Supreme Court New South Wales Medium Neutral Citation: Lui v Guan; Sun Link Group Pty Ltd v Lui [2019] NSWSC 803 Hearing dates: 27-28 June; 10-11 October and 6 December 2017; 12 March 2018; 4, 15 and 23 April 2018 (written submissions) Date of orders: 28 June 2019 Decision date: 28 June 2019 Jurisdiction: Common Law Before: Walton J Decision: The Court makes the following directions: (1) Mr Lui shall file and serve: (a) written submissions as to his claim for relief under prayer 4 of the amended statement of claim, with respect to the vehicle; and (b) written submissions or evidence as to the question of interest and costs; on or before 4pm on Friday, 12 July 2019. (2) The defendants shall file and serve: (a) written submissions in reply as to any claim for relief by Mr Lui under prayer 4 of the amended statement of claim, with respect to the vehicle; and (b) written submissions or evidence in reply as to the question of interest and costs; on or before 4pm on Friday, 26 July 2019. (3) In the event that either party seeks an oral hearing in relation to the question of interest and costs, an application to that effect should be made in the written submission filed in accordance with orders (1) and (2) above. Catchwords: BREACH OF CONTRACT – written agreement – parties to agreement – construction of terms of agreement – principles of construction – objective surrounding circumstances – object and purpose of the agreement – whether obligations performed under the agreement – whether breach of agreement – claim for damages – payment of fee – damages regarding the vehicle – relief as to the vehicle and interest and costs subject to further directions CIVIL PROCEEDINGS – whether Property, Stock and Business Agents Act 2002 applied to proceedings – "carries on a business" – definition of "real estate agent" – "as an agent" – definition of "real estate transaction" – principles of statutory construction EVIDENCE – credibility findings – first defendant not a witness of truth and not reliable – whether Jones v Dunkel inferences available – witness failed to appear – admissibility of evidence – weight to be given to evidence Legislation Cited: Civil Procedure Act 2005 (NSW) Corporations Act 2001 (Cth) Evidence Act 1995 (NSW) Property, Stock and Business Agents Act 2002 (NSW) Taxation Administration Act 1953 (Cth) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Adamson v Ede [2009] NSWCA 379 Australia Casualty Co Ltd v Federico (1986) 160 CLR 513; [1986] HCA 32 Australian Broadcasting Commission v Australasian Performing Right Associated Ltd (1973) 129 CLR 99; [1973] HCA 36 B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 97011 Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251 Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647; [1908] HCA 88 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Browne v Dunn (1893) 6 R 67 Burton v English (1883) 12 QBD 218 Caringbah Investments Pty Ltd v Caringbah Business and Sports Club Ltd (in liq) [2016] NSWCA 165 Challenger Group Holdings Ltd v Concept Equity Pty Ltd [2008] NSWSC 801 Challenger Group Holdings Ltd v Concept Equity Pty Ltd [2009] NSWCA 190 Chapmans Ltd v Australian Stock Exchange Ltd (1996) 67 FCR 402 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24 Colbron v St Bees Island (1995) 56 FCR 303 Con Ange v Calogo Bloodstock AG t/as Coolmore Australia [2012] NSWSC 666 Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd (2013) 29 BCL 329; [2012] NSWCA 184 Cox Purtell Staffing Services Pty Ltd v Our Energy Group Pty Ltd [2017] NSWSC 1122 Darmanin v Cowan [2010] NSWSC 1118 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423; [1978] HCA 12 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 Eurico SpA v Philipp Brothers (the Epaphus) [1987] 2 Lloyd's Rep 215 Fabre v Arenales (1992) 27 NSWLR 437 FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 Fairway Estates Pty Ltd v Federal Commissioner of Taxation (1970) 123 CLR 153; [1970] HCA 29 Farrell v Bannister (1952) 52 SR (NSW) 73 Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 97023 Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418; [1970] HCA 31 Greg Roughsedge Realty Pty Ltd v Whitecross [2001] QCA 426 Halford v Price (1960) 105 CLR 23; [1960] ALR 560 Hancock v Rinehart [2014] NSWSC 844 Hawk Australia Pty Ltd v George Ambrose Commercial Pty Ltd [2007] NSWSC 1150 Hide & Skin Trading v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68; [1907] HCA 38 J Kitchen & Sons Pty Ltd v Stewarts Cash & Carry Stores (1942) 66 CLR 116; [1942] ALR 229 Jenkins v Kedcorp Pty Ltd (2001) Q ConvR 54-547; [2002] 1 QD R 49 John R Keith Pty Limited v Multiplex Constructions (NSW) Pty Limited [2002] NSWSC 43 Jones v Dunkel (1959) 101 CLR 298; [1959] ALR 367 Kedcorp Pty Ltd v Jenkins (2001) Q ConvR 54-547; [1999] QCA 452 Lend Lease Real Estate Investments Ltd v Charter Hall Retail Management Ltd [2011] NSWSC 1624 Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; [2001] HCA 70 Martinis v Raine & Horne Hornsby WPNLServ. P/L (Commercial) [2005] NSWCTTT 69 Mathas v Slater [2009] NSWSC 1397 Metropolitan Gas Co v Federated Gas Employees Industrial Union (1925) 35 CLR 449 Milne v Coxton (unreported, Supreme Court of NSW, Clarke J, 1985) BC8700884 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 Pao On v Lau Yiu Long [1980] AC 614 Porter v Oamps Ltd (2004) 207 ALR 635; [2004] FMCA 272 Qureshi v John Fairfax Publications Pty Ltd [2012] NSWSC 1605 Re Griffin; Ex parte The Board of Trade (1890) 60 LJQB 235 Re Media, Entertainment & Arts Alliance; Ex parte Hoyts Corp Pty Ltd (No 1) (1993) 178 CLR 379; [1993] HCA 40 RHG Mortgage Limited v Rosario Ianni [2015] NSWCA 56 Rivat Pty Ltd v B and N Elomar Engineering Pty Ltd (2007) NSW ConvR 56-186; [2007] NSWSC 638 Rural Insurance (Aust) Pty Limited v Reinsurance Australia Corporation Limited (2002) 41 ACSR 30; [2002] NSWSC 156 Ryan v Textile Clothing & Footwear Union of Australia (1996) 130 FLR 313; [1996] 2 VR 235 Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd [2017] NSWCA 339 Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 4) [2017] NSWSC 436 Samm Property Holdings Pty Ltd v Shaye Properties Pty Ltd (2017) 345 ALR 633; [2017] NSWCA 132 SAS Realty Developments Pty Ltd v Kerr [2013] NSWCA 56 Shevill v Builders Licensing Board (1982) 149 CLR 620; [1982] HCA 47 Simpson v Donnybrook Properties Pty Ltd [2010] NSWCA 229 Sims v Gawne [2005] NSWSC 750 Sultana Investments Pty Ltd v Cellcom Pty Ltd [2008] QCA 357 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 Victoria v Tatts Group Ltd (2016) 328 ALR 564; [2016] HCA 5 Waterways Authority of New South Wales v Coal and Allied (Operations) Pty Limited (2008) Aust Contract R 90-278; [2007] NSWCA 276 Williams v ATM & CPA Projects Pty Limited [2015] NSWSC 703 WIN Corporation Pty Ltd v Nine Network Australia Pty Ltd (2016) 341 ALR 467; [2016] NSWCA 297 Zhang v ROC Services (NSW) Pty Ltd (2016) 93 NSWLR 561; [2016] NSWCA 370 Texts Cited: J D Heydon, Cross on Evidence (LexisNexis, 10th ed, 2015) Category: Principal judgment Parties: 2015/160052 Kevin Yung Lui (Plaintiff) Xiuyan Guan (First Defendant) Sun Link Group Pty Ltd (Second Defendant) 2015/223106 Sun Link Group Pty Ltd (Plaintiff) Kevin Yung Lui (Defendant) Representation: 2015/160052 Counsel: P Afshar (Plaintiff) I Leong (Defendants) Solicitors: Dunstan Legal (Plaintiff) Auyeung Hencent & Day (Defendants) 2015/223106 Counsel: I Leong (Plaintiff) P Afshar (Defendant) Solicitors: Auyeung Hencent & Day (Plaintiff) Dunstan Legal (Defendant) File Number(s): 2015/160052; 2015/223106 TABLE OF CONTENTS: INTRODUCTION - paragraph 1 The Pleadings: The Primary Matter - paragraph 7 Agreement - paragraph 8 Terms of Agreement - paragraph 11 Performance - paragraph 13 Breach - paragraph 18 Loss and Damage - paragraph 20 Defence pursuant to the Property, Stock and Business Agents Act 2002 - paragraph 21 The Agreement - paragraph 22 Property Projects The Kensington Project - paragraph 31 The Auburn Project - paragraph 37 Relevant Persons and Companies Mr Lui and Elite 100 - paragraph 40 Ms Guan - paragraph 48 Sun Link - paragraph 51 Mr Liang - paragraph 52 Other relevant parties - paragraph 55 The Issues - paragraph 56 Written Submissions - paragraph 58 EVIDENCE Overview of the Evidence - paragraph 60 The Witnesses - paragraph 62 The Credibility of Ms Guan - paragraph 63 Table 1: Evidence of Ms Guan – cross-examination The Credibility of Mr Lui - paragraph 87 Mr Liang - paragraph 100 The Jones v Dunkel Issues - paragraph 107 Exhibit 18 - paragraph 112 FACTUAL BACKGROUND - paragraph 119 Initial meetings between Mr Lui and Ms Guan: 2013-2014 - paragraph 120 The loan agreement with A Capital: 26 June 2014 - paragraph 126 The purchase of the Kensington land and the Auburn properties: 2014 - paragraph 138 The expectation of payment: Ms Guan and Mr Liang - paragraph 140 Prior to signing the agreement, the assistance of Mr Lui: 2013-2014 - paragraph 141 The Option / Sales contract with Landream: 22 September 2014 - paragraph 145 Letter of offer by Anson City: 4 November 2014 - paragraph 151 The Kensington Project appointed receivers and Shuangfu placed under external administration: November 2014 - paragraph 160 Meetings of the Creditors to Shuangfu: 2 December 2014 to 2 March 2015 First meeting of the creditors: 2 December 2014 - paragraph 163 Second meeting of the creditors: 23 December 2014 - paragraph 164 Third meeting of the creditors: 2 March 2015 - paragraph 166 The vehicle - paragraph 167 The circumstances immediately prior to signing the agreement: December 2014 to January 2015 - paragraph 170 The circumstances at the time of the signing of the agreement: 18 January 2015 - paragraph 177 The expression of interest process: 29 January to March 2015 - paragraph 188 The contract for the Kensington land exchanged: 25 March 2015 - paragraph 226 The circumstances after the confirmation of the exchange: March 2015 to May 2016 - paragraph 229 THE PRIMARY MATTER: THE CONTRACT DISPUTE ISSUE Construction of the Agreement General Principles Formation of Contract - paragraph 236 Principles of Construction - paragraph 244 Parole evidence rule - paragraph 254 Contra proferentem - paragraph 255 Implied industry term - paragraph 256 The rule that past consideration is not good consideration - paragraph 258 The presumption against impossibility - paragraph 261 A contractual clause must not be considered in isolation - paragraph 266 All parts of a contract must be given effect where possible and no part should be treated as inoperative - paragraph 271 Reasonableness - paragraph 274 Requirement of clear words to support construction, particularly in circumstances where a construction would yield an unfair result - paragraph 277 Defendants' Submissions Formation of the agreement - paragraph 281 Construction of the agreement - paragraph 283 Objective Circumstances Surrounding the Agreement - paragraph 285 Terms of the agreement - paragraph 302 Handwritten Term - paragraph 326 Consideration: Construction of the Agreement - paragraph 327 Performance of the Agreement Defendants Submissions - paragraph 353 Assisting Ms Guan with her immigration issues - paragraph 355 Calling Mr Qian of Kerry Properties - paragraph 359 Privately meeting with Mr Chen of A Capital - paragraph 362 Speaking to Mr Chan of Anson City - paragraph 369 Speaking to Mr Zhao - paragraph 379 Bringing in Fairway's bid - paragraph 382 Speaking to Mr Gung - paragraph 385 Even if Mr Lui's job was to find an "investor" rescuer, he failed at that as well - paragraph 386 Consideration: Performance - paragraph 391 THE PRIMARY MATTER: THE REAL ESTATE AGENT ISSUE - paragraph 413 Defendants Submissions - paragraph 414 Issue 1: "carries on a business" - paragraph 418 Issue 2: Range of Activities - paragraph 438 Issue 3: "As an agent" - paragraph 450 The Act - paragraph 466 Consideration: Real Estate Agent Issue - paragraph 470 The First Issue - paragraph 473 The Second Issue - paragraph 498 Third Issue - paragraph 507 THE PRIMARY MATTER: RELIEF – DAMAGES - paragraph 509 CONCLUSION: THE ISSUES - paragraph 511 THE SECOND MATTER - paragraph 512 CONCLUSION - paragraph 516 DIRECTIONS - paragraph 521 Judgment INTRODUCTION 1. HIS HONOUR: By an amended statement of claim filed on 29 September 2015 ("the ASOC"), the plaintiff, Mr Kevin Yung Lui, commenced proceedings for breach of contract against the defendants, Ms Xiuyan Guan and Sun Link Group Pty Ltd ("Sun Link") (collectively, "the defendants"). Those proceedings shall hereinafter be referred to as "the primary matter". The central question arising in the primary matter was whether Mr Lui should receive damages for breach of an agreement entered with Ms Guan, namely, the "Co-operative Agreement" dated 18 January 2015 ("the agreement"). The ASOC pleaded that the agreement was also made on behalf of Sun Link (I will return to that contention later in this judgment). 2. In the primary matter, Mr Lui initially sought declaratory relief and specific performance of the agreement or, in alternative, the transfer of title of a Rolls Royce Phantom IS68 Sedan ("the vehicle") to him. The vehicle was registered to Sun Link. The relief claimed, as pleaded, is extracted below: 1. A declaration that the agreement between the plaintiff and the first defendant for and on behalf of the second defendant dated 18 January 2015 (Agreement) is valid and enforceable and ought to be specifically performed. 2. An order that the Agreement be specifically performed. 3. In the alternative to prayer 2 above, an order that the second defendant, by the first defendant, executes all documents and enters into any instruments necessary to transfer to the plaintiff the title, without any encumbrance, to the vehicle being a Rolls Royce Phantom IS68 Sedan bearing the number plate number SL9555, VIN No SCA1S680X6UH00366, which is registered in New South Wales (Vehicle). 4. In lieu of specific performance in accordance with prayer 2 above, damages for breach by the first defendant and the second defendant of the Agreement 5. Interest pursuant to section 101 of the Civil Procedure Act 2005. 6. Costs. 1. By a statement of claim filed on 30 July 2015, Sun Link commenced detinue proceedings against Mr Lui and sought damages with respect to the vehicle ("the second matter"). The second matter was listed with the primary matter; the matters were to be heard together. 2. On 13 May 2016, the vehicle was sold by its mortgagee for $200,000. 3. At the outset of the proceedings, the Court sought to confirm the status of the second matter, in circumstances where the vehicle had been sold by the mortgagee, the mortgage with the financier settled and the remaining equity of around $24,434.87 was being held by the Supreme Court of Victoria. The onus was put upon the Sun Link to communicate the course it intended to take, in that respect, "by communicating with your opponent what the basis of it is, how you say it comes into the proceedings now and then, what should be done with it". Counsel for Sun Link, Mr I Leong, as to that issue, intimated an intention to raise arguments as to the issue of damages, notwithstanding the fact that pleadings in the second matter were predicated upon Mr Lui having possession of the vehicle. However, any argument, in that respect, received little development and appeared to dissipate as the proceedings progressed with the focus of the parties, in the balance of the proceedings, fixated upon the resolution of issues in the primary matter. I will return to my findings, as to the second matter, after my consideration of the primary matter. 4. Returning to the primary matter, following the sale of the vehicle, the relief sought in the primary matter was ultimately reduced and refined by Mr P Afshar, counsel for Mr Lui, at the outset of the hearing, and without resorting to the filing of further amended pleadings, as follows: 1. Prayers 1, 2 and 3 were superseded insofar as the vehicle was sold on or around 13 May 2016 and, as a result, were no longer pressed in that form. 2. Prayer 4 sought an order for damages followed by interest and costs. Mr Lui's damages were particularised as $780,000, being 2% of the total bidding figure of the successful bid, and the market value of the vehicle. Given that the vehicle was sold for $200,000, that amount provided, it was submitted, the most sensible evidence of its market value. 3. Prayers 5 and 6, sought interest pursuant to s 101 of the Civil Procedure Act 2005 (NSW) and costs, respectively. The Pleadings: The Primary Matter 1. The relevant cause of action pleaded is breach of contract. The following summary is derived from the ASOC filed on 29 September 2015 and the defence to the amended statement of claim filed on 23 October 2015 ("the defence"). For the purpose of concision, particulars, for the most part, have been omitted from the below summary. Agreement 1. On or about 18 January 2015, Mr Lui entered into an agreement with Ms Guan for and on behalf of Ms Guan and Sun Link. The defendants, in that respect, admitted that Mr Lui and Ms Guan entered into an agreement on that date. The defendants denied the balance of the matters alleged, including the pleading that Sun Link was party to the agreement. 2. Mr Lui also pleaded that at all relevant times that Ms Guan was the sole director and shareholder of Sun Link. The defendants denied this and pleaded that Henson Liang was also a director of Sun Link for the period 31 October 2012 to 23 February 2015. 3. It may be noted at this juncture, that there was no claim that the agreement has no legal effect or was, in some way, vitiated. Terms of Agreement 1. The terms of the agreement were pleaded and particularised by Mr Lui as follows: Terms of the Agreement 4. It was a term of the Agreement that the plaintiff would locate good and resourceful investment partners in Australia or overseas to assist the first defendant with her financial situation and difficulties. Particulars i. Clause 1 of the Agreement. 5. It was a term of the Agreement that the plaintiff would locate suitable investors and developers in Australia or overseas to take over a project for the development (Project) of the site located at 81-85 Anzac Parade, Kensington in New South Wales (Land), by tendering expressions of interest. Particulars i. Clause 2 of the Agreement. 6. It was a term of the Agreement that once the expression of interest bids for the Project were successful the first plaintiff would give to the plaintiff, free of charge, the vehicle, being a Rolls Royce Phantom IS68 Sedan bearing the number plate number SL9555, VIN No SCA1S680X6UH00366, which is registered in New South Wales (Vehicle). Particulars i. Clause 4 of the Agreement. 7. It was a term of the Agreement that once the expression of interest bids for the Project were successful, the first defendant would pay to the plaintiff an amount equal to 2% of the total bidding figure of the successful bid. Particulars i. Clause 5 of the Agreement. 8. It was a term of the Agreement that the plaintiff would approach the mortgagee on behalf of the first defendant so as to facilitate the success of the bidding process for investors and developers in Australia and overseas to take over the Project. Particulars i. Telephone conversation between the plaintiff and the first defendant in or around December 2014. ii. Conversation in Sydney between the plaintiff and the first defendant in or around January 2015. 1. The defendants denied those matters and pleaded the following: 1. that "the term of the agreement was a period of 10 days from the date of execution of the agreement"; and 2. that on the true construction of the agreement, Mr Lui "did not become entitled to any commission or reward unless and until [he] effectively introduced the purchaser of certain land at 81-85 Anzac Parade, Kensington NSW owned by Shuangfu". Performance 1. Between January and March 2015, Mr Lui performed his obligations pursuant to the agreement. This was denied by the defendants. 2. On or about 25 March 2015, Shuangfu Development Pty Ltd ("Shuangfu") exchanged a contract for the sale of land with Anson City Developments 1 (Australia) Pty Ltd ("Anson City") for the sale of the site located at 81-85 Anzac Parade, Kensington in New South Wales for $39 million after a successful bidding process, which Mr Lui facilitated. The exchange was effected by the real estate agent Jones Lang LaSalle acting on instructions from the mortgagee or a receiver appointed by the mortgagee. In answer to this pleading, the defendants: 1. admitted that Shuangfu exchanged a contract with Anson City for "the sale of the Properties on or around 25 March 2015 for the sum of $38.389 million"; 2. denied the balance of that pleading; and 3. in further answer to the same, the defendants argued "the purchaser Anson City Developments Pty Ltd was introduced by Henson Liang and not by [Mr Lui]". 1. Mr Lui further pleaded at paras 11 and 12 of the ASOC: 1. On or about 25 March 2015, the mortgagee received pursuant to the mortgagee's power of sale a 10% deposit from Anson City upon exchange of the contract. 2. On or about 22 April 2015, the mortgage on "the land" (numbered AI899769) was transferred by the mortgagee to Anson City. (Those pleadings were, in essence, statements of fact). 1. In answer to the foregoing pleading, the defendants said: "The defendants do not understand and accordingly do not admit paragraphs 11 and 12". 2. In summary, the defendants denied that Mr Lui performed his obligations. Breach 1. Mr Lui pleaded that in breach of the terms of the agreement, and despite demands by Mr Lui, Ms Guan and Sun Link failed or refused to: 1. cause the registration of the vehicle to be transferred to the plaintiff in accordance with cl 4 of the agreement; and 2. pay Mr Lui in accordance with cl 5 of the agreement (set out below). 1. As to the contended breach, the defendants: 1. admitted Ms Guan has received correspondence seeking payment and transfer of title to the vehicle to Mr Lui; 2. admitted that they have not made the payment or the transfer demanded by Mr Lui; 3. denied any obligation to make the payment or the transfer demanded; and 4. denied the balance of the matters alleged in the paragraph. Loss and Damage 1. As a result of breaches by Ms Guan and Sun Link of the terms of the agreement, Mr Lui pleaded, he has suffered loss or damage. This was denied by the defendants. Defence pursuant to the Property, Stock and Business Agents Act 2002 1. By their defence to the ASOC, the defendants also introduced a pleading with respect to the Property, Stock and Business Agents Act 2002 (NSW) ("the Act"). That pleading is extracted in full (together with particulars): 13. The sale of the Properties by Shuangfu Development Ltd was a real estate transaction as defined by section 3 of the Property, Stock and Business Agents Act 2002 ("PSBAA"). 14. On the true construction of the agreement, the plaintiff's obligations were to: a. induce or attempt to induce or negotiate with a view to inducing other persons to enter into, or to make or accept an offer to enter into, the sale of the Project properties or a contract for the sale of the Project properties, or b. introduce or arrange for the introduction of a prospective purchaser, to the owner, or the receiver of the owner, of the Project Properties; and in the premises, by operation of section 3 of the PSBAA the plaintiff was, for the purposes of the PSBAA, a real estate agent. Particulars The relevant terms of the agreement and the obligations of the plaintiff are as alleged by the defendants in paragraph 7 of this defence. 15. The plaintiff does not hold a licence to be a real estate agent as defined by the PSBAA. 16. The consideration of the transfer of the Vehicle to the plaintiff amounts to a commission, fee, gain or reward for the services of the plaintiff under the agreement. 17. The consideration of payment of 2% commission on the purchase price of the Project properties amounts to a commission, fee, gain or reward for the services of the plaintiff under the agreement. 18. In the premises of the matters pleaded in paragraphs 13 to 17, by operation of section 8(2)(a) of the PSBAA, the plaintiff is not entitled to bring proceedings for the recovery of any commission, fee, gain or reward for any service performed by him and as such is not entitled to any of the amounts or transfer of the Vehicle under the agreement. The Agreement 1. The agreement (the existence of which was admitted) was a written contract, which included a combination of typed Chinese script and English, and was executed by the parties on 18 January 2015. 2. Mr Lui led expert evidence as to the terms of the contract when the Chinese script was translated to English. The English translation was prepared by Lin Zhou, accredited NAATI Professional Translator and was before the Court (see Ex 1). 3. The English translation appears below (with the words that originally appeared typed or handwritten in English and, therefore, not requiring translation, italicised for the purposes of distinction only): Co-operative Agreement Party A: LEI, Jingquan Address: Suit 25, Elevation Building 6 Meridian Place Bella Vista, NSW 2153 Australia Party B: GUAN, Xiuyan Address: 81-85 Anzac Parade, Kensington NSW Australia Project company: Shuangfu Development Pty Limited ACN 151971041 Project address: 81-85 Anzac Parade, Kensington NSW After discussions and negotiations in good faith, the Parties enter into the following agreement based on the principle of justice and fairness for mutual benefit: 1. According to the detailed explanation and analysis about the project given by Party B, Party A is required to seek good investment partners in or out of Australia in order to improve the current economic situation and solve the financial problems encountered by Party B. 2. Party A agrees that it will work hard to assist Party B to find appropriate investment developers in and out of Australia by using his reputation and prestige in the industry, and the investment developers will submit a sealed bid to the company which takes over the project. 3. Party B agrees to encourage directors with voting power for the project to support the proposal of Party A which involves a sealed bid in order to overcome her current financial difficulties successfully. 4. Party B promises Party A to give him a Rolls-Royce motor car (plate number: SL9555) under the name of Party B as a free gift when a sealed bid for the project is successful. 5. Party B undertakes to pay Party A a usual service fee to the agent nominated by Party A at the amount of percent (2%) of the tender rate. The matters unspecified in the agreement may be completed in the formal cooperative document through discussions by the Parties identifying the duties, responsibilities and rights of each Party. The agreement is in quadruplicate and will take effect from the signature date by the Parties. (Handwriting [sic] words) the actual settlement price requires a separate talk. Party A: LEI, Jingquan Signature: (signature) LEI, Jingquan Date: 18/1/2015 Party B: GUAN, Xiuyan Signature: (signature) GUAN, Xiuyan Date: [no date inserted.] (It should be noted that it is not in dispute that "Mr Jingquan Lei" is the same person identified as Mr Lui in these proceedings). 1. It may be noted that counsel for the defendants, notwithstanding his agreement to the English translation, reserved the right to run an uncertainty argument as to the translation; a matter that was not pleaded. Leave was granted to counsel to file and serve a notice of motion to amend its defence in that respect. A notice of motion was filed by the defendants but, ultimately, not moved upon. The issue of costs, in that respect was reserved. 2. Counsel for the defendants ultimately accepted at the outset of the proceedings that Ex 1 represented the English form of the agreement. Later, Ms Guan made, during the course of her evidence, several assertions suggesting, in effect, that Mr Lui had perpetuated a fraud with respect to the agreement, such that sections of agreement had been excised or otherwise changed from the original. Those assertions had not been raised in the pleadings or at an earlier point in the proceedings. That factor, in conjunction with several others, went directly to Ms Guan's credit and contributes to my finding that she was not, as I will discuss below, a truthful or reliable witness. It may be noted that the rejection of her evidence, in the absence of corroboration (as I will later find), results in a rejection of the pleading in the defence that the term of the agreement was for a period of 10 days from the date of execution. 3. The matter proceeded before the Court upon the concession of counsel for the defendants that the terms of the agreement were those contained in and marked Ex 1. Despite some very late prevarication by counsel for the defendants about some of the terms of the agreement as expressed in Ex 1 (without any submission seeking leave to depart from that previous concession), I find the agreement was in the terms of Ex 1. 4. The particulars pleaded as to the form of the agreement were as follows: 1. The agreement was express; 2. The agreement was partly oral and partly in writing; 3. Insofar as the agreement was in writing, it was recorded in a document entitled: "Co-operative Agreement", which was signed by the plaintiff and the first defendant on or about 18 January 2015; 4. At the time of signing the agreement, Ms Guan was the sole director and shareholder of Sun Link; and 5. Insofar as the agreement was oral, it comprised of conversations between Mr Lui and Ms Guan during the period September 2014 to January 2015. 1. At this juncture, it should be noted that Shuangfu, whilst listed as the "project company" on the agreement, was not a party to the agreement. I will deal with the balance of those particulars later in this judgment. 2. I will also turn to the issue of construction at a separate juncture. Further, detail as to the events that following the signing of the agreement will be set out under the heading "Factual Background" below. Property Projects The Kensington Project 1. Shuangfu purchased seven parcels of land in Kensington which shall hereinafter be described as "the Kensington land" (it may be noted that two other parcels of land were unaccounted for in the evidence and the submissions of the parties, but that gap is immaterial to the disposition of the issues in the proceedings). The Kensington land incorporated the land appearing in the preamble to the agreement, namely, "81-85 Anzac Parade, Kensington". 2. The evidence disclosed (as will be discussed in greater detail below) that Shuangfu purchased the Kensington land for the purposes of developing a mixed residential and commercial property site at Kensington using the Kensington land (hereinafter referred to as "the Kensington Project"). 3. It was not entirely clear, on the evidence, why the agreement did not refer to the whole of the Kensington land, which seven parcels incorporated 81-95 Anzac Parade, Kensington and 69-71 Boronia Street, Kensington. No party relied upon or referred to that fact. In any event, it is not a matter that will occupy further consideration in this judgment because whether Mr Lui's obligations under the agreement concerned the lesser or the greater of the Kensington land, the issue in the proceedings is whether he performed under the agreement as properly construed with respect to the land or project specified therein. That is not to say that an issue did not emerge in the proceedings as to which parcels of land were in fact the subject of various offers made by various relevant entities up to the sale of the Kensington land. However, that issue can await discussion later in this judgment with respect to performance. 4. The purchase of the Kensington land was financed pursuant to the Kensington Loan Agreement dated 9 May 2014, between Australia Capital Financial Management Pty Ltd ("A Capital") as lender, and Shuangfu as borrower. A total sum of $21,353,357 was drawn by Shuangfu in respect of the Kensington Project in accordance with that agreement. 5. At this juncture it should be noted, during Mr Lui's cross-examination, there were many and varied attempts by the defendants' counsel to challenge Mr Lui's evidence in relation to the use of the word "project" as opposed to "land" or "property". Those challenges were aimed at causing Mr Lui to agree he was engaged to sell land and so to enhance the defendants' case in relation to the Act (as discussed below under the heading, "Real Estate Agent Issue"). This cross-examination ultimately failed, not only because Mr Lui explained his reasons for using the word "project" coherently, but also because evidence from Ms Guan established that she also used the description, "project", to describe the Kensington Project rather than using the word "land" to describe it, especially in the context of Shuangfu's attempted sale to Landream Project Management Pty Ltd ("Landream") (as discussed below under the heading, "The Option / Sales contract with Landream: 22 September 2014"). The same instance occurred throughout counsel for the defendants' submissions, both written and oral. As such, over the course of the proceeding references are made to the Kensington Project, the Kensington properties and the Kensington land. I accept that delineation has primarily been made in order to advance arguments with respect to the real estate agent issue, namely, the second case theory advanced by counsel for the defendants. 6. I will refer variously to the Kensington Project, as defined above or the Kensington land, again in that context, but particularly in light of an expression of interest process discussed below. The Auburn Project 1. Shuangxing Development Pty Ltd ("Shuangxing") purchased six properties in Auburn ("the Auburn properties"). Shuangxing purchased the Auburn properties for the purposes of developing a mixed residential and commercial property site at Auburn. 2. A Capital initially agreed to lend $12 million from its own funding to Shuangxing in settling the Auburn properties. A Capital subsequently agreed to raise a further $7 million from external funding for settlement, on the following conditions: 1. that the Kensington Loan Agreement was refinanced under the loan agreement dated 26 June 2014; 2. the Auburn properties were transferred to the Australia Capital Sunlink Property Fund (also referred to as the "ACSP Auburn Fund"); and 3. Shuangxing agreed to share returns with A Capital to compensate for additional risks undertaken by A Capital. 1. Thus, by the loan agreement dated 26 June 2014, it was agreed that the loan with respect to the Kensington Project would be refinanced with A Capital (as a result, the Kensington Loan Agreement dated 9 May 2014 was replaced by the loan agreement dated 26 June 2014). A Capital was listed as the registered mortgagee for the Kensington land. It may also be noted that Sun Link was listed, amongst others, as guarantor to the loan agreement dated 26 June 2014. I will return to a discussion of that loan agreement below. Relevant Persons and Companies Mr Lui and Elite 100 1. Mr Lui is the plaintiff. He is a senior project development consultant who provides advice and obtains funding for development projects in Australia from investors located both in Australia and overseas. Over the years, he has formed relationships, acquaintances and a network, which he used to conduct his business. The defendants in the primary matter contended that Mr Lui was a real estate agent in relation to the Kensington Project, I will return to this argument later in the judgment. 2. Mr Lui has a 40% shareholding in "Elite 100". Elite 100 have offices in Sydney, Hong Kong, Beijing, Shanghai and Macau. In May 2012, "Elite 100 Australia Pty Ltd" was registered for the purpose of "promoting Australia as the best destination for business migration, especially in China, India and other Asia regions". 3. The Elite 100 website sets out the vision of the business: "Elite 100 aims to provide the best opportunities and services for Australia and its people through globalised experience and expertise in property development, investment, immigration, integrated resorts, media and art". 4. By its website, Elite 100 also set out brief information about "[t]he new Australian Significant Investor Visa" and described it as "a not-to-be-missed opportunity for wealthy individuals to invest in the future security of their families". 5. Elite 100 stated that the Australian Significant Investor Visa ("SIV") was introduced "to assist high net worth migrants who will make a minimum investment of five million AU dollars in the Australian economy for a continuous four year period". 6. Mr Lui gave evidence that Elite 100 does not employee registered migration agents. However, "many registered immigration agents, alliance with us". As a result, he would not attend to the completion of any SIV applications. 7. Elite 100 was described as "a modern enterprise group". It described its core business operation as focused upon: 1. strategic planning of urban developments; 2. theme creation and application designs; 3. facilitating project and property investment; 4. recruiting and migration services; and 5. resorts, media and art. 1. In the absence of evidence to the contrary, it must be concluded that Mr Lui did not have a real estate agent's license. Ms Guan 1. Ms Guan is the first defendant in the primary matter. She was, at various points that will be distinguished where relevant, the sole director and/or sole shareholder of the following companies: 1. Sun Link; 2. Shuangfu; and 3. Shuangxing. 1. Both Shuangfu and Shuangxing entered into agreements to purchase properties, as discussed above. 2. It was not contested that Ms Guan personally funded a component of the Kensington Project in the amount of $12 million. (A debt that would later be absorbed by the Australia Taxation Office ("ATO"), another creditor of Shuangfu: see below under the heading "Meetings of the Creditors to Shuangfu"). Sun Link 1. Sun Link is the second defendant in the primary matter. Both Ms Guan and Mr Liang were directors of Sun Link at one stage. However, on the material before the Court, the precise timeframes of each directorship is not defined. Notwithstanding that fact, I will ultimately find that Mr Liang was a director of Sun Link, together with Ms Guan, at 26 June 2014 through to 23 February 2015. As at the time of these proceedings, Ms Guan was the sole director of Sun Link. Mr Liang 1. As will be discussed below, no evidence of Mr Liang was before the Court and, as such, the Court has a limited account as to his role within the events surrounding the dispute. 2. From the material before the Court, the following is known: 1. Mr Liang was described as holding the title of "managing director" and "Chief Executive Officer" of Sun Link in April 2015; 2. Mr Liang was a director of Sun Link, together with Ms Guan, at 26 June 2014 through to 23 February 2015; 3. Mr Liang was described as the "manager" of Shuangxing; 4. Mr Liang had experience as a real estate agent and appeared to have worked for Crown Commercial Real Estate; 5. Mr Liang was a guarantor to the loan agreement dated 26 June 2014; and 6. Mr Liang was a guarantor to the deed of guarantee and indemnity dated 26 June 2014. 1. It should also be noted that Mr Liang's first and last name was inconsistently spelt throughout documents before the court as both Henson/Hanson and Liang/Leung, as such, a reference to Mr Leung should be taken as a reference to Mr Liang. Other relevant parties 1. The following parties are also relevant to the facts in the primary matter discussed below (whilst some of the parties may have been earlier mentioned or introduced, for convenience and completeness, they are repeated): 1. A Capital, the mortgagee (and secured creditor) to Shuangfu and Shuangxing and, subsequently, the mortgagee in possession; 2. Mr Owen Chen, the principal of A Capital; 3. Jones Lang LaSalle, the appointed selling/sales agent by the receiver appointed to the land, which was the subject of the Kensington Project; 4. Representatives of Jones Lang LaSalle: 1. Mr John Macree, a regional director; 2. Mr Sam Brewer, national director; 3. Mr Alex Worsthorne, analyst in sales & investment; and 4. Mr Leslie Chang, a director in sales & investment. 1. Mr Barry Kogan and Mr Joseph Hayes of McGrathNicol, appointed agents for mortgagee in possession of the Kensington land (also described as the "controllers" and/or "external administrators"). 2. Representatives of McGrathNicol: 1. Ms Kristin Legge, Assistant Manager; and 2. Mr Mitchell Mansfield. 1. Baker & McKenzie, solicitor for the agents for mortgagee in possession; 2. Representatives of Baker & McKenzie: 1. Mr David Jones, partner; and 2. Ms Haley Chan, solicitor. 1. The following companies, inter alia, participated in the expression of interest process, with respect to the sale of the Kensington land (a complete list is set out below, under the heading "The expression of interest process"): 1. Fairway Investment & Development Pty Ltd ("Fairway"); and 2. Anson City Developments 1 (Australia) Pty Ltd ("Anson City"). 1. Representatives of Anson City: 1. Mr Pak Wai Ngor (also referred to as "Mr Pak" and "Mr Bai"), the principal; 2. Mr Tom Hu, development manager; and 3. Mr Bernard Chiu, solicitor. 1. Mr Justin Chan, was identified as a friend to Mr Lui and a "business advisor" to Mr Pak. 2. Landream Project Management Pty Ltd, a development company based in Melbourne. Landream, entered an Option / Sales Contract with Shuangfu in 2014; proposed a deed of company arrangement ("DOCA") in 2015; and was also a creditor of Shuangfu. The Issues 1. On 6 June 2018, the parties provided the Court with an agreed statement of issues, setting out the issues in dispute in the primary matter. Those issues are set out below: 1. What were the precise terms of the contract signed by Mr Lui and Ms Guan on 18 January 2015 (the agreement), including in relation to performance and payment? 2. Is Mr Lui entitled to the vehicle referred to in the agreement? 3. Is Mr Lui entitled to damages in the amount for which the vehicle was sold in lieu of specific performance? 4. Is Mr Lui entitled to the fee referred to in the agreement? 5. Does the Property, Stock and Business Agents Act 2002 apply to disentitle Mr Lui from receiving the benefits (the vehicle, or damages in lieu, and the fee) under the agreement? 1. This judgment will be structured so as to firstly deal with the relevant factual circumstances, globally, with respect to those issues. The consideration of those issues shall be discussed in two parts: 1. The first part, shall consider issues 1-4, which shall be collectively referred to as "the contract dispute issue"; and 2. The second part, shall consider issue 5, which concerns the application of the Act and shall be referred to as "the real estate agent issue". Written Submissions 1. Mr Lui's submissions consisted of the following: 1. Plaintiff's Outline of Opening Submissions for Hearing on 27 June 2017, 5 pages (27 paragraphs); 2. Plaintiff's Closing Submissions in Chief for Hearing on 12 March 2018, 31 pages (94 paragraphs) ("Plaintiff's Closing Submissions"); 3. Plaintiff's Closing Submissions in Reply for Hearing on 12 March 2018, 14 pages (47 paragraphs) ("Plaintiff's Closing Submissions in Reply"); and 4. Plaintiff's Response to the Defendants' Consolidated Submissions, 2 pages (7 paragraphs). 1. The submissions of the defendants consisted of the following: 1. Defendants' Outline of Opening Submissions for Hearing on 27 June 2017, 27 pages (80 paragraphs); 2. Defendants' Closing Submissions, 96 pages (248 paragraphs); 3. Defendants' Supplementary Submissions, 26 pages (91 paragraphs); 4. Defendants' Consolidated Submissions on the PSBAA, 5 pages (28 paragraphs); and 5. Defendants' Reply to the Plaintiff's Response to the Defendants' Consolidated Submissions, 4 pages (15 paragraphs). EVIDENCE Overview of the Evidence 1. The Court received in evidence a total of 19 exhibits that consisted of a large amount of documentary material. That material included, inter alia, the following: 1. the agreement; 2. three affidavits of Mr Lui dated 8 December 2015, 27 June 2016 and 21 June 2017, respectively; 3. an affidavit of Ms Guan dated 20 April 2016; 4. written correspondence; 5. business and property related documents; and 6. ASIC records. 1. It may be noted that some of the business related documents were controversial, namely, the email correspondence of Jones Lang LaSalle, with respect to the sale of the Kensington land, marked Ex 18 in the proceedings, to which I will return. The Witnesses 1. Ms Guan and Mr Lui were the only two witnesses in the primary matter. The defendants sought to call a third witness, Mr Liang. I will briefly turn to the submissions of the parties in that respect. However, I will firstly turn to the credit issues concerning Ms Guan and Mr Lui. The Credibility of Ms Guan 1. Counsel for Mr Lui made extensive submissions as to Ms Guan's credit. He gave notice of this intention to do so at various points in the proceedings, including during Ms Guan's cross-examination. By and large, little submissions were advanced in reply by counsel for the defendants. 2. I accept the submissions of counsel for Mr Lui, in that respect, which underpin a substantial portion of my findings that follow, as they reflect my close observations of Ms Guan during her evidence. I note that many directions were given by the Court during the course of Ms Guan's evidence and the Court raised a question with counsel for the defendants, during submissions, as to how the Court should approach its deliberations if it did not accept Ms Guan's evidence. 3. Ms Guan was evasive, argumentative, non-responsive and displayed an unwillingness to engage with questions that were asked of her and to answer them directly, fairly, openly and, in some cases, at all. 4. An applicable example was provided by counsel for Mr Lui as follows: Q. You recall, do you not, that there are a number of conversation that Mr Lui has put in his affidavit which are conversations with you? A. INTERPRETER: Yes. When I was signing the contract and that contract was not fair because the contract was only - had a validation date for ten days. That particular contract was signed in the restaurant. He insisted on me signing it. I didn't want to sign it. He insisted. He made out the contract as well. He told me that he would get a good price for me. My company already were under liquidation. I said to him that I had no authority to sign that contract. That's why I only signed for the valid date for ten days. How could you sue me for something a contract that only valid for ten days? HIS HONOUR: I don't propose to do anything about this. Q. Could you stop there, please. HIS HONOUR: I don't propose to do anything about this unless you ask for a direction, I'll make a ruling. In other words, I'll let you make any forensic decisions you may wish to make about it. The answers are plainly not responsive to the question asked. AFSHAR: Yes, quite. Might I reserve my position for the moment just to see what comes out of the transcript, but I foreshadow that I'll probably be objecting to if not all, some of that evidence, because some of it is evidence in chief which has never been led in the past but I will, if you would be minded to make a direction to the witness that she answers my questions, I would be grateful. 1. Ms Guan obfuscated and hindered the cross-examination process by feigning illness and coughing through questions. Counsel for Mr Lui provided a number of examples of this behaviour as follows: Example 1: Q. Thank you. You're content that this affidavit tells the Court the whole story about your interactions with Mr Lui about the Kensington properties. Is that right? INTERPRETER: Sorry, could you repeat that question, sorry, because-- AFSHAR: Sorry, that was a bit fast, I apologise. INTERPRETER: No, it's because there was coughing here. I couldn't hear. Example 2: Q. You received, did you not, a number of investment - I'll withdraw that. You received in that office, did you not, a number of developers with whom you wanted to partner to build the Kensington properties up? A. INTERPRETER: Which developer are you referring to? I don't have English so I don't usually receive people on my own. Q. Did you receive with anyone else, including Henson Liang, any developers at the offices-- INTERPRETER: Sorry, can you stop for a moment, sorry? AFSHAR: I'll withdraw that, sorry. INTERPRETER: No, sorry, because she's coughing, sorry. AFSHAR: Your Honour, if the witness wishes to take a moment to-- INTERPRETER: I'm sorry, it's a bit distracted for me. AFSHAR: No, that's okay. That's all right. Would you like me to repeat the question? INTERPRETER: Yes, thank you. AFSHAR Q. Did you receive either on your own or with someone else, maybe Henson Liang, developers in the Kensington office to do with the Kensington development? A. INTERPRETER: A long time ago. I don't remember. That was before the liquidation. After the liquidation I didn't go there. 1. Rather than answering questions, Ms Guan coughed strategically throughout her cross-examination to, in my view, interrupt the flow of cross-examination, especially when she was asked difficult questions. The following passage from the transcript records the observations from the bench of Ms Guan's conduct in the witness box: HIS HONOUR: There is a question in my mind, by the way, as to whether this interruption is by cause of illness or by reason of some other factor. I will make it clear. Q. Does the witness require a break in order to deal with the illness she's presently experiencing? INTERPRETER: No, it's just that I'm having headache so the questions he ask me I can't remember clearly, that's all. I'm having a headache, I can't think. … LEONG: I'm only proceeding on what my own eyes are telling me about the physical state of the witness. HIS HONOUR: The physical state of the witness varies depending upon the degree of difficulty in the questioning, that's the difficulty. That's the question I'm raising squarely. LEONG: I won't make any comment on the demeanour of the witness; that's not my role. HIS HONOUR: No. If you make an application that the evidence cannot go forward because of the state of the witness in a way that is fair to her, then I'll have regard to that submission, but in the absence of the making of such a submission, I'll be guided by the witness' own assessment of whether she's able to proceed or not. In other words, I've given her a plain opportunity to have that break. I'm more than willing to do so. She's declined presently. She seems to have composed herself again now, but if you make that application then I'll consider it in terms and either grant it or not grant it. LEONG: In light of the fact that there are other productive things the Court can do-- HIS HONOUR: No, this is simply an adjournment to deal with whatever submission you make as to the state of the witness. LEONG: Yes, I make an application for ten minutes, say, of adjournment. HIS HONOUR: Do you wish to be heard on that? AFSHAR: I don't mind if it's ten minutes or whatever but ten minutes means that you will come back and there'll be another 15 minutes of time before 1 o'clock. You might be minded to take the luncheon adjournment a bit earlier if that assists. HIS HONOUR: Yes, that would give her a long period of-- LEONG: Or you could come back before, as in maintain the same amount of time, but just take the luncheon adjournment earlier. HIS HONOUR: That's just what he said. LEONG: Yes. HIS HONOUR: I'll take that course it seems to me in the circumstances, but it should not be taken that I am doing so because I have formed the view that the witness is necessarily afflicted in such a way as prevents her to give her evidence, but for more abundant caution, in the circumstances the witness is presently now completely composed, my observation is, without any coughing or other impediment beyond that which emerged a moment ago during the course of questioning. I'll deal with that. Is there anything further on the Liang matter presently just by way of foreshadowing where that's likely go? [Emphasis added.] 1. It might be observed that the transcript of the proceedings does not indicate that the Court intervened at or about that part of the proceedings recorded above to direct the court officer to not provide further assistance to the witness, unless otherwise directed to do so, as it appeared that process was also being employed, by the witness, to distract and interfere with the cross-examiner. 2. The witness often made speeches, in which she repeated the assertions and claims in support of her case rather than in engaging in a meaningful attempt to discharge her duties as a witness. Further, she repeatedly ignored the Court's directions to answer the questions put her. The following is an example of the same: HIS HONOUR Q. Ms Guan, yesterday I gave a direction-- A. INTERPRETER: I have been sick all along. Q. Yes. Yesterday I gave a direction-- A. INTERPRETER: Your Honour, I have been sick ever since I had the liquidation. Q. She is not to interrupt me. Yesterday I gave a direction that she was to answer the questions given to her. This is not the place. A. INTERPRETER: I know I have to answer but I don't want to answer the question, but I can remember well. Q. This is not the place to make speeches. INTERPRETER: Sorry? HIS HONOUR Q. This not the place to make speeches or to give her own version. A. INTERPRETER: But I can't remember. I can't think clearly. Q. Or to give her own version of events outside what is asked of her. If she needs a break in order to attend to her illness then I will give her that opportunity. A. INTERPRETER: I feeling very uncomfortable but I don't want to take people's time. Q. No, if she needs an opportunity because she is feeling ill by way of having a break then I will give her that opportunity. 1. The Court made the following observations on day two her cross-examination, after continual examples of Ms Guan not answering questions put to her: Q. The evidence that you-- A. INTERPRETER: I want to say something that is not nice. He is a rascal. He was a swindler. I'm not slandering against his character. What has he done for me? HIS HONOUR: Mr Leong, it's got to the stage where, in the absence of some abatement of this behaviour, I will give consideration to a warning being given to the witness and I will have her charged for contempt of court. LEONG: Yes. HIS HONOUR: There appears to me to be a wanton refusal, allowing for some emotion affecting her evidence - which I have - which has had me pause to this point. There is, it seems to be, a desire to expand in the latest outbursts in a way which is both pejorative and nonresponsive to the question. I mention it to you now so I can put more plainly in my mind what is in my consideration in that respect. I'll have the evidence go on a bit further, after I say to Guan something in a moment. And I'm giving you the opportunity if you wish to raise at this point, to raise it. [Emphasis added.] 1. Ms Guan evaded direct questions about relatively neutral facts, such as the aims of the Kensington Project and, as the cross-examination progressed, began contradicting her earlier evidence with disregard for the Court and the oath she had taken. By the final day of her cross-examination, she had come to reject many of the propositions that were put to her about her intentions with respect to the Kensington Project, even propositions that she had accepted on the first day of her cross-examination. 2. The juxtaposition of her evidence from the first and third day of her cross-examination demonstrates Ms Guan's evasion and duplicity. By the third day, she had begun to repeat the baseless propositions set out in her opening submissions, namely, the case theory that all she wanted to do was to sell the Kensington Project. Illustrations of that conduct were set out in a table proposed by counsel for Mr Lui, which is a fair representation of the proposition advanced by him, which I have accepted. That table is extracted below: Table 1: Evidence of Ms Guan – cross-examination First day of cross-examination Third day of cross-examination Q. What did Shuangfu want to do with the Kensington properties that it had bought one after the other? Q. I'm going to put a series of propositions to you in the way that I've just described. In 2013 and 2014 you wanted a developer to invest in the Kensington development. Do you agree with that or do you disagree with that? A. INTERPRETER: Develop, develop and build, build - sorry, build houses, sorry, property developing, sorry. A. INTERPRETER: I wanted to sell that. My intention was to sell that. [Emphasis added.] [Emphasis added.] Q. And this was going to be a big development, wasn't it? A. INTERPRETER: Yes. Q. This was going to be mixed residential and commercial property, wasn't it? A. INTERPRETER: Correct. Q. So you're saying that your intention in 2013 and 2014 was to sell the Kensington development? Is that what you're saying? Q. You had been working on the project plan since 2013, hadn't you? A. INTERPRETER: Yeah. Yes, because I was too much in debt, owing a lot of money, I was under a lot of pressure and I wanted to sell that. A. INTERPRETER: Yes, because I came as a business migrant and I need to do some project. Q. I suggest to you that in 2013 and 14 your intention was to develop the Kensington project. You accept that? Q. But you'd been working on it since 2013, hadn't you? A. INTERPRETER: This is your belief, but that's not my belief. A. INTERPRETER: Yes. Q. And that you wanted a developer to invest in the development of the Kensington properties because you didn't have the money to develop it fully. You accept that? Q. At the time that the ninth lot was purchased, Shuangfu did not have the funds to pay for the development of the Kensington properties, did it? A. INTERPRETER: I disagree. I, I, I wanted to sell that. I have to sell that, because I owe money. And, and in fact I have already sold it. At the time when this, I signed this agreement with him, the piece of land, it had already been. A. INTERPRETER: That's right. [Emphasis added.] Q. So what you had done, so just to perhaps cover this bit off, in or around 2013, was that the time when you found the Kensington properties and determined that it was suitable for the development you wanted to do? A. INTERPRETER: Yes. [Emphasis added.] Q. The plan in 2013 and 14 was, I suggest to you, that when you had a developer invest in the development you would retain a share in the project going forward, do you agree with that or do you disagree with that? A. INTERPRETER: I was relatively small and if I find a developer it will be out of proportion to restructure the company and I only have four or five pieces of land, how could I find - how could I in a position to find a developer? Q. Was there a project to develop the Kensington properties? Q. The alternative plan in 2013 and 2014 was that if you could not retain a share you would obtain an option to buy back into the project isn't that right? A. INTERPRETER: Yes. Yes. A. INTERPRETER: It's very hard to find a partner so just simply to sell it to make things easier. Q. When you say it was difficult to find a partner, is that you saying that you did try to find a partner on those terms? A. INTERPRETER: I thought about it but it was very difficult to do so the best way is to sell it. [Emphasis added.] Q. Let me put it again so that it's clear to you. As part of the plan in 2013 and 2014 you wanted to get a developer in, keep a share in the business and then obtain fees for managing the development, isn't that right? A. INTERPRETER: That's what you are in mind, not me. Q. You, on behalf of Shuangfu, approached development companies and wanted them to invest in the project and you offered them a share of the returns when the project was successful. Isn't that right? Q. Do you agree or do you disagree Guan? A. INTERPRETER: Yes. A. INTERPRETER: Disagree, that's what I was thinking. Q. Then that was the business. What you wanted to do was develop, or have the Kensington properties developed, sold, so that you can get a return. Isn't that right? Q. That was what you were thinking or that wasn't what you were thinking? A. INTERPRETER: Yes. A. INTERPRETER: No that wasn't because I - I thought this was not practical, that's just like wild imagination. Q. Because you didn't have the money, you needed someone else's investment in order to not only purchase the property, but build it up and organise it for sale? Q. You had invested millions of dollars of your own funds into the development isn't that right? A. INTERPRETER: Yes. A. INTERPRETER: Uh-huh. [Emphasis added.] Q. The plan was in 2013 and 2014 to come to an arrangement with a developer so that you will get back some of your investments in the development isn't that right? A. INTERPRETER: That - it has nothing to do with this. Nothing to do with this. I wanted to sell it. I have already sold it. I sold it in 2014. [Emphasis added.] 1. Towards the middle of her cross-examination, Ms Guan began to attack the agreement. Although she had admitted the agreement in her defence, had annexed the agreement to her own affidavit and her counsel had accepted the English form of the agreement, Ms Guan gradually descended, on the second day of her cross-examination, into an hysterical series of accusations as to "fraud", as earlier mentioned, in relation to the agreement. 2. On the third day of cross-examination and day 5 of the trial, Ms Guan resumed her assertions in relation to the agreement complaining that the signature was a different size in the copy of the agreement annexed to her affidavit and the version sent to Mr Lui's expert. That behaviour in giving evidence, reinforces my view that Ms Guan is a person prone to lying when she thinks she would gain an advantage by that behaviour and she did so in giving her evidence. 3. At the height of that conduct, she claimed the following: 1. that Mr Lui had somehow changed the size of her signature on the agreement; 2. that Mr Lui had "processed" the document, that "it has been altered"; or 3. that she had been "forced" to sign it. None of those claims were pleaded or raised at an earlier stage of the proceedings. Having regard to the course of the proceedings and my observations of Ms Guan in cross-examination, I reject those claims. 1. When challenged on her memory, she gave a series of answers, reflecting in a significantly adverse way as to her credit. I accept the submissions of counsel for Mr Lui, in that respect, that Ms Guan had deceitfully curated her evidence to serve her interests in this case. That is illustrated by the following: Q. That's nowhere to be seen in your affidavit, is there? A. INTERPRETER: Yes, he has said so many - too many thing, yes, too many things. Do I write everything? I only write down things which are useful for me. For things which are not useful for me, I don't put them down. Q. What you're saying is what you put in your affidavit is what is useful for you, is that right? A. INTERPRETER: Correct. For things which are useful for me, I remember. For things which are not useful for me, why would I try to remember them? [Emphasis added.] 1. And later in her cross-examination, Ms Guan gave the following evidence: Q. You were there when someone from Jones Lang LaSalle gave a copy of the information memorandum to do with the Kensington properties to Mr Lui? A. INTERPRETER: I can't remember. Q. You can't remember because all your remember is what helps your case, isn't that right? A. INTERPRETER: If it's useful for me, then I'll remember. If it's not useful for me, what's the point in me remembering and there's no outcome. What can I do? Q. If it doesn't help your case, you simply forget it. Is that what you're telling the Court? A. INTERPRETER: Anyhow, yes - but anyhow, whoever can sell the land can sell it; who can buy, can buy it. [Emphasis added.] 1. More generally, Ms Guan deflected and interrupted questions rather than answering them directly and honestly and chose to hold onto untenable positions even when confronted with documents or with the logic of the opposing view. For example, when it was put to Ms Guan that she had not protested to Mr Lui about the contents of the agreement (to claim that the alleged "ten day" term was missing) when she had received it from him the following exchange took place: Q. Can I just ask you to go to paragraph 42 of your affidavit? That's at page 147 of the court book. … INTERPRETER: Yeah, I have not seen it again. I have things to say. Can I say it, please? HIS HONOUR Q. You can answer the questions that are asked of you. A. INTERPRETER: No. I want to say something to the Court. Q. I want you to answer the questions that are addressed to you. A. INTERPRETER: I want to add things. Q. No, you cannot, you must answer the questions that are put to you. At the end of the cross-examination your counsel will be able to ask you questions in re-examination. AFSHAR Q. The evidence that you gave a moment ago about forgery and this ten day term is false because when you received the document from Mr Lui, as you've said in paragraph 42, you did not raise any of these matters; isn't that right? A. INTERPRETER: Actually, he - actually, he was the - he was not telling the truth. Well, let the - let the - let God punish me if I'm telling anything that's not true. He covered it up when he made a photocopy. He covered those words, handwritten words, and he made a photocopy. If the words "validity period, ten days" were not in the original copy, then my whole family, I don't mind if we are condemned to death. This is forgery to deceive me. Sorry, I'm very emotional. I am the mother for three children. My children are all very good, very excellent people. I am obviously teaching them, "You must not tell a lie. You mustn't do anything harmful to other people." We must not do anything harmful to other people and I've been coming - I've come here from China and it has not been easy. I do not have the ability to deceive other people, but then, unfortunately, I have been deceived by other people. Your Honour, you can either believe my words, or you can also not believe my words. I have created so much trouble for everybody. HIS HONOUR: You can continue. AFSHAR: Thank you. Q. I'm going to suggest to you that if, indeed, all that you now say in the witness box were true, then, upon receiving the contract from Mr Lui, you would have raised it all at that time, but you didn't, and that's because - can I just-- A. INTERPRETER: I told my lawyer already, this is false, or this fake. I already told my lawyer about that at that time. Q. Did you tell your lawyer about this document being a fake when you first received a letter of demand from Mr Lui's lawyers? A. INTERPRETER: Yes, and also one more thing I wanted to tell the Court— 1. The letter her solicitor sent to Mr Lui's solicitors did not make any mention about the agreement being fake or that there was a "ten-day" term. An inference may be drawn that Ms Guan did not complain to her solicitor after she received the agreement from Mr Lui because there was no such "ten day" term. The "ten day" term was a falsification. 2. Her obstinate and obstructionist behaviour was another factor that undermined her credit. During the second day, the following exchange took place: AFSHAR: I will carry on. I'll have to make submissions, ultimately, in relation to some of these answers. HIS HONOUR: I have been weighing up whether I should take a step in relation to this evidence, reluctantly. I understand that you're proceeding under some difficulties and putting questions that you are required to put as your professional obligations require. We'll see how things go a little further. I'm not sure how much further you have to go, but, subject to the course of things, if they continue the way they are, then I'll give consideration as to whether I should take a further step in the proceedings. I've given at least three directions to the witness, which are orders of the Court in relation to the evidence, all of which have variously been ignored. That gives rise to obvious questions, but, at the moment, I'm preferring to take a course which is less in the nature of intervention and more in the nature of having the proceedings concluded in a timely way rather than, as I said, some other course. AFSHAR: Yes, and I will continue on with my questioning. 1. Ms Guan also feigned disinterest in the affairs of her companies, which behaviour strained credulity. Counsel for Mr Lui provided the following examples with which I concur: 1. She claimed variously that she did not know much about what was happening with her multi-million dollar project, or that she had forgotten everything, because she had been sick since Shuangfu was placed into administration. 2. She purposefully downplayed Mr Liang's role in her businesses, so as to support the contention that Mr Liang was merely a real estate agent who had introduced Anson City to Shuangfu. As mentioned, Mr Liang was a guarantor to the loan to Shuangfu and Shuangxing. 3. Her evidence about her engagement in the business strained credulity, especially, as she progressively distanced herself from the process of finding a development partner. 4. When asked about the first conversation with Mr Lui about the Kensington Project, she gave the following evidence: Q. You don't remember, as in it didn't happen, or you don't remember and it may have happened? A. INTERPRETER: I - that was the first time I met with Lui and it was not - I didn't talk very much. They were friends. They were talking. Q. But it is likely that - you met with Lui across the road from the Kensington properties, didn't you? A. INTERPRETER: Yes, we had something to eat as well. Q. ... It is likely, given that you were across the road from the Kensington properties, that you or Mr Liang spoke to Lui about the development of the Kensington properties. Isn't that right? A. INTERPRETER: I don't remember. I don't know. I didn't care very much what they were talking about. They can talk about whatever they wanted. It's been since - it's been a long time ago since 2013. I can't really remember everything. Q. Sorry if I'm paraphrasing what you said, did you just say that you weren't interested or didn't care what they were talking about? A. INTERPRETER: That's right. I didn't want to be involved. I didn't want to worry that much. [Emphasis added.] 1. In my view, Ms Guan's evidence portrays intentional fabrication and reconstruction of conversations. For example, she accepted in cross-examination that if she had disagreed with any portion of Mr Lui's evidence, she would have expressed her disagreement with the evidence. Yet, in her affidavit she had not disagreed with and had not denied significant portions of Mr Lui's evidence, including a conversation that occurred on or around 30 December 2014 recalled by Mr Lui in his affidavit affirmed 8 December 2015. That conversation, recorded at para 63 ("the para 63 conversation"), was the subject of much debate as to its use in the case of Mr Lui and is extracted below: MS GUAN: I have big financial problems with that project I could not repay the mortgage and now the mortgage company is taking over and trying force sale it and I will be in big trouble. MR LUI: Tell me the detail of the mortgagee's sale. MS GUAN: As you know, A Capital is the mortgagee. I really hope you can help me to find an investor to join with me and pay out Owen or buy the project. If you do this, you are saving me from deep trouble. I really need your help and I will pay you a lot I know you have lots of friends in the industry. I know you can help and please help me. You save me from deep trouble and of/course I will pay you a lot for your help. MR LUI: Well it is a big deal and if I can help, I will try. Anyway, it is a business, therefore we need to make some kind of agreement between us to do this business and if it is successful, how I can get my fair go for my work. MS GUAN: Sure. If you helped in this business, I of course will be grateful and will pay you. What I want now is to find out an investor to take over this project as soon as possible. The mortgage company has engaged an agent to sell this land by expression of interests bidding. If you can get your friends or potential buyers to participate in the bidding, I will give you commission if the bidding process succeeds. MR LUI: In this case, I think I will try. But before we can do this business, we need to have some details of the terms and sign an agreement between us so if you sold this land with my assistance, I should be paid accordingly. MS GUAN: Sure, sure. We can sign the agreement. You prepare it and then we both sign it I will not let you work and help me for nothing. I will pay you a lot since you will save me if the land can be sold. 1. Ms Guan was an unreliable witness; her evidence was inconsistent with and superseded by the major document in this case, namely, the agreement. I agree with Mr Lui's submission that the agreement stands both as evidence of the parties' agreement but also as evidence of Ms Guan's intentions in relation to the Kensington Project. 2. Further, I do not consider Ms Guan should be accepted as a witness of truth. To the extent that her evidence is inconsistent with Mr Lui's evidence (having regard to the findings about his evidence made below) and with any of the contemporaneous documentary evidence, it must be rejected and given no weight. 3. As a result, unless the evidence of Ms Guan is corroborated, I do not propose to accept it. In particular, I do not accept Ms Guan's account of the para 63 conversation. The Credibility of Mr Lui 1. There was also a challenge as to the credibility of Mr Lui. 2. My overall observation of Mr Lui's evidence is that he was a truthful witness whose evidence was reliable although sometimes prone to exaggeration or unnecessary embellishment. 3. I consider that Mr Lui gave his evidence in a careful and measured way. As challenged in cross-examination, his demeanour was not one of evasion or argumentative, but rather he refuted questions essentially designed to advance the defendants' case theories, and drew distinctions or made concessions where appropriate. 4. Further, I do not consider his evidence was substantially damaged by cross-examination and in all respects his evidence is to be preferred to that of Ms Guan's. 5. Counsel for defendants referred to the viva voce evidence of Mr Lui, which it was contended consisted of several contradictory or inconsistent statements. The submissions by counsel for the defendants, in that respect, and my consideration of them appears below: 1. It was submitted, Mr Lui tried to take credit for helping Fairway fill in the expressions of interest forms. Yet, photographic evidence before the Court revealed it was, in fact, Mr Macree who did this. I do not accept that contention. In the affidavit of Mr Lui sworn 27 June 2016, the nature of the relevant photograph was described as follows: "Photograph of Mr John Macree of JLL filling out expression of interest forms by Fairway…". The fact of another person filling out the forms does not prove that Mr Lui did not help or assist. Further, the photograph was also annexed to Mr Lui's affidavit sworn 21 June 2017 where, at para 3, he deposed: "Annexed hereto and marked with the letter "A" are the following photographs which I either took or observed being taken" (emphasis added). Thus, it follows that Mr Lui was also present at the time of the Fairway expression of interest forms were being completed. (The significance of Fairway will be discussed further below). 2. It was contended, Mr Lui tried to take credit for introducing Mr Pak to the Kensington land and drawing out the winning bid. The documents before the Court, counsel for the defendants submitted, showed otherwise. In this respect, reliance was placed upon the initial letter of offer from Anson City dated 4 November 2014 ("the letter of offer dated 4 November 2014"), which was addressed to Mr Liang and not Mr Lui. It was contended that the same letter demonstrated that Mr Liang introduced Mr Pak to the Kensington land. Additionally, as the letter was signed by Mr Hu, it was submitted that Mr Hu, therefore, spoke for Mr Pak. I will ultimately find that the letter pre-dates the agreement and does not undermine Mr Lui's account vis-à-vis performance, I will return to this contention within the body of the judgment. 3. It was submitted that in cross-examination, Mr Lui denied understanding the question when asked if he knew how a SIV worked and how much money it required. It was submitted that "[t]he Court was alive to this tactic". Mr Lui answered evasively, "I don't understand your question…" when asked if he knew where the $5 million (which such visas require) goes once it arrives in Australia, be it real estate or businesses. Yet, Mr Lui's own Elite 100 website clearly explains how a Significant Investor Visa works, how much money it requires, and how Elite 100 can provide the "best options for your investment" with its core business operation in "[f]acilitating project and property investment". Mr Lui then admitted (only because he was shown the website) that he was familiar with the Elite 100 website, and even offered that the SIV information was found on the "last page". This shows that his earlier "I don't understanding your question" answers were just an escape tactic, which he abandoned upon seeing the Elite 100 website. I do not accept that this evidence represents evasion or inconsistency but rather a witness recalling information which provided clarification and relevant information bearing upon the question. He simply made a concession when presented with a relevant context. 1. The defendants made a further series of other contentions challenging Mr Lui's credibility. It is convenient to deal with them, to the extent required, globally, although I do so in the context of my overall observations of Mr Lui which I have referred to above. A summary of the defendants' submissions, in that respect, appears below: 1. In cross-examination, Mr Lui, undoubtedly cognisant of the Act, began to use the word "investor" in an attempt to solve the problem he knew it posed. This caused him to contradict himself vis-à-vis his affidavit (or within his cross-examination) and/or defend commercially impossible positions: 1. By Mr Lui's affidavit affirmed 8 December 2015, Mr Lui said that he "introduced the Kensington Project to my friend Justin Chan" and that he told Mr Chan, "Mr Pak has a good chance to win the bidding process if he increases his bid" (i.e. a bid for real estate). Yet, in cross-examination, Mr Lui switched to say he brought in Mr Chan (and thus Mr Pak) as an "investor" (i.e. not a purchaser of land). 2. Mr Lui initially maintained in cross-examination that his job was to find an "investor". However, Mr Lui "eventually" admitted that his job was to find the best price for the Kensington land, after first investigating its development approval status, which he "tried to do". 3. Mr Lui said in his affidavit affirmed 8 December 2015 that he asked Mr Qian: whether he remembered "the property" in Kensington and "[a]re you still interested in that property?". He also deposed that he was "aware" that Mr Liang had travelled to Mr Qian to "sell the Kensington project to Kerry Properties". This is "clear evidence", it was submitted, of a potential real estate transaction. Yet, in cross-examination, Mr Lui switched to paint Mr Qian as a potential "investor", not a buyer of real estate, and to allege that he had only ever been interested in "investing". Mr Lui incredibly denied that his question to Mr Qian, namely, "[a]re you still interested in that property?", equated to '[w]ould Kerry Properties still like to buy the Kensington land?". 4. By Mr Lui's affidavit affirmed 8 December 2015, he deposed that he said to Ms Guan, on 29 or 30 December 2014: "so if you sold this land with my assistance, I should be paid accordingly". Yet, in cross-examination, when asked to confirm that these clear words mean what they say, Mr Lui, it was submitted "wriggled out" by saying: "But in my mind, it's always try to help her with investor and what I've written here is what you read, yeah". What makes this "incredible" is that Mr Lui admitted to personally drafting his affidavit carefully, and to knowing the differences in language between a buying company's shares and buying land (when he drafted his affidavit). 5. To further "wriggle out" of the words, "so if you sold this land with my assistance, I should be paid accordingly", Mr Lui then, it was submitted, invented an allegation that he told Ms Guan: "any effort I put in and I should be paid". When challenged why this new allegation was not in his affidavit, Mr Lui blamed the differences between English and Chinese contracts (an illogical explanation since the agreement being a Chinese contract has nothing to do with the drafting of Mr Lui's affidavit). When challenged that he had never said to Ms Guan, "If I find a joint venturer… I should be paid accordingly", Mr Lui alleged that he had said it "many times". When asked why his affidavit contained no references to a "joint venture", Mr Lui gave a nonsensical response about the parties' "motivation". 6. Mr Lui in cross-examination admitted that he gave the Jones Lang LaSalle Information Memorandum ("the Information Memorandum") to some wealthy Chinese businesspersons and/or talked to them about the Kensington land. That document was clearly designed to entice businesspersons to buy the Kensington land by lodging a sealed bid. It was not designed to entice them to buy shares in Shuangfu (like a share prospectus would). Yet, when challenged that the reason why he had distributed that document was to entice as many high sealed bids as possible, Mr Lui incredibly answered "no". Rather, the real reason (supposedly) was to entice them to become an "investor… to develop the project". It is difficult to believe, it was submitted, that Mr Lui distributed the Information Memorandum in order to get people to buy shares in a company. 7. Mr Lui in cross-examination alleged that he was trying to get a $60 million investor to come in and help Ms Guan. Yet, in almost the same breath, Mr Lui admitted that $60 million was just too high and that he told people this. "Amazingly", it was submitted, Mr Lui sabotaged his own efforts to dig Ms Guan out of the $60 million hole she was in. It was contended that Mr Lui had a track record of such conduct. Reference was made to his earlier act of "advising" Mr Qian in October 2013 to not to buy the Kensington land since the "asking price" proposed by Mr Liang was "too high". 8. Mr Lui tried to maintain that it was not "commercial craziness" for an "investor" to buy into Shuangfu when its land was only worth $38 million against a mortgage of $42 million on the theory that a development approval (with its ability to increase land value) could be "arranged". To support this position, Mr Lui alleged that no one knew (back then) what the Kensington land was worth. This, it was contended, was not true. In the 23 December 2014, in a second meeting of creditors, Mr Bruce Gleeson reported that "[a] valuation obtained indicated that the Kensington properties were worth approximately $30 million". Further, there is "no way" Mr Chen (whose "fast paced" interest rate would "gobble up" any rise in land value due to development approval) would have waited months or years for a development approval to come in to save Ms Guan. When it was put to him that the only thing an incoming buyer would do was buy the Kensington land, Mr Lui rejected the proposition. Mr Lui then alleged that his plan could have happened because "in real estate there are many things is not logical [sic]". Essentially, Mr Lui was saying that his "investor" plan required him to find an "illogical multi-millionaire" to save Ms Guan. 9. Mr Lui did not include a single sentence about him talking to Mr Qian about buying shares in Shuangfu. When asked about this, Mr Lui alleged that his affidavit was just a "summary". Nor did he include a single sentence about him talking to Mr Qian about a joint venture. When asked about this, Mr Lui non-responsively said that Mr Qian had asked him to find out if the Kensington land had development approval. 10. Mr Lui's affidavit affirmed 8 December 2015 described him approaching Mr Qian, Mr Zhao and Mr Chan to get them to buy the Kensington land and liaising with Jones Lang LaSalle for this purpose. Yet, in cross-examination, Mr Lui outright denied that this was what he was doing. 11. Mr Lui in cross-examination outright denied (except in relation to Fairway) that he was acting as a real estate agent who talked potential bidders up, before passing them onto Jones Lang LaSalle, even though his own affidavit: 1. alleged that this was what he was doing; and 2. was absolutely silent on him doing anything else. 1. It was submitted that "[a]ll of this ducking and weaving" is explained by the fact that Mr Lui's affidavit was initially constructed to show his attempts to find a winning buyer for the Kensington land, yet by the time the trial started, Mr Lui became aware of the Act (likely due, it was submitted, to the Defendants' Opening Submissions for Hearing on 27 June 2017). 2. In cross-examination, Mr Lui, undoubtedly cognisant of the letter of offer dated 4 November 2014 from Mr Tom Hu to Mr Liang, "tried to back away from his affidavit evidence" because he knew that he could not sustain it in the face of that letter. Mr Lui's affidavit affirmed 8 December 2015 alleged: "I also introduced the Kensington Project to my friend Justin Chan… who is the business advisor of Mr Pak Wai Ngor", a clear taking of sole credit "as the introducer", it was submitted, with no mention of Mr Liang. Mr Lui's affidavit further alleged: "Before the lodgement of the EOI for the Anson Company I kept in close contact with Mr [Justin] Chan through face to face meetings and through telephone calls", a clear taking of sole credit for getting Mr Pak across the line. Yet, in cross-examination, Mr Lui was asked four times to confirm that he and not Mr Liang was the introducer, to which he answered (contradictorily and evasively): "Yes", "I don't know your question", "I still don't understand your question" and "I don't understand your question". Later, when asked whether he was trying to take credit for the efforts of Mr Liang, he deflected with a personal attack: "No, If you bring Hanson here I know lots of dirty things about Hanson…". Eventually, Mr Lui told the truth and admitted that the credit for introducing Mr Pak to the Kensington land should be shared because it was a "group effort". Mr Lui admitted that he had no direct contact with Anson City and that "maybe Justin [Chan] did something" (i.e. to cause Mr Pak to bid more) (thus saying that Mr Chan should take the credit). This is vastly different to Mr Lui's affidavit where Mr Chan told him, "I told Mr Pak what you said and he is going to increase his bid". 3. In cross-examination, Mr Lui answered "yes" when asked if Mr Chen would agree that he had "fixed the relationship between him [i.e. Mr Chen] and Ms Guan". After confirming Mr Chen's absence in Court, Mr Lui reverted to his evasive "I don't understand your question" when it was put to him that Mr Chen was absent because he would not backup Mr Lui's allegation. Mr Lui had also given a similar "I don't know" when it was put to him that Mr Chan and Mr Pak were absent because they would not backup Mr Lui's allegations. When asked why Mr Lui had not gotten affidavits from Mr Chen, Mr Chan and Mr Pak, Mr Lui answered, it was submitted, evasively, "You should ask Mr [Justin] Chan. I think Mr [Justin] Chan had affidavits made". It was submitted that was a fabricated answer given to persuade the Court that these three men would have backed up Mr Lui. If any of the three men had given affidavits, Mr Lui would surely have used them as corroborating evidence (noting that Mr Lui said that Mr Chan and Mr Chen would agree with his evidence). Instead, when asked "where is that affidavit [of Mr Chan]?" Mr Lui answered: "I do not know". 4. In cross-examination, Mr Lui initially stated that Mr Qian did not pay him to look for properties to buy in Australia. It was submitted that "Apparently, Mr Lui just liked to help people. Yet, eventually Mr Lui admitted that he does get paid for his real estate work". 1. As mentioned above, I will deal broadly with those contentions in the context of my favourable observations of Mr Lui as a witness. First, with respect to the introduction of Mr Pak vis-à-vis Mr Chan, Mr Lui's evidence was concise, clear and responsive. The brevity of his answers, in particular, may also be attributed to the repetitious manner in which questions were framed and put to the witness, which at times were unfairly compounded and/or referred to earlier questions asked and answered. An illustration appears below: Q. Now, if you can go to paragraph 78 of your affidavit, 78, you say that you introduced Mr Pak to the Kensington land and the Kensington project, is that right? Mr Pak Wai Ngor? A. My friend Justin Chan is the adviser of Mr Pak. I know Mr Pak for a long time. And then I only talk to Mr Chan. Q. So you introduced Mr Chan, Mr Kevin Chan A. No, no, Justin Chan. Q. I'm sorry, Mr Justin Chan who works for Mr Pak. You introduced Mr Justin Chan to the Kensington property and the Kensington land? A. Yes. Q. You said to him there's a potential opportunity that you might be interested in to Mr … Justin Chan. That's what you said to him? A. Well, it's possible, yeah. Investor. … Q. It wasn't Henson Liang, was it, who introduced Mr Justin Chan who worked for Mr Pak, it wasn't Henson Liang who introduced Mr Chan to the Kensington property. It was you, is that right. A. Yes. Q. Thank you. It wasn't A. But you have two questions. I only answer the last one. Q. Thank you. I appreciate it. Thank you. Now, it wasn't Henson Liang who introduced Mr Pak, Mr Pak Wai Ngor, to the Kensington properties and the Kensington project, it was you who did that, isn't that right? A. I don't know your question. Q. Oh, okay. Mr Henson Liang did not introduce Mr Pak to the Kensington properties, it was you who introduced Mr Pak to the Kensington properties, isn't that right? A. I still don't understand your question. Q. I'll move on. Do you say that Henson Liang, do you agree that Henson Liang did not introduce Mr Chan or Mr Pak to the Kensington properties? A. I don't understand your question. Q. Now, I think you said that you introduced Mr Chan to the Kensington property. I think you earlier said that right? Now Mr Chan would agree with this if he was here today, wouldn't he? A. Of course. Q. But Mr Chan is not here today, right? A. But that is the truth, nothing but the truth. Q. And Mr Pak is not here today either, is he? Mr Pak is not here today? A. No, not here. Q. They are not, Mr Pak and Mr Chan, are not here today because their evidence would not agree with what you are saying, isn't that right? A. I don't know. 1. Additionally, as mentioned above, counsel for the defendants contended that Mr Lui's use of term "investor" was of significance and deliberately employed due to his "cognisance" of the Act. That contention cannot be accepted. Mr Lui, as revealed by the above responses, was simply answering questions, to the best of his ability, as to his performance under the agreement. It may also be added, in that respect, that the terms of the agreement contain the words "investment" in both cll 1 and 2, referring specifically to an "investment partner" and "appropriate investment developers". Mr Lui also concisely explained what he understood an "investor" to be: "Investor is, is someone coming into invest for the property or joint venture with Ms Guan or take over the shares and then develop the, the whole development. That is what we call investors with money and with experience". Any attack on Mr Lui's credit as to the use of such a term in response to questions under cross-examination is meritless and I reject it. 2. Secondly, turning to the conduct of Mr Lui, in particular with respect to Jones Lang LaSalle, counsel for the defendants sought to put questions to the witness which had no evidentiary foundation, in an effort to advance the defendants' case theory as to Mr Lui's role as a real estate agent: Q. So this idea that you just introduced buyers to Jones Lang LaSalle and did nothing more, it's just wrong, isn't it? A. I did not introducing buyers to JLL except Fairway. Q. You didn't just get the buyer, drop them off at Jones Lang LaSalle's front door and then have no more involvement, that wasn't what you were doing. A. No. No. Q. You were doing all the things that a real estate agent does, finding the buyer, showing the buyer the land, helping the buyer make a bid, persuading the buyers to increase their bid, communicating the buyer's bid to the vendor, you were doing all these things, weren't you? A. No. [Emphasis added.] 1. By that same evidence, it may be noted, that Mr Lui made concession, without prompting, as to his conduct with respect to Fairway. 2. Thirdly, notwithstanding Mr Lui's clear and concise responses to questions, counsel for the defendants placed emphasis upon Mr Lui's uncertainty at times. However, as exemplified in the example below, Mr Lui's responses with uncertainty may generally be attributed to poorly framed and, at times, confusing questions. An example is as follows: Q. You were also communicating the expression of interest from the potential buyers to Jones Lang LaSalle and ultimately to Owen Chen and A Capital, isn't that what you were doing? A. No. Q. But you did it with Fairway. A. I did with Fairway, yeah. Q. Isn't that just wrong to suggest that all you were doing was introducing buyers to the vendor? That's not what you're doing, you're doing much more than that. A. I don't know your question. [Emphasis added.] 1. Fourth, as to the contention that Mr Lui attempted to "maintain" that it was not "commercial craziness" to, inter alia, find an investor to buy Shuangfu, that contention was based upon a mischaracterisation of the witness' attempt to answer questions put to him. Mr Lui cannot be criticised for being careful with his evidence, given the importance of that evidence. He was attempting to answer, albeit with slight exaggeration at times, not "maintain" a position. Again, I refer to the following example: Q. Once Owen Chen and A Capital sold the land, then Shuangfu would no longer have a very valuable asset, a piece of land, isn't that right? A. No, I don't understand where you're coming from. You know, if I find an investor coming in into Ms Guan's company, which is mainly Kung - Kung Fu(as said), and then invest maybe 45 million or 60 million, which is they approach - $60 million they approach, and then they can pay off whatever owe to Owen, and then they can still have pocket money into their pocket, and then also someone coming in to build a Kerry Hotel or supermarket or apartment, and then they can still have some shares, majorities goes into the investor, and - and that - that is what I've been working on, you know. Q. There's no evidence in your affidavit of anyone being willing to pay $60 million for this piece of land, isn't that right? A. They've been asking about that price, approaching some of my friends, some of my contacts, but it's too high, and I advise them it's too high. … Q. Can you have a look at it for me? Do you see any offers for $60 million? A. Fairway did offer 45. Q. But that's with development approval. A. Well, this is what they approaching Kerry and approaching some of my investors and they asking for 60, but for this bid, and then they put in 45, which is still a very good bid, you know, higher than anybody, but with one condition, because at the moment there's some shops there and not worth that much, but with a development, yes, it will worth more than the shops, the land or shops, car park, you know, yeah. Q. This allegation that you were trying to find a $60 million investor is just a fantasy, isn't it, because the land wasn't worth that much? A. Well, with development, it will worth a lot more than what it is. Q. No one would want to buy shares in Shuangfu, the owner of the land, because its asset, the land, was under a mortgagee sale at the time, isn't that right? A. No. Depends. In - in the business world, many people can - can - many people can - can do something if - if they see the future, and also Ms Guan sees the future by the time they purchase the - the - the land and the property and also the shops. Q. I put to you that it would be crazy for an investor to buy shares in a company whose asset, the Kensington land, was about to be sold off. A. I, I don't understand. Q. That would be commercial craziness, isn't that right, that would be commercial insanity to pay millions of dollars to buy shares in a company whose asset, the Kensington land, was about to be sold off, it's about to lose its asset? A. Why lose? Because as long as they pay the debt and it will not be lose. Why? 1. Mr Lui, in my view, gave thoughtful and truthful evidence. None of the many and varied matters that have been suggested by counsel for the defendants undermine his credibility. The witness was responsive, as best could be expected, to, at times, poorly framed and confusing questioning. The fact the answers were not what counsel sought to adduce is not a foundation for an attack on the witness' credibility. Mr Liang 1. Ms Guan and Mr Lui were the only two lay witnesses in the proceedings. There was due to be a third witness called by the defendants, namely, Mr Liang. The defendants did not disclose the content of the evidence they sought to call in that respect. 2. As to Mr Liang, counsel for Mr Lui submitted, that the defendants' missing witness simply avoided giving evidence. Further, it was contended that, it seemed the defendants were more concerned about appearing to take steps to procure his attendance than actually procuring his attendance so as to avoid a negative inference. Given that Mr Liang has always been firmly in Ms Guan's camp, it was contended, the failure to procure his attendance forms the basis for negative inferences. 3. Counsel for the defendants, in reply, relied upon the following submissions: 1. The Court might decline to draw a Jones v Dunkel inference because there is an adequate explanation for his absence, namely, he was sick on both days. Indeed, his absence on Day 3, it was submitted, equally surprised the defendants (see Jones v Dunkel (1959) 101 CLR 298; [1959] ALR 367 at 320). 2. Also, he is someone that the defendants did call by serving a subpoena issued under an order for substituted email and SMS service (this being, after an earlier subpoena for which a process server was hired). 3. There was nothing more that the defendant could legally have done to compel attendance. It is wrong to say the defendants used the subpoenas as a Jones v Dunkel shield because they twice asked if Uniform Civil Procedure Rule 2005 (NSW) r 35.2 would be available (the Court indicating a preliminary view that it likely was not on the first occasion). The defendants wanted his evidence because it would have corroborated the 4 November 2014 letter, but they chose not to push the point to save trial time. 4. The Court expressed an initial view on this issue on Day 5: HIS HONOUR: I'll hear from your opponent, but it's difficult to see what Jones v Dunkel inference might arise, unless it's to the effect that some evidence might have been available but was not called. But having read the affidavit and the objections to it, I'll be interested to hear what submission might be contemplated in that respect in due course. 1. In reply to the defendants' contentions, counsel for Mr Lui contended that there is no real explanation for Mr Liang's absence "besides his say so". It was submitted: His absence clearly gives rise to an inference that he would have given evidence contrary to Guan's position not only in relation to the Kensington Project, but also in relation to Lui's involvement, the performance of the Cooperative Agreement and the circumstances, in which Guan gave Lui the Vehicle. Those inferences are open to the Court and ought to be drawn. 1. As to the absence of Mr Liang, the following may be noted: 1. On 10 October 2017, the third day of hearing, counsel for the defendants informed the Court of the difficulties encountered by "a professional process server, who reported that he tried ten times to serve the subpoena and, although he was able to talk on the telephone with the witness, was unable to serve him". In light of those difficulties, counsel for the defendants made an application for substituted service. 2. On 11 October 2017, the fourth day of hearing, the following orders were made as to the "Service of the Subpoena to Attend to Give Evidence": 1. An order that by the close of business on 13 October 2017 that: a. Service of the Subpoena to Attend to Give Evidence filed on or by 13 October 2017 be effected in the first instance by emailing a PDF of it to the email address [omitted]. b. Service of the Subpoena to Attend to Give Evidence filed on or by 13 October 2017 be effected in the second instance by SMS'ing a copy of it to the mobile phone number: [omitted]. 2. An order that upon execution of Order 1 above Henson Liang be taken to have been served with the Subpoena to Attend to Give Evidence filed on or by 13 October 2017. 3. An order that a copy of these orders be served on Henson Liang together with the Subpoena to Attend to Give Evidence filed on or by 13 October 2017, in the manner described in Order 1, by the close of business on 13 October 2017. 4. An order that the Defendants pay any of the Plaintiff's costs thrown away by reason of the failure of Henson Liang to attend Court for cross examination on 10 October 2017 and 11 October 2017. 1. On 6 December 2017, the fifth day of hearing, following the service of a subpoena, Mr Liang did not attend Court. He sent a message to the Court via an email to his solicitor, which stated: "My name is Henson Liang who could not attend to the court as you request due to my illness. Attaching you with my doctor's certificate. Should you have any question feel free to contact me…". That communication was brought to the Court's attention at the start of proceedings that day. 2. Immediately following notice of that communication, with no appearance by witness as required by the subpoena, the Court took the following steps: 1. first, Mr Liang was called for outside the courtroom. The call was not answered; and 2. second, the court turned to counsel for the defendants as to how he wished to proceed: HIS HONOUR: It's a question really as to what application you make in the circumstances. Plainly there are questions, which I haven't seen, but from what you've read, as to the medical explanation for the attendance. Sometimes subpoenas are issued for doctor's records in those circumstances, if not upon the doctor him or herself. But really the immediate question, given that this was the first order of business today, is what should be done? LEONG: My question would be to hear your Honour's preliminary thoughts on whether your Honour would allow, under 35.2 of the UCPR, the affidavit of Henson Liang to be read, albeit subject to waiting discounts being applied due to him not being available for cross-examination. In the absence of having to call him, or without having to call him, as in to take further steps to force him to come to Court such as a bench warrant for his arrest, or a subpoena of medical records and so forth. If your Honour is against that, then we make no further application at all, because we don't want this trial to continue any longer - we want to launch into submissions instead of having to incur more cost and have more days of trial and so on. HIS HONOUR: The short answer to your inquiry is it's a matter for you to make whatever application you propose to make in the circumstances, and then I'll deal with it in terms. But these matters, particularly the matter at hand, needs to be dealt with, with some particularity, because on one view of it, and only one view of it, there is a person who is not complying with orders of the Court. That's a serious matter, and therefore any application that flows out of it needs careful consideration, and the Court should only deal with such application as is actually made in that respect. It's not a matter, with respect to you, of some process of mediating between that failure to appear and what might be done as a procedural step in the proceedings. There might be a procedural step that flows from this, but at the moment we haven't crossed the first threshold. 1. In reply to the available steps, counsel for the defendants sought to make inquiries of the counsel for Mr Lui, before determining upon a course: LEONG: Can I perhaps ask my friend for his position; whether he would require further steps to be taken? HIS HONOUR: You mean whether he would accept the admission of the evidence subject to objection, under relevant rule? LEONG: Yes. HIS HONOUR: Again, I don't propose to call on him in that respect. If you make an application, whatever it may be, in terms, then I will deal with it. I don't propose to speculate upon what may or may not happen, in the circumstances. 1. Counsel for the defendants ultimately declined to make either an application pursuant to r 35.2 of the Uniform Civil Procedure Rules 2005 (NSW), as he did not want the "trial to continue any longer". He also declined to seek the Court take further steps: "We're mindful of the fact that if he is arrested and brought to court, he could turn out to be a hostile witness. So in a sense we would simply invite your Honour not to make any judgment, if your Honour is asked to do so, noting all of the prior history of this witness, and we'll leave it at that". 1. Thus, the affidavit of Mr Liang was not read. There was no evidence by Mr Liang before the Court. 2. I do not consider that an adverse inference should be drawn with respect to Mr Liang being called in these circumstances, as sought by Mr Lui. However, the significance of the absence of Mr Liang's evidence was that there is no evidence from him as to any involvement that he or Mr Lui had with Anson City, other than the cross-examination of Mr Lui, which I have dealt with earlier. The defendants were largely left to rely upon the letter of offer dated 4 November 2014, which I will deal with below. The Jones v Dunkel Issues 1. Counsel for the defendants made a submission that Jones v Dunkel inferences should be drawn due to the failure of Mr Lui to call certain witnesses, namely, "Janette", Mr Qian, Mr Chan, Mr Pak, Mr Chen, Mr Zhao and Mr Gung . In other words, the defendants submitted that Mr Lui's failure to call witnesses should, in each case, "lead to an inference that the uncalled evidence … would not have assisted [Mr Lui's] case": J D Heydon, Cross on Evidence (LexisNexis, 10th ed, 2015) at [1215]. 2. For example, it was submitted that Mr Chan was a person that the Court would expect Mr Lui to call and whose evidence could confirm Mr Lui's allegations and, therefore, that the failure of Mr Lui to call Mr Chan should result in the inference that Mr Chan's evidence would not have assisted Mr Lui's case. 3. The principles in Jones v Dunkel were helpfully outlined in RHG Mortgage Limited v Rosario Ianni [2015] NSWCA 56 at [75]-[79] per McColl JA (with whom Emmett JA and Sackville AJA agreed) as follows: [75] The rule in Jones v Dunkel is that the "unexplained failure by a party … to call witnesses … may in appropriate circumstances lead to an inference that the uncalled evidence … would not have assisted that party's case": Cross on Evidence ("Cross"), LexisNexis (at [1215]). Any "explanation" such as unavailability or absence of recollection for the failure to call the witness must be established by evidence: West v Government Insurance Office (NSW) [1981] HCA 38; (1981) 148 CLR 62 (at 70) per Murphy J; Rowell v Larter (1986) 6 NSWLR 21 (at 24 – 25) per Young J (as his Honour then was). The "rule cannot be applied to the non-calling of a [non-party] witness unless it would be natural for the party to call the witness, or the party might reasonably be expected to call a witness": Cross (at [1215]); O'Donnell v Reichard (at 729) per Newton and Norris JJ. [76] The circumstances for drawing a Jones v Dunkel inference are found where the uncalled witness is "a person presumably able to put the true complexion on the facts relied on [by a party] as the ground" for any inference favourable to the plaintiff: Jones v Dunkel (at 308) per Kitto J; Australian Securities and Investments Commission (ASIC) v Hellicar [2012] HCA 17; (2012) 247 CLR 345 ("ASIC v Hellicar") (at [168]) per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. [77] The Iannis bore the burden of proof on the issue of whether the loan agreement and mortgage were unjust. Accordingly, in deciding whether they had discharged that burden of proof, it was relevant for the primary judge to have regard to their "ability to adduce evidence relevant to the issue and any failure on [RHG's] part … to adduce available evidence in response": G v H [1994] HCA 48; (1994) 181 CLR 387 at (391 – 392) per Brennan and McHugh JJ. [78] In Payne v Parker [1976] 1 NSWLR 191 (at 201 – 202) Glass JA explained (albeit in a dissenting judgment, but in a passage accepted as correctly stating the relevant principles) when one party rather than the other would be expected to call a missing witness in the following manner: "(6) Whether the [Jones v Dunkel] principle can or should be applied depends upon whether the conditions for its operation exist. These conditions are three in number: (a) the missing witness would be expected to be called by one party rather than the other, (b) his evidence would elucidate a particular matter, (c) his absence is unexplained. (7) The first condition is also described as existing where it would be natural for one party to produce the witness: Wigmore, par. 286, or the witness would be expected to be available to one party rather than the other: O'Donnell v Reichard [1975] VR 916, at p. 921, or where the circumstances excuse one party from calling the witness, but require the other party to call him: ibid. [1975] VR 916, at p. 920, or where he might be regarded as in the camp of one party, so as to make it unrealistic for the other party to call him: ibid. [1975] VR 916, at p. 920, Regina v Burdett (1820) 4 Barn & Ald 95; 106 ER 873, or where the witness' knowledge may be regarded as the knowledge of one party rather than the other: Earle v Castlemaine District Community Hospital [1974] VR 722, at p. 733, or where his absence should be regarded as adverse to the case of one party rather than the other: ibid. [1974] VR 722, at p. 734. It has been observed that the higher the missing witness stands in the confidence of one party, the more reason there will be for thinking that his knowledge is available to that party rather than to his adversary: ibid. [1974] VR 722, at p. 728. If the witness is equally available to both parties, for example, a police officer, the condition, generally speaking, stands unsatisfied. There is, however, some judicial opinion that this is not necessarily so: ibid. [1974] VR 722, at p. 728. Evidence capable of satisfying this condition has been held to exist in relation to a party's foreman: Cafe v Australian Portland Cement Pty Ltd (1965) 83 WN (Pt 1) (NSW) 280; his safety officer: Earle v Castlemaine District Community Hospital [1974] VR 722; his accountant: Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348; his treating doctor: O'Donnell v Reichard [1975] VR 916, at p. 921." [79] If those conditions are satisfied, the tribunal of fact may "infer that that person's evidence would not have helped that party's case" and may then use that inference: "(a) in deciding whether to accept any particular evidence, which has in fact been given, either for or against that party, and which relates to a matter with respect to which the person not called as a witness could have spoken; and (b) in deciding whether to draw inferences of fact, which are open … upon evidence which has been given, again in relation to matters with respect to which the person not called as a witness could have spoken": O'Donnell v Reichard (at 929). 1. Jones v Dunkel principles were further expounded in Fabre v Arenales (1992) 27 NSWLR 437 at 449-450 (per Mahoney JA, with whom Priestley and Sheller JJA agreed) as follows: The significance to be attributed to the fact that a witness did not give evidence will in the end depend upon whether, in the circumstances, it is to be inferred that the reason why the witness was not called was because the party expected to call him feared to do so. But there are circumstances in which it has been recognised that such an inference is not available or, if available, is of little significance. The party may not be in a position to call the witness. He may not be sufficiently aware of what the witness would say to warrant the inference that, in the relevant sense, he feared to call him. The reason why the witness is not called may have no relevant relationship to the fact in issue: it may be related to, for example, the fact that the party simply does not know what the witness will say. A party is not, under pain of a detrimental inference, required to call a witness "blind". 1. The defendants' submissions as to Jones v Dunkel inferences cannot be accepted as counsel for the defendants has misunderstood the correct application of the principle. The key flaws made by counsel for the defendants, in this respect, are as follows: 1. The witnesses referred to by the defendants cannot be regarded as "in the camp" of Mr Lui, so as to make it unrealistic for the defendants to call the witness. In the case of Mr Chan, Mr Pak and Mr Chen, in particular, the defendants could have called the witness themselves. 2. The defendants seemed to argue that if Jones v Dunkel inferences were to be made, the inferences could be used to fill gaps in the evidence or to convert conjecture into evidence. This view misapplies the scope of the scope of a Jones v Dunkel inference (Cross on Evidence at [1215]). (A summary of the defendants' submissions, in this respect, will be set out later in this judgment under the heading, "Performance of the Agreement"). Exhibit 18 1. Exhibit 18 consisted of email correspondence sent or received by Jones Lang LaSalle in relation to "the sale of 81-95 Anzac Parade, Kensington from Shuangfu Development Pty Ltd to Anson City Developments Pty Ltd". The material was tendered by counsel for the defendants on 6 December 2017, the fifth day of the hearing, but initially made returnable in response to Mr Lui's subpoena filed 15 June 2017. 2. The defendants relied upon a significant portion of that material to argue that Mr Lui had not performed under the agreement because it was evident, it was submitted, he nowhere appears in transaction or exchanges culminating in the sale of the land. I will return to this issue, but it is important to note, at this juncture, that these transactions or exchanges predominantly concern the period after the conclusion of the expression of interest process; that is, in my view, consistent with the agreement, as it will be construed below. However, the documents do not undermine Mr Lui's evidence as to his activities directed to the expression of interest process. 3. As to the admission of Ex 18, counsel for the defendants advanced the following submissions: 1. Exhibit 18 fits with Mr Lui's cross-examination answers. It confirms rather than contradicts his evidence. Due to evidential rulings, Mr Lui's affidavit does not contain any evidence that he caused Anson City to increase its bid to the winning bid, or that he caused it to make its winning bid (thus, there is nothing there to challenge or contradict). Mr Lui's affidavit does not contain any allegation that he brought Anson City home (so to speak) after telling Mr Chan that if Mr Pak increased his bid there was a good chance of success: thus, there is no evidence of Mr Lui, in that part of the time sequence, to challenge or contradict. 2. Mr Lui gave the following evidence in cross-examination: Q. Do you know why - maybe you don't know why, but I'm asking you do you know why - Anson City Developments increased its bid from 36 million to 38 million? A. I don't know why. … Q. Thank you. A. But it could be one reason because JLL asking everybody to increasing the bid price. They did ask Fairway. They asked many people, the bidders, in increasing their bids and maybe that is the reason. 1. It was contended that, as the material in Ex 18 confirms those answers, the rule in Browne v Dunn does not apply (see Browne v Dunn (1893) 6 R 67). 2. The defendants were obliged to and did put across the nature of their case, namely, that Mr Lui did not bring in the winning bidder and he did not cause the winning bidder to increase its bid. This was supported with reference to nine questions asked during cross-examination: 1. "[N]ow I put it to you that any theory that you're the guy who caused Mr Pak to increase his offer from 30 million to 38 million is just not correct, and that what really happened was that Mr Pak was willing to pay $36 million in November 2014 and that when he came to make his final expression of interest bid he put it at $38 million, he increased it by 2 million, and that's what really happened?" 2. "That's not in your affidavit at all is it?" 3. "I put it to you that you are trying to eat Mr Hanson Leung's cake and take credit for his work?" 4. "You had nothing to do with the final $38 million offer from Mr Pak, isn't that right?" 5. "You cannot take credit for the winning bid that was made by Anson City Developments, you can't take credit for that can you?" 6. "You did not take credit because you do not deserve the credit for the winning bid by Anson City Developments, isn't that correct?" 7. "You did not have anything to do with Anson City developments putting its final bid of $38 million for the Kensington land. Isn't that right?" 8. "The guy who did that, and who should get the credit for it, is Hanson Leung. Isn't that right?" 9. "Do you know why - maybe you don't know why, but I'm asking you do you know why - Anson City Developments increased its bid from 36 million to 38 million?" 1. Exhibit 18 is a credible body of evidence. The defendants submit that the Court should take into account how clearly it explains events, how consistent it is with Mr Lui's transcript answers, the belated circumstances of its acquisition, and the fact that it is an independent contemporaneous account from a real estate firm (Jones Lang LaSalle) with no interest in the proceedings. 2. The case law (set out below) gives the Court discretion to accept Ex 18 on the issue of whether Mr Lui brought in and caused Anson City to increase its bid, and lodge its winning bid. 1. The defendants also relied upon the following, inter alia, authorities: 1. The judgment of McColl JA in Samm Property Holdings Pty Ltd v Shaye Properties Pty Ltd (2017) 345 ALR 633; [2017] NSWCA 132 at [139]: [139] It might be accepted, as Mr George submitted, that the rule in Browne v Dunn is of less importance where pleadings, affidavits or pre-trial preparation, have already made clear that the particular assertion or evidence will be disputed. However, "[e]ven when there has been an exchange of affidavits or statements, the rule in Browne v Dunn will require a cross-examining counsel to put to a witness the implications which counsel proposes to submit can be drawn from the evidence, if those implications are not obvious from the evidence, or from other pre-trial procedures, or the course of the case." [Footnotes omitted.] 1. In Adamson v Ede [2009] NSWCA 379 at [62], Campbell JA (with whom Giles and Hodgson JJA agreed) said: [62] The interaction between established court procedures and the playing out of the requirement of natural justice in a court is illustrated by the way the rule in Browne v Dunn will not require a witness' account to be challenged explicitly in cross-examination if other procedural steps in a case have given the witness notice that his or her account will be challenged in particular ways: … 1. In Porter v Oamps Ltd (2004) 207 ALR 635; [2004] FMCA 272 at [12], Raphael FM said: [12] It was submitted on behalf of Mr Porter that because Counsel for the respondent had not put to him in terms that he did receive a bankruptcy notice containing the two orders the rule in Browne v Dunn would apply and his evidence would have to be accepted. This rule is discussed by the New South Wales Court of Appeal in Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 at [586] - [588] per Samuels J. There was also relevant discussion in Seymour v Australian Broadcasting Commission (1990) 17 NSWLR 219 at [224] - [225]. Browne v Dunn is a rule which has been put in place in order to ensure a fair trial. It does not provide a rigid bar to the provision of contrary evidence. By the time this case came to be heard before me it was quite clear what the issues were. The main issue was whether or not the document which was served upon Mr Porter contained two orders or did not. Mr Porter said it didn't. Mr Coombs and Mr Bryett said it did. What could possibly have been gained by Counsel putting to Mr Porter a submission that the document which he had received did contain the attachments? Mr Porter had already said that it didn't. 1. In Darmanin v Cowan [2010] NSWSC 1118 at [120]-[121], Ward J said: [120] In Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 (at 225), Glass JA explained that where an infraction against this rule has occurred, the remedy is essentially a matter in the discretion of the trial judge. Whilst it has been recognised that a court may be inclined to disregard a submission on the evidence which was not tested by putting questions to the party best able to deal with it (Precision Plastics Pty Ltd v Demi (at 370)), it has been otherwise considered that such a step would be extreme. Glass JA in Seymour made clear his view that that it would be to go too far to contend that evidence which would otherwise be relevant to a conclusion for which one party contends should be disregarded because its implications have not been put to the party against whom the inference is to be drawn. Consequently, Glass JA was of the view that a trial judge would be entitled to refuse to accede to a submission that such an approach should be taken (see also Crosthwaite v Elizabeth City Corporation (1989) 51SASR 105, where comment was similarly made as to the extremity of such action). [121] In Cross on Evidence, considering some of the consequences which it was recognised may flow from a failure to follow the rule in Browne v Dunn (at [17460]), the authors note that whether the court does accept unchallenged evidence is a matter for it and that though there may be a very good reason for accepting a witness evidence, particularly if it is uncontradicted by other evidence, "there is no requirement that the court must accept the evidence not the subject of cross-examination; this is particularly so if the evidence is contradicted by other evidence", citing Newton J in Bulstrode v Trimble [1970] VR 840, at 848. 1. Further, in a written submission marked Ex 19 in the proceedings, the defendants advanced the following submissions as to the tender of Ex 18 (referred to as "the Jones Lang LaSalle Bundle" in the following submissions): 1. "The Jones Lang La Salle Bundle was acquired solely from the Plaintiffs subpoena of Jones Lang La Salle (in particular its Category 3 which states 'a copy of correspondence (including electronic correspondence) sent or received in relation to the Sale' ('Sale' defined in Category 1 of the subpoena as the sale of 81-95 Anzac Parade Kensington from Shuangfu Development Pty Ltd to Anson City Developments Pty Ltd))"; 2. "The Jones Lang La Salle Bundle, being correspondence in the course of Jones Lang La Salle performing its real estate agent's duties in marketing and selling the Kensington Properties, are business records (s 69 Evidence Act 1995 (NSW))"; 3. "The Jones Lang La Salle Bundle are contemporaneous documents created at the time when Anson City Developments made its winning bid (and in the lead-up thereto) and before the prospect of litigation between the Plaintiff and Defendants loomed. They speak more clearly than any affidavit or cross examination answer as to what really happened regarding Anson City Development's winning bid"; 4. "The Court has already, in relation to Exhibit 11, made a variety of admissibility rulings in relation to loan agreements and guarantees pertaining to Shuangfu Development Pty Ltd and the First Defendant being business records, being of provisional relevance, and being sufficiently contextual to the facts in issue (Transcript page 154[25] - 156[15])"; 5. "Relevance is a key consideration when it comes to the tender of documents: Hancock v Rinehart [2014] NSWSC 844 per Brereton J; Qureshi v John Fairfax Publications Pty Ltd [2012] NSWSC 1605 per Rein J"; 6. "Prima facie, the Jones Lang La Salle Bundle is relevant because Category 3 of the subpoena, as drafted by the Plaintiff, sought relevant documents. If the Defendant, hypothetically, had attempted to set aside Category 3, the Plaintiff would have defended the category"; 7. As to the pleadings, it was submitted they define what is relevant, namely: a. [9] of the Amended Statement of Claim pleads that the Plaintiff performed the contract, which [7] of the Defence denies in its entirety. The shape of the Defendant's denial will depend on the ultimate case argued by the Plaintiff. The Plaintiffs case appears to be that either that the Plaintiff did bring Anson City Developments to the administrator/liquidator of Shuangfu Developments Pty Ltd as a buyer of land and thus it should be paid, or the Plaintiff brought Anson City Developments in as an 'investor' who subsequently became a buyer of land and thus it should be paid. The Defendant is entitled to deny all manifestations of the Plaintiffs case. b. [9] of the Defence pleads that Henson Liang brought Anson City Developments in as the buyer of the land. This [9] is pleaded 'in further answer' (see the 1st three words of [9] of the Defence) to [9] of the Amended Statement of Claim, and not in replacement of the denial in [7] of the Defence. This pleading at [9] of the Defence is a sub-category, and not the entirety of, the Defendant's denial. 1. "The Jones Lang La Salle Bundle is relevant since, it is capable of rationally affecting the assessment of the probability of (especially when read with Exhibit 8, the 4 November 2014 $36M letter of offer from Anson City Developments to Henson Liang)". The following issues, in that respect, were then listed: a. Whether or not any middlemen (such as the Plaintiff or Henson Liang) were involved between Anson City Developments and Jones Lang La Salle in relation to the former's winning bid, b. Who, or whether anyone, caused Anson City Developments to make its final winning bid (i.e. expression of interest) of $38M (or whether such bid was self-propelled), c. Whether Anson City Developments increased its bid from $36M in November 2014 (see Exhibit 8) to $38M in March 2015 (see Exhibit 7), or whether Anson City Development was ever at and/or increased its bid from $30M to $38M (as claimed by the Plaintiff). d. Whether Anson City Developments ever switched from being an interested buyer of land to an interested buyer in shares (or interested joint venturer) and then back again to being an interested buyer of land; or, whether it stayed an interested buyer of land all along with no change in its status. e. Whether Anson City Developments was initially introduced to the land by Henson Liang and then subsequently brought in by Jones Lang La Salle with no other real estate agent intervening (or, person acting as a real estate agent). This issue is relevant both to the Defendant's denial in [7] of the Defence and to its pleading in [9] of the Defence. 1. The material in Ex 18 is plainly a set of business records from Jones Lang LaSalle. The material is relevant to an issue in these proceedings, namely, the defendants' contentions as to the extent of Mr Lui's involvement in the expression of interest process or the later acceptance of the bid, in particular, with respect to the Anson City. The material is, therefore, admissible pursuant to ss 56 and 69 of the Evidence Act 1995 (NSW). The remaining question, with respect to that evidence, was prejudice, having regard to the circumstances in which the material was admitted, namely, late in the proceedings, after Mr Lui's evidence had closed, and concerning, at least in part, material that should have properly been raised with Mr Lui in the course of his evidence at the hearing given the submissions of the defendants. Notwithstanding the opportunity to raise further submissions on the question of prejudice, no submission was received, in that respect, from Mr Lui and no application was made, by either party, to re-open Mr Lui's evidence or the proceedings otherwise. 2. It is implicit that the material was admitted, subject to submissions, but for abundance of caution, I formally admit it. Following this admission, the remaining question ultimately becomes one of weight to be attached to the records. That weight will be particularly affected, in the circumstances, by considerations as to whether the material should have been properly put to Mr Lui. FACTUAL BACKGROUND 1. This section of the judgment sets out the relevant findings of fact in these proceedings, for the period between 2013 and 2016, in chronological order under the following headings seriatim: 1. Initial meetings between Mr Lui and Ms Guan: 2013-2014; 2. The loan agreement with A Capital: 26 June 2014; 3. The purchase of the Kensington land and Auburn properties: 2014; 4. The expectation of payment: Ms Guan and Mr Liang; 5. Prior to signing the agreement, the assistance of Mr Lui: 2013-2014; 6. The Option / Sales contract with Landream: 22 September 2014; 7. Letter of offer by Anson City: 4 November 2014; 8. The Kensington Project appointed receivers and Shuangfu placed under external administration: November 2014; 9. The vehicle; 10. The circumstances immediately prior to the signing of the agreement: December 2014 to January 2015; 11. The circumstances at the time of the signing of the agreement: 18 January 2015; 12. The expression of interest process and Mr Lui's performance under the agreement: 29 January to 4 March 2015; 13. The contract for the Kensington land exchanged: 25 March 2015; and 14. The circumstances after the confirmation of the exchange: March 2015 to May 2016. Initial meetings between Mr Lui and Ms Guan: 2013-2014 1. In or around 2013, Mr Lui first met Ms Guan. 2. In or around September 2013, Ms Guan approached Mr Lui and told him that she had a problem with the Kensington Project. He was invited to have a look at the project and attended Kensington but was not retained to advise in relation to the Kensington Project at that time. The evidence that Ms Guan gave at the beginning of her cross-examination supports Mr Lui's evidence about the Kensington Project and its aims. 3. Mr Lui gave evidence that he met her through members of the Chinese community in Sydney that were acquaintances of Mr Lui. At the oral hearing, Mr Lui confirmed that Ms Guan was introduced by Mr Liang. 4. Prior to that introduction, Mr Lui had a conversation with Mr Liang. Mr Liang was seeking advice with respect to the purchase of the Kensington land for the proposed Kensington Project. Mr Lui was subsequently invited and attended the site of the Kensington land. That site visit was followed by a meeting with both Mr Liang and Ms Guan at a café in Kensington. Mr Lui was not retained to advise at that time. 5. Around that time, Ms Guan also approached Mr Lui for help with respect to her immigration troubles. Ms Guan was experiencing difficulties renewing her visa and applying for permanent residency. She reached out to Mr Lui, in this respect, for his assistance in the form of lobbying with his known political connections, which included Mr Philip Ruddock. 6. There was some confusion between both the written and oral evidence of Mr Lui as to the precise timing of the meeting or meetings in which Ms Guan sought help as to her "two major troubles": immigration and the Kensington Project. I accept that conversations with respect to both issues occurred. The loan agreement with A Capital: 26 June 2014 1. On 26 June 2014, Shuangfu and Shuangxing entered into the loan agreement, by way of deed, with A Capital, to purchase the respective properties each owned. Ms Guan, as sole director of Shuangfu and Shuangxing, executed the agreement. The loan agreement, as previously mentioned, replaced an earlier agreement made in May 2014. (The defendants described this new agreement as a "second collateralised loan agreement"). 2. It may be noted that two versions of the loan agreement, each dated 26 June 2014, were before the Court. The two versions appear to differ in their content, which was unexplained in the proceedings, but those differences (unless otherwise stated) are of no real consequence in this case. 3. The parties to the loan agreement were as follows: 1. A Capital, "the lender"; 2. Shuangfu and Shuangxing, "the borrowers"; 3. Sun Link, Ms Guan and Mr Liang (together with Guansheng Development Pty Ltd, Shuang Sheng Pty Ltd and Shuangling International Development Pty Ltd), "the guarantors". 1. It may be noted that both Ms Guan and Mr Liang, as directors of Sun Link, executed the loan agreement on behalf of Sun Link as guarantor, in accordance with s 127(1) of the Corporations Act 2001 (Cth). Thus, as at 26 June 2014, Mr Liang was also a director of Sun Link. 2. The facility limit was for $45,018,000. (During the proceedings the parties and witnesses would at times round the loan down, for ease of reference, to $45 million). 3. The base interest rate was 12% per annum. The default interest rate was defined as follows: "[f]or each seven day period by which the overdue interest payment or overdue loan repayment remains unpaid, the applicable interest rate under Item 3 will be increased by 1%". 4. The recitals to the loan agreement are extracted below: RECITALS A. The Borrowers are a companies controlled by Guan. B. The Borrower, Shuangfu is the holder of the title to seven lots of land at Kensington NSW 2033 and has exchanged contracts in respect of a further two lots of land at Kensington NSW 2033 which are to be settled in October and November 2014 respectively ("Kensington Properties"). Shuangfu intends to develop the abovementioned lots of land into a mixed residential and commercial property site ("the Kensington Development Project"). At the time of this agreement, the Borrower has not obtained Development Approval ("DA Approval") but It is understood that the Development Manager will obtain DA approval in respect of the Kensington Development Project within eight months from the date of the First Drawdown made under this Agreement. C. Based on the understanding as noted in Recitals A to B, the Borrower and the Lender entered into a Loan Agreement on 9 May 2014 ("the Kensington Loan Agreement") under which a total sum of A$21,353,357 had been drawn by the Borrower in respect of the Kensington Development Project and in accordance with that Agreement. D. The Borrower, Shuangxing has exchanged contracts in respect of a six lots of land at Auburn NSW 2144 which are to be settled on 24 June 2014 f Auburn Properties"). Shuangxing also intends to develop the abovementioned lots of land into a mixed residential and commercial property site ("the Auburn Development Project". At the time of this agreement, the Borrower has not obtained Development Approval ("DA Approval") but it is understood, that the Development Manager will obtain DA approval within nine (9) months from the date of the Second Drawdown made under this Agreement. E. The Lender initially agreed to lend twelve million Australian dollars (A$12,000,000) from its own funding to assist Shuangxing in settling the Auburn properties. However upon further negotiations, the Lender agreed to assist Shuangxing in raising up to a further seven million (A$7,000,000) Australian dollars from external funding for settlement of the Auburn properties on the conditions that the Kensington Loan Agreement is to be refinanced under this Agreement, the Auburn Properties are to be transferred to the Australia Capital Sunlink Property Fund, and the Borrower, Shuangxing, agrees to share returns with the Lender to compensate for additional risks undertaken by the Lender. F. As at the date of this agreement, Shuangxing is the sole unitholder holding 100% of all units in the Australia Capital Sunlink Property Fund. G. The Guarantors, being Liang, Guan and companies controlled by Guan, have also requested that the Lender provide the Loan Facility to the Borrower in accordance with this Agreement. H. The parties acknowledge that the Borrower intends to make the First Drawdown on or before 30 June 2014. 1. An important fact, for the purposes of this case, is the difference between the two versions as to the agreed "Share of Return" as listed in Item 4A of the Schedule: Version 1: Forty percent (40%) of all returns which may be received or receivable by the Borrower, Shuangxing in respect of its total unitholdings in the ACSP Auburn Fund at any given time (Return). … Version 2: Seventy percent (70%) of all returns which may be received or receivable by the Borrower, Shuangxing in respect of its total unitholdings in the ACSP Auburn Fund at any given time (Return). 1. Ms Guan accepted under cross-examination that she had obtained the facility from A Capital on the basis that it would share in the returns of the Kensington Project. The evidence of Ms Guan on this matter is consistent with Mr Lui's evidence about his understanding of what Ms Guan wanted to achieve (whatever the mechanism), namely, the return would be effected, either by contract or by an investment to purchase shares in the holding company. That factual matrix is also consistent with and supports the structure of the agreement. The following passage of Ms Guan's evidence, under cross-examination, is consistent with that factual proposition: Q. You expected, of course, when you bought those pieces of land that the development project for the Kensington properties would be successful. Is that right? A. INTERPRETER: Yes. Q. You, on behalf of Shuangfu, approached development companies and wanted them to invest in the project and you offered them a share of the returns when the project was successful. Isn't that right? A. INTERPRETER: Yes. Q. Then that was the business. What you wanted to do was develop, or have the Kensington properties developed, sold, so that you can get a return. Isn't that right? A. INTERPRETER: Yes. Q. Because you didn't have the money, you needed someone else's investment in order to not only purchase the property, but build it up and organise it for sale? A. INTERPRETER: Yes. 1. On 26 June 2014, Ms Guan guaranteed the "borrowers" obligations under the loan agreement by way of a general security deed and a deed of guarantee and indemnity. 2. In October and November 2014, through Shuangfu, Ms Guan purchased nine parcels of land, which comprised the Kensington Project. Ms Guan was Shuangfu's sole shareholder. The purchases took place in steps, as follows: 1. the purchase of seven of the nine lots settled in October 2014; and 2. the purchase of the remaining two lots settled in November 2014. 1. Ms Guan's plan was to develop the land Shuangfu (and Shuangxing) had purchased into a "big development" of a "mixed residential and commercial" kind. I reject any suggestion in Ms Guan's evidence to the contrary (see also, para B of the Recitals of the loan agreement). The purchase of the Kensington land and the Auburn properties: 2014 1. Whilst Ms Guan was reluctant when asked about the price Shuangfu paid for the Kensington Project, but ultimately said that "…every single lot costed a few millions, a few million dollars per lot". Ms Guan said she had loaned Shuangfu $12 million of her own money to purchase the Kensington Project, which confirms that her stated disinterest in the affairs of the development in evidence as unbelievable. 2. As mentioned earlier, Shuangxing purchased the Auburn properties comprised under the Auburn Project (which settled around June 2014). The expectation of payment: Ms Guan and Mr Liang 1. Both Ms Guan and Mr Liang expected to be paid out from the Kensington Project for the work that they were doing. The fact that Ms Guan was paid out of Shuangfu and the fact that Mr Liang expected to be paid (as Ms Guan confirmed in her oral evidence), confirms that each were expecting to receive some fees for their past, and by inference, future involvement in the development of the Kensington Project. This is consistent with Mr Lui's evidence, namely, that Ms Guan and Mr Liang wanted to ensure their continued involvement in the development of the Kensington Project, so that they could receive management and other fees. Prior to signing the agreement, the assistance of Mr Lui: 2013-2014 1. Between 2013-2014, Mr Lui contacted people he knew who could potentially partner with Ms Guan to conduct the Kensington Project. 2. On or around 18 October 2013, he introduced Kerry Properties to Mr Liang. From that introduction, Mr Liang met with Mr Qian, Chief Executive Officer of Kerry Properties in Hong Kong. Kerry Properties ultimately withdrew interest from the Kensington Project. Photographs in evidence place Mr Liang and Mr Lui together with potential investors in the Kensington Project. 3. Ms Guan's evidence supported Mr Lui's in this regard. She confirmed in cross-examination that she had received, either on her own or with someone else, developers at the Kensington office prior to the liquidation. Ms Guan identified the office in the photographs she was shown, which photographs had been taken by Mr Lui. Whilst she later gave evidence that she basically did not know what was going on with the Kensington Project, for reasons given earlier that evidence should be rejected. In any event, I accept the submission of counsel for Mr Lui that nothing that she said affected the veracity of Mr Lui's evidence about the performance of his obligations under the agreement (set out below). 4. During the second half of 2014, Ms Guan became dissatisfied with the arrangements with A Capital, namely, the interest her companies had to pay A Capital under the loan agreement (see above under the heading "The loan agreement with A Capital"), which, it appeared, she could not pay. The Option / Sales contract with Landream: 22 September 2014 1. It also appears that her dissatisfaction or inability to pay led her to make a deal with Landream in the latter half of 2014 (around September 2014). 2. In an ASIC Form 507 titled "Report as to Affairs" signed by Ms Guan in her capacity as director of Shuangfu on 31 December 2014, a hand written notation appears in the column headed "Short particulars of Title": OPTION / SALES CONTRACT TO LANDREAM PROJECT MANAGEMENT P/L WAS SIGNED ON 22/9/14 AT $52,000,000 PLUS REIMBURSEMENT. By that evidence it may be accepted that Shuangfu entered into an option / sales contract with Landream. I infer that the "option" for which the contract with Landream provided was for Shuangfu to buy back into the project and share in the returns of the development. The construction of this option makes commercial sense, especially given that the contract provided for some "reimbursements". The evidence of Ms Guan, is consistent with that proposition as does the fact Ms Guan did not produce the option / sales contract in her case. 1. It is unclear whether Ms Guan told A Capital about this deal or whether A Capital found out about it from other sources. Given the terms of the loan agreement that secured A Capital's loans and given what happened next in time, it may be inferred that Ms Guan did not tell them. 2. Returning briefly to the ASIC Form 507, the following observations may be made as to details recorded by Ms Guan on that form: 1. The land had a recorded valuation of $30,020,000; 2. The land had been sold for $52 million (plus reimbursement). During cross-examination Ms Guan recalled that the contract was for $54 million (as noted, the contract was not put before the Court); and 3. The estimated "realisable value" was $55,200,000, being the "sale price + reimbursements". 1. I find that, on the balance of probabilities, the reimbursements were for upfront costs paid by Ms Guan to commence the project, which would appear to be the "$12 million" of her money that she said she invested into the project. She was to receive around only $2 million from the Landream deal, the granting of an option to buy back into the Kensington Project was the only way she could benefit from her $10 million investment. It may also be noted that an amount of $12 million, was referred to as a debt owed to Ms Guan as a creditor of Shuangfu in the second creditor's meeting. That same debt was ultimately absorbed by the ATO (see below under the heading "Meetings of the Creditors to Shuangfu". 2. It may also be noted, that on the material before the Court, a purchase price of "$52 million" was the highest figure associated with the sale of the land (excluding reimbursement fees). Letter of offer by Anson City: 4 November 2014 1. On 4 November 2014, Mr Liang received a letter from Anson City outlining an offer to purchase the Kensington land for $36 million. Ms Guan appeared reluctant to acknowledge this document during cross-examination, notwithstanding the fact it was annexed to her affidavit affirmed 20 April 2016. 2. The letter of offer demonstrates, there was no offer of any future involvement by Ms Guan (or Mr Liang) in the project (which meant, no management fees), no option to buy back into it and no offer to reimburse Ms Guan for her investments. The import of Ms Guan's evidence, in this respect, was that Mr Liang had told her that someone had made an offer for the land after November 2014 but that she did not know that "Mr Bai" (being the principal behind Anson City) was involved until after the "completion of the transaction". Further, Ms Guan gave evidence that she was not aware of the amount of the offer at that time. Part of Ms Guan's evidence, in that respect, is extracted below: Q. In November 2014 you were told that Mr Bai's company wanted to purchase the Kensington land for $36 million, isn't that right? A. INTERPRETER: I was told that there were someone who made the offer to buy the piece of land. I didn't know at that time it was Mr Bail. I only found out that it was him after the completion of the transaction. Q. Did you know that there was an offer for the purchase of the Kensington land in November 2014 for $36 million? A. INTERPRETER: I only found out later, because many people wanted to buy at that time. I didn't know who ended up buying it. Q. There might be some confusion, let me help you. I'm not asking about the expression of interest process and the sale of the land in 2015. I am asking you about an offer that was made by Anson company, Mr Bai's company, in November 2014. Does that assist you to answer the question that I just asked you a moment ago? A. INTERPRETER: I heard about that but I was not present, I was not involved. Q. Are you saying you were not involved in an offer of $36 million to buy the land that your company owned? Are you saying you weren't involved in that? A. INTERPRETER: I wasn't involved because I was in liquidation. I was not working so I didn't know what happened, what's going on. Q. You-- A. INTERPRETER: I was only aware of the agreement signed between Mr Lui and I didn't know how it was sold. 1. It would appear that no one seriously intended to act on the offer dated 4 November 2014 because, as Ms Guan said in cross-examination, she had "already sold" the project for over $50 million (probably $54 million). Counsel for Mr Lui submitted, by the option / sales contract the Kensington Project was sold as a "project", whereas Anson City only wanted to pay for the land. I accept that submission. Ms Guan's evidence, in that respect, is extracted below: Q. Again, can I just clarify for you, I'm asking about November 2014, not 2015. Do you understand that? A. INTERPRETER: Yes, I understand you, but I sold the, the property, the, the land at Kensington in August 2014. Q. The sale to a company called Land Dream Pty Ltd, as I put to you before, had an option for you to buy back in the project. Isn't that right? A. INTERPRETER: No, I collected the money. I pocketed the money. How can I purchase and the, the liquidator would liquidate those, to put that into liquidation. How can I purchase? Q. You entered into the contract for the sale with Land Dream with an option to buy back because that was consistent with a plan that you had for the development in 2013 and 2014. Isn't that right? A. INTERPRETER: That's, that is what you are might thinking, but that was not mine. I sold for 50 million and, and the other offer is 36 million, and I will lose a lot of money. Q. The difference between the offer from Land Dream and the offer from Anson Company, that's the buyer's company, was that Mr Bai wanted to buy the land outright and give you no further participation, whereas the deal with Land Dream allowed you an option to buy back in the project. Isn't that right? A. INTERPRETER: I disagree. Q. And the reason you went with the Land Dream deal was because it gave you that option to buy back into the project. A. INTERPRETER: The Land Dream had already paid the 10% deposit. If they do not know - we have collected the 10%. If they don't complete the sale by September, and they have to pay, forfeit that 10%. Q. The evidence that you have given today and previously, to the effect that all you wanted to do in 2013 and 2014 was sell the land, is false, because what you actually wanted to do was to have a developer invest in it and keep an option to buy back in the project. Do you agree with that or do you disagree with that? A. INTERPRETER: That's what you are thinking. I have different, I have different thinking, even in the day. 1. As to the same letter, the defendants relied upon the fact that the letter of offer was addressed to Mr Liang and not Mr Lui. It was contended that the same letter demonstrates that Mr Liang introduced Mr Pak to the Kensington land. Additionally, as the letter was signed by Mr Hu, it was submitted that Mr Hu, therefore, speaks for Mr Pak. 2. As I will find, it is not strictly necessary to make a finding as to this issue given my conclusion as to the construction of the agreement. However, for completeness, I will deal with the factual issue raised by the defendants. 3. There are a number of factual difficulties with those contentions. First, there is nothing on the face of the letter of offer dated 4 November 2014 which suggests that Mr Liang introduced Anson City to the Kensington Project. It may be noted that a similar letter of offer was addressed to the then relevant real estate agent on 4 March 2015 (see the letter of offer dated 4 March 2015, which was addressed to Jones Lang LaSalle). 4. Secondly, Mr Lui was not the real estate agent for the Kensington Project. Hence it would have made little sense for a letter of offer to be addressed to him. 5. Thirdly, and of greater significance, the offer was not communicated to Ms Guan at the time it was made because, as discussed above, Shuangfu had already entered into an arrangement with Landream pursuant to the option / sales contract dated 22 September 2014. Mr Lui was correct to submit that, in the circumstances, the letter of offer dated 4 November 2014 was not seen as a proposition that would be seriously entertained having regard to the value of the Landream proposal vis-à-vis the option / sales contract. It may be also noted, in that respect, that proposal concerned the acquisition of a "project", whereas, Anson City only wanted to pay for the land. As mentioned above, the letter of offer dated 4 November 2014 did not offer any future involvement by Ms Guan in the project, thereby resulting in no management fee or buy back option. 6. It follows that the letter of offer dated 4 November 2014 does not sustain the proposition that Mr Liang introduced Mr Pak to the Kensington land in such way as to negative the proposition advanced by Mr Lui that he had engaged Mr Chan, after entering into the agreement, in various ways associated with the expression of interest process for the Kensington land. The Kensington Project appointed receivers and Shuangfu placed under external administration: November 2014 1. The events immediately following the contract with Landream are unclear (noting, in this respect, that option / sales contract, as earlier mentioned, was not before the Court). Ultimately, A Capital "did not agree" with the proposed Landream arrangements. The most likely scenario was that A Capital was not told about the Landream deal or that it did not want to be deprived of its share in the returns of the Kensington Project. In any event, on or about 20 November 2014, A Capital appointed receivers to the Kensington Project. 2. That same month, Shuangfu was placed under external administration. 3. On 20 November 2014, the following appointments occurred: 1. Mr Gleeson was appointed "voluntary administrator" of Shuangfu by the secured creditor of the company, namely, A Capital; 2. Mr Gleeson was appointed "voluntary administrator" of Shuangxing; 3. Messrs Kogan and Hayes of McGrathNicol were appointed as "Agents for Mortgagee in Possession" of the Kensington land. The role of both Messrs Kogan and Hayes was described as "Controller" on the ASIC Form 505: "External Administration: Appointment of an external administrator"; and 4. Messrs Kogan and Hayes were appointed as "Receivers and Managers" of Shuangxing. Meetings of the Creditors to Shuangfu: 2 December 2014 to 2 March 2015 First meeting of the creditors: 2 December 2014 1. On 2 December 2014, the first meeting of the creditors of Shuangfu was held at the offices of Jones Partners Insolvency & Business Recovery ("Jones Partners"). The purpose of the first meeting was to, inter alia, determine whether to appoint a committee of creditors and confirm the appointment of an administrator. The creditors continued to meet throughout December 2014 and into 2015. Second meeting of the creditors: 23 December 2014 1. On 23 December 2014, a second meeting of the creditors of Shuangfu was held at Jones Partners. The following occurred: 1. Mr Gleeson adjudicated on claims for proxies received and admitted the respective "proof of debts" for voting purposes. The ATO lodged a proof of debt for $17,931,874.50. During that process, Ms Guan lodged, as earlier mentioned, a proof of debt of $12,102,591.92 (her solicitor appeared as her proxy at this meeting). However, any funds due to Ms Guan were required to be remitted to the ATO in respect of their debt pursuant to s 260-5 of Sch 1 of the Taxation Administration Act 1953 (Cth). That amount, inter alia, was admitted to the ATO (being the balance of Ms Guan's loan account). No debt was, therefore, admitted for Ms Guan. 2. Mr Richard Lye appeared on behalf of Landream, another creditor. He requested an adjournment for the following reasons: 1. Landream, A Capital and Messrs Kogan and Hayes ("the controllers") were in discussions, at the time, "which may result in a proposal for a [Deed of Company Arrangement]". 2. A valuation obtained indicated that the Kensington land was worth approximately $30 million. He noted that an offer had been made in excess of $30 million. In addition, there was an offer to settle the properties earlier than previously agreed. 3. He was yet to receive a formal response from the secured creditor regarding the proposal and that negotiations were on going. 4. He noted that given the holiday period, an adjournment for a period of 45 business days would result in little disadvantage to unsecured creditors. 1. A Capital advised that they would not be accepting the offer made by Landream "in its current format as there was no benefit to unsecured creditors". The creditors resolved that the meeting be adjourned for a period of up to 45 business days. 1. On 18 February 2015, a DOCA was proposed by Landream. The DOCA proposal required that A Capital consent to sell the Kensington land for a total amount of $36.35 million and agree to discharge their registered mortgage for $35 million. This would leave an amount of $1.35 million remaining to meet the costs of the voluntary administration and deed administration and to pay a partial dividend to employees and ordinary unsecured creditors. Third meeting of the creditors: 2 March 2015 1. On 2 March 2015, a third meeting of the creditors of Shuangfu was held at Jones Partners. At that meeting, a resolution was put the creditors that the company execute the DOCA proposed by Landream. As there was no majority, the motion was declared lost. A further resolution was put to the meeting: "That the company be wound up". No creditor voted against that resolution, it was resolved to put the company into liquidation. By a further and separate motion, Mr Gleeson was appointed as liquidator. The vehicle 1. In or around November 2014, Ms Guan provided the vehicle to Mr Lui. Having regard to my earlier finding, I accept the evidence of Mr Lui concerning the vehicle, over that of Ms Guan, as extracted below. I also accept the submission of counsel for Mr Lui that his evidence accords with common experience that at some stage in November 2014 Mr Lui was given the vehicle as he described in his evidence. That evidence is extracted below: 47. After we passed Goulburn, the New South Wales Police stopped the vehicle on the highway and would not let us proceed, because the vehicle was not registered and had a flat tyre. 48. I was very angry and telephoned Ms Guan immediately. We had the following conversation: [Mr Lui:] Why did you give me an unregistered and uninsured car to drive to Canberra? I am very embarrassed, because I had to leave the curator and the owner of the exhibition to get driven down to Canberra with someone else. Ms Guan[:] I am so sorry. I am very angry at Hanson Leung. He has had the car for two years, but he does not look after it and does not get it properly repaired. Can you please arrange for the car to be towed back to Sydney? Please also get it repaired. You need to get the tyre from England. Do not give the the keys or the car back to Hanson, because he is not looking after it. Keep the car. Don't tell him where the car is located. 49. The other passengers proceeded to Canberra with a passer by and I waited for 5 hours in the ram and after dark for a tow truck to arrive to tow the Rolls Royce back to Sydney. Later that evening, I went to a hotel in Goulbourn [sic]. 50. I tried to call Mr Leung numerous times but could not get through. Later that evening, I spoke with Mr Leung about the issues that had arisen with the Rolls Royce. Mr Leung told me during the telephone conversation, "You should not be driving this car. That car is mine". 51. I arrived in Canberra very late that evening, at around 10.00pm. I had to work from that time until the exhibition opened at 11.00am the next morning, on 3 December 2014. I was far too busy to make any representations to anybody on Ms Guan's behalf. I had to hire a car to travel from Canberra to Sydney. 52. On 4 December 2014, I arranged for the tyre to be repaired, for the Rolls Royce to be serviced and for it to be placed into a garage at Rolls Royce Parramatta. I paid for the service of the Rolls Royce, the costs of a hire car from Canberra to Sydney, the costs of towing the Rolls Royce back to Sydney and for the replacement of the tyres. I have never been compensated for the payments I made. 53. That afternoon I travelled to China and then to the USA. 1. In his affidavit of 8 December 2015, Mr Lui deposed that Ms Guan provided him with a "Letter of Appointment", with respect to the vehicle, in or around the first week of February. The letter was undated and was executed by Ms Guan as "shareholder and Director of Sun Link Group Pty Ltd and also the owner of a Rolls Royce Motorcar". By that letter, Mr Lui was appointed "to take care" of the vehicle (in accordance with the terms set out in the letter). 2. The vehicle remained in the possession of Mr Lui up until its repossession (see below). The circumstances immediately prior to signing the agreement: December 2014 to January 2015 1. In December 2014, various conversations took place between Mr Lui and Ms Guan: 1. Whilst in the Las Vegas in the United States, Mr Lui received a call from Ms Guan, during which she told him that the Kensington Project had gone into receivership. She asked Mr Lui to speak with Mr Chen. 2. Whilst in New York, Mr Lui received another phone call from Ms Guan. She again pleaded for help. Mr Lui replied he would help upon his return to Australia. 3. On 29 December 2014, Mr Lui returned to Australia. On or around 30 December 2014, he met with Ms Guan with respect to financial troubles with the Kensington Project, namely, an inability to pay the mortgage. During that conversation she advised that A Capital, the mortgagee, appointed a sales agent, Jones Lang LaSalle, to sell the land by expression of interest bidding. She told Mr Lui: "If you can get your friends or potential buyers to participate in the bidding, I will give you commission if the bidding process succeeds". Mr Lui indicated that "before we can do this business, we need to have some details of the terms and sign an agreement". Ms Guan agreed to that course. 1. It may be noted, much of Mr Lui's cross-examination was devoted to debate with the witness about as to whether or not it was possible for Shuangfu to recover from external administration and whether the chances of such a recovery undermined Mr Lui's credit. This proposition put out of account that was Ms Guan who sought Mr Lui's assistance. Her entreaties brought with them, it may be inferred, her expectation of regaining control over the Kensington Project, that is a matter for Ms Guan. Shuangfu's administration and the events in December 2014 to January 2015 provide the context, within which the agreement came into being. 2. Following the above meeting with Ms Guan in December 2014, Mr Lui met with Mr Chen. Mr Chen confirmed the security held over the Kensington and Auburn properties for a "$42 million loan to Ms Guan or her companies". He advised, inter alia, that Ms Guan had defaulted in interest payments. He confirmed that Jones Lang LaSalle was appointed as "the selling agent". 3. Mr Lui continued to have meetings with Mr Chen, so as to seek to reconcile him with Ms Guan. Mr Lui's evidence about his work, in this respect, withstood attack under cross-examination. During cross-examination, Mr Lui gave evidence as to further conversations with Mr Chen that were not included in his affidavit evidence in cross-examination: Q. …Owen Chen and A Capital had said, "There will be an expression of interest bidding process to sell the land." That's what was happening, is that right? A. (No verbal reply) Q. That was going to happen because Owen Chen was in charge and he said, "Sell the land, mortgagee sale," is that right? A. Yes. Q. Ms Guan said, "Oh my goodness, there's going to be a mortgagee sale. Please go and find as many buyers as possible to participate in this mortgagee sale"? A. Well, I spoke to Owen as well and Owen said if anybody can fix up the debt, and Owen is more than happy to stop whatever processing is, all he wants is money back and paid. And then the negotiation is Ms Guan always ask me to do and help find an investor, which is the - that is the best outcome for her, not just a mortgagee sale, mortgagee sale is - is a big problem. Q. That conversation with Owen Chen is not in your affidavit, is it? A. I did not put it in but Q. In fact, in your affidavit you say that you got Owen Chen to give the expression of interest bidding process more time, so the best that you did was you got more time, you didn't get him to not do it? That's paragraph 67. A. For my understanding is Owen Chen wants to get the money which is borrowed forty - 42 million to Ms Guan for that property and then that is the - the intention. And then miss - Ms Guan wants to pay off the debt, and then also Ms Guan wants to have a piece of the cake, you know, the - the property in the future. … Q. … You never persuaded Owen Chen to withdraw the mortgagee sale, did you? A. Not withdraw. Q. There's no way Owen Chen would have stopped the mortgagee sale, isn't that right? A. No. Q. Ms Guan was trying to get you to get more people participating in the bidding process because the more bidders, the better chance of getting a higher price, isn't that right? A. No, and to go into the bid is one thing, to help her in the best way is another thing. Q. Ms Guan essentially was asking you to find people interested in buying the Kensington land. A. To invest or follow this process. Q. Ms Guan had no power, she had no choice, the Kensington land was going to be sold, and all she could do was try to find buyers for it, isn't that right? A. No. I think it's depend on Owen, by the - by the person who - who has control, he can stop processing any time if somebody pays the money. Q. If Ms Guan had said to Owen Chen, "Please stop the mortgagee sale," Owen Chen would have said, "No," is that correct or incorrect? A. I'm not Owen, I don't know. 1. On 31 December 2014, as earlier mentioned, Ms Guan in her capacity as director of Shuangfu signed the ASIC Form 507. 2. In early January 2015, Ms Guan was barred from attending the offices of Jones Lang LaSalle. 3. By January 2015, the vehicle was something that Mr Lui wanted and had included in the agreement. The circumstances at the time of the signing of the agreement: 18 January 2015 1. Mr Lui and Ms Guan signed the agreement on 18 January 2015. 2. The factual question is whether Ms Guan signed agreement both on behalf of herself and Sun Link. 3. The circumstances in which the agreement was signed were set out in the affidavit of Mr Lui affirmed 8 December 2015 at paras 68-75. I accept that evidence and it is extracted below: 68. On or about 18 January 2015, I attended a restaurant with Ms Guan. I sat across a table from her and said, "I have prepared a draft agreement for you to consider". I then handed to her a typed document in the simplified Chinese script. 69. I said, "please read it carefully and let me know if you want me to change anything". 70. I observed her reading the document. She then looked up and said, "I am happy with the document. Do you have a pen?". 71. She said, "but we do not know what the actual price will be". As a result, I wrote, by hand, the character that appear in handwriting just above the signature panels. 72. Ms Guan signed the document first. I then signed and dated it. 73. Other than her signature, Ms Guan did not write anything else on the document or any copy of the document. There was never any discussion about a 10-day limit on this agreement. 75. I took the original home with me and made a photocopy of the document, after which I handed the original to Ms Guan in later date. A truly copy of the document as signed by me and Ms Guan and dated 18 January 2015 is annexed hereto and marked "B" (Agreement). 1. Shortly stated, Mr Lui handed a typed document to Ms Guan. She said she was happy with the terms but annotated it (see para 71 of Mr Lui's affidavit, extracted above). She did not write anything else the document. There was only one original, a copy of which was given to Ms Guan. She never complained that the document she had been given was not the document she had signed. 2. As at that date, in summary of the above factual findings, the following circumstances, inter alia, may also be noted: 1. Ms Guan was a director of Sun Link at the time; 2. The vehicle was a "company car" and registered in Sun Link's name; 3. Shuangfu was in default of the loan agreement dated 26 June 2014; 4. Both Shuangfu and Shuangxing had external administrators appointed, and controllers over the Kensington land; 5. A second meeting of the creditors had taken place and been adjourned for 42 days; 6. No DOCA had been proposed, although the proposal of a DOCA by Landream remained a possibility. However, if no DOCA was ultimately accepted, Shuangfu would likely be wound up; and 7. Shuangfu's two biggest creditors were A Capital and the ATO and were owed approximately $55.7 million. 1. At the time of entering the agreement, Ms Guan clearly thought that she had the authority to sign the agreement and to promise Sun Link's property to Mr Lui. Sun Link is not mentioned in the agreement but the vehicle, its property, is. 2. An issue arose as to whether Sun Link was bound by the terms of cl 4 of the agreement. That issue arose because it was common ground that the vehicle referred to in cl 4 was owned by Sun Link and Sun Link is not mentioned in the agreement. 3. The vehicle was repossessed by its financier, because as counsel for the defendants admitted, "my side did not upkeep the mortgage on the car". It was sold and $24,434.87 in surplus funds were paid into the Supreme Court of Victoria. Mr Lui sought damages in lieu of specific performance of the contract. Given that the vehicle was sold for $200,000, that should be taken as the its market value for the purposes of the order for damages. 4. The relevant background to the issue is as follows: 1. As previously mentioned, in or around November 2014, the defendants provided the vehicle to Mr Lui to drive as he has described in his evidence. 2. There is a paucity of evidence as to whether Ms Guan was the sole director at the time of entering the agreement. However, notwithstanding a submission that Ms Guan was a sole director at the time of the agreement, counsel for Mr Lui put the following question to Ms Guan during cross-examination: Q. There is another company, which is the second defendant in this proceeding, called Sun Link Pty Limited. You're aware of that? A. INTERPRETER: Yes, I am aware. Q. You are the sole director of that company. Is that right? A. INTERPRETER: I am now, but not before. Q. Because before that, Mr Henson Liang was also a director of the company. Is that right? A. INTERPRETER: Correct. Q. Indeed, Mr Liang was a director of Sun Link until 23 February 2015. Do you accept that? A. INTERPRETER: Yes. Q. You said a few things this morning about Mr Liang. What does Henson Liang do? A. INTERPRETER: Helps me to look after the other companies. 1. I agree with the submission of the counsel for Mr Lui that Ms Guan clearly thought that she had the authority to sign the agreement and to promise Sun Link's property to Mr Lui. Ms Guan did not appear in the witness box to be someone who made clear distinctions between her property and her companies' assets. Reference, in that respect, may be made to Ms Guan's evidence as to Shuangfu during cross-examination: Q. Now can I just ask you a couple of questions about Mr Liang and you. Did you get paid by Shuangfu for your work on the development project? A. INTERPRETER: Shuangfu gave me money. Q. How much did you get paid by Shuangfu? A. INTERPRETER: I don't know what you mean. Q. How much did you get paid by Shuangfu to work in relation to the Kensington property development? A. INTERPRETER: Shuangfu is my own company. Why would they, why would the company pay me money? It's my own company. Q. I asked you a moment ago whether you got paid and you said yes. A. INTERPRETER: I had my business, my - please, I said please hold sentence by sentence. I'm a business migrant from China. I, I thought my money would be from China, so I was buying my land piece by piece, and when I bought the land, I'm going to take out a loan. Shuangfu is my own company. How can the company give me money? I am the one who has to put money into Shuangfu. 1. Ms Guan's protestations about Mr Liang's views about the alienation of the vehicle could not be tested, because Mr Liang was not produced for cross-examination. 1. The execution of the agreement by Ms Guan, notwithstanding that she purported to act with the authority of Sun Link and thereby sought to execute the agreement on its behalf, did not have the authority to bind Sun Link. The evidence before the Court, including evidence led by counsel for Mr Lui (when the question was otherwise in doubt), revealed that Mr Liang was also a director of Sun Link, together with Ms Guan, at 26 June 2014 through to 23 February 2015. Pursuant to s 127 of the Corporations Act, where a company has more than one director, a single director does not have authority to bind it. Thus, in the absence of some representation made by Sun Link, Ms Guan has no ostensible authority to bind it (see Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at 205). The evidence before the Court does not support a conclusion of agency. It follows that at the time of the agreement, in order to bind Sun Link, in particular with respect to cl 4, the agreement would have required execution by two directors, namely, both Ms Guan and Mr Liang: s 127 of the Corporations Act. 2. I find that Ms Guan signed the agreement in a strictly personal capacity. She did not bind Sun Link. The expression of interest process: 29 January to March 2015 1. On 24 January 2015, Mr Lui was married. In an effort to promote reconciliation between Ms Guan and Mr Chen, both were invited and seated at the same table at the wedding. Mr Lui considered his efforts achieved "successful restoration of the relations" and said, as a result, "[Mr Chen] gave her more time for me to participate in the EOI process" (namely, the expression of interest process conducted by Jones Lang LaSalle). 2. On 29 January 2015, Jones Lang LaSalle publicly released information about the expression of interest process. If there was any shortfall, pursuant to the terms of a deed of guarantee and indemnity dated 26 June 2014, Ms Guan would have been personally liable. By that deed, Ms Guan had guaranteed Shuangfu's obligations. It was around this time that she widely canvassed persons to participate in the bidding process or encourage others to do so. 3. The nature of the expression of interest process is important, because it fatally undermines the defendants' case in relation to the Act (which I will return to later in this judgment). 4. The Information Memorandum was prepared by, inter alia, Jones Lang LaSalle in relation to the Kensington land. The covering page describes the process: "Mortgagee Sale / By expressions of interest". That "expression of interest" process was to close at 3pm on 4 March 2015. The Information Memorandum described the process thus: An assessment of all expressions of interest received by 3pm (AEDT) on Wednesday 4 March 2015 at 3pm (AEDT), will be made by the vendor and its advisers leading to the selection of a shortlist of parties or one preferred party to enter into exclusive negotiations and exchange of contract. It is the intention of the vendor to select the parties from the first round of the EOIs received and we encourage all prospective parties to lodge their highest and cleanest proposal at this time. [Emphasis added.] 1. The Information Memorandum also included the following disclaimer: DISCLAIMER: Joseph Hayes and Barry Kogan of McGrathNicol as Agents for [A Capital] as Mortgagee in Possession ("AMIP") are offering the real properties location at 81-95 Anzac Parade, Kensington NSW 2035 and 67-71 Boronia Street, Kensington NSW 2033 (together, the "Properties") for sale. 1. The process involved two stages. The first was an expression of interest process, which involved the lodgement of proposals for the Kensington Development. The second stage concerned review and negotiation. 2. There was no evidence that Mr Lui negotiated with the vendor (or the agents for mortgagee in possession) on behalf of any of the bidders. Further, Mr Lui had no authority to negotiate on behalf of the vendor as Jones Lang LaSalle had the exclusive agency agreement (see "Commercial/Industrial Sales Inspection Report and Exclusive Agency Agreement and Continuing Agency" dated 19 January 2015 (also referred to as "the REINSW Exclusive Selling Agency Agreement"). On the evidence he did not do so. 3. The parties to that agreement were as follows: 1. The principal: Joseph Hayes & Barry Kogan as agents for mortgagee in possession (with the email address of Ms Legge provided); and 2. The agent: Jones Lang LaSalle (with the email address of Mr Brewer provided). 1. The property listed as the property for sale was the Kensington land. For completeness, Baker & McKenzie were listed as the principal's solicitor (with Mr Walter's email address provided). 2. Thus, I find, on the balance of probabilities, that Ms Guan had no authority to authorise Mr Lui to negotiate on behalf either of herself or Shuangfu with respect to the sale of the Kensington Project; a fact which she admitted throughout her cross-examination. Mr Lui was not authorised to, nor did he, negotiate on behalf of any other party to that agreement. Further, Ms Guan accepted on a number of occasions during the cross-examination that she had no authority to deal with the Kensington Project after receivers were appointed or to even ask Mr Lui to make any offers, accept any offers or to negotiate on her behalf or anyone else's for the Kensington Project. These factual findings serve to completely undermine Ms Guan's claims concerning the Act and the argument that Mr Lui was to "introduce" a buyer. 3. As I will later find, the agreement was aimed at the expression of interest process. No doubt Ms Guan's purpose in entering into the agreement was to ensure that as many proposals as possible were lodged as part of the process. She encouraged that outcome, no doubt, because she would be personally liable for any shortfall not covered by the sale of the Kensington Project (pursuant to the terms of a deed of guarantee and indemnity dated 26 June 2014). 4. I will return to the construction of the agreement but, on its face, the terms do not expressly provide for negotiations with the vendor; nor does the agreement require any action by Mr Lui in relation to the bidders once the expression of interest process was complete. 5. I accept the submission of Mr Lui, that Mr Lui was given an incentive, by the reward set out in the agreement, under the agreement to take steps which Ms Guan considered would ensure the expression of interest process succeeded. 6. Between January to March 2015, pursuant to his obligations under the agreement, Mr Lui contacted various investors and introduced others to the Kensington Project. 7. There is evidence from Mr Lui that was uncontradicted and undiminished in cross examination, which I accept, that he contacted his network both before and then after 18 January 2015: 1. Mr Qian of Kerry Properties (pre-18 January 2015); and 2. Messrs Pak and Chan of Anson City (post-18 January 2015), noting that Anson City was the successful bidder. (He also organised another proposal by another company, Fairway, which was ultimately unsuccessful). 1. This was set out in the affidavit of Mr Lui affirmed 8 December 2015, which I extract below: 76. I began looking for potential investors from amongst my business contacts and friends circle for the project including doing a study of the Kensington Project. I arranged for AECOM to conduct the study. 77. I continued to work on this project including arranging a meeting with AECOM to advise in relation to the development potential, value and other relevant matters. 78. Apart from speaking to Mr Qian, I also introduced the Kensington Project to my friend Justin Chan (Mr Chan), who is the business advisor of Mr Pak Wai Ngor (Mr Pak) (but pronounced "Bai" in Mandarin), who is in control of Anson City Development 1 (Australia) Pty Ltd (Anson Company). Mr Pak is a close friend, who often seeks my advice in relation to various projects, including another project in which he was involved in Kensington. 79. Mr Pak and Mr Chan also attended my wedding. 80. In middle of February 2015, I met Mr Chan in a Japanese restaurant on Sussex Street, Sydney and talked about the Kensington Project. At the meeting, Mr Chan called Mr Pak regarding the proposal for the Anson Company to invest in the Kensington Project. Mr Chan told me, "Mr Pak considers that the project is worth around $30,000,000". 81. I then called Ms Guan and said, "yesterday, I met Justin and talked with Mr Pak about your project Mr Pak knew this project Why did you not talk to him since you all know each other and he has some interest in this project?". 82. She said, "I know Mr Pak and talked with him about this project, but it is very hard to talk with him about it I could not continue the negotiation on this project with him. I think we are not able to reach the deal". 83. [Struck.] 84. I said, "Well, since he is interested in this project now, maybe I can talk to him via my business circles and see if it is the case". 85. She said, "That is good. We can try. But still I hope you can introduce more friends to bid on this project to increase the chance of a successful outcome". 86. After this conversation with Ms Guan, I had communications with Mr Chan, who was acting as liaison between me and Mr Pak, about the Kensington Project. 87. At the time of the EOI Process, I told Mr Chan, "There are several interested parties, but given their various conditions, Mr Pak has a good chance to win the bidding process if he increases his bid from $30,000,000". A day or so later, Mr Chan told me, "I told Mr Pak what you said and he is going to increase his bid". 88. During February and March 2015, I visited Jones Lang LaSalle (NSW) Pty Ltd (JLL) a number of times in relation to the EOI Process. JLL were the appointed sales agent by the receiver appointed to the land, which was the subject of the Kensington Project. I met John Macree (Mr Macree), who is the regional director of JLL. I got know the EOI Process in more detail and got a bundle of the information memorandum of the Kensington Project to distribute to potential investors. 89. Before the lodgement of the EOI for the Anson Company I kept in close contact with Mr Chan through face to face meetings and through telephone calls. 90. I gave Mr Chan the information memorandum relating to the Kensington Project and discussed with him that project in more detail, including the direction of the market, the EOI Process conducted by JLL and the feasibility of the project. 91. The Anson Company ultimately made a bid for the Kensington Project for $38,000,000. 92. I also introduced this project to another potential investor, Mr Zhao, who lives in China. Prior to the end of the EOI Process, I accompanied him to the site of the Kensington Project for inspection and liaised with JLL concerning the EOI Process. 93. I also introduced this project to Fairway Investment & Development Pty Ltd (Fairway), whose directors are my friends. Before the close of the EOI Process and its end date, Fairway placed two expressions of interest for the Kensington Project. I helped them complete the expressions of interest. The first was an unconditional offer for $30,000,000 and the second was an offer for $45,000,000, which was conditional on the approval of a development application, A copy of the expressions of interest forms from Fairway is annexed hereto and marked "C". 94. On or about 5 March 2015, the day after bids had closed, I organized a dinner party to celebrate the close of bidding process and to thank the people who supported and helped in this transaction. Ms Guan and I were present together with other individuals who had been involved in the process. Ms Guan said to me, "I am grateful for all the effort and support from the people at the dinner table". I paid for this dinner party and bought a bottle of Remen Congee for the celebration. 1. Counsel for the defendants made a submission that Mr Lui's evidence at para 87, namely, that Mr Chan told Mr Pak "what [Mr Lui] said and he is going to increase his bid", was, given the evidentiary rulings by the Court, not evidence as to Mr Pak's state of mind. However, that consideration is immaterial to the question of performance, having regard to my conclusion as to the construction of the agreement. The operative question is whether Mr Lui had endeavoured to influence Mr Pak in a manner consistent with the agreement. Upon the construction of the agreement I will later develop that question must be answered in the affirmative. 2. In summary, Mr Lui deposed and I find that he performed his obligations by: 1. Finding Mr Chan and Mr Pak and providing advice as to the expression of interest process, with respect to the Kensington land, from around February 2015; in particular, Mr Lui advised Mr Chan that Mr Pak would need to increase Anson City's bid to be successful. He also subsequently provided Mr Chan with the Information Memorandum. Anson City ultimately made a bid of $38 million. 2. Meeting with Mr Macree, the regional director of Jones Lang LaSalle, in order to obtain details about the expression of interest process to pass on to potential investors. 3. Finding "Mr Zhao", a Chinese investor. 4. Bringing the Kensington Project to the attention of Fairway. Fairway placed two expressions of interest for the Kensington Project: the first was an unconditional offer for $30 million and the second was an offer for $45 million (conditional upon development approval). 1. It may be noted that the only mention of Mr Zhao was in the evidence of Mr Lui. No further details, save for the reference to a site visit was provided. It also appears he did not participate in the expression of interest process. 2. During cross-examination, Mr Lui also gave evidence that "there's a few more people who… I talk on the side. I did not put in my affidavits". He gave evidence that Mr Xia Gung, who was pictured in a photograph annexed to the affidavit of Mr Lui sworn 27 June 2016, was a "potential investor". That same affidavit included photographs of several people identified as "potential buyer[s]" or "potential purchaser[s]". These included: 1. Mr Zhang and Mr Chiu from China; 2. Mr David Ho from Hong Kong; and 3. Mr Gung from Northern China. 1. Counsel for the defendants contended that the evidence of Mr Lui as to Mr Chan and Mr Pak is not credible due to inconsistencies between his evidence by affidavit and his evidence under cross-examination. As to the introduction of the Kensington Project to Mr Chan and/or Mr Pak, Mr Lui gave the following evidence at the hearing: Q. Now, if you can go to paragraph 78 of your affidavit, 78, you say that you introduced Mr Pak to the Kensington land and the Kensington project, is that right? Mr Pak Wai Ngor? A. My friend Justin Chan is the adviser of Mr Pak. I know Mr Pak for a long time. And then I only talk to Mr Chan. Q. So you introduced Mr Chan, Mr Kevin Chan A. No, no, Justin Chan. Q. I'm sorry, Mr Justin Chan who works for Mr Pak. You introduced Mr Justin Chan to the Kensington property and the Kensington land? A. Yes. Q. You said to him there's a potential opportunity that you might be interested in to Mr … Justin Chan. That's what you said to him? A. Well, it's possible, yeah. Investor. … Q. It wasn't Henson Liang, was it, who introduced Mr Justin Chan who worked for Mr Pak, it wasn't Henson Liang who introduced Mr Chan to the Kensington property. It was you, is that right. A. Yes. Q. Thank you. It wasn't A. But you have two questions. I only answer the last one. Q. Thank you. I appreciate it. Thank you. Now, it wasn't Henson Liang who introduced Mr Pak, Mr Pak Wai Ngor, to the Kensington properties and the Kensington project, it was you who did that, isn't that right? A. I don't know your question. Q. Oh, okay. Mr Henson Liang did not introduce Mr Pak to the Kensington properties, it was you who introduced Mr Pak to the Kensington properties, isn't that right? A. I still don't understand your question. Q. I'll move on. Do you say that Henson Liang, do you agree that Henson Liang did not introduce Mr Chan or Mr Pak to the Kensington properties? A. I don't understand your question. Q. Now, I think you said that you introduced Mr Chan to the Kensington property. I think you earlier said that right? Now Mr Chan would agree with this if he was here today, wouldn't he? A. Of course. Q. But Mr Chan is not here today, right? A. But that is the truth, nothing but the truth. Q. And Mr Pak is not here today either, is he? Mr Pak is not here today? A. No, not here. Q. They are not, Mr Pak and Mr Chan, are not here today because their evidence would not agree with what you are saying, isn't that right? A. I don't know. 1. The evidence of Mr Lui, with respect to the introduction of Mr Chan to the Kensington Project, albeit slightly confused at times, does not appear to be inconsistent with the evidence earlier deposed in his affidavit. It should also be noted that the conversations in Mr Lui's affidavit are recorded in English but were originally spoken in Mandarin; Mr Lui said, and I accept, that he translated them to the best of his ability. 2. As to his "job" under the agreement, Mr Lui gave the following evidence: Q. Your job, what you were trying to achieve is to show this information memorandum to as many rich, Chinese, say, Hong Kong or mainland Chinese businessmen as possible. That's what you were trying to do; correct? A. No. Not all but I did give it to one or two and then I talked to Alfred accordingly because somebody know the project and I talk to Mr [Zhang] accordingly because they know the project. And then also I talked to Mr Zhao, with the site, there were three people I, I introduce to the site. Yeah. Q. After you show this information memorandum to those rich, you know, multi-million dollar Chinese businessmen and show them the Kensington land and maybe have some dinner, some lobster, some golf, after all of that your job was to get them to make a bid and as high a bid as possible. That was what you were trying to do? A. No. Q. No? A. What I'm trying to do, because I've been asked to find an investor and also I, I see the information in JLL and also I propose some people to follow this EOI, especially Fairway, Justin Chan and a couple people and then, and then I still in, in processing and try to help her out with an investor coming in to, to develop the project. Q. This information memorandum, you are familiar with the document, are you? You know the document? A. I know the document, yes. Q. It is a proposal to sell land, isn't it? A. This is for selling the property. Q. Yes. A. Yes, the property. Q. It's not an information memorandum to sell shares in a company? A. But before that closing I've been asked to join force with Ms Guan, find an investor, join force with Ms Guan and then fix up the debt and also develop the project. And that is the best outcome for Ms Guan. Not just selling the land. Because selling the land maybe Ms Guan will lose lots of money. But trying to get an investor Mr Guan, Ms Guan will have an upside of the project and also Hanson approached me have project management and development, development contract. 1. No further evidence was given with respect to Mr Zhang, Mr Ho or Mr Gung. 2. It may also be noted that Mr Lui gave evidence that, during the expression of interest process, some of his contacts asked about $60 million as a price but he advised them "it's too high". The land did not have development approval, a bid of $60 million was too high "because at the moment there's some shops there and not worth that much". He gave evidence that the land with development approval "it will [be] worth a lot more than what it is". 3. During cross-examination, counsel for the defendant attempted to characterise the activity of Mr Lui as that of a real estate agent. It was put to him that he was "in a sense, a free agent working with Jones Lang LaSalle" or "the middle man": "[y]ou were going out there in your network with the information memorandum, talking to people who might be interested buyers, giving them a copy of the information memorandum, talking, answering their questions, talking price, what it's probably worth with them, and then having got that information, you then went to Jones Lang LaSalle". Mr Lui rejected both characterisations of his conduct. I do not consider that his evidence was undermined by cross-examination or that his approach to this evidence should result in an adverse conclusion as to his conduct. 4. Counsel for the defendants then asked a further series of questions as to the conduct of Mr Lui: Q. You were working with Jones Lang LaSalle to get the best price possible for this land. A. No. Q. You were showing the land to potential buyers? A. Investors and - and Justin Chan. Q. You were helping potential buyers with their expression of interest applications to fill out the form, you were helping them do that? A. I only help Fairway. Q. You were answering the buyers' questions, weren't you, about the land? A. No. Q. You were talking price about the land with the buyers, weren't you, discussing what it's worth and what they should pay, what it might be, you know, what the right figure would be, you were talking price with the buyers, weren't you, the potential buyers? A. No, I leave the price to them, no. Q. So this idea that you just introduced buyers to Jones Lang LaSalle and did nothing more, it's just wrong, isn't it? A. I did not introducing buyers to JLL except Fairway. Q. You didn't just get the buyer, drop them off at Jones Lang LaSalle's front door and then have no more involvement, that wasn't what you were doing. A. No. No. Q. You were doing all the things that a real estate agent does, finding the buyer, showing the buyer the land, helping the buyer make a bid, persuading the buyers to increase their bid, communicating the buyer's bid to the vendor, you were doing all these things, weren't you? A. No. … Q. You were also communicating the expression of interest from the potential buyers to Jones Lang LaSalle and ultimately to Owen Chen and A Capital, isn't that what you were doing? A. No. Q. But you did it with Fairway. A. I did with Fairway, yeah. Q. Isn't that just wrong to suggest that all you were doing was introducing buyers to the vendor? That's not what you're doing, you're doing much more than that. A. I don't know your question. 1. Mr Lui did not agree with any of the propositions put to him, save for admitting that he helped Fairway with its expression of interest application, which, as earlier mentioned, was a concession given candidly and was to his credit. 2. From 23 January 2015, representatives of Jones Lang LaSalle were in contact with representatives of Anson City. A summary of the email correspondence throughout the first round of the expression of interest process, in chronological order, follows: 1. On 23 January, Mr Macree of Jones Lang LaSalle emailed Mr Hu of Anson City "a brief summary of the property". In reply, that same day, Mr Hu requested that Jones Lang LaSalle provide "any additional information when it becomes available". 2. On 26 February, Mr Leslie Cheng, director at Jones Lang LaSalle, emailed the Contract of Sale to Mr Hu; 3. On 27 February, Mr Cheng emailed information as to "some of the recent off-plan sales in and around the Kensington area" to Mr Hu; 4. On 4 March, Mr Cheng emailed the expression of interest form to Mr Hu. In reply, that same day, Mr Hu advised he would submit the expression of interest "this afternoon". Later that day, Mr Hu emailed the completed expression of interest with respect to the Kensington land to Mr Cheng (Mr Hu copied two additional Anson City representatives to the email: Ms Leila Zhu and Mr Charles Chi). 5. On 4 March, following the receipt of the completed expression of interest form from Anson City, Mr Cheng forwarded the same to Mr Macree, Mr Brewer and Mr Worsthorne of Jones Lang LaSalle. 1. Mr Lui was not included or mentioned in any of the aforementioned email correspondence. 2. It may be noted, in the first marketing update prepared by Jones Lang LaSalle for McGrathNicol, dated 4 February 2015, there was a summary as to the first week of bidding. In that summary it was confirmed that Jones Lang LaSalle received more than 130 enquires as well as three requests for a copy of the contract of sale, including, a request from "Mr Kevin Lai" on behalf of Elite 100 (which appears to be a typographical error and should properly read "Mr Kevin Lui"). In the Defendants' Supplementary Submissions, reference was made to this inclusion within the marketing update. Counsel for the defendants' submitted that this inclusion indicates "from February 2015 onwards, Mr Lui, acting with his Elite 100 hat on, tried to get entities to bid for the Kensington land because that is the only reason one would ask for such a document". Notwithstanding that contention, it is not inconsistent with the evidence of Mr Lui, whom said he had contact with Jones Lang LaSalle but only met at the offices of Jones Lang LaSalle on one occasion. Further, that submission was advanced after the close of evidence and was not put to Mr Lui. 3. The defendants also contended, in that respect, that when that document is read in conjunction with Jones Lang LaSalle's letter date 8 April 2015 (which was addressed to "Kevin Lui and Elite 100", which I will return to below), gives the Court a firm documentary basis to tie Elite100 to Mr Lui. 4. On 4 March 2015, as earlier mentioned, the first round of the expression of interest process closed. The expression of interest process generated 22 bids, which were set out in tabular form in Ex 6, together with details as to, inter alia, proposed deposit, settlement and proposed conditions. A summary of the companies and their respective bid/s, ordered from highest to lowest, follows: Table 2: Summary of EOI Bids as a 4 March 2015 Party Price ($million) 1 Fairway 45 2 Polaris Holdings Pty Ltd 40 3 Anson City 38 4 Auswin TWT Development Pty Ltd 37 5 Landream 36.35 6 (RDA Property Group) DA No7 Pty Ltd ATF DA No7 Trust and RA No7 Pty Ltd ATF RA No7 Trust 36 7 Piper Property Group 35 8 Winworth Construction 32 9 Taylor Construction Group 32 10 Buildform Projects Pty Ltd 32 11 Dahlua Group Pty Ltd 30.5 12 Piper Property Group 30 13 (RDA Property Group) DA No7 Pty Ltd ATF DA No7 Trust and RA No7 Pty Ltd ATF RA No7 Trust 30 14 Luxcon Property Trust (SPV) 30 15 Fairway 30 16 Tizzone Developments Pty Ltd 27.5 17 KLF Group 27 18 Icon Developments 25 19 KLF Group 23 20 King Group Property 22 21 Roxy Pacific Developments Pty Ltd 18 22 Ross Lavdaras 9 1. As earlier mentioned, of those bids, Mr Lui gave evidence that he introduced the Kensington Project to both Fairway and Anson City. As will set out below, the two highest bids did not proceed as the Fairway bid of $45 million was conditional upon development approval and the Polaris bid of $40 million was conditional upon a 12 month settlement. Anson City was ultimately the successful bidder. 2. Following the closure of the first round of the expression of interest process, the following email correspondence occurred between representatives of McGrathNicol (as earlier mentioned, the appointed agents for mortgagee in possession and controllers of Shuangfu), Jones Lang LaSalle and Anson City: 1. On the same day, Mr Cheng emailed Ms Legge, Assistant Manager of McGrathNicol, together with Messrs Kogan and Mansfield of McGrathNicol, the Anson City expression of interest (Messrs Macree, Brewer and Worsthorne of Jones Lang LaSalle were also copied into that email). The email, inter alia, described Anson City as "the group that we met with Mitch late last year". It may be inferred that the reference to "Mitch" was to "Mitchell Mansfield", who was included in the email. 2. On 5 March, Mr Hu emailed Mr Cheng to confirm that Anson City "are happy to discuss with the vendor" the settlement terms. That email was forwarded on to Ms Legge by Mr Cheng (Mr Macree was copied in). 3. On 6 March, Mr Cheng emailed Mr Hu to, inter alia: 1. confirm that the Anson City expression of interest on the "81-95 Anzac Pde & 67-71 Boronia Street Kensington properties" had been shortlisted for further negotiation and review; and 2. invite Anson City to submit a revised "final & best" bid by way of a signed contract to McGrathNicol by 4pm on 20 March 2015; and 3. advise that any bid that proposed a "conditional sale" and/or settlement greater than 3 months would not be considered. 1. On 18 March, Mr Cheng provided Mr Hu (and Mr Bernard Chiu, the solicitor for Anson City) with the contract details of Mr David Jones, Partner at Baker & McKenzie, who was introduced as the solicitor "dealing with this transaction for the Vendor". 2. On 19 March, Mr Cheng emailed Ms Legge and Mr Macree to advise that Anson City intend to submit the signed contract to McGrathNicol "tomorrow". He recommended that McGrathNicol instruct Mr Jones to forward the contract to Anson City's solicitor "today". 3. On 19 March, Mr Jones and Mr Chiu engaged in correspondence with respect to the contract of sale and proposed amendments. The following parties were included in the email chain at various points: Mr Mansfield, Ms Legge, Ms Haley Chan (colleague of Mr Jones), "Mr David Walter", "Mr John Anderson", Mr Macree, Mr Hu and Mr Chi. 4. On 20 March, Mr Macree forwarded the email correspondence with respect to the contract of sale and proposed amendments to Mr Cheng. 5. On 23 March, Ms Legge updated Mr Macree with a summary of the "second round EOIs received on Friday": 1. Anson - $38 million 2. RDA - $32 million 3. TWT Auswin – letter received (indicate $40 million, meeting at 11am) Could you please contact each of the remaining shortlisted bidders to understand why they did not submit or if they intend to submit today? 1. On 23 March, the following occurred: 1. correspondence between Mr Macree and Mr Brewer indicated that following a meeting with TWT Auswin (the company with the highest bid at the time), they "did not resolve the caveat issue… and expect Anson will be the preferred party". (In an earlier email dated 19 March, Ms Legg had advised Mr Macree that TWT Austin "are insisting on clear title at settlement… it is the absolute removal of the caveats they want"). 2. Mr Macree updated Ms Legge with feedback from the groups that did not lodge: Polaris – Did not lodge as they need a 12 month settlement Fairway Developments – Did not lodge as our feedback was they needed to increase above $35m – they can't but are happy to exchange vat $35m & 6 weeks or up to $50m subject to DA Landream – Richard Lyne called on behalf of Justin Kang –They do not intend lodging – not feedback or rationale offered. Piper – Not returning calls – Has lodged a bid on another property – so expect his focus has shifted. 1. On 24 March, the following occurred: 1. Mr Hu emailed Mr Cheng the "final offered purchase price" on behalf of Anson City: $38,389,000 ("the final offer"). The email also made reference to a solicitor's letter and signed contract provided to McGrathNicol on 20 March. Mr Hu advised that Anson City was in a position to complete the contract "in 4 weeks or at an earlier date to be agreed between the parties" and "[i]f the above offer can't be accepted by the vendor by today, we will withdraw the offer". 2. Mr Cheng forwarded the final offer of Anson City onto both Mr Macree and Mr Brewer by two separate emails. 3. Mr Jones confirmed, on behalf of the agent for the mortgagee in possession (namely, McGrathNicol), acceptance of the offer, subject to the matters set out in the email. 1. On 25 March, the following occurred: 1. Ms Legge wrote to Mr Macree to confirm the details of the second round offers: 1. Anson • $38.389 million (ex GST) • 4 week settlement 2. RDA • $32 million (ex GST) • 6 week settlement • 30 day finance 3. TWT Auswin • $40 million (ex GST) • 6 week settlement • Conditional on clear title 1. Mr Macree contacted Mr Mansfield and Mr Kogan on behalf of Anson City to determine whether McGrathNicol would require the deposit currently held to be "topped" up or, alternatively, "exchange on the existing deposit" (with the latter being the preference of Anson City). Mr Mitchell confirmed that McGrathNicol were "happy with the existing deposit". 2. Ms Chan of Baker & McKenzie emailed Mr Mansfield to confirm that the Contract of Sale in respect of the Kensington land was exchanged that afternoon, with a deposit of $3,838,900. 1. Mr Lui was, again, not included or mentioned in any of the aforementioned email correspondence. However, as earlier mentioned, on the evidence before the Court, it may be accepted that Mr Lui met with and spoke to Mr Chan, a personal friend to Mr Lui and a business advisor to Mr Pak, with respect to the expression of interest process and the submission of a bid. By way of further assistance, Mr Lui also provided Mr Chan with the Information Memorandum. 2. Mr Lui's assistance, as I will ultimately find, was limited to the period from 18 January 2015 through to the expiry of the expression of interest process. Mr Lui assisted Ms Guan by encouraging potential investors and/or bidders to participate in the process by using his reputation and prestige. His role did not extend to any later stage of the conveyancing process, namely, the preparation of the contract, exchange or settlement. Thus, his absence from any correspondence with respect to the Kensington land does not undermine his contentions that there was performance under the agreement, which I will return to below. 3. By March 2015, Shuangfu entered into liquidation. The contract for the Kensington land exchanged: 25 March 2015 1. By a letter dated 8 April 2015, Mr Lui was notified by Mr Macree of Jones Lang LaSalle that the contract for the Kensington land "exchanged on 25 March 2015". That letter is short and its contents included in full below: Dear Kevin, Re: 81-95 Anzac Parade, Kensington As discussed we confirm contract for the above mentioned property exchanged 25 March 2015. We thank you for your interest and support throughout the campaign and look forward [to] working with you in the future. Sincerely, John Macree Region Director – Sales & Investments, NSW JLL 1. Anson City was ultimately successful with a bid of $38 million for the Kensington land (which bid was submitted by Mr Hu of Anson City on 4 March 2015). 2. On 22 April 2015, the Kensington land was transferred by A Capital to Anson City for $38,389,000. The circumstances after the confirmation of the exchange: March 2015 to May 2016 1. Following the confirmation of the exchange of the contract, Mr Lui discussed "receiving my fees and the Rolls Royce" in accordance with the agreement. Ms Guan promised that she would give Mr Lui his due under the agreement. However, she failed to do so. Mr Lui deposed: "Ms Guan never paid me any money and did not take action to transfer the Rolls Royce to me". 2. On 16 April 2015, a letter of demand was sent from Mr Martin Gu of Advance Lawyers Group, the solicitor for Mr Lui, and addressed to Sun Link, Ms Guan and Mr Liang ("the letter of demand"). 3. The letter of demand concerned "performance under Co-operative Agreement dated 18/01/2015 and claim of defamation". As to performance, Mr Gu stipulated the following: We refer to the Agreement executed between Ms Xiuyan Guan and our client Mr Lui on 18 January 2015 and noticed that under Mr Lui's assistance in a "blind-bid auction" transaction your company had reached the contract with the purchaser. The contract had been exchanged on 25 March 2015 and you had received the deposit under the contract. Therefore, Mr Lui has fulfilled his contractual obligation under the Agreement, particularly clauses 1-3 in the Agreement, and had requested you to perform accordingly pursuant to the Agreement, in particular clauses 4 and 5. … Until your full performance under the Agreement, our client is exercising the right of liens to this vehicle, which is currently under his possession through lawful bailment and/or derive from the Agreement. 1. On 27 April 2015, Mr Edwin Kwan of Pacific Legal, the solicitors for Sun Link and "its officers" (namely, Ms Guan and Mr Liang), wrote a letter in reply to the letter of demand (and communications received in April). By that reply, Pacific Legal contended, inter alia: 1. the agreement was "nothing more than a memorandum of understanding or head of agreement with dubious legal effect"; 2. as the agreement was executed personally by Ms Guan "as Party B" and the legal owner of the vehicle, Sun Link, "is clearly not a party" to the agreement – the agreement had no effect in binding Sun Link; and 3. the action of keeping and refusing to return the vehicle is "an act of larceny" and "it is proper to report it as stealing". 1. By that same letter, Pacific Legal warned that legal proceedings to recover the vehicle would be commenced "forthwith" if the vehicle was not returned by 30 April 2015. 2. In 2016, the vehicle was repossessed by its financier, because as counsel for the defendants admitted, "my side did not upkeep the mortgage on the car". 3. On 13 May 2016, as earlier mentioned, the vehicle was sold by its mortgagee for $200,000. The remainder of the proceeds from the sale of that vehicle, namely, the surplus funds of $24,434.87 were placed into the Supreme Court of Victoria. THE PRIMARY MATTER: THE CONTRACT DISPUTE ISSUE Construction of the Agreement General Principles Formation of Contract 1. In Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61, Heydon JA set out succinctly the conventional and accepted principles of the law of contract: 1. The first relevant principle of law is that pre-contractual conduct is only admissible on questions of construction if the contract is ambiguous and if the pre-contractual conduct casts light on the genesis of the contract, its objective aim, or the meaning of any descriptive term: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24 ("Codelfa") at 347-352. 2. The second relevant principle is that post-contractual conduct is admissible on the question of whether a contract was formed: Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68; [1907] HCA 38 at 77; Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647; [1908] HCA 88 at 668, 669 and 672; B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 97011 at 9149 and 9154-9156; Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 97023 at 9255. 3. The third relevant principle is that post-contractual conduct is not admissible on the question of what a contract means as distinct from the question of whether it was formed. As explained by Priestley JA (with Meagher JA agreeing) in Hide & Skin Trading v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 326-330, the status of the relevant High Court authorities is unclear: hence unless it is demonstrated that the later decisions of the Victorian Full Court and Court of Appeal against admissibility, Ryan v Textile Clothing & Footwear Union of Australia (1996) 130 FLR 313; [1996] 2 VR 235 and FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343, are clearly wrong or they are overruled, they should be followed in New South Wales. No attempt was made to demonstrate that they are clearly wrong. 4. The fourth relevant principle is that the construction of a contract is an objective question for the court, and the subjective beliefs of the parties are generally irrelevant in the absence of any argument that a decree of rectification should be ordered or an estoppel by convention found. 1. Hence, in determining the circumstances surrounding the formation of the agreement, the matrix of facts, it is the objective intent that is paramount: John R Keith Pty Limited v Multiplex Constructions (NSW) Pty Limited [2002] NSWSC 43 at [228]. 2. A fundamental question falling for consideration is whether the conduct of the parties, viewed in the light of surrounding circumstances, shows or is indicative of an agreement having come into existence: Rural Insurance (Aust) Pty Limited v Reinsurance Australia Corporation Limited (2002) 41 ACSR 30; [2002] NSWSC 156 at [35]. 3. I also adopt the principles as set out in Cox Purtell Staffing Services Pty Ltd v Our Energy Group Pty Ltd [2017] NSWSC 1122 at [51]-[57]: [51] The essential condition for the formation of a conduct contract is mutual consent to be bound one to the other by one agreement. However, there is a clear distinction between the terms of an agreement and whether a contract has been made. As McColl JA (with whom Macfarlan JA agreed) observed in Kriketos v Livschitz (2009) 14 BPR 26,717; [2009] NSWCA 96 ("Kriketos") at [106]: [106] It is trite law that there is no contract unless two parties mutually consent to be bound one to the other by one agreement. However, as Higgins J thought it necessary to add to that statement of the law, "it is one thing for two parties to settle what are to be the terms of an agreement, if it should be made; and quite another thing to make the agreement": Barrier Wharfs Ltd v W Scott Fell & Co Ltd [1908] HCA 88; (1908) 5 CLR 647 (at 650), approved on appeal per Griffith CJ (at 666); O'Connor J (at 671); Isaacs J (at 671). [52] The essential question in determining the formation of contract, otherwise than in the paradigm of offer and acceptance, is whether the parties conduct reveals an understanding of agreement or a manifestation of mutual assent, which portrays an intention to be legally bound to the essential elements of the contract: Kriketos at [14] (per Allsop P with whom Macfarlan JA agreed). [53] The conventional approach to the question of whether a contract has been formed involves a determination as to whether there has been offer and acceptance. An acceptance of an offer is a communication to the offeror of a final and unqualified assent to the terms of the offer: Day Morris Associates v Voyce [2003] EWCA Civ 189 at [35] (see also, Kriketos at [110]). In some circumstances, even in the absence of a specific assent by an express verbal or written acceptance of an offer, an offer may, by proof from objective facts, be impliedly accepted by the offeree by the offeree's conduct and thus a contract can be constituted by acceptance inferred from conduct: Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 ("Brogden"); Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 ("Empirnall") at 528-531 (per Kirby P with whom Samuels JA agreed). [54] Silence may indicate rejection of an offer after a reasonable period of time. However, the silence of an offeree in conjunction with other circumstances may include acceptance; such as where the offeree knows the terms of an offer and the offeror's intention to enter into a contract and the offeree has taken the benefit of the offer. This is a question of fact which may be stated as: "where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that offer was accepted according to its terms." [Emphasis added]: Empirnall at 535 (per McHugh JA, with whom Samuels JA agreed). [55] For conduct to amount to an acceptance of an offer "the character and circumstances of the conduct" must indicate unambiguously that the parties intended to contract and that "no explanation can be given of it unless it refers to the contract in question" [emphasis added]: Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 ("Laidlaw") at [5]-[6] per Macfarlan JA (citing Lord Cairns LC in Brogden at 678 and 680). Not only must the conduct, which is asserted to amount to the implied acceptance of the relevant offer, point to the existence of a contract "it must point to the existence of the contract in the terms alleged in the proceedings" [emphasis added]: Laidlaw at [9]. (See also Brogden at 680 per Lord Cairns LC; Orio Holdings Pty Ltd v Costi & Co (No1) [2007] SASC 403 at [26]). [56] Further, the passage of the judgment of McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 97,326 referred to be McColl J in Kriketos at [115] is important. That passage from Kriketos is as follows: McHugh JA (Hope and Mahoney JJA agreeing) discussed the approach to the inference of a contract from conduct in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 [sic] (at 11,117-11,118) as follows: "… [A] contract may be inferred from the acts and conduct of parties as well as or in the absence of their words…The question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement… The conduct of the parties, however, must be capable of proving all the essential elements of an express contract… Care must also be taken not to infer anterior promises from conduct which represents no more than an adjustment of their relationship in the light of changing circumstances..… Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties' subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed." (emphasis added) See also Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 (at [369]) per Allsop J (Drummond and Mansfield JJ agreeing); Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 (at [5] – [9]) per Macfarlan JA; (at [58]) per Handley AJA. [Original emphasis.] [57] Post contractual conduct may be relevant in contractual disputes both to the formation of contract and other contractual issues. Post contractual conduct can be evidence of contractual performance, relevant to whether a contract was formed (see Kriketos at [100]); itself constitute acceptance of an offer (in Empirnall at 528-531 (per Kirby P) and 534-535 (per McHugh JA)); or lead to an inference as to the existence of a contract between the parties. This context underlines the importance of expressly pleading with proper particulars acceptance by conduct including the conduct asserted to have established the implied acceptance. I will return to that question after considering principles associated with adherence to pleadings. 1. Mr Lui pleaded that he entered into an agreement with Ms Guan for and on behalf of herself and Sun Link. It was pleaded the agreement was partly oral and partly in writing. 2. As to the oral component, Mr Lui pleaded that it comprised of conversations between Mr Lui and Ms Guan between September 2014 and January 2015, although attention was particularly directed to the conversation of 30 December 2014 recorded in para 63 of Mr Lui's affidavit affirmed 8 December 2015. 3. The agreement in writing was the agreement. This was admitted by Ms Guan, but an oral agreement was not. There is substance in the defendants' submissions, in this regard, that, whilst the oral conversations between Mr Lui and Ms Guan between September 2014 and January 2015, and in particular the para 63 conversation, featured prominently in the evidence, and further, whilst the para 63 conversation was plainly the precursor to the parties entering into a written agreement, I do not consider counsel for Mr Lui maintained in the proceedings (except for the bare pleadings and a small component of closing submissions) that the contract between the parties had oral terms. Nor was there any clarification as to what precisely would constitute those oral terms out of the para 63 conversation. I do not, therefore, find there was a contract made orally between Mr Lui and Ms Guan. 4. When considered in the light of my earlier finding, I find, therefore, that a contract was made between Mr Lui and Ms Guan in terms which, when translated into English, were contained in Ex 1. Principles of Construction 1. In construing a written contract, the Court is to look to its objective background, including its genesis and aim, and the common assumptions of the parties: DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 429; [1978] HCA 12; Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; [2001] HCA 70 at [11]. 2. In Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7, the High Court observed that (at [35]): [35] … this Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable; businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". [Footnotes omitted and emphasis added.] 1. The High Court also reviewed the principles of construction in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 ("Mount Bruce Mining") at [46]–[52], [59]. See also Caringbah Investments Pty Ltd v Caringbah Business and Sports Club Ltd (in liq) [2016] NSWCA 165 at [93], per Bathurst CJ (with whom McColl and Macfarlan JJA agreed) and Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd (2013) 29 BCL 329; [2012] NSWCA 184 at [52], per Bathurst CJ (with whom Macfarlan and Meagher JJA agreed). 2. In Codelfa at 352, Mason J said: The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract where it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although... if the facts are notorious knowledge of them will be presumed. 1. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 at 179, the High Court observed: The meaning of the terms of a contractual document ... normally requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. [Footnotes omitted.] 1. In Mount Bruce Mining at [46]-[51], French CJ, Nettle and Gordon JJ observed: [46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose. [47] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. [48] Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning. [49] However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals. [50] Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations. [51] Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption "that the parties … intended to produce a commercial result". Put another way, a commercial contract should be construed so as to avoid it "making commercial nonsense or working commercial inconvenience". [Footnotes omitted.] 1. There Honours also noted, at [52], that those observations were "not intended to state any departure from the law as set out in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales and Electricity Generation Corporation v Woodside Energy Ltd". In Victoria v Tatts Group Ltd (2016) 328 ALR 564; [2016] HCA 5, the same principles were cited at [51], by the High Court, which confirmed the construction adopted in that matter of the relevant agreement was "supported by reference to the text, context and purpose" of that agreement. 2. In Zhang v ROC Services (NSW) Pty Ltd (2016) 93 NSWLR 561; [2016] NSWCA 370 ("Zhang") at [79]-[80], Leeming JA said: [79] There has been a debate whether the effect of what was said in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR337 at 352 concerning the "true rule" that "evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning". The position has now been clarified by the High Court's decision in Victoria v Tatts Group Ltd [2016] HCA 5; 90 ALJR 392 as was recently observed by Barrett AJA in WIN Corporation Pty Ltd v Nine Network Australia Pty Ltd [2016] NSWCA 297 at [59]: "the notion that it may first be necessary to consider context when construing a contract is not inconsistent with Mason J's 'true rule'. On this footing, it does not follow that the task of assessing whether a phrase or expression is ambiguous or susceptible of more than one meaning must be undertaken without regard to evidence of surrounding circumstances. This position corresponds with the approach of the High Court in Victoria v Tatts Group Ltd where the relevant contract was construed by reference to its text, context and purpose without any anterior finding of ambiguity as a precondition to a consideration of surrounding circumstances as an aid to discovering or elucidating context and purpose." [80] The same point was also made in Calvo v Ellimark Pty Ltd [2016] NSWCA 136 at [55] and in Todd v Alterra at Lloyds Ltd (2016) 239 FCR 12; [2016] FCAFC 15 at [73]-[75]. A different view was expressed by one member of the Victorian Court of Appeal in Apple and Pear Australia Ltd v Pink Lady America LLC [2016] VSCA 280 at [91]-[138]. However (presumably because the hearing of that appeal predated it) no reference was made to Victoria v Tatts Group Ltd, and there is thus little to be gained from analysing that reasoning in any detail. Of course, on no view does it follow that the evidence of surrounding circumstances will be of assistance and therefore ultimately relevant: evidence of surrounding circumstances did not assist in Mainteck and in WIN Corporation. It is true that this may in some cases lead to an expansion of the evidence tendered on an issue of construction, although ordinarily it may be expected that parties will confine their tender to material which will bear on the meaning of the contract. Indeed, a party seeking to tender a document as evidence of surrounding circumstances and for no other purpose ought to be able, readily and precisely, to identify how it is said that its reception will bear on the process of ascertaining the legal meaning. 1. In addition to the above stated principles, counsel for the defendants produced extensive submissions vis-à-vis principles of construction, and sought to rely upon several particular principles of construction, namely: 1. the parole evidence rule; 2. the principle of contra proferentem; 3. implied industry term; 4. the rule that past consideration is not good consideration; 5. the presumption against impossibility; 6. a contractual clause must not be considered in isolation; 7. all parts of a contract must be given effect where possible and no part should be treated as inoperative; 8. reasonableness; and 9. requirement of clear words to support construction, particularly in circumstances where a construction would yield an unfair result. 1. I will briefly turn to the authorities relied upon, in that respect, by the defendants. Parole evidence rule 1. Reference was made to the parole evidence rule. In WIN Corporation Pty Ltd v Nine Network Australia Pty Ltd (2016) 341 ALR 467; [2016] NSWCA 297 at [55]-[59], Barrett AJA (with whom McColl JA and Sackville AJA agreed), as to pre-contractual dealings, stated: [55] Discussion to this point has concentrated on the words used by the parties in their contract and objective facts which, at the time of contracting, were obviously known to them as major operators in the relevant commercial field. It is now necessary to address WIN's submission that the primary judge failed to appreciate and give due weight to the commercial purpose or objects to be secured by the contract, they being something that informs the meaning of the words used. [56] As a preliminary, however, there is a need to consider the extent to which evidence concerning the course of dealings and negotiations between the parties before the making of their contact may properly be taken into account in determining the commercial purpose and objects. [57] Evidence of prior negotiations is admissible to the extent that it establishes objective facts known to both parties and the subject matter of the contract. Conversely, evidence reflecting the subjective intentions of the parties is, in accordance with long-standing authority, necessarily inadmissible for the purpose of determining the meaning of the contract (unless it demonstrates knowledge of surrounding circumstances). In recent times, the High Court has revisited the distinction between impermissible recourse to the parties' subjective intentions and expectations and permissible regard to objective matters known to the parties. In Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 90 ALJR 392 at [51], the Court unanimously approved the formulation of principle advanced by three members of the Court (French CJ, Nettle and Gordon JJ) in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 (at [46]-[51]) that, as a general principle of construction, the rights and liabilities of parties under a contractual provision fall to be determined by objective consideration of its text, context and purpose. The relevant enquiry is to be conducted on the footing of what a "reasonable businessperson" would have apprehended the terms to mean in light of the particular language used by the parties, the circumstances addressed by the contract and its commercial purpose. Although the Court was of the view that this process would not uncommonly be possible without reference to evidence of surrounding circumstances, it acknowledged that regard could be had to such evidence if, for example, it assisted in establishing the objective facts known to the parties and thereby elucidated with greater precision the commercial purpose or subject matter of the contract. [58] In Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd at [48], the Court also referred with approval to the view of Mason J (Stephen and Wilson JJ agreeing) in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24 at 352. Mason J there observed: "The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning." [59] A potential tension that inheres in this proposition is that to recognise words as bearing a "plain meaning" is merely to state a conclusion arrived at by some process of interpretation which cannot, as a matter of logic, exclude context. As Leeming JA noted in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 at [77], to state that a legal text is "clear" does no more than recognise that "there is nothing in the context which detracts from the ordinary literal meaning". It therefore becomes clear that the notion that it may first be necessary to consider context when construing a contract is not inconsistent with Mason J's "true rule". On this footing, it does not follow that the task of assessing whether a phrase or expression is ambiguous or susceptible of more than one meaning must be undertaken without regard to evidence of surrounding circumstances. This position corresponds with the approach of the High Court in Victoria v Tatts Group Ltd where the relevant contract was construed by reference to its text, context and purpose without any anterior finding of ambiguity as a precondition to a consideration of surrounding circumstances as an aid to discovering or elucidating context and purpose. [Footnotes omitted.] Contra proferentem 1. Counsel for the defendants submitted that where there is doubt about the meaning of a contract, the words will be construed against the party who puts them forward: Burton v English (1883) 12 QBD 218 (at 220); Halford v Price (1960) 105 CLR 23; [1960] ALR 560 (at 34). See also Zhang at [34]-[35] and [136]-[139] (per Leeming JA). This principle needs to be understood in the light of the foregoing statement of principles for the construction of commercial contracts. Implied industry term 1. In Martinis v Raine & Horne Hornsby WPNLServ. P/L (Commercial) [2005] NSWCTTT 69 at [73], Member B Brady held: [73] In similar fact cases to this one, courts and tribunals agree that in order for an agent to secure a commission, mere introduction is not enough and there must be a causal link between the introduction and the ultimate sale of the property. 1. This principle would only be relevant if the Court was to find that the agreement was a real estate agency agreement. However, as I will ultimately find that the agreement is not a real estate agency agreement, it is not relevant to the issue of construction. The rule that past consideration is not good consideration 1. In SAS Realty Developments Pty Ltd v Kerr [2013] NSWCA 56 at [66]-[69], Ward JA (with whom Macfarlan JA and Sackar J agreed) explained how the rule operated and confirmed that it is well established: [66] The question here, however, turns on one of timing as to the so-called "refund" agreement. If payment of the sum of $350,000 in July 2010 (in advance of the contractual obligation to make that payment which accrued only on approval of financing), had already been made by the time an agreement was reached as to the circumstances in which it would be refunded, then (notwithstanding that in other circumstances an advance payment would be capable of constituting good consideration) the making of that advance payment would be past consideration by the time that the July document was signed. [67] When viewing the question of consideration, the evidence seemed to throw up two possibilities (leaving aside the assertion, not accepted by her Honour, that the July document was no more than a receipt). [68] First, that the $350,000 was paid (in advance of the time it was otherwise due) in consideration of a promise at that time (by Mr Shen, on his own behalf and on behalf of SAS) that this amount would immediately be repaid (by Mr Shen on behalf of SAS or by SAS) if construction finance was not obtained, and the July document simply recorded that agreement (whether it was signed at the time of payment or later). If that is the correct construction to be placed on the relevant events, then the July document would constitute a fresh agreement (enforceable on its own terms, whether or not it amounted to a variation of the Joint Venture Agreement) supported by good consideration (by reference to the early payment). [69] Second, that the July document recorded an agreement reached after the payment of the sum of $350,000. If so, then it would be an agreement that was made with reference to past consideration and would fall foul of the well established principle that past consideration is not good consideration (Eastwood v Kenyon (1840) 11 Ad & E 438; 113 ER 482; Roscorla v Thomas (1842) 3 QB 234; 114 ER 496). (See also Con Ange v Calogo Bloodstock AG t/as Coolmore Australia [2012] NSWSC 666). 1. An established exception to the rule is set out in Pao On v Lau Yiu Long [1980] AC 614 ("the Pao On Exception"). That exception has three elements: 1. the act must have been done at the promisor's request; 2. the parties must have understood that the act was to be remunerated; and 3. the remuneration must have been legally enforceable if it had been promised in advance. 1. This rule will be relevant to the Court's assessment of performance by Mr Lui, but I find that the aforementioned exception applied in this case. It should also be added that counsel for Mr Lui was correct to submit this issue was not pleaded in the defendants' defence. The presumption against impossibility 1. In Eurico SpA v Philipp Brothers (the Epaphus) [1987] 2 Lloyd's Rep 215 at 218, Sir John Donaldson MR said: My starting point is that parties to any contract are free to agree upon any terms which they consider appropriate, including a term requiring one of the parties to do the impossible, although it would be highly unusual for parties knowingly so to agree. If they do so agree and if, as is inevitable, he fails to perform, he will be liable in damages. That said, any Court will hesitate for a long time before holding that, as a matter of construction, the parties have contracted for the impossible, particularly in a commercial contract Parties to such contracts can be expected to contemplate performance, not breach. 1. There is a presumption that a contract does not require performance of the impossible, albeit this may be rebutted with clear words. 2. Turning to the matter before the Court, in this respect, the defendants contended that the following two scenarios were relevantly "impossible": 1. for an affluent investor to come in satisfy Shuangfu's creditors ("either via buying its shares, proposing a DOCA, or whatnot"); and 2. to revive Ms Guan's already terminal chances of making anything from the Kensington land. 1. Counsel for the defendants invites the Court to find that "the only conceivable thing which could have happened, after the signing of the Co-operative Agreement, was the sale of the Kensington land". That means, in was submitted, that the agreement "was always a contract to find a buyer of land". 2. Counsel for Mr Lui contended that the defendants' submissions, in this respect, "are without any factual or other basis". Further, it was submitted, "it was never pleaded and it cannot now be raised. In any event, the Court would find that far from being impossible to perform, the Cooperative Agreement was able to be performed and was indeed performed". I accept those submissions. A contractual clause must not be considered in isolation 1. In Australian Broadcasting Commission v Australasian Performing Right Associated Ltd (1973) 129 CLR 99; [1973] HCA 36 at 109, Gibbs J (in dissent) said: It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them ... On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, "even though the construction adopted is not the most obvious, or the most grammatically accurate" ... Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument… 1. In Metropolitan Gas Co v Federated Gas Employees' Industrial Union (1925) 35 CLR 449 at 455, Isaacs and Rich JJ stated: It is a received canon of interpretation that every passage in a document must be read, not as if it were entirely divorced from its context, but as part of the whole instrument: Ex antecedentibus et consequentibus fit optima interpretatio. In construing an instrument "every part of it should be brought into action, in order to collect from the whole one uniform and consistent sense, if that may be done; or, in other words, the construction must be made upon the entire instrument, and not merely upon disjointed parts of it; the whole context must be considered, in endeavouring to collect the intention of the parties, although he immediate object of inquiry be the meaning of an isolated clause" 1. In Zhang, Leeming JA said (at [89]): [89] The contract is to be read as a whole. It is not only permissible but mandatory to have regard to how the potential legal meanings fit with the other provisions of the contract. That accords with the basal principle of construction stated and applied in Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17 at [16]) that: "In construing the Policy, as with other instruments, preference is given to a construction supplying a congruent operation to the various components of the whole." 1. In relation to one clause taking effect subject to another seemingly inconsistent clause, in Re Media, Entertainment & Arts Alliance; Ex parte Hoyts Corp Pty Ltd (No 1) (1993) 178 CLR 379; [1993] HCA 40 at 386-387, Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ said: A conflict of that kind, involving apparently inconsistent provisions in the one instrument, is to be resolved, if at all possible, on the basis that one provision qualifies the other and, hence, that both have meaning and effect ... That rule is an aspect of the general rule that an instrument must be read as a whole... [Footnotes omitted.] 1. In summary, a clause within an agreement takes its meaning from the context of the whole document in which it is found. These authorities are relevant to the issue of construction although must be understood in the light of the aforementioned discussion of general principles of construction, set out above. Their approach was emphasised by the defendants but did not feature prominently in their approach to construction. All parts of a contract must be given effect where possible and no part should be treated as inoperative 1. In Rivat Pty Ltd v B and N Elomar Engineering Pty Ltd (2007) NSW Conv R 56-186; [2007] NSWSC 638 at [46], Hamilton J stated: [46] This last principle was stated as follows by Lord Romilly LR in Re Strand Music Hall Co Ltd (1865) 35 Beav 153 at 159; 55 ER 853 at 856: "The proper mode of construing any written instrument is, to give effect to every part of it, if this be possible, and not to strike out or nullify one clause in a deed, unless it be impossible to reconcile it with another and more express clause in the same deed. I think that I must, if possible, give effect to both these clauses in the articles in question …" More recently, in Lewis v Barnett (1982) 264 EG 1079 at 1080 Stephenson LJ said: "I have not the smallest hesitation in saying that no principle of construction and no authority of any court compels or even justifies a judge in finding one paragraph in a written document (in this case a sealed lease) to have effect. Effect must be given to the paragraph if it possibly can be." 1. In Chapmans Ltd v Australian Stock Exchange Ltd (1996) 67 FCR 402 at 411, Lockhart and Hill JJ said: It is an elementary proposition that a contract will be read as a whole giving weight to all clauses of it where possible, in an endeavour to give effect to the intention of the parties as reflected in the language which they have used. A court will strain against interpreting a contract so that a particular clause in it is nugatory or ineffective, particularly if a meaning can be given to it consonant with other provisions in a contract. 1. In summary, by this principle, the Court should give effect to each part of a contract and presume no parts are redundant. This is because each part is taken to have been deliberately inserted having regard to the other parts. So it is the case with the contract in this case. Reasonableness 1. In J Kitchen & Sons Pty Ltd v Stewart's Cash & Carry Stores (1942) 66 CLR 116; [1942] ALR 229 at 124-125, Latham CJ and McTiernan J said: The defendant's interpretation of the contract would make it foolish as a business arrangement from the point of view of both parties and, when a more reasonable interpretation such as that contended for by the plaintiff is open upon the words of the contract, the latter view should be preferred. 1. In Australia Casualty Co Ltd v Federico (1986) 160 CLR 513; [1986] HCA 32 at 520, Gibbs CJ said: As in the case of any other commercial contract, a court may depart from the strictly literal meaning of a particular expression to place upon it an alternative construction which is more reasonable and more in accord with the probable intention of the parties if the words will bear that construction … 1. By this principle, it was submitted, that the reasonableness of the result of any particular construction is relevant consideration in choosing between rival constructions, albeit there is no power to remake or amend a contract (to a position not open on the language) to avoid a result which is considered inconvenient or unjust. I have applied this principle in the construction of the agreement. Requirement of clear words to support construction, particularly in circumstances where a construction would yield an unfair result 1. In Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251 at [61], Lord Hoffman (in dissent) said: [61] When judges say that 'in the absence of clear words' they would be unwilling to construe a document to mean something, they generally mean (as they did in the case of exemption clauses) that the effect of the document is unfair. 1. In Shevill v Builders Licensing Board (1982) 149 CLR 620; [1982] HCA 47 at 628, Gibbs CJ (with whom Murphy, Brennan and Wilson JJ agreed) said: However it would require very clear words to bring about the result, which in some circumstances would be quite unjust, that whenever a lessor could exercise the right given by the clause to re-enter, he could also recover damages for the loss resulting from the failure of the lessee to carry out all the covenants of the lease - covenants which, in some cases, the lessee might have been both willing and able to perform had it not been for the re-entry. 1. In Waterways Authority of New South Wales v Coal and Allied (Operations) Pty Limited (2008) Aust Contract R 90-278; [2007] NSWCA 276 at [216], McColl JA (in a separate judgment agreeing with Beazley JA's judgment) stated: [216] In construing written contracts it should be presumed that the parties did not intend their terms to operate unreasonably. The more unreasonable the result a party's construction would produce, the more unlikely it is that the parties would have intended it. If the parties did intend an unreasonable result it is essential that that intention be made "abundantly clear": L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 (at 251) per Lord Reid. 1. The "clear words principle" provides that where a suggested construction is unjust, a court would not adopt it in the absence of clear words. Again, I have applied this principle in the construction of the agreement. Defendants' Submissions Formation of the agreement 1. As to the formation of the agreement, at the outset, the defendants submitted that, notwithstanding the pleading of Mr Lui, the hearing proceeded upon the basis that the agreement signed on 18 January 2015 was the contract. It was contended that by counsel for Mr Lui's opening submission, Mr Lui abandoned any argument as to "the oral terms of the contract". As such, it was submitted, that counsel for the defendant did not cross-examine Mr Lui with respect to any "oral terms". Counsel for the defendants submitted that, in light of the opening and closing submissions of counsel for Mr Lui, the Court should maintain that the agreement is a written contract. 2. Turning to any recording of an "oral agreement", if there was one, immediately prior to the signing of the agreement, counsel for the defendant accepted this would be encapsulated by para 63 the affidavit of Mr Lui and para 28 of Ms Guan's affidavit (due to earlier findings as to credit, I note that the account of Mr Lui is to be preferred). Further, during closing submissions, counsel for the defendant contended that the Court should ignore both paragraphs, for the purpose of construction, "because of the parole evidence rule and just read the contract for itself". In the alternative, if the Court were to find that the agreement was partly oral, it was contended: "then all the court has to do is scan 63 and 28 and look for contractual language and, in my respectful submission, the only contractual language relates to 'sell the damn land and I will pay you'". Construction of the agreement 1. Turning to the issue of construction, the defendants divided their submissions into two parts. First, submissions as to the relevant objective circumstances surrounding the agreement. Second, in light of the applicable principles of law and the relevant objective circumstances, the defendants advanced submissions as to the appropriate interpretation of the agreement. 2. Mr Lui's submissions will be addressed in the course of considering the contentions advanced by the defendants. Objective Circumstances Surrounding the Agreement 1. This section of the judgment will turn to summarise the submissions of the defendants with respect to the relevance of the circumstances surrounding the agreement. This summary will refer to aspects of the factual background earlier set out, with minimal repetition. 2. Counsel for the defendants contended: 1. The known objective surrounding facts are relevant to interpretation. The Court can look at the known objective factual background, at the date of the contract, to assist in its interpretation, if the language is ambiguous or susceptible of more than one meaning. This includes looking at the genesis and aim of the transaction. However, a Court cannot look at subjective intentions, or give words a meaning they cannot legitimately bear. 2. The Court should ignore what was said before, during and after the agreement was signed (unless used to establish known objective facts). The Court should also ignore the subjective intentions of Ms Guan. 3. The known objective circumstances, when examined, reveal the agreement's object and purpose. 1. In the Defendants' Closing Submissions, counsel for the defendants sets out in detail, the objective circumstances on which it relies (at pages 9-17), which were substantially derived from the ASIC and business related documents. In summary, without repetition of the earlier summary of those facts as part of the factual background, the defendants advanced the following submissions in light of facts surrounding the signing of the agreement: [T]he essential fact is that by the time the Co-Operative Agreement was signed (i.e. 18 January 2015), the shrewdness and ruthlessness of Own Chen and Australia Capital Financial Management Pty Ltd ('A Capital') (including their high rate of normal and penalty-like default interest) meant that the only option available to the First Defendant was to assist in the sealed bidding process, by bringing as many sealed bidders as possible (in addition to the ones Jones Lang LaSalle found on its own), in the hope that the more bidders there were, the higher the ultimate sale price would be: all this aimed at reducing the First Defendant's exposure (under her personal guarantee) from an astronomical figure to a six (or five) digit figure. 1. The defendants contended that the relevant surrounding circumstances at the time the agreement was signed were as follows: a. A Capital had appointed an external administrator over Shuangfu Development Pty Ltd (and its sister company Shuangxing Development Pty Ltd), and controllers over the Kensington land. b. A second meeting of creditors had taken place and been adjourned. c. No DOCA had been proposed, and the only possible DOCA did not involve the Plaintiff or First Defendant. d. A Capital had indicated that the unsecured creditors would also need to be paid. e. Shuangfu Development Pty Ltd's two biggest creditors were owed $61,562,464.13 (i.e. A Capital and the ATO). f. Shuangfu Development Pty Ltd was in default. Thus, $43,630,589.63 was a debt immediately due and payable to A Capital (per the terms of the 26 June 2014 loan agreement). g. Interest was increasing at a very high rate of 1% per week. Thus, the $43,630,589.63 figure was snowballing. h. A valuation of Shuangfu Development Pty Ltd's only asset (i.e. the Kensington land) placed its worth at circa $30,000,000. i. The possibility of assistance coming from Shuangxing Development Pty Ltd was zero. j. The possibility of Shuangxing Development Pty Ltd dragging Shuangfu Development Pty Ltd down was high due to cross collateralisation. k. If Landream Project Management Pty Ltd's DOCA proposal failed, Shuangfu Development Pty Ltd would be wound up. 1. Turning specifically to the terms of the agreement, with respect to financial difficulties, namely, "current economic situation", "financial problems" and "current financial difficulties" (see cll 1 and 3 of the agreement), the defendants relied upon the surrounding objective circumstances, at the time of the agreement, in order to understand those terms. The defendants contended that the following findings of fact are available, in that respect: a. They were very poor. b. They were at least $30,000,000 in the red, being the difference between the debts to A Capital ($43,630,589.63) and the ATO ($17,931,874.50) and the Kensington land's value ($30,000,000) (likely more, since other unsecured creditors existed. Indeed, as at 2 June 2015, the proof of debts of 23 creditors totalled $102,505,933.3040). c. For an 'investment developer' rescuer (i.e. 'investor' in the Plaintiff's language) to rescue the First Defendant, it would first have to satisfy A Capital and the ATO to get them out of the picture. d. A Capital would have required from an 'investment developer' rescuer an offering for the other unsecured creditors as well (since it indicated that Landream Project Management Pty Ltd's initial DOCA proposal was unacceptable on this count). e. It is likely that A Capital would have required not only its $43,630,589.63, but also something for the 40% return it had lost from the Auburn project that had been run by the sister company, Shuangxing Development Pty Ltd, due to cross collateralisation. f. The amount of money which an 'investment developer' rescuer would need to satisfy A Capital and the ATO (not to mention the other creditors) was well in excess of $60,000,000. g. An 'investment developer' rescuer would need to believe that it was worth paying in excess of $60,000,000 (plus some respectable portion of $40,000,000 for the other creditors) to take control of a company whose asset was worth $30,000,000, or being generous, $40,000,000, in order to then get development approval, and then spend further tens of millions of dollars to build residential units and commercial shops for sale to the market. All this in circumstances where the highest figure ever associated with the Kensington land was $52,000,000, and where the Court knows that the final sale price was $38,389,000.42 It is also in circumstances where A Capital had rejected an offer to receive $36,350,000 for the Kensington land (offered in Landream Project Management Pty Ltd's DOCA proposal): thus indicating its unwillingness to receive anything less than everything it was owed. Such an 'investment developer' rescuer would need to believe that all this was a better method than simply buying the Kensington land outright via the expression of interest process. [Footnotes omitted.] 1. In light of those contentions, the defendants submitted: [T]he First Defendant's only option as at 18 January 2015 was to bring as many participants to the sealed bidding process as possible in the hope that it would translate into the highest price possible. If fortunate, the $43,630,589.63 owed to A Capital could have been discharged (or substantially discharged) by the sale (noting that $38,389,000 is within the ballpark of $43,630,589.63), with the First Defendant greatly relieved (noting her personal guarantee). The remaining unsecured creditors would then have been substantially unable to pursue the First Defendant due to the corporate veil, albeit they might have funded the liquidator vis-à-vis chasing her for unfair loans and/or insolvent trading. 1. As to Mr Lui's knowledge of the objective circumstances, counsel for the defendants contended that Mr Lui was aware of the following: 1. Shuangfu was in default under the loan agreement; 2. Shuangfu was in external administration; 3. $42 million was owed to A Capital; 4. Shuangfu could not sustain interest payments; 5. There were other creditors, beyond A Capital; 6. A Capital controlled the Kensington land via mortgage; 7. Ms Guan had financial problems and needed the Kensington land to sell at the absolute highest possible price; 8. A Capital had set a timetable for the forced sale of the Kensington land; 9. The Kensington land was to be sold via expression of interest bidding; and 10. There had been or would be a creditors' meeting 1. Essentially, it was contended, "all of the critical elements known to the first meeting of creditors on 2 December 2014 were also known to both parties as at 18 January 2015". 2. As to the objective facts after 18 January 2015, which were heavily drawn from material in Ex 17 and Ex 18 (namely, the ASIC material and emails from Jones Lang LaSalle), it was contended: "highlight the intelligence and ruthlessness of Owen Chen and confirm the First Defendant's limited options as at 18 January 2015. They also confirm that the Plaintiff had zero influence on Owen Chen". It was also suggested that "no one would have rescued Shuangfu Development Pty Ltd because it was embroiled in litigation". 3. The following observations should be made at the outset as to the defendants submissions as to objective circumstances: 1. Recourse to surrounding circumstances in the construction of a contract cannot be employed to contradict the language of a contract when it has a plain meaning. I accept the submissions of Mr Lui that aspects of the defendants' submissions as to "objective circumstances" tended to invert the process of construction by making the consideration of what is a relatively short and uncomplicated document (notwithstanding submissions which seek to unnecessarily complicate the consideration of its text) subservient to the consideration of surrounding circumstances. 2. Significant components of the surrounding circumstances relied upon by the defendants offend the rule of construction that such circumstances may only be considered in construction where they are known to both parties and the subject of the contract. 3. Further, the consideration of whether a phrase or expression in a contract has more than one meaning may be ascertained by considering context when construing the contract which may include surrounding circumstances. 4. The construction of the contract will, consistently and subject to these considerations, require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects. 1. There is no evidence that Mr Lui knew of the contents of the ASIC documents or the emails of Jones Lang LaSalle, relied upon by the defendants, and their contents were not put to Mr Lui. There was also no evidence that Mr Lui knew of the matters referred to in the defendants' submissions as contended by the defendants, with respect to the same, as extracted above at [287]. Those propositions were not put to him in cross-examination. 2. As to the particular "objective circumstances" listed above at [289], the following observations should be made: 1. There is no evidence in support of [289(a)]. It is assumed "they" is actually a reference to Ms Guan. 2. There is no evidence in support of [289(b)]. There is no evidence that Ms Guan was "in the red". That submission involves a misapprehension of the receivership/administration process. (As the only secured creditor, A Capital appointed receivers to the Kensington Project. The expression of interest process was not related to Shuangfu's other debts (or debtors, for example, such as the ATO or Ms Guan). There is no evidence that the rest of Shuangfu's debts were also Ms Guan's or could be recovered against her personally. It should be noted that Ms Guan, as earlier mentioned, had also sought to prove debts she alleged she was owed in the administration of Shuangfu. Accordingly, I reject the various submissions that seek to construe the terms of the agreement by reference to bids by investor/developers). 3. There is no evidence in support of the assertions at [289(c)]-[289(g)]. In any event, it is unclear what relevance any of those matters could have to the interpretation of the agreement 1. I agree with counsel for Mr Lui that what Mr Lui "knew" at the time of the making of the agreement is that which is primarily contained in Mr Lui's affidavit. Mr Lui was significantly informed by the context of the para 63 conversation. That conversation is available, in my view, as evidence of the commercial purpose of the agreement. That commercial purpose is depicted by Ms Guan stating that she was in financial trouble, she required an investor "to join with [her] to pay out Owen or buy the project". She sought Mr Lui engage with his friends "in the industry" to participate in an "expression of interests bidding" in return for reward or payment. 2. The availability of the para 63 conversation for this purpose derives from the immediacy of the conversation to the making of the agreement, the intention to make the agreement becomes clear from the conversation, the conversation finds articulation in the words of the agreement (although the agreement contains some ambiguity as I will discuss below) and because of the nature of the expression of interest process the parties were involved in, namely, a process by which the parties would make varying offers, as well as specifying any conditions attached to any proposed purchase of the development site in Kensington. 3. The defendants' itemised particular matters, it was contended, were known to Mr Lui at the time of making the agreement (see above at [291]). They were preceded by various statements of fact. My findings of factual background were earlier set out. 4. As to particular matters identified by the defendants as known to Mr Lui and Ms Guan and at the time of the making of the agreement the following may be accepted: 1. Shuangfu was in default of the loan agreement; 2. The Kensington Project was in "receivership"; 3. $42 million was owed to A Capital; 4. Shuangfu could not sustain interest payments; 5. A Capital controlled the Kensington land via mortgage; 6. Ms Guan had "big financial problems" with the Kensington Project; 7. A Capital had "taken over" and was conducting, or preparing to conduct a mortgagee's sale of the land (ultimately conducted by way of expression of interest); and 8. A Capital had engaged a selling agent (namely, Jones Lang LaSalle) to sell the land by expression of interest bidding. 1. However, as to the evidence relating to creditors and creditors' meetings, as well as the circumstances surrounding the timetable fixed by A Capital for the sale of the Kensington land, whilst it may be inferred that Ms Guan was aware, the material before the Court does not support a conclusion that Mr Lui was aware of the same at the time of the agreement. Terms of the agreement 1. Turning to the terms of the agreement, the defendants undertook an incremental approach to each clause, analysing it with respect to its components as opposed to a whole. 2. The approach of parsing the various clauses of the agreement in this fashion contained, in my view, the very real prospect of failing to consider the agreement as a whole and understanding the meaning of the terms in context. Nonetheless, I will set out the defendants submissions in this respect and for ease of reference, the submissions will be preceded by the clause appearing in its entirety. Clause 1: According to the detailed explanation and analysis about the project given by Party B, Party A is required to seek good investment partners in or out of Australia in order to improve the current economic situation and solve the financial problems encountered by Party B. 1. As to the words, "according to the detailed explanation and analysis about the project given by Party B", the defendants submitted: 1. they mean that Ms Guan explained and analysed the objective surrounding facts to Mr Lui on or about 18 January 2015 and the agreement was formed in this context, that is, it was a transaction designed to meet, address and solve (or reduce the severity of) Ms Guan's financial problems as explained and analysed; and 2. they link and give meaning to the next words "is required to seek good investment partners in or out of Australia in order to improve the current economic situation and solve the financial problems encountered by Party B". 3. the "linkage" shows that Ms Guan's financial fate was tied to that of Shuangfu; and 4. this linkage also demonstrates that Shuangfu's financial problems were the cause of Ms Guan's "current economic situation" and "financial problems". 1. As to the words, "in order to improve the current economic situation and solve the financial problems", the defendants submitted: 1. they indicate the object and purpose of the agreement, namely: 1. improve Ms Guan's economic situation; and 2. solve Ms Guan's financial problems. 1. the language is suggestive of saving from, or at least reducing the severity of, a weak situation, rather than preserving a chance to make a profit; and 2. to "improve" a "situation" and to "solve" a "problem" implies that the "situation" itself is a "problem". 1. Following the above submissions, the defendants submitted that the language of cl 1, therefore, reveals the performance which Mr Lui was required to deliver: Mr Lui was required to solve Ms Guan's financial problems, or if he could not do that, at least improve her current economic situation. However, when read in conjunction with cl 2, it was contended, that Mr Lui was "not at liberty to achieve these ends however he pleased". Clause 2: Party A agrees that it will work hard to assist Party B to find appropriate investment developers in and out of Australia by using his reputation and prestige in the industry, and the investment developers will submit a sealed bid to the company which takes over the project. 1. As to the words, "Party A agrees that it will work hard to assist Party B to find appropriate investment developers in and out of Australia by using his reputation and prestige in the industry", it was submitted the clause dictated the type of solution which Mr Lui was required to provide: to "work hard" (by using his "reputation" and "prestige") to "assist" Ms Guan to find "appropriate investment developers". 2. As to an "appropriate investment developer", the balance of the clause revealed, it was contended, that to be one whoever submits a winning sealed bid that "takes over the project". It was contended that, absent a link between those two aspects of the clause, the phrase "and the investment developers will submit a sealed bid to the company which takes over the project" becomes a prediction, existing on its own, about what a third party will do. 3. Further, in light of that linkage, it was submitted that an "inappropriate" investment developer is a person who, although an "investment developer", is unwilling or unable to submit a sealed bid to the company "which takes over the project". 4. Counsel for the defendants also noted the term "investment developer" is not defined by the agreement. However, in support of their contended definition, counsel for the defendants advanced the following grammatical analysis: 1. The noun is "developer" (not "investor"); 2. The adjectives are "appropriate" and "investment"; 3. The word "developer" connotes a commercial entity which develops real estate by buying land, demolishing if necessary, and then building real estate on the land; and 4. The word "investment" or "investor" can refer to a person who buys shares in companies, or enters into a joint venture, but in the present context, where it is used as an adjective to "developer" only, it referred to a person who "invests" in real estate by paying substantial money to buy and develop land. 1. Returning to the word "assist", the defendants submitted that Mr Lui was obliged to act as a principal, independently from Ms Guan, and use his "reputation" and "prestige" (on his own initiative) to find and bring in "appropriate investment developers". By doing this, Mr Lui would be, in that sense, "assisting" Ms Guan. 2. Particular emphasis was placed upon the phrase "by using his reputation and prestige". It was contended, such a phrase indicates that the word "assist" should not be construed as meaning merely assisting Ms Guan in the way that an employee or personal assistant would. 3. As to the final words, "submit a sealed bid to the company which takes over the project", the defendants submitted: 1. the "company" is either Shuangfu (the registered owner of the land) or A Capital (the mortgagee in possession at the time of the agreement and the vendor listed on the contract for sale of land); 2. the "sealed bids" are to be made to either or both of those companies; 3. those companies are not "taking over the project": Shuangfu was already running the project and A Capital was selling the land via its power as mortgagee; 4. the phrase "which takes over the project" describes the "sealed bid" – as it is a sealed bid which "takes over the project"; 5. Mr Lui's job was to find "appropriate" investment developers (meaning persons willing to submit a "sealed bid"), and from amongst which had to arise a "sealed bid" which "takes over the project" – essentially, a winning bid. 1. Thus, it was contended that Mr Lui was required to use his reputation and prestige to get his connections to bid. Clause 3: Party B agrees to encourage directors with voting power for the project to support the proposal of Party A which involves a sealed bid in order to overcome her current financial difficulties successfully. 1. As to the second half of the clause, the defendants submitted: 1. The words, "the proposal of Party A" further support the abovementioned construction of cll 1 and 2 and provide "further definition to the solution which the Plaintiff was required to provide"; 2. The proposal, in that respect, "involved a sealed bid", which is consistent with cl 2; and 3. The clause provided that the "sealed bid" is on which "overcomes her current financial difficulties successfully". 1. As to the definition of "successfully" (or success), the defendants' submitted: 1. For success to occur, the "investment developer" would need to buy the Kensington land and it was contended that this was the only realistic method; 2. Success would not occur in the following instances: 1. If Mr Lui brought in an investment developer whose sealed bid did not take over the project and did not overcome Ms Guan's financial difficulties "successfully"; 2. If Jones Lang LaSalle found a buyer which overcame Ms Guan's financial difficulties "successfully" but was not attributable to "the proposal of Party A". 1. As to the first component of the clause, namely, with respect to the requirement of Party B to "encourage directors with voting power for the project to support the proposal of Party A", it was submitted: 1. Ms Guan was obliged to act in the way defined, to give the proposal the best chance of succeeding; 2. The word, "directors" concerns the creditors that Ms Guan met at the first meeting of creditors on 2 December 2014 (in person) and the second meeting of creditors on 23 December 2014 (by proxy). These creditors had voting power and the ability to determine Shuangfu's fate. 1. It was also contended, in this respect, that owing to the power of Mr Chen, as director of A Capital, to halt the expression of interest process and vis-à-vis his power of sale owing to a wealthy entity brought in by Mr Lui, it was Ms Guan's job to persuade Mr Chen to do this in the event Mr Lui brought in such an entity. 2. In summary, as to the first three clauses: 1. clauses 1 and 2 specify what Mr Lui had to do; 2. clause 3 required Ms Guan to assist Mr Lui if he managed to bring in a sufficiently wealthy entity; and 3. their positioning ahead of cll 4 and 5 suggest that the parties had to perform these first before getting paid. Only after cll 1 to 3 are performed, do the parties arrive at cll 4 and 5, which deal with payment. Clause 4: Party B promises Party A to give him a Rolls-Royce motor car (plate number: SL9555) under the name of Party B as a free gift when a sealed bid for the project is successful. 1. First, as to the definition of "sealed bid" in the clause, it was submitted: 1. as a matter of consistency, it should be interpreted as being the same "sealed bid" referred to in cll 2 and 3. This was also supported by the consistent use of "a sealed bid", singular noun, in each clause; 2. as to the consistent use of the singular, in this respect, it was contended that the agreement was, therefore, only concerned with a particular sealed bid, namely, the winning sealed bid; 3. the "sealed bid" in cl 4 is the same "sealed bid" which "takes over the project" and which "overcome[s] her current financial difficulties successfully"; and 4. thus, the "sealed bid" will also come from "investment developers" which Mr Lui will use his "reputation" and "prestige" to bring in. A congruent meaning to "a sealed bid" across the document is thus given. 1. If the above definition of "a sealed bid" is accepted, therefore, Mr Lui would only be entitled to the vehicle if he found and persuaded an investment developer to submit a successful sealed bid (which bid must also improve Ms Guan's situation, in order to be rendered "successful" under the agreement). Clause 5: Party B undertakes to pay Party A a usual service fee to the agent nominated by Party A at the amount of percent (2%) of the tender rate. 1. Counsel for the defendants contended that the activation of cl 5 required performance of cll 1-2, which required, on the defendants construction, Mr Lui by his conduct, as specified by the agreement, to "solve" and "overcome" Ms Guan's current economic situation and financial difficulties "successfully". 2. To bring in an investment developer whose sealed bid failed – is not meeting the object and purpose of the agreement. Further, counsel for the defendants referred to the nature of the bidding process – it was "sealed": no buyer knew what the others were offering. Therefore, it was submitted, it made no sense to pay Mr Lui a considerable sum for mere participation in the process if it was not, in fact, successful as per the agreement. 3. Turning to the term, "tender rate", the following submissions were made: 1. As the term is in Mr Lui's favour, and was also created by him, the contra proferentem maxim should apply. 2. The term is singular. This is significant as Mr Lui could theoretically have brought in multiple bidders and there is no specification as to the determination of the applicable bid (for example, there is no requirement that the tender rate concerns the "highest" or "median" of the sealed bids submitted by Mr Lui). 3. The term is likely to mean the winning bid, with the common definition of "tender" being a type of "bid". However, this only makes sense if it was Mr Lui who brought in the winning bidder. Otherwise, there would be no incentive for Mr Lui to try his best. 1. In support of that construction, the defendants provided the following example: If Jones Lang LaSalle brought in a very heavy bidder, and Mr Lui brought in a light weight bidder, Mr Lui would nevertheless receive a very large commission by "freeriding" on Jones Lang LaSalle. Commercially, this makes no sense. Hence, it was contended, that the contra proferentem principle should be applied. Handwritten Term 1. The final words of the agreement were handwritten and were as follows: "the actual settlement price requires a separate talk". The defendants submitted: 1. that as the terms "tender rate" and "settlement price" are different, it follows that they refer to different things; 2. once again, it was contended that the contra proferentem principle should be applied, which was supported with reference to the negotiation process that followed the receipt of a sealed bid (noting that Anson City ultimately adjusted its sealed bid at the time of its final offer); and 3. the word "actual" suggests that the settlement price will be similar to but not exactly the same as the winning bid brought in by Mr Lui. Consideration: Construction of the Agreement 1. Without derogating from the aforementioned statement of principles, the agreement is to be construed in accordance with the natural and ordinary meaning of the words used within their object and purpose. 2. Notwithstanding the reference to Shuangfu being a "project company", the agreement creates a series of personal obligations between Mr Lui and Ms Guan; it is not a contract between Mr Lui and Shuangfu. 3. It may be accepted that the object or purpose of the agreement was to improve Ms Guan's economic situation and solve Ms Guan's financial problems. However, there is nothing on the face of the agreement which supports the construction contended for by the defendants that the language of cl 1, whether read alone or in the context of the whole of the agreement should be interpreted as requiring that, in order to "deliver" or perform under the agreement, Mr Lui must actually achieve those outcomes such that performance of the agreement required him, as submitted by the defendants, to "at least improve Ms Guan's economic situation". His obligations, with respect to those objects or purposes, lay specifically under cll 1 to 2, respectively. 4. Clause 1 required Mr Lui "to seek good investment partners in or out of Australia in order to improve the current economic situation and solve the financial problems encountered by [Ms Guan]". 5. Clause 2 required Mr Lui to "work hard to assist" Ms Guan to find appropriate "investment developers" and the "investment developers" will submit a "sealed bid to the company which takes over the project". 6. Clause 3 required Ms Guan to "encourage directors with voting power for the project to support the proposal of [Mr Lui] which involve[d] a sealed bid" in order to overcome her financial difficulties. 7. I will elaborate upon the construction of each clause. 8. Clause 1 created an obligation to seek good "investment partners". There is nothing in the clause or surrounding provisions which would warrant the word "seek" to have another meaning other than its ordinary natural meaning, namely, to "attempt to find" or "search for". Whilst this clause refers to "good investment partners" and cl 2 to "appropriate investment developers", the uniformity of obligation in each clause, namely, to seek or find, and the objectives as described above, being common to each such clause, would suggest they should bear the same meaning. 9. The defendants accepted that the word "investment" may mean a joint venture, but argued that the word "developer" connoted a commercial entity that developed real estate and that an investment developer is someone that invests in real estate. I do not accept that construction. 10. When seen in that light, the term "investment partners", whilst not defined, should be construed as entities who would invest in the development of the development properties. This construction is consistent with the balance of the clause when read in context (as I will further discuss below), namely, that Mr Lui was to find investment developers using his "network" to take part in the expression of interest process. 11. Whilst the expression "investment developer" is ambiguous, that construction is also consistent with reading cll 1 and 2 together with coherency between the words investment partner and investment developers, and avoids the relatively artificial grammatical device employed by the defendants, namely, of identifying a meaning or connotation for the word "developer" (as a noun) and then treating the word "investment" as an adjective without reading the words together consistent with the surrounding context of the expression of interest process (as described below) and the para 63 conversation. 12. The defendants were correct to submit that the word "assist" in cl 2 was conditioned by the words "by using his reputation and prestige" in that clause and that the conditioning words meant that Mr Lui would use his standing or influence to "assist". However, counsel for Mr Lui correctly submitted that neither cll 1 or 2 required Mr Lui to "effectively cause" any sale of the property (or sale for the development of the property) because the agreement was concerned with ensuring the expression of interest process was successful. 13. Clauses 1 and 2 do not employ words such as to "introduce" the purchaser or be the cause of a sale or "procure" an investment developer. Clause 2 states that Mr Lui is to "work hard to assist [Ms Guan] to find appropriate property developers". The ordinary and natural meaning of "assist" in that context is to "help, typically by doing a share of the work". The clause does not refer to Mr Lui introducing (as opposed to "seek" in cl 1) or "procuring" (as opposed to "assist [Ms Guan] to find [such entities to] submit a sealed bid" in cl 2). I agree with the submission of counsel for Mr Lui that the requirement imposed upon Mr Lui by cll 1 and 2 was to "assist Guan personally to allay her personal financial issues". 14. That interpretation of cll 1 and 2, to the extent of any ambiguity, is entirely consistent with the para 63 conversation, including the consistency between the construction and the commercial purpose of the agreement as discussed above. 15. The use of the word "encourage" in cl 3, whilst directed to a different object, is consistent with that interpretation. 16. Clause 4 promised the vehicle to Mr Lui and represented that it is "under the name of [Ms Guan] as a free gift when a sealed bid for the project is successful". The obligation to give Mr Lui the vehicle was triggered by there being the success of "a sealed bid for the project". That is the only requirement. The syntax necessarily points to the success of the process as the trigger. 17. Clause 5 contained the undertaking (or promise) for Ms Guan to pay Mr Lui (via Mr Lui's agent) a "usual service fee" of 2% of tender rate. The correct interpretation of that clause is that the 2% ought to be calculated by reference to the final bid/tender by Anson City. The obligation in cl 5 to pay a fee of 2% of the "tender rate" is broad and should be construed as being triggered if Mr Lui performed in accordance with cll 1 and 2. Clause 5 pertains to the service provided and is not contingent on the success or otherwise of the bidding process. 18. Further, as to cl 5, I reject the defendants' contentions as to the application of the principle of contra proferentem. The content of the phrase "tender rate" is tolerably clear as set out in the preceding paragraph, especially when read in the context of the language used in the agreement. The contrast with the phrase "actual settlement price" supports Mr Lui's contention that the 2% was to be calculated by reference to the successful bid amount rather than the actual sale price. The aforementioned language lends further support to the proposition that the Act does not apply, given that remuneration was not to be calculated by reference to the actual settlement price. 19. Counsel for Mr Lui was correct to point to the significance of the context of the expression of interest process and the effect of receivership and administration to his construction in this respect and, more generally, as to the construction of the agreement. 20. The expression of interest process is described in the Information Memorandum. It was not a "fire sale" or an auction. As earlier mentioned, it was a multi-tiered process, which involved A Capital considering a series of very different proposals for the Kensington Project and deciding, in its absolute discretion, the party, to which it would sell the Kensington Project. Neither the other creditors of Shuangfu nor Mr Lui nor Ms Guan were able to make any decisions concerning the process. In fact, A Capital could have decided not to sell the Kensington Project to any of the participants. 21. I agree with the submission of counsel for Mr Lui, given these facts, which were known to both Mr Lui and Ms Guan at the time, it would be wholly uncommercial to construe the remuneration payable under the agreement as being contingent on Mr Lui being the "effective cause" of the sale, because, Mr Lui would have no control whatsoever over the process and because many variables other than price were involved. For example, each participant was invited to set out not only the price but also any terms or conditions of purchase and many did so. The evidence demonstrated that Anson City, the ultimate purchaser, was not the highest bidder. A company called Polaris Holdings Pty Ltd expressed interest to purchase the project for $40 million. Fairway also offered $45 million on the condition that the vendor obtained, at its own expense, development consent for a minimum of 160 apartments and retail space and $30 million if there was no development application or consent. 22. The defendants' pleadings do not plead the existence of any implied term, namely, the "industry implied term" that would result in Mr Lui only getting paid if he brought in the winning bid (i.e. was the "effective cause"). Such a contention, in the absence of a pleading to that effect, cannot properly be raised in closing submissions. In any event, the defendants led no evidence that there is any such "industry" term either generally or in this context. 23. Further, including words requiring Mr Lui to effect the outcome, would have been easy for a person with Ms Guan's experience. The absence of those words weighs against the defendants' construction of the agreement. 24. The receivership/administration arrangements were also important in the construction of the agreement. As the only secured creditor, A Capital appointed receivers to the Kensington Project, the expression of interest process was not related to Shuangfu's other debts (or debtors, for example, the ATO or Ms Guan). There is no evidence that the rest of Shuangfu's debts were also Ms Guan's or could be recovered against her personally. It should be noted that Ms Guan had also sought to prove debts she alleged she was owed in the administration of Shuangfu. Accordingly, I reject the various submissions that seek to construe the terms of the agreement by reference to bids by investor/developer. 25. I accept the submissions of counsel for Mr Lui that, broadly stated, the agreement reflected that Ms Guan needed as many participants as possible in the expression of interest process, she knew that Mr Lui had a network, which could be tapped for that purpose, and she engaged him accordingly. Mr Lui's reward was proportionate to the size of the Kensington Project as valued by Ms Guan. 26. It may be noted that, in many respects, that I do not accept the broad propositions advanced by counsel for the defendants at paras 120-138 of the Defendants' Closing Submissions, which contain an admixture of assertions, many of which are unsupported by evidence and stand contrary to the construction of the agreement available by its terms and the commercial purpose as described in the agreement itself or by reference to the available evidence of relevant surrounding circumstances including the expression of interest process referred to above. In particular, I reject the notion that the agreement was concerned with an impending fire sale concerned with the sale of land or that the "only option" was to obtain the highest price for the sale of the land or that the project was only concerned with capital gain through land or land value. Performance of the Agreement Defendants Submissions 1. The defendants contended that Mr Lui failed to perform the agreement. The defendants submissions, in this respect, were structured with respect to seven events and/or actions of Mr Lui, which were said to amount to performance, namely: 1. assisting Ms Guan with her immigration issues; 2. calling Mr Qian of Kerry Properties; 3. privately meeting with Mr Chen of A Capital; 4. speaking to Mr Chan of Anson City; 5. speaking to Mr Zhao; 6. bringing in Fairway's bid; and 7. speaking to Mr Gung. 1. It was also noted, that Ms Guan was not present to witness any of the alleged acts of performance. Hence, it was contended, that any issues of her credit, in that respect, are not relevant. The issue is simply whether the Court accepted the evidence of Mr Lui, in this respect, vis-à-vis the documents tendered to the Court. Assisting Ms Guan with her immigration issues 1. It was submitted, as to the evidence of Mr Lui, that he helped Ms Guan with her immigration issues, that action does not constitute performance. 2. First, the agreement does not contain any clause requiring such assistance. 3. Secondly, the alleged work, in any event, took place in or about 2013 – before the agreement was signed on 18 January 2015. The rule that past consideration is no consideration applies. Nor does the Pao On Exception apply because the parties did not understand that such work was to be remunerated. 4. There is also a Jones v Dunkel inference available since "Janette", the personal assistant of Phillip Ruddock, was not called to give evidence. Calling Mr Qian of Kerry Properties 1. Mr Lui's alleged phone call to Mr Qian took place in the period 4 December 2014 to 29 December 2014, which is before 18 January 2015. The rule that past consideration is no consideration applies. Nor does the Pao On Exception apply because in the conversation leading up to the alleged phone call, Mr Lui and Ms Guan never formed an understanding that such work was to be remunerated. 2. Further, Mr Qian (and/or Kerry Properties) never submitted a sealed bid. 3. The Court is invited to draw a Jones v Dunkel inference that anything Mr Qian would have said would not have assisted Mr Lui to confirm that his allegations about Mr Qian. Privately meeting with Mr Chen of A Capital 1. It was submitted, Mr Lui's alleged private meeting with Mr Chen took place after 29 or 30 December 2014 and before 18 January 2015. The rule that past consideration is no consideration applies. Nor does the Pao On Exception apply because in the alleged prior conversation of 29 or 30 December 2014, Mr Lui and Ms Guan only discussed finding an investor to take over the project and selling the land with Mr Lui's assistance. The conversation did not discuss persuading Mr Chen to do anything. No understanding formed that any work relating to Mr Chen was to be remunerated. 2. Further, no clause in the agreement required Mr Lui to do anything with respect to Mr Chen. 3. It was submitted, Mr Lui gave the following evidence: 1. Mr Chen said, "I will see what I can do"; 2. Mr Lui managed to "bring about sufficient reconciliation between him and Ms Guan" and a "successful restoration of relations between him [Mr Chen] and Ms Guan"; 3. "Mr Chen was more restrained in the manner by which the recovery process of his loan money was conducted"; 4. Mr Lui "organised for Mr Chen and Ms Guan to be seated at the same table at my wedding"; and 5. "Owen [Chen] gave us time – or asking me if I can find investor or developer to help to pay his – which is the money owe – borrow by Ms Guan from Owen. And I tried to do that, yes". 1. It was submitted, Mr Chen was not called to give evidence and there is no explanation as to why not (including in cross-examination). Mr Chen is a person that the Court would expect Mr Lui to call and whose evidence could confirm Mr Lui's allegations. The Court is invited to draw a Jones v Dunkel inference that anything Mr Chen would have said would not have assisted Mr Lui to confirm that he successfully influenced Mr Chen. 2. It was also contended that the objective evidence, with respect to Mr Chen, particularly his conduct at the time of the creditors' meetings, revealed that Mr Chen "showed no restraint or mercy… to the First Defendant". The only slowing down of the progression towards Shuangfu's liquidation was an adjournment resolution at the second meeting of creditors, which A Capital abstained from voting. It was contended that Mr Chen abstained from voting in order to not block the adjournment that was granted to Landream, which provided Landream with "a final chance to come up with a better DOCA that would satisfy A Capital and the unsecured creditors". The relevance of this submission was to highlight that Mr Lui had nothing to do with these events. 3. It was also contended that Mr Chen "never negotiated on the sidelines with [Mr Lui] or [Ms Guan] for anything. Nor would he since no DOCA proposal came from them". In that light, it was submitted that Mr Lui's allegation that he had influence upon Mr Chen to the financial benefit of Ms Guan is incorrect. 4. It was submitted that any evidence with respect to Mr Lui's wedding, was not relevant to performance. Speaking to Mr Chan of Anson City 1. As to Mr Chan, counsel for the defendants submitted that there is no document proving who Mr Chan is, or whether he has any association with Mr Pak. The defendants' submissions, in this respect, focused upon the evidence of Mr Lui in light of the material before the Court. I have earlier made findings contrary to Ms Guan in that respect. 2. First, turning to the evidence of Mr Lui by way of affidavit, in summary: 1. Mr Lui changed Mr Pak's mind, with respect to the price, by talking to Mr Chan, who was described as "the business advisor of Mr Pak Wai Ngor"; and 2. Mr Lui kept in close contact with Mr Chan through face-to-face meetings and telephone calls, and that he gave Mr Chan the Information Memorandum. 1. As to the evidence before the Court via the affidavit of Mr Lui, the Court made evidential rulings that the words "Mr Pak considers that the project is worth around $30,000,000" and "I told Mr Pak what you said and he is going to increase his bid" could only be evidence that the words were said, but not evidence of the truth of the contents of each statement (i.e. truth about Mr Pak's state of mind). Thus, there is no evidence before the Court about Mr Pak's state of mind or any changes to it and, it was contended, there is no evidence that Mr Lui changed Mr Pak's mind, price-wise. 2. Both Mr Chan and Mr Pak were not called to give evidence and no explanation is given as to why not. As they are people that the Court would expect Mr Lui to call and whose evidence could confirm Mr Lui's allegations, the Court is invited to draw a Jones v Dunkel inference that Mr Chan and Mr Pak were not called to give evidence because any evidence they might have given would not have assisted Mr Lui. 3. The following submissions were further advanced: 1. Mr Pak did not hold a $30 million position as at 15 February 2015. This is because Mr Pak held a $36 million position as at 4 November 2014 (for most but, it was contended, not all of the Kensington land). The letter of 4 November 2014 from Mr Hu (of Anson City) to Mr Liang establishes this. It is not necessary for the Court to know the circumstances surrounding the letter, it was contended, because as a business record, the letter speaks for itself. 2. The letter of 4 November 2014 shows that Mr Liang was the introducer of Mr Pak to the Kensington land since it was addressed to him only. It shows that Mr Hu spoke for Mr Pak since he is the author the letter. Mr Lui somewhat corroborated Mr Liang as the introducer, by describing him as an "introducer" of people and as "the one selling it [i.e. the Kensington land] everywhere". 3. When shown the 4 November 2014 letter, Mr Lui admitted that Mr Liang (and not himself) was the one who introduced Mr Pak to the Kensington land: "Well, you show me a document like this, I will say yes". Mr Lui was free to explain away the 4 November 2014 letter and insist that he was the introducer of Mr Pak to the Kensington land despite the letter. He did not do this. 4. There is no evidence that Mr Pak regressed by $6 million in the period 4 November 2014 to 15 February 2015. The documents prove that there was no regression and that no one convinced Mr Pak to do anything. Mr Lui cannot take credit for shifting Mr Pak from $30-38 million in the absence of evidence to corroborate that contention. 1. Turning to the evidence before the Court, with respect to the Anson City bid, the defendants submitted: 163. … When Pak Wai Ngor caused Anson City Developments (Australia) 1 Pty Ltd to offer $36,000,000 on 4 November 2014, he was offering to buy 81 - 95 Anzac Parade Kensington only (i.e. only part of the Kensington land). The subject line of the 4 November 2014 letter makes this clear (note, the Court should not be confused by the separate $5,000,000 offer for 61 and 63 Boronia Street, those properties were not included in the Jones Lang LaSalle Information Memorandum and aren't part of the Kensington land). However, when Pak Wai Ngor made his ultimate winning bid of $38,000,000, he was making a bid for 67 - 71 Boronia Street Kensington as well. It makes perfect sense to offer an extra $2,000,000 if there is additional land on offer (i.e. 67 - 71 Boronia Street Kensington). Indeed, what Pak Wai Ngor really did was to offer on his own initiative just a little bit more ($38,389,000) at 1.38pm, and then to apply pressure by making the offer expire 'by today'. This meant that Owen Chen had 3 hours to think carefully about whether to exit at about - $4.6 million (plus rising interest), or whether he could somehow extract a better figure elsewhere for the Kensington land. 164. What this means is that the ultimate winning bid of $38,389,000 was just a repeat of the 4 November 2014 position. That is, if Buyer A offers $36 for 10 widgets, and then a few months later offers $38 for 12 widgets, the extra $2 is clearly for the 2 additional widgets. The $38 offer is a repeat of the $36 offer, but adjusted for more widgets. If said Buyer then offers an extra 38 cents, he is just getting the vendor over the line. 165. The Plaintiff's explanation for why Pak Wai Ngor increased from $36,000,000 to $38,000,000 weakens his claim that he knew what was going on. The Plaintiff admitted that he had never even seen Tom Hu's 4 March 2015 expression of interest document until cross examined (if he was so in the loop, he would have seen it already). The Plaintiff admitted that he had no idea why Pak Wai Ngor increased from $36,000,000 to $38,000,000. To try to fix his ignorance, the Plaintiff speculated that Pak Wai Ngor rose to $38,000,000 perhaps because of Jones Lang LaSalle160 (which contradicts the Plaintiffs theory that it was his whispering into Justin Chan's ear which got Pak Wai Ngor to move). 166. No document establishes that Pak Wai Ngor ever held a $30,000,000 position. The Plaintiff cannot take credit for shifting Mr Pak Wai Ngor from $30,000,000 to $38,000,000. 167. There are emails (i.e. business records) confirming that the Plaintiff had no involvement with Anson City Developments (Australia) 1 Pty Ltd. None of the emails are copied to the Plaintiff (or First Defendant). The Plaintiff could not have said a single thing about them, even if cross examined. They speak for themselves. They were obtained via the Plaintiffs 15 June 2017 Jones Lang LaSalle subpoena (i.e. no one forced the Plaintiff to issue the subpoena so late), returnable 26 June 2017 (the day before Day 1 of Trial), but provided by the Plaintiffs solicitor to the Defendants' solicitor on 27 June 2017 at 12.04pm (Day 1 of Trial) via email dated 27 June 2017 (containing a dropbox link). The night of Day 1 of Trial was spent preparing for a motion to amend the Defence (as shown at the start of Day 2's transcript). The Plaintiffs cross-examination finished on Day 2. The emails (and the ASIC documents) were served as proposed tenders to the Plaintiff on 6 October 2017. On 6 December 2017 (Day 5, last day), the Plaintiff did not ask a single cross-examination question on them (presumably, because the First Defendant was equally incapable of saying a single thing about them). [Footnotes omitted.] 1. The contents of those emails and the findings of the Court, together with the letter of 4 November 2014, were earlier set out in this judgment and will not be repeated. In the light of those emails, the defendants contended the following: 1. The absence of Mr Lui from all of the email correspondence, with respect to the sale of the Kensington land, it is unlikely that Mr Lui was involved in the process. This was supported with reference to the evidence of Mr Lui in cross-examination: he admitted that Jones Lang LaSalle would not talk to him and would only give him a copy of the Jones Lang LaSalle Information Memorandum. 2. It is clear from those emails, after Mr Liang received the 4 November 2014 offer from Mr Hu, Jones Lang LaSalle and McGrathNicol took over all dealings with Anson City. Mr Lui and Mr Chan were not involved in any of this. Mr Hu's active role excludes Mr Chan's involvement in the expression of interest process, and further weakens Mr Lui's allegation that he exerted influence on Mr Pak via Mr Chan. 1. Counsel for the defendants suggested that Mr Lui's evidence was at time contradictory, particularly with respect to Mr Pak. During cross-examination, Mr Lui acknowledged the efforts of Mr Chan and the involvement of Mr Chen. He said: "I don't think it's only one person. It's a group effort to help Ms Guan". 2. Finally, reference was made to the available inferences to be drawn from the letter dated 8 April 2015, from Jones Lang LaSalle, addressed to Mr Lui. Counsel for the defendants described the letter as "a short cursory letter of the type Jones Lang LaSalle would send to associated real estate agents, some of whom would have brought in sealed bidders, to let them know [the land had sold]… and to thank them for participating". It was suggested, had the role of Mr Lui "been so instrumental", such that he would be aware of the exchange of contract, there would be no need for such a letter. 3. Thus, it was submitted, in light of the above submissions, Mr Lui was not the one who found the winning bidder and, as a consequence, cl 5 of the agreement was not fulfilled. Speaking to Mr Zhao 1. Mr Lui's affidavit said that "Prior to the end of the EOI Process" he accompanied a "potential investor", a "Mr Zhao", to the Kensington land for inspection. It is not clear when this took place, but if it took place before 18 January 2015, then the rule that past consideration is no consideration applies. 2. In any event, this was not performance because Mr Zhao never submitted a sealed bid. 3. Further, Mr Zhao was not called to give evidence and there is no explanation as to why not. Mr Zhao is a person that the Court would expect Mr Lui to call and whose evidence could confirm Mr Lui's allegations. The Court was invited to draw a Jones v Dunkel inference that anything Mr Zhao would have said would not have assisted Mr Lui to confirm his allegations. Bringing in Fairway's bid 1. Counsel for the defendants submitted that Mr Lui's alleged work with Fairway was not performance. There appeared to be two bases for that submission. 2. First, counsel for the defendants turned to the allegation of Mr Lui, "I helped them complete the expressions of interests", and contrasted that statement with a photograph depicting Mr Macree filling out the expression of interest forms for Fairway. As earlier found, that fact does not impact upon Mr Lui's credibility nor does it support a conclusion that Mr Lui did not help Fairway. I also reject any proposition that this assistance was inconsistent with Mr Lui's obligation under the agreement. 3. Secondly, the defendants, in reliance upon a summary of the expression of interest bids, made the following submissions: 183. The Plaintiffs best effort (assuming he did it) was to bring in this 'investment developer' (a) who ranked equal 10th or 11th (equal with Luxcon Property Trust) in the sealed bidding process, (b) who did not make it to the second round, (c) whose offer of $30,000,000 was $6,350,000 less than the already unsuccessfully DOCA of $36,350,000, and (d) who indicated to Jones Lang LaSalle that they could not go above $35,000,000.220 [sic] (Note: the $45,000,000 bid from Fairway Investment & Development Pty Ltd is irrelevant because it was a bid which is conditional upon development approval.) 184. The Plaintiffs best effort was to bring in a light weight inconsequential bidder. Even if the 10 higher bidders had not participated, it can be safely assumed that Owen Chen would never have accepted $30,000,000. This was not an Investment developer' who 'took over the project', 'solved' the First Defendant's financial problems, or 'overcame' the First Defendant's 'current financial difficulties successfully'. Speaking to Mr Gung 1. Nothing became of Mr Lui's alleged work with Mr Gung who submitted no sealed bid. As earlier mentioned, it was submitted, a Jones v Dunkel inference was available for Mr Gung. Even if Mr Lui's job was to find an "investor" rescuer, he failed at that as well 1. Mr Lui gave evidence that he was tasked to find an "investor" since it would give a better result for Ms Guan than a mere sale: I've been asked to join force with Ms Guan, find an investor, join force with Ms Guan and then fix up the debt and also develop the project. And that is the best outcome for Ms Guan. Not just selling the land. Because selling the land maybe Ms Guan will lose lots of money. But trying to get an investor Mr Guan, Ms Guan will have an upside of the project and also Hanson approached me have project management and development, development contract. 1. If that task was accepted, it was contended, that Mr Lui failed to deliver a wealthy entity as a rescuer and that he failed to even ask, propose or mention to Mr Qian, Mr Zhao, Mr Gung, Fairway and Mr Chan that they come in with about $60 million (as an "investor") to rescue Ms Guan. As to the absence of any such evidence in his affidavit, Mr Lui described his affidavit as "a summary". Counsel for the defendants contended that "there is not a single sentence in the transcript describing an actual proposal by him to these people that they act as 'investor' rescuers". 2. Further, Mr Lui's efforts, it was contended, never led to: 1. the appearance of any investor rescuer; 2. any DOCA proposal; 3. Mr Chen pausing, let alone stopping, the sale; or 4. Mr Chen negotiating with Ms Guan on anything. 1. Thus, his conduct was not "an overcoming of the First Defendant's 'current financial difficulties successfully'". 2. Finally, it was submitted that the task that Mr Lui failed to complete was also impossible. Mr Lui identified $60 million as an amount which would enable Ms Guan to "pay off whatever owe[d] to Owen, and then they can still have pocket money into their pocket, and then also someone coming in to build … and then they can still have some shares, majorities goes into the investor, and - and that - that is what I've been working on, you know". However, Mr Lui also admitted that he advised his contacts that $60 million was too high for the land. In fact, the highest figure associated with the Kensington land was $52 million. Consideration: Performance 1. Mr Lui's contentions as to performance were encapsulated in a pithy written submission provided by his counsel in reply. That submission is extracted below: 88. Lui fulfilled the terms of the Cooperative Agreement. 89. There is uncontracted evidence from Lui that both before and then after 18 January 2015, he contacted his network, including Mr Pak, whose company was the successful bidder and, indeed, organised another proposal by another company, Fairway Investment & Development Pty Ltd (Fairway), which was ultimately unsuccessful. Lui's evidence in paragraphs [76] to [98] of the Lui Affidavit demonstrate his performance amply. Once the expression of interest process finished, Lui held a celebration, at which Guan was present, and even paid for dinner and a bottle of Remen Congee. 90. Anson City was ultimately successful with a bid of $38,000,000 for the Kensington Project. 91. Once the transaction was completed, Lui and Guan promised to give M Lui his due under the Cooperative Agreement. She failed to do so. [Footnotes omitted.] 1. It will be immediately observed that Mr Lui placed no reliance upon the first limb of Ms Guan's submissions, namely, any involvement by Mr Lui with Ms Guan's immigration issues. In fact, Mr Lui is correct to submit that it had not been contended by him that the agreement was concerned with such issues. 2. It is clear that Mr Lui's submissions concentrated upon his dealings with Mr Pak of Anson City, via Mr Chan, which was the successful bidder. Emphasis was also placed upon Fairway, which was an unsuccessful bidder. I will therefore commence with those matters. 3. As to Anson City, I accept the submission of Mr Lui that he contacted his network including Mr Pak and Mr Chan, as earlier found, after the date of the agreement, with a view to seeking Anson City's engagement with the expression of interest process. I have earlier rejected the defendants by reliance upon the 4 November 2014 letter and the related contention that Mr Liang, not Mr Lui, was instrumental in communications with Anson City 4. A further submission was developed by the defendants as to whether Mr Lui had procured an increase in the bid of Anson City. As I have found, that submission proceeds upon a misunderstanding of the agreement when properly construed. In any event, the foundation for the submission may not be accepted. The defendants contended that the ultimate winning bid by Anson City of $38,389,000 was, in fact, the equivalent of the offer of $36 million made on 4 November 2014. That submission has no foundation in the evidence. 5. Counsel for the defendants submitted that the letter of offer dated 4 November 2014 was limited to "81-95 Anzac Parade" because "[t]he subject line of the 4 November 2014 letter makes this clear". This submission misunderstands the content of the subject line, which is extracted below: Anson City Developments 1 Pty Ltd Proposed Acquisition of Property in relation to 81-85 Anzac Parade (Lot A of DP345813), 87 Anzac Parade (Lot A of DP331643), 89 Anzac Parade Kensington (Lot 1 & 2 of DP605231), 91-93 Anzac Parade (Lot A and B of DP953401), 95 Anzac Parade Kensington (Lot 22 of DP3917). 1. True it is that the subject line refers to 81-95 Anzac Parade but, upon closer examination, the subject line refers to additional lots beyond 81-95 Anzac Parade. 2. The letter of offer dated 4 November 2014 concerned an offer with respect to seven parcels of land, with the following title details: 1. Lot A of DP345813; 2. Lot A of DP331643; 3. Lot 1 of DP605231; 4. Lot 2 of DP605231; 5. Lot A of DP953401; 6. Lot B of DP953401; and 7. Lot 22 of DP3917. 1. Item (5) concerns Boronia Street, Kensington (I will return to the exact description of that lot below). 2. The same seven parcels of land are then repeated in the subject line of the letter of offer dated 4 March 2015, which is extracted below: Anson City Developments 1 Pty Ltd EOI for 81-85 Anzac Parade (Lot A of DP345813), 87 Anzac Parade (Lot A of DP331643), 89 Anzac Parade Kensington (Lot 1 & 2 of DP605231), 91-93 Anzac Parade (Lot A and B of DP953401), 95 Anzac Parade Kensington (Lot 22 of DP3917). 1. It should be noted, that the same seven title details were listed in the Information Memorandum as the "Property Particulars" for "81-95 Anzac Parade & 67-71 Boronia Street, Kensington NSW". 2. The same title details were also listed under the definition of "land" in the contract of sale exchanged on 22 April 2015, although it is appropriate to note the address attached to folio identifier A/953401 (previously described as Lot A DP953401) is "69-71 Boronia Street, Kensington". The change in address was never fully explained but that matter is immaterial to the issue raised by the defendants. 3. It follows the only difference between to the offers of 4 November 2014 and 4 March 2015 concerns the context in which the offer is made. The first letter was defined as a "Proposed Acquisition of Property". The second letter of offer was defined as an "EOI". 4. Contrary to the submission of the defendants, each offer contained an offer for the same parcel of land in Boronia Street, Kensington. 5. The defendants' submission with respect to "widgets" is rejected. 6. The fact that Mr Lui may not have seen the expression of interest form until cross-examination, or did not have a specific knowledge of why Mr Pak increased the bid, does not refute or diminish his evidence as to his contribution with Mr Pak and Mr Chan vis-à-vis the expression of interest process. 7. Further, I do not accept the submission of the defendants that the letter forwarded by Jones Lang LaSalle to Mr Lui on 25 March 2015 was not an indication of his involvement of the expression of interest process but a mere courtesy. 8. The defendants advanced a further submission as to whether the bid increased from $36 million or $30 million, based upon various contentions as to whether Mr Pak adjusted his position from the offer of 4 November 2014 of $36 million, or his conversation with Mr Lui as to the worth of the project from $30 million. Given the construction of the agreement and the abovementioned finding that there had been an increase in the Anson City bid by over $2 million, those contentions strictly do not require resolution. However, as I have noted, I accept Mr Lui's evidence as to his discussion with Mr Pak, in that respect. I do not consider the evidence is diminished by an apparent inconsistency between the offer of 4 November 2014 and Mr Pak's observations to Mr Lui. That is because, there is no evidence as to the circumstances in which the 4 November 2014 offer was made and Mr Pak's statement to Mr Lui (on Mr Lui's evidence) concerned what Mr Pak considered the project to be "worth". 9. Turning to Fairway, the defendants' submission on the ranking of bids misunderstands, in a fundamental way, the operation of the agreement. The implication of the submission is that Mr Lui's obligations under the agreement would be conditioned by the performance of those entities entering expressions of interest on some graduated scale. This is not the case. 10. The submission is also flawed on another basis, namely, it is not explained why Mr Lui's assistance in having Fairway produce a $45 million bid on a conditional basis was inconsistent with his obligations, as I have construed them, under the agreement. 11. It follows, that I accept the aforementioned submission by Mr Lui as to his performance under the agreement with respect to Anson City and Fairway. Accordingly, I consider Mr Lui performed his obligations under the agreement. 12. Additionally, as previously mentioned, I reject the defendants' contentions as to the availability of Jones v Dunkel inferences in that respect. THE PRIMARY MATTER: THE REAL ESTATE AGENT ISSUE 1. This part of the judgment concerns issue 5. Defendants Submissions 1. The defendants' case, in this respect, may be briefly stated: Mr Lui meets the definition of "real estate agent" under the Act and, therefore, pursuant to s 8(2) of the Act he is not entitled to sue to recover any commission or fee for any service performed in that capacity unless he was licensed at the time of performing the service. 2. Both parties accepted that in determining whether or not s 8 of the Act acted as a bar to relief, the Court was to construe its provisions, including the definitions set out in s 3 of the Act, in accordance with the usual rules of statutory construction, and to apply them to the facts of this case. The defendants appropriately relied, in that respect, upon the judgment of Payne JA in Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd [2017] NSWCA 339 ("Ryde Developments") (at [39]-[45]). 3. Whilst counsel for the defendants recanted from aspects of the language used of the statement of issues produced for the defendants as to the real estate issue, it is appropriate to nonetheless extract the statement below as it contains the essence of the case brought by the defendants: 2. Section 8(2) of the PSBAA says that a natural person is not entitled to sue to recover any commission or fee for any service performed by him/her as a "real estate agent" unless he/she was licensed at the time of performing the service. This makes central the s.3 definition of "real estate agent". 3. The s.3 definition of "real estate agent" appears to be a box ticking exercise. In the present case, the relevant boxes are: a. Whether the subject person is a person who for reward "carries on a business" as an agent in doing any of the things listed in paras (a)-(e) of the definition of "real estate agent" ("Carries on a Business" Box). b. Whether the subject person, in performing the subject service, acted "as an agent" ("As an Agent" Box). c. Whether the subject person, in doing the subject service, acted as an agent ("Range of Activities" Box): i. for a real estate transaction, or ii. for inducing or attempting to induce or negotiating with a view to inducing any person to enter into, or to make or accept an offer to enter into, a real estate transaction or a contract for a real estate transaction, or iii. for the introduction, or arranging for the introduction of a prospective purchaser of land to another licensed agent or to the owner, or the agent of the owner, of land. 1. It is evident that the focus of the defendants' submissions on construction concern the definition of "real estate agent" in s 3 of the Act. Issue 1: "carries on a business" 1. It was submitted that Mr Lui carried on a business of an agent for the purpose of the definition of real estate agent under s 3 of the Act. 2. As to the construction of the Act, the defendants placed significant reliance upon the judgment of Ball J in Williams v ATM & CPA Projects Pty Limited [2015] NSWSC 703 ("Williams"). A summary of the principles relied upon by the defendants follows: 1. A person is an "agent" for the purposes of the Act if the person negotiates for the sale of real estate. It is not necessary for the person to have authority to bind his or her principal: Challenger Group Holdings Ltd v Concept Equity Pty Ltd [2008] NSWSC 801 ("Challenger") at [46] per Young CJ in Eq (Williams at [69]). 2. Whether a person carries on business as a real estate agent is a question of fact. In order to carry on business, repetition and continuity of the activities which characterise the business are necessary (Williams at [70]). 3. An isolated activity with the intention of repeating it is sufficient. As Lopes and Kay LJJ said in Re Griffin; Ex parte The Board of Trade (1890) 60 LJQB 235 at 237, cited with approval by Barwick CJ in Fairway Estates Pty Ltd v Federal Commissioner of Taxation (1970) 123 CLR 153; [1970] HCA 29 at 165: "If an isolated transaction, which if repeated would be a transaction in a business, is proved to have been undertaken with the intent that it should be the first of several transactions, that is, with the intent of carrying on a business, then it is a first transaction in an existing business". See also Simpson v Donnybrook Properties Pty Ltd [2010] NSWCA 229 ("Simpson") at [145] per Young JA (with whom Hodgson and Macfarlan JJA agreed) (cited in Williams at [70]). 4. Similarly, a person who holds himself or herself out as a person who is in the business of introducing potential buyers to potential sellers of property carries on that business even if the business is not generally successful in the sense that only in isolated instances do the introductions result in a sale (Williams at [71]). 5. Ball J in Williams clarified that the Act still applied, even if other, so called, "higher level investor" services are mixed into the subject services. So long as an "essential feature" of the subject services were those of a real estate agent, the Act still applies (Williams at [73]-[77]). 6. His Honour made, it was submitted, the following observations in Williams: 1. "it seems to me that a component of their business involved acting as agent for buyers or sellers of real estate and charging commission to sellers for their services. Those services could not be regarded as merely incidental to some other business" (at [74]); 2. "Although as I have said, the services offered by Mr Morison and Mr Williams were not limited to acting as agents in relation to the sale of real property, the sale of real property was an essential feature of a number of contracts that they were seeking or hoped to negotiate" (at [77]); and 3. "In order to make that sale more attractive to potential purchasers, what was also being offered was a building contract. But that does not alter the fact that an essential feature of the transaction was the sale of real property in respect of which development approval had been obtained. If the plaintiffs are right about the correct construction of the 1 December Agreement, they are entitled to commission for introducing a purchaser for the real estate alone. That is quintessentially a real estate transaction. It was the type of transaction, although not the only type of transaction, that they were seeking to negotiate." (at [77]). 1. In light of those principles, the defendants contended that the Court should look at Mr Lui's actions, as a starting point in determining whether or not he "carries on business as an agent", and not to the terms of the agreement. The defendants advanced six submissions, in that respect. 2. First, the defendants submitted: 213. The Plaintiff's approach is to make money in a field without a license. In that sense, he is a fixer who finds and brings clients in (the Plaintiff's words are that he 'initiates'). The Plaintiff then delivers the client to the relevant licensed professional who then processes the client. The Plaintiff admitted to operating this way in the field of immigration. The Plaintiff took credit for thousands of Significant Investor Visa applications, and yet admitted that he is not a MARA agent nor licensed as a migration agent. Similarly, when it comes to giving financial advice, the Plaintiff via Elite100 helps clients determine 'the best options for your investment' and assists them to make 'the investment that is best and easiest for you'. Yet the Plaintiff does not have an Australian Financial Services license. 214. It is likely the Plaintiff takes the same approach in real estate. [Footnotes omitted.] 1. Secondly, it was also submitted that Mr Lui's involvement in the Kensington land "was not a one-off or isolated event, nor the first, or even the last, real estate transaction in his career". It was contended, that Mr Lui's conduct could not be described as being done "with no intention to engage in subsequent real estate transactions". 2. Thirdly, the defendants further relied upon the evidence of Mr Lui and Elite 100 in support of this contention. This included the following: 1. Mr Lui deposed in his affidavit of 8 December 2015: 1. "I specialise in obtaining funding for development"; 2. "I began looking for potential investors from amongst my business contacts and friends circle for the project including doing a study of the Kensington Project. I arranged for AECOM to conduct the study"; and 3. "I continued to work on this project including arranging a meeting with AECOM to advise in relation to the development potential, value and other relevant matters". 1. Elite100 describes its "core" business operations as focused upon, inter alia, "facilitating project and property investment". 2. Elite 100 also help Chinese businessmen migrate to Australia via the SIV program, which requires landing $5 million in Australia. It was submitted that a prudent option is property investment and that is why one of Elite100's "core" business operations is "property investment". 3. Mr Lui owns 40% of 10,000 E class shares in Elite 100. 4. During cross-examination: 1. It was put to Mr Lui, that he finds properties, buyers, brings prospective buyers to properties and talks to prospective buyers about properties. Mr Lui did not appear to explicitly accept or reject that proposition, but said: "I just try to help". 2. As to whether or not Mr Lui accepts a commission, Mr Lui said: "the people agree with me with agreement and what I'm working is not for - not free". 1. Fourthly, in light of the evidence of the business conducted by Elite 100, Mr Lui's evidence as well as Mr Lui's provision of services, allegedly, to Mr Gung, Mr Zhao, Mr Qian, Fairway and others, it was submitted that Mr Lui was able to conduct such services in the way he did because Mr Lui was a "veteran real estate agent". 2. Fifthly, reference was also made to the letter of demand. It was submitted that it bears the characteristics of a real estate agent's letter of demand, for the following reasons: 1. it refers to "the contract had been exchanged" and "you had received the deposit", which are "two typical triggering events for commission payments in real estate agency retainers"; 2. it deems 2% to be an "agreed agent fee"; and 3. it demands that payment be made to a "Kingkong Real Estate Trust Account". 1. The defendants also contended that, in light of the letter of demand, there is an available inference that the money demanded was a real estate agent's commission. 2. Sixthly, reference was also made to the earlier cited references to Elite100 and Mr Lui in documentation prepared by Jones Lang LaSalle, namely, the marketing update document dated 4 February 2015 and a letter from Jones Lang LaSalle to Mr Lui and Elite 100 dated 8 April 2015. This documentary evidence, it was submitted, indicates the ties between Elite 100 and Mr Lui. 3. In reply to contentions raised by Mr Lui, in the Plaintiff's Closing Submissions in Reply, as to the relevance of the "capacity to bind" to the definition of "real estate agent" under the Act (with respect to the power of Ms Guan, or lack thereof, to sell, buy, exchange or otherwise dispose of the land), the defendants advanced the following submissions in the Defendants' Supplementary Submissions: 1. First, whilst it is true that Ms Guan could not sell the Kensington land, she was still free to bring in the winning bidder, and Mr Lui was free to act as her real estate agent in her attempt. She was not cross examined on whether she understood she could participate in this way. 2. The defendants rely on five authorities for the proposition that capacity to bind is not relevant to assessing if someone is a "real estate agent" and in support of its approach to construction: 1. Williams; 2. Hawk Australia Pty Ltd v George Ambrose Commercial Pty Ltd [2007] NSWSC 1150 ("Hawk") (at [36]-[40]); 3. Sultana Investments Pty Ltd v Cellcom Pty Ltd [2008] QCA 357 ("Sultana") (at [36]); 4. Challenger (at [46]) (at first instance, noting it was overturned in Challenger Group Holdings Ltd v Concept Equity Pty Ltd [2009] NSWCA 190); and 5. Colbron v St Bees Island (1995) 56 FCR 303 ("Colbron") (at 21). 1. From those authorities the following principles and observations were relied upon by the defendants: 1. "It is not necessary for the person to have authority to bind his or her principal" (Williams at [69]; Challenger at [46]). 2. "The term real estate agent is defined for the purposes of the Act and is to be understood by reference to the statutory definition and not the general law" (Hawk at [36]). 3. "I consider that the Magistrate erred in approaching the preliminary question on the basis that consideration of the capacity of the agent to bind the principal was relevant to the determination of whether GAC was a real estate agent" (Hawk at [40]). 4. "[I]t was not necessary that the agent possess authority to commit his principal contractually before it could be said that he had acted "as an agent for others" and held that the expression "simply connotes a person engaged to act on behalf of another"" (Sultana at [36], citing Kedcorp Pty Ltd v Jenkins (2001) Q ConvR 54-547; [1999] QCA 452 ("Kedcorp") at [16] and with reference to a similar Act in Queensland). 5. "[W]here a person carries on the business of a real estate agent, if he or she negotiates, it matters not that that person has no power to enter into a contract. The words "as an agent for others" in the legislation mean at least "not as party principal"" (Challenger at [46]; Colbron at 21). 6. "[W]hereas the language "buying, selling, exchanging, or letting houses, land, or estates" suggests transactions which, by one means or another, take effect, the notion of "negotiating for" such a result is something antecedent to it. Authority to commit contractually is irrelevant to the idea of negotiating for the buying, selling, exchanging or letting referred to" (Colbron at 21). 1. Secondly, whilst it is true that one of the definitions of "real estate agent" is a person who is an "agent" to a "real estate transaction" (see sub-section (a) of the definition), that is only one part of the definition, which, it was contended, Parliament had widened. Due to other parts of that definition, a person need not necessarily be an "agent" to a "real estate transaction" to be a "real estate agent". This is due to sub-sections (b)-(e) in the definition, and the word "or" which separates each sub-section. (It was also noted that the defendants maintained that the expression of interest process was a real estate transaction). 2. If a person acts "as an agent" in "introducing" or "arranging for the introduction" of a "prospective purchaser" to "another licensed agent", to "the owner", or to the "agent of the owner" of land, that person is a "real estate agent". No real estate transaction is needed. 3. Similarly, even if there is a "real estate transaction", one does not necessarily need to be the agent acting for the vendor. One can be the agent acting for the buyer, or just an agent. All that is needed is for one to not be acting as a principal for himself or herself; that is why the phrase "as an agent" is present. In the present case, Mr Lui never acted as a principal for himself. 4. It is not necessary to have a power to sell a piece of land, to "induce" others to "make an offer" to buy it. Further, it is not necessary to have a power to sell a piece of land to "introduce" others to the "owner" or to be an "agent of the owner" of said land. In that respect, reliance was placed upon the following note that directly follows the definition of real estate agent in the Act: "Note: This definition is not limited to the selling of land and extends to an agent acting on behalf of the buyer of land (a buyer's agent)". Reference, in this respect, was also made the second reading speech of 9 May 2002: The bill also recognises the activities of buyers' agents who act exclusively for purchasers in finding suitable properties and negotiating sales on the best possible terms for the purchasers. Buyers' agents will continue to be required to hold a real estate agent's licence. 1. As to this second component of construction, reliance was placed upon the following authorities: 1. Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 4) [2017] NSWSC 436 ("Ryde No 4" ) at [89] (per Ball J); and 2. CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2 at [91]-[93] (per Brennan CJ, Dawson, Toohey and Gummow JJ); 1. In light of those two authorities, the defendant submitted: whilst it is true that Mr Lui's real estate agency work was "not typical" in that he was acting for the director of a company which owned the Kensington land, but whose land was being sold by the mortgagee in possession, he was nevertheless providing real estate agency services to Ms Guan. He was her agent. He was never the principal. As her agent he "introduced", as well as "negotiated" and "induced". 2. Lastly, it was submitted, the cases of Ryde No 4 and Ryde Developments (first instance and on appeal) point to the phrase "as an agent" being satisfied on the present facts. 3. The defendants also advanced a submission as to the appropriate analysis of the transaction, namely, "retrospective versus prospective analysis". The defendants, in this respect, relied upon the existing business of Elite 100 by which, it was contended, Mr Lui received payment for real estate work. Mr Lui's work on "the Kensington land", therefore, was not an isolated transaction, rather it was just another in a long series of already performed real estate agent's work. (It was noted that Mr Lui's role within Elite 100 and the function of that business was put to Mr Lui during cross-examination). Issue 2: Range of Activities 1. The defendants contended that the "service" performed by Mr Lui fell within the definition of "real estate agent" under s 3 of the Act. It was submitted the definition provided for five forms of "service", the defendant relied upon argument with respect to the first three: (a) for a real estate transaction, or (b) for inducing or attempting to induce or negotiating with a view to inducing any person to enter into, or to make or accept an offer to enter into, a real estate transaction or a contract for a real estate transaction, or (c) for the introduction, or arranging for the introduction, of a prospective purchaser, lessee or licensee of land to another licensed agent or to the owner, or the agent of the owner, of land, 1. No strict delineation was made between the forms of services within the defendants' submissions. However, submissions with respect to (a), (b) and (c) are summarised below. (a) for a real estate transaction 1. As to the first contention, that the service performed by Mr Lui was for a real estate transaction, the following submissions were made: 1. There was a vendor. Notwithstanding the fact that the Shuangfu and Ms Guan were not the vendor to the sale of the Kensington land at the time of the services, with the appointment of, inter alia, external administrators and receivers, Mr Lui, it was submitted, purported to act as real estate agent from Shuangfu (albeit unlicensed). 2. There was a purchaser, namely, Anson City, for the purposes of the definition of "real estate transaction". 3. There was an exchange on contracts on 25 March 2015. 4. There was a price paid of about $38 million. 1. Thus, there was a real estate transaction and it was contended that Mr Lui acted as an agent for that transaction. 2. Turning to the specifics of "the service" provided, the defendants described the services, when taking Mr Lui's case at its highest, as follows: 1. looking for potential investors in the Kensington Project and, by extension, a potential purchaser for the land; 2. arranging a valuation study of the Kensington Project to ascertain its development potential and value; 3. introducing the Kensington Project (and by extension, the land) to Mr Chan; 4. persuading Anson City to increase its offence for the Kensington Project (and land); 5. introducing the Kensington Project (and land) to Fairway, and extracting two bids for the expression of interest process; 6. liaising with Jones Lang LaSalle; 7. introducing Mr Zhao to the Kensington Project (and land); and 8. smoothing relations between Ms Guan and Mr Chen, in an effort to avoid a fire sale. 1. It may be observed that these submissions (and many other submissions advanced by the defendants under this heading) were not pleaded in the alternative, although I accept counsel for the defendants framed his closing submissions in that way. There is an obvious tension between the defendants' case as to the contract dispute issue and the real estate agent issue. 2. Those services, it was contended, were all services of a real estate agent or, in alternative, enough of them were such that it can be said that an "essential feature of the transaction was the sale of real property" (to use the words of Ball J in Williams). 3. Returning to the agreement, the defendants submitted that the agreement, deconstructed, "was nothing more than a real estate agent's retainer". The following submissions were advanced in support of that contention: 1. First, reference was made to the circumstances at the time of the signing of the agreement, in particular, the fact that an external administrator and receiver had been appointed; the financial trouble of Shuangfu; and the need to find a buyer to payout the mortgagee/receiver. 2. Notwithstanding the language of the agreement it was submitted that Mr Lui's task was, put simply, "to find an affluent buyer to buy the land and Kensington Project". It was contended that the agreement should be "de-coded" as follows: 1. "find[ing] appropriate investors" = "buyer of land"; 2. "submit a sealed bid" = "blind auction for land"; 3. "the company" = "Shuangfu"; 4. "take over" = "buy"; and 5. "the project" = "the land". 1. By its consolidated submissions on the Act, counsel for the defendants also sought to revisit the English translation of the agreement which had been settled at the outset of the proceedings in the light of the evidence as to translation before the Court. No proper basis was established for such a departure as a matter of evidence or otherwise and I do not accept the defendants' contentions in that respect. 2. As to the translation before the Court, it was submitted that the Court should not allow the delicate language of the agreement to "alter the fact that an essential feature of the transaction was the sale of real property" (again, returning to the language of Ball J in Williams). 1. Further, as to the terms of the agreement, if Mr Lui was simply required to "find investment partners" and to help Ms Guan "find appropriate investment developers", the defendants submitted that it would follow that Mr Lui would have "passed on the contact details to [Ms Guan], and she would have been the one zeroing in and talking to all these people". 2. It was also contended that Mr Lui did not attempt to "mix in any other service", for example, that of finding an investor. The defendants contended that "[o]ne does not hand out a real estate information memorandum to persuade someone to buy shares or submit a DOCA". However, even if he did, the primary factor that the Court needs to be satisfied with is that "an essential feature of the transaction was the sale of real property": the transaction must be "quintessentially a real estate transaction" – the fact that that may not be "the only type of transaction, that they were seeking to negotiate" is not detrimental to the Act's application (Williams at [77]). (b) for inducing or negotiating 1. The defendant contended that Mr Lui also acted as agent for "for inducing or attempting to induce or negotiating with a view to inducing any person to enter into, or to make or accept an offer to enter into, a real estate transaction or a contract for a real estate transaction". The following submissions were advanced in that respect: 35. When the Plaintiff said to Justin Chan (allegedly) 'There are several interested parties, but given their various conditions, Mr Pak has a good chance to win the bidding process if he increases his bid…" that was negotiation with a view to inducing and/or inducement itself. It was not just a passing comment. The Plaintiff was trying to get Anson City Developments (Australia) 1 Pty Ltd to 'make an offer' to 'enter into' a 'real estate transaction' (i.e. an above $30M offer). 36. When the Plaintiff helped (allegedly) Fairway Investment & Development Pty Ltd fill out its expression of interest, he was inducing it to 'enter into' a 'real estate transaction' or a 'contract for a real estate transaction'. The Plaintiff was not just providing clerical services. 37. When the Plaintiff gave pricing advice to Fairway Investment & Development Pty Ltd, using data from the AECOM study, he was 'negotiating with a view to inducing' or 'inducing' it to enter into a 'real estate transaction' or a 'contract for a real estate transaction'. (c) for the introduction 1. Turning to the defendants contentions as to "introduction". The following submissions were advanced: 1. Even if, which is denied, Mr Lui did not "negotiate" or "induce", he nevertheless "introduced" prospective purchasers to "'another licensed agent" (i.e. Jones Lang LaSalle), the "owner" (i.e. Mr Chen / Shuangfu via Ms Guan) or the "agent of the owner" (i.e. Jones Lang LaSalle / McGrathNicol). 2. Mr Lui's evidence, including that given by way of affidavit and during cross-examination, referred to him "introducing" as follows: 1. "On or about 18 October 2013, I had arranged, at the request of Mr Leung, an introduction to Kerry Properties in relation to the Kensington Project"; 2. "Apart from speaking to Mr Qian, I also introduced the Kensington Project to my friend Justin Chan"; 3. "I then called Ms Guan and said, 'yesterday, I met Justin and talked with Mr Pak about your project'" (i.e. Mr Lui introduces Mr Chan to Ms Guan, director of Shuangfu, itself the registered owner); 4. "I gave Mr Chan the information memorandum relating to the Kensington Project" (i.e. Mr Lui introduces Mr Chan to Jones Lang LaSalle by giving him the Information Memorandum); 5. "I also introduced this project to another potential investor, Mr Zhao...l accompanied him to the site...for inspection and liaised with JLL concerning the EOI Process" (i.e. Mr Lui introduced Mr Zhao to Jones Lang LaSalle); 6. "I also introduced this project to Fairway Investment & Development Pty Ltd"; 7. "Fairway placed two expressions of interest... I helped them complete the expressions of interest" (i.e. Mr Lui introduced Fairway to Jones Lang LaSalle via a document called an "expression of interest"); 8. "She said, '...But still I hope you can introduce more friends to bid on this project...'"; and 9. "In the discovery and then I think those photos is relevant for what I've done and how successively the job has been done and why is a celebration after the - a day after the EOI and why are you introducing people and that is evidence". 1. Mr Lui's argument that "[a]ll that Lui was required to do was to 'find investment partners'" and help Ms Guan to "find appropriate investment developers" is incorrect. If that were the case, he would have passed contact details to Ms Guan, and she would have been the one zeroing in and talking to all these people. At the very least, Mr Lui introduced Fairway to Jones Lang LaSalle (even taking a photo of Mr Macree) and Mr Chan to Ms Guan. Issue 3: "As an agent" 1. The third category concerns the use of and the meaning of the words "as an agent" within the definition of real estate agent (and as distinct from the definition of "agent" as provided under the Act). 2. Reliance was placed upon two lines of authority described as "established" and "recent", respectively: Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418; [1970] HCA 31 ("Freehold") (per Walsh J) and Ryde No 4 (per Ball J). 3. In Freehold at [15], Walsh J observed: [15] ... No doubt the main purpose of the inclusion of the words "as an agent for others" was to exclude from the operation of the Act investors and developers who buy and sell land on their own account. It is typical of the business of a real estate agent that the transactions of sale or purchase of land in which he takes part or with which he is associated are not his personal transactions but are those of other people. It is in that sense that the business is one which he exercises or carries on "as an agent for others" and, if a person does not do this "generally" but does it "in respect of any one transaction", that transaction as a whole is carried out as an agent for others. But in carrying on such a business the agent is, of course, acting also for his own benefit and for the advancement of his own business interests. Therefore he seeks retainers or selling rights and he advertises. His object is that he will have more opportunities available to him to buy or to sell or to negotiate for buying or selling, that is to say, more opportunities to do those things which, when he does them, he will do as an agent for others … [Emphasis added.] 1. Freehold was subsequently approved in Greg Roughsedge Realty Pty Ltd v Whitecross [2001] QCA 426 at [34], [35] and [42] (per Jones J, with whom Williams JA and Douglas J agreed) and Sultana (per the Court at [34]). 2. Reference was also made by the defendants to the earlier decision of Kedcorp. In that decision, the Court said (at [16]): "In our view the words 'as an agent for others' in s 2, which is merely one element in a complex definition, simply connotes a person engaged to act on behalf of another … It is not amiss to note in this context that the classical function of a real estate agent has been regarded as 'to find a buyer' or to introduce a vendor and purchaser". 3. In light of the "established" authorities, the defendants submitted that a person meets the definition "as an agent" if they act, not for themselves, but on behalf of another. 4. It was also noted, in that respect, that no line of authority (nor the Act itself) appears to define or otherwise restrict "other" to that of the vendor or the buyer only. Thus, it was contended, the Court would be hesitant to find that a person only acts "as an agent", with the context of the Act, when acting for certain classes of people, but not others; namely, the "other", it was submitted, need not be defined as limited to "the vendor or the buyer" alone. It was submitted, that such a finding would create a precedent that jars with the established line of authority. 5. Turning then to the recent authorities of Ball J in Ryde No 4. Notwithstanding, that decision was ultimately overturned on appeal (as earlier mentioned), it was contended that the "primary judge's analysis" remains good law (see Ryde Developments at [4]). (As to the point overturned on appeal, see Ryde Developments at [68]-[86]). 6. In Ryde No 4, Ball J accepted the established line of authority but also sought to expand upon the construction of "as an agent" (at [88]): [88] It is not easy to understand Ryde's submission that the definition of "real estate agent" does not require PIA to be acting as Ryde's agent as ordinarily understood. PIA's point is that "agent" cannot be a reference to agent as defined in the Act because "agent" as defined includes a "real estate agent" and "real estate agent" is defined to mean a person who acts as an agent in engaging in the activities identified in paras (a) to (e) of the definition. It is true that "agent" is used to refer to someone engaging in those activities other than an auctioneer. But that does not avoid the need to give meaning to the expression "as an agent". It is plain from the definition that a real estate agent is limited to a person who engages in the identified activities and who engages in those activities as an auctioneer or as an agent. Ryde is correct to submit that the phrase "as an agent" is included in the definition to make it clear, for example, that a real estate agent does not include a person who for reward engages in any of the activities identified in paras (a) to (e) as a principal. But it is not clear that that is the only purpose of the phrase; and put like that the submission begs the question of the difference between an agent and a principal in the context of the definition. 1. His Honour further observed (at [89]-[93]): [89] The word "agent" does not have a fixed meaning. Rather, its meaning must be ascertained from the context in which it appears, having regard to the legislative purpose of the requirement in which the expression is used: see CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2 per Brennan CJ, Dawson, Toohey and Gummow JJ; Interpretation Act 1987 (NSW) s 33. [90] The purpose of the Act is to protect the interests of consumers of real estate agency services. It does that by regulating providers of those services through a system of licensing and the imposition on licensees of various obligations that are principally set out in the Regulation. It also prevents a licensee from recovering remuneration where the licensee has not entered into a contract that complies with the Act and the Regulation. It is evident that one of the concerns of the legislation is to ensure that a licensee discharges the usual obligation of a real estate agent to obtain the best price possible for the owner and a number of the provisions of the Act and the Regulation are directed to that end. But that is not the only concern of the legislation. Another important concern of the legislation is to ensure that an owner is properly informed concerning the terms on which the licensee is retained, including the terms governing the basis on which the licensee will be remunerated. Again, the Act and the Regulation contain a number of provisions directed to that end. [91] It is difficult to see why "agent" should be interpreted narrowly so that it does not catch a person unless that person performs all or most of the usual functions of a real estate agent, whatever they happen to be. The Act and Regulation are designed to protect consumers of real estate agency services. As I have said, an important way that they do that is by seeking to ensure that consumers are properly informed about the services that will be provided to them and the costs of those services. It would be odd to interpret that legislation as not applying where the proposed services are not typical of a real estate agency relationship. It might be thought that it is precisely those types of term that the legislation would be concerned to ensure were drawn to the consumer's attention. Moreover, if "agent" were interpreted narrowly in that way, it would provide an easy mechanism for avoiding the Act and the Regulation by the inclusion of atypical terms in the agency agreement. That could not have been the intention of Parliament. [92] There is more force in PIA's submission that it was not acting as an agent for the purposes of s 55 of the Act because, as a result of the contractual relationship between the parties, it was acting for its own benefit rather than the benefit of Ryde. However, it was still selling property belonging to Ryde and engaging in a number of activities that were typical of a real estate agent. In that sense it was acting as Ryde's agent. The protection afforded by s 55 of the Act was appropriate in those circumstances. In particular, the requirements that the agency agreement be in writing and be provided to the vendor (Ryde) were appropriate, and it is difficult to see why Ryde was not entitled to those protections simply because the benefits and risks of the sales were transferred to PIA as a result of the Agreements and Put Options. [93] The same is true of many of the provisions of the Regulation. There is a question whether the terms of the Regulation can be taken into account in interpreting the Act. The general principle is that they cannot: see Mine Subsidence Board v Wambo Coal Pty Ltd [2007] NSWCA 137; (2007) 154 LGERA 60 at [41] per Tobias JA (with whom Hodgson and Santow JJA agreed). However, an exception exists where the Act and the Regulation form part of a legislative scheme: Empire Waste Pty Ltd v District Court of New South Wales(2013) 86 NSWLR 142 ; [2013] NSWCA 394 at [70] per Bathurst CJ (with whom Beazley P and Hoeben JA agreed). In my opinion, that exception applies in this case. The relevant provisions of the Regulation form part of the scheme setting out what is required of real estate agents. Schedule 7 of the Regulation requires the agency contract to contain the name and address of the parties, a statement that the principal has authority to enter into the contract, a term setting out the extent of the agent's authority, a term setting out the duration of the contract and terms setting out the remuneration to which the agent was entitled. All those terms, and the protection they afford to the principal, were appropriate to a case where the risks of the contract were with the agent. Plainly, for example, it was important for Ryde to know that it would not receive any more than the MUP under the contract. Given that, it is appropriate to interpret the word "agent" broadly to include any case where one party is selling the real property of another. 1. In light of that authority, counsel for the defendants advanced the following submissions: 18. The 'more' which Ball J identified is at [88]-[94] of Ryde Developments (first instance) (set out at DSS [18]). What Ball J did was to reason from first principles. The touchstone of Ball J's reasoning is his Honour's recognition of the fact that the PSBAA is designed to protect consumers of real estate services. This fact means that word 'agent', in the phrase 'as an agent', should be interpreted in a way which catches, not just situations where the proposed service is typical of real estate agency relationships, but also where it is atypical. (Note: it is patent that when Ball J discusses the word 'agent' from [89] onwards he is discussing it as it sits in the phrase 'as an agent'). Ultimately, the Court must decide, using Ball J's first instance reasoning, whether it is 'appropriate' to extend the protection of the PSBAA to the circumstances before it (see [92]-[93] where Ball J uses the word 'appropriate' several times). 19. Ball J's reasoning applies to the present circumstances as follows. The First Defendant was a consumer of real estate services, namely, the Plaintiff's. A common real estate service is to find potential buyers for property and get them to buy. The Plaintiff was tasked with finding a winning buyer for the Kensington land who would buy it for as much as possible. Whilst typically, it is vendors which engage real estate agents to find potential buyers and get them to buy, it is understandable why the First Defendant joined in the effort. The First Defendant had an economic interest in the sale of the Kensington land, which was exactly the same as the one of the mortgagor/registered proprietor (i.e. Shuangfu) and the mortgagee in possession/vendor (i.e. A Capital): to see it sold for as much as possible. 20. That is, there was no difference between A Capital using Jones Lang LaSalle to find a wealthy buyer to buy the Kensington land for as much as possible (so as to reduce the amount which it would have to chase the First Defendant for under her personal guarantee) and the First Defendant using the Plaintiff to do the same (so as to reduce the amount that A Capital might pursue her for under her personal guarantee in the loan from A Capital to Shuangfu). 21. The First Defendant's economic interests were directly affected by the Plaintiff's provision of real estate services in the same way that A Capital's economic interests were directly affected by Jones Lang LaSalle's provision of real estate services. In that sense, she was a real consumer of the Plaintiff's real estate services, just as A Capital was of Jones Lang LaSalle's. 22. Whilst the Plaintiff's provision of his real estate services to the First Defendant might be considered atypical (because he was providing it to a director of a registered proprietor, who was itself not the vendor, due to the appointment of a controller), the First Defendant was still a consumer of such services in the sense described by Ball J. 23. In the Defendants' submission, the issue of the First Defendant's lack of authority to sell the Kensington land is not determinative. The supposed impediment represented by that lack of authority would have vaporised if she had (via the Plaintiff) found a $43,000,000 buyer. Nor does it stop the fact that she was consuming the Plaintiff's real estate services in attempting to bring in such a buyer. 24. In Ryde Developments (first instance), Ball J held that it was 'appropriate' to apply the PSBAA's protection to the particular situation before his Honour (i.e. where the risks of the transaction were laid with the agent2). Ball J cited the PSBAA's various requirements to put things in in the present case, it is appropriate to apply the PSBAA's protections to the First Defendant. For example, it was appropriate for the First Defendant to receive the protection of knowing the duration of the Co-operative Agreement3 (be it 10 days, until the Kensington land was sold, or whatnot), of having a clear written statement of what the Plaintiff needed to achieve to be paid4 (be it to merely participate, or to bring in the winning buyer), and of having a clear written statement of what the 2% was to be multiplied against (as opposed to an ambiguous term called 'tender rate').5 It was appropriate for the First Defendant to receive, in clear written form, these basic parameters upon which she was engaging the Plaintiff. 25. The converse amounts to saying that the First Defendant was not entitled to such basic, clarity giving, protections, just because the registered proprietor was not technically the vendor due to the appointment of a controller. Such a ruling would likely create a precedent that the protections of the PSBAA do not apply where the consumer of the real estate services is not the vendor or buyer. The precedent would withdraw the PSBAA from applying to a whole range of situations: for example, where a potential buyer does not end up being the actual buyer, where a shareholder engages a real estate agent to sell a company's property, where a guarantor engages a real estate agent to sell a debtor's property, and/or where a person engages a real estate agent to find a property to buy not for him/herself but for someone he/she knows or for his/her company. It is unnecessary for the Court to create such a radical precedent. 26. Instead, the conservative approach is to follow Ball J's first principles reasoning. After setting out his first principles reasoning, his Honour then said that it was 'appropriate' to apply the PSBAA's protections to the particular situation before him (i.e. to a case where the risks of the transaction were laid with the agent). This case should be just another specific application of Ball J's first principles reasoning. It is a case where it is either appropriate, or inappropriate, to apply the protections of the PSBAA to a particular situation where a director guarantor, whose interests were exactly the same as the vendor's, engages a real estate agent to find a winning buyer to buy some land for as much as possible. 27. Thus, case by case, and by slow accretion, the law might add more and more specific instances to Ball J's first principles reasoning, leading to a collection of cases in where it was held appropriate, or inappropriate, to apply the protections of the PSBAA to the specific instance. 28. Conversely, there is no need in the present case for the Court to create a radical precedent, and rule that that the PSBAA's protections only apply to the vendor or the buyer (and not even a potential buyer). Such a precedent would run against Ball J's first principles reasoning. The Court would have to explain why it is doing this despite the Established Line (which Ball J approved), despite the PSBAA not saying that 'as an agent' is restricted to 'as an agent for the vendor' or 'as an agent for the buyer', and despite Ball J's 'careful' and 'concise' first principles reasoning which the Court of Appeal approved. Due to the fact that Ball J seems to be the one leading the charge on the interpretation of the PSBAA in NSW, judging by his extensive, textbook-like passages in both Ryde Developments (first instance) and Williams, it is most prudent to fir in the present case, as a specific instance, in and amongst hi Honour's existing structure. 1. In further summary, counsel for the defendants made the following, in closing oral submissions: 1. The definition of "real estate agent" is "wider than what we commonly understand in society to be a real estate agent". It was submitted that the definition under the Act essentially says: "a person is a real estate agent if they carry on business as an auctioneer or as an agent" and then (a) "for a real estate transaction"; (b) "for negotiating with a view to inducing, or inducing"; and (c) "for introducing". Therefore, in light of sub-sections (a) and (b), it was contended that "you need to act as an agent for a real estate transaction, but you don't necessarily need a real estate transaction because of (b), so if you act as an agent and you negotiate with a view to inducing or you induce then you're in the definition" (emphasis added). 2. Counsel for the defendants accepted that the above construction of real estate agent was "counter-intuitive" but maintained that "if one drills down to the substance of the Act, the section 3 definition of real estate agent, that's how it works". 3. On the defendants' case, Mr Lui was acting as an agent for Ms Guan: "He was the real estate agent finding buyers of the land for her, and then introducing them to the vendor, and also negotiating with a view to inducing and/or inducing them to make an offer for the land, right". 4. The judgment of Ball J in Ryde No 4 is "highly persuasive" and supports a wider definition of "agent". Therefore, "to make an offer to enter into a contract… does not need to be the vendor's agent. Buyers' agents are included as well" (see, in particular, [91]). 5. Turning to issue before the Court, counsel for the defendants sought to emphasise the novelty of the case, being a set of facts and circumstances for which no case law appears to have traversed: "it's a situation where a real estate agent gives real estate agent services to a director of a company who is the registered title holder of land that is being sold by the mortgagee in possession, who has itself its own agent, Jones Lang LaSalle". 6. It was also contended, "it is not necessary for the person receiving the real estate agency services to have the power and authority to cause the sale to happen… because of the way the statutory language is written. All that is needed is to induce or attempt to induce or negotiate with a view to inducing any person to make an offer to enter into a real estate transaction, so all Kevin Lui had to do was go out into the Chinese business community and induce, or attempt to induce those guys to make an offer to enter into a real estate transaction". 7. In summary, as to the construction contended for by the defendants, counsel for the defendants suggested that the Court should work through the legislation in a "step-by-step" fashion. 1. Finally, in the Defendants' Reply to the Plaintiff's Response to the Defendants' Consolidated Submissions, the following submissions were further advanced in supplementation of the above contentions. 2. First, in furtherance of submissions as to the wide approach to be taken to the construction of "real estate agent" under s 3 of the Act, the defendants submitted: "Nowhere does the PSBAA say that 'as an agent' means 'as an agent for the buyer' or 'as an agent for the seller' only". If the Court were to limit the definition in that way, "[t]he Court would essentially be deleting sub-sections (b)-(e) in the s 3 definition… A person would only be a real estate agent if that person was an 'agent' for a 'real estate transaction' (sub-section (a))". By contrast, sub-sections (b)-(e) do not require things to reach the stage of "purchase" or "sale"; it was contended that "merely inducing someone to make an offer, or merely introducing someone is enough". 3. Second, the "touchstone" of Ball J's decision in Ryde No 4 is, it was submitted, "whether the person being sued to pay a fee was a 'consumer of real estate agency services' as provided by the person doing the suing". It was contended that by that "touchstone" the "As an Agent Box" is not restricted "to those real estate agents who are only agents for the buyer or seller". This submission appears to connect with the defendants' earlier submission as to the "involvement" of Ms Guan, namely, she "had a keen interest in seeing the Kensington land sold for as much as possible" (notwithstanding the fact she was not the vendor/seller). 4. Lastly, the agreement, it was contended, required Mr Lui to find a winning bidder for the Kensington land for the highest price possible and that everything Mr Lui did was in furtherance of providing that "service". That service, it was submitted, "was clearly a real estate agency service. That is what real estate agents do: they find buyers for land at the best price possible". Ms Guan was a "consumer" of that service. The Act 1. Section 3 sets out the definitions for "agent" and "real estate agent". An "agent" is defined as follows: agent means: (a) a real estate agent, or (b) a stock and station agent, or (c) a business agent, or (d) a strata managing agent, or (e) a community managing agent, or (f) an on-site residential property manager. 1. A "real estate agent" is defined as follows: real estate agent means a person (whether or not the person carries on any other business) who, for reward (whether monetary or otherwise), carries on business as an auctioneer of land or as an agent: (a) for a real estate transaction, or (b) for inducing or attempting to induce or negotiating with a view to inducing any person to enter into, or to make or accept an offer to enter into, a real estate transaction or a contract for a real estate transaction, or (c) for the introduction, or arranging for the introduction, of a prospective purchaser, lessee or licensee of land to another licensed agent or to the owner, or the agent of the owner, of land, or (d) collecting rents payable in respect of any lease of land and otherwise providing property management services in respect of the leasing of any land, or (e) for any other activity in connection with land that is prescribed by the regulations for the purposes of this definition, but does not include a person who carries on business as an auctioneer or agent in respect of any parcel of rural land unless the regulations otherwise provide. Note. This definition is not limited to the selling of land and extends to an agent acting on behalf of the buyer of land (a buyer's agent). As noted in section 168 of the Retirement Villages Act 1999, a selling agent acting on the sale of residential premises in a retirement village must be licensed as a real estate agent under this Act. 1. "Real estate transaction" means "the purchase, sale, exchange, lease, assignment or other disposal of land, whether or not an auction is involved". 2. Section 8 provides as follows: 8 Agents required to be licensed (1) A natural person must not act as or carry on the business of (or advertise, notify or state that the person acts as or carries on the business of or is willing to act as or carry on the business of): (a) a real estate agent, unless the person is the holder of a real estate agent's licence, or (b) a stock and station agent, unless the person is the holder of a stock and station agent's licence, or (c) a business agent, unless the person is the holder of a business agent's licence, or (d) a strata managing agent or community managing agent, unless the person is the holder of a strata managing agent's licence, or (e) an on-site residential property manager, unless the person is the holder of an on-site residential property manager's licence or a real estate agent's licence. Maximum penalty: 100 penalty units. (2) A natural person is not entitled to bring any proceeding in any court or tribunal to recover any commission, fee, gain or reward for any service performed by the person: (a) as a real estate agent, unless the person was the holder of a real estate agent's licence, or employed the holder of such a licence, at the time of performing the service, or (b) as a stock and station agent, unless the person was the holder of a stock and station agent's licence, or employed the holder of such a licence, at the time of performing the service, or (c) as a business agent, unless the person was the holder of a business agent's licence, or employed the holder of such a licence, at the time of performing the service, or (d) as a strata managing agent or as a community managing agent, unless the person was the holder of a strata managing agent's licence, or employed the holder of such a licence, at the time of performing the service, or (e) as an on-site residential property manager, unless the person was the holder of an on-site residential property manager's licence or a real estate agent's licence, or employed the holder of such a licence, at the time of performing the service. (3) This section applies to a natural person whether or not the person is a member of a partnership. (4) The fact that a particular activity is an activity for which more than one class of licence may be appropriate does not require the holding of more than one type of licence so long as at least one of the licences that is appropriate to the activity is held. (5) For the purposes of this section, a person is not considered to carry on a business merely because the person is a member of a partnership that carries on that business. Note. Subsection (5) makes it clear that "silent" partners are not required to be licensed. Consideration: Real Estate Agent Issue 1. The defendants contended that the provisions of s 8(2) of the Act were a bar to Mr Lui making the claim pursuant to the agreement for damages in this Court. 2. In order to make good that contention the defendants must establish that Mr Lui was performing the service of a real estate agent for a natural person, namely, Ms Guan. 3. Section 3 of the Act provides definition of real estate agent. By virtue of that definition the defendant must establish for the purposes of these proceedings that Mr Lui was a person who carried out the business of an agent for a real estate transaction as defined in the Act. This shall be described, as the defendants did, as the first issue. The First Issue 1. The first issue debated by the parties in isolation from the questions as to whether Mr Lui was engaged in performance of the agreement in a real estate transaction but those considerations, at least as a matter of fact, cannot be entirely dislocated. 2. The first issue, so described, is a question of fact. An evidentiary onus lies on the defendants in that respect. 3. The starting point for the resolution of the first issue is to construe the relevant provisions and then to carefully examine the facts: Farrell v Bannister (1952) 52 SR (NSW) 73 ("Farrell"); Lend Lease Real Estate Investments Ltd v Charter Hall Retail Management Ltd [2011] NSWSC 1624 ("Lend Lease"); Sims v Gawne [2005] NSWSC 750 ("Sims") at [21]. 4. As to the meaning of the expression "carries on a business" for the purposes of the definition of a real estate agent in s 3 of the Act I adopt, with respect, the analysis of Ball J in Williams at [70] as follows: In order to carry on business, repetition and continuity of the activities which characterise the business are necessary. However, an isolated activity with the intention of repeating it is sufficient. As Lopes and Kay LJJ said in Re Griffin; Ex parte The Board of Trade (1890) 60 LJQB 235 at 237, cited with approval by Barwick CJ in Fairway Estates Pty Ltd v Federal Commissioner of Taxation [1970] HCA 29; (1970) 123 CLR 153 at 165: If an isolated transaction, which if repeated would be a transaction in a business, is proved to have been undertaken with the intent that it should be the first of several transactions, that is, with the intent of carrying on a business, then it is a first transaction in an existing business. 1. I also accept his Honour's broad description of the principles of the Act in Ryde No 4 at [90]. 2. In my view, there is a relatively straightforward factual basis upon which the defendants' reliance upon a bar under s 8(2) of the Act must be rejected by reference to the first issue. 3. Assuming that it may be found that Mr Lui's services to Ms Guan in relation to the Kensington Project amounted to services as a real estate agent (and I will conclude that no such finding is properly available), the defendants failed to establish that Mr Lui provided the services other than as a one off transaction: Bannister (1952) 52 SR (NSW) 73 at 74 per Street CJ; Simpson at [146]; Mathas v Slater [2009] NSWSC 1397 at [111]. 4. There was no evidence that Mr Lui intended to be involved in future transaction of the kind engaged on behalf of Ms Guan or real estate transactions of any kind. There was no evidence of Mr Lui intending to repeat that business: Williams at [70]. Those propositions were never put to him in cross-examination. 5. A person who is found to have been involved in an isolated transaction of the kind in question or is not otherwise found to have been involved in a "business" of a real estate agent is not prohibited from recovery: Farrell at 74 per Street CJ; see also Milne v Coxton (unreported, Supreme Court of NSW, Clarke J, 1985) BC8700884 (at 53). 6. In this case, the defendants have failed to establish, as a matter of fact, that Lui conducted a "business" of a real estate agent. Counsel for the defendants was entirely unsuccessful in putting such a proposition to Mr Lui in cross-examination. He accepted Mr Lui's rejection of the propositions (albeit that they were on occasions not put in an entirely clear way). The defendants called no evidence in that respect. 7. In the Defendants' Reply to the Plaintiff's Response to the Defendants' Consolidated Submissions, the defendants' made an unsuccessful attempt to demonstrate there was some evidence that Mr Lui's business concerned real estate either historically or as a present day operation. 8. None of those submissions referred to Mr Lui's evidence. Further, the evidence that the defendants sought to rely upon, as to Mr Lui's prior activities as a real estate agent, in this respect, was threadbare, inconclusive and ultimately did not establish the proposition that the defendants sought to put. My reasons for that conclusion are in two parts. 9. First, the defendants sought to rely upon Mr Lui's past interactions with Mr Liang and Mr Qian, as derived from Mr Lui's affidavit and answers during cross-examination, to demonstrate that Mr Lui was involved in "a whole raft of real estate work". In support of that contention, the following evidence was referred to: 1. Mr Lui's conversation with Mr Liang in 2013 as recorded at para 20-22 of Mr Lui's affidavit affirmed 8 December 2015, by that conversation Mr Liang seeks advice as to purchasing the Kensington land, to which Mr Lui replied: "If you want to buy them, that is your choice and I have no views. I cannot advise you without getting your documents and doing studies". It may be noted that counsel for the defendants incorrectly characterised the exchange as "advice" by Mr Lui. 2. Mr Lui's response to enquiries from Mr Qian as described during his evidence at the hearing (extracted below). The defendants, in this respect, submitted that Mr Lui's conduct concerned "searching for properties to purchase for Alfred Qian", which once again appears to be a mischaracterisation of the evidence before the Court: Q. Now you have done business with Alfred Qian before and earned money from doing business with him, haven't you? You have done business with Alfred Qian before? A. Alfred asked me to look for properties in Sydney. For Kerry Properties, for Shangri La Hotel, for sites which can build different hotels, like Traders or Shangri La or the Hotel James, they have a series of bands of the group. … Q. Your job, what you were trying to achieve is to show this information memorandum to as many rich, Chinese, say, Hong Kong or mainland Chinese businessmen as possible. That's what you were trying to do; correct? A. No. Not all but I did give it to one or two and then I talked to Alfred accordingly because somebody know the project and I talk to Mr Tang accordingly because they know the project. And then also I talked to Mr Zhao, with the site, there were three people I, I introduce to the site. Yeah. 1. The evidence of Mr Lui as to his interactions with Mr Liang and Mr Qian are not demonstrative of prior activities as a real estate agent. Further, it may be added, the submissions advanced by counsel, in this respect, which were described as "basic facts", appeared to be based upon a highly optimistic interpretation of a rather slender piece of evidence (In my view, the defendants contention was not supported by the evidence at all). 2. Secondly, the defendants sought to rely upon Mr Lui's connection to Elite 100, which the defendants' contended was a business that conducted real estate transactions. In advancing that submission, counsel for the defendants sought to eradicate any form of delineation between the activities of Elite 100 and Mr Lui, in order to draw connections between the business of Elite 100 and Mr Lui (Mr Lui was a 40% shareholder). The highest point of the defendants' case, as to Elite 100 demonstrating prior conduct of real estate transactions (notwithstanding the fact that Elite 100 was not party to the agreement), was an extract from the Elite 100 website that described one of its "core" business operations (of which there were five listed) to be: "facilitating project and property investment". That evidence cannot be accepted as sufficient to sustain the proposition that Elite 100 thereby conducted real estate transactions and, therefore, Mr Lui was, by extension, involved in and "a whole raft of real estate work". 3. It may be noted, in that respect, counsel for the defendants never put to Mr Lui that, by his connection to the work of Elite 100, he was thereby involved in real estate transactions. During cross-examination, counsel for the defendants, with respect to the business of Elite 100 and the involvement of Mr Lui, sought to draw, however, a connection, albeit tenuous, between SIV and real estate, as follows: Q. The idea is that the overseas Chinese business person brings $5m to Australia and invests in a variety of things and they get the visa. That's how it works? A. I don't understand your question. Q. This visa, significant investment visa, the way it works is you come from overseas, you bring $5m, you buy real estate or businesses and then you get the visa, is that right? A. I don't understand your question because it's a government regulation and immigration regulation. And your question is - I cannot answer. Q. Do you know how much money you need to pay in order to get the visa? A. I never done one. Q. Now, do you charge a fee to help Chinese business people come to Australia and get a visa? You charge a little bit of money just to do the job. A. I don't understand your question. 1. In any event, as mentioned, Elite 100 was not party to the agreement, nor was it ever suggested that Mr Lui entered the agreement in anything other than a personal capacity. 2. Overall, the Defendants' Reply to the Plaintiff's Response to the Defendants' Consolidated Submissions appeared to be an attempt to sieve through to evidence to repair a lacuna in the defendants' case with respect to this issue. It was unsuccessful. 3. Importantly, unlike the case in Williams, there was no evidence that Mr Lui and Ms Guan discussed in any other similar transaction either in relation to another property or generally into the future. 4. Overall there was no evidence to support that Mr Lui had engaged in prior activity as to as a real estate agent or intended to carry on any such businesses. 5. This conclusion suffices to reject the defendants' contention as to the operation of a prohibition on recovery pursuant to s 8(2) of the Act. 6. For completeness, I will review other bases for the defendants' contentions. Those contentions must also be rejected. I will initially turn to the balance of consideration under the first issue and then briefly deal with the second and third issues as stipulated by the defendants. 7. In my view, there was insufficient evidence to support a conclusion that Mr Lui carried on a business as a real estate agent in or in connection with the performance of his work under the agreement. Further, I do not consider he carried on a business as an agent for a real estate transaction for Ms Guan for reward. 8. In further summary, the defendants submitted, in support of its contention that Mr Lui carried out the business of an agent for a real estate transaction, Ms Guan was a consumer of real estate services, upon the following bases: 1. Mr Lui was tasked with finding a winning buyer of "the Kensington land". It was true Mr Guan could not sell the land but she was free to bring in a winning bidder and Mr Lui had agreed to in that respect. 2. Ms Guan's interest in the land was "exactly the same" as that of the mortgagor/registered proprietor (Shuangfu) and the mortgagee in possession/vendor (A Capital), namely, to "see" if the land could be sold. 3. There is no difference in A Capital using Jones Lang LaSalle to find a buyer of "the Kensington land" and Ms Guan using Mr Lui. Ms Guan's economic interests were directly affected by Mr Lui's provision of real estate services in the same way as A Capital's was affected by Jones Lang LaSalle's provision of real estate services. 4. The capacity of Mr Lui "to bind" is not relevant to determining whether he was a real estate agent. 5. It is sufficient to introduce others to the owner or to be an agent of the owner. Mr Lui "introduced" in a relevant sense and "negotiated" and "induced" with respect to the land transaction. Mr Lui did not have to be a registered real estate agent. 6. Mr Lui was engaged generally in a real estate business (which I have rejected above). 7. The letter of demand sent by legal representatives of Mr Lui had the characteristics of a real estate agent's letter. 8. The letter received by Mr Lui at the close of the expression of interest process was similar to a letter which would be forwarded to a real estate agent. 1. I reject those submissions because they misunderstand or misstate the nature of Mr Lui's engagement on behalf of Ms Guan for the following reasons: 1. Mr Lui contracted with Ms Guan and not with any of the bidders, Anson City, A Capital or Shuangfu. This fact is significant, because Ms Guan had no power to sell, buy, exchange or otherwise dispose of the Kensington Project (see Challenger at [60]). 2. Ms Guan also had no power to give any inducements or enter into any negotiations with any of the purchasers in relation to the contract or the sale of the Kensington Project. 3. Mr Lui did not have any power or authority that went beyond that held by Ms Guan. Ms Guan did not have the power to affect what Shuangfu did after it was placed into administration or affect the conduct of the receiver. 4. The entire process and the sale, including the selection of any bidders and any negotiation with them, was in the sole discretion of A Capital. 5. I accept the submission of Mr Lui that many of the authorities dealing with these provisions may be distinguished because in those other matters the contractual relationship was between an "agent" and a party that could be a party to a "real estate transaction". 6. Mr Lui was not concerned with, nor did he deal with, a process akin to an auction. It was a non-binding expression of interest. The judgment of Rein J in Lend Lease is closer to the factual circumstances of this matter. In that matter, it was found that the plaintiffs inclusion of the defendant in the former's bidding group for the purposes of engaging in an expression of interest process did not "readily fit within the notion of services that a real estate agent performs" (at [38]). 7. It is appropriate to have regard to the agreement itself given that the issue raised by the defendants is whether Mr Lui should be barred from recovering monies for a service he provided to Ms Guan (see Sims at [25]-[31]. The service in question here is only the service performed in accordance with the agreement for reward. Further, services performed beyond what was agreed, for which no monies were payable, do not trigger the prohibition in relation to services, the provision of which, without a license, is not prohibited. 8. The findings made above as to whether Mr Lui conducted the business of a real estate agent (which are further discussed below with respect to the second issue). The Second Issue 1. It was submitted by the defendants that contrary to Ball J's opinion in Ryde No 4, involvement as a real estate agent was not confined to a vendor or buyer. Alternatively, even on Mr Lui's version, it was contended, his participation in finding a bidder constituted a "real estate agency service". It was submitted that sub-sections (b) to (e) of the definition of "real estate agent" in the Act required an affirmative conclusion in this respect. 2. The difficulty with that submission is the evidence as to the lack of proximity between Mr Lui and the real estate transaction in which the vendor and ultimate purchaser were involved in. 3. Whilst I agree with Ball J in Ryde No 4 as to the purpose of the Act (see at [90]) and that the word agent should not be interpreted narrowly (at [91]), the definition of "real estate agent" in the Act should not be read too broadly: Lend Lease at [38]-[39]. I do not consider the agreement or Mr Lui's conduct, as construed in this judgment, falls within that definition. 4. There was no evidence that either Ms Guan or Mr Lui was in any position to offer any inducement to anyone to enter either into the bidding process or the contract of sale. In Hawk, Bell J (as her Honour then was) described "inducement" by reference to the "real estate transaction" and analysed the relevant conduct by reference to whether it was an endeavour to persuade someone to "enter a contract for a real estate transaction" (at [49]). There was no such inducement in this case. 5. There is no evidence that Mr Lui sought to persuade any party to enter into a contract for a real estate transaction. He encouraged Fairway and Anson Company to engage in the expression of interest process and provided certain information. 6. Nor do I consider the evidence reveals that Mr Lui engaged in any negotiations. In Challenger, Young CJ in Eq stated, "the word [negotiation] usually means the arrangement of a sale and purchase, that is obtaining and finally settling all the terms and conditions and the price" (at [60]). Mr Lui was not involved in any task that answers those descriptions. The evidence was that he and Ms Guan were specifically excluded from any such negotiations. All that Mr Lui was required to do was to "find investment partners" and "assist" Ms Guan to "find appropriate investment developers". That clearly involved no negotiation. 7. The defendant contended that, in any event, Ms Guan was "involved" in the sale of "the Kensington land" or she was a director and shareholder of a company that was a registered proprietor and was a personal guarantor of that company's debt to A Capital. She had a "keen interest in seeing the Kensington land sold for as much as possible". 8. However, the bidding process was not a "real estate transaction". The "purchase, sale… or other disposal of the land" took place without reference to either Mr Lui or Ms Guan. Neither was involved in that process. 9. In Lend Lease, Rein J dealt with circumstances where the plaintiff, Lend Lease, had included the defendant in a bidding process as part of a consortium. Whilst his Honour was not faced with the present issues as such, namely, whether a bidding process satisfies the requirements of the term, "real estate transaction", his Honour rejected the argument based on s 9 of the Act on the basis that the "fee" was for "including Charter Hall in its bid for all of the assets owned by ING...". The circumstances of this case are even further removed from the circumstances of the case in Lend Lease. Here, Mr Lui's entitlement to the monies that he seeks was triggered by the success of the bidding process and not the sale of the Kensington Project. Third Issue 1. I accept the submission of Mr Lui that there is no basis on present authority to extend the meaning of agent to include a person not partaking in a real estate transaction. 2. As Ball J said at [90] and [91] of Ryde No 4, the Act was enacted to protect the interests of consumers of "real estate agency services". On no view could Ms Guan be considered to be such a consumer. She was neither a vendor nor a purchaser. This factual matrix differs from factual matrices in the authorities cited by the defendants on this question. Unlike the parties in those cases, neither she nor Mr Lui was involved in the "real estate transaction". THE PRIMARY MATTER: RELIEF – DAMAGES 1. It was common ground that the vehicle owned by Sun Link had been sold for $200,000. I consider, in the absence of a contrary submission that should be taken as the material value of the vehicle for the purposes of an order of damages. However, the Court will require further submissions as to the whether or not Ms Guan may be personally liable for such damages, with respect to the vehicle, in circumstances where Ms Guan did not have the authority to bind Sun Link and Sun Link was not found to be a party to the agreement. 2. Having regard to the aforementioned construction of the agreement the relevant consideration for the balance of the relief claimed by Mr Lui is "the tender rate", which is to be calculated by reference to the final bid by Anson City. Two percent of the tender rate equals $780,000. That amount remains unpaid. It is appropriate that Ms Guan be ordered to pay Mr Lui that sum. CONCLUSION: THE ISSUES 1. In the circumstances, the issues raised by the parties should be answered as follows: 1. Mr Lui and Ms Guan entered a contract on 18 January 2015 in terms which are set out in English language in Ex 1 in the primary proceeding. There was no oral contract. 2. This issue was superseded by the selling of the vehicle. 3. This issue shall be the subject of further submissions provided for in the directions below. 4. Yes (see under the heading "Relief: The Primary Matter – Damage"). 5. No. THE SECOND MATTER 1. I return briefly to the second matter. As earlier mentioned, the contentions of Mr Leong, counsel for the Sun Link in the second matter (noting Ms Guan was not a party to the second matter), were brief and primarily served as supporting context to arguments in relation to the primary matter. Nonetheless, a brief summary of the parties' submissions, in that respect, follows. 2. Counsel for Sun Link did not produce any written submissions with respect to the second matter, save for the following contention in the Defendants' Opening Submissions in the primary matter: "Sun Link Group's ownership of the vehicle has been maintained and asserted". 3. On the first day of hearing, counsel for Sun Link contended that, notwithstanding the sale of the vehicle, an action in damages remains, as Sun Link "suffered loss of enjoyment". However, as the second matter was pleaded on the basis of the vehicle being in Mr Lui's possession, the Court allowed counsel for Sun Link to consider how it wished to proceed. That exchange was as follows: HIS HONOUR: Yes. Well, look, at this stage, I propose to proceed on the basis that unless you do something to resurrect the, what I call "the second matter", that I won't treat it as being relevantly before me in the proceedings that are listed over these two days. That will put the onus on you, as it were, to initiate something in relation to it, firstly, by communicating with your opponent what the basis of it is, how you say it come into the proceedings now and then, what should be done with it. There's no license, I should indicate, contained in anything that I've just said. It's just a way of case managing what is in the proceedings now to simplify them in an economical way without this, as it were, lingering in a way that might affect it adversely in that respect. LEONG: Is your Honour perhaps referring to a notice of motion of some sort? HIS HONOUR: Not at this stage. I think it can be dealt with more simply. If it's spent, as I suspect it is, then you can simply take the necessary steps to have it dealt with as if it is spent in the proceedings which I'll let you contemplate, but the usual sort of steps in that respect, such as a discontinuance or something of that kind might be in order. LEONG: What steps would your Honour require for us to re-agitate it, so to speak? HIS HONOUR: Well, the starting point of that would be giving advice in writing to your opponent as to what you would propose to do and then raise it before the Court before I conclude the proceedings over these next two days. That might require some formal process beyond that, but at the moment, I'm simply indicating unless and until I hear something to the contrary, I'll proceed on the basis that it is spent and that at some point or rather it will be discontinued or some other things done subject to costs. 1. Counsel for Sun Link did not seek to further develop submissions or re-agitate the issue. Counsel for Mr Lui submitted that nothing remained of the second matter and that it should be dismissed with costs. I accept that submission. CONCLUSION 1. Mr Lui has established his claim for breach of contract against Ms Guan. Ms Guan failed to pay Mr Lui in accordance with cl 5 of the agreement. Mr Lui performed his obligations under the agreement as set out in this judgment. Accordingly, Mr Lui should obtain the relief in that respect. 2. It is true Ms Guan failed or refused to cause the registration of the vehicle to be transferred to Mr Lui in accordance with cl 4 of the agreement. However, there remains a question as to whether Mr Lui may properly be awarded damages with respect to that failure under prayer 4 for relief of the ASOC, having regard to the vehicle belonging to Sun Link. Accordingly, the Court will receive further submissions as to any personal liability of Ms Guan in that respect. If damages were ordered, they would be in the sum of $200,000. 3. The parties sought that the question of interest and cost be held over pending this judgment. It is appropriate that directions are made, in that respect, and are reflected below. 4. Submissions as to interest and costs may be affected by the Court's final determination of damages with respect to prayer 4 for relief vis-à-vis damages with respect to the vehicle. However, that is a quite compact issue and, accordingly, the Court may receive submissions on that issue at the same time as receiving submissions or evidence on the question of interest and costs even if alternative formulations are provided by the parties. 5. The statement of claim brought by Sun Link is dismissed. DIRECTIONS 1. The Court makes the following directions: 1. Mr Lui shall file and serve: 1. written submissions as to his claim for relief under prayer 4 of the amended statement of claim, with respect to the vehicle; and 2. written submissions or evidence as to the question of interest and costs; on or before 4pm on Friday, 12 July 2019. 1. The defendants shall file and serve: 1. written submissions in reply as to any claim for relief by Mr Lui under prayer 4 of the amended statement of claim, with respect to the vehicle; and 2. written submissions or evidence in reply as to the question of interest and costs; on or before 4pm on Friday, 26 July 2019. 1. In the event that either party seeks an oral hearing in relation to the question of interest and costs, an application to that effect should be made in the written submission filed in accordance with orders (1) and (2) above. 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: 03 July 2019