District Court New South Wales Medium Neutral Citation: Poon v Poon [2017] NSWDC 117 Hearing dates: 27-30 March 2017; 6-7 April 2017; 24 April 2017 Date of orders: 17 May 2017 Decision date: 17 May 2017 Jurisdiction: Civil Before: Dicker SC DCJ Decision: (1) Judgment for the plaintiff. (2) The parties are to bring in Short Minutes of Order reflecting these reasons and updating the interest claim of the plaintiff. (3) The defendant is to pay the plaintiff's costs of the proceedings as agreed or assessed. (4) Liberty to the parties to apply for a variation of the costs order in (3) above. (5) Exhibits to be returned after 28 days. Catchwords: Contract – identity of the lender in an alleged loan between family members – whether the moneys advanced by the plaintiff were lent by him personally to the defendant or by the mother of the plaintiff and the defendant – alternative claim in restitution Cases Cited: ANZ v Westpac Banking Corporation v (1988) 164 CLR 662 Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 Carr v Baker (1936) 36 SR (NSW) 301 Croucher v Cachia [2016] NSWCA 132 Cubillo v Commonwealth (No 2) [2000] FCA 1084; (2000) 103 FCR 1 Danckert v Tonkin [2015] NSWSC 1570 David Securities Pty Ltd v Commonwealth Bank of Australia (1993) 175 CLR 353 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [2012] NSWCA 380 Ho v Powell [2001] NSWCA 168 Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 Category: Principal judgment Parties: Wai Kit Poon (Plaintiff) Wai Shun Poon (Defendant) Representation: Counsel: A D'Arville (Plaintiff) G Stapleton (Defendant) Solicitors: McLachlan Thorpe Partners (Plaintiff) Ralph Lawyers (Defendant) File Number(s): 2015/00240204 Judgment 1. In this matter the plaintiff asserts that the defendant is indebted to him in relation to moneys said to have been advanced by the plaintiff to the defendant by way of loan in November 2013. The plaintiff and the defendant are brothers. The defendant asserts that the moneys were not lent to him by the plaintiff but by their mother who is now deceased. 2. Accordingly, the main issue before the court is who was the lender to the defendant: the plaintiff or the plaintiff's and the defendant's mother? Alternatively, if both parties operated under a mistake as to the identity of the lender and there is no contract, does the plaintiff have a claim in restitution against the defendant? 3. By Statement of Claim dated 17 August 2015 the plaintiff sued the defendant in contract for breach of an agreement to repay moneys advanced and, alternatively, in restitution for unjust enrichment. The moneys said to be advanced was the amount of HK$1 million, comprising of A$100,000 and HK$300,000. An Amended Statement of Claim was filed with leave on 7 April 2017. This expanded the alternative unjust enrichment claim: see paragraphs 12A to 13 and relies on a mistake by the plaintiff in advancing the moneys. 4. By a Further Amended Defence, the defendant disputes that the moneys were loaned to him by the plaintiff and says they were lent by their mother. In relation to the unjust enrichment claim, a change of position defence is pleaded. The parties and related family 1. Both the plaintiff and the defendant and the relevant persons referred to in their evidence are all persons of a Chinese heritage and a number of the witnesses live in Hong Kong. I set out in the following table the names of the various persons who will be referred to in the course of these reasons. I also set out the anglicised names by which the various persons are also known. Chinese Name Anglicised Name Relationship Yau Sau Luen Mother of plaintiff and defendant. Died March 2014. Wai Lit Poon James Elder brother of plaintiff and defendant Wai Kit Poon Francis Plaintiff and brother of defendant. Married to Siu Fong Wong who is also known as Sanny. Wai Ching Poon Samuel Brother of plaintiff and defendant. Married to Ma Yuk Pik who is also known as Bonnie. Wai Shun Poon Timothy Defendant. Married to Yuk Ping Tam who is also known as Viola. Wai Yee Poon Windy Sister of plaintiff and defendant. Siu Fong Wong Sanny Wife of plaintiff, Francis. Ma Yuk Pik Bonnie Wife of Samuel. Yuk Ping Tam Viola Wife of defendant, Timothy. Background facts 1. The background facts are important in this matter. The following recitation of facts constitutes my findings as to the facts, unless otherwise stated. In making these findings, I have had regard to all the evidence and the oral and written submissions made on behalf of the parties. 2. In the following statement of facts I will refer to the parties and the witnesses by their anglicised first names. I will do this without any disrespect to any of the parties or the witnesses and in order to enable a more simple understanding of the facts. 3. In 1977 the father of Timothy and Francis Poon, Poon Chan Wing, died. At that time all of the various siblings shared rented premises in Hong Kong with the mother of Timothy and Francis, Yau Sau Luen: T29.37. 4. In the late 1970s the plaintiff, Francis, moved out of the rented family apartment and moved in with his current wife, Sanny. 5. In about 1980, Francis opened a joint bank account with his mother: T34.14. He regularly deposited money into the joint bank account for his mother's use. However, with his mother's approval, on occasions he withdrew money from the joint account when needed for his business purposes and then deposited a similar amount of money back into the account: T34.44; T35.9. The mother held the passbook for the account (T38.25; T39.3) but Francis was able to access the joint account and could withdraw or deposit funds from the account from time to time. He initially started to deposit HK$2,000 each month into the joint account and in due course that monthly amount increased progressively to HK$2,500 and ultimately to HK$2,900. 6. In addition to these amounts, the mother had access to government benefits of about HK$1,200 which she received monthly. Sanny gave evidence, which I accept, that the Hong Kong government benefit of HK$1,200 per month was directly deposited into a bank account in the mother's sole name: T89.6-90.33. This account was still held by the mother as at the date of her death: T90.47. Sanny stated that the account was with the Dah Sing Bank (T91.19) but the passbook was discarded after the mother's death and statements were not held: T92.14; 92.37. It is unclear when the mother became entitled to this Hong Kong government benefit. The defendant submitted that the court should find that the mother qualified from age 70 but there was no evidence which permits me to so find: cf defendant's written submissions paragraph 56 and footnote 2. 7. In about 1994, the mother moved into Francis' apartment in Hong Kong and lived with him and his family: T32.17. She had previously lived with Samuel. As her day to day expenses were mainly covered by Francis and she probably had access to gifts from her children, she seldom withdrew money from the joint account for her own use. 8. Francis lived in his apartment with his mother and his immediate family from about 1994. Francis lived in Australia from 2000 until 2005. During that period, his mother continued to live alone in his apartment in Hong Kong. When he returned to Hong Kong in 2005 his mother continued to live in his apartment in Hong Kong with Francis and his family. 9. In late 2011, the mother was diagnosed with terminal cancer. She subsequently passed away in March 2014. 10. In 2002 or 2003 the defendant, Timothy, borrowed $100,000 from the plaintiff Francis. The loan was repaid by Timothy in about 2009 or 2010 together with interest. 11. By February 2012 the joint account between Francis and the mother had grown to HK$703,721.55: Exhibit A, page 330. 12. Francis asserts that in February 2012, soon after when his mother was diagnosed with cancer, he and his mother had a conversation to the effect that the mother was of the view that Francis should withdraw the money from the joint account. Francis asserts that the mother said words to him to the effect: "It is your money anyway and I do not need it": paragraph 3(t) of the plaintiff's affidavit affirmed 10 August 2016. Francis says that on 26 February 2012, he transferred HK$680,000 from the joint account back to his own account leaving HK$23,721.55 in the joint account. Francis also gives evidence that he stopped depositing HK$2,900 per month into the joint account at this time. 13. The various balances referred to above are supported by the passbook to the joint account a copy of which became part of Exhibit A and appear accurate: see Exhibit A, pages 322 and 330. 14. This conversation asserted by Francis with his mother is apparently disputed by the defendant: defendant's written submissions paragraph 45. Francis accepts that the moneys he deposited into the joint bank account were gifts by him to his mother: T33.19-.28. He says that his mother agreed that he could use money from the account for his business from time to time and that he agreed to replace the amounts. In relation to the claimed conversation in February 2012, this is consistent with the withdrawal made from the account at or about that time. In my view, it is likely that the mother would have been aware of the withdrawal of HK$680,000 from her account in or around February 2012 and I find that a conversation occurred to the effect asserted by Francis. In my view this is a probable conversation to be had in circumstances where the moneys placed in the account were likely primarily to have been from advances from Francis and gifts from Francis, albeit that there may have been other gifts of money from the other siblings. The mother was ill by this time. It is likely that she wanted to commence getting her affairs in order including by returning to Francis (with whom she had lived for a long time and who had supported her) monetary gifts he had made to her which she expected not to need. 15. Sanny also claims to have heard the conversation: T113.32-.43. Although her evidence was somewhat inconsistent on this issue (T110.19 cf T113.43), it provides some independent support for Francis' account. As she is the plaintiff's wife, I exercise some caution in considering her evidence in the proceedings as she has an indirect interest in the outcome. 16. As stated, having reviewed the evidence I find that the February 2012 conversation occurred. 17. I formed a generally positive view of Francis whilst he was giving his oral evidence. He appeared to me to be truthful, made concessions where appropriate and in most cases did not generally assert to have a recollection of matters where he did not have any. I generally accept the submissions made on behalf of the plaintiff in this regard. 18. In coming to that view, I carefully reviewed the contrary submissions of the defendant as to the plaintiff's reliability and credit. I will consider a number of particular submissions as to the plaintiff's credit later in these reasons. 19. What is clear is that by February 2012 the mother only had about HK$24,000 left in the passbook account, which was jointly held with Francis: Exhibit A, page 330. There was some evidence that the mother had a Bond with Lehmann Brothers (jointly with Sanny although the mother provided the money) for HK$80,000 before the Global Financial Crisis in 2008, although the evidence was unclear from which precise account of the mother this money came when it was invested: T81.4; T87.16. It seems that about 80% of this money was returned by the bank when Lehmann Brothers had solvency issues and was placed in a joint bank account between the mother and Sanny. The evidence was that this money was used by the mother to buy a wedding present of jewellery for one of Francis' children for his wedding in 2013: T44.8-.17. Although it was disputed by the defendant in submissions, I accept that evidence which was not subject to cross examination. There was no evidence that it was available to the mother or Francis in November 2013. 20. There was evidence that the mother may have had substantial funds in other accounts in her name in 2013-14. The defendant strongly submitted that she had very substantial funds available to her at this time. First, she had a personal bank account into which her monthly Hong Kong government pension of HK$1,200 was deposited. It seems the mother used at least some of these funds for her own use: Exhibit A page 311 paragraph 3(e). Secondly, she apparently received a monthly payment from Samuel and Bonnie, asserted by Bonnie in her oral evidence to be on average HK$3,000 per month from 1979 to 2012: T183.32. Thirdly, James asserted in his oral evidence that he also had given his mother a monthly payment for a lengthy period: T191.48. He later stated that this payment was HK$2,000 per month: T215.20. Fourthly, Timothy gave evidence that he paid HK$3,000 to his mother monthly between 1979 and 1992 as well as some gifts of money after that period: T309.31-310.36. There was no evidence before the Court of what the balances were, if any, in any personal accounts of the mother as at November 2013. 21. The plaintiff submitted that I should not accept the evidence of Timothy, Bonnie and James as to these amounts as it was not included in their affidavit evidence and was, in the main, given in re-examination. It was submitted that accordingly, the plaintiff had no opportunity to properly test it. It was also submitted that the court should take into account the fact that the evidence was not led in chief: Ho v Powell [2001] NSWCA 168 at [15]. The plaintiff was said to be deprived from giving evidence about the financial capacity and difficulties of each of James, Samuel (Bonnie's husband) and Timothy: see T34.1. It was also said that the plaintiff was deprived of the opportunity to seek further discovery on the issue. 22. Taking all these submissions into account, I am still of the view that I should accept the evidence, in substance, that frequent money gifts were made to the mother by the siblings James, Samuel and Timothy. However, I take into account that the absence of documentary support for their oral evidence is obviously relevant to the weight to be given to it. Francis himself gave gifts of money to his mother even when she lived with him and he accepted that at various times his siblings had supported their mother according to their financial capacities: T33.13; T33.49, T36.10. I found the evidence of the defendant, James and Bonnie believable and likely on this issue. 23. Both Bonnie and James gave evidence that the mother was thrifty: T192.47. This may well have been the case. There is no evidence of her actual personal expenditure, although it seems most of her living expenses were met by Francis and Sanny as she lived with them. There is no evidence in relation to who paid the mother's living expenses when she lived alone in 2000-2005 when Francis lived in Australia. 24. It seems to be the case that the mother gave a generous gift to at least one of her grandchildren, being Francis' son in 2013: T44.17. 25. Contrary submissions were made on this issue of the availability to the mother of funds in November 2013. The plaintiff submitted that a conclusion that the mother had substantial funds available to her from these sources in November 2013 could not be reached and really amounted to conjecture or speculation: plaintiff's submissions in chief at paragraphs 19-23. It was submitted that conjecture may range from the barely possible to the quite possible but in order for the existence of a fact to be inferred from other facts those other facts must make it reasonably probable that it may exist: see Carr v Baker (1936) 36 SR (NSW) 301 at 306 per Jordan CJ; Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at [84]-[88]. None of James, Bonnie or Timothy knew what funds the mother had in November 2013. 26. The defendant submitted that the court could properly infer that the mother had access to funds approaching HK$3m by 2014: defendant's submissions paragraphs 48-58. The defendant specifically submitted that "the parties' mother could clearly have accumulated an amount close to HKD$2,983,200 by 2014" (emphasis added): submissions at paragraph 57. 27. In my view, I am unable to make any finding on the evidence that the mother had extensive personal funds available to her as at November 2013. She may or may not have had substantial funds on that date. It is possible that she did. I am unable to come to the conclusion on the evidence that the mother had access to HK$1m or anything near that sum from these various sources. The only clear evidence of money held by her is the small balance in the joint account with Francis: Exhibit A, page 331. The amount, if any, in the pension account is not known and may have been modest. I prefer the plaintiff's written submissions in chief that any suggestion the mother had access to substantial funds as at November 2013 from the regular gifts from Timothy, James and Samuel amounts to conjecture or speculation: submissions in chief at [21]-[23]. 28. From early 2012 until her death in March 2014, the mother was unwell on various occasions. She was hospitalised on a number of occasions. 29. In 2013 the defendant Timothy decided with his wife to buy a residential block of land and build a new home on it before selling the existing family home. On 30 October 2013 Timothy and Viola, together with what appears to be another member of their family, obtained a loan approval for $336,000 for the purchase of the residential land where the defendant currently lives. The house was constructed. The defendant then sold his previous family home with the planned settlement date being 20 September 2014. 30. In mid to late November 2013 Timothy travelled to Hong Kong to visit his mother as her health was deteriorating. During this visit the defendant Timothy told his mother about the land he had purchased and the proposed building of the new house on that land by Clarendon Homes. 31. The events between 19 November 2013 and 29 November 2013 are partly disputed by the parties. The plaintiff asserts that his mother asked him to lend money to Timothy to build his new house as she did not have the money to lend to him and she knew that Francis did have money. The plaintiff said that he ultimately agreed to lend the requested HK$1 million to Timothy: paragraphs 15 to 17 and 22 of Francis' affidavit affirmed 9 March 2016. Francis says that his understanding of the agreement which he reached with Timothy was that he would provide him with a bridging loan of A$100,000 and HK$300,000, amounting to around HK$1 million, no interest would be payable on the loan and that the loan would be repaid by Timothy to him upon the sale of his existing house property: paragraph 18 of Francis' 9 May 2016 affidavit. 32. Timothy says that the agreement to lend money was with his mother and Francis merely facilitated the transfer of the money or alternatively transferred his own money as his mother's agent. Timothy says that the identity of the lender was important to him because he would not have borrowed from Francis and he did not want to pay any interest: Timothy's affidavit affirmed 23 June 2016 at paragraphs 10-12. I will consider the identity of the lender in due course after I have set out the parties' submissions. At present I shall set out what objectively is shown by the documentation. 33. On 21 November 2013 at 11:09am, Timothy sent an email to his wife Viola which was eventually copied (in an amended form) to Francis. That email includes the following: "Ah Ma [the mother] has promised to lend me some money (approx. AU150,000 dollars to 160,000) to help me with the building of our new home". Exhibit C establishes that Francis probably saw this email not on 21 November 2013 as he seems to assert in his affidavit but on 25 November 2013. The date he saw it is probably not crucial (except it is relevant to his reliability) as what was occurring between 21 and 25 November 2013 was primarily an exchange of emails to facilitate the transfer of funds. Francis says that he rang up Timothy soon after receiving Timothy's email and made clear to Timothy that the loan was from him not their mother: Francis' affidavit affirmed 9 March 2016, paragraph 22. Timothy disputes this. 34. Francis says that he did not confirm this by way of email as he had had the telephone conversation which he sets out in his affidavit with Timothy and the loan was one between brothers: T45.32; T45.49. 35. Between 21 and 29 November 2013 there were various emails between the parties and between Timothy and his wife Viola in relation to making arrangements to transfer the funds to Timothy's account in Australia. See Exhibit B, pages 2-9. I am satisfied from the evidence that the sources of the funds transferred to Timothy were accounts held either in the name of Francis alone or in the joint names of Francis and his wife, Sanny. See Exhibit A, pages 135-137 and 159-162. It was conceded by counsel for Timothy that there was no evidence that the money transferred to Timothy was money which had originated from an account of the mother: T69.49-.50; T70.48; T118.31; plaintiff's submissions in chief at [13]. 36. Timothy places weight on an email dated 23 November 2013 (Exhibit B page 4) which he says establishes that Francis had given Timothy not Samuel a cheque for HK$300,000 and that Timothy gave this to Bonnie to bank. Timothy also says this supports his evidence about the cheque being given to him by Francis at a family dinner on 22 November 2013. 37. On 29 November 2013 at 7:32pm Francis sent an email to Timothy to the following effect: "Hi Tim So, total loan from me is AUD100K HKD300K Francis." 1. The plaintiff relies on the fact that Timothy did not dispute either orally or in writing his description in this email that the loan was from him (Francis) and not from the mother. Timothy says in his affidavit that when he read this email he understood this to be the money that his mother had loaned him as at no time did he ask to borrow money from Francis: paragraph 16 of Timothy's 23 June 2016 affidavit. See also paragraph 30 of the defendant's written submissions. Timothy also relies on the fact that this email was not referred to in Francis' first affidavit (although Francis was not cross examined on this issue). 2. There is no dispute that the money in the sums claimed was received by Timothy in his account in Australia and used for the purpose of construction of the house. 3. As indicated above, the mother died in March 2014 and her funeral occurred later in the month. The cost of the funeral was around HK$26,000. 4. On 7 April 2014 after a "tomb sweeping" of a grandfather's tomb, a conversation occurred in the presence of James, Timothy, Samuel, Bonnie, Windy and Francis to the effect that Windy asked Francis how much was left behind by their mother and was there a need to share in the cost of the funeral. Francis says that he replied that there was some money in the joint bank account which covered the costs of the funeral and did not go into any further detail: paragraph 3(n) of Francis' 10 August 2016 affidavit. Samuel, Bonnie and Timothy deny that there was any mention of the joint account but otherwise in substance confirm the conversation. 5. It seems clear that no probate or letters of administration or the Hong Kong equivalent of these two procedures have been taken out in relation to the estate of the mother. Francis gave oral evidence that he did not regard this as his responsibility or see the need for it: T63.5. The evidence before the court is that there was somewhat more than HK$26,000 in the joint account between Francis and his mother, there were possibly other personal bank accounts and she also owned some jewellery at the time of her death. 6. The evidence seems to be that the siblings did not regard Francis' response in relation to the extent of the mother's estate as satisfactory. They seemed to be of the view that Francis was concealing money held by the mother. Consequently, there was an agreement reached between the four siblings other than Francis for Timothy to repay HK$250,000 of the loan amount to each of the other three siblings and for him to retain HK$250,000 of the debt of HK$1 million. No amount was agreed to be divided to Francis. Thereafter, HK$250,000 was forwarded to each of James, Samuel and Windy: see Exhibit B, pages 12-17. 7. As stated above, the sale of the house of Timothy was planned to settle on 20 September 2014. On 22 December 2014 Francis sent an email to Timothy enquiring about the time frame in selling the house and repaying the funds. Timothy replied promptly by asking whether the money referred to was the money that he borrowed "from our Mum". On the same day Francis replied saying that the funds came "from me. I told you at the time. How much money do you think our Mum has saved over the time she lived with me?": see Exhibit B, pages 18-21. 8. Thereafter, there was email correspondence between Timothy and Francis disputing each other's account of what the agreement was: see Exhibit B, pages 21-25. It is not necessary to set out this correspondence as it merely sets out the parties' entrenched positions as to the identity of the lender. 9. On 22 September 2014 it appears that Timothy and his wife sold their property and thus received the proceeds of sale: Exhibit A, pages 192-193. However, the plaintiff only claims interest from 24 September 2013: plaintiff's submissions in chief at [109]. 10. In January and June 2015 letters of demand were sent by Francis' current solicitors to Timothy demanding the repayment of the money said to have been lent by Francis to Timothy: Exhibit B, pages 26-29. Timothy did not repay the moneys as requested and in due course these proceedings were commenced on 17 August 2015. 11. On 18 March 2017 Timothy sent an email to his counsel which included the following: "Also, regarding the HK$300,000 cheque, the fact is the plaintiff brought a cheque with the amount of HK$300,000 dated 22-11-2013 but leave [sic] the payee blank and gave it to me at the family dinner on 22-11-2013. I gave it to Bonnie to put down her name as the payee on the cheque." Timothy submitted that this supported his account of the payee being inserted on the cheque by Bonnie and the occurrence of the 22 November 2013 family dinner. It was also sent before Timothy saw the plaintiff's 24 March 2016 affidavit. The question to be decided 1. There is, accordingly, a stark factual question which needs to be determined in the present case. That question is whether the mother or Francis lent the money to Timothy. There is both oral and documentary evidence supporting each party's account. It is always preferable for a court to base its decision, wherever possible, on objective evidence or inferences or the court's conclusion about the logic of the facts rather than basing it merely on the court's assessment of a witness' demeanour. 2. In Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [31], the majority of the High Court stated as follows: "[31] Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical." 1. It is also clear that in making factual findings, a court may accept part only of a particular witnesses' evidence. That is the case even if it is found that a witness is lying as to part of the evidence of the witness: Cubillo v Commonwealth (No 2) [2000] FCA 1084; (2000) 103 FCR 1 at [18]-[123]; Danckert v Tonkin [2015] NSWSC 1570 at [152]; Croucher v Cachia [2016] NSWCA 132 at [129]. Plaintiff's submissions 1. Counsel for the plaintiff relied on his opening written submissions dated 22 March 2017 and made further written and oral submissions. The plaintiff's submissions in chief which were relied upon are dated 13 April 2017. Further reply written submissions dated 21 April and 26 April 2016 were also relied on. 2. The plaintiff submits, in summary, as follows: 1. The plaintiff's evidence should be accepted. The plaintiff gave his evidence honestly and truthfully and made concessions where appropriate. His evidence was not shaken in cross-examination: submissions in chief at [69]-[70]. The plaintiff's evidence is in substance backed up by documentary evidence. Sanny's oral evidence should also be accepted: submissions in chief at [73]-[79]. Timothy's evidence as to the arrangement entered into as to the loan should be rejected and he should be held to be an unreliable and misleading witness: submissions in chief at [81]-[85]; 2. The defendant does not deny the existence of the loan but merely the identity of the lender. Was it made by the parties' mother or Francis?; 3. Francis should be accepted in relation to his evidence of the November 2013 conversations with his mother and Timothy. That evidence is supported by the 29 November 2013 email from Francis to Timothy which is at Exhibit B, page 11. The email between Timothy and his wife dated 21 November 2013 which was copied to Francis in an amended form (Exhibit B, page 1) was not responded to by Francis in writing. This is readily explicable by the fact that Francis clarified the position in a telephone call and the loan was between brothers: see submissions in chief at [33]-[38]; 4. There can be no dispute that the money for the loan came from bank accounts in the name of Francis alone or Francis and his wife. The Hong Kong dollar cheque was made out from the bank account of Francis and the Australian dollar transfers were paid from a joint bank account of Francis and Sanny. There is no satisfactory evidence to suggest that these amounts originally came from any source other than a bank account of Francis or a joint account of Francis and Sanny: submissions in chief at [12]-[14], [23]-[25]. In particular, there is no evidence that the money lent was the HK$680,000 which was withdrawn by Francis from the joint account held by him and his mother in February 2012. That amount did not in any case constitute HK$1 million but was substantially less. 5. On the evidence, the mother did not herself have sufficient money to make the loan sought by Timothy. This is shown by the passbook of the only bank account in evidence which was in her name which was a joint account with Francis. The evidence is that at the relevant time of the loan the account held only HK$26,331.70. That was not sufficient to make a loan of HK$1 million. To establish the defendant's case the defendant would need some evidence of some account or assets of the mother from which the loan might have come or that the money transferred from Francis' account or his joint account with his wife was the mother's money and there is no satisfactory evidence of this. The evidence of other accounts was vague and speculative and did not prove the existence of readily available substantial funds totalling at least HK$1 million. It effectively amounted to conjecture: see submissions in chief at [16]-[23]; 6. There is also no evidence that Francis advanced his own money to Timothy as the mother's agent creating a debt between the mother and Francis; 7. In all the circumstances there could be no doubt that the loan was from Francis to Timothy; 8. It is submitted that there is no real need to decide the factual disputes as to the conversation which occurred during a "tomb sweeping ceremony" on 7 April 2014 or the dispute about how the HK$300,000 cheque was provided by Francis to Timothy: see submissions in chief at [52]-[54] and [94]. Both parties agree that the amount was received and it originated from Francis writing a cheque from his own bank account for that amount; 9. The alternative claim of unjust enrichment is established on the evidence if there was no contract. Francis believed that the loan was with him, advanced the money and this constitutes a clear mistake of fact and/or law: submissions in chief at [47]. There was no change of position in good faith: submissions in chief at [48]-[67]; 10. The plaintiff's claim is also consistent with the evidence of his wife Sanny: affidavit of Wong Siu Fong affirmed 3 August 2016, paragraphs 3 and 9 and affidavit affirmed 22 March 2017, paragraph 2; 11. To the extent that the affidavits of other persons other than the defendant assert conversations consistent with a loan from the mother to Timothy, those deponents are either mistaken or they should not be accepted as they have an interest in the outcome of the case and their affidavits were not prepared independently: submissions in chief at [94]-[103]. Submissions on behalf of the defendant 1. Counsel for the defendant relied upon written submissions in a short case outline dated 27 March 2017. He also made other written and oral submissions. His responsive written submissions were dated 20 April 2017. 2. The following submissions were made, in summary, on behalf of the defendant: 1. The evidence of the defendant should be preferred to that of Francis and Sanny. He appeared to be an honest and straightforward witness who made appropriate concessions: submissions paragraphs 77, 79. The conclusion should be reached that the plaintiff Francis was "wholly unreliable and or wholly untruthful": submissions paragraph 80; 2. The loan agreed was from the plaintiff's mother because the defendant believed that if it was from Francis it would incur interest which he did not need to agree to: submissions paragraphs 34 (d); 3. The plaintiff received the email dated 21 November 2013 at 11.09am and did not contest it. This email is very significant. It is consistent with the evidence of the defendant and not with the evidence of the plaintiff. If the plaintiff's evidence were true it is inherently unlikely that the defendant would have written the email. It is also likely that the plaintiff would have replied disputing the identity of the borrower. However, he took no such action: submissions paragraphs 21-35, 39 and 124; 4. The plaintiff also did not send an email confirming the conversation which he purports occurred in paragraph 22 of his first affidavit: submissions paragraph 28; 5. The defendant should be accepted that he ignored the 29 November 2013 email from Francis because he knew the loan was from his mother and he believed that it meant that Francis had transferred the money to him: submissions paragraphs 30-33; 6. The affidavits and evidence of Samuel and Bonnie are consistent with the defendant's case and their evidence should be preferred. They were inherently honest and impressive witnesses: submissions paragraphs 75-82. The evidence of the defendant "outweighs the evidence for the plaintiff": submissions paragraph 82; 7. If the unjust enrichment claim was relevant, the defendant had a change of position defence available to him: submissions paragraphs 84-117. The money distributed to the other siblings in 2014 was a "de facto" repayment to the mother and completed by the defendant in good faith: submissions paragraphs 107, 114 and 116. The defence arises even if Timothy may have claims against his siblings in money had and received for the return of the money. Consideration The contractual claim 1. The primary issue in dispute between the parties is the identity of the lender to the defendant Timothy. Timothy submits that the lender to him was his mother. Francis submits that he was the lender under the loan agreement to Timothy. 2. The case involves a consideration of documentary evidence, affidavit evidence and oral evidence. On some issues the plaintiff's evidence is contradicted by several witnesses who have some potential interest in the case as they or their spouse has received a HK$250,000 payment from Timothy. This requires the court to consider carefully all of the evidence and assess what is likely, particularly from the objective evidence, including documents created in November 2013. Credit issues are clearly relevant. Both parties gave some evidence which was wrong or inconsistent with their affidavit evidence. 3. In my view, having considered all the evidence and the submissions made on behalf of the parties, the plaintiff should succeed in his contractual claim. I find on the balance of probabilities that the lender to Timothy was Francis, the plaintiff, and not their mother. For the reasons which follow, I prefer Francis' evidence to Timothy's evidence on this issue. 4. The only clear and objective evidence before me of any specific financial resources of the mother as at November 2013 was the evidence of the joint account between the mother and Francis with Hang Seng Bank: Exhibit A, page 322. 5. As at November 2013, the balance in this account was HK$26,333: Exhibit A, page 331. Accordingly, the mother did not as at November 2013 apparently have the money available to her to lend Timothy HK$1 million as he claims. 6. The defendant submits that the opposite conclusion can be arrived at in the light of evidence of monthly payments made to the mother over an extensive period by her children other than Francis: defendant's submissions paragraphs 48-58. However, as considered above, in my view there is no clear evidence that the mother had substantial savings either at all or at or exceeding HK$1 million as at November 2013. All the court is left with is that it is possible that she may have had extensive savings as she was a thrifty woman who had been gifted money over a lengthy period or she may not have. However, her real financial resources as at November 2013 have not been established. The suggestion that the mother had extensive savings at this time to lend to Timothy is in essence conjecture or speculation. Even thrifty people are known to spend or give away to family or friends large sums of money when they are requested or lose it on investments (as the mother had lost some money on the Lehmann Brothers investment). 7. The evidence shows that HK$680,000 was withdrawn from the joint account between Francis and his mother by Francis on 26 February 2012 (Exhibit A, page 330). Francis says that he withdrew this money in accordance with a conversation with his mother in February 2012: affidavit affirmed 10 August 2016, paragraph 3(t). The evidence establishes that most of the money in this account originated from deposits by Francis, although Francis conceded in cross-examination that this money was his mother's money and that when he deposited money into the account for her day to day expenses that it was a gift. As stated above, the conversation set out in paragraph 3(t) of Francis' 10 August 2016 affidavit is believable in the light of his mother's illness and the origin of the money and I accept that it occurred. Further, the account was a joint one and there is no reason why Francis could not have withdrawn the sum from the account as a joint holder if he chose to do so. There was no evidence that there was some restriction on the account. 8. Even if a finding could be made that Francis withdrew the money from the joint account without his mother's consent, express or implied, and that the money was hers only, that would only leave a cause of action in the mother or any legal personal representative to take proceedings against Francis. The mother would still not have had the money to lend in November 2013 that was in the account as at February 2012. I agree with the submission made in paragraph 16 (d) of the plaintiff's written submissions in chief. 9. Further, even if one takes into account the HK$680,000 which was withdrawn on 26 February 2012, there would only have been HK$706,333 in the account as at November 2013, the time at which Timothy alleges his mother agreed to lend him money. Accordingly, even at that time there would have been a significant shortfall in the money in the joint account with Francis compared to the loan which Timothy alleges his mother agreed to make to him. Put simply, his mother did not on the evidence before me have HK$1 million or anything approximating that to lend to Timothy as at November 2013. There is no clear evidence of any other financial holdings as at this time which would have made up the difference. 10. Although the mother had been diagnosed with cancer in late 2011, there is no evidence that she was not fully aware in November 2013 of her financial position. I infer that it is highly likely that she would have known the balance in the joint account at that time. Francis gave oral evidence that his mother kept the passbook in her possession at his flat: T38.25. I have no reason to doubt that evidence (it was not subject to cross-examination) and I find that it is likely that she would have been aware of the balance in the account in November 2013. 11. Accordingly, it is highly unlikely that the mother would have agreed to lend HK$1 million to Timothy as he appears to assert as she simply did not on the evidence before me have this money to lend. There is, of course, the possibility that the mother was mistaken as to her resources as at November 2013. Both parties agree that Timothy had asked his mother if he could borrow some money from her: T44.44. However, Francis asserts that she accepted that she did not have the money to lend him "to build a new house": Francis 9 March 2016 affidavit paragraph 15. Timothy disputes that in his affidavit. It is to be noted that no precise loan sum was mentioned between Timothy and the mother according to Timothy's first affidavit: 23 June 2016 affidavit paragraphs 10-11. Timothy altered that evidence in his cross-examination. He also relies on amounts being mentioned in the 21 November 2013 email (Exhibit B, page 1). Even if the mother was initially mistaken, it seems likely on the evidence that Francis would have reminded her of her financial limitations and offered to help Timothy himself. 12. If no loan amount was mentioned by Timothy to his mother, as is suggested in Timothy's first affidavit (Exhibit A, page 256 paragraphs 10-11), then a fundamental term of the loan agreement was missing and there would seem to have been no concluded agreement as Timothy asserts. 13. I am satisfied on the evidence that the money for the loan which was made to Timothy originated from bank accounts in the name of Francis or a joint account of Francis and his wife Sanny. This is established by the documentary evidence which I have referred to above. The evidence establishes that the source of the funds was not any account in the name of the mother, even jointly. I accept the plaintiffs written submissions in chief on this issue: paragraphs 12-13. There is also no satisfactory evidence that Francis was somehow acting as the mother's agent as the defendant asserts in the alternative. In my view, it is objectively unlikely that the plaintiff would have advanced the loan funds to the defendant as the agent of the mother and looked to the mother to repay him as a borrower. The mother was ill and that would have created a further layer of complexity and trouble. 14. There is no evidence to show that the majority of the funds advanced to Timothy originated from the HK$680,000 which Francis withdrew from the joint account with his mother on 26 February 2012: Exhibit A, page 330. The defendant seems to accept that Francis used the HK$680,000 for his own purposes: T40.23-.43; defendant's submissions paragraph 42. While it may be accepted that Francis banked this amount, there is no evidence that this sum formed part of the money ultimately lent to Timothy. No tracing exercise was undertaken to establish the contrary. 15. The evidence suggests that at all times the mother was a person of limited means. Francis gave evidence that the family apartment was rented in the late 1970s and that the working members of the family contributed to the payment of rent and other expenses. There is no evidence that the mother came into a large inheritance or a large windfall which would have provided her with some other substantial source of funds. She lived alone when Francis was in Australia from 2000-2005. It is accordingly likely that even though the mother may have wanted to lend money to Timothy, that she realised she could not do so and therefore turned to Francis with whom she had been residing and who was clearly, from the evidence, a person of substantial means: Exhibit A, page 135. 16. The defendant says there was no offer, acceptance, consideration or intention to create legal relations which would form a contract between Francis and Timothy. In my view, if Francis' account of the conversations is accepted these elements are all satisfied: see paragraphs 16 and 22 of Exhibit A, pages 142-144. Francis offered to lend HK$1m which was accepted on the basis of a promise to repay when his house was sold. The contract could also be implied by the advance and acceptance of the funds in due course. 17. The plaintiff relies heavily on the 21 November 2013 email from him to his wife Viola which was copied to Francis on 25 November 2013: Exhibit A, page 153. It is submitted that Timothy would not have indicated in the email to his wife that the mother had promised to lend money to help with the building of the new home unless that was the case. The email should be reviewed carefully. The email is equally consistent with the mother having indicated to Timothy prior to 21 November 2013 that she would like to assist. However, the mother, I find, could not on the evidence have believed at the time that she had the amount of money available to her which was anywhere near what was ultimately lent. In the end, this email reflected Timothy's views at the time, cannot be viewed in isolation and must be seen in the context of all the evidence. 18. In the end, I find that the email is inconsistent with the arrangement which was ultimately entered into, which was that Francis would lend Timothy the money. I prefer Francis' evidence as set out in his affidavit of the arrangements. The 21 November 2013 email was also earlier than the 29 November 2013 email and was likely simply overtaken by events. 19. Timothy asserts that he would not have borrowed from Francis because he did not want to pay interest as had occurred in the first loan made a decade earlier. However, on the versions of both parties, interest was not to be paid by Timothy on the loan. The loan was to be made interest free until the defendant built his house, sold it and received the proceeds. 20. The case of the plaintiff is supported by the email sent on 29 November 2013 at 7:32pm which makes clear that the loan is from Francis. It is a later email and is, I find, more likely to be accurate for that reason. I do not accept the defendant's submissions that the 29 November 2013 email is less likely to be accurate as it was sent several days after the discussions and was not contemporaneous (submissions paragraphs 31-33). The entire interaction between the parties occurred over a relatively short period in November 2013. If Timothy, having received this email, disputed the identity of the lender, he could readily have done that and returned the money. On his own case he was able to borrow the money from the bank but simply did not want to pay the interest. I find it unlikely that the plaintiff would risk a reaction from Timothy after the funds had been sent to Australia if the loan had indeed been from the mother. There is no evidence of the defendant seeking to contact Francis or the mother to clarify the position. He did not attempt to return the funds. The email is consistent with the lender, Francis, setting out in clear terms to Timothy the amount which was lent by him in the light of him seeing Timothy's 21 November 2013 email to Viola on 25 November 2013. 21. I accept that the correspondence between the parties after the sale by Timothy of his house is consistent with the cases which they have adopted in these proceedings: see Exhibit B, pages 19 and following. No particular benefit is obtained by either party from this correspondence: entrenched positions are simply repeated. It may well be that Timothy had reconstructed in his mind the arrangement which was entered into in 2013, possibly because he and the other siblings thought that Francis was trying to take advantage of the death of the mother to retain assets held by her. That the belief was held by them is consistent with the division of the HK$1 million between the siblings as reflected in the correspondence: Exhibit B, pages 12-17. 22. In preferring the evidence of the plaintiff to that of Timothy on the loan issue I take into account the various matters relating to Francis' credit set out in the defendant's submissions including: 1. That Francis must have been wrong when he said he was copied into the 21 November 2013 email from Timothy to Viola and rang Timothy soon after in Hong Kong: defendant's submissions paragraphs 25-27. It seems clear Francis did not see the 21 November 2013 email until 25 November 2013 and that he must have rung Timothy in Australia. In my view, the details of when and where the call was made and received are far less important than the substance of what was said in the call; 2. That Francis did not send an email confirming his conversation with the defendant on or after 25 November 2013; 3. The plaintiff's so-called admission at T50.47: defendant's submissions paragraph 36. This part of the transcript needs to be read in its full context including with the affidavit evidence. When it is there does not appear to me to be a relevant admission; 4. The plaintiff's claim that he did not know that there was a joint bank account between the mother and Sanny: defendant's submissions paragraph 69. The plaintiff's explanation that he regarded the Lehmann money as a joint investment not account is believable; 5. The plaintiff's evidence that he knew of only one account in his mother's name: Exhibit A, page 316 paragraph 3(u). The defendant said the plaintiff must have known of the pension account or the Lehmann Brothers account. The plaintiff referred to his mother's monthly benefits at Exhibit A, page 311 paragraph 3(e) and may well have not known the details of the other accounts; 6. Francis' evidence at T47.6-.40. In my view, when this evidence is read in its proper context the evidence does not constitute an admission or the plaintiff giving relevantly inconsistent evidence; 7. The plaintiff's evidence about who inserted the payee on the HK$300,000 cheque. This is considered further below; 8. The plaintiff's evidence about the 22 November 2013 dinner. This is considered further below. 1. Reliance is placed by the defendant upon the evidence of Samuel and Bonnie which is generally consistent with a loan from the mother as opposed to Francis: defendant's submissions paragraphs 75-82. For the reasons which I have set out above, I prefer the plaintiff's evidence in relation to the identity of the lender. Their evidence is also consistent with the mother hoping to provide some assistance to Timothy but this was overtaken by events and the loan from Francis which occurred. The defendant placed reliance on the following affidavit evidence which was generally supported by the deponents' oral evidence: affidavit of James affirmed on 8 June 2016, paragraphs 3-4; Bonnie's affidavit affirmed 8 June 2016, paragraphs 6-7 and 9 and affidavit of Viola affirmed 23 June 2016, paragraphs 6-7. This evidence generally supports the identity of the lender to Timothy as being the mother. 2. I did not find James or Bonnie to be convincing witnesses on the central issues relating to the identity of the lender. I generally prefer Francis' evidence. I also note the following matters in relation to the evidence: 1. Viola's evidence was very general and was limited to the 21 November 2013 email and what Timothy had said to her: see Exhibit A, page 245 at paragraph 7. Viola was not even aware of Francis' important 29 November 2013 email to Timothy: T219.7; 2. Bonnie had difficulties answering questions directly and seemed to repeat answers which preserved her account of what occurred even though the answers did not answer the questions asked of her: examples are at T141-2, T143.31 and T149.32-.41. Some of her answers were also illogical: T153.16. Bonnie agreed that she had spoken to Timothy about her most recent affidavit (T175.20-176.17) whereas he denied that: T305.22-.39. This raises questions about the independence of her later affidavit evidence. Overall, I found Bonnie to be an unimpressive witness; 3. James was more impressive as a witness but gave inconsistent evidence (for example T196.48, T197.9 cf T198.29, T199.41) and added to his affidavit evidence on important matters which should have been in his affidavit if the evidence was correct: T203.48, T204.7. James also agreed that he had discussed his later affidavit with Timothy: T206.22, T206.39, T207.49 and T208.6 whereas Timothy denied this: T305.41-306.49. This raises issues about the independence of James' later affidavit. 1. Timothy, the defendant, was also not impressive on some central matters: 1. He said in cross-examination that he told his mother on 19 November 2013 that he wanted to borrow about HK$1m: T277.24, T277.33 and T278.16. However, that does not appear in paragraph 10 of his first affidavit: Exhibit A page 256. This is one of the central conversations in the case and Timothy would clearly have been aware of the need to include the complete conversation as he recalled it; 2. He said in cross-examination that his mother said on 19 November 2013 that she would double check with Francis as to how much she had available to lend to him: T265.39, T277.11. That also is important and does not appear in paragraph 10 of his first affidavit: Exhibit A page 256; 3. He referred to believing that the A$100,000 loaned to him came from a joint account of his mother and Sanny in paragraph 16 of his first affidavit (Exhibit A page 258) whereas it was clear from Francis' affidavit and its annexures, which he (Timothy) had before preparing his own affidavit, that the money came from a joint account of Francis and Sanny: See Exhibit A, page 146, paragraph 29 and pages 160-1; T266.49; T267.31, T268.43-.49. The defendant appeared to initially claim in his oral evidence that he had not seen Francis' first affidavit before he prepared his first affidavit (T267.31), then withdrew that and then claimed that he overlooked this in preparing his affidavit and he had made a mistake: T268.25; T269.14. This is relevant to the defendant's reliability; 4. Timothy accepted that the only joint account he was aware of with his mother and Sanny was the joint account arising from the Lehmann Brothers investment: T269.31, T269.43 and Exhibit A, page 258 paragraph 19; 5. Timothy accepted that his own bank statements showed the A$100,000 came from the joint account of Francis and Sanny (Exhibit B, page 37) not Sanny and his mother (Exhibit A, page 258 paragraph 16) but said that he only looked at the amounts being deposited not the identity of the account from which the money came: T271.4-.37; T272.21. The defendant said it was his mistake: T272.41; 6. Timothy claimed he read the email at Exhibit B, page 11 from Francis dated 29 November 2013 ("So, total loan from me is…") as merely being the physical transfer of money from Francis not a loan from Francis because this was the Cantonese way of saying it: T283.20-T285.18; defendant's submissions paragraph 30. However, the difficulties with that were that the email from Francis was in English not Cantonese, both spoke English and there was no mention of the belief of Timothy based on the Cantonese way of saying things in paragraph 16 of Timothy's first affidavit: Exhibit A pages 257-8 and Timothy indicated in paragraph 16 in his first affidavit that he believed the transfer came from an account in the name of the mother and Sanny not an account in the name of Francis. The matter was not put to Francis or proved by expert evidence. The defendant's evidence on this matter was not, in my view, persuasive and I reject it. See the plaintiff's submission in chief at [37(d)]; 7. Further Timothy claimed he believed that Francis was responsible for the physical transfer of the money yet he also claimed that he believed the money came from a joint account of the mother and Sanny. The two concepts appear to be inconsistent: T286.8-287.47. 1. The matters in the previous paragraph have assisted me in deciding to prefer the evidence of the plaintiff, who I found to be a more impressive witness, as opposed to the evidence of the defendant as to the identity of the lender. 2. I do not regard the cross-examination of Timothy on discovery issues as weighing heavily on Timothy's credit. The orders were clear but Timothy read them as only requiring relevant material. Although wrong that is understandable from a layman and did not suggest dishonesty to me: defendant's submissions paragraph 120 cf plaintiff's submissions paragraphs 86-91. 3. In relation to events prior to 25 November 2013, any assertions by Timothy must be seen in the light of Exhibit C which establishes that Francis only saw Timothy's email to Viola asserting a loan from the mother on or after 25 November 2013. 4. In relation to evidence of assertions by Timothy or the mother after 25 November 2013, they are inconsistent with the facts as I have found. The money lent came from Francis not the mother and there is no claim or pleading that Francis lent the money to the mother to enable the loan to occur. 5. These matters all lead me to prefer the evidence of Francis on this issue. 6. There is different evidence in relation to the conversation which occurred on 7 April 2014 at the "tomb sweeping": see paragraph 3(n) of the plaintiff's affidavit affirmed 10 August 2016. It may be that the other siblings thought that the plaintiff was deliberately reticent in disclosing the mother's assets. In my view the differences in the versions of the conversation are not significant. Whether the joint account was mentioned or not does not appear to me to be relevant. 7. There is also a difference in the evidence as to how the cheque for HK$300,000 signed by Francis was received by the defendant. The cheque is at Exhibit A, page 339. See also Exhibit 3. The issue is whether the payee was completed by the plaintiff or his sister-in-law Bonnie, Ma Yuk Pik. The plaintiff says that he completed the payee and gave it to Samuel to give to Bonnie. Timothy and Bonnie say that Timothy gave the cheque to Bonnie at a dinner on 22 November 2013 and requested her to complete the payee which she did. It is noted that Samuel did not give evidence at the trial although an affidavit from him was served by the defendant. I also note the 23 November 2013 email at Exhibit B page 4. 8. This matter seems to be relevant only to credit: see the plaintiff's submissions in chief at [94]; defendant's submissions at [71]. 9. In my view it is unnecessary to make a formal finding on this issue. I accept the submissions on behalf of the plaintiff that the issue does not appear to be material as both parties agree that the amount was received and that it originated from Francis writing a cheque from his own bank account: plaintiff's opening written submissions, paragraph 22(b); final submissions in chief paragraph [94]. Even if the plaintiff was wrong in relation to this evidence, it would not result in me changing my view on the main issue of the identity of the lender. 10. However, I make the following comments on the issue. Bonnie asserts that it is her handwriting on the back of the cheque and in the payee section: Exhibit 3. When asked about the difference between the writing on the back of the cheque of her name and that in the payee section, Bonnie gave evidence that she "always" made out cheques with capital letters: T151.34. When faced with the two cheques she made out to James and Windy for HK$250,000 which were not in capitals (Exhibit A, pages 240, 242; Exhibit D), Bonnie then very unconvincingly claimed that "always, to me is sometimes": T153.16 but see T152.30-154.25. In my view, this substantially affected her credit. A careful review of the two cheques to James and Windy shows the handwriting to be quite different in my view to that in the payee section of the disputed cheque: Exhibit 3. 11. This raises real doubts in my view that Bonnie completed the payee section of the cheque for HK$300,000. I prefer the plaintiff on this issue. 12. I reject the submission of the defendant in paragraph 122 of his submissions about issuing a subpoena on Samuel by the plaintiff at the beginning of the trial. Samuel lives in Hong Kong with Bonnie and any subpoena served in China would be ineffective. Whilst evidence on commission could be taken, that involves a complex and time consuming process which was impractical in the circumstances. 13. An issue was also raised as to whether Francis, Sanny and the mother attended a dinner on 22 November 2013. Francis and Sanny said they did not. James, Bonnie and the plaintiff said they did. The dinner was before Francis saw the 25 November 2013 email from Timothy to Viola. In my view this issue is not decisive. Overall, I find on the evidence that Francis, Sanny and the mother were probably present but the mother may have been confused then as to the lending arrangements and the identity of the lender: cf plaintiff's submissions in chief paragraph [106(d)]. I do not accept that this fatally damages the plaintiff's credit as it was not as to a central issue: cf defendant's submissions paragraph 123. It is a factor which must be taken into account in assessing the plaintiff's credit on the central issues. 14. For all of the above reasons I find that the identity of the lender to Timothy was the plaintiff Francis and that there was a concluded loan agreement between them. Accordingly, as the defendant Timothy has not repaid the loan upon the sale of his house, he is in breach of the loan agreement and is liable to Francis for damages for breach of contract. Restitution 1. Although it is strictly unnecessary for me to deal with the restitution claim, the question arises whether a cause of action is available in restitution where the evidence establishes that the money was paid by Francis to Timothy and not by the mother. 2. It seems to be established that a restitutionary remedy may not be available where the restitutionary remedy interferes with an existing and bargained for allocation of risk and liability: Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [2012] NSWCA 380 at [74]. In that situation the retention of the payment by Timothy was not unjust as against Francis if the contract was between the mother and Timothy: see David Securities Pty Ltd v Commonwealth Bank of Australia (1993) 175 CLR 353 at 379. Hills Industries was upheld on appeal: (2014) 253 CLR 560. This seems to be accepted by the plaintiff (plaintiff's submissions in chief at [46]) and the defendant (defendant's submissions paragraphs 88, 90 and 100). 3. On this basis, Timothy's choice of the lender was important, no doubt because he could talk to his mother if repayment was to be delayed. 4. In my view, in those circumstances it would not be unjust for Timothy to refuse to repay the advance made by Francis on his mother's behalf, essentially as her agent, as a restitutionary remedy would interfere with the contracted bargain between the mother and Timothy. However, this is contrary to my finding that it was Francis who was in fact the lender. 5. The next restitution scenario is if there was no agreement between the parties as each proceeded on a different and conflicting basis of mistake. This seems to be the basis relied on in paragraphs 12D and 12E of the Amended Statement of Claim. On this analysis, Francis made a mistake of fact and/or law as to the identity of the lender and advanced the monies pursuant to this mistake thinking he was the lender. See the evidence of Francis at Exhibit A pages 143-144 paragraphs 18-19. Generally moneys advanced by a person pursuant to a mistake of fact and/or law are recoverable as the recipient is unjustly enriched by the receipt: ANZ v Westpac Banking Corporation v (1988) 164 CLR 662 at 673; David Securities Pty Ltd v Commonwealth Bank of Australia (1993) 175 CLR 353 at 376, 379; Hills Industries at [67]. 6. Accordingly, if I am in error in my primary finding as to the lender, there is no contract as the parties did not reach agreement and Francis in fact lent the money under a mistake of fact and/or law that he was the lender. He would prima facie have a restitution claim subject to a change of position defence which is relied on by the defendant: David Securities Pty Ltd v Commonwealth Bank of Australia (1993) 175 CLR 353 at 385; Hills Industries at [67]. A change of position defence relies on the fact that the defendant has changed his or her position and acted to his or her detriment on the faith of the receipt of the mistaken payment: see Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at [88]-[93]. The plurality said at [88]: "In the context of mistaken payments, the question is whether it would be unconscionable for a recipient who has changed its position on the faith of the receipt to be required to repay." Gageler J held in Hills Industries that the defendant must have acted "in good faith on the assumption that the defendant was entitled to deal with the payment which the defendant received": at [157]. 7. Here the defendant submits, in summary, on this alternative factual scenario, that the following matters are relevant: 1. Francis made/arranged for the payment to Timothy under a mistake expecting repayment when the property was resold; 2. Timothy believed the loan was from his mother not Francis; 3. Timothy, James, Samuel and Windy decided on 7 April 2014 that as Francis had not disclosed the full extent of the mother's assets they would distribute the HK$1m to the four siblings other than Francis with Timothy retaining HK$250,000; 4. The house sale was settled in September 2014; 5. Timothy forwarded HK$750,000 to Bonnie to distribute in accordance with the 7 April 2014 agreement; 6. Bonnie distributed HK$250,000 to each of James and Windy and kept HK$250,000 for Samuel; 7. Timothy retained HK$250,000; 8. Francis first made the claim to Timothy that he lent the money on 22 December 2014: Exhibit B page 18; 9. The first solicitor's letter from Francis' solicitor to Timothy was dated 30 January 2015: Exhibit B page 26; 10. By the time of the 22 December 2014 email Timothy had changed his position in good faith at least as to the payment of the HK$750,000; 11. It would be unjust to require him to repay to Francis any of the HK$1m as this sum was "distributed" as part of the mother's estate in good faith. In other words, Timothy changed his position in good faith as he believed he was the borrower from the mother not Francis. The defendant claims he made a "de facto repayment of the loan to his mother's estate and then receiv[ed] a distribution from it": defendant's submission paragraph 116. 1. This argument assumes: 1. I am wrong in my finding that Francis was the true lender in November 2013; 2. The defendant should be accepted in relation to his evidence of his understanding of the 29 November 2013 email from Francis (Exhibit B page 11), contrary to my findings; 3. Francis advanced the funds to Timothy under a mistake; 4. Timothy wrongly believed the mother was the lender under a contract; 5. Timothy honestly believed from 7 April 2014 that the siblings other than Francis were entitled to share the HK$1m owed by him to the mother, presumably because the mother died intestate and Francis had kept more than HK250,000 of his mother's money; 6. Timothy paid the HK$750,000 to his three siblings in good faith; 7. It is unlikely that the siblings would repay this money to him. It is noted that James gave evidence that he would not repay the money to Timothy: T212.30. However, it seems to me that if Timothy is correct these payments were also made by him under a mistake and may be recoverable. 1. The matters in sub-paragraphs (a)-(d) above are contrary to my findings in the proceedings. If I am found to be wrong and those matters are accepted, then in my view Timothy would still not be entitled to rely on a change of position defence. 2. On this scenario Timothy believed the money belonged to the estate of the mother. There is no evidence that he knew or believed the mother left no will. The appropriate procedure would have been to retain the money in a trust account for the mother's estate and then made enquiries about the correct procedure in Hong Kong in relation to the equivalent of an application for the grant of letters of administration. There is no reason why the siblings other than Francis were entitled to decide how the money should be distributed without knowing the extent of the mother's assets or creditors, if any. Francis would also potentially have an entitlement and the issue of other alleged assets of the mother (including any held in trust for her by Francis and/or Sanny) could have been investigated. I do not believe for these reasons that it would have been unconscionable within the majority view in Hills Industries for Francis to require the repayment because of Timothy's informal actions. Timothy concedes in his submissions that it was only a "defacto" repayment to the mother. The fact four siblings out of five agreed does not advance the issue. 3. If I am wrong as to this view, any change of position defence would only apply as to the amount of HK$750,000 (Timothy having kept HK$250,000), as he would have changed his position to his detriment in good faith only as to this sum. 4. Damages 5. I note that the plaintiff's opening written submissions (paragraph 25), Exhibit A, page 11 and the plaintiff's written submissions in chief at [109] contain calculations of damages which include interest. The latter will have to be updated in relation to interest. Interest should be calculated on the loan amount from 24 September 2014. 6. I therefore make the following orders: 1. Judgment for the plaintiff. 2. The parties are to bring in Short Minutes of Order reflecting these reasons and updating the interest claim of the plaintiff. 3. The defendant is to pay the plaintiff's costs of the proceedings as agreed or assessed. 4. Liberty to the parties to apply for a variation of the costs order in (3) above. 5. Exhibits to be returned after 28 days. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 May 2017