Guo v Yufeng Investment Group (Australia) Pty Ltd [2024] NSWSC 1599

Supreme Court New South Wales

Medium Neutral Citation: Guo v Yufeng Investment Group (Australia) Pty Ltd [2024] NSWSC 1599 Hearing dates: 4-8 November 2024 Date of orders: 13 December 2024 Decision date: 13 December 2024 Jurisdiction: Equity - Commercial List Before: Nixon J Decision: (1) Directs the parties to bring in short minutes of order, by 5pm on 20 December 2024, to give effect to these reasons for judgment. (2) Directs that, in the event that the parties are unable to agree orders to give effect to the reasons for judgment, the parties exchange, by 5pm on 20 December 2024, and provide to the Associate to Nixon J, the orders which each party proposes and submissions (limited to 5 pages) on those orders, indicating whether, and if so why, an oral hearing is requested to deal with the issues in dispute. Catchwords: EQUITY – Fiduciaries – where First Defendant received $20m from Plaintiff following discussions between Plaintiff and Third Defendant – where 30% of shares in First Defendant were transferred by Third Defendant to Plaintiff's wife, who was appointed a director of First Defendant – where money received from Plaintiff was transferred by First Defendant to Fourth Defendant, in which First Defendant owned 95% of shares, and was used by Fourth Defendant for purchase of shopping centre as development project – where development project was subsequently sold at substantial profit and no amount of profit was distributed to Plaintiff – whether sum of $20m was advanced by Plaintiff as a loan to First Defendant or was contributed as investment in joint commercial endeavour between Plaintiff and Third Defendant, on basis that Plaintiff was entitled to a share of profits from the development project – whether Third Defendant owed fiduciary obligations to Plaintiff – whether Third Defendant breached fiduciary obligations – whether Fourth Defendant liable as knowing participant or as alter ego of Third Defendant EQUITY – whether Third Defendant agreed to hold a further 30% of shares in First Defendant on trust for Plaintiff – where shares held by Third Defendant were transferred to Second Defendant – whether Second Defendant holds shares on trust for Plaintiff EQUITY – Remedies – equitable compensation – account of profits – where Fourth Defendant failed to discover relevant documents – whether Plaintiff entitled to discovery prior to making election between remedies CONTRACT – oral loan agreement – where Plaintiff paid $16.8m to First Defendant following conversation with Third Defendant – whether the money was paid as a loan to First Defendant, or as a loan to Third Defendant which was guaranteed by First Defendant –whether term of loan that interest payable at rate of 24% per annum – whether payments received by Plaintiff were repayments made in respect of loan – whether loan was repayable on demand – whether recovery of outstanding balance is statute-barred Legislation Cited: Limitation Act 1969 (NSW), ss 14, 54, 63 Cases Cited: Ancient Order of Foresters in Victoria Friendly Society Limited v Lifeplan Australia Friendly Society Limited (2018) 265 CLR 1; [2018] HCA 43 Anderson v Canaccord Genuity Financial Ltd [2023] NSWCA 294 Bellevarde Constructions Pty Ltd v L'Officina by Vincenzo Australia Pty Ltd [2022] NSWCA 246 Breen v Williams (1996) 186 CLR 71; [1996] HCA 57 Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWCA 199 Chong & Neale v CC Containers Pty Ltd (2015) 49 VR 402; [2015] VSCA 137 Crawley v Short [2009] NSWCA 410 DVO16 v Minister for Immigration and Border Protection (2021) 273 CLR 177; [2021] HCA 12 ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Guojin Huang v Jinghong Wei (No 2) [2022] NSWSC 473 GM & AM Pearce & Co Pty Ltd v Australian Tallow Producers [2005] VSCA 113 GoConnect Ltd v Sino Strategic International Ltd (in liq) [2016] VSCA 315 Grimaldi v Chameleon Mining NL (No 2); Chameleon Mining NL v Murchison Metals Ltd (2012) 200 FCR 296; [2012] FCAFC 6 Hasler v Singtel Optus Pty Ltd; Curtis v Singtel Optus Pty Ltd; Singtel Optus Pty Ltd v Almad Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64 In the matter of Sunnya Pty Ltd [2024] NSWSC 403 Jaken Properties Australia Pty Ltd v Naaman [2023] NSWCA 214 John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd; Walker Corp Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563; [1995] HCA 68 Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 Lane v L3 Enterprises Pty Ltd [2007] QSC 288 Ling v Pang [2023] NSWCA 112 Maguire v Makaronis (1997) 188 CLR 449; [1997] HCA 23 Norberg v Wynrib [1992] 2 SCR 226 Ogilive v Adams [1981] VR 1041 O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262 Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165; [2001] HCA 31 Sangha v Baxter [2009] NSWCA 78 Singh v AKM Investments Group Pty Ltd [2024] NSWCA 268 The Insurance Commissioner v Joyce (1948) 77 CLR 39; [1948] HCA 17 Tozer Kemsley & Millbourn (Australasia) Pty Ltd v Collier's Interstate Transport Service Ltd (1956) 94 CLR 384; [1956] HCA 6 Watson v Foxman (1995) 49 NSWLR 315 Xiao v BCEG International (Australia) Pty Ltd (2023) 111 NSWLR 132; [2023] NSWCA 48 Young v Queensland Trustees Ltd (1956) 99 CLR 560; [1956] HCA 51 Zibara v Ultra Management (Sports) Pty Ltd (2021) 283 FCR 18; [2021] FCAFC 4 Texts Cited: PD Finn, Fiduciary Obligations (Federation Press, 2016) Category: Principal judgment Parties: Wencheng Guo (Plaintiff) Yufeng Investment Group (Australia) Pty Ltd (First Defendant) Roseburg Investment Pty Ltd (Second Defendant) Changran Huang (Third Defendant) 152 Rowy Pty Ltd (Fourth Defendant) Representation: Counsel: MS Henry SC w DJ Delany (Plaintiff) J Kay Hoyle SC w FD Di Lizia (First and Fourth Defendants) G Ng SC w N Li (Third Defendant)