understood that we could access our funds in the timeframe identified, being at the expiration of the four-year period required by the SIV Program" (CB 8265). The counterfactual evidence is (CB 8265): If I had been told that it may not be possible to redeem the investment in [Fund K and Fund L] at the expiration of the four-year period (being two years in [Fund C] and then two years in [Fund K and Fund L]), I would not have switched our investment into those funds. 1000 Notably, Jingyi Li did not give evidence-in-chief as to what she would have done if she had been informed of the pleaded matters at a time when redemption requests in Fund K and Fund L were still being met. Nor did she say that she relied on the IM Representations in making the decision to invest in Fund C in August 2016 or to switch her investments in February 2019. 1001 Jun Chen's evidence-in-chief was that because the 1 September 2015 Information Memorandum was in English, he could not understand it (CB 9320). He considered only the PowerPoint slides that he received on 28 August 2016, each of which were in Mandarin and addressed Fund C and Fund D. He did not distinctly say that he relied on those documents in deciding to invest in Fund C, but that inference is obviously open, and it is one that I draw from his affidavit evidence (CB 9320-9321). 1002 As to the decision to switch investments in February 2019, he said that "a key motivator" was the predicted higher return from the property funds (CB 9324). He recalls that the return on Fund C at the time was lower than if he had simply invested the money directly into a bank deposit account. He stated that "we would not have transferred our investment had we understood that the fund was illiquid and that our funds could not be accessed" (CB 9324). Further, "if we had known that we would not be able to redeem their investment after the two-year period we would have left our investment in [Fund C]" (CB 9324). He further gave evidence that "because of the assurances" that had been provided during the WeChat exchanges, he decided to switch the investment. 1003 Save to confirm that Jingyi Li did not read the September 2015 Information Memorandum, there was no direct challenge in cross-examination to the counterfactual evidence. The cross-examination of Jun Chen resulted in the concession that I have earlier recorded; that he was aware between 2016 and 2020 that any investment with Salter Brothers could only be redeemed if liquidity permitted, and he was also aware that illiquidity of a fund would prevent or delay redemptions. 1004 Further, as I have found in Part G 5.11, Jun Chen was aware that Salter Brothers intended to proceed to an IPO as a means of generating liquidity in the property funds and that there was uncertainty as to when that would occur. G. 6.3 Submissions 1005 In closing submissions, Ms Bennett accepted the fact that the September 2015 Information Memorandum had not been read by Jingyi Li or Jun Chen presented difficulties on the causation issue. In written submissions Ms Bennett framed a generalised contention that is not pleaded, to the effect that the IM Representations formed the basis of all discussions between Jingyi Li and Jun Chen and representatives of Salter Brothers and the "DNA" of the IM Representations is contained in the subsequent conduct of the agents of Salter Brothers. The submission continues: The pervasive nature of the IM representations in the environment within which the investments were marketed meant that they were part of the reason that [Jingyi Li decided] to switch her investment into [Fund K and Fund L]. 1006 In oral submissions, Ms Bennett put it this way (T 1632): [T]he evidence has disclosed… the pervasive underpinning nature of this Information Memorandum. Everyone is on board with it. All representations made have to be consistent with it. It's drafted by Mr Salter, and it's the governing document that underpins everything that follows from it. And so we say that on the evidence as it has been disclosed at this hearing, it demonstrates – it is in the very DNA of the way in which people deal with these funds. And we see it being – we see those representations manifested in lots of different ways. And the direct reliance – it doesn't bite. It doesn't bite in the way that the direct representations are made. They are indirectly suffusing the environment, the ecosystem within which these investments… HIS HONOUR: Terms like ecosystem are not helping me, Ms Bennett. 1007 I questioned how that submission is made good when the September 2015 Information Memorandum had not been read and Ms Bennett responded (T 1632): Because the representations suffuse the entire environment within which the investment takes place. That's how we put that. And your Honour will see it manifested in a number of ways. So there's the four-year investment. So the pathway is this: there's a representation. We ask is it false? And we say they're patently false. And then we ask, "well, did that falseness – is loss there because of that falseness?" And I referred in opening to HAH and the cases that are referred to in it. 1008 The HAH (sic) reference is to the decision of Brereton J in Re HIH Insurance Ltd (in liq) [2016] NSWSC 482; (2016) 335 ALR 320 at [42], [74] and [77], where in summary (in the context of several proceedings brought by shareholders who had acquired shares at inflated values arising from misleading or deceptive conduct), his Honour rejected the contention that misleading conduct must be directly relied upon as causative of loss. 1009 Dealing next with the WeChat Representations case, Ms Bennett submits the evidence clearly supports the finding that Jingyi Li wished to access her funds upon satisfaction of the four-year minimum investment requirement. But for the WeChat Representations, she would have maintained her investment in Fund C. Her written submissions did not directly address the evidence of Jun Chen and Paul Salter about the intended IPO. However, in oral submissions Ms Bennett confronted this evidence by drawing a distinction between a statement to the effect that the underlying assets are illiquid, which is materially different to a statement to the effect that redemption is entirely tied to the future possibility that the fund may be illiquid when, in any event, there is a discretion reposed in the Trustee. The risk of subsequent illiquidity is not the same thing as the absence of a right to redeem upon satisfaction of the four-year investment term. G. 6.4 Consideration 1010 In my view, the fact that the 1 September 2015 Information Memorandum was not read prior to making the August 2016 investment in Fund C and the February 2019 investments in Fund K and Fund L is fatal to the success of the causation case based on the IM Representations. Jingyi Li and Jun Chen in fact placed no reliance on any of the five representations pleaded as contained in that document in their decision-making. 1011 In some cases, it is not necessary for an applicant to prove direct reliance on misleading conduct to establish that loss or damage was suffered in consequence. Damage may be suffered where, for example, misleading conduct causes other persons to act in a way that causes damage to the applicant: Janssen-Cilag at 529-530, Lockhart J. In Digi-Tech (Australia) Ltd v Brand [2004] NSWCA 58; (2004) 62 IPR 184, Sheller, Ipp and McColl JJA referred to this as the "indirect causation theory": [147]. At [156], their Honours distinguished the Janssen-Cilag category of case (amongst other cases) as: [M]aterially different to that which occurs when plaintiffs suffer loss because they, themselves, are induced by misleading representations to perform some act or omission by which they are prejudiced. The difference lies in the fact that in the first category of case no conduct on the part of the plaintiff forms a link in the causation chain. In the second category, the inducement of the plaintiff and his or her act or omission causing loss is an essential part of the chain. Without such inducement and a consequential act or omission on the part of the plaintiff there is indeed no linking chain between the misleading conduct and the plaintiff's loss. 1012 This should not be understood as proceeding on the basis that proof of reliance is a substitute for the statutory requirement that damage must be suffered by the contravening conduct (Campbell at [143], Gummow, Hayne, Haydon and Kiefel JJ). 1013 There is another category of case concerned with market-based causation, of which HIH Insurance and TPT Patrol Pty Ltd v Myer Holdings Ltd [2019] FCA 1747; (2019) 293 FCR 29, are examples, which have held that where shares are acquired because the market was misinformed, for example by failing to comply with the continuous disclosure requirements, it is sufficient to establish that they were acquired at an inflated value. In TPT Patrol, Beach J in a characteristically comprehensive judgment, identified three causal pathways that may apply in misleading conduct cases. First, direct causation at [1657]: This is the scenario where absent a power in the respondent to direct or compel the applicant to take a course of action, the mechanism by which misleading acts or omissions by the respondent might directly cause loss to the applicant is almost invariably by inducing the applicant to some course of action. This inducing requires proof that the applicant relied upon some impression created by the respondent's misleading act or omission. 1014 Second, active indirect causation at [1659]: This is the scenario where a respondent's misleading conduct induces some reaction in X, and the applicant would have acted differently but for that reaction by X. There is no additional requirement that the applicant was aware of or relied on the respondent's conduct. It is enough that X relied, and that the applicant would have acted differently but for that reliance by X. Or in other words, it is enough that the applicant relied on X. Thus in Hampic the injured cleaner succeeded because the supervisor had relied on a misleading label which the cleaner herself never saw. So, the investors in Digi-Tech failed, not because active indirect causation is untenable in law, but because their evidence at trial had failed to show that the advisor on whom they relied had himself relied on the defendant's misleading valuations. 1015 Third, passive indirect causation of the Janssen-Cilag category at [1660] where in that type of case: [T]he defendant's misleading representations to the plaintiff's customers caused their customers to shift their custom to the defendant's business. Provided that the plaintiff established, by direct proof or proper inference, that the customers relied upon the defendant's misleading conduct, there was no second requirement of 'reliance' by the plaintiff, either on the defendant or on the reactions of the customers. The plaintiff was relevantly passive, but there was still causation of loss and it was still recoverable. 1016 HIH Insurance concerned the purchase of shares where the plaintiffs contended that the financial year end published results were misleading or deceptive and had the effect of distorting the market price for the shares. They did not contend they read or directly relied upon the results. The claims succeeded. It was sufficient to establish that the financial results inflated the market and they paid more for the shares than the true value at the time. At [42] Brereton J said of the requirement at s 82 of the Trade Practices Act: The word "by" signifies no more than that the loss or damage has to have been brought about by virtue (or reason) of the contravening conduct. As a matter of principle, if causation – "by conduct of" – can otherwise be established, it cannot matter that reliance is not established. Thus, the statutory cause of action does not, per se, include reliance as a necessary material fact (although that is not to say that it will not be one, as a matter of fact, in the context of many, if not most, individual cases). (citation omitted) 1017 At [71] his Honour stated that Digi-Tech does not stand against indirect market causation which he explained at [72]: The policy that informs Digi-Tech and Ingot is to deny recovery where the contravening conduct did not influence anyone (that is to say, where no-one was deceived or misled by the contravening conduct), and to those who knew, or were indifferent to, the true position. The explanation of those decisions is that (a) if the contravening conduct in fact misleads no-one, then it cannot be said to have caused loss; and (b) where contravening conduct sets in motion or allows to continue a process which culminates in an applicant making a decision to enter a transaction which incurs loss, a decision to enter into the transaction by an applicant who knows the true position or is indifferent to it would break the chain of causation as a novus actus interveniens, so that it could not be said that the loss was incurred "by" the conduct. 1018 Where the price of a share is not reflective of a fully informed market (if there had been proper disclosure), it is the market that was misled by the conduct which caused purchasers of shares to suffer loss by paying an inflated price: [73] – [75]. 1019 Jingyi Li's reliance on HIH Insurance is misplaced. No case of market-based causation was pleaded. No facts are set out in the pleading as to how the "DNA" of the September 2015 Information Memorandum informed how representatives of Salter Brothers dealt with Jingyi Li or Jun Chen. No facts are pleaded as to how it was "manifested in lots of different ways" (T 1632) in the representations that are relied on. There is no pleading of facts as to how the IM Representations "provided the basis for the discussions" between Jingyi Li and representatives of Salter Brothers prior to the making of the switch decision in February 2019. 1020 The case was pleaded as one of reliance, notably at [49] "based on" the IM Representations, Jingyi Li determined to transfer her investment from Fund C to Fund K and Fund L. Jingyi Li has failed to establish that fact. The case is not salvaged by the pleading that if Salter Brothers had informed Jingyi Li of the restrictions, limitations or material risks to her ability to redeem her investment Fund K or Fund L she would have retained her investment in Fund C or re-transferred her investment to Fund C for two reasons. First, this is not a case of misleading conduct by silence and these limitations were expressly adverted to in the September 2015 Information Memorandum which Jingyi Li would have noticed if she had procured a translation of it. 1021 Second, the IM Representation case is not assisted by the contention that Jingyi Li was not informed that investments by Fund K and Fund L were not diversified and illiquid arising from investment in the Hotel Group. Jun Chen was aware of that fact before the switch decision was made. 1022 I deal next with the WeChat Representations case. It will be recalled that Jingyi Li's contention is that the WeChat exchanges were misleading or deceptive because Fund K and Fund L were not available for redemption by an investor upon notice after two years, there was no need to fix a further investment period in Fund L on redemption and after Fund K had been listed, which was imminent, redemption would be effected by investors holding shares which could then be sold. The corresponding causation pleading at [49] is that the decision to switch the investment in February 2019 was based on the WeChat Representations, at [50(b)] there is a reliance plea and at [59] a but for plea that absent the WeChat Representations that decision would not have been made. 1023 In my view that case is not made out. Whilst Jingyi Li gave evidence-in-chief supportive of her counterfactual, there is the direct evidence from Jun Chen that he was aware that redemptions depended on fund liquidity and there was a proposal for an IPO to provide liquidity but the timing of that event was uncertain. Where a representee subsequently becomes aware or understands that the position is different or disbelieves the representation, reliance is unlikely to be established: Campbell at [28], French CJ; Delaney v Delaney [2021] VSC 365 at [443], Lyons J and Cargill at [3208], Elliot J. It is not in this case. 1024 In reaching that view, I do not accept the distinction drawn by Ms Bennett, that a future possibility of fund illiquidity is materially different to no right in the investor to require a redemption, for the reasons that I have set out in addressing the misleading conduct claim. G. 7 Unconscionable conduct G. 7.1 What is in issue in this case? 1025 Proceeding in accordance with the principles set out in part E.2, I deal first with the pleaded case of Jingyi Li. 1026 The contention at [67B] of the Further Amended Narrative Statement is that "by reason of the foregoing" SBAM engaged in unconscionable conduct contrary to s 12CB of the ASIC Act "because" of the matters enumerated in the four subparagraphs that follow. In summary: (a) She was under a special disadvantage due to her inability to fluently converse in or read documents in English and wished to obtain permanent residency through the SIV Program; (b) SBAM knew each of those matters; (c) SBAM provided the majority of the relevant documents to her in English; and (d) SBAM otherwise took no steps to explain to her the matters that were set out in the English documents as provided. 1027 Particular reliance is also placed on s 12CC(1)(c) of the ASIC Act- whether the recipient was able to understand any documents relating to the supply of financial services and s 12CC(1)(i)(ii)-any unreasonable failure to disclose risks. 1028 Conformably with the pleaded matters, Ms Bennett commenced her written submissions with the overarching theme: Salter Brothers5 was well aware that Chinese investors did not speak (or read) English as a first language, and was well aware of the risk that would come from variable translations of documents. Indeed, this trial itself demonstrated the uncertainties created by language barriers. Salter Brothers could have provided a translated version of the IMs, but chose not to because English was the language that Salter Brothers itself understood. It was aware of the risk of misunderstanding arising from translations, and it chose to shift the burden of obtaining that translation to its investors. It did so because it was more convenient and beneficial to it. These are matters of calculation in an already asymmetrical investment relationship. The barriers to completely understanding the nature of the investment and in particular the barriers around redemption were matters which, together with the misleading and deceptive conduct, created an unfairness which rendered the investment unconscionable. 1029 It is not said that Salter Brothers acted dishonestly, engaged in trickery, or sharp practice, that the conduct was predatory, or caused unjust enrichment or that it acted in bad faith, which are some of the matters identified by Allsop CJ in Paciocco at [296]. 1030 Ms Bennett, in summary, correctly submits that the statute is concerned with conduct that is so far outside of the societal norms of acceptable commercial behaviour as to warrant condemnation. The analysis is not approached in a confined or technical manner and requires consideration of each relevant circumstance, is not limited by the list of non-exhaustive factors at s 12CC(1) and involves an evaluative assessment. Matters relevant to a determination of misleading or deceptive conduct are also relevant to a finding of unconscionable conduct, but such findings are not preconditions. 1031 The following matters were developed in submissions. The first is the contention that the SIV funds were structurally unfair in that it was represented through the IM Representations and the WeChat Representations that Fund K and Fund L would be managed by a third-party manager which would ensure investment in the most attractive investments and that each investment would be professionally considered and assessed according to a structured process. An aspect of this submission is more general. The making of the WeChat Representations and the use of an Information Memorandum that contained the IM Representations, that were relevantly misleading or deceptive as relevant to the overall assessment due to the overlap between unconscionable and misleading conduct. 1032 The second is the inability of Jingyi Li and Jun Chen to read or comprehend English. Illiteracy and language comprehension difficulty is an indicia of unconscionable conduct. SBAM understood English was not the first language of persons within the class of investors of which Jingyi Li formed part and as such were unlikely to be able to read or comprehend a document as complex as an Information Memorandum. The SIV funds were specifically developed for Chinese residents who intended to participate in the SIV Program. Referral agreements were entered into with China based corporations to that end. Paul Salter gave evidence that approximately 85% of all investors in the SIV Program were Chinese and that he was aware that they did not, as a rule, speak English as their first language. Despite these matters, the Information Memoranda were not translated. Procuring translations would not have been complicated or time-consuming for SBAM. The submission extends to a contention that SBAM owed "obligations to its investors to ensure they understood what they were investing in" and therefore "should have been concerned with what its investors could understand". 1033 Mandarin translations of some documents were provided by SBAM. Whether or not Jingyi Li and Jun Chen could have obtained a translation or independent advice is not to the point: SBAM failed to comply with its obligations to investors, and thereby took unconscionable advantage of Jingyi Li. 1034 The third is that Jingyi Li and Jun Chen were not sophisticated investors when it came to the Australian market, that Jingyi Li had no investment experience and was financially naïve as to such matters and to the extent that Jun Chen had investment experience, it was confined to the Chinese market which operates in a distinctly different financial and legal system. 1035 The fourth is that a class of investors of which Jingyi Li formed part was focused on obtaining permanent residency, not the making of financial gains. The primary motivation was to obtain permanent residency in Australia and to start a new life. Each successful applicant was required to make a complying investment as the price of the grant of a visa. As such, deriving financial gain was a bonus and not the reason for the transaction. This placed Jingyi Li in a position of vulnerability and weakness, which was known to SBAM. Thus, by not ensuring that investors were aware of the true position in relation to Fund K and Fund L (that their primary investment was in the Hotel Group, and was illiquid), SBAM took unconscientious advantage of this class of investors, and in particular Jingyi Li. The last point was taken somewhat further in oral submissions when the funds were characterised as "feeder funds into the Salter Brothers' own family companies and ultimately for their benefit" (T 1641). 1036 Mr Peters submits that aspects of these contentions fall outside the pleaded case. His submission commences with the pleading structure which is divided into sections A-G. Section G first pleads at [66A] that the IM Representations were misleading or deceptive because they were contrary to four facts. Separately, at [66B], the pleading is that the WeChat Representations were misleading or deceptive because an investment in Fund K and Fund L was not available for redemption upon notice from the investor after two years. Paragraph [67] addresses causation and [67A] pleads "by reason of the foregoing" SBAM breached s 12DA of the ASIC Act or 1041H of the Corporations Act. 1037 The introductory phrase "by reason of the foregoing" next appears at [67B] to introduce the contention that the conduct "was unconscionable, including because…" of four enumerated matters being a special disadvantage due to inability to fluently read or converse in the English language, that such was known or ought reasonably to have been known to SBAM, the documents were mostly provided in English and no steps were taken to explain documents provided in English. This pleading is linked to the misleading conduct constituted by the IM representations and the WeChat Representations. 1038 The submission is that the structure of the unconscionable conduct pleading is confined to the contended special disadvantage, knowledge or constructive knowledge of SBAM and the provision of documents in English without taking steps to explain the content. There is no pleading at [67B], which is concerned with the integers of the unconscionable conduct, about any broader case that extends to structural unfairness, or the implied assumption embedded in the obligation that is said to have been owed to the investors in the second submission of Ms Bennett. 1039 Jingyi Li was obliged to specify the conduct that she contends was unconscionable to the level identified by Gleeson J in Productivity Partners at [313] when addressing the indistinguishable provision at s 21(1) of the ACL: To prove a contravention of s 21(1), the plaintiff must identify: (1) relevant conduct; (2) why the conduct is properly characterised as unconscionable; and (3) the factual circumstances in which the conduct occurred that bear upon its characterisation as unconscionable. 1040 Chief Justice Gageler and Jagot J at [59] referred with approval to the reasoning of the Full Court in the appeal which emphasised the obligation of the parties to define the issues at the trial by identification of matters relevant to a contention of unconscionable conduct: Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2023] FCAFC 54; (2023) 297 FCR 180 at [218], Wigney and O'Bryan JJ. 1041 Jingyi Li did not put in issue in her pleading any matter of structural unfairness or assumption of an obligation extending beyond the four facts pleaded at [67B], which appear after "by reason of the foregoing". Whilst within that pleading there is a contention that the conduct of SBAM was unconscionable "including because", that does not open a pathway for Jingyi Li to contended for the first time in closing submissions that other matters are relevant to the assessment. Moreover, Mr Peters submitted without objection that particulars were requested of this pleading, but none were provided. In my view the pleading failed to identify the structural unfairness and the assumption of obligation as components of the conduct to be relied upon and failed to identify the factual circumstances which were said to establish the unconscionable conduct contention. Those contentions are not in issue. 1042 Further, the "feeder funds" submission only emerged in oral closing submissions, without notice and any supporting pleading. It is not in issue. 1043 However, I do not accept the further submission of Mr Peters that if I reject the misleading conduct case, the "unconscionable conduct case falls away". In my view Ms Bennett is correct to submit that the boundaries of misleading conduct may overlap, but it does not follow that a finding of unconscionable conduct is not able to be made when a misleading conduct claim arising from the same facts fails. The provisions set different standards of normative conduct and the list of relevant matters at s 12CC is not so constrained. Thus, it is relevant that I have concluded that the IM Representation case is made out to the extent of the Conflict Representation, although by itself it is insufficient to support a finding of unconscionable conduct. The facts must support an overall conclusion that the conduct of SBAM was outside the relevant societal norm: Productivity Partners at [60], Gageler CJ, Jagot J. 1044 That leaves as the first matter for consideration that Jingyi Li and Jun Chen were not fluent in English in August 2016 or February 2019, which is common ground. A matter that is obviously relevant to the overall assessment is that the Information Memoranda were in English, and no translation was provided. I accept that their level of English fluency prevented them from reading the September 2015 Information Memorandum. From that premise, Ms Bennett submits that this is a well-established indicia of special disadvantage in equity: Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 at [466], Mason J; [474-475], Deane J. It is a matter to which the Court may have regard at s 12CC(1)(c) of the ASIC Act. Of course, by itself that was insufficient in Amadio. The range of factors which led the Court to uphold the orders made to set aside the mortgage by guarantee included age, financial illiteracy, the manner in which the guarantee of the elderly parents for the debt of the son was procured, the gross inequality of bargaining power between the bank and the guarantors and the history of default by the creditor. Together, these factors all contributed to the overall conclusion that the bank took unfair or unconscientious use of its superior bargaining power: for example Mason J at 461-464. 1045 Correctly, Ms Bennett did not submit that limited English fluency is sufficient in this case. Her submissions are anchored by the following facts that I am satisfied are established by the evidence. First, SBAM was aware that English was not the first language of persons in the class of investors intended to be recipients of the September 2015 Information Memorandum and they were unlikely to be able to read and comprehend the document which was lengthy (almost 100 pages) and which dealt with technical matters. 1046 Second, SBAM entered into referral arrangements with China based immigration agents for the purpose of attracting prospective SIV applicants to invest in their funds. There were promotional events in China, some of which Paul Salter attended personally. And, as he accepted in cross-examination, China was identified as "an important investment target", 85% of the investors in the SIV Program were Chinese and he knew that most were not fluent in English. 1047 Third, SBAM could have taken steps to translate the Information Memoranda into Mandarin. It chose not to so that it "could be sure of the content". 1048 Fourth, there was a burden involved in procuring a Mandarin translation of the Information Memoranda, but it was one that SBAM was able to bear. No assessment was undertaken as to whether the class of potential investors have the capacity to have the document translated. Paul Salter accepted that his company should make it "as easy as possible for investors to understand" but this did not extend to providing translated documents "within the bounds of what we were prepared to do". 1049 From those facts Ms Bennett submits that the conduct of SBAM fell short of the societal norm of acceptable commercial behaviour because some documents were provided to potential investors in Mandarin, there is evidence that other fund managers provided Investment Memoranda in Mandarin and some complaints had been received from investors that Information Memoranda had not been provided in Mandarin. The evidence about complaints is contained in a complaints register for the period 1 February 2022 until 15 May 2024 (CB 29363 and the referenced Excel document) and as such does not assist the submission that complaints at an earlier date should have been considered before distributing English versions of the Information Memoranda in question. 1050 In further developing the English fluency disparity, Ms Bennett submits that the decision not to provide copies of Mandarin translated documents for all relevant material was a deliberate choice despite targeting prospective investors in a foreign country where English is not the native language. The documents provided were complex and it is no answer that the prospective investors were able to procure translations, there being no assurance that the translations would be accurate. In that way, SBAM shifted the risk of mistranslation to the investors who were considering life-changing decisions and who were primarily focused on obtaining a visa subject to a limited time frame to make a complying investment and who were not familiar with Australian investments. 1051 Mr Peters submits that if one or more of the aspects of misleading conduct are made out, it does not follow that SBAM also engaged in unconscionable conduct. Jingyi Li identifies as her special disadvantages that she was not fluent in English and that she wished to obtain permanent residency pursuant to the SIV Program. The first point is in his submission answered by reference to the ability that Jingyi Li and Jun Chen had to procure translations of all relevant documents. That submission is consistent with the evidence. Jingyi Li accepted in cross-examination, and by reference to the agency agreement that she entered with Austar Suzhou, that for the payment of an additional fee, she could also have engaged her agent to have documents translated. She also agreed that after she migrated to Australia, she could have engaged someone to provide a translation service. 1052 When similar questions were put to Jun Chen, he gave evidence to the same effect and went further. He said that Austar Suzhou told "us" that they were able to engage an agent to translate any material required for the visa application. In cross-examination it was demonstrated that the application form was able to be translated by the interpreter in a short period. Conduct is not unconscionable because SBAM did not take a step that Jingyi Li and Jun Chen could easily have taken themselves: Atlas Advisors at [237], Black J. 1053 As to the second point, Mr Peters submits that being an applicant for an SIV cannot give rise to relevant special disadvantage. 1054 The third submission of Ms Bennett is that Jingyi Li and Jun Chen were not sophisticated investors in the Australian financial market. Jingyi Li had no relevant experience and entirely relied on the judgment of Jun Chen. The reliance by SBAM on the financial literacy of Jun Chen is misplaced as it ignores that he had no relevant experience in foreign investment markets. 1055 In contrast, Mr Peters emphasises the very considerable investment experience, talent and judgment of Jun Chen. Conformably with my earlier findings, he was in August 2016 and in February 2019 a very shrewd and successful investor with a large appetite for financial risk who well understood the risk/return calculus. His risk taking had accumulated very considerable wealth for his family. The detailed questions that he asked Natalie Liao in the WeChat exchanges is evidence of careful study by him of the proposed investments in Fund K and Fund L, which he accepted were considered by him in order to achieve a higher return than the investment in Fund C. It is common ground that Jingyi Li was an unsophisticated investor who relied on the assessments made by her husband. 1056 The fourth submission of Ms Bennett is a variation of the second part of her first submission. Jingyi Li proposed her investments for the purpose of obtaining permanent residency, and not for financial gain. It is not controversial that this class of investors sought to "start a new life" in Australia. The submission continues that the SIV Program provided a faster route to permanent residency in Australia that otherwise was a "relatively difficult and prolonged exercise" and for that reason the making of a complying investment was of attraction to those financially able to participate in the program. As such the prospect of future financial gain is properly characterised as a "bonus" rather than the primary reason for the investment. On that submission, the SIV investors "were in a position of vulnerability and weakness vis-à-vis the fund managers of complying investments". 1057 From that premise, Ms Bennett developed the following written submissions: Is it therefore unsurprising that such investors, including the Plaintiff, entered into the relevant investments without ensuring that they could read and comprehend the relevant fund documents, and instead relied on what they were told by their immigration agent and the fund manager's staff. That the Defendant knew that the relevant investors' primary motivation for investing in the SIV funds was to obtain permanent residency was acknowledged by each of Paul Salter, Mr Fan, Ms Liao and Hannah Zhu in relation to their knowledge that the four-year investment horizon in respect of the relevant investments tracked directly to the requirement to hold a complying investment for a period of four-years in order to obtain a visa. Accordingly, the Defendant's conduct in not ensuring that investors knew of the true position of the SIV K and L Funds, being that their primary investment was in the SBHG, their illiquidity and long-term investment horizon, making it almost impossible to redeem after four-years, in the circumstances described directly above, resulted in [SBAM] taking unconscientious advantage of the class of investors such as [Jingyi Li]. 1058 Mr Peters accepts that the decision to migrate to Australia was a life-changing event for Jingyi Li and her family, but that is "all the more reason" to take the simple step of having the documents translated and in any event there is no basis to conclude that being a wealthy Chinese citizen with an intention to migrate to Australia placed Jingyi Li in any position of disadvantage and liable to exploitation by the conduct of SBAM. G. 7.2 Consideration 1059 Section 12CC of the ASIC Act is a non-exhaustive list of matters that may be considered for the purpose of determining whether SBAM contravened s 12CB as alleged. The pleaded case and the submissions of Ms Bennett that I have summarised serve to limit the scope of the inquiry. Or, as put by Ms Bennett, the factors that have been identified "largely mirror" the relevant considerations from s 12CC. No single factor is determinative, including the overarching submission of SBAM to the effect Jingyi Li and Jun Chen were wealthy Chinese citizens, quite capable of procuring translations of relevant documents and Jun Chen was a very sophisticated investor. 1060 What is the normative standard of acceptable commercial behaviour in this case? 1061 The Victorian Department of State Development, Business and Innovation nomination and appointment of agent form that Jingyi Li signed on 7 April 2015, is in English. Parts of it have been overwritten in Mandarin and I have found that an individual within Austar Suzhou was responsible for the partial translation. The letter from the Department dated 9 August 2016 is in English. Jingyi Li received it from Austar Suzhou without a translation. In her affidavit, Jingyi Li said that Austar Suzhou informed her of the receipt of the offer, she was not able to read the document and "it was not translated for me". She gave further evidence that her usual practice, upon receipt of the document in English, was to print it out and if it was sufficiently short, use an electronic and hard copy dictionary to "work out the meaning of words". She did not go so far as to say that she implemented that practice upon receipt of the letter of 9 August 2016. In cross-examination she said that her English was "limited" in August 2016, that she could not read the letter and when asked whether she was aware that it required her to do certain things, answered: "Austar told me" (T 342). I infer from that evidence that an unidentified person from Austar either translated the letter for Jingyi Li or informed her of its substance. 1062 What emerges from this is that two departments of the executive branches of the Victorian and Commonwealth Governments did not provide Mandarin translations of documents central to participation by prospective investors in the SIV Program, where the inference which is open and which I draw is that each had the resources and capacity to provide Mandarin translations, must have been aware that a significant proportion of the intended class of recipients were not fluent in English, but nonetheless left it to the potential investors to obtain their own translations. 1063 From August 2016, Jingyi Li received a mix of formal or fund promotional material documents in Mandarin and English, some of which related to Atlas Capital products. In summary: (a) The Atlas Capital Hotel Investment Opportunities document of August 2015 in Mandarin, which was attached to the Dulcie Du email of 15 August 2016. There was also attached an iProsperity investment summary in Mandarin; (b) The Atlas Capital overview for Fund C and Fund D and the overview of five hotels as acquired by the Hotel Group which was attached to the email from Dulcie Du of 28 August 2016. This email also attached in English the Atlas Capital September 2015 Information Memorandum, a BT Investment Management SIV Australian Fixed Income Fund Information Memorandum dated 22 December 2015 in English and an iProsperity Park Regis summary document in Mandarin; (c) On 30 August 2016, a further copy of the Atlas Capital September 2015 Information Memorandum in English attached to an email from Dulcie Du; (d) On 28 September 2016, the letter from the Australian Government, in English notifying the grant of the Subclass 188 Visa; (e) On 19 April 2017, as attachments to an email from Kevin Fan, five Atlas Capital or Hotel Group documents partly in English and partly in Mandarin. The documents in English comprised background material concerning the terms of the trust deeds for funds A-G and I-K, the SB&G USA Bond Fund, SB&G Hotel group and the BKLN Autograph Investment Memorandum for a hotel in Brooklyn New York. The documents in Mandarin, some of which replicated documents in English, comprised fund reports for Fund K and a Hotel Group Update; (f) On 31 July 2018, as an attachment to the email from Cathy Zhang a holding statement as at 30 June 2021 in English, a fund report dated 30 June 2021 in English for Fund L, a fund report dated 30 June 2021 in Mandarin for Fund L, a fund report dated 30 June 2021 in English for Fund K and a fund report dated 30 June 2021 in Mandarin for Fund K; (g) On 11 September 2018 as part of the WeChat exchanges, an Atlas Capital complying SIV deck in Mandarin and a Fund L report dated September 2018 in Mandarin and English; and (h) In or about December 2018, an Austar Selective Mortgage Trust Information Memorandum dated 21 September 2018 in English. 1064 Each application form signed by Jingyi Li in August 2016 and February 2019 was in English. Ms Bennett also refers to a document that is attached to the affidavit of Zheng Xu and which Dulcie Du provided in October 2016. It is an Information Memorandum for the VIMG Property Fund dated 1 February 2016 (CB 10276). Portions of that document are in English and Mandarin. The summary for redemptions is in each language to the effect that the trust is open-ended, with no prospect of redemption during the lock-in period (four-years) and thereafter investors have the right to apply to redeem by giving no less than 30 days written notice. Section 7, which deals with the risk factors, is in English and Mandarin. 1065 This document survey reveals that there was not at the relevant time (August 2016 – February 2019) a normative standard of commercial behaviour to the effect that important documents relating to the SIV Program, intended to provide information and details about complying investments, were provided in the native language of the intended class of investors. One fund operator (VIMG) provided an Information Memorandum in February 2016 with significant portions in English and Mandarin. There is no evidence as to why that was done or whether the Trustee of that fund was aware that potential investors were not fluent in English and/or did not have the capacity to obtain translations. 1066 Another fund operator (Austar) prepared an Information Memorandum in September 2018 in English. There is no evidence as to why that was done, as to the knowledge of the Trustee or the capacity to provide a Mandarin translation. Whilst the intended class of recipients of the Atlas Capital Information Memoranda were not fluent in English, (and as I have found Atlas Capital was aware of that fact), the evidence of what was done by two other fund trustees does not establish any general standard of commercial behaviour to the effect that important documents relating to complying investments were provided in the native language of the intended class of recipients. 1067 Of course, that is not determinative. Salter Brothers prepared and issued promotional (sales) material in Mandarin, knowing that approximately 85% of their investors in complying investments were Chinese with limited or no fluency in English. The explanation as to why the central document, the Information Memoranda and accompanying application form, were not translated "within the bounds of what we were prepared to do" is unsatisfactory. No fiscal or practical reason emerged in the evidence as to why translations were not prepared, save for a concern that the translation may not be accurate. Accuracy is something that was able to be ensured if Salter Brothers had engaged its own reputable translation service. There is some force therefore in Ms Bennett's submission that Salter Brothers transferred the burden of translation to the individual investors within the targeted class. 1068 However, this class was not vulnerable. It comprised comparatively wealthy Chinese citizens who were contemplating or had decided to make the life-changing decision to migrate to Australia. For that purpose, China based agents were engaged to assist. The fee paid to the agent expressly did not include translation services. Austar Suzhou offered to have documents translated for an additional fee, and some degree of translation was undertaken for the price of the service that Jingyi Li and Jun Chen did choose. 1069 Jingyi Li had no difficulty in approaching Austar Suzhou to either translate for her the letter from the Department of 9 August 2016, or at least to summarise its essential aspects. There is no question that Jingyi Li and Jun Chen had the financial capacity to engage a competent translator so that they could understand the terms on which they were contemplating the making of a very substantial financial investment and as a necessary condition to the grant of the 188 Visa. A prudent prospective investor in their circumstances would have taken that course. It is not to the point that Jun Chen was not a sophisticated investor in the Australian markets or in the products the subject of the fund summaries that were provided in Mandarin. That is more reason to take simple steps to inform himself of the investment terms. In any event, there is no evidence to the effect that the risk/return ratio is different between Chinese and Australian assets. 1070 Moreover, as the WeChat exchanges reveal, Jun Chen studied the information that was provided on 11 September 2018 in detail before engaging in a lengthy discourse with Natalie Liao. Despite the care and obvious attention that he focused upon his consideration of switching the investment from Fund C to Fund K and Fund L, he did not proceed similarly by ensuring that he was informed as to the terms upon which the putative investments would be subject. Jingyi Li and Jun Chen, through their employment and management experience, were aware of what it means to enter into a contract. Jingyi Li accepted that she was aware that when she signed each application form she was entering into a contract and that she was obliged to abide by the contractual terms. 1071 The opportunity and ability to engage independent advice extended to independent financial and accounting advice. There was no economic or practical impediment which prevented Jingyi Li and Jun Chen from doing so. I reject the contention that because there was a period of 28 days to respond to the Australian Government invitation of 9 August 2016, including the taking of the steps of selecting and making application for a complying investment and providing evidence thereof, that it represented some form of practical barrier that prevented Jingyi Li and Jun Chen from seeking a translation of the core documents or from obtaining independent financial or accounting advice. No evidence was given as to why those steps could not have been taken within the 28-day period or, why if that were so, an extension of time could not have been applied for by contacting the nominated processing officer as identified in the invitation. 1072 Justice Black in Atlas Advisors considered an unconscionable conduct claim that has some factual similarity to the present. Three plaintiffs brought proceedings relating to an investment in a managed fund promoted by the respondent as the holder of an AFSL. Various claims were framed in misleading or deceptive conduct and for one plaintiff (Ms Xue) for unconscionable conduct in connection with financial services contrary to s 12CB of the ASIC Act. His Honour proceeded on the basis that the provision does not require "that there necessarily be some form of pre-existing disability, vulnerability or disadvantage of which advantage was taken, in order to establish unconscionability…" at [228]. Ms Xue was an experienced Chinese businesswoman before she migrated to Australia. She had development and investment experience, a good understanding of commercial matters and had made investments in Australia. From time to time, she engaged advisors to assist her. Her understanding of English was limited. 1073 His Honour rejected the unconscionable conduct claim, reasoning at [237] – [238]: It seems to me that the Plaintiffs' case that Ms Xue was under any relevant disability or vulnerability to Atlas was not established. Ms Xue was and is plainly an intelligent and sophisticated businessperson, and it was not relevantly a disability or vulnerability that Mandarin was her first language, as it is the first language of many successful Chinese businesspersons trading with or living in Australia on a temporary or permanent basis. It was also not relevantly a disability or vulnerability that she had the ability to use Atlas staff to perform administrative and other tasks for her that she could have performed for herself. The evidence established that Ms Xue made extensive use of Ms Zhuang's and Ms Wang's services, but did not establish any vulnerability on her part, beyond the fact that she would need translation assistance with written documents or oral communications of any complexity in English. She accepted in cross-examination that she knew how to obtain such assistance and had used it from time to time. That did not give rise to any disability in her written and oral dealings with Atlas which were largely in Mandarin and where she had the capacity to obtain a translation of documents such as the Information Memorandum if she wished to do so. It seems to me that the Plaintiffs' wider unconscionability claim is also not established. The Plaintiffs have failed to establish misleading and deceptive conduct on the part of Atlas or knowing involvement in that conduct on the part of Ms Zhuang, and I have found that Atlas provided an Information Memorandum which included substantial risk disclosure, although neither Atlas nor Ms Xue sought to translate it from English to Mandarin and Ms Xue did not read it. The bargaining strengths of the parties were not unequal, because Ms Xue was an experienced businesswoman, and, as I have noted above, to be Mandarin speaking is not generally or in the relevant circumstances a matter of disadvantage; Ms Xue had the capacity to understand the materials provided to her, including the Information Memorandum, by either asking Atlas to translate it for her if it wished to obtain an investment of $4.8 million from her associated entities, or that she use a software program or a third party service which she had used in other matters to translate it for herself; even if, contrary to view that I have formed, misleading conduct had been established by reference to the Plaintiffs' pleaded case, it did not rise to the level of unconscionable conduct. It does not seem to me that this result could come as any particular surprise, where the conduct of Atlas and Ms Zhuang in this case falls well short of that addressed, for example, by the High Court in Kobelt, which the majority found was not unconscionable. 1074 That analysis, though very useful and with which I agree, cannot detract from my consideration of all the relevant circumstances in this case. Here an aspect of the pleaded case is that Jingyi Li was under a special disadvantage vis-à-vis Salter Brothers because she was not fluent in the English language. Necessarily that pleading must extend to Jun Chen. Correspondingly however, Jingyi Li and Jun Chen were not under any disadvantage, and therefore were not in some way vulnerable, because they were not able to have relevant documents provided to them in English translated to make a properly considered decision to invest in the Atlas Capital funds in August 2016 or to switch that investment in February 2019. 1075 There is much force in the submission made by Mr Peters that the making of a complying investment of $5 million in life-changing circumstances is more reason to proceed prudently and to ensure, by securing necessary translations of documents, that the terms of the investment were comprehended. They were sophisticated and comparatively wealthy Chinese citizens who were able to make the informed choice as to what complying investment they would make to satisfy the requirements of the grant of the 188 Visa. Jun Chen was a knowledgeable, experienced and shrewd investor who was well placed to assess investment risks and the corresponding terms of the proposed investments. 1076 I reject the contention that Jingyi Li and Jun Chen were under a special disadvantage because Jingyi Li wished to obtain permanent residency in Australia pursuant to the SIV Program. That was a matter of personal choice, one available only to persons of considerable wealth by comparison with other Chinese citizens. The accumulated wealth of Jingyi Li and Jun Chen by reason of their financial capacity, management ability and risk-taking conferred the advantage of being able to participate in the SIV Program, and to do so by being fully informed as to all aspects of it, including the terms on which an investment may be made with Atlas Capital. 1077 The misleading conduct that I have concluded was engaged in, the Conflict Representation made in the September 2015 Information Memorandum, does not assist the unconscionable conduct case. That representation was not relied on and, in any event, when the presently relevant investment decision was made to switch funds in February 2019, the fact that Fund K and Fund L would invest in the Hotel Group had been disclosed. Further, as to the facts relied on as establishing the making of the WeChat Representations, even though I have concluded that these aspects of the misleading or deceptive conduct claims are not made out, I consider the underlying facts as relevant parts of the overall circumstances that are within the pleaded unconscionable conduct because of the manner in which paragraph 67B of the Further Amended Narrative Statement of Facts and Explanation is framed. In summary, that the investor had a unilateral right to redeem after two years and there was no need to fix a further investment period in Fund L upon redemption. 1078 Ultimately, the fact of the making of those representations does not assist the unconscionable conduct case for two reasons. One, the lack of English fluency special disadvantage (coupled with actual or imputed knowledge of that fact) is not relevant to the WeChat exchange in Mandarin. The other, is that Jun Chen was aware prior to the making of the switch of investment in February 2019, that redemptions were not assured on maturity if the funds were not liquid and that the IPO was the plan to create sufficient liquidity to meet all redemption requests. He also knew that the timing of the IPO was uncertain. 1079 I have considered the list of matters at s 12CC of the ASIC Act as a guide as to the content of the statutory norm of acceptable commercial conduct to the extent relevant to the way the case of Jingyi Li has been pleaded and argued. The submissions of Ms Bennett reference only the comprehensibility of the documents provided and the extent to which matters were unreasonably not disclosed: s 12CC(1)(c) and (i). I have addressed in detail the former. The latter is concerned with the extent to which Salter Brothers unreasonably failed to disclose to Jingyi Li and Jun Chen any intended conduct that might affect their interests and any risks to them arising from its intended conduct, being risks that it should have foreseen would not be apparent to them. 1080 The pleaded unconscionable conduct case does not clearly identify a failure to disclose. Obliquely, it might be said that it emerges from an earlier pleading at [56(d)] that Jingyi Li "was not aware of any limitation, restriction or material risk to her ability to redeem her investment in [Fund K or Fund L] at the expiry of the remaining two-year period required under the SIV Program". Even if one proceeds on that expansive view of the unconscionable conduct case, the 1 September 2015 Information Memorandum addressed the investment risks in some detail and the application form included an express warning that the Information Memorandum must be read before completing and signing an application for investment together with an express declaration that the applicant had read the document, agreed to be bound by it and the terms as set out in the relevant fund trust deed. Jingyi Li and Jun Chen had the ability and capacity to have those documents translated. Had they done so, they would have been appraised of each of the risks which Jingyi Li now contends were unconscionably not disclosed. 1081 Considering all these matters together, I am not satisfied that Jingyi Li has established that the conduct she relies on warrants the serious finding that it was outside societal norms of acceptable commercial behaviour as offensive to conscience: Productivity Partners at [60]. G. 8 Damages and other relief G. 8.1 What is the claim? 1082 Jingyi Li claims declaratory relief, damages pursuant to s 1041I of the Corporations Act or 12GF of the ASIC Act, a refund pursuant to s 12GM, interest and unspecified further or other orders. 1083 She particularised her damages claim on 15 April 2024. On the counterfactual that the $5 million investment would have been retained in Fund C from 18 February 2019, Jingyi Li calculates the claim as: Item Description Amount A Amount that would have been received on redemption in September 2020 $4,928,599 B Less distributions from Fund K to December 2019 ($71,098) C Less distributions from Fund L to December 2019 ($86,047) D Plus distributions that would have been received by remaining in Fund C $167,067 E Less current value of units in Fund K and Fund L $0 F Total $4,939,521 1084 A similar calculation is undertaken for the alternative counterfactual: if Jingyi Li had known the true situation in Fund K and Fund L after February 2019, in which case she would have requested in or around September 2020, that the investments be re-transferred to Fund C. The calculation produces the same quantum of $4,938,528. A further alternative is particularised on the assumption that the redemption request would have been made "in the months or years" after February 2019. 1085 Ms Bennett in her written opening submission put the case on the basis that the appropriate measure of loss is the difference between the amount invested and the real value of Jingyi Li's units at time of the trial: HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640 at [34] – [40]. The real value of the unit holdings in Fund K and Fund L is nil "because an investor would have ascribed no value to them" on the basis that they were structured so as to "funnel" funds into the Salter Brothers Group. Further, each fund was at all material times illiquid with any prospect of liquidity dependent upon an IPO for the Hotel Group and Property Opportunity Fund, which listing was not expected to occur until 30 June 2024 at the earliest. It was also submitted that the units "continue to have no real value, due to the intrinsic nature of the units themselves: their structure, content, and the convoluted and uncertain pathway towards any opportunity to realise value": Bathurst at [969] – [971]. 1086 Ms Bennett further submits that "even if intervening events did occur and the units therefore had some value at the date of acquisition, the entire amount of the loss is still recoverable due to the fact that [Jingyi Li] is effectively locked into her investment in the sense that it is not practically possible to dispose of the units". The proposition is said to be established by the fact that SBAM has refused all requests to redeem Jingyi Li's units (because there is insufficient liquidity in the funds), there is no market for the sale of the units on the secondary market and no distributions have been paid to investors in either fund since 31 December 2019. 1087 In the alternative it is submitted that "if some value is ascribed to the units", then Jingyi Li is willing to transfer or surrender all her units in Fund K and Fund L to SBAM, and in return receive a refund "of the initial investment" by utilisation of the powers at s 12GM of the ASIC Act. 1088 In oral opening submissions, I raised with Ms Bennett whether, upon the making of a successful redemption request, Jingyi Li would only have been entitled to receive a payment for her units calculated in accordance with the trust deeds, and at the then prevailing unit price. Ms Bennett accepted that was so, for an award of damages but not if there were to be refund order in exchange for a surrender of units. 1089 In written closing submissions, Ms Bennett framed an alternative damages calculation. Jingyi Li maintains that the value of the units is nil and that her damages should be calculated in accordance with the particulars that I have summarised. Even if it be the case that the value of the units has declined due to the impact of the COVID-19 Pandemic (an event beyond the control of Salter Brothers), the claim is unaffected because the units in Fund K and Fund L had no real value as at the date they were acquired for the reasons summarised in the opening submission. 1090 Alternatively, however, if that case is rejected Jingyi Li claims damages calculated by reference to the value of the units as at the date of the trial and in accordance with the expert evidence of Dawna Wright. In answer to the submission of Mr Peters that Jingyi Li is bound to her particularised case, Ms Bennett submits in her written case: [Jingyi Li] does press those particulars as the primary claim. However, if the Court is satisfied that there was misleading or deceptive conduct, or unconscionable conduct, then the Court ought not close its eyes to the evidence before it which quantifies that loss. Indeed, to do so would defeat consumer protection aims of the legislative scheme. Any objection to reliance upon Dawna Wright's calculation could only be premised upon surprise. There can be no such surprise when the evidence was put forward by the defendant itself. 1091 The steps in the argument are then: (a) Dawna Wright commences with the unit price for Fund K as at April 2024, derived from the market value for each of the underlying hotel assets as at 30 June 2023 in accordance with the evidence of Peter Hamilton; (b) There have been movements in the value of the hotel assets since June 2023. Dawna Wright was cross-examined by reference to a graphic representation of the value of the unit prices from April 2023 until May 2024. She accepted that her calculation, had it commenced with the value of the assets in May 2024, would have been from a lower starting point from which she would then have applied a discount; and (c) Thus, if it is found that the units have value, an alternative amount for damages is capable of being calculated in accordance with the methodology of Dawna Wright and adjusting for the May 2024 asset values. 1092 It is of course trite that if a court finds that an applicant has suffered some damage, the court must do the best that it can on the evidence to calculate a sum of money which provides fair compensation. So far, so good. From there however, the case of Jingyi Li entered new and uncharted territory. 1093 In oral submissions, Ms Bennett produced to me that which she described as a "road map" (T 1600): …And that has led me to loss and damage." And, in that sense, I'm just still going through the – this is just a road map but we've provided yesterday to our friends the updated particulars of loss and damage and I will hand up to your Honour now – these are not – when I say "updated", your Honour will have seen in our outline of submissions we maintain our initial claim for the loss and damages as we've articulated and is in the court book. We do, however, say that, if your Honour is against us about that, you're entitled to have regard to what Dawna Wright has said and we've done the maths and it's no more than the maths. So the evidence is identified and I will go through this in a moment. I'm just providing this document now but we say that your Honour is perfectly entitled to pick up a calculator and to do the maths demonstrating the loss and damage including from a different date, which is the later date which was the subject of the evidence. I'm sorry, your Honour, I've handed up all the copies. 1094 That document bears the title of proceeding 123 and 124. It did not find its way into the Court Book but was emailed to my associate. It comprises two pages. The front page has three tables. The first is a calculation of the unit prices "of the SIV Funds" as at 31 May 2024, less a deduction of 0.5% for the Sell Spread by reference to Table 17 in the Expert Report. The derived figure is $.8312. This is a calculation for Fund K. There is no calculation for Fund L. 1095 The second table is a calculation of the unit prices for Fund K as at 31 May 2024 for each of the redemption dates by reference to Table 22 in the Expert Report. For redemption date 2, the calculated price is $0.7398. 1096 The third is a mathematical calculation of the units held in Fund K at each redemption date. For redemption date 2 it is $2,202,955. 1097 On the second page there is a recalculation of the loss claimed. 1098 When Ms Bennett returned to this document, her submission was (T 1655): Now, we maintain our primary case. I do not resile from it for a moment. And I refer you on to our written submissions about them in opening and in closing. But if I'm wrong about that calculation and if I'm wrong that they are relevantly locked in in the way that term is used in the case, that does not mean there's no cause of action. It does not mean we were not misled. It's not necessary for me to show your Honour - - - HIS HONOUR: You say I've got to do the best I can on the evidence of value. MS BENNETT: Yes, and your Honour, the old – there's an old – your Honour would be well aware of the old comments, "Why should he listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate? With the light before him, why should he shut his eyes and grope in the dark?" Your Honour has evidence that loss has been suffered. It has come from the defendant. They're not surprised by it. Why can't we say, if your Honour is against us on our lock-in point or on the real value point as we've articulated it, then why can't we have the loss that our friends seek to establish? HIS HONOUR: I understand your submission. 1099 Unfortunately, what was not noticed at that time is that the calculations in the table are for the Zheng Xu proceeding. I make no criticism of Ms Bennett, as doubtless her submissions reflected the intense time pressure imposed on her instructing solicitor. I noticed that when drafting these reasons. I caused my associate to email the parties on 12 November 2014 seeking clarification whether updated calculations had been produced for the Jingyi Li proceeding. The multiple responses boil down to: (a) The calculation was not provided to the lawyers for Salter Brothers, but without any grant of leave, or consent, was attached to an email to my associate of 13 November 2024; (b) Salter Brothers do not consent to the use of the calculations; and (c) In a further email from my associate to the parties it was noted that absent a grant of leave the plaintiff could not rely on the calculations: Bale v Mills (2011) 81 NSWLR 498 at [54]-[60]; (d) No application for leave has been made. An explanation as to what occurred is set out in an affidavit from Matthew Critchley, one of the solicitors for Jingyi Li dated 5 December 2024. He is also the solicitor for Zheng Xu. Steps were not taken to prepare the alternative calculation until after the filing of Jingyi Li's closing submissions. Separate calculations were prepared for Jingyi Li and Zheng Xu. By inadvertence on 5 August 2024, only the finalised calculations in the Zheng Xu proceeding was emailed to the lawyers for the Salter Brothers parties. That error was repeated when only one document was emailed to my associate on 8 August 2024. The error went unnoticed until the email from my associate of 12 November 2024. 1100 I accept that the solicitor's error was not intentional. However, that does not address the more fundamental issues of fairness and compliance with the overarching purpose. No timely notice was given of the material change in position (albeit as an alternative) in the nil value contention. The Salter Brothers parties were deprived of any opportunity to engage Dawna Wright to consider the calculations. The finalised calculations were not put to her in cross-examination, although there was some cross-examination of a part of the underlying methodology. 1101 The extent of that cross-examination was as follows. Ms Bennett put questions to Dawna Wright and received answers to the effect that the discounts applied vary over time to reflect the time value of money, that the calculations vary if one applies the unit prices as at 31 May 2024 (rather than April 2024) and in doing so I admitted into evidence a graphic representation of the movement in unit prices for Fund K and Fund L between April 2023 and May 2024 (CB 29871-29872) (T 1446-1451). 1102 However, what was not put to Dawna Wright in documentary form is the outcome of making those adjustments by recalculating the particulars of loss. Mr Peters was deprived of any opportunity of questioning Dawna Wright in re-examination by reference to the new claim, particularly of ascertaining whether the adjustments about which she was cross-examined, required further adjustments to her assumptions or the calculation of loss in the Expert Report. 1103 Moreover, the recalculated claims were not able to be considered before the filing of the written closing submissions of the Salter Brothers parties. The email with the calculations in the Zheng Xu proceeding was not sent to the lawyers for the Salter Brothers parties until 1.25 pm on 5 August 2024. Mr Peters concluded his closing oral submissions on 5 August 2024 at 4.15 pm. Plainly he did not have time to reflect on this document to provide any meaningful submission to me. The evolution of the updated alternative calculations was substantially unfair to the Salter Brothers parties and a material departure from the obligation of Jingyi Li to conduct her proceeding in a way that is consistent with the overarching purpose to facilitate the just resolution of this dispute. 1104 Accordingly, I have decided that I will not have regard to the updated calculations in this proceeding. 1105 But that is not the end of the matter. Ms Bennett also submits that the quantum of damages may be recalculated by reference to the evidence of Dawna Wright as at the assumed valuation date of 3 June 2024. On this alternative one substitutes for nil the present value figure in the particulars in the amount of $3,272,468 for redemption date 2 from Table 7 of the Expert Report (CB 22121). After further adjustments as applied by Dawna Wright (Table 8, CB 22121), the calculated loss is $1,631,636. 1106 In support of this alternative, Ms Bennett uncontroversially submits that the proper measure of loss is the amount which represents the prejudice or disadvantage suffered by Jingyi Li as a result of altering her position in reliance on the misleading conduct: Henville at [131] – [132]. The objective is to determine an amount of damages which fairly compensates Jingyi Li for the loss suffered, which often requires a flexible approach adapted to the particular circumstances: Wyzenbeek at [105]. Ms Bennett emphasises that this is a no transaction case where the objective of an award of damages is to place Jingyi Li into the position where, although she still holds the units the subject of the impugned transaction, she would have been in if the transaction had not occurred: Wyzenbeek at [108]. Damages are calculated on the same basis on the unconscionable conduct claim. 1107 Mr Peters objects to the alternative particularisation of the case. The recalculation is a fundamental departure from the nil value claim which was maintained right up until the point of closing submissions. I have set out when dealing with the Li Xu proceeding, the exchange with Mr Peters in closing submissions concerning the claim of prejudice. 1108 Jingyi Li had the same opportunity of delivering expert evidence as Li Xu, and the same criticisms apply to the late change of her case and for the same reasons as I have given, the claim of prejudice and the failure to deliver expert evidence are material considerations that weigh against permitting the case to be recast at a late stage. 1109 Each consideration is a weighty matter against allowing Jingyi Li to recast her damages claim, even in circumstances where no formal application has been made to amend. However, for broadly the same reasons as I have given in the Li Xu proceeding, they are not fatal. 1110 The total value of the units, and the unit prices, held in Fund K and Fund L is a matter of calculation and is set out in the evidence of Peter Hamilton at selected dates. The Salter Brothers parties prepared the case on the basis that the nil value contention was plainly wrong. Dawna Wright in the Expert Report undertakes her own calculations of Jingyi Li's loss as at each assumed redemption date. In the summary at Table 8 she compares her loss calculations with the particularised claim: 1111 In my view it could hardly have been a surprise to Salter Brothers, following receipt and delivery of the report of Dawna Wright, that if her evidence was accepted the nil value contention would be rejected. Indeed, at paragraph 7.3.6 of her report, Dawna Wright says: If the court finds the assumption that the units in SIV Fund K and L have $nil value to be incorrect, the loss calculated in the Jingyi Li Particulars would decrease by the value of those units. 1112 For the reasons that I have given in the Li Xu proceeding, it is open to consider the calculation of damages by attributing a value to the units in Fund K and Fund L. 1113 Otherwise, on the damages issue, Mr Peters adopts mutatis mutandis his submissions in the Li Xu proceeding. 1114 As to the surrender of units and refund claim, Ms Bennett submits that the broad power to make remedial orders at s 12GM of the ASIC Act, justifies, as an alternative to an award of damages, a refund of the invested amount, conditional upon surrender of Jingyi Li's units in Fund K and Fund L. Mr Peters adopts his submissions as to the same alternative claim in the Li Xu proceeding. G. 8.2 Consideration 1115 In summary, the evidence of Dawna Wright, which I accept and find according to is as follows. 1116 She made the following assumptions on the counterfactual case, had Jingyi Li known the true situation in Fund K and Fund L in February 2019 she would: (a) Have retained her investment of $5 million or 4,976,875 units in Fund C; (b) Not have transferred her investment to Fund K or Fund L; and (c) Have redeemed her investment in September 2020. 1117 Tables 46, 47 and 48 of the Expert Report summarise the detailed calculations of Dawna Wright for respectively: the calculated loss at each redemption date, detailed calculations for redemption date 1 and a comparison of Jingyi Li's particularised claim with the analysis of Dawna wright. Table 48 is identical to Table 8. 1118 A detailed explanation of how the loss calculations have been undertaken is in section 7 of the Expert Report. Dawna Wright took account of an assumed redemption of the total investment in Fund C in September 2020. 1119 For the reasons I have given in the Li Xu proceeding, I accept the explanation of Dawna Wright that the major difference between her opinions and the calculated loss of Jingyi Li is her disagreement that the units do not have any value. I also adopt each of my earlier findings, mutatis mutandis, about why I have accepted her evidence in the Li Xu proceeding concerning her adoption of the correct valuation standard, use of the DCF methodology, the appropriateness of adopting the unit prices as at 30 April 2024 from the audited financial accounts, the present value discount, her assumptions about each of the redemption dates and the alignment of her opinions and assumptions with the likelihood of an IPO for the Salter Brothers Hotel Group and the Property Opportunity Fund and whether the units have intrinsic value even if there is no current market for the sale of the units to an alternative investor. 1120 Accordingly, I find that the units held by Jingyi Li in Fund K and Fund L do have a current value, which varies depending upon the assumed redemption dates. 1121 I adopt my finding in the Li Xu proceeding that, conservatively, redemption requests by investors in Fund K and Fund L are likely to be satisfied no later than 31 March 2025. That is redemption date 2. On that basis, I find that the current combined value of the units in Fund K and Fund L is $3,272,468 by adoption of the unit prices as at April 2024 which in turn is taken from the determined value of the underlying hotel assets as at 30 June 2023. 1122 That is as far as I proceed. As with the Li Xu proceeding, I have found against Jingyi Li on her causation case and as such it is not appropriate that I engage in the speculative analysis of determining what amount I would have awarded by way of damages on one or more of her counterfactuals. G. 8.3 The failure to take reasonable care defence G. 8.3.1 Submissions 1123 The section 12DB ASIC Act issue does not arise in this proceeding as no damages claim is made pursuant to s 12DB. 1124 SBAM relies on the following facts which I have found: Jingyi Li was aware that risk was involved in the making of the relevant investments, including the loss of income and capital, and that to earn a higher return involved a greater risk. Jun Chen was most certainly aware of investment risk, the risk/return ratio and knew between 2016 and 2020 that any investment in a Salter Brothers fund could only be redeemed if liquidity permitted. He was also aware that when the switch decision was made a redemption request would not be able to be met if the fund was insufficiently liquid at the time. 1125 Jingyi Li was aware that when she signed a document, she accepted an obligation to be bound by its terms. She knew that to be the case when she signed the application forms to make the switch of investments in February 2019. 1126 There was no economic or practical reason that prevented Jingyi Li or Jun Chen from obtaining independent financial advice as to the terms of the proposed investments or from obtaining Mandarin translations of documents provided in English. Although the letter from the Department imposed a 28-day time period for a response, that was not in the circumstances an unreasonable time pressure point and, in any event, it was open to apply for an extension. 1127 Jingyi Li failed to read relevant material that was sent to her in Mandarin, particularly via email from Kevin Fan of 19 April 2017 which highlighted risk information in the attachments. 1128 These matters support, in Mr Peters' submission, a very substantial reduction in the quantum of any damages otherwise awarded. 1129 In contrast, Ms Bennett submits that this is not a case for any reduction. Her arguments focus on other facts. There was no reason why Salter Brothers could not have provided translations of the relevant documents in Mandarin, in the knowledge that 85% of their target market pursuant to the SIV Program were Chinese nationals who they knew most likely could not speak English. The reason for not providing a translation went no further than a matter of convenience for the Salter Brothers Group and the desire to maintain control over the wording to avoid the risks of mistranslation. These matters disclose "a notable lack of care" by Salter Brothers to look after the interests of the potential investors. 1130 Ms Bennett further emphasises that the goal of Jingyi Li was to obtain permanent residency, and there was a relatively short window within which to make a compliant investment which in the circumstances would have made it difficult to obtain a certified translation or independent advice about the information memorandum or the application form. 1131 As an overarching submission, Ms Bennett correctly submits that the purpose of the legislation is to protect consumers of financial services from misleading conduct, and a reduction in damages by reason of any or all of the matters relied upon by Salter Brothers would be contrary to that purpose. G. 8.3.2 Consideration 1132 I do not accept the submissions of Ms Bennett. It is perfectly true that the general purpose of the statutory schemes is to protect consumers from misleading conduct. That submission, however, overlooks the fact that Parliament has expressly provided for a reduction in the quantum of any damages otherwise assessed by such amount as a court concludes is just and equitable having regard to the claimant's share in the responsibility for the loss or damage. I do not accept that there was a relatively short window of opportunity within which it was open to Jingyi Li to obtain a translation of the documents or to seek independent financial advice. A certified translation would not have been necessary to disclose the essential terms of an investment in any of the Atlas Capital funds. The fact that the ultimate goal of Jingyi Li was to obtain permanent residency is a reason to be careful and to be informed as to the terms upon which a very substantial investment was required to be made in order to secure the Class 188 Visa. 1133 Jingyi Li was aware of investment risks. Jun Chen was a very sophisticated investor who was aware of investment risks. He was the primary decision-maker. He was aware that redemption requests in a property fund could only be met if a fund was sufficiently liquid. He conducted a detailed analysis of certain documents that were provided to him before the switch decision was made in February 2019. But he made no study of the critical investment document, being the Information Memorandum. The fact that it was in English, and he could not read it, does not count in his favour or that of Jingyi Li. A translation could have been easily procured. 1134 I adopt my analysis in the Li Xu proceeding of what a prudent investor would have done to protect his or her own financial interests at the time. Jingyi Li and Jun Chen ought to have procured Mandarin translations of the Information Memorandum and/or obtained independent financial advice about the terms and effect of the significant investment which they were contemplating initially, and later when deciding to make the investment switch decision. 1135 True it is that Jun Chen asked detailed and specific questions of Natalie Liao during the course of the WeChat exchanges, and was informed that an investor in Fund L had a unilateral right to redeem at any time after two years upon notice and need not fix a further investment period upon redemption, but the fact that these representations were made does not displace that a prudent investor acting reasonably between September 2018 and February 2019 would not have committed to a switch of a bank deposit investment to a property fund investment, knowing that there was more risk, without understanding the terms on which the investment was to be made. To the extent that documents could not be read or comprehended at the time because they were in a foreign language, the prudent investor would have obtained translations. 1136 In my view having regard to all of these matters and in the context of my detailed findings of fact in this proceeding, I am satisfied that if I had otherwise awarded damages in favour of Jingyi Li, I would have applied a reduction of 60% as the amount that I consider just and equitable having regard to Jingyi Li's share in the responsibility for the loss and damage. G. 9 ASIC Act s 12GM refund claim 1137 I apply the same reasoning and conclusion that I have reached in the Li Xu proceeding and I decline to make the order sought. H. THE CASE OF ZHENG XU H. 1 The pleaded issues 1138 The issues are framed in Zheng Xu's Further Amended Narrative Statement dated 24 April 2024 and accepted for filing on 26 April 2024, the SBAM Response of 12 June 2024 and the Amended Reply of 12 June 2024. There are distinct similarities with the case of Jingyi Li, although Zheng Xu only made one investment of $3 million in Fund K on 15 June 2016. Nonetheless, separate careful attention to the matters in issue on the pleadings is required. 1139 Zheng Xu was a citizen of the People's Republic of China, at all material times was and is conversant with and able to read documents written in Mandarin and is a wholesale client within the meaning of s 761G of the Corporations Act. 1140 On or around 4 June 2015, Zheng Xu applied for a Subclass 188 Visa. She engaged Austar Suzhou to assist her with the process. On 7 June 2016, Zheng Xu signed an application form electing to invest $3,000,000 in the SIV K Fund (application form). The application form was in English and was sent by Austar Suzhou to SBAM. SBAM knew the application form was annotated in part by a representative of Austar Suzhou. SBAM knew that the SIV K Fund's primary investment would be in the Hotel Group. 1141 On around 15 June 2016, Zheng Xu transferred the required amount to SBAM and was issued 2,977,818 units in Fund K 1142 The first controversial plea of Zheng Xu concerns a 1 February 2016 Information Memorandum for the Atlas Capital Funds. She contends that in or around June 2016, she met with Jeanetta Jin, an employee of Austar Suzhou, and at that time was provided with details of five SIV fund managers together with a brochure about those funds as suitable for the making of complying investments pursuant to the SIV Program. At that meeting it is said that Jeanetta Jin "reinforced" the representations made in the February 2016 Information Memorandum. In an earlier iteration of her pleading, she stated that a copy of the February 2016 Information Memorandum was provided to her at that meeting, but that allegation was deleted in a later pleading. The position in consequence is that Zheng Xu does not positively assert receipt of the February 2016 Information Memorandum and does not recall receiving a copy of it, but nonetheless contends that she did not and could not read or understand the document. 1143 SBAM denies that Jeanetta Jin acted on its behalf, but otherwise does not know and therefore cannot admit whether there was a meeting between her and Zheng Xu, and if so what was discussed. SBAM pleads further that the contention of Zheng Xu that she did not and could not read or understand the February 2016 Information Memorandum is embarrassing where Zheng Xu claims not to have received the document. Nonetheless, SBAM does admit that from time to time it provided Austar Suzhou with a copy of current Information Memoranda relating to the SIV funds so that this information could, in turn, be provided to potential investors. 1144 Zheng Xu next pleads that SBAM knew or ought reasonably to have known by virtue of its dealings with Austar Suzhou that the February 2016 Information Memorandum would be unable to be read, or properly understood, by persons who were unable to read English and that prospective investors were looking to make and did make investments in SIV funds for the purpose of obtaining permanent residency in Australia under the SIV Program where a four-year investment period was required. Apart from admitting that it knew that a four-year minimum investment period was required for the purposes of the SIV Program, SBAM denies these allegations. 1145 The next contention of Zheng Xu is that the February 2016 Information Memorandum made each of five representations that are also relied upon by Jingyi Li in her proceeding: the Four Year Investment Representation, the Investment Assessment Representation, the Conflict Representation, the Structured Investment Representation and the Diversification Representation. She refers to these collectively as the IM Representations. As is the case in Jingyi Li's proceeding, SBAM admits that each of these representations were made in the February 2016 Information Memorandum. 1146 Reliance by Zheng Xu is pleaded that "based on" each of the IM Representations, on or around 7 June 2016, she determined to invest $3,000,000 in Fund K when at that time she considered that it was likely that she would wish to redeem her investment at the expiry of the four-year period and was not aware of any limitation, restriction or material risk to her ability to redeem her investment in Fund K. 1147 SBAM answers these allegations as follows: (a) On her own case Zheng Xu did not receive the February 2016 Information Memorandum when she determined to make her investment and, in any event did not and or could not read or understand that document; (b) Therefore, the allegation that she determined to invest in Fund K based on the IM Representations fails to disclose reliance and in any event, the pleading is embarrassing; (c) There were limitations on the ability of Subclass 188 Visa holders if they wished to redeem a complying investment at the expiry of four years (these contentions are pleaded in the same way as for the case of Jingyi Li); (d) Zheng Xu's ability to redeem her investment was governed by the terms of the Trust Deed for Fund K; (e) The February 2016 Information Memorandum disclosed the significant risks of making an investment including liquidity risk, the long-term nature of the investment, that risks could not be eliminated, and that redemption was only available where liquidity permits. 1148 Zheng Xu says that the application form purported to provide that she had received a copy of an Information Memorandum dated August 2015 and agreed to be bound by its terms and the trust deed for Fund K. Emphasis is placed on the fact that the application form was unable to be read and was not read or understood by her, and that in fact she had not been provided with an Information Memorandum dated August 2015 or with any trust deed applicable to Fund K. In response, SBAM pleads that the application form stated, amongst other things: "you must read the Information Memorandum before completing and signing this form", recorded that Zheng Xu's main purpose of investment was "SIV visa & capital gain" and that the source of funds for the investment was the sale of assets (properties). SBAM pleads further that: (a) It was aware that the application form was annotated in part by representatives of Austar Suzhou; (b) The application form included various declarations and acknowledgements which Zheng Xu accepted when placing her signature on the document including that she had received a copy of the Information Memorandum dated 24 August 2015 which she had read and agreed to be bound by including the provisions of the SIV Fund trust deed, that she satisfied the definition of a wholesale client within the meaning of the Corporations Act and that no representations had been made to her as to the performance or success of the SIV Funds, which are subject to investment risk including delay in repayment and loss of income or principal invested; (c) In signing the application form, Zheng Xu agreed and acknowledged that she had obtained her own independent financial advice prior to making her investment; (d) To the extent that Zheng Xu's level of comprehension of English prevented her from reading or understanding the application form, she was able to procure a translation of it and or obtain independent advice as to its content; (e) It accepts that at the time of signing the application form, Zheng Xu had not been provided with an Information Memorandum dated August 2015 and that the reference to that document was a mistake; (f) Zheng Xu could have, prior to signing the application form, obtained a copy of the February 2016 Information Memorandum; (g) It accepts that Zheng Xu was not provided with a copy of the trust deed for Fund K at the time of signing the application form, but could have obtained a copy of the deed upon request; and (h) It otherwise denies Zheng Xu's allegations. 1149 Zheng Xu then pleads a range of matters that SBAM knew or ought reasonably to have known about her and her investment in terms indistinguishable from the pleading of the same matters in the Jingyi Li proceeding. 1150 Approximately at the same time as Zheng Xu invested with SBAM, she invested a sum of $2 million into an alternative complying unrelated managed fund, the VIMG Property Fund. 1151 As to the investment report that SBAM provided to Zheng Xu in February 2017 in Mandarin, being a report of the operations of Fund K for the period ending 31 December 2016, Zheng Xu contends that the document did not disclose the fact that Hotel Group was part of the Salter Brothers Group or any issue or risk concerning the liquidity of Fund K, including risks arising from non-diversification and illiquidity of investment and likely investment horizon. 1152 SBAM answers these contentions as follows: (a) Distribution statements and fund reports for Fund K were provided to Zheng Xu on a six-monthly basis from the date of her investments in Mandarin and in English; (b) Some of those reports (18 September 2016, 13 March 2017, 6 September 2017, 2 March 2018, 5 March 2019, 13 September 2019, 28 February 2020, 16 September 2020, and 1 April 2021) contain various statements which disclosed the investments made by Fund K in the Hotel Group and related trust funds; (c) The purpose of the investment report was to provide an update on the performance of Fund K, not to disclose risks associated with investing in Fund K as such risks were disclosed in the February 2016 Information Memorandum; and (d) Otherwise denies Zheng Xu's allegations. 1153 Similar allegations are made by Zheng Xu, and denied by SBAM, about investment reports provided by SBAM to Zheng Xu in February 2018, February 2019, 30 June 2019 and February 2020. Within this series of allegations Zheng Xu also contends that in late 2017, Hannah Zhu "repeated and reinforced the Four-Year Investment Representation" during a meeting. SBAM denies that conduct and repeats its embarrassing pleading point (the IM Representations could not have been repeated and reinforced where, on Zheng Xu's case, she did not receive the document and did not and could not read or understand it in any event). 1154 It is not in issue that on 28 July 2020, Zheng Xu submitted a redemption application form for all of her investment in Fund K, and that on 21 February 2022, SBAM advised her that it had no obligation to redeem her units, in any event the fund was illiquid and could not satisfy the request and that it intended to establish a listed investment trust for the purpose of providing liquidity, which it hoped could be achieved by the end of 2023. 1155 Zheng Xu's pleading then turns to her contentions about misleading or deceptive conduct and unconscionable conduct and pleads the same five contentions as Jingyi Li. 1156 Her causation case is that if she had been informed of the restrictions, limitations, or material risks to her ability to redeem her investment in Fund K and/or the non-diversification and illiquidity of investment and likely investment horizon of up until at least 30 June 2024 (arising from investment in the SB&G Hotel Group), then she would: (a) Not have invested in Fund K; (b) Have redeemed her investment in Fund K upon becoming aware of the misleading nature of the IM Representations, prior to the Fund ceasing to meet redemption requests; and (c) Have invested in alternative complying investments that provided rights of redemption. 1157 SBAM denies these allegations and pleads further that Fund K has not made direct investments in property and infrastructure assets, at all times has invested indirectly in such assets through the SB&G Hotel Group and as such the Structured Investment and Diversification Representations have no application to the investment process of the Fund. It further pleads that the causation counterfactual is not open where Zheng Xu disavows a case of misleading conduct by silence and relies only on a case of misleading conduct by positive representation. In that circumstance, the causation counterfactual which turns on "if" she had been informed of certain matters is inconsistent with her case and is otherwise embarrassing. In any event, SBAM relies on disclosure of the risks of investing in Fund K as set out in the February 2016 Information Memorandum. 1158 In reply to the direct/indirect investment distinction, Zheng Xu contends that if that was the case, the distinction was not disclosed which was of itself misleading or deceptive conduct. 1159 Zheng Xu's unconscionable conduct case is in part pleaded in the same terms as that of Jingyi Li. That is, by reason of each matter pleaded, including because of her special disadvantage (language and intention to obtain permanent residency), SBAM's knowledge (actual or constructive) of those matters, the failure to provide most of the documents in Mandarin and the failure to take steps to explain the matters set out in the documents in Mandarin. 1160 In part it differs from that of Jingyi Li. There is a specific plea (in the alternative) that SBAM's conduct was unconscionable by reason of the earlier pleaded facts, being the conduct of Jeanetta Jin, what SBAM knew or ought to have known by reason of its dealings with Austar Suzhou, and that the application form was in English (and was unable to be read or understood). Reliance is also placed on SBAM's knowledge of the circumstances in which the application form was filled out and submitted and the later provision of documents between February 2017 and February 2020, together with the representation made by Hannah Zhu to Zheng Xu whereby the liquidity and non-diversification risks were not disclosed to her. 1161 SBAM responds in the same terms as in the case of Jingyi Li. The pleading fails to identify the conduct relied upon as unconscionable, as distinct from the circumstances that make out this aspect of her case, and otherwise denies that the conduct was unconscionable. 1162 Zheng Xu next pleads that if Fund K is, or has at any relevant time been, illiquid, then it is a consequence of the non-diversification and liquidity of the investment strategy arising from investments in the Hotel Group. SBAM accepts that Fund K does not have sufficient liquidity to meet Zheng Xu's redemption request and says that it invested in a diversified portfolio of hotel assets, the fact that the primary investment of Fund K was in the Hotel Group was disclosed to Zheng Xu during the course of her investment and relies upon the February 2016 Information Memorandum to the effect that an investment in property assets is not a liquid investment. 1163 Zheng Xu's damages claim is calculated using a methodology like that of Jingyi Li. She contends that the real value of her units is nil, and that her loss is $3,443,547 being the face value of her redeemed investment, less management fees of $940,000 plus the difference between distributions received from her Fund K investment compared with distributions that would have been received if she had invested in the VIMG Property Fund, the alternative complying fund, of $503,547. That said, like Jingyi Li, her alternative preferred remedy is a refund pursuant to s 12GM of the ASIC Act, upon surrender of her units. She also seeks declaratory relief. Entitlement to any relief is denied by SBAM. 1164 Similarly, to the case of Jingyi Li, SBAM pleads further defences commencing with the contention that Zheng Xu has failed to allege that she suffered loss or damage by reason of the alleged contravening conduct, and as such her claim fails to disclose a cause of action or a basis upon which relief may be granted. There is then a limitation defence, that each of the claims for damages are statute barred because Zheng Xu first suffered damage in late 2017 when she determined to remain in Fund K, instead of redeeming her investment on that date and investing with VIMG, which event occurred more than six years prior to the commencement of her proceeding. 1165 Finally, SBAM contends that Zheng Xu failed to take reasonable care within the meaning of s 1041I(1B) of the Corporations Act and s 12GF(1B) of the ASIC Act and in consequence any damages must be reduced to reflect her share in the responsibility for the loss. The particulars relied upon follow a familiar pathway: Zheng Xu was advised to read the relevant Information Memorandum, she had the ability to procure a translation of it into Mandarin and to obtain independent legal, accounting and financial advice, and made her investment without knowing or considering the investment terms and their suitability for her purposes. H. 2 The witnesses and the evidence 1166 Zheng Xu gave evidence with the assistance of an interpreter. She did not call any other witness in her case. She was born in the People's Republic of China in 1970. She migrated to Australia in September 2017. She is married to Qi Xiaohua and they have two children. Qi Xiaohua continues to reside in the People's Republic of China, to attend to his business interests in that country. In an email of 14 March 2014 that Zheng Xu sent to Austar Suzhou, she described English as not poor, not good but average (CB 18352, 29444, T 658-659). 1167 Prior to investing in Fund K in June 2016, with her husband she held a 60% equity in the Suzhou Jutong Automation Equipment Company Ltd which had a registered capital of approximately 15,000,000 yuan (T 660). They also had an interest in the Shuang Tong Machinery Company that was conducted by her husband's brother. From January 2003 until August 2005, Zheng Xu was employed as the purchasing manager of Jutong and between August 2005 until 2014 was the deputy general manager. Her responsibilities included overseeing contracts to procure materials and the signing of some contracts which she described as "administrative documents". The company had approximately 200 employees (T 661). 1168 On 14 August 2015, Zheng Xu provided two certificates to Austar Suzhou as evidence of her and her husband's income (CB 18467, 29530). In it she described her role as deputy general manager of Jutong as "in charge of the comprehensive management of the company". Her income, including bonuses and subsidies, in 2013 was 180,000 yuan and in 2014, 190,000 yuan. In those years her husband's income was 250,000 and 268,001 yuan respectively. In a further document (CB 18363, 29444)), which is not dated, but was prepared for the purpose of identifying how Zheng Xu intended to meet the $5 million minimum requirement for a complying investment, she described how, with her husband, they had built up the business of Jutong since its establishment in 2002 including: The company's business has been growing stronger and stronger each year, and the income of our employees has also increased significantly. Even during the global economic downturn, our value of production was still increasing. In 2004, my husband and I bought a house in Wuzhong District….The purchasing price of the house was about 1.1 million yuan (we bought it with a down payment of 300,000 yuan and a five – year mortgage for the balance of 800,000 yuan , which has been paid off). The market value of our home is about 3.5 million yuan. After so many years of hard work we've built up a small fortune. In 2010, we invested our remaining savings, about 1 million yuan, in stocks. At present, we have no less than 800,000 AUD in our personal assets. 1169 In cross-examination it was put to her that in mid-2016 she and her husband were very wealthy people. Zheng Xu did not directly accept that proposition, preferring to answer that they were "better than the normal everyday workers that go to work" (T 706). I reject that evidence. It is not consistent with the stated value of the accumulated assets of Zheng Xu and her husband, or the contemporaneous statements made prior to June 2016 (CB 18,363, T 664-666). 1170 From her business experience Zheng Xu was aware that economic circumstances may rapidly alter, the value of assets may rise or fall due to external forces and well understood before June 2016 that "there is no such thing as an investment without risk" (T 723). 1171 Her husband did not give evidence, even though he attended one of the meetings that Zheng Xu relies upon. When questioned as to his non-attendance, she stated that he does not "know much of the whole thing because he hasn't been part of this whole case that much at all" (T 669). 1172 In several respects Zheng Xu was not a satisfactory witness. In cross-examination on multiple occasions, she failed to answer questions directly, or at all (examples are at T 705, 706, 708, 710, 711, 712, 713, 726, 743 and 761). She frequently advocated for her case in doing so, an example of which is a series of answers that she gave when questioned whether Austar Suzhou had provided information to her about multiple complying investment funds in 2016 (T 712): MR PETERS: But Austar offered you a number of funds in 2016, didn't they? THE INTERPRETER: Yes. MR PETERS: And Austar told you each of these funds are funds which people can invest in to get a visa? THE INTERPRETER: Yes, and they were – these funds were acknowledged by the government, compliant, and also recognised by solicitors, by lawyers. They were compliant and safe. MR PETERS: Thank you for adding that. I didn't ask you whether you were told they were complying and safe, did I? THE INTERPRETER: That's what the agent told me. MR PETERS: Yes. My point is, you're here to answer my questions, not add things. THE INTERPRETER: Could you please repeat that. MR PETERS: You're here to answer my questions, not tell his Honour how good your case is; do you understand? THE INTERPRETER: Okay. MR PETERS: And I say that because if you keep doing that, I will tell his Honour, at the end of this case, that you were more of an advocate trying to persuade his Honour, rather than a witness who would answer my questions. 1173 That is not the only occasion on which Mr Peters advised Zheng Xu that she should only answer the questions as put to her. Other examples of her advocacy, rather than evidence as to the facts, relate to the repeated contention that she had been informed that the Atlas Capital Funds were safe and compliant (T 712, 715, 722, 725, 732, 737, 743 and 752), which is the consistent message that she wished to convey even when the questions put to her did not call for that response. 1174 Another matter that reflects adversely on Zheng Xu's credit is whether in June 2016, she received at a meeting with Jeanetta Jin from Austar Suzhou, a copy in English of the Atlas Capital February 2016 Information Memorandum or any other complying fund Information Memoranda. I address this in more detail later in these reasons, but for present purposes, in an early version of her pleading she contended that she received the Atlas Capital document at the meeting but did not, and could not, read or understand it. In an amended pleading prepared shortly before commencement of the trial, she withdrew her acceptance of receipt of the Atlas Capital document and added that she does not recall receiving it. In her affidavit made on 26 March 2024, she said Jeanetta Jin showed hardcopy documents to her relating to five different SIV Fund managers, each in English and without translations, and that she was not provided with hard or electronic copies. In evidence-in-chief, she did not mention having seen any SIV Fund documents (T 654). 1175 In cross-examination (T 718) Zheng Xu accepted that one of the documents that she discussed with Jeanetta Jin was the VIMG Fund Information Memorandum of 1 February 2016, that was in English and in English with Mandarin sub text. A copy of that document, including the internal application form signed by Zheng Xu on 7 June 2016 in English, was discovered by Zheng Xu in the preceding (CB 29424, 29688). 1176 I find that Zheng Xu, contrary to her affidavit evidence, did receive at least one Information Memorandum from Jeanetta Jin in June 2016. 1177 Salter Brothers rely on evidence from Paul Salter, Robert Salter, Kevin Fan, Hannah Zhu, Natalie Liao and Peter Hamilton. My previous findings about the credibility of each apply in this proceeding. H. 3 The IM Representations case 1178 As I have noted, Zheng Xu relies on the February 2016 Information Memorandum as conveying the same five representations as pleaded in the Jingyi Li proceeding. What is in issue is whether all relevant conduct, including the Information Memorandum read as a whole, was misleading or deceptive or likely to mislead or deceive. H. 4 Were the IM Representations misleading? H. 4.1 The evidence 1179 This requires analysis of all the relevant conduct. The evidence is as follows. 1180 On 2 April 2015, Zheng Xu appointed Austar Suzhou as her agent (CB 20873). The agreement records that it is the responsibility of Zheng Xu to make the investment in funds "as required by the Australian Government in complying investment products in the prescribed time". Zheng Xu was required to pay a non-refundable fee of 3000 yuan and an intermediary service fee of 5000 yuan, the latter being refundable if the visa application was unsuccessful. It further provides that the intermediary service fee: [D]oes not include notary fee, physical examination fee, translation fee, investment plan fee, audit fee, visa fee, passport fee, property/asset appraisal fee, English training fee, air ticket, interview accompanying fee and other fees and expenses, and such expenses, if any shall be borne by [Zheng Xu]. 1181 Zheng Xu accepted in cross-examination that she could have obtained translation services from Austar Suzhou or "from other people in China" and disclosed that during the application process "the agent organise translation for me and all my Chinese documents were included in there" (T 707). She also accepted that she had the financial capacity to pay for a translation service of "any document" at the time. 1182 On 4 June 2015, Zheng Xu lodged her application for a Business Skills (Provisional) (Class EB) Visa. On 20 August 2015, she received an email (in English and Mandarin) from a representative of the State Government of Victoria which congratulated her on being nominated for a significant investor visa. In November 2015, an application was made to the ANZ bank in her name for a home loan to purchase a property in Victoria. A rogue mortgage broker took it upon himself to fill out the application documents and to forge her signature. This is not a matter that counts adversely to Zheng Xu's credit, because I accept her evidence that she appointed an agent in good faith and trust of the individual to "take care of everything" (T 691). 1183 On 14 April 2016, the Department sent email correspondence to Austar Suzhou advising that Zheng Xu's visa application had reached the stage where she was invited to select and make a complying investment of at least $5 million. It records that the assets that were to be used to make the investment were: 4.1 million yuan in cash in a bank account and two real estate assets in China. The letter is otherwise in the same form as sent to Li Xu and Jingyi Li including the statement on the second page that the Commonwealth of Australia "does not approve or endorse those investments, or provide advice on their performance, and will not accept any liability whatsoever, whether for negligence or otherwise, for any loss you may suffer as a result of making a Complying Investment". 1184 Zheng Xu's evidence about whether she read this letter was not very satisfactory. She acknowledged receipt of the letter in her affidavit and gave unparticularised evidence that Jeanetta Jin told her that she was required to make the complying investment within 28 days (CB 10128). In cross-examination, when asked whether she read the letter at the time, her initial answer was (T 693): I wouldn't be able to read the letter, and my agent told me what the letter was about, and for the details of the letter, I don't have a memory of. 1185 Later when asked about the 28-day time and whether an extension had been granted, Zheng Xu stated that she could not recall anything about an extension (T 713), and when asked again whether she had read the letter answered: "yes, I – I knew that" (T 714). On that evidence, I am only satisfied that Zheng Xu was aware that the letter had been received by her agent and that Jeanetta Jin had told her about some of the details in it. 1186 However, I reject her further affidavit evidence that she was under "immense time pressure" to make the complying investment (CB 10129). She did not say anything about being under time pressure in oral evidence-in-chief (T 654) and accepted in cross-examination that an extension of time was obtained for the making of her investments with Salter Brothers and VIMG until June 2016 (T 694). The objective fact is that the initial 28-day period was due to expire on 12 May 2016, and Zheng Xu did not sign the application form with Atlas Capital until 7 June 2016. 1187 On 2 June 2016, Zheng Xu and her husband met Jeanetta Jin at the office of Austar Suzhou in Shanghai. Of that meeting in a paragraph that was not excised from her affidavit, Zheng Xu said that during the meeting she told Jeanetta Jin in "words to the effect" that the safety of her investment was very important, to which Jeanetta Jin responded that the funds had been selected by lawyers and were very safe. None of that was put as an exact quote. In her oral evidence-in-chief, she said (T 654): THE INTERPRETER: Yes. We discussed the fund and we learned from Ms Jin that this fund was compliant to the significant investor visa requirements. So there's a requirement of investment for a four-year period before we can get the residency visa. So we also understood that this fund was compliant – visa compliant, or CIV visa compliant. And when I get my permanent residency after four-years period, I can redeem my investment. MS BENNETT: And which fund are you referring to? You said you discussed a fund. Which fund were you talking about? THE INTERPRETER: Yes, we were given five funds to choose from, and we were also told that these funds had been chosen by the lawyers. MS BENNETT: Yes. THE INTERPRETER: Yes. MS BENNETT: And so are you able to tell his Honour which particular fund you were discussing with Ms Jin at the meeting? THE INTERPRETER: Yes. Because it happened too long ago, so a lot of things I can't remember exactly. But in the end, I chose two funds. One is Salter Brothers Fund. THE WITNESS: VIMG. MS BENNETT: And VIMG. MS BENNETT: VIMG, yes. MS BENNETT: Okay. And The Salter Brothers Fund, do you remember what that was called? THE INTERPRETER: I am sorry, I can't remember. MS BENNETT: And what did she tell you about the characteristics of the Salter Brothers Fund? THE INTERPRETER: There are quite a few types, but I was interested in the hotel fund. Because in 2012, I visited Australia. At that time, the hotel industry was booming. So I thought that the prospect was good. MS BENNETT: Can you tell me about – no I will leave that. Let's – when you said it was safe, why did you – well, she just said it was safe. What made you think it was a safe investment? THE INTERPRETER: Because SIV Funds are kind of – well, promoted by the government and we thought that the – these funds were kind of linked with the government initiatives. MS BENNETT: And how did you get that impression from this meeting? THE INTERPRETER: So because I want to have this done, then I need to be trusting. 1188 What is clear from this evidence is that Zheng Xu was aware that an investment in at least some of the Salter Brothers funds related to the hotel industry in Australia. In contrast, in cross-examination (T 727) she said that when she made her initial investment, she did not know about several hotels operated by the Hotels Group and that she did not become aware "about the hotel investment until after I came to Australia" in September 2017. Ms Bennett submits that evidence is somewhat ambiguous, and I agree. The focus of the cross-examination at that point concerned the fund report for the Atlas Capital Fund K to 30 June 2016 (CB 6101). I find that the extent of Zheng Xu's knowledge when she made her application in June 2016 was limited to some understanding that there was a connection between the Atlas Capital funds and the Hotel Group. 1189 On 7 June 2016, Zheng Xu signed the application form to invest $3 million in the Atlas Capital Fund K (CB 10165). Apart from her signature, the handwriting on the form is not hers. In her affidavit she stated that Jeanetta Jin completed it. In cross-examination, she could not identify who completed the form (T 709) and when confronted with apparently contradictory evidence (T 710), at one point stated that she could not remember what had been said in her affidavit. When pressed further, she stated that Jeanetta Jin "was leading a team, and I'm not too sure whether the form was filled in by herself, or someone on this team. I didn't see that." She refused to make the obvious concession that she had simply overlooked the earlier statement in her affidavit (T 710–711). The form records that the main purpose of the compliant investment was to obtain the visa and "gain". 1190 Zheng Xu was next asked in cross-examination whether she understood at the time of signing the application form that she was entering into a contract. She did not directly answer that question and said that the agent "was just telling me that it was just a subscription form" (T 711). That evidence was not in her affidavit. Zheng Xu denied that she understood that she was applying to invest in a fund with other investors, the fact of which she only became aware in 2017 when Hannah Zhu told her that the fund was designed exclusively for Chinese investors as part of the SIV Program. The cross-examination continued during which Zheng Xu admitted that she was aware in June 2016 that there were a number of funds available for investment by SIV applicants in China and repeated her contention, which was not responsive to the question, that representatives of Austar Suzhou had assured her that the funds were "compliant and safe" (T 712). 1191 Eventually Zheng Xu admitted that she was aware that she was entering into a contract when she signed the application form, but did not understand at the time that the words immediately above her and signature were important (T 714). The paragraph was translated for her, which took less than one minute. She accepted that it contains various warnings about investment risks and when questioned as to whether she could have obtained a translation before signing the document answered (T 715): Okay. We were thinking about that option, but the agent told me that the funds were safe and compliant, so we chose to trust in him – trust in them. … MR PETERS: And you agreed with me that you chose not to get a translation. THE INTERPRETER: Because we trusted in the agent that these funds were safe and secure and compliant. 1192 Zheng Xu was next cross-examined about her knowledge of investment risk at the time. She did not obtain independent financial advice. Zheng Xu denied that when selecting Fund K, she sought a higher rate of investment then available in a term deposit. When asked the open question why she did not simply choose a bank deposit she answered in part that she "did not know about investment", did not have a good knowledge about government bonds, had travelled to Australia as a tourist and found the tourism industry was "very nice" and for that reason decided to invest in the Hotel Fund (T 722). Zheng Xu agreed that she understood at the time that there is no such thing as an investment without risk, but when she considered making the investment she "was not thinking too much about those risks" (T 723 – 724). 1193 I find that Zheng Xu was aware at the time that investments carry risk but was unconcerned about the degree of risk due to the assurances that she had received from Jeanetta Jin, or some other representative of Austar Suzhou, to the effect that an investment with Atlas Capital was safe, secure and compliant. As I explain later in these reasons, that finding is significant because those representations were not made on behalf of Salter Brothers and, in any event, because they were made in China, are incapable of founding any cause of action in this proceeding. There is no Ministerial consent, unlike in the Li Xu proceeding. 1194 On 8 June 2016, Zheng Xu received an email from Kevin Fan (in Mandarin and English) which acknowledged receipt of her investment application form and provided details for the bank transfer of funds (CB 10171). 1195 On 17 June 2016, Zheng Xu received a further email from Kevin Fan which attached, in English, a MAP Capital welcome letter, confirmed the placing of her investment in units in Fund K and provided an accompanying unit certificate (CB 10176). Zheng Xu responded and requested Kevin Fan to translate the attachments to the letter for her (CB 10463). When questioned further as to why she did not make a request of that type before signing the application form, Zheng Xu answered that she did not do so because: "I trusted in the agent as to this statement about funds being safe and compliant" (T 725). Kevin Fan provided the requested explanation in Mandarin on 18 June 2016 (CB 10183). On 21 June 2016, Zheng Xu received confirmation of the making of her investment of $2 million in the VIMG Property Fund. 1196 On 31 August 2016, Zheng Xu received an email from Kevin Fan which attached in Mandarin and English a report for Fund K to 30 June 2016 (CB 6101). That document clearly disclosed that the largest investment of Fund K was in the SB&G Hotel Group. Another attachment provided commentary about the Australian property market and in turn attached a report from the SB&G Hotel Group in Mandarin and English (CB 6105), which at a high level of analysis gave some detail about the trading performance of individual properties in the Hotel Group. In cross-examination Zheng Xu initially contended that she had not received this document. When it was pointed out to her that it was discovered by her, she accepted that it had been received and then expanded her answer in a non-responsive way to include the contention that she had not seen this document when making her initial investment which is obvious (T 727). Zheng Xu clearly did receive the document and had she read it, could not have misunderstood that the primary investment of Fund K was in the Hotel Group from 31 August 2016. She did not, however, request a redemption of her investment at that time. 1197 On 15 September 2016, Zheng Xu received correspondence from Atlas Capital in English and Mandarin which advised of the change of the name of the Trustee from MAP Capital to SBAM and which on the third page disclosed that a portion of her investment in Fund K was in the Hotel Group, with the additional benefit of three nights complimentary accommodation in one of the portfolio hotels (CB 6108). 1198 On 17 October 2016, Zheng Xu received from Dulcie Du an email (CB 10185) in Mandarin which attached the Atlas Capital Information Memorandum dated 1 February 2016 (in English) and the VIMG Property Fund Information Memorandum dated 1 February 2016 (in English and Mandarin) together with Atlas Capital Fund Performance Report (in English and Mandarin) (CB 10321). The first line of the email notes that the attachments "provide detailed explanations of the fund's structure" (CB 10458). In cross-examination, Zheng Xu stated that she did not read the VIMG Information Memorandum before making a $2 million investment in the VIMG Property Fund (T 720). Amongst various disclaimers and warnings about investment risk, the VIMG Investment Memorandum stated (CB 10295 – 10296): [A]n investment in the fund should be viewed as a long-term investment and fixed term. It is illiquid. The unit holders must hold their investment for four-years. … The Constitution provides limited circumstances for an investor to transfer your Units. Please refer to the Constitution. The Trustee has an absolute discretion to refuse a transfer of the whole or any part of your holding of Units. 1199 On 31 March 2017, Zheng Xu received email correspondence (in English and Mandarin) from Paul Salter which attached fund reports and a distribution statement for her investments for the period to 31 December 2016 (CB 6114). The attachments were also provided in English and Mandarin. There is clear disclosure that the largest investment of Fund K is in the Hotel Group (CB 6115). Similarly worded investment reports were provided to her on 6 September 2017, 2 March 2018, 7 September 2018 and 1 April 2021. In cross-examination: Zheng Xu revealed that she never read these reports and was "only checking how much money was received in my bank account. To be honest, I did not understand the report" (T 735). 1200 Zheng Xu pleads that in late 2017 she met with Hannah Zhu who repeated the four-year investment representation to her. That meeting in fact occurred on 1 February 2018, which is confirmed by a meeting invitation (CB 29447). In evidence-in-chief, Zheng Xu said that the purpose of the meeting was to understand her investment and to discuss the performance of the fund (T 655). Her oral evidence about what was discussed was (T 656): THE INTERPRETER: Okay. We – I wanted to understand the operational scope of the company and, in particular, the security or safety of my investment. MS BENNETT: Yes. And what else did you want to know about the investment itself? THE INTERPRETER: Yes, mostly safety. MS BENNETT: Can you tell His Honour about the discussions you had about the safety of the fund? THE INTERPRETER: Yes, I sought confirmation with regard to the funds and also, in particular, the period of investment, which is four-years, and also, after the four-years period, would I be able to redeem my investment. MS BENNETT: And what was the answer to that inquiry? THE INTERPRETER: The answer was affirmative. MS BENNETT: And why was that important to you? THE INTERPRETER: Because initially this is what we wanted to get, to obtain a visa and also to redeem the capital of our investment. MS BENNETT: And why did you want to redeem the capital of your investment? THE INTERPRETER: Because this would be – this would support our life in Australia. 1201 There is no mention in the WeChat messages (CB 29423), which directs one to the native Excel translated file) leading to this meeting between Zheng Xu and Hannah Zhu about the operation of the Hotel Group or the security or safety of the investment. The relevant messages begin on 30 January 2018 and the discussion is about Zheng Xu's tax file number. Zheng Xu stated that she had received her tax file number, and Hannah Zhu requested that it be provided to her so that certain forms could be updated. They agreed to meet on 1 February 2018 for that purpose. The WeChat discussion about fund performance and fund return did not commence until 2 February 2018, when Zheng Xu stated that she had looked at the earnings for "this time" and had noted that they were lower than for the same period in 2017. Hannah Zhu responded to the effect that the return of the fund cannot be examined only by reference to the dividends and consideration must also be given to the long term strategic direction of the fund capital growth. As an example, she referenced the significant increase in the valuation of the hotel at Potts Point and noted that renovations had commenced on the Crowne Plaza Hotel in Melbourne. 1202 In cross-examination, Zheng Xu accepted that what she "really wanted" to discuss was her tax file number (T 734). A little later Zheng Xu added: "And to learn about their company, by the way" (T 735). Her next series of answers confirmed that she had not read the Fund K reports as periodically provided to her, but did have knowledge of the returns as deposited to her bank account and: MR PETERS: Do you recall that's something you wanted to discuss with Miss Zhu, at your meeting with her? THE INTERPRETER: I was only wanting to find out about some basic information about the trading of a fund, and to also learn about the safety of the fund. That's what I am concerned about. 1203 Zheng Xu's attention was next directed to paragraph [60] of her affidavit, where her evidence was that for the first two years of her investment (i.e. to June 2018) she received a return and: We did not discuss the liquidity of the SIV K Fund at this time because for the first two years, my focus was not on the operation of the SIV K Fund or any return, but on getting my visa. This was why I did not consider switching my investment to other more profitable funds, unlike other people who had invested in the SIV K Fund. 1204 Zheng Xu did not accept that evidence to be incorrect, contending that the issues were related (T 738). Her oral evidence continued that in February 2018, she "did not have an idea of any liquidity issue" (T 739). Her evidence when directly challenged about what was discussed was (T 741-742): MR PETERS: Okay. Now, when you met with Ms Zhu, you say that Ms Zhu said to you that after the four-year period, you would be able to redeem your investment. Is that what she said in early 2018, before Chinese New Year? THE INTERPRETER: Right. Because I asked her. MR PETERS: Yes. I want to suggest to you redemption was not discussed between you and Ms Zhu at that meeting. THE INTERPRETER: I'm sorry, you want to suggest that to her; right? MR PETERS: Yes. THE INTERPRETER: Yes, we did. MR PETERS: I want to suggest you made no reference to redemption in your WeChat messages that we spoke about before lunch. THE INTERPRETER: Right. Not in the WeChat history. MR PETERS: All right. But you understand from me, I suggest redemption was not discussed at that meeting. THE INTERPRETER: Based on what you have there, did you have that conclusion or thoughts? MR PETERS: I'm not here to argue with you, Ms Xu; I'm just challenging you. THE INTERPRETER: But in fact we did talk about it. Because that was – because we have – we met with each other more than once. We met with each other in the office on several occasions, and we have also met in person. We discussed the operation of the funds, the security, so the safety of the funds, and also some personal matters. 1205 In re-examination (T 771), Zheng Xu said: At the end of 2017, before the Chinese New Year, I had an appointment with Ms Zhu, in her office. Okay. The purpose for that meeting was to find out something about their company, and also to confirm the safety of my principal. Ms Zhu's statement was quite positive that the fund was operating well, and the fund's prospect was also well. 1206 Hannah Zhu gave oral evidence-in-chief to the effect that the purpose of the meeting was to update her tax file number. As to what was discussed, her evidence was (T 1060): So the meeting was scheduled at 10 am and agenda was to help Ms Xu to update her tax file number. But Ms Xu was running late, and when she arrived at office was nearly 11, and I just quickly met Ms Xu, help her complete her change of contact details form, and I keep the original form for the process and I made a copy, passed to Ms Xu, because I need to run for another meeting that's outside the office. Ms Xu knew that. When we scheduled the meeting, I asked Ms Xu what time she will be arriving, she told me 10, and I told Ms Xu because in the afternoon I had another meeting outside the office and Ms Xu didn't tell me she want to discuss any further stuff or anything else. So the meeting was only scheduled for half hour, but actually it was quite quick. It only took about 10/15 minutes to complete the form. 1207 Hannah Zhu denied that there was any discussion with Zheng Xu about her investment at that meeting (T 1061). When Hannah Zhu was cross examined about his evidence (from T 1246), she initially accepted that there was a discussion the effect of which was that Zheng Xu requested confirmation that her investment was safe, which Hannah Zhu provided. Her evidence was: MS BENNETT: Sorry. Now, can I suggest to you that, at this meeting, that she asked you for some confirmation that the fund in which she had invested was safe. Do you agree with that? THE WITNESS: Yes, I agree. MS BENNETT: Yes. And she – you assured her that it was safe. THE WITNESS: Yes, I agree with you. MS BENNETT: And she asked for your confirmation that, after a four-year investment period, she would be able to redeem her investment. Do you accept that? THE WITNESS: We didn't have this conversation. MS BENNETT: Well, it was common, wasn't it, for significant investors to talk about the four-year horizon, wasn't it? THE WITNESS: I would say, if Ms Xu had such queries, she should ask Rob and myself at the first meeting in July 2017. MS BENNETT: I will return to that. But, this meeting, she did ask you about that and she asked you if she could redeem her – and you told her she could redeem her investment after four-years. What do you say to that? THE WITNESS: She did not, and Ms Xu knew I'm in a junior position. She would like to discuss her investment with a senior director level. So if she had such queries, she would let me know before the meeting and I will invite a senior staff come to the meeting with me and, also, I will book a meeting room for a longer period of the discussion. Not half an hour. MS BENNETT: The matter of the safety of the fund is not a controversial matter for you, was it? THE WITNESS: Sorry. I will just clarify controversial. THE INTERPRETER: What is not controversial? MS BENNETT: Something you - - - THE WITNESS: Can you repeat your question again? MS BENNETT: You considered the investment to be safe, didn't you? THE WITNESS: From my knowledge, if an investor asks me her investment is safe, I would ask more questions, like, what it's referring to. What does she mean by the safe. MS BENNETT: Well, I suggest to you that that's not what you did on this occasion. Now, can I take you to one-three - - - HIS HONOUR: Well, there was no answer to that question. MS BENNETT: Sorry, your Honour. HIS HONOUR: Do you agree with that? THE WITNESS: Disagree. We didn't have this conversation. MS BENNETT: Well, have a look at 137 in the WeChats there. So this picks up now 2 February, and this Ms Xu saying: Dear – I have had a look and the earnings this time is lower than the same period last year. Do you see that? THE WITNESS: Yes. MS BENNETT: So can I suggest to you that you've had a discussion about the fund on the 1 February and then she has gone back and looked at her documents and texted you about it on 2 February. Do you agree with that? THE WITNESS: I disagree. So if we had a discussion, that means she shouldn't ask me on the second day. This query should be addressed. 1208 Hannah Zhu made no reference to this meeting in her affidavit. She responded to the affidavit of Zheng Xu made on 24 March 2024, where it was contended that there was a meeting in late 2017. Hannah Zhu stated that she had no record of that meeting but then denied "ever saying" to Zheng Xu words to the effect that her investment was "safe and legitimate" or that she could redeem her investment at the end of the four-year period. She went further and said that Zheng Xu did not ask her about redemption until 2020. Hannah Zhu should not be criticised for not referencing this meeting in her affidavit, for the reason that it was not until a late amendment to the pleading on 6 April 2024, that this contention was inserted, and it was not until Zheng Xu gave oral evidence that she corrected the date and the year in which the meeting had occurred. Hannah Zhu made her affidavit on 10 May 2024 and Zheng Xu did not file a correcting affidavit contemporaneously with the date of her amendment. 1209 I am not satisfied that Zheng Xu's evidence about the meeting on 1 February 2018 was sufficiently precise to enable me to be satisfied as to what was discussed and more particularly what was said by Hannah Zhu. The pleaded contention is that in late 2017, Hannah Zhu "repeated and reinforced" the Four-Year Investment Representation. That is, the SIV Funds were suitable for investments of four-years duration, may be suitable for long-term (at least four-years) investors who were seeking, relevantly, an actively managed portfolio. The evidence of Zheng Xu does not match that representation as either repeated or reinforced. Her pleaded case makes no reference to any discussion about the safety of her investment. The pleading wrongly dates the meeting, which error was repeated in Zheng Xu's affidavit. The contemporaneous documents that led to the meeting, the WeChat exchanges, reveal only that its purpose was concerned with Zheng Xu's tax file number and the necessity to record it within the information systems of Salter Brothers. If the purpose of the meeting was to seek information about the ability to redeem her investment at the end of the four-year period, then logically that topic would also have been mentioned by her in the WeChat exchanges. 1210 Her evidence-in-chief was that she was mostly concerned about the safety of her investment and in introducing what she sought by way of "confirmation" Zheng Xu rolled up the concepts of safety, the four-year investment and the ability to redeem into a single statement. When asked what answer was given to that inquiry, she simply said that it was "affirmative", which begs the question, affirmative as to what? If there was some form of affirmation from Hannah Zhu, Zheng Xu failed to give evidence as to what proposition was affirmed and in what way. Her evidence was vague and unpersuasive. 1211 There is no mention of this meeting, or of the representation attributed to Hannah Zhu, in the detailed letter that Zheng Xu sent to Salter Brothers on 1 February 2022 which contained 72 questions and required a response by 14 February 2022 (CB 10390). Nor is there any mention of the meeting and the representations in the earlier versions of Zheng Xu's pleadings – her Concise Statement of 15 March 2022 or her Narrative Statement or the amendments thereto of 6 June 2022 and April 2023. The first mention of this meeting, albeit wrongly dated, was in Zheng Xu's affidavit of March 2024. The failure to mention a meeting that assumed importance at the trial at an earlier time is telling. 1212 There is further relevant evidence that Zheng Xu gave in cross-examination. She was questioned about the focus of her attention on her investments in 2018 and 2019. Her evidence was (T 743): MR PETERS: Ms Xu, your focus throughout 2018 and 2019 was about the performance – the earnings and profits from this hotel fund that you've invested in. THE INTERPRETER: My real focus was on the principal of my investment. My – if the hotel fund operated normally my principal should be safe. MR PETERS: All right. Well, look at – before I come to the China deck – look at entry 267, 268, 269 and 270 of your WeChat history. This is February 19. Nowhere in there do you talk about redemption, do you? THE INTERPRETER: There was nothing about redemption here. MR PETERS: No. You're looking about – asking about dividends and date of distribution, aren't you? THE INTERPRETER: Yes. MR PETERS: That's correct, isn't it? And nowhere, up until 2020, do you ask her about – in the WeChats – ask Ms Zhu about redemptions. THE INTERPRETER: It was because my investment was not material. MR PETERS: Don't tell me why it was because, I just – I'm going to cut you off because it's non-responsive. I asked you – I put to you; nowhere in your WeChats in 2018 and 2019 do you talk about redemption. Do you agree, or disagree? THE INTERPRETER: I agree. We talked in person. 1213 It is implausible that a matter that was so central to Zheng Xu's concern about her investment in 2018 and 2019, about which on her case, a representation was repeated and reinforced to her at a meeting with Hannah Zhu in February 2018, is not mentioned by her in the contemporaneous WeChat exchanges of which there are hundreds commencing on 29 September 2017 and concluding with entry 429 on 12 September 2019. 1214 Although Hannah Zhu accepted that there was a discussion about the safety of Zheng Xu's investment, she denied that there was any discussion about the ability to redeem the investment at the conclusion of the four-year term. The issue of the safety of the investment is not one that arises on the pleadings. I am not persuaded in accordance with the evidence of Zheng Xu, and I am actually persuaded in accordance with the evidence of Hannah Zhu, that the repetition and reinforcement discussion did not take place at the meeting on 1 February 2018. 1215 On 16 May 2018, during a WeChat exchange, Hannah Zhu provided to Zheng Xu, in Mandarin and English, the SB&G Group New Opportunities document dated May 2018. On the second page, there is an important notice about investment risk, including (CB 6150): All investments are subject to risks and no guarantee or assurance is given by Salter Brothers AM or any of its related bodies corporate or the respective officers or representatives in relation to the performance of the investment opportunities or that any specific rate of return will be achieved or that there will be no loss of capital invested. 1216 Zheng Xu acknowledged in evidence that she received this document but stated: "I didn't look at it, because I don't – I didn't understand" (T 742). Nonetheless, she confirmed that at the time she was aware that Fund K invested in the Hotel Group. 1217 Although not pleaded as a separate meeting, Zheng Xu gave oral evidence-in-chief of a meeting with Hannah Zhu and Kevin Fan in early 2019 at the office of Salter Brothers in Melbourne. Her evidence was (T 656 – 658): MS BENNETT: Can you tell his Honour what you remember discussing? THE INTERPRETER: Because before the meeting, I learned from my accountant that the interest – or dividend or interest was taken out of the capital. That made me nervous about the safety of my capital. And I wanted to have an appointment with someone who can speak Mandarin and who is more senior than Hannah Zhu so that I can discuss these matters with them, and they told me that there was no problem with the operation of the fund. MS BENNETT: And so who was it that told you that? THE INTERPRETER: Kevin Fan. MS BENNETT: And when did Kevin Fan tell you that? THE INTERPRETER: At the meeting. MS BENNETT: And who else was present at the meeting? THE INTERPRETER: And Hannah Zhu, so three of us. MS BENNETT: And you – what language were you all three speaking? THE INTERPRETER: Chinese. MS BENNETT: And did you discuss – you said earlier that – well, sorry. Let me go back. What did Kevin Fan tell you about the operation of K Fund? THE INTERPRETER: He used quite a lot of jargon, so I do not understand much of it, but I understood that what he said was that the fund was safe. MS BENNETT: And what was the main area of your concern when you were having that conversation about the safety of the fund? THE INTERPRETER: The depreciation of capital. MS BENNETT: And what were your plans for the fund at that point? THE INTERPRETER: So in four-years' time I could redeem my capital in a safe way. MS BENNETT: And four-years from when? THE INTERPRETER: From confirmation of my investment. MS BENNETT: And when was that? THE INTERPRETER: Roughly in June or July of 2017, when a government document confirmed my application for visa. MS BENNETT: And what was the response to that discussion from Kevin Fan? THE INTERPRETER: Their response to me was that the operation of the fund and the safety is okay – was okay and was safe as well. MS BENNETT: And so what did you understand that meant for your redemption plans? THE INTERPRETER: So I thought in four-years' time I could get my capital back in a safe way. MS BENNETT: And so roughly when were you planning to do that? THE INTERPRETER: So when I have met the requirement of the timing of investment set by the government. 1218 Kevin Fan could not recall this meeting, and Hannah Zhu denies that she was in attendance. In cross-examination, Zheng Xu accepted that it was possible that Hannah Zhu was not at the meeting, stating that she met twice with Kevin Fan and could not recall the occasion on which Hannah Zhu was present (T 749). When questioned one day after having given her evidence-in-chief about this meeting, and by reference to the transcript, Zheng Xu said that she could not recall what she had said in evidence and then stated that Kevin Fan "briefed me on the management of the fund – of the company, and also the safety of the fund". When questioned further, her evidence was (T 755): MR PETERS: Look at line 27. You say, "he used quite a lot of jargon, so I do not understand much of it", but I understood that what he said was that the fund was safe. THE INTERPRETER: Yes. He told me not to worry. MR PETERS: That's what he said, is it? THE INTERPRETER: Yes. 1219 Once again, I am not satisfied that Zheng Xu's evidence was given with sufficient precision to enable me to find that there was a discussion between her, Kevin Fan and perhaps also Hannah Zhu in early 2019, at which time a statement was made to her to the effect that she would be able to redeem her investment after four-years. Zheng Xu's evidence elided between being told that there was "no problem with the operation of the fund", the use of jargon which was not fully comprehensible to her and her understanding that her investment capital was safe and consistent with her redemption plan. I am not able to find as a fact that there was a discussion during which Kevin Fan and or Hannah Zhu made a representation that redemption would be met or available after four-years, as distinct from an understanding to that effect which Zheng Xu formed based on jargon that she did not understand. 1220 Further, I am satisfied in accordance with the evidence of Hannah Zhu that she was not at the meeting, and I reject the evidence of Zheng Xu to the contrary. The repetition and reinforcement case is not made out. That conclusion considerably undermines the credibility of Zheng Xu's account. 1221 That leaves for consideration, the IM Representations case. There is nothing in these findings to relevantly distinguish my reasons in the Jingyi Li proceeding concerning the IM Representations case. Considered in context, the February 2016 Information Memorandum did not convey the Four-Year Investment Representation, the Investment Assessment Representation, the Structured Investment Representation or the Diversification Representation. However, it did convey the Conflict Representation. H. 4.2 Agency is not established 1222 The evidence concerning the conversation with Jeanetta Jin in June 2016, does not establish Zheng Xu's case. No attempt has been made to prove the contention that Jeanetta Jin acted on behalf of SBAM at the time. No submission is made in the written closing of Zheng Xu that the facts support an agency finding. There is a reference to the fact that referral arrangements were entered into with Chinese immigration agents being the document dated 17 November 2015 (CB 4949). But that agreement is between MAP Capital and DH Global Investment Ltd. There is of course an earlier agreement between SBII and Austar Group Ltd dated January 2015, which I addressed in my analysis of the agency contention as raised in the Li Xu proceeding. I adopt and apply my reasons for rejecting the agency contention. 1223 Moreover, no consequence flows in this proceeding from what was said by Jeanetta Jin to Zheng Xu at a meeting in China in 2016. There is no pleading that what was said contravened the statutory provisions that Zheng Xu relies on, and Mr Peters is correct to submit that no contention of that type is open because s 1041H(1) of the Corporations Act is confined to conduct in Australia and there is no ministerial consent for the purpose of s 12AC of the ASIC Act. H. 5 Conclusion as to the misleading conduct case 1224 The IM Representations case fails, save for the Conflict Representation. H. 6 Causation H 6.1 The pleaded case 1225 The direct causation case is pleaded at [26] of the Further Amended Narrative Statement as: Based on the [IM Representations], on or around 7 June 2016, [Zheng Xu] determined to invest $3,000,000 in the SIV K Fund. 1226 To this there is added at [27] that at the time, Zheng Xu: (a) considered that it was likely she would wish to redeem her investment in the SIV K fund at the expiry of the four-year period required under the SIV Program; and (b) was not aware of any limitation, restriction or material risk to her ability to redeem their investment in the is the SIV K Fund. 1227 There is also a series of pleadings about the investment reports that were subsequently provided, commencing at [44]. The contention that is repeated is that none of those reports disclosed any issue or risk relating to the liquidity of Fund K or the likely investment horizon of up until at least 30 June 2024 arising from investments in the SB&G Hotel Group. 1228 At [58] the pleading is to the effect that if she had been made aware of the restrictions, limitations or material risks to her ability to redeem their investments in Fund K and or the non-diversification and illiquidity of the investment in the likely investment horizon, then she would not have invested in Fund K at all or would have redeemed her investment in Fund K upon becoming aware of those matters prior to the fund ceasing to pay redemption requests in early 2020 and would have invested in an alternative complying fund. H. 6.2 Reliance evidence 1229 Zheng Xu did not read the February 2016 Information Memorandum before making their investment. She did not give counterfactual evidence. Her written closing submissions at [105] contend that she gave evidence that if she had been aware of the true state of affairs after making her investment in Fund K, she would have transferred her funds into the VIMG Property Fund. The footnote to that submission is wrong- it is a reference to the affidavit evidence given by Jingyi Li. 1230 Despite that error, it is not essential for an applicant to give direct counterfactual evidence if an inference is able to be drawn from the whole of the evidence as to what would likely have been done if the misleading conduct had not been engaged in: Hanave at 555-556. 1231 The drawing of an inference favourable to Zheng Xu simply does not arise because she did not read the February 2016 Information Memorandum and hence placed no reliance on any of the five asserted representations in it which she alleges induced her to invest $3 million in Fund K in June 2016. That is because the pleaded case is that "based on" the IM Representations, Zheng Xu determined to invest $3 million in Fund K on or about 7 June 2016. 1232 There is a pleading at [58] to the effect that if, at a later time, Salter Brothers had disclosed the illiquid nature of the investment or an investment horizon beyond the initial four-year period, then Zheng Xu would have made a request for redemption from Fund K when redemptions as a matter of practice were being met. Zheng Xu did give evidence that in consequence of a discussion with her accountant in early 2019, she was adamant that she wished to withdraw her investment (CB 10133). She did not after her subsequent meeting with Kevin Fan. H. 6.3 Causation submissions 1233 Doubtless in recognition of the evidentiary difficulties of establishing reliance on the IM Representations, Ms Bennett formulates a submission that reflects the DNA submission in the Jingyi Li proceeding. In writing it is expressed as: It is accepted that the Further Amended Narrative Statement identified a causal relationship at a high level. It asserted that 'based on' the IM Representations, the Plaintiff took the step which caused her loss. The evidence about the way in which the IM was used by the Defendant was ventilated in the course of the hearing of the proceeding. Its centrality to the 'DNA' of the investment process can be seen in a number of factors, including: (a) The IM itself which provides that any information representation not in this Information Memorandum may not be relied on as having been authorised by the Issuers; (b) Mr Paul Salter's evidence that the IM was the "source of truth" for SIV funds; and (c) The manner in which the IM was provided to staff, who were directed to explain the funds by reference to it. There is often an asymmetry of information in cases concerning misleading or deceptive conduct and unconscionability, which may "throw up facts, circumstances or context out of which the plaintiff is unaware". [I]t is clear from the evidence that the IM representations provided the basis for discussions between [Zheng Xu] and Jeanetta Jin and Hannah Zhu concerning her investment in SIV K fund. Accordingly, the IM representations informed, underpinned and were ultimately conveyed to [Zheng Xu] in the course of those discussions. 1234 Mr Peters submits that Zheng Xu's failure to read the Information Memorandum is fatal. In addition, he submits that the contention that if Zheng Xu had known about the restrictions, limitations or material risks about her ability to redeem an investment in Fund K, then she would have invested all her funds in the VIMG Property Fund, also fails. The reason is that the Information Memorandum for that fund, which Zheng Xu received from Dulcie Du on 17 October 2016, in English and Mandarin, made full disclosure of the risks of investment in a property fund, stated that the investment was illiquid and that there is no secondary market for the sale of an interest. Zheng Xu did not "try to suggest that she did not read" that document. Further, Zheng Xu has not given evidence that she made any attempt to withdraw her investment in the VIMG Fund upon becoming aware of the matters about which she complains. H. 6.4 Consideration 1235 At the outset, it should be understood that despite the time taken in evidence, no causal consequence is pleaded as flowing from the reinforcement of the IM Representations by Jeanetta Jin in June 2016, any repetition and reinforcement of the Four Year Investment Representation by Hannah Zhu in late 2017 or any other representation by Kevin Fan or Hannah Zhu at a meeting in early 2019. In any event, the causation case fails for the same reasons as I have given in the Jingyi Li proceeding when dealing with the same claim as framed by reference to the IM representations. In summary, the failure of Zheng Xu to read the February 2016 Information Memorandum is fatal, and I do not accept that it is open on the facts or the pleading to advance a case of market-based indirect causation. I adopt my reasoning in the Jingyi Li proceeding mutatis mutandis. H. 7 Unconscionable Conduct 1236 Zheng Xu's unconscionable conduct plea is similar to the pleading of Jingyi Li as are her submissions. There are of course factual similarities and differences that are summarised in her written and oral closing submissions. Ms Bennett's submissions and my analysis may be grouped as follows. 1237 In June 2016, Zheng Xu was not fluent in English, had not taken any course of study in English and accordingly could not read or understand any English document. Her prime motivation was to migrate to Australia and eventually to obtain permanent residency. These matters may be accepted. 1238 Zheng Xu was reassured by Hannah Zhu that her investment could be redeemed after four years. I have concluded this contention is not made out. 1239 Salter Brothers put in place a system designed to target vulnerable overseas investors who primarily wished to secure permanent residency in Australia and without making provision for their language needs or unfamiliarity with the commercial and financial systems in Australia. That case is not pleaded as systemic unconscionable conduct, even though some of its elements are separately identified in the pleading. It is not open to Zheng Xu, at the stage of closing submissions, to seek to make out that case: Productivity Partners at [59] and [313]. 1240 The relative strength of the bargaining positions. Salter Brothers was in a much stronger position because Zheng Xu was required to make a complying investment to obtain her visa, it had all relevant information about the purpose, nature and risks of the investment – only some of which it shared. This led to an "information asymmetry" which caused substantial imbalance in favour of Salter Brothers. In framing that submission, Ms Bennett submits that it was not until during the course of the preceding that Zheng Xu became aware of "the liquidity strategy disclosed in the evidence" of Salter Brothers, which is a reference to the IPO proposals to create liquidity and then effect redemptions from Fund K. That case is not pleaded, no application was made upon delivery of the relevant evidence of Salter Brothers, primarily the affidavit of Paul Salter made on 12 May 2024, to amend and the trial was conducted on the basis that this contention did not form part of the unconscionable conduct case. It is not open to Zheng Xu to advance it. 1241 No English translation was provided of the February 2016 Information Memorandum and, with it, the application form. That is so and it is of weight. Conformably with my findings in the Jingyi Li proceeding, Salter Brothers was aware that approximately 85% of the target market comprised Chinese citizens with little or no fluency in English and made the decision not to provide Mandarin translations as beyond the boundaries of what they were prepared to do. I have found that this is an unsatisfactory explanation in the circumstances. 1242 However, balanced against that consideration in this case is the fact that Zheng Xu admitted in evidence that, despite being able to engage Austar Suzhou to provide a translation of relevant documents (and there being no financial impediment which would have prevented her from obtaining a translation) and having considered that option, she did not do so because her appointed agent represented that her funds would be "safe" which advice she accepted (T 715). Zheng Xu made an informed and deliberate choice to place faith in her appointed agent. She was not vulnerable or disadvantaged because the documents were not provided to her in Mandarin. 1243 Relatedly, Salter Brothers ensured that some of the documents it provided to investors were translated (the slide-decks and the yearly fund investment reports are notable examples), other fund managers did provide Information Memoranda in a translated form and complaints had been received from some investors concerning Salter Brothers' failure to provide translated documents. The same submission was made in the Jingyi Li proceeding, and I adopt my analysis. In short, I am not satisfied that there was at the time any normative standard of societal commercial behaviour to the effect that important documents relating to complying investments should be provided in the native language of the intended class of recipients. And for the same reasons given in the Jingyi Li proceeding, the receipt of contemporaneous complaints contention is not made out on the evidence. 1244 The extent to which Salter Brothers failed to disclose intended conduct that could affect Zheng Xu's interests or the risks of the investment. This is particularised as knowledge that the plans to achieve liquidity in Fund K necessarily made redemption at expiry of the four-year timeframe unviable which was not shared with potential investors. Further, for that reason an investment in Fund K was materially illiquid. The pleaded case includes the contention, in several paragraphs, that limitations, restrictions or material risks were not disclosed. It extends to a failure to disclose those matters before the initial investment was made in June 2016 and thereafter in the form of the provision of various investment reports in February 2017, 2018, and 2019. 1245 The pleading of the unconscionability case necessarily therefore "picks up" these matters. Some are simply not made out on the facts. That Fund K would the investing in the Hotel Group was disclosed as early as 13 March 2017, when Zheng Xu received in Mandarin a fund report for the period to 31 December 2016, and similar disclosures were made in each of the fund reports (in Mandarin) that were provided on 6 September 2017, 2 March 2018, 7 September 2018, 5 March 2019 and 16 September 2020. Further, on 16 May 2018 she received an investor presentation and the SB&G Group New Opportunities document dated May 2018 and accepted in cross-examination that upon receipt she was aware that an investment in Fund K was in turn an investment in the Hotel Group (T 745). Zheng Xu did not then seek a redemption. 1246 As to the failure to disclose the intention to undertake an IPO as a means of achieving fund liquidity and meeting redemptions, the evidence of Paul Salter, which I have accepted, is that a major reason why the liquidity strategy was not achieved was the impact on the hotel industry of the COVID-19 Pandemic. His evidence was also that by late 2015, he had conceived of a plan to list the Hotel Group as "one means" of satisfying redemptions in Fund D and Fund K. There were other proposals in contemplation before the onset of the COVID–19 Pandemic, being a sale of units to institutional investors or wealth managers or the introduction of new investors. Zheng Xu has not established that as at June 2016, redemption immediately after the four year timeframe was unviable. 1247 The circumstances that led to the decision to sign the application form, including the conduct in separating the Information Memorandum from the application form "created a risk that it would not be provided" and there was awareness by Salter Brothers that "some complaints about dealings with Austar over time" had been made. 1248 The detachment of the application form from the Information Memorandum was the work of Austar Suzhou, not Salter Brothers. There is some evidence from the cross-examination of Kevin Fan that he would receive by email a completed application form from Austar Suzhou, detached from the relevant Information Memorandum, which practice he accepted was "common" (T 949-950). To this, should be added the evidence of Zheng Xu that she does not recall receiving a copy of the February 2016 Information Memorandum before she signed the application form in June 2016. However, once again, the fact of separation of the application form and knowledge that this practice was common by Salter Brothers is not pleaded as a matter relevant to the unconscionable conduct claim and it is not open to Zheng Xu to now rely on these facts. 1249 As to the allegation about "some complaints", the evidence from the complaints register is for the period 1 February 2022 until 15 May 2024, and in any event concerns the failure to provide Information Memoranda in Mandarin. This contention is not made out on the evidence. 1250 There is a general rolled up submission that "funnelling investors into an investment for the benefit of related entities while representing that investments would be arms-length, conflict free, and based on a sound, diversified and structured approach is comfortably within the concept of statutory unconscionability". As expressed, that broad submission is not founded in the pleaded unconscionable conduct case, although aspects of it are expressed differently. Conformably with my earlier findings, it is only the Conflict Representation that was made which was in the circumstances misleading or deceptive or likely to mislead or deceive. However, it was not a matter of consequence for Zheng Xu because the evidence is clear that she was made aware from as early as 13 March 2017, that Fund K made related investments in the Hotel Group. She made no complaint about that at the time and made no request to redeem upon becoming aware of it. Similarly, she made no complaint when that fact was disclosed in writing to her on multiple occasions thereafter. 1251 The structural unfairness submission put in the Jingyi Li proceeding is repeated, which I reject for the reasons I have given. 1252 That no copy of the February 2016 Information Memorandum (or any earlier version) was provided, and even if it had, Zheng Xu would not have been able to read or comprehend it. I have dealt with the related submissions concerning Zheng Xu's lack of fluency in English, the targeting of Chinese citizens as the significant potential class of investors and the fact of separation of the information memorandum above. This separate submission takes the matter no further. 1253 Despite that Zheng Xu had the means to procure translations, Salter Brothers did not comply "with its obligations to its investors" to provide documents in Mandarin from the outset. No such case is pleaded, and I reject it for the reasons given in the Jingyi Li proceeding. 1254 Zheng Xu had a relatively short window within which to consider and to make a complying investment, which likely would have made it difficult for her to do so, and in any event, she considered that she was under time pressure to decide. This submission is taken as far as the contention that Zheng Xu was under "immense pressure" to make the requisite investment in compliance with the 28-day deadline. I have rejected her case to that effect. Objectively, she became aware that her application had been successful on or about 14 April 2016 but did not attend the offices of Austar Suzhou until 2 June 2016. The investment application form was not signed until 7 June 2016. 1255 The evidence discloses that the time necessary to translate into Mandarin, the declarations and acknowledgements on the application form was quite short (less than three minutes). For example, during the evidence of Jun Chen it took one and a half minutes to translate three paragraphs on the application form at CB 9484 (T 519) and when the identical passage at CB 10169 was translated for Zheng Xu, it took less than one minute (T 714). Plainly, there was sufficient time to obtain a translation of all the words under the declaration and signature section of the application form, and then any necessary part of the corresponding Information Memorandum if Zheng Xu was interested to know the terms on which her money would be invested. She did not take these prudent steps because she trusted Austar Suzhou as her agent to protect her interests. 1256 Zheng Xu was not at the time a sophisticated investor. I accept that. Most certainly she was not as sophisticated as Jun Chen. She was, however, relatively wealthy and had the financial means to obtain a translation of relevant documents and the intellectual ability to consciously decide that she would not do so because she had engaged Austar Suzhou from whom she had received the assurances of safety and compliance 1257 Zheng Xu was a member of a class of investors who were required to make a complying investment as a means of obtaining permanent residency, which submission is relevantly identical to one put in the Jingyi Li proceeding. I adopt my reasoning to the extent relevant. In short, the class was not vulnerable in comparison to other Chinese citizens at the time. These were comparatively wealthy people who had decided to make the life-changing decision to migrate to a foreign country and who had the financial capacity to comply with the significant requirement to make and to fund a complying investment of not less than $5 million from their own resources. The class appointed China-based agents to assist in that process. The agent offered, for the payment of an additional fee, to procure translations of relevant documents. 1258 These circumstances in my view lead to the inevitable conclusion that, acting prudently, Zheng Xu ought to have obtained translations or ought to have interrogated the relevant personnel from Austar Suzhou more carefully about the terms on which her funds were to be invested in a foreign country and in a financial system that she had no understanding or experience of: cf Atlas Advisors at [237] – [238]. 1259 Finally, I have also considered the list of factors at s 12CC of the ASIC Act as a guide to the societal norm of acceptable commercial conduct, in the same way as I have in the Jingyi Li proceeding; that is to the extent relevant and argued. There is no additional matter I consider relevant. 1260 For these reasons I am not satisfied having undertaken an overall evaluative assessment, that the conduct of Salter Brothers as alleged, even though some matters favour the case of Zheng Xu, are sufficient to establish the serious allegation that the conduct was unconscionable. H. 8 Damages and other relief 1261 The approach to the claim of Zheng Xu very closely follows that of Jingyi Li. Declaratory relief, damages pursuant to s 1041 of the Corporations Act or s 12GF and a refund pursuant to s 12GM of the ASIC Act are claimed, some in the alternative. 1262 Damages were particularised (until closing submissions) in the form of a letter of 15 April 2024 (CB 255). On the counterfactual that if Zheng Xu had known the true state of affairs in respect of Fund K in June 2016, then she would not have invested $3 million in Fund K and instead would have invested $3 million in the VIMG Property Fund. 1263 The financial consequences of not proceeding in that way are calculated at $3,443,547 as follows: Item Amount 4-year investment return not received from an investment with the VIMG Property Fund $946,800 Plus redemption sum that would have been received from VIMG in June 2021 (assuming a redemption request submitted in June 2020) and less a management fee of 2% $2,940,000 Less distributions received from the investment Fund K between 15 June 2016 and December 2019 ($443,252) Less current value of the units in fund K ($0) Total $3,443,547 1264 There is an alternative particularisation on the counterfactual that Zheng Xu would have discovered the true state of affairs of Fund K shortly after making her investment in June 2016 and if so she would have requested her investment in Fund K to be redeemed and upon redemption, would have invested the funds received in the VIMG Property Fund. 1265 The same calculation is then performed to arrive at an amount of $3,443,547. A third alternative proceeds on the counterfactual that Zheng Xu would have discovered the true state of affairs "in the months or years" following her initial investment. The quantum of that claim is not calculated, as it turns upon findings about the face value of a redeemed investment at unparticularised points in time and the difference in hypothetical distributions. 1266 For the reasons I have given in the Li Xu and Jingyi Li proceedings, Zheng Xu has failed to prove that the current value of her units is nil. Once again, I accept the methodology, procedure and calculations as set out in the Expert Report of Dawna Wright and I find according to her evidence. The calculations for Zheng Xu are as follows. 1267 The selected discount rates and the unit prices from Tables 1 and 2 in the Expert Report are the same. In the Executive Summary, Dawna Wright made the counterfactual assumption consistent with the claim of Zheng Xu as to what she would have done if she had known of the true state of affairs in June 2016 (CB 22,122). Table 9 sets out her summary opinion of the loss suffered at each redemption date: (CB 22122) 1268 Table 10 sets out the calculations as to the current value of the unit holdings in Fund K as at each redemption date: (CB 22122) 1269 Table 11 is a summary comparison of loss with Zheng Xu's particularised claim: (CB 22122-22123) 1270 A more detailed analysis is at Table 60 for Redemption Date 1: (CB 22192) 1271 In summary, I accept that on the no transaction case, the current value of the units held by Zheng Xu in Fund K is between $2,416,870 and $1,819,149. I am satisfied that redemption requests are likely to be satisfied no later than 31 March 2025, with the consequence that the units had a value of $2,312,919 (redemption date 2) as at the valuation date of 3 June 2024. 1272 Despite the submission of Mr Peters, that Zheng Xu must be held to her nil value claim, in my view there is no significant prejudice that flows from an assessment of damages on the basis of the evidence set out in the Expert Report. It is the same issue that I have resolved in the Li Xu and Jingyi Li proceedings by reference to paragraphs [6.3.6] and [7.3.6] in the Expert Report. The corresponding paragraph for Zheng Xu is [8.3.5]. 1273 On that basis, if I had determined that Zheng Xu was entitled to an award of damages, I would have determined the value of her Fund K units at redemption date 2 as $2,312,919 in accordance with the evidence of Dawna Wright. 1274 As I have rejected the causation case, it would be speculative for me to proceed further and determine the quantum of damages that I would have assessed if the case of Zheng Xu had otherwise succeeded. 1275 In closing submissions, Ms Bennett relied on a third alternative calculation, which I have mentioned when dealing with the Jingyi Li proceeding. The document that was handed to me in closing submissions is a recalculation of the damages claim as at each redemption date by applying the unit prices for Fund K as at 31 May 2014 after deduction of the 0.5% Sell Spread (Table 17 of the Expert Report) and by application of the discounts set out in Table 22 of the Expert Report. The derived unit value is then applied to the units held conformably with the methodology at Tables 56 and 61 of the Expert Report. The result is a recalculation of the particularised loss at each redemption date. 1276 I will not permit Zheng Xu to rely on this alternative calculation (for the reasons I have given in the Jingyi Li proceeding) because it is unfair, inconsistent with the overarching purpose and I do not have the benefit of the considered opinion of Dawna Wright. H. 9 Did Zheng Xu fail to take reasonable care? 1277 Salter Brothers rely on s 1041I(1B) of the Corporations Act and s 12GF(1B) of the ASIC Act. The s 12DB ASIC Act issue does not arise as there is no claim for damages pursuant to s 12DB. 1278 As refined in final submissions, Salter Brothers contend that there ought to be a substantial reduction of any damages award because Zheng Xu was: (a) Aware of investment risks. She accepted that in 2016 she knew that no investment can be made without risk (T 724); (b) Aware when she signed the application form in June 2016, that she was entering into a contract (T 713); (c) Not prevented from obtaining a translation of the application form or the February 2016 Information Memorandum; and (d) Not under time pressure to select a complying investment. 1279 In contrast, Ms Bennett submits: (a) Paul Salter accepted that Salter Brothers owes obligations to investors extending to ensuring that they understand "what they're investing in" (T 838). This obligation cannot be displaced by a reasonable care defence, despite Paul Salter's further evidence that the "burden in terms of their investment decision is theirs" (T 838); (b) There was no impediment to the provision by Salter Brothers of Mandarin translations of the important documents, by delivery to the China based immigration agents. This was not done because it sat beyond of what it was prepared to do. (c) Kevin Fan gave evidence (T 948) that translation quality can vary, and mistakes can be made. If the concern of Salter Brothers was to ensure accuracy and control over content, it was not logical to leave it to the investors to obtain translations; (d) Thus, it should be concluded that the evidence "discloses a notable lack of care by [Salter Brothers] to the interests of its investors"; and (e) Zheng Xu's goal was to obtain permanent residency, the window of opportunity to select a complying investment was narrow, she felt pressured and in fact did engage her own agent to assist her with the process. 1280 Finally, the overarching submission is made that the statutory provisions are concerned with protecting consumers of financial services from misleading conduct and acceptance of the submissions of Salter Brothers "would result in significantly adverse implications" for the statutory regime. 1281 I adopt mutatis mutandis my reasoning in the Jingyi Li proceeding as to why broad reliance on the statutory purpose does not answer the application of the reduction of damages provisions. 1282 In my view there are three material facts that establish that Zheng Xu failed to take reasonable care to protect her own interests. First, she engaged Austar Suzhou as her agent to assist with the process, knowing that for an additional fee it could provide her with any requested translation service, but she chose not to have the application form or the Information Memorandum translated because her agent told her that it is a government scheme, which caused her to think that her principal was not at risk (T 695- 696). She was also told by Austar Suzhou representatives that the funds were assessed by lawyers as compliant and safe (T 712) and deliberately chose not to obtain a translation of the application form that she signed in June 2016 because of those assurances (T 715). Austar Suzhou acted as her agent in providing that advice. Salter Brothers bear no responsibility for these representations. 1283 Further, in my view, it was unreasonable to rely on the generalised oral assurances from representatives of Austar Suzhou when the agency agreement signed by Zheng Xu (in Mandarin) expressly warranted, immediately above her signature, that Austar Suzhou "shall not assume any responsibility for any kind of liability relationships arising from various contracts and agreements executed between" Zheng Xu and third parties (CB 20875). 1284 Despite this, Zheng Xu made application to invest $3 million into a fund in a foreign country without herself making rudimentary enquiries as to the terms of her investment. 1285 Second, Zheng Xu took these steps in the knowledge that there are risks associated with any investment. Accepting that she was then considering a life-changing decision is not a reason to take less care to protect her own financial interests. In my view an ordinary and prudent investor in the position of Zheng Xu at the time would have taken steps to inform herself more fully about the terms on which she was preparing to part with a substantial sum of money to make an investment in a foreign country and in an unfamiliar financial system. 1286 Third, there was no impediment, financial or practical, which prevented Zheng Xu from obtaining a translation of at least the application form which would then have alerted her to the need to enquire into what was in the Information Memorandum by having it translated as well. 1287 In my view a significant reduction is warranted. Essentially Zheng Xu decided not to take steps to protect her own interests because she relied on generalised assurances from Austar Suzhou. If I had otherwise been minded awarding an amount of damages, I would have reduced the sum by 65% as the amount that I consider just and equitable having regard to Zheng Xu's share of responsibility. H. 10 Section 12GM refund claim 1288 I apply the same reasoning and conclusion that I have reached in the Li Xu proceeding and decline to make the orders sought. H. 11 Other matters of defence 1289 Salter Brothers pleads that the claims are statute barred, as having been commenced beyond the six-year limitation period that applies under the Corporations Act and the ASIC Act. The basis is that loss or damage was first suffered, by reference to Zheng Xu's pleaded claim, in late 2017 (or early 2018) when she decided to remain in Fund K instead of redeeming her investment and transferring to the VIMG Property Fund. In the written closing submissions, this defence is confined to paragraph [45A] of the Further Amended Narrative Statement which pleads that in late 2017 Hannah Zhu repeated and reinforced the four-year investment representation. 1290 There is no merit in the defence, essentially for the reasons I have given when dealing with the limitation defence in the Li Xu proceeding. Loss or damage was prospective in late 2017 or early 2018. It depended upon the making of a redemption request and it not being met. The first redemption request that Zheng Xu made was on 28 July 2020, which Salter Brothers accepts was not met because at that time due to insufficient liquidity in Fund K. Until that event, Zheng Xu had not suffered actual as distinct from prospective loss: Wardley at 532. H. 12 Overall conclusions in the Zheng Xu proceeding 1291 There is no issue that the five IM Representations were made. Only the Conflict Representation was misleading or deceptive or likely to mislead or deceive. Zheng Xu did not rely on the Conflict Representation and her case fails on the causation issue. 1292 Even if Zheng Xu had established that the other representations relied on where misleading or deceptive or likely to mislead or deceive and that she relied on one or more when making her initial investment decision in June 2016, her particularised claim for damages cannot succeed because her units are not without value. Had I otherwise found in her favour, I would have proceeded by adopting the evidence of Dwana Wright as to the value of the units calculated to redemption date 2. If I had awarded an amount of damages in her favour (depending on acceptance of one of her causation contentions) I would have reduced the quantum of the award by 65% as the amount that I consider just and equitable having regard to Zheng Xu's share of responsibility for her loss or damage. 1293 Overall, the claim fails and the proceeding and must be dismissed. I certify that the preceding one thousand two hundred and ninety three (1293) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McElwaine. Associate: Dated: 19 February 2025 Schedule No: VID122/2022 Federal Court of Australia District Registry: Victoria Registry Division: General Fifth Defendant FUYIN FAN Sixth Defendant HANNAH ZHU Seventh Defendant AUSTAR GROUP MIGRATION PTY LTD