Wang v Yu

HIS HONOUR: These proceedings arise out of arrangements between the parties relating to a development of property at Meadowbank (project). The project commenced following the plaintiff, Lu Wang (Dr Wang) mutually introducing for investment partnership purposes a former school friend and acquaintance, the first defendant, Jiayi Yu (otherwise known as Steven Yu (Mr Yu)) and Dr Wang’s then boyfriend, Toshiyuki Yamaguchi (Mr Yamaguchi).

The project involved the building of a block of 30 residential apartments and a single retail shop: T 209-210, Exhibit P23. It was structured through a unit trust (Trust) in which a company of which Mr Yu is the sole director and shareholder (namely, the second defendant, STYU Pty Ltd ATF Sy Family Trust (STYU)) and Mr Yamaguchi held an equal number of units.

The third defendant, Auslon Property Group Pty Ltd (APG), was the trustee of the Trust.

The events bear some features common to commercial arrangements between parties involved in property development.

However, what started as a type of joint venture property development between Mr Yu/STYU and Mr Yamaguchi in which Dr Wang – from Mr Yu’s perspective – was initially a form of supervisor or “gatekeeper” of investment funds paid by Mr Yamaguchi morphed into something more undefined whereby Dr Wang began to make payments to APG (the character of which payments is in dispute).

The arrangements between Mr Yu and Mr Yamaguchi were oral and not formally documented. Their rights as between themselves may be gleaned from Mr Yu’s evidence regarding his discussions with Mr Yamaguchi, inferences drawn from the terms of the Trust, and an email 2 days after the Trust was created referring to Mr Yu’s understanding of the arrangements between them.

As can often happen between people who are acquaintances, when they engage in business relations with one another the arrangements are either not documented at all or poorly documented and their respective understandings of what the arrangements are, and their entitlements differ.

That frequent occurrence has happened here.

The informality attending the arrangements between Mr Yu and Mr Yamaguchi was compounded by a complete failure, at least initially on the part of Dr Wang, to seek to formalise and document with Mr Yu and APG the basis on which she commenced to make payments to APG. Over time, with the making of more payments, Dr Wang’s desire to assert claims of right regarding such payments increased. Her ability to press her claims became more complicated consequent upon the breakdown of her relationship with Mr Yamaguchi.

Then, sadly, the interactions between Dr Wang and Mr Yu took on a more sinister character in which consequent upon Dr Wang seeking to press her claims for recognition of monetary inputs to the company on the one hand and Mr Yu not directly recognising such claims (at least in part because he regarded it as being a matter to be sorted out as between Dr Wang and Mr Yamaguchi), Mr Yu claims he was assaulted on 11 May 2015 by Dr Wang’s new boyfriend, the second cross-defendant, Song Yang (known as Allen Yang (Mr Yang)). Ultimately, on 28 June 2016, Mr Yu says he was pressured to enter a deed of settlement and release (Deed) by duress from fear of Mr Yang, which Mr Yu says occurred at the instigation of Dr Wang. Further, monies were paid by Mr Yu to Mr Yang immediately after the alleged assault and, additionally, monies were paid by Mr Yu to Mr Yang for Dr Wang prior to the entry into the Deed (he says) at the request of and under the threat of violence from Mr Yang.

On 13 April 2021, Mr Yu and STYU claimed to have elected to “void” the Deed by reason of duress.

Dr Wang in the proceedings principally claims specific performance of the Deed. In particular, Dr Wang seeks an order that:

Mr Yamaguchi is not a party to the Deed, and Mr Smallbone (who appeared for Dr Wang) submitted it is evident that the parties decided that STYU would declare itself to be the trustee of its interest for Dr Wang and chose to give effect to their agreement to effect what is described, perhaps clumsily, as a transfer but is (he submits) in fact a declaration of trust: T 9.42-.48.

Dr Wang seeks other relief which essentially depends upon whether the order for specific performance is made or not including that APG prepare books and certain records of accounts, and that an enquiry be held and an account be taken as to the benefits, interest and profits obtained by Mr Yu and STYU from the Class B Units, and, in addition to or in lieu of specific performance, orders that they pay Dr Wang damages at law for breach of covenant or in equity under Lord Cairns’ Act (a colloquial reference to the Chancery Amendment Act 1858, 21 & 22 Vict, c 27 – now see s 68 Supreme Court Act 1970 (NSW)) for damage it is said that Dr Wang has sustained by reason of the refusal of the defendants to specifically perform the deed or for breach of covenant: CB 104-105.

Mr Yu, by a cross-claim, seeks declarations that agreements to pay monies to Dr Wang and Mr Yang are void and of no effect and seeks repayment of the funds he paid and judgment for $210,000.

It may be noted that the defendants (who are all parties to the Deed) and Mr Yu and STYU in particular did not expressly seek a declaration that they had avoided the Deed.

Nonetheless, as noted below, it was obvious that whether the Deed has been effectively avoided was essentially an issue as between the defendants and Dr Wang (in particular, whether, if the Deed was avoided, restitution was possible).

Ultimately, I have found that the Deed was entered into by the defendants as a result of duress.

The above-mentioned four persons are the main participants featured in this real-life drama. Two of them, Dr Wang and Mr Yu, gave evidence. The other two (Mr Yamaguchi and Mr Yang) were not called to give evidence giving rise in their case to questions as to whether a Jones v Dunkel inference arose.

Dr Wang is the common link between the main parties. She had known Mr Yu since school days. She had also known Mr Yamaguchi since childhood and was in a relationship with Mr Yamaguchi during the early part of the period covered by the relevant events. She ceased to be in a relationship with him and from February 2015 was in a relationship with Mr Yang until February 2017: T 98.39, 160.34-36.

There were aspects of the evidence of Dr Wang and Mr Yu which I found difficult to accept. I will address this more particularly below.

I will address specifically below the events that bear upon the issues in the proceedings listed below. However, it is helpful to give a brief summary of the context of the parties’ claims in the proceedings.

Mr Yu outlined the project to Dr Wang who introduced Mr Yamaguchi as the initial investor. Mr Yu says that he spoke with Mr Yamaguchi and agreed that Mr Yamaguchi would provide initial funding for the project and that Mr Yu would contribute his time, skills, connections and an office space.

In July 2014, the Trust was created with STYU holding 20 units and Mr Yamaguchi 20 units (totalling 40 units).

Mr Yu says that he and Mr Yamaguchi would be equal unitholders (50-50) but envisaged that, ultimately, other more substantial investors would be required.

Other investors were introduced to the project by a unitholders agreement signed on 24 April 2015 (Unitholders Agreement).

Dr Wang was from the time of the creation of the Trust a director of APG with Mr Yu. She was also the signatory to APG’s bank account. Surprisingly, Mr Yu was not also a signatory to the bank account.

Dr Wang says that she paid to APG (and an associated company) sums totalling $616,206.83 as funding for various purposes. The bulk of those funds was paid in over the period 13 October 2014 to 23 March 2015.

Dr Wang claims that she sought to have her funds repaid. Mr Yu, on the other hand, says that prior to January 2015, he had no idea that she contributed funds.

I will describe salient features of the Unitholders Agreement below. However, it suffices to note at this point that there was a restructuring of unit entitlements.

STYU’s units and Mr Yamaguchi’s units were, for want of a better description, converted to D Class Units and they were issued with B Class Units, the features of which I will refer to below.

The events reached a crisis point in late-June 2016 whereby Dr Wang says that STYU agreed by the Deed to transfer its beneficial interest in its B Class Units to Dr Wang in addition to her having received from Mr Yu and STYU the sum of $200,000.

It is that deed which has become the focus of the parties’ rights in the proceedings. Dr Wang, for her part, seeks to enforce the Deed. Mr Yu, for his part, claims that the Deed was entered into by him under duress and he asserts that in April 2021, he elected to “void” the Deed.

I pause to note that various parts of the evidence and submissions in these proceedings contained references to unitholders possessing “legal title” to, or “legal interest” or “legal estate” in, units of the Trust: see, e.g., CB 176, 499, 561, 578; T 10, 12, 513, 528, 529. Such references are misconceived. It is true that units in a unit trust are often compared to or spoken in terms that emphasise their resemblance to shares in a functional or commercial sense: Charles v Federal Commissioner of Taxation (1954) 90 CLR 598; [1954] HCA 16 at 608-609 per Dixon CJ, Kitto and Taylor JJ; Cachia v Westpac Financial Services Ltd [2000] FCA 161; (2000) 170 ALR 65 at [87] per Hely J; JD Heydon and MJ Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis) at [3-12]; Nuncio D’Angelo, Commercial Trusts (2014, LexisNexis) at [1.40]. Both shares and units entitle their holder to certain rights, which may include rights with respect to voting, payment of funds (by way of dividend (shares) or distribution (units)) and may be organised into different types of “class”.

Doctrinally speaking, however, shares and units differ in significant respects. A share is a legal chose in action: Re Investa Properties Ltd [2007] FCA 1104; (2007) 25 ACLC 1186 at [26] per Lindgren J; De Lorenzo v De Lorenzo [2020] NSWCA 351 at [20] per Leeming JA. Both legal and equitable title to shares may be enjoyed where, e.g., one person holds shares on trust for another person. On the other hand, a unit in a unit trust, like the interests enjoyed by beneficiaries of other types of trust, is necessarily an equitable chose in action: Aust-Wide Management Ltd (Receiver Appointed) v Chief Commissioner of Stamp Duties (1996) 33 ATR 384 at 386 per Handley JA (Beazley JA – as her Excellency then was – agreeing); Elkington v Moore Business Systems Australia Ltd (1994) 13 ACSR 342 at 350 per Bryson J (as his Honour then was). A unit constitutes an undivided share in the beneficial estate in the property held subject to the unit trust, with the trustee holding the legal title to that property (although the extent to which it can be said a unitholder has a proprietary interest in particular items of property forming the subject matter of the trust will necessarily vary depending on the terms of the trust deed: Jonsue Investments Pty Ltd v Balweb Pty Ltd [2013] NSWSC 325 at [20] per White J (as his Honour then was)).

A unit in a unit trust, like other equitable interests, may be assigned to a third party or held on sub trust (see, e.g., Chief Commissioner of State Revenue v Centro (CPL) Ltd (2011) 81 NSWLR 462; [2011] NSWCA 325 at [46]) but it is wrong to say that a unitholder can possess legal title to units: Reef & Rainforest Travel Pty Ltd & Anor v Commissioner of Stamp Duties [2002] 1 Qd R 683; [2001] QCA 249 at [11] per McPherson JA (Thomas JA and Muir J agreeing). The fact that there may be a “register” of unitholders does not convert what is an equitable chose in action (the unit) into legal property.

Dr Wang was born in September 1980 in Liaoning, China. At the time of the hearing, she was aged 42. Dr Wang can speak, read and write in English: e.g. CB 185[39].

Dr Wang is qualified as a medical practitioner in China and Australia and an accredited specialist respiratory physician: CB 168. In her affidavits, she described her occupation as being “Medical Practitioner”: CB 161, 168. Currently, she indicated that she still practices lawfully, though mainly does consultation jobs regarding any pharmaceutical and medical projects: T 53.

Mr Yu was born in January 1982 (approximately 16 months after Dr Wang was born) also in Dalian, Liaoning Province, China: T 177.

In about 1996, Dr Wang met Mr Yu for the first time when they attended the same high school. They were in the same class for one year and attended the same school for the next two years: CB 168. Then for a time, they went their separate ways.

In 2000, when Mr Yu was 18, he travelled to Australia. Between 2001 and 2006, he completed a Bachelor of Laws and Finance at the University of Melbourne: CB 181[8]. In 2007, he was admitted as a solicitor in the Supreme Court of Victoria. Between 2007 and 2008, he was employed as a graduate solicitor and practised in corporate law. Between 2008 and 2010, he was employed by Norton Rose Fulbright in Melbourne as a junior associate, again practising in corporate law: CB 181.

Between approximately 2010 and 2012, Mr Yu indicated in his affidavit that went to Boston University and completed a Master of Laws: CB 182. During cross-examination, he revised that timing to be the period between 2010-2011 noting that the Master of Laws only took one year: T 172-173.

In early 2012, he recommenced his employment with Norton Rose Fulbright but in the Beijing office further practising in corporate law: CB 182. He clarified that he spent six months in Beijing and then came back to Sydney: T 173.

In about mid-2012, when Mr Yu returned to Sydney, he ceased working as a solicitor, he says due to other business opportunities: CB 182, T 173-174. He worked, in particular, for a client establishing the Longton Property Group: T 174.

Mr Yu has a sister, Jialing Yu who did some work for the company: T 196.4-8.

Mr Yamaguchi, though of Japanese heritage, was raised in China and is fluent in Mandarin. Mr Yu states he conversed with Mr Yamaguchi almost solely in Mandarin: T 182.

Dr Wang and Mr Yamaguchi were girlfriend and boyfriend from at least the time when Dr Wang introduced Mr Yamaguchi to Mr Yu in (early) 2014: CB 182[18]. They broke up in December 2014: T 100.

APG was registered on 18 July 2014, on the same date as the Trust was created. The application for registration of APG was made by Ross Koffel, a solicitor (Mr Koffel): Exhibit P11. The application for registration proposed a share structure of 100 fully paid shares with Mr Yamaguchi and Mr Yu having 50 shares each: Exhibit P11.

The initial directors of APG were Mr Yu and Dr Wang. Mr Yu was the initial secretary: CB 619-621.

At the time of incorporation (or shortly thereafter) APG had 100 issued paid-up shares. The company search does not clearly indicate precisely what the shareholding was as between Mr Yu and Mr Yamaguchi from 18 July 2014 and 7 May 2015. Nonetheless, the Unitholders Agreement indicates that Mr Yu and Mr Yamaguchi agreed to sell 49 shares to Ms Junting Liang (Ms Liang) as representative of YTF and SL Pty Ltd ATF YTF and SL Family Trust and 6 shares to Ms Dongfang Jia (Ms Jia) as representative of HJ&S Pty Ltd ATF HJ&S Family Trust: CB 491-492.

On 7 May 2015, it appears (by reference to document 7E6936021) that there were changes to shareholdings (undoubtably consequential upon the Unitholders Agreement – as to which see below) whereby the shareholding in APG was (CB 622, 623):

Consequent upon the events relating to the Unitholders Agreement, Ms Liang and Ms Jia were appointed as directors on 3 May 2015. Dr Wang ceased to be a director on 8 August 2015. Mr Yu ceased to be a director on 1 April 2019. Yuan Xiang Ng (Mr Ng) and Jialing Yu were appointed as directors on 5 May 2020. Ms Liang and Ms Jia ceased to be directors on the following day 6 May 2020. On 11 May 2020 (6 days after appointment), Jialing Yu ceased to be a director. On 1 June 2021, Mr Ng ceased to be a director and Shilin Lai was appointed as a director and remains the sole director of APG. It appears that the majority shareholder, Ms Liang, appointed him: T 222.29-48. Notwithstanding the above changes in directorship, the shareholding in APG has remained constant since approximately 7 May 2015.

Another company, Auslon Development and Management Pty Ltd (ACN 601 050 140) (ADM) was associated with APG and seemingly involved in the management of the project. There is little in the evidence that explains precisely the set up and involvement of ADM. Some insight as to its role is explained in the Unitholders Agreement. In particular, the Unitholders Agreement provides that “[t]he Original Unitholders [STYU and Mr Yamaguchi], through the current directors of The Company [Mr Yu and Dr Wang] as well as the Management Company shall continue to be responsible for the day to day operations of the Project” (emphasis added): cl 12.1(a), CB 503. ADM is defined as being the “Management Company”: CB 515.

ADM was registered on 4 August 2014. Mr Yu was its initial director. It had 1 ordinary share held by APG: Exhibit P1. On 15 April 2017, Mr Yu ceased to be a director of ADM and another person, Min Hu was appointed as director: Exhibit P1. On 12 June 2017, Leon Lee and Brendan Joseph Nixon were appointed as liquidators of ADM in a creditors voluntary winding up. On 29 June 2017, they ceased to be liquidators and Blair Pleash was appointed as liquidator (ceasing on 4 December 2017): Exhibit P1. Account statements for two Westpac bank accounts for ADM for the period 1 October 2014 to 31 August 2015 were tendered at the hearing and marked as Exhibit P3.

Dr Wang was, it appears, the only signatory on APG’s bank account: T 195.3-8, 195.15-22.

APG had an accountant. However, the evidence does not disclose clearly who that was. Mr Yu referred to a name “Maxmillion” (T 188.45-46, 222.27, spelling not clarified) but could not recall the name of the person working on it. Later, he said that was the name of the accounting firm: T 233.5-15.

In or about April 2015, it appears that Jason Yang, Ms Liang’s accountant worked with APG’s accountant and with Dr Wang in relation to the figures for verifying the amount of $1.31 million that came to be inserted in cl 1.2(a) of the Unitholders Agreement (fixed as being the financial input of STYU and Mr Yamaguchi) and thereafter he became APG’s accountant: T 188.45-50, 232.28-233.3.

It appears that Dr Wang was also the account signatory for ADM before the new investors became involved. Ms Liang essentially appointed Ms Jia (see below) as a financial controller to take on a similar role that Dr Wang was performing on behalf of Mr Yamaguchi: T 202.8-19.

The parties provided written submissions both prior to the hearing and on the final day of hearing as well as their counsel addressing orally on the final day of the hearing.

I will make reference to the oral submissions by transcript page reference. For convenience, I will refer to the various written submission documents as follows:

The parties prepared for the purposes of the hearing lists of issues. Notwithstanding a pretrial direction for the provision of an agreed set of issues, each of the parties provided a separate set of issues. For the purposes of addressing the claims in the proceedings, I set out below a list of issues which I have adapted from those separate sets of issues. I have reordered the numbering of the issues to deal with them in a logical (essentially chronological) order in which they arise.

The issues are:

In referring to the relief claimed and in describing the issues above, it is notable, as I have indicated, that Mr Yu and STYU in particular did not expressly seek a declaration that they had avoided the Deed.

The lack of any particular pleading in relation to that left unstated, and accordingly, somewhat elusive, the precise basis on which Mr Yu alleged that Dr Wang was for want of a better description implicated in the duress.

In his opening and closing submissions, Mr Mack (appearing for Mr Yang) rhetorically submitted that it is not clear why Mr Yang had been joined to the cross-claim. He submitted that the cross-claim seems built on the premise that Mr Yang as agent for Dr Wang assaulted Mr Yu, made demands of Mr Yu and received monies from him: AYOS [2], [3]; AYCS [2].

Mr Mack went on to comment that it is alleged that the assault was made by Mr Yang as agent for Dr Wang: AYCS [2].

In the cross-claim by which Mr Yu sought relief against Mr Yang and Dr Wang, he particularised the events occurring on 11 May 2015 as being an assault by Mr Yang (with four accomplices) who attended the restaurant “pursuant to the request of” Dr Wang and advised Mr Yu that they were “acting under the authority of” Dr Wang: CB 140[2a].

Although the precise legal basis for Dr Wang being implicated was not articulated essentially the matter was litigated on the basis that Mr Yu was alleging that Mr Yang and his accomplices were acting under the authority of Dr Wang as her agents. That the duress case was framed as alleging that Mr Yang was “acting under the authority of” Dr Wang is reinforced at least in a factual sense by the letter from Ibrahim Kammoun (Mr Kammoun) on behalf of Mr Yu to Brydens Lawyers (Brydens) (then acting for Dr Wang) on 13 April 2021 whereby it was asserted that, at the meeting on 11 May 2015, Mr Yang and his accomplices advised Mr Yu that they were acting under the authority of Dr Wang: CB 580.

In the above circumstances, I have proceeded on the basis that Mr Yu claims that Mr Yang was Dr Wang’s agent for the alleged assault or that Dr Wang procured the alleged assault upon Mr Yu by Mr Yang.

The cross-claim alleges that, on or about 11 or 12 May 2015, Mr Yu was induced by duress “under the part of the cross-defendants” to pay to Dr Wang and Mr Yang the sum of $10,000 and induced to lend them the sum of $200,000: CB 140-141. The cross-claim contains allegations that Mr Yang demanded Mr Yu pay to Dr Wang monies that she had paid into the Trust and that the sum of $10,000 was demanded for Mr Yang to provide to Dr Wang: CB 141[2c]. The pleading contains somewhat conflicting allegations that the sum of $200,000 was a loan to both Dr Wang and Mr Yang (CB 141[4]) although the particulars of that allegation are that the monies were to be lent to Dr Wang: CB 142[4b].

The primary allegation is that Dr Wang and Mr Yang have been “unjustly enriched” at the expense of Mr Yu in the sum of $210,000 (CB 142[6]) and alternatively the sum of $200,000 was a loan with an implied term that it would be repayable on demand: CB 142[9].

The relief sought in relation to the monies frames the payments as an agreement or arrangement to pay the sum of $10,000 and a lending of the sum of $200,000: CB 140.

Mr Mack makes the point that Mr Yu and Dr Wang appeared to accept that Dr Wang had the benefit of the payment of $200,000 (which, as I have found, appears to be the case) and makes the observation that there is no claim for monies had and received but rather for unjust enrichment and observes that Mr Yang has not been enriched: AYCS [3].

Apart from a matter which I will refer to below which arose during evidence in which Mr Yu described a demand by Mr Yang for the sum of $10,000 as being a form of “sweat fee”, the evidence in the case pointed essentially to the monies paid by Mr Yu to Mr Yang or Dr Wang as being essentially for Dr Wang’s benefit, not as a “loan” as such but rather as payments having the effect of being a type of “repayment” or contra payment reducing, in a manner of speaking, the monies paid by Dr Wang to APG (and one payment to ADM).

Each of Dr Wang and Mr Yu were called to give evidence and were cross-examined.

In addition, a solicitor, Shun Cheng (Mr Cheng), who was the managing partner of Guantao & CS lawyers (who relevantly acted for Dr Wang in 2015), gave evidence.

As noted above, Mr Yamaguchi and Mr Yang were not called to give evidence.

Each of Dr Wang and Mr Yu were cross-examined at length. Indeed, Mr Yu was cross-examined on the third day of the hearing and remained under cross-examination until the resumption of the hearing on 1 August 2023.

In closing submissions, each of Mr Mack and Mr Smallbone provided written submissions which outlined aspects of Mr Yu’s evidence which they submit provide a basis for rejecting his evidence on all material matters. The submissions proceeded on the basis that I should accept the evidence of Dr Wang as being reliable.

I had concerns regarding the credibility and reliability of each of Dr Wang and Mr Yu. Neither of them emerged unscathed from cross-examination.

There were parts of the evidence of both of those witnesses that I found difficult to believe.

Mr Yu had a tendency to not answer questions directly and deflect a degree of the cross-examination by argument and other means.

Further, Mr Yu appeared, in my estimation, to be a very poor historian. He acknowledged that he was not good with dates.

There were material parts of the evidence of Dr Wang which I found difficult to believe.

Ultimately, I consider that more reliable indicators of the facts that occurred can be established by reference to at least some of the contemporaneous documents and I have had particular reference to such documents.

Essentially, I have approached and weighed the evidence having regard to objective surrounding facts which are either undisputed or established by contemporaneous documents and the inherent probabilities of life as they bear upon the events: see e.g. In the matter of Hoju Jobs Pty Ltd [2021] NSWSC 302 at [77] per Williams J citing Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 at [15] per Gleeson CJ, Gaudron, Kirby and Hayne JJ; Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at 129 per Gleeson CJ, Gummow and Kirby JJ; Re Hillsea Pty Ltd [2019] NSWSC 1152 at [16] per Black J.

I consider that rather than reject entirely the evidence of Dr Wang and Mr Yu, a nuanced approach is important in relation to their evidence and, accordingly, I will address in relation to the issues in the matter which I deal with below the evidence which I accept and that which I do not.

Mr Cheng was examined principally on day five of the proceedings.

Earlier, on day two of the hearing, Mr Lonergan had sought to tender a letter from Guantao & CS lawyers to Sydney Law Practice dated 18 June 2018 (CB 599-606) and file notes: CB 607-609. Specifically, he sought to get into evidence paragraphs 15 and 16 of the letter: CB 601; T 79. Mr Smallbone objected on two grounds, firstly, hearsay and secondly, privilege: T 79. There was argument over the admissibility of the document. Paragraphs 15 and 16 of the letter read as follows:

There was a question as to whether the document was admissible as a business record pursuant to s 69 Evidence Act 1995 (NSW) (Evidence Act). Mr Lonergan, by reference to the decision of Finn J in Australian Medic-Care Co Ltd v Hamilton Pharmaceutical Pty Ltd (No 4) (2008) 170 FCR 9; [2008] FCA 1038, submitted that the document was admissible.

Mr Smallbone submitted that the relevant representation in paragraph 15 (being the statement “Steven is afraid of Alan. Alan looks as intimidating as a gang member and he could threaten Steven and let him to co-operate with us.”) was a representation of Dr Wang.

Mr Smallbone submitted that by reference to cl 6 in Pt 2 of the Dictionary to the Evidence Act, the representation contained in the document is taken to be made by the person only if the document was written, made or otherwise produced by the person, or the representation was recognised by the person as (relevantly) her representation by signing, and initialling or otherwise marking the document.

As Dr Wang had not written the letter nor adopted the letter by signing or marking it, I indicated that my impression was that the hearsay exception in s 69(2) Evidence Act did not appear to apply and, accordingly, the document was not admissible as a business record. Mr Lonergan appeared to accept that: T 84.11-17.

However, Mr Lonergan submitted that the paragraphs in question could be tendered under s 69 for a non-hearsay purpose citing the comments of Hamilton J in Lewis v Nortex Pty Ltd (in liq); Lamru Pty Ltd v Kation Pty Ltd [2002] NSWSC 1083 at [10].

It is far from clear to me that the purpose of the tender was a non-hearsay purpose. Whilst Mr Lonergan focussed attention on paragraphs 15 and 16 at CB 601, the critical part of the material in those paragraphs, as I understood Mr Lonergan, was the statement in the concluding part of paragraph 15 to the following effect:

My understanding was that Mr Lonergan sought to have the statements adduced for the purpose of proving the truth of the statements, in particular, to demonstrate that Mr Yu was afraid of Mr Yang. When I asked Mr Lonergan what his asserted non-hearsay purpose was, he indicated that it was to show that there were communications between solicitors “in or around the [date of the] 2016 deed”: T 85.10.

There was further discussion about it and, eventually, Mr Lonergan indicated that, in particular, in relation to paragraph 15, he contended there was an admission made by Dr Wang: T 89.24-25. I indicated that I was not persuaded at that time that it was Dr Wang’s representation for the purposes of the Evidence Act provisions and that to the extent that it was a representation made by Mr Cheng that he was not available to be cross-examined. Mr Lonergan withdrew the tender and indicated that he would revisit the matter: T 89.27-43.

Mr Lonergan revisited the matter when the hearing resumed on 1 August 2023. He indicated that his instructors had arranged to issue a subpoena for the attendance of Mr Cheng: T 298-299. Mr Cheng attended on the following day pursuant to the subpoena: T 339.

After some submissions by counsel as to whether Mr Cheng should be permitted an opportunity to receive legal advice in relation to the evidence he had been called to give, Mr Cheng was given that opportunity: T 343-344. He returned to give evidence on 2 August 2023. To address Mr Smallbone’s objection to the evidence being received on the basis that it may disclose some privileged communication, I indicated that I proposed that the evidence be taken on the voir dire so that the evidence could be received, and that counsel could then later debate whether the evidence should be received as evidence on the hearing: T 300. Ultimately, Mr Cheng’s evidence was received on the voir dire: T 442.

Mr Lonergan called Mr Cheng: T 428. He adduced some initial evidence from Mr Cheng. It appeared that Mr Cheng exhausted his memory regarding the matter and then Mr Lonergan made an application under s 32 Evidence Act for Mr Cheng to refresh his memory: T 432.

Mr Smallbone directed my attention to the provisions of s 32(2)(b) Evidence Act, particularly s 32(2)(b)(i), submitting that it was not established that events recorded in the document were fresh in Mr Cheng’s memory: T 434. The issue appeared to be whether, on 18 June 2018, what was contained in the document at paragraphs 15 and 16 was recorded by Mr Cheng when those matters were fresh in his memory: T 435.

The requirement for the material being “fresh” in the memory of the witness does not appear to be limited by reference to a specific time that is necessarily proximate to the recording of the matter in the document: Stephen Odgers SC, Uniform Evidence Law (16th ed, 2021, Thomson Reuters) at [EA 32.150].

In R v Rogerson; R v McNamara (No 24) [2016] NSWSC 105 (R v Rogerson), Bellew J noted (at [8]-[15]):

Mr Cheng was asked whether he recalled the reason for sending the letter in question and he indicated that he did. There was no real suggestion that he might not have recalled that reason.

Subsequently, Mr Cheng was asked whether when he wrote the letter the contents that he put into the letter were fresh in his memory at that time and he indicated that that was the case: T 437.36-38.

Contrary to the position in R v Rogerson, I have no reason to think that Mr Cheng did not understand the import of the phrase “fresh in his memory”.

Mr Cheng was asked to read paragraph 15 of the letter: T 437.

Mr Cheng then gave the following evidence (T 438.12-18):

Mr Lonergan asked Mr Cheng whether Dr Wang had said why Mr Yu was afraid of Mr Yang. He was unable to recall why. He indicated that Dr Wang did not give him the details: T 438.45-50.

Mr Cheng was asked why he put the word “persuade” in inverted commas (CB 601[17]). Mr Cheng also had difficulty remembering why he had done that although initially proffered that it was an alternative way of negotiation rather than by being assisted directly by lawyers: T 440.16-49.

Mr Smallbone cross-examined Mr Cheng. He suggested to him that Dr Wang has said that Mr Yu was “a friend” of Mr Yang rather than “afraid” of Mr Yang. He further suggested that the word “afraid” could be an interpretation. When he ultimately put to Mr Cheng that Dr Wang did not say that Mr Yu was afraid of Mr Yang, Mr Cheng rejected that notion stating: “I think she said”: T 445.36-446.20. I sought to clarify with Mr Cheng that his answer “I think she said” meant “I think she said ‘afraid’” and he confirmed that: T 446.24-27.

Mr Smallbone, a little later, suggested to Mr Cheng that what Dr Wang was communicating to him was not that Mr Yu was afraid of Mr Yang but rather that he was more likely to take notice of Mr Yang. Mr Cheng also rejected that confirming that Dr Wang did say that Mr Yu was afraid of Mr Yang, although Mr Cheng did not know exactly what she meant by that: T 427.24-40.

Dr Wang was recalled for further cross-examination by Mr Lonergan to address this issue. He put to her that, on the occasion of the meeting, she had told Mr Cheng that Mr Yu was afraid of Mr Yang. She denied that and she also denied that at the time of the meeting she was aware that Mr Yu was afraid of Mr Yang: T 452.13-26.

I asked Mr Smallbone whether there was any reason why I should not accept the evidence of Mr Cheng. He submitted as follows (T 475.8-28):

Notwithstanding Mr Smallbone’s submission, I am comfortably satisfied that Dr Wang did tell Mr Cheng that Mr Yu was afraid of Mr Yang. I reject Dr Wang’s evidence that she did not tell him that.

In approaching the question of whether an assault occurred, Mr Mack submitted that the Briginshaw “standard” was applicable: Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 (Briginshaw) at 361 per Dixon J (as his Honour then was).

Matters emphasised by Mr Mack were that the Court must feel an actual persuasion of the occurrence of the relevant event (in this case, an assault) and that the Court’s satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences: Briginshaw at 361-362.

In Briginshaw, Dixon J noted that when in civil proceedings a question arises as to whether a crime has been committed, the standard of persuasion is, according to the better opinion, the same as upon other civil issues. But, consistently with this opinion, weight is given to the presumption of innocence and exactness of proof is expected: at 363.

In a civil proceeding, the Court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities: s 140(1) Evidence Act.

Without limiting the matters the Court may take into account in deciding whether it is so satisfied, it is to take into account: (a) the nature of the cause of action or defence; (b) the nature of the subject-matter of the proceeding; and (c) the gravity of the matters alleged: s 140(2) Evidence Act.

In making findings in the proceedings and, in particular, in relation to whether the alleged assault on Mr Yu occurred and whether Mr Yang demanded payment of monies, I have proceeded on the basis of the requirement of proof to the standard of s 140 and I have been particularly mindful of the nature of the case and the gravity of the matters alleged.

As noted above, two persons significant to the events which are the subject of the proceedings were not called to give evidence. One was Mr Yang, the other Mr Yamaguchi.

I raised with the parties whether an inference should be drawn about the failure of Mr Yang and Mr Yamaguchi to be called to give evidence referring to Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 (Jones v Dunkel) at 308, 312, 320-321.

Counsel made submissions regarding this, and I was provided with quite a degree of authority regarding the Jones v Dunkel principle.

The rule in Jones v Dunkel is a principle of judicial reasoning which addresses the drawing of inferences of fact: Ling v Pang [2023] NSWCA 112 (Ling) at [24] per Kirk JA (Leeming and Mitchelmore JJA at [1], [2] respectively agreeing).

The rule has been described in various ways.

Two types of inferences that might in any given circumstances be drawn are that:

The rule permits an inference, not that the evidence not called by a party would have been adverse to the party, but that it would not have assisted the party: Kuhl at [64] citing Dilosa v Latec Finance Pty Ltd (No 2) [1966] NSWR 259 (Dilosa) at 276-277 per Street J.

The rule applies only once all the evidence in the case is in. Whether some inference should be drawn, what inference, and with what significance are all matters depending upon the circumstances of the particular case. It is not a rule to be applied formulaically: Ling at [24].

The matters which underpin and permit the drawing of an inference that the uncalled evidence would not have assisted the party’s case are that:

What underlies the principle is that the failure to call the witness “serves to indicate, as the most natural inference, that the party fears to do so, and this fear is some evidence that the circumstance or document or witness, if brought, would have exposed facts unfavourable to the party”: Ling at [27] citing Jones v Dunkel at 320-321 per Windeyer J quoting from John Henry Wigmore, Treatise on the Anglo-American System of Evidence in Trials at Common Law (3rd ed, 1940, Little, Brown & Co) (Wigmore on Evidence) vol 2, s 285, p 162.

Precisely what may be inferred from the absence to call a witness requires some consideration. This was addressed by the Full Court of the Federal Court in Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 at [79] per Besanko, Perram and Katzmann JJ:

The observation that such an inference “is frequently somewhat barren, for knowing that the evidence of a witness would not have assisted tells one nothing about what the witness’s evidence affirmatively would have been” is a helpful reminder of the limits of the principle.

Practically speaking, their Honours’ observations recognise that the aspect of the principle that is more often deployed is the notion that the trier of fact may more confidently draw any inference unfavourable to the party that failed to call that witness if that witness appears to be in a position to cast light on whether the inference should be drawn.

Their Honours make the observation that, generally speaking, the inferences only become material where the balance of the evidentiary record is equivocal. That observation has been endorsed in this Court: see, eg, CSR Ltd v Adecco (Australia) Pty Ltd [2017] NSWCA 121 at [144] per McColl, Macfarlan and Simpson JJA; RHG Mortgage Corporation Ltd v Ianni [2016] NSWCA 270 at [27] per Basten JA (as his Honour then was) and at [156] per Ward JA (as the President then was) (Meagher JA agreeing at [29]).

The sort of circumstances which have been recognised as indicating in any given case that an inference is not available, or if available, is of little significance, has been discussed in caselaw.

Exactly the same principles apply when a party, who is capable of testifying, fails to give evidence as in a case where any other available witness is not called: Jones v Dunkel per Windeyer J at 321 citing Wigmore on Evidence vol 2, ss 289,290, pp 171-180; see also Dilosa at 276-277; Kuhl at [63]. That is relevant here as Mr Yang did not give evidence as a part in his defence of the cross-claim and Dr Wang did not call Mr Yang in her case.

Caselaw addresses the type of circumstances that may be regarded as adequate explanations regarding failures to call witnesses.

Thus, a party may not be sufficiently aware of what the witness would say to warrant an inference that the party feared to call him. It has been said that a party is not, under pain of a detrimental inference, required to call a witness “blind”: Fabre v Arenales (1992) 27 NSWLR 437 (Fabre) at 449G-450A per Mahoney JA (Priestley and Sheller JJA agreeing).

Further, if a witness has a reason for not telling the truth or refusing to assist and the party who may call him or her is aware of this, an inference may not arise. Thus, it has been indicated that it is at least arguable that no inference will be drawn if a witness, if called, would have been asked in effect to admit a crime of some seriousness: Fabre at 450B-C.

It has been said that the rule in Jones v Dunkel is a particular application of the broader principle that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted: Ho v Powell (2001) 51 NSWLR 572; [2001] NSWCA 168 (Ho v Powell) at [15]-[16] per Hodgson JA, Beazley JA (as her Excellency then was) at [1] agreeing. The observations of Davies AJA at [76] (to the effect that the principle does not permit an inference to be drawn that evidence which was not called would, in fact, have been damaging to the party who withheld it, but, rather, depending on any given case, may permit evidence to be given greater weight and an inference or inferences to be more readily drawn when the other party who might have called evidence to the contrary has chosen not to do so) do not detract from that observation.

More particularly, the rule can operate against a party whether or not they bear a burden of proof: JD Heydon, Cross on Evidence (online, LexisNexis) (Cross on Evidence) at [1215] citing Ho v Powell at [16]; see also Knell v QAV Pty Ltd [2020] WASCA 23 at [96]-[108] per Pritchard and Vaughan JJA.

Mr Mack, in addressing Jones v Dunkel issues, submitted that the present case is a circumstantial one and referred to the observations of Bathurst CJ, Bell P (as his Honour then was) and White JA in Jagatramka v Wollongong Coal Limited [2021] NSWCA 61 in relation to drawing conclusions based on circumstantial evidence. In particular, he referred to the comments of the Court of Appeal regarding a “links in the chain” approach to assessing evidence that it is not enough that the links considered as a whole lend support to the ultimate conclusion sought to be reached, but rather it is necessary to find that the circumstances proved made it reasonable to reach that conclusion on the balance of probabilities: at [45] citing the principle stated by the High Court in Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5 per Dixon, Williams, Webb, Fullagar and Kitto JJ.

Mr Mack’s submission that the case is a circumstantial one invites examination.

The law has various terms by which it classifies types of evidence. One form of taxonomy is that the law for certain purposes distinguishes between “direct evidence” and “circumstantial evidence”.

“Direct evidence” is a term used in a couple of senses. In one sense, it describes testimony, as contrasted with hearsay, being an assertion made by a witness in court offered as proof of the truth of any fact asserted by the witness, including the witness’s own mental or physical state at a given time. In a second sense, “direct evidence” is used to refer to a witness’s statement that the witness has perceived a fact in issue with one of his or her five senses or was in a particular mental or physical state (if that is a fact in issue): Cross on Evidence at [1110].

“Direct evidence” as such is contrasted with “circumstantial evidence” which may be defined as any fact (sometimes called an “evidentiary fact” or “fact relevant to the issue”) from the existence of which a judge or jury may infer the existence of a fact in issue (sometimes called a “principal fact”): Cross on Evidence at [1110] citing, inter alia, Festa v The Queen (2001) 208 CLR 593; [2001] HCA 72 at [5] per Gleeson CJ.

There are various issues in the proceedings which I have identified above and deal with below. Insofar as Mr Yang is concerned, at least a number of those issues are not what I would describe as necessarily or exclusively issues involving circumstantial evidence.

One issue relates to whether the alleged assault by Mr Yang on Mr Yu occurred, and, if it occurred, whether it occurred as alleged by Mr Yu.

Determination of that issue involves consideration of all relevant evidence. At least part of that consideration is consideration of the direct evidence Mr Yu gives of the assault. Thus, consideration of whether the assault occurred is not exclusively an exercise of making a finding based on circumstantial evidence.

There are other parts of evidence in which Mr Yu gives an account of discussions with Mr Yang which involve direct evidence from Mr Yu and at least in that respect do not, or at least do not exclusively, require application of principles relating to drawing of inferences from circumstantial evidence.

Each of Mr Smallbone and Mr Mack submitted that no Jones v Dunkel inference should be drawn from the fact that Mr Yang did not give evidence on the basis that he would, if called, be asked to admit to a crime of some seriousness and that this provided a sufficient explanation as to why he was not called. In this regard, they relied upon the decision of Adamson J (as her Honour then was) in Permanent Custodians v Nobilo [2012] NSWSC 109 (Nobilo).

In closing submissions, Mr Mack submitted that the protection afforded by s 128 Evidence Act has been held not to affect the Jones v Dunkel principle (and, in particular, the reasoning of Mahoney JA in Fabre to the effect that an inference may not arise if a witness has a reason for not telling the truth) citing Nobilo at [73].

However, that is not necessarily the case. Indeed, it has been recognised by the Court of Appeal that a suggestion that the witness might be reluctant to give evidence because it may constitute an admission of wrongful conduct on his or her part might well be ameliorated by the potential protections offered by s 128: Ling at [31]-[32] per Kirk JA (Leeming and Mitchelmore JJA agreeing); RHG Mortgage Ltd v Ianni [2015] NSWCA 56 at [90] per McColl JA (Sackville AJA agreeing), [122] per Emmett JA.

Additionally, there is authority to the effect that the fact that an absent party witness might fear that to give evidence in civil proceedings might prejudice him in later criminal proceedings is not per se a sufficient explanation for the failure to give evidence so as to preclude a Jones v Dunkel inference being drawn: Cross on Evidence at [1215] citing Rowell v Larter (1986) 6 NSWLR 21 at 24 per Young J (as his Honour then was) and Clayton Utz (a firm) v Dale (2015) 47 VR 48; [2015] VSCA 186 at [181]-[200] per Tate JA (Ashley JA agreeing).

Further, the notion that a Jones v Dunkel inference cannot be drawn in a civil case where a defendant chooses not to give evidence because police have been notified of a complaint and have issued a COPS Event Summary was not embraced by Rein J in Hudak v Adams [2013] NSWSC 1464 at [41]. His Honour, albeit not needing to resolve the question of whether a Jones v Dunkel inference (see at [42]) could not be drawn in those circumstances, stated at [41] (bolding in original):

I am not persuaded that a Jones v Dunkel inference cannot be drawn for the reasons advanced by Mr Smallbone and Mr Mack.

The facts of Fabre, Nobilo and Bank of Western Australia Ltd v Tannous [2010] NSWSC 1319 (Tannous) (referred to by Adamson J in Nobilo at [74]-[75]) differ from those in the present proceedings.

There are a number of reasons why those cases are distinguishable from the present proceedings. However, at least one reason is that the relevant witnesses in Nobilo and Fabre, if called, would have been asked by the party calling them to admit to a crime of some seriousness.

In Nobilo, Mrs Saad would have been called (by the Nobilos) to support their case that they did not execute the mortgage and, essentially, that she (Mrs Saad) forged their signatures on the mortgage (see e.g. [101]).

In Fabre, if called as a witness for the insurer, Mr Arenales would have been asked (by the insurer) to give evidence regarding the circumstances as to the commission of a crime he was involved in, namely, the break and enter offence and the police pursuit that followed.

In Tannous, the situation was even more starkly removed from the circumstances of this case. In that case, the defendant’s son, Michael had in fact sworn affidavits admitting to having forged his parents’ signatures and otherwise to have persuaded them to enter into various transactions misrepresenting those transactions to them. Lest there be any doubt, I do not read the comments of Davies J expressing surprise that Michael had sworn such affidavits as necessarily implying what, if any, inference his Honour might have drawn had Michael not been called: cf Nobilo at [74]. His Honour, in the reasons for judgment, simply does not address any Jones v Dunkel inference.

The positions of Mr Yang as a party and whether he would be called in his own case in defence of the cross-claim, and his position as a potential witness in the case of Dr Wang should be distinguished.

The central allegation in Mr Yu’s defence of the proceedings and his cross-claim is to the effect that Mr Yang engaged in serious wrongdoing by assaulting him in the company of associates or with the assistance of associates, giving rise to a fear in Mr Yu that if he did not cooperate with what Dr Wang wanted, Mr Yang would cause harm to Mr Yu and his family.

Mr Smallbone submitted that no adverse inference should be drawn from his failure to call Mr Yang to give evidence. He submitted that Mr Yang was not available as a witness to Dr Wang because “I can’t conference him. He has his own solicitor” (i.e. he was a separately represented party), that he (Mr Smallbone) could not “interrogate him and find out his story” and that “[h]e’s got his own interests in this case”: T 462.

However, there is no “property” in a witness and one side cannot “prohibit the other side from seeing a witness of fact, from getting the facts from him and from calling him to give evidence or from issuing him with a subpoena”: Harmony Shipping Co SA v Davis [1979] 3 All ER 177 at 180h-i per Lord Denning MR. Thus, there is no legal impediment to Dr Wang’s legal representatives from being able to speak to Mr Yang per se.

Subject to one matter, Mr Yang’s defence in the proceedings did not suggest that his evidence would in any way conflict with Dr Wang’s evidence or position in the case nor that Mr Yang’s interests in the case would in any way conflict with Dr Wang’s interests.

The one matter is that Mr Yang admitted that he was Dr Wang’s boyfriend, but did not admit that that was the case “at all material times”, whereas Dr Wang denied that she was in a boyfriend-girlfriend relationship “at all material times”: CB 140, 149, 156. However, there was no real dispute in the proceedings that Mr Yang was Dr Wang’s boyfriend at the time of the alleged assault. Dr Wang’s denial of paragraph 1 of the cross-claim is potentially explicable with her not per se disputing that at some point of time Mr Yang was her boyfriend, but rather disputing the extent of the time period during which he was her boyfriend. It being borne in mind that the pleaded assertion regarding him being her boyfriend was framed in terms of being at “all material times”, which expression might be steeped in pleading tradition but is often entirely unhelpful in clarifying issues in circumstances where anything connected with a time period is a pleaded fact.

There are of course rules regarding legal representatives conferring with a client of other legal representatives: Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) r 33. However, it is well-known that arrangements can be made and are often made for legal representatives for one party to speak with another party in the presence of that party’s legal representatives.

Mr Smallbone led no evidence to suggest that any attempt had been made by his instructors to speak with Mr Yang. Whilst I accept Dr Wang’s evidence that she broke up with Mr Yang in February 2017, the fact remains that Dr Wang accepted that she and Mr Yang “are still friends”: T 160. Further, during the court hearing, Mr Yang, at least part of the hearing, sat next to or at least adjacent to Dr Wang. I do not accept that Mr Yang was unavailable as a witness for Dr Wang to call.

In terms of the matters which would permit an inference to drawn, I consider that it might be expected or be natural for Mr Yang to be called as a witness in his own case. Having regard to the allegations made against him on the cross-claim, I consider that his evidence would be expected to have elucidated the matter of whether he assaulted Mr Yu such as to give rise in Mr Yu the alleged fear or concern which Mr Yu claims amounted to duress.

Thus, the issue is really whether the absence of Mr Yang is unexplained.

Mr Yang’s defence denied any assault. Thus, it would not be the case that Mr Yang would, from his perspective, be asked to confess to wrongdoing. This is not a case in which Mr Yang would be called by his own counsel in effect “blind”.

On the facts here, Mr Yang, if called, by either Dr Wang or his own counsel would not have been asked to give evidence confessing to the commission of a crime of some seriousness. Rather, his evidence presumably would have fallen in line with his pleaded defence, namely, not admitting that Mr Yu paid him the sum of $10,000 and denying that any such payment was made under circumstances of duress (CB 157), which allegation included particulars of an assault by Mr Yang: CB 140.

In the above circumstances, I consider that the uncalled evidence from Mr Yang would not have assisted Dr Wang’s case nor Mr Yang’s case in relation to whether the assault occurred or not. Even if I be wrong in relation to that, and no adverse inference may be drawn from the absence of Mr Yang giving evidence, I am nonetheless satisfied by the evidence of Mr Yu that the assault did occur. In making that finding, I expressly confirm that I have been mindful of the provisions of s 140(2) Evidence Act and, in particular, the gravity of the matters alleged and also mindful of the criticisms made by Mr Smallbone and Mr Mack of Mr Yu in giving evidence including certain inconsistencies in his responses.

I further consider that the uncalled evidence from Mr Yang would not have assisted his case in relation to whether he received payment of the sum of $10,000 from Mr Yu. However, even if I be wrong in relation to that, and no adverse inference may be drawn from the absence of Mr Yang giving evidence, I am nonetheless satisfied by the evidence of Mr Yu that he made the payment of the sum of $10,000.

None of the parties made any particular submission regarding the absence of evidence from Mr Yamaguchi. Mr Smallbone and Mr Mack did not suggest that Mr Yu ought to have called Mr Yamaguchi in his case. Mr Lonergan, on the other hand, did not suggest that Dr Wang and Mr Yang ought to have called Mr Yamaguchi in their cases.

Further, it appeared that Mr Yamaguchi is not in Australia.

In all the circumstances, I do not propose to dwell further on whether any Jones v Dunkel inference arises from the failure to call Mr Yamaguchi. I proceed on the basis that no such inference arises.

The evidence indicates that in (or about) December 2014, Dr Wang broke up with Mr Yamaguchi. Thus, it could not be necessarily said that Mr Yamaguchi was in Dr Wang’s “camp” for the purpose of him being called to give evidence in her case. Particularly is that so when there is no clear evidence as to whether Dr Wang was still friends with Mr Yamaguchi.

Duress is conduct by which one person applies pressure or undue persuasion on another, to induce that person to do something or refrain from doing something. Duress may take the form of constraint by injury, confinement, or threats: Encyclopaedic Australian Legal Dictionary (LexisNexis).

In relation to contractual provisions, duress is illegitimate pressure applied to obtain a contractual promise, payment, service, or other benefit: Smith v William Charlick Ltd (1924) 34 CLR 38; [1924] HCA 13 (Smith v William Charlick Ltd) at 64 per Higgins J.

Violence to the person or threats of violence may amount to illegitimate pressure so as to give rise to duress: Barton v Armstrong [1976] AC 104 (Barton v Armstrong).

In Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333 (Elite Realty (Peden J)), Peden J noted at [240]:

Duress may be by means of battery, which involves a direct, intentional act which causes contact with another person’s body without consent: Elite Realty (Peden J) at [130] citing Binsaris v Northern Territory (2020) 270 CLR 549; [2020] HCA 22 at 566 per Gageler J.

Duress may be by means of assault which involves a direct and intentional threat by the defendant that places the plaintiff in reasonable apprehension of an imminent contact with his person, either by the defendant or by some person or thing within the defendant's control: Elite Realty (Peden J) at [133] citing Kit Barker, Peter Cane, Mark Lunney and Francis Trindade, The Law of Torts in Australia (5th ed, 2012, Oxford University Press) at 44-54.

Duress may also be found in a series of threats: Penhall (as executor of the estate of the late Paul Sukkar) v Abu. Tony Pty Ltd atf Abu. Tony Discretionary Trust [2023] NSWSC 434 (Penhall) at [116] per Robb J citing Ampol Ltd v Caltex Oil (Aust) Pty Ltd (Supreme Court (NSW), Foster J, 22 December 1982, unrep).

A threat that constitutes duress may be actual or threatened (Smith v William Charlick Ltd at 56 per Isaacs J), express or implied: e.g. Mason v New South Wales (1959) 102 CLR 108; [1959] HCA 5 at 123 per McTiernan J, at 126 per Kitto J, at 140 per Windeyer J; Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 (Hawker) at 303C per Priestley JA (Handley and Clarke JJA agreeing). It may be veiled: Penhall at [116] per Robb J citing B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419. In determining whether there has been applied pressure, the words and conduct of the party against whom duress is alleged, are to be judged as a matter of substance and reality, and not mere form: Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2013] WASCA 36 at [180] per Murphy JA.

The relevant duress must arise prior to or during the party’s entry into the relevant contract or deed. Events after entry are not relevant: Elite Realty (Peden J) at [241].

The person alleging duress must establish that the illegitimate pressure was directed at procuring the affected person’s consent: Braam v BBC Hardware Ltd [2020] VSCA 164 (Braam) at [83] per Tate and Osborn JJA; Elite (Peden J) at [259].

A flavour of how the Court considers this requirement is indicated in the decision of Jacobs JA (as his Honour then was) in Barton v Armstrong at 612 (of the NSWLR report of the case: see [1973] 2 NSWLR 598), quoted in Elite Realty (Peden J) at [261] as follows:

As noted by Peden J, there is no principle of law that requires the illegitimate pressure and duress to be contemporaneous with the deflection or direction of the will: Elite Realty (Peden J) at [263].

Her Honour noted that there are cases where pressure occurs over an extended period and the actual response is not immediate citing Maskell v Horner [1915] 3 KB 106 and Antonio v Antonio [2010] EWHC 1199 (QB): Elite Realty (Peden J) at [263], [264].

Where an allegation of duress is relied upon to set aside an agreement not with the person who engaged in the threatening behaviour but with a third party (as here), it is necessary to show that the third party knew of the duress, or had constructive notice of it or had procured the making of the contract through the agency of the party who exercised the duress: Braam at [84] referring to McColl JA in Dunwoodie v Teachers Mutual Bank Ltd [2014] NSWCA 24 at [53] citing Hugh Beale, Chitty on Contracts (31st ed, 2012, Sweet & Maxwell) vol 1 at [7–053].

In relation to agency, in Elite Realty (Peden J), her Honour noted at [164]:

Procurement may arise where the primary wrongdoer has been “induced or incited or persuaded” by the joint tortfeasor to commit the tort: CBS Songs Ltd v Amstrad Consumer Electronics PLC [1988] AC 1013 at 1058 per Lord Templeman (Lord Keith of Kinkel, Lord Griffiths, Lord Oliver of Aylmerton and Lord Jauncey of Tullichettle agreeing). The concepts of inducement, incitement or persuasion are not a freestanding and new category of accessory liability, rather, these concepts are factual means of procurement: Elite Realty (Peden J) at [161] citing Fish & Fish Ltd v Sea Shepherd UK [2015] AC 1229 at [19] per Lord Toulson JSC.

Her Honour noted at [161(2)]:

The duress need not be the only reason a person enters into the transaction: Barton v Armstrong; Elite Realty (Peden J) at [237]. It is sufficient to enable a party to rely on duress for the pressure to have been a cause of the decision to contract, even if the pressure complained of is not the sole or principal cause of the decision to contract: Penhall at [116] per Robb J citing Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 (Crescendo) at 46.

If a party’s signature to a contract is procured by duress, the contract is voidable not void: Bloomingdale Holdings Pty Ltd v 63 Buckley Street Pty Ltd [2008] VSC 168 (Bloomingdale) at [436] per Hargrave J citing Pao On v Lau Yiu Long [1980] AC 614 (Pao On v Lau Yiu Long) at 634 per Lord Scarman for the Board; Universe Tank Ships Inc of Monrovia v International Transport Workers Federation [1983] 1 AC 366 at 400 per Lord Scarman; North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1979] QB 705 at 720 per Mocatta J.

At first blush, it might be natural to think that if a party’s will is overborne by duress, the contract entered into under duress should be void. Yet, the accepted doctrine is that the contract is merely voidable: Crescendo at 45G per McHugh JA (as his Honour then was).

There is considerable judicial consideration of why duress, if operative, renders the contract as being merely voidable. However, essentially, the reason why the contract is regarded as being merely voidable rather than void finds its explanation in the notion that the person’s will is deflected rather than being destroyed: Crescendo at 45F-G citing Director of Public Prosecution for Northern Ireland v Lynch [1975] AC 653 (DPP v Lynch) at 695 per Lord Simon of Glaisdale. Although DPP v Lynch involved a case of duress as a defence to criminal proceedings, the reasoning has been applied to duress in the context of commercial transactions as explained by McHugh JA in Crescendo referring to the dissenting advice of Lord Wilberforce and Lord Simon of Glaisdale in Barton v Armstrong at 121 and subsequently the Judicial Committee of the Privy Council in Pao On v Lau Yiu Long at 635: at 46B-D. McHugh JA, in indicating that the overbearing of the will theory of duress should be rejected, explained that in such circumstances the person who is the subject of duress usually knows only too well what he or she is doing but chooses to submit to the demand or pressure rather than take an alternative course of action: at 45D-46A; see also A v N [2012] NSWSC 354 at [434]-[435], [505] per Ward J (as the President then was) citing, inter alia, JW Carter, Elisabeth Peden and GJ Tolhurst, Contract Law in Australia (5th ed, 2007, LexisNexis Butterworths) at [22–02], [22–03].

The test of whether the alleged conduct amounts to duress is objective and involves asking whether it was reasonable for the party alleging duress to believe that the person engaging in the wrongful conduct would take the action foreshadowed: see Hawker at 302E-F–303D-E per Priestley JA (Clarke and Handley JJA agreeing); Elite Realty Development Pty Ltd v Sadek [2023] NSWCA 165 (Elite Realty (Court of Appeal)) at [23] per Payne JA, Mitchelmore and Stern JJA respectively agreeing at [113] and [114]. The test is not subjective depending only on a person’s impression or perception: Braam at [83].

The party alleging duress has an onus of proving that illegitimate pressure was brought to bear on him or her when he or she entered into the relevant agreement. If that onus is met the opposing party must prove that the pressure had no causative effect (of deflecting the will) such as to cause the party to enter the agreement: Barton v Armstrong at 120 per Lord Cross of Chelsea; Elite Realty (Peden J) at [234]; Elite Realty (Court of Appeal) at [20].

Where there is duress, the contracting party who has been affected by the duress is put to an election. The affected party can either elect to rescind the contract for duress or can elect to affirm the contract: Bloomingdale at [436].

A contract procured by duress is voidable but is binding until set aside by the victim: Halsbury’s Laws of Australia, 110 – Contract, Duress and the overborne will (online) at [110-5675].

If the contract is affirmed, it is said to be affirmed once and for all: Bloomingdale at [436].

In considering whether a contract or payment said to have been the subject of duress has been affirmed, it should be noted that “affirmation” is not a legal category in its own right. Rather, it covers situations governed by election and estoppel. That is, to make a case of affirmation it needs to shown either that the affected party elected not to avoid the contract or became estopped from asserting its right to avoid the contract: Hawker at 304E.

Whether or not the affected party has elected to rescind the contract, or to affirm it, is to be determined objectively by the Court in light of all the evidence: Bloomingdale at [436].

The party alleging that the agreement has been affirmed has the onus of establishing that: Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 (Erlanger v New Sombrero Phosphate Co) at 1283 per Lord Blackburn; Elite Realty (Peden J) at [278].

In Elite Realty (Peden J), her Honour noted further as follows regarding affirmation at [278]-[280]:

Mr Smallbone and Mr Mack submitted that having regard to the seriousness of the allegation of duress the Court needed to be mindful that its reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences citing, inter alia, Carrier v Georges [2013] NSWSC 401 at [26]-[28] per Nicholas J and Penhall at [120]-[126] per Robb J.

By June 2012, Dr Wang was living in China and planned to migrate to Australia: CB 169. At that stage, Mr Yu was living in Australia: CB 169.

On 18 June 2012, Dr Wang approached Mr Yu on a Chinese social media platform. At that stage, he was in Beijing for a holiday: CB 169[11].

In about June 2013, she says that he contacted her through the social media platform and suggested that she travel to Sydney and that he would show her around. By then she had already migrated to Australia and was living in Melbourne, having spent 12 months there: CB 169.

In about July 2013, Dr Wang took a flight to Sydney and stayed there for eight days, during which time Mr Yu showed her current projects he was working on: CB 169.

In or about June or July 2013, after her Sydney trip, Dr Wang took a flight to Tokyo and stayed there for one month. During this time, she met Mr Yamaguchi: CB 169-170.

Seemingly in or about 2014, Dr Wang came to live in Sydney, briefly staying in Brookvale before renting at Strathfield: T 60.40-45, 75.19-30.

By September 2013, Dr Wang had returned to Sydney. She called Mr Yu and indicated to him that she had a friend who wanted to meet him to get some information about the “development industry”: CB 170. Mr Yu organised a dinner at Chinatown, Sydney and Dr Wang attended with Mr Yamaguchi. Dr Wang indicates that Mr Yu’s girlfriend, Yico Guo also attended the dinner. She states that at the dinner Mr Yu and Mr Yamaguchi had a conversation to the following effect (CB 170-171[18]):

Mr Yu clarified in his evidence that the reference to Lindfield was incorrect – in fact, it was Roseville: T 183.8.

Mr Yu in his affidavit evidence could not recall whether that conversation took place in September 2013 or early-2014: CB 197[7]. In cross-examination, he accepted that there was nothing that helped him place the event more precisely in time: T 169.21-39. The evidence of Dr Wang suggests it took place at least prior to December 2013.

Mr Yu agrees that a conversation as deposed to by Dr Wang took place and says that further to that conversation, Mr Yamaguchi and he discussed his investments and Mr Yamaguchi’s interest in investing in a project in Sydney and states that Mr Yamaguchi said (CB 197[7]):

He states that Mr Yamaguchi then took out his phone and started to show him some of the property developments he was interested in: CB 198[8].

In December 2013, according to Dr Wang, the parties met again in Dalian, China: CB 171[19].

There is no evidence from Dr Wang which bears directly upon the arrangements between Mr Yu and Mr Yamaguchi regarding their arrangements for the project.

Between about June and July 2014, Mr Yu says he had discussions with Mr Yamaguchi about setting up a unit trust to acquire and develop a property for the purpose of selling it and splitting the profits. He states he was to be involved through STYU whereas Mr Yamaguchi was to be personally involved: CB 182. He states that during one of the discussions they had a conversation to the following effect (CB 182-183[19]):

Further to his affidavit evidence, Mr Yu indicated that the agreement was that Mr Yamaguchi would provide the funding to kick off the project and that his (Mr Yu’s) responsibility was to source the site, organise funding in terms of bank loans and external investors and to make the site work. He also contributed the use of his office rent free: T 186.39-48 (see also T 189.40-46). He regarded the initial arrangement between himself and Mr Yamaguchi as being a 50:50 joint venture: T 193.49. He indicated that those proportions were written down in the unitholder register: T 218.35-219.11.

The only documentary material that seems to particularly bear upon the matter is the email from Mr Yu to Mr Koffel dated 20 July 2014: Exhibit P22.

On 20 July 2014, at 4:23 PM, Mr Yu sent an email to Mr Koffel in the following terms (Exhibit P22):

On 20 July 2014, at 5:27 PM, Mr Koffel sent an email to Mr Derin of Azure Group Pty Ltd (Azure Group), an accounting business advisory firm. The email was copied to Jack Qi (Mr Qi) (another representative of Azure Group) and Min Hur (a solicitor at Koffels Solicitors & Barristers (Koffels)): T 297. The email was in the following terms (Exhibit P22):

On 22 July 2014, at 9:19 AM, Mr Qi sent an email to Mr Koffel referring to a phone conversation and setting out a list of action items which he considered that Mr Yu needed to address: Exhibit P22. He sent a further email at 11:11 AM and Mr Koffel responded at 12:28 PM: Exhibit P22.

The email sent at 4:23 PM on 20 July 2014 indicates that for the initial contribution Mr Yamaguchi would inject the sum of $497,500 by way of equity to pay for what was said to be the 5% deposit for the site acquisition ($415,000) and the remaining ($82,500) as working capital. That email was sent at a time when it appears that the property proposed to be acquired was a property at St Leonards. As events unfolded, the Meadowbank property was purchased: see also CB 161[5].

Despite cross-examination by Mr Smallbone seeking to challenge Mr Yu’s evidence regarding the arrangement between himself and Mr Yamaguchi in respect of contributions to the project, I accept Mr Yu’s evidence. It is not inherently unbelievable. It appears to me to be consistent with the 20 July 2014 email.

Essentially, Mr Yamaguchi would provide capital contribution and Mr Yu would not be contributing any capital but would provide his expertise and time, in the manner I have described above.

Mr Yamaguchi asked Mr Yu (CB 182-183[19]) how much funding would be required. Mr Yu’s response indicated that it would depend upon the costs of the property and development. He further indicated that what would be required was essentially enough to cover the initial funding until other investors could come in and they obtained funding from the bank. According to Mr Yu, Mr Yamaguchi effectively agreed with that.

What is significant about the arrangements between Mr Yu and Mr Yamaguchi is that they were arrangements only between themselves. There is no suggestion in Mr Yu’s evidence regarding the arrangements that Dr Wang was to have any part in the project arrangement. Dr Wang herself does not give any particular evidence of any discussions with Mr Yu and Mr Yamaguchi in which she was envisaged by them (or herself for that matter) as being an initial investor. Further, the only contemporaneous documentation which bears upon the matter (being the email dated 20 July 2014 from Mr Yu to Mr Koffel being Exhibit P22) does not suggest that Dr Wang was to have any involvement.

Dr Wang pleaded a case to the effect that Mr Yu was obliged to contribute to the investment project. The pleading was as follows (CB 107[9]-[12]):

Mr Yu denied any requirement on his part to financially contribute to the project. His defence was relevantly (CB 123-124[9]-[12]):

Dr Wang’s affidavit evidence regarding her allegation of Mr Yu being obliged to financially contribute to the project was addressed in her affidavit sworn on 16 October 2020. However, there were objections to parts of her evidence in this regard and I set out below the evidence as admitted following rulings on evidence as follows, with the parts rejected struck through (CB 161-162[7]-[12]; T 39-41):

Mr Smallbone engaged in a line of cross-examination of Mr Yu testing the notion that Mr Yu was obliged to contribute funds equally with Mr Yamaguchi to the project.

The cross-examination proceeded as follows (T 186.23-48):

As noted above, Mr Yu rejected the notion that he was obliged to contribute funds to the project. He indicated that it would be unfair for him to do all the work in relation to the project and also contribute funds with Mr Yamaguchi only contributing funds: T 186.25-34 (see also T 189.48-190.1).

It is not clear whether Mr Smallbone pressed a submission to the effect that Mr Yu was obliged to contribute funds to the project. To the extent that he did, I reject the submission.

I accept Mr Yu’s evidence as to the arrangements between himself and Mr Yamaguchi. It is consistent with the email dated 20 July 2014 (Exhibit P22)

It is not unusual for arrangements to be struck between businesspersons where one person (in this case Mr Yamaguchi) provides some initial funding (which Mr Yu described as “seed funding”: T 185.19) but no other express input and the other party (in this case Mr Yu) provides no funding but provides the expertise regarding arranging the development.

Mr Smallbone also engaged in a line of cross-examination of Mr Yu suggesting that Mr Yu was remunerated for work on the project. It seems to me clear that Mr Yu did receive some monetary remuneration for work in respect of the project. However, the cross-examination was seemingly predicated on the theory that it was impermissible for Mr Yu to receive any such remuneration.

The precise reason for the challenge was unclear.

The question of his remuneration was not listed amongst any of the agreed issues.

It may have been that Mr Smallbone was testing a number of theories regarding the arrangements between Mr Yu and Mr Yamaguchi. In any event, it is not clear to me that the arrangements between Mr Yu and Mr Yamaguchi were significantly more detailed than that which I have described above. In particular, it is not clear to me that the arrangements between Mr Yu and Mr Yamaguchi precluded Mr Yu from being remunerated for the project.

The extent of what was to be Mr Yamaguchi’s investment in the project does not appear to have been precisely defined. I doubt that a specific amount of initial contribution was agreed.

Rather, the tenor of the conversation which Mr Yu says he had with Mr Yamaguchi and the email dated 20 July 2014 (Exhibit P22) suggests that what was required was enough money to cover the deposit for the site acquisition and a degree of working capital.

Mr Smallbone challenged Mr Yu regarding the terms of his agreement with Mr Yamaguchi. He put to Mr Yu that the agreement was that he and Mr Yamaguchi would each subscribe $497,500 for their respective units in the Trust. Mr Yu denied that: T 186.19-25. He put to Mr Yu that they were obliged to contribute equally in terms of actual money. Mr Yu denied that: T 186.27-31.

The cross-examination continued at T 186.36-48:

A bit later, the cross-examination continued as follows (T 188.4-43):

I accept Mr Yu’s evidence regarding the arrangements. He indicated that there was an agreed estimate of the amount needed to secure the site as a deposit but that he and Mr Yamaguchi would need more funding, depending on how the project proceeded: T 188.8-14.

Mr Smallbone cross-examined Mr Yu regarding how the further funding by Mr Yamaguchi beyond the initial $497,500 amount was to be recorded in the accounts of the Trust. Mr Yu agreed that the amount of $497,500 would be the initial subscription price for Mr Yamaguchi’s units but that the question of any further funding from Mr Yamaguchi was not discussed. He disagreed that it would be necessarily by way of debt finance: T 188.11-22.

Mr Yu did not indicate that there was any particular part of the arrangements between himself and Mr Yamaguchi that quantified an equal unitholding by reference to financial contributions. In any event, Mr Yamaguchi had an opportunity as at April 2015 (when the Unitholders Agreement was entered into) to redress any concerns regarding quantity of unitholding by reference to amount of payments made by him and did not do so.

Dr Wang was cross-examined regarding her role in the project.

Dr Wang stated that, at least until September 2014, she was acting like a financial officer though her “actual position was always a director”: T 64.19-22.

Specifically, regarding her role in the project, Dr Wang gave the following evidence (T 74.34-50):

Her evidence in this regard is consistent with that of Mr Yu who said that the whole purpose of Dr Wang being appointed as a director was to act as a form of supervisor, “gatekeeper” or controller on the finances for Mr Yamaguchi, to ensure that the money was applied reasonably and related to the project. He understood that Dr Wang would discuss the company’s financial details with Mr Yamaguchi and his (Mr Yu’s) part was to look after the operation-side of the project: T 189.10-12, 190.26-29, 195.11-13, 195.39-41, 196.35-37, 217.2-4, 241.13-14.

Mr Yu indicated that that was Dr Wang’s role essentially up until the time that the more substantial investors were to become involved at which time they would take more control of the finances and Dr Wang would be “faded out from the financial controlling role”: T 201.49-201.1. Mr Yu did not handle the banking matters: T 241.50.

On 18 July 2014, a Customer Service Officer from Ryde City Council wrote to Ron Edgar, it seems an architect on behalf of the vendor, noting that a development application had been lodged and forwarded for assessment: CB 342.

Further, on 18 July 2014, a deed creating the Trust (known as the “567 Pacific Unit Trust”) was executed (Trust Deed).

Mr Koffel assisted in drafting the Trust Deed instructed by Mr Yu and his firm also prepared various forms for the establishment of registers for the Trust: T 183.44-184.16.

The parties to the Trust Deed are STYU, stated to be the “initial unit holder” and APG stated to be the Trustee. The Trust Deed was signed by Mr Yu on behalf of STYU as its sole director and secretary. The Trust Deed was also signed by Dr Wang and Mr Yu as respectively director and secretary/director on behalf of APG. The Trust Deed provides that the Trustee acknowledges receipt of “the initial amount which entitles the initial unit holder to be entered in the register as the holder of 20 units”: cl 2.2, CB 280. The “initial amount” is defined to mean an amount of $20: cl 1.1(d), CB 279.

The Trust Deed makes no reference at all to Mr Yamaguchi. However, Mr Yu explained that the absence of particular reference in the Trust Deed to Mr Yamaguchi was because he had not at that time received advice in relation to tax issues: T 184.36-185.12.

Nonetheless, in the proceedings, part of the evidence included a form of register of units issued by the Trustee which register records as being issued on 18 July 2014 20 units (numbered 1 to 20) to STYU as Ordinary Class Units and a further 20 units (being numbered 21 to 40) to Mr Yamaguchi: CB 597.

Although the Trust Deed makes no reference to Mr Yamaguchi’s involvement, Mr Yu states that on or about 18 July 2014, Mr Yamaguchi paid $497,500 as part of the initial funding for the acquisition and development of the St Leonards property and was provided 20 units in the Trust, being at that stage 50% of the units of the Trust: CB 183. Dr Wang’s evidence (albeit limited under s 136 Evidence Act) was to the same effect: CB 161, T 186.

The claims of the parties in the proceedings to a large extent are born out of what appears to be the shift in the intentions of Dr Wang regarding her perception of her role or entitlements with respect to the arrangements between Mr Yu and Mr Yamaguchi.

What is clear is that at some point from about early October 2014, Dr Wang commenced making payments all bar one of which came into the bank account of APG, with the other single payment, on 6 November 2014, being to ADM: CB 488, Exhibit P3.

The reason why she made those payments was, as asserted by her in the pleadings and her affidavit evidence, an alleged request by Mr Yamaguchi to pay Mr Yu’s “investment contribution”: CB 107, 162[10], [11] (as admitted see above). However, I have rejected Dr Wang’s claim that Mr Yu was obliged to financially contribute to the project.

Nonetheless, in order to understand the context for what ultimately occurred in the matter regarding the entry of Dr Wang and Mr Yu into a Deed of Settlement and Release, and the allegations of assault giving rise to duress on the one hand by Mr Yu and the denials by Dr Wang of any such invalidating matter on the other, it is necessary to explore what actually occurred which led to Dr Wang making payments and what rights the making of such payments gave to her.

In order to address those questions, it is necessary to set out some of the context leading up to the assertion of rights by Dr Wang.

Despite the fact that the initial discussions as between Mr Yu and Mr Yamaguchi focussed on purchase of property at St Leonards, that was not the property that was purchased for the project.

The reasons for that are not entirely clear. However, the reasons need not be explored. The following may be noted.

On 1 August 2014, APG entered into a contract to purchase the Meadowbank property for a price of $5.9 million. The deposit was 10% of that figure being $590,000 leaving a balance of $5.31 million to be paid: CB 302. Koffels acted for APG: CB 302. The contract contained a form of deed of guarantee and indemnity, and Dr Wang and Mr Yu were specified as being the guarantors in favour of the vendor guaranteeing APG’s performance of the terms of the contract: CB 325.

It appears that at the time of the contract, the property had erected on it a brick house and warehouse: CB 332.

According to Mr Yu, the initial funding required for the acquisition and development of the Meadowbank property was in the order of $1.08 million: CB 184[29]. He states in his evidence that at the time of purchase of the Meadowbank property (1 August 2014), Mr Yamaguchi had only paid $497,500 being less than half the money required: CB 184[29].

There is no doubt that Mr Yamaguchi paid the sum of $497,500 as part of the initial funding. That occurred in a context in which it was envisaged that the project would involve the acquisition and development of a property at St Leonards.

The deposit for the Meadowbank property was $590,000 being 10% of the purchase price: CB 302. However, there is little evidence explaining what the arrangements were for paying a deposit on the St Leonards property.

The email from Mr Yu to Mr Koffel dated 20 July 2014 suggests that only a 5% deposit was necessary to secure that site.

Dr Wang gave some evidence that a 5% deposit had been made towards the property albeit that there was no clarity as to who had paid that amount: CB 162[9], T 40. She states that “the loan by me was to pay for fees such as solicitor, marketing and other sales fees”: CB 162[9]. That evidence was admitted but limited under s 136 Evidence Act: T 40.

Dr Wang’s belief that a 5% deposit was made to purchase the property is at odds with the form of the contract for the purchase of the Meadowbank property which indicates that a 10% deposit was required: CB 302. There is some support in Mr Yu’s evidence for a 5% amount: CB 198[9]. Mr Lonergan said on the first day of the hearing “there's no dispute that a 5% deposit was paid” by somebody: T 40.36-40.

Despite the contract form, the parties seem to have accepted that a 5% deposit was paid. There is no need for me to make a specific finding on the issue. However, if a 10% deposit was required and paid the evidence is unclear as to who provided the additional $92,500 ($590,000 - $497,500) to complete the monies required for the purchase of the Meadowbank property on 1 August 2014.

On 21 July 2014, there is a record of various payments being received including a sum of $415,000 going in and out of CBP Lawyers Trust Account: CB 598.

On 29 July 2014, the sum of $415,000 was paid into APG’s Westpac bank account and the same amount paid out on 31 July 2014: CB 352.

In any event, according to Mr Yu, in October 2014, he spoke with Mr Yamaguchi indicating that Mr Yamaguchi would need to pay about $580,000 more for the initial funding for the acquisition and the development of the Meadowbank project and Mr Yamaguchi agreed to do that: CB 184[30]-[31].

In about October 2014, Mr Yu and Mr Yamaguchi had a conversation as follows (CB 184[30]):

The conversation does not refer to any involvement of Dr Wang.

Dr Wang, in her affidavit evidence I have set out above, stated in a passage that was not ideal in form but nonetheless admitted (CB 162[10]):

Further, in or around October 2014, Dr Wang states that she told Mr Yu that she would loan APG the investment amount required and had a conversation with Mr Yu to the following effect (CB 162[11]):

Dr Wang asserted in her affidavit that Mr Yu had made a verbal promise to pay back the money which she asserts she paid on his behalf: CB 162[14]. I do not accept that any such conversation occurred, and I do not accept that any such “verbal promise” was made by Mr Yu.

First, Dr Wang was cross-examined regarding this and accepted that Mr Yu had made no personal obligation to repay monies to her prior to the Unitholders Agreement (i.e. April 2015). Dr Wang appears to have assumed that if anyone had any responsibility to pay back monies it was APG not Mr Yu. The cross-examination was as follows (T 106.21-41):

Secondly, it is contrary to evidence that I accept (see further below) that Mr Yu’s discussions about funding occurred with Mr Yamaguchi and at least until about January 2015, whilst he was aware of payments being made to APG, he was not aware that Dr Wang was making the payments: T 216.49-217.4, 217.49-50-218.9, 225.40-46, 226.15-227.6, 254.5-9.

Thirdly, the notion that Mr Yu made a promise sits uneasily with Dr Wang’s evidence, which I refer to below, that Mr Yamaguchi requested her to make payments: T 104.5-35, 108.34-110.51, 132.27-133.11.

Dr Wang, in the proceedings, asserted that she had paid expenses in the sum of $30,981.83 at or prior to 13 October 2014: CB 488. In evidence she indicated that this related to expenses incurred by herself and Mr Yamaguchi: T 116-117.

Between 13 October 2014 and 23 March 2015, Dr Wang made various payments of money to APG’s bank account in 29 tranches of payments: CB 488. Dr Wang, in her initial affidavit (16 October 2020), asserted she paid the money. Her assertion (which was rejected as evidence) was that she paid it on behalf of Mr Yu: CB 162[12].

Mr Yu, for his part, asserted that he understood that Mr Yamaguchi had caused the funds (which total $584,200) to be paid for the initial funding for the acquisition and development of the Meadowbank property (I note that 29 payments were made to the APG account and one payment of $100,000 was paid to the account of ADM: CB 488, Exhibit P3). He stated, in his initial affidavit (22 July 2021), that he recalled at the time checking and confirming that the payments were made into the bank account but did not check and was not aware as to whose account the money had come from: CB 184[31]. I accept that evidence.

Mr Yu states, in particular, that after some of the payments were made Mr Yamaguchi would give him a call and say “I have caused money to be paid to Auslon, please check”: CB 184[32]. He further states that at no time did he speak with Dr Wang about her paying any money to APG or to him for any reason and at no time did he request Dr Wang to pay any money to APG or him whether as a loan or otherwise. From his perspective, if Dr Wang did pay any money to APG, any such payment was between her and Mr Yamaguchi, and at no time was he aware of her paying any cash to APG or on behalf of APG: CB 184[32]-[34]. I accept his evidence.

Mr Yu asserted (in evidence limited under s 136 Evidence Act to his belief) that he always believed and understood that the monies paid into APG’s bank account were by Mr Yamaguchi as part of the initial funding and not by or on behalf of or for the benefit of Dr Wang: CB 185[35]. Mr Yu was cross-examined about this. His evidence is consistent with his affidavit evidence to the effect that he was not aware that Dr Wang was supplying funds to APG or ADM, and at no stage did Dr Wang tell him that (until January 2015): T 216.49-217.4, 217.49-218.9, 225.40-46, 226.15-227.6, 254.5-9. I accept his evidence.

Mr Smallbone suggested to Mr Yu that Dr Wang in October 2014 had told him that she was going to be lending money to the companies and asked for some documentary acknowledgement of her contribution and that he was well aware of the fact that she was making contributions from that time. He denied that: T 252.17-42. I accept Mr Yu’s denial.

In (or about) December 2014, according to Dr Wang, she broke up with Mr Yamaguchi as girlfriend and boyfriend: T 100.28-40. Mr Yu timed the breakup as being in or about February 2015. Mr Yu said that Dr Wang had disclosed the reason being that she had caught Mr Yamaguchi having an affair with another woman and came to learn that he had a partner and children in China: CB 186[45], T 218.17-21. Dr Wang denied that the relationship came to an end because she caught Mr Yamaguchi cheating on her with another woman: T 100.28-40.

From about February 2015, Mr Yu says that Dr Wang began dating Mr Yang and from that time until April 2015, they came over to his parents’ home on a few occasions for a social gathering. He introduced them to his parents (who were elderly) and his sister: CB 186[46]-[47].

On 18 February 2015, Ryde Council issued a development consent in respect of the project: CB 515.

Whilst I accept that Dr Wang made the payments set out in the schedule of payments as asserted by her (CB 488), the precise basis on which she made the payments is more elusive.

The payments which Dr Wang made between October 2014 and March 2015 were made by her on the basis that she was one of the investors to the project.

During final submissions, I engaged Mr Smallbone in discussion about the effect of the monies contributed.

Mr Smallbone suggested that the payments made by Dr Wang should be regarded as a loan to APG: T 455.14-15.

Mr Lonergan disputed that the payments were a loan. He submitted that they were payments on behalf of Mr Yamaguchi: T 486.13-36.

There are difficulties with the proposition that Dr Wang’s payment should be regarded as a loan.

First, the arrangements between Mr Yu and Mr Yamaguchi were fixed initially without reference to involvement of Dr Wang.

Secondly, I do not accept that Dr Wang had any discussions with Mr Yu whereby there was any agreement for her to lend monies to APG, let alone to lend any monies to him. Dr Wang was cross-examined regarding her contributions to the company in October 2014, and her evidence was to the effect that the payments that she made to the company were payments agreed by her with Mr Yamaguchi: T 104.5-35.

Thirdly, there is no evidence that Dr Wang had any discussions jointly with Mr Yu and Mr Yamaguchi to alter the basic underlying arrangement that they had a 50% share in the Trust at least up until the point where the external investors came in.

Fourthly, a not insignificant number of the payments made by Dr Wang contain the descriptive reference “yamaguchi invest” or “Yamaguchi Invest”. This includes the payments made on 23 December 2014, 13, 14, 16 and 19 January 2015 and 19 March 2015: CB 461, 475, 476 and 444. Further, other of the payments refer to “Yamaguchi” being payments made on 10 October 2014, 2 December 2014 and 18 December 2014: CB 363, 481 and 463.

Fifthly, during her cross-examination, Dr Wang accepted that the first five payments referenced in the schedule of payments between 13 October 2014 (in fact, the first occurred on 10 October 2014: CB 363, 437) and 25 November 2014 of respectively $10,000, $10,000 $2500 $25,000, $100,000 were all payments made by her at the request of Mr Yamaguchi: T 108.34-110.27. In fact, as I understood her evidence, Dr Wang acceded to the proposition that every single payment she made as set out in her table of payments was made by her at the request of Mr Yamaguchi following a discussion she had with Mr Yamaguchi which discussion was after a request from Mr Yu for additional funding. Her evidence was as follows (T 110.18-50):

After the luncheon adjournment, Dr Wang in cross-examination slightly qualified this evidence as follows (T 132.27-133.11):

However, the qualification does not impact upon the substance of her evidence. Her evidence is to the effect that the 30 payments from 10 October 2014 to 23 March 2015 referenced in her table (CB 488) were all made by her at the request of Mr Yamaguchi.

There is some lack of detail in Dr Wang’s evidence above (T 132.27-133.11) regarding precisely how Mr Yu was said to have made the communications regarding funding. However, there is no suggestion that there were any very specific occasions between October 2014 and March 2015 at which Mr Yu met jointly with Dr Wang and Mr Yamaguchi.

Mr Yu denied that Dr Wang informed him that she was putting money into the company at least until approximately January 2015: T 216.49-217.4, 217.49-50-218.9, 225.40-46, 226.15-227.6, 254.5-9. I accept his evidence in that regard. From time to time when funds were required for the company’s activities, Mr Yu said he told Mr Yamaguchi. Sometimes that was directly, sometimes it was through Dr Wang, though Mr Yu did not recall every single request instance. However, after January 2015 Mr Yu “communicated those messages” (request for funds) to Mr Yamaguchi directly, noting he also came to Mr Yu’s house for dinner: T 227.8-.19: I accept his evidence.

Sixthly, none of the payments made by Dr Wang listed in her schedule contain any descriptor in the bank statements that the payments were made by her. None of the payment descriptors refer to any loan. Apart from the neutral descriptor “APG” the only descriptor is, as noted above, “Yamaguchi Investment” or “Yamaguchi”.

Seventhly, neither Dr Wang nor Mr Smallbone seemingly put any position that there was some middle ground of some of the payments being loans and some of the payments being investments.

On balance, I find that the monies paid by Dr Wang between October 2014 and March 2015 were paid on behalf of Mr Yamaguchi as funds necessary for the initial investment by him until more substantial investors could be found.

Mr Yu indicated that he only became aware that Dr Wang claimed to have any financial interest in or about January 2015 when she called him and told him that she had broken up with Mr Yamaguchi and asked him to “do something about her interest” which took him by surprise. She told him that her family had contributed some money to Mr Yamaguchi or lent some money to Mr Yamaguchi which had been put into the project. His response was that that was difficult because the structure of the unit holdings within the Trust were “fixed in the agreement, or in the unit trust document” (T 219.36-37; see also generally T 218.23-220.9-10) and her claims were effectively a personal matter between herself and Mr Yamaguchi to sort out: T 218.23-27, 223.38-45, 251.34, 252.17-253.24.

I do not think that it is inexplicable that Dr Wang waited to inform Mr Yu that she was putting money into the company at least until approximately January 2015. Essentially, up until that time, Dr Wang was monitoring financial matters as a gatekeeper for Mr Yamaguchi.

It is possible that in January 2015, Dr Wang referenced to Mr Yu the fact that she was making payments in the context of her, at that stage, recent breakup with Mr Yamaguchi. Perhaps by 23 March 2015, when essentially the last main payment was made by Dr Wang (I exclude the miscellaneous payment of $1,025 on 1 September 2015), she realised that she had made payments on behalf of Mr Yamaguchi which in light of the breakdown of their relationship might be difficult for her to recover from him and, accordingly, started to agitate for recovery of the funds that she had paid from Mr Yu. Whilst I consider that what I have just indicated is a plausible explanation for what occurred, it is not specifically necessary for me to make a firm finding as to what happened as between Dr Wang and Mr Yamaguchi.

Mr Yu states and I accept that in February or March 2015, Mr Yamaguchi came to Australia, and he invited Mr Yamaguchi to dinner at his home and had a discussion about it, but Mr Yamaguchi rejected any notion of giving up some interest in the project to compensate Dr Wang: T 224.2-21.

On the basis that Dr Wang made the payments on behalf of Mr Yamaguchi as funds necessary for the initial investment, Dr Wang’s remedy for funds contributed, at least at that point in time (and ultimately), I regard as being a claim against Mr Yamaguchi: T 486.49-487.3.

On or about 24 April 2015, Dr Wang states that she received a telephone call from Mr Yu and had a conversation as follows (CB 171[20]):

Mr Yu, for his part, seemingly accepted that such a conversation occurred albeit that he disputes that he stated that it would only take five minutes. However, he states there was a further conversation to the following effect (CB 198[9]):

In about April 2015, Mr Yu states that he and Mr Yamaguchi had a conversation as follows (CB 185[36]):

The timeline for location of the investors and negotiation of the Unitholders Agreement is a little vague.

Mr Yu, in his affidavit evidence, referred to a discussion with Mr Yamaguchi in April 2015 regarding getting more investors to complete the project. He indicates that at that time he located investors to invest $6 million in the Trust for the purposes of the “acquisition [I infer settlement] and development of the Meadowbank [project]”: CB 185[37]. It seems that he made contact with Ms Jia who then introduced Ms Liang as being the substantial investor: T 231.21.

During cross-examination, it appeared that the investors were actually located earlier because Mr Yu thought that negotiations for the Unitholders Agreement occurred prior to April 2015. He suggested that it took three months (January-April 2015) to negotiate and finalise the drafting of the Unitholders Agreement: T 237.15-29. I consider that the timing suggested by Mr Yu in his cross-examination is the more likely accurate timing for locating of the investors.

In the negotiations for the Unitholders Agreement, Zhijun Liu of the firm Teddington Legal, solicitors then in Bathurst Street, Sydney, acted for Ms Liang and Ms Jia. Mr Yu, STYU, Mr Yamaguchi and APG had no separate solicitors acting for them: T 230.27-231.6.

Mr Yu was involved in the negotiations. He indicated that he did not speak on behalf of Mr Yamaguchi but did give him feedback after the negotiations for his comments and approval. Mr Yamaguchi was overseas at the time at least of the negotiations: T 232.

On 24 April 2015, the Unitholders Agreement was signed: CB 490-521.

There was an arrangement for the parties to meet at the Meriton in Pitt Street. Mr Yu telephoned Dr Wang and asked her to attend: T 246.5-7. The parties attended it seems in the afternoon on 24 April 2015. Apart from Mr Yu and Dr Wang, Ms Liang, her husband (Henry), Ms Jia and the lawyer from Teddington Legal attended. However, Mr Yamaguchi was not there as he was overseas: T 247.44-248.8, 250.21-22.

It is not entirely clear how Mr Yamaguchi signed given that he was overseas. Mr Yu could not recall although suggested that he had probably signed later: T 248.6-10. The positioning of the initials on the Unitholders Agreement is a little curious in that Mr Yamaguchi’s initial is the second of the four initials on each of the relevant pages. It seems a little odd that the three persons who were present and initialled the pages (namely Ms Liang, Ms Jia and Mr Yu) did not sign one after the other rather than leaving a gap for Mr Yamaguchi to sign. Mr Yu had no particular explanation of it: T 250.6-40. However, it is not necessarily untoward.

The Unitholders Agreement bears the hallmarks of having been drafted by Teddington Legal (CB 490) and is stated as being between a number of parties as follows:

The Unitholders Agreement is executed as a deed by each of the parties, including relevantly on page 29 of the document, by APG, with each of Mr Yu and Dr Wang signing on behalf of APG. Dr Wang’s signature is as a director of APG: CB 518. Mr Yu signed on behalf of STYU, and Mr Yamaguchi signed, his signature being witnessed by Betty Chen: CB 518.

The recitals to the Unitholders Agreement are as follows (CB 491-492):

The arrangements brought about by the introduction of investors give an appearance of some complexity although are explicable by commercial imperatives.

Essentially, what appears to have occurred is that one investor, Ms Liang, would make an investment of $6M: c 1.1.1(a), CB 493. The parties effectively agreed that as at 1 March 2015, an amount of $1.31M had been invested into APG to operate the project: cl 1.2(a), CB 494.

The calculation of the amount of $1.31M is described by the Unitholders Agreement as being “agreed by all unitholders or as evidenced by an audit report”: cl 1.2(a), CB 494. Mr Yu indicates that the actual figure of $1.31M was verified by Jason Yang, the accountant for Ms Liang, and APG’s accountant, the firm Maxmillion, working together with Dr Wang and said he (Mr Yu) was not privy to those discussions: T 232.26-235.1, 242.17-18. I accept his evidence. It is consistent with Mr Yu’s assertion that Dr Wang was supervising the company’s financial transactions at least up to the time of the Unitholders Agreement: e.g. T 224-225. At no point of time did Mr Yu assert that he had control of the financial arrangements or accounts. Mr Smallbone did not demonstrate that he in fact did have such control.

Ms Liang was to pay the sum of $6M in two tranches. First the sum of $1.5M within five days of the commencement date which is defined as being 28 April 2015 (four days after the date of the deed). The second tranche of $4.5M was to be paid or before 18 May 2015: c 1.1.1(a), CB 493.

Thus, upon payment of those sums, the total capital amount would be effectively $7.31M ($1.31M + $6M).

There was a restructuring of the classes of units to the following effect:

The Unit Schedule at the end of the Unitholders Agreement suggests that the value of the Class B Units was $1.5M: CB 517. However, that appears to be a mistake and is at odds with the $1.31M figure referred to in cll 1.2 and 13.1(b) and the amount of 1.31M units recorded as having been issued to STYU and Mr Yamaguchi in the Register of Units: CB 597.

The Unitholders Agreement provided that following the commencement date, APG would appoint Ms Liang and Ms Jia as new directors of the company acting respectively as the representatives of the new unitholders (YTF and SL Pty Ltd and HJ&S Pty Ltd) in participation of the operation of the project. The Unitholders agreed that Ms Jia would be entitled to have an annual salary up to $100,000 plus superannuation to be borne and paid for by APG: cl 12.1(b), CB 503.

The financial arrangements going forward were to be organised specifically with the involvement of Ms Liang. In this regard, the Unitholders Agreement provided in cll 12(c) and (d) as follows (CB 504):

On 25 April 2015, Mr Yu invited Dr Wang and Mr Yang to his house for dinner. It is agreed that Mr Yu’s parents were present at the dinner.

Dr Wang states that during the dinner she had a conversation with Mr Yu as follows (CB 172[22]):

Mr Yu denies that Dr Wang requested that he send her a signed copy of the complete agreement: CB 198[13]. Whilst I accept it is plausible that Dr Wang might have requested a copy of the agreement per se, I do not accept that Dr Wang requested the “complete” agreement. It is clear the way that Dr Wang’s case was put that Mr Smallbone suggested that Dr Wang had not been shown the entire agreement at the time that she signed the agreement on behalf of APG. I reject that suggestion.

From about late-April 2015 to 11 May 2015, Mr Yu stated that Dr Wang would call him almost every day requesting him to transfer to her Mr Yamaguchi’s shares (I infer units) in the Trust. He indicated, and I accept, she stated (CB 186-187[48]):

Mr Yu states that each time Ms Yang requested he transfer Mr Yamaguchi’s shares he said (CB 187[49]):

I accept that Mr Yu made statements to the above effect to Dr Wang.

On 1 May 2015, an amount of $10,000 was paid into APG’s account: CB 400. Mr Smallbone suggested to Mr Yu that he had requested Dr Wang to pay that in connection with the construction finance or construction contract. He suggested that APG had to make a payment application fee to ANZ but could not recall the source of the funding or when it was made: T 250.44-251.19. It is evident that the monies came from an account described as “Lulu Save” relating to Dr Wang: CB 642.

The size of the ANZ mortgage in relation to the project is unclear. Mr Smallbone submitted that one could only infer that it was something less than $16.925 million: T 484.

On 3 May 2015, Ms Liang and Ms Jia were appointed as directors of APG with Mr Yu remaining as a director until 1 April 2019 (CB 621) and Dr Wang remaining as a director for about three months thereafter.

On 7 May 2015, the change of shareholding in APG was formalised by a change of company details document lodged with ASIC. Mr Yu had 23 shares, Mr Yamaguchi had 22 shares, Ms Liang had 49 shares and Ms Jia had 6 shares: CB 622.

In Dr Wang’s first affidavit, she states that it was on or around 10 May 2015 that she was provided with a copy of the Unitholders Agreement: CB 163[16]. She states that she “became very disturbed to see that [STYU] was listed as a shareholder despite not having returned my money”. She states that she chased Mr Yu verbally for “my money” and indicates that he said words to the effect of (at CB 163[17]):

I accept that up to 10 May 2015, Dr Wang pressed Mr Yu for her “money”. However, I do not accept that at that point he had offered to transfer units to her.

In Dr Wang’s second affidavit, she revised the date of receipt of the Unitholders Agreement to 2 days earlier being 8 May 2015. Dr Wang asserts that she was provided with a copy of the Unitholders Agreement: CB 172[23]. She did not indicate who had provided her with a copy of the document.

She states that when she first saw the Unitholders Agreement she was “shocked and confused”. She asserts that she was not aware that APG would issue Class B Units at a price of “$1.3 million” to Mr Yu and Mr Yamaguchi in equal shares. She asserted that it was “[o]nly when I saw the complete copy of the agreement” that she realised that Mr Yu “did not fully explain to me the terms of the agreement when I asked him”: CB 172[23]. The Unitholders Agreement on pages 2-28 (CB 491-517) contains the initials of four persons on each of those pages. It is not disputed that those initials are the initials of Ms Liang, Mr Yamaguchi, Ms Jia and Mr Yu: T 249.24-50. Dr Wang states that she did not initial the document: CB 172[23].

Dr Wang, in particular, asserts that Mr Yu did not tell her about the distribution of the original investment and that he only told her that the new investor “will be getting 49% Class C shares in exchange for the $6 million investment into the company for its project”. She asserts that she was not aware that Ms Jia, “the middleperson who introduced Liang, the investor of the company to [Mr Yu], will get 6% share in the company”. She asserts that Mr Yu failed to tell her about the distribution of the original investment and rushed her to sign the document: CB 172-173[24].

Mr Yu denied that he failed to explain to Dr Wang the terms of the agreement when asked. He states that at no time prior to 24 April 2021 was it discussed or agreed that she was to be a unitholder or issued any shares: CB 198[14]. He states that at all times the agreement (regarding the project) was between Mr Mr Yamaguchi and himself and not Dr Wang and himself: CB 198[14].

Mr Yu states that the terms of the Unitholders Agreement had been discussed in detail between Mr Yamaguchi and himself prior to him calling Dr Wang (in context, on 24 April 2015) and that he and Mr Yamaguchi had discussed the exact breakdown of the distribution including the fact that Ms Jia would receive a 6% share in the company. He denies that he rushed Dr Wang to sign the Unitholders Agreement in any way: CB 198-199[16].

Mr Smallbone challenged Mr Yu to the effect that he had not shown Dr Wang the entire agreement at the time of execution. The evidence included the following (T 248.35-249.8):

I accept Mr Yu’s evidence that the whole of the Unitholders Agreement was available to Dr Wang to review as at the time of execution of the document and that she did review it, and that he did not rush her. I reject Dr Wang’s evidence otherwise.

On 10 May 2015, the units as allocated pursuant to the Unitholders Agreement were issued, as is recorded in the Register of Units: CB 597.

On or about 11 May 2015, Dr Wang telephoned Mr Yu and had a conversation she says as follows (CB 173[26]):

Mr Yu confirmed in cross-examination that that was the one and only occasion on which Dr Wang called him that day: T 261.7-12. Mr Yu states that at no time was he aware prior to attending the dinner, at the Emperor’s Garden restaurant, that Mr Yang was going to be joining them: CB 199[19].

Mr Yu drove to the restaurant. He arrived a little late, at some point after, and possibly well after, 7:30 PM.

In his affidavit evidence, Mr Yu states that he attended at the restaurant and began walking around looking for Dr Wang. He was approached by a single male individual who told him to follow him. He followed that individual to a private room where Mr Yang and three other male individuals were sitting. He says the male individual who told him to follow him sat down at one of the seats: CB 187[51].

In cross-examination, he indicated that when he got there he went to the ground level of the restaurant and could not find anyone so went to the first level of the restaurant: T 261.17-25. There was a number of private rooms on that first level and Mr Yang and the others were in one of those private rooms: T 262.26-263.9.

Mr Yu further indicated that Mr Yang was there with a few “strange males”. They were already drinking or at least he had the impression that they were drinking. There was wine on the table and Mr Yang’s face was already red: T 261.27-31, 265.11-13.

In his affidavit evidence, Mr Yu indicated that Mr Yang had a conversation with him as follows (CB 188[52]):

Following the conversation (CB 188[52]), Mr Yu says that Mr Yang then slapped him across the face whilst the four accomplices rushed towards him. He states that he cannot recall the exact series of events after he got slapped but recalls being punched and kicked repeatedly whilst he was on the floor covering his head. He says he felt dazed and close to going faint. Eventually, he says two of the four accomplices grabbed him by the arms, placed him on his knees and held him whilst Mr Yang stood over him yelling and stating as follows (CB 188[53]):

Mr Yu then said to Mr Yang (CB 188[54]):

In cross-examination, Mr Yu indicated that Mr Yang had said to him as follows (at T 263.24-28):

He added that Mr Yang had said:

He confirmed that the demand was for money not for a transfer of units or shares: T 264.7-14. The reference to a forest is explained by the fact that he lives by a park. He said there is “a little forest next to my home”, “a little bush”: T 264.23-28.

When pressed, Mr Yu indicated that he told Mr Yang that he had no agreement with Dr Wang about any payment: T 264.38-47.

Mr Smallbone challenged him to the effect that this content was not in his affidavit. Mr Yu indicated that there was a lot more content that was said in addition to what was in the affidavit. There is dispute as to how long Mr Yu was at the restaurant. On any view of that, it seems to have been for up to an hour. I consider that it is likely that there was more conversation that occurred than Mr Yu can recall. However, in the circumstances of this particular matter, I do not think the fact that he referred in cross-examination to content that was not in his affidavit is of great significance against his credit.

Though challenged, Mr Yu confirmed that he was asked to serve tea to Mr Yang and that Mr Yang told him “I’ve killed a man before”: T 265.15-23. He indicated that Mr Yang sent him a picture of his firearm licence or permit. He indicated that he still had the picture in his phone: T 265.24-266.11.

Mr Yu stated (at that point) he was there at most about an hour. The beating he says occurred at the end of that time: T 261.38-262.7.

Mr Yu says that Mr Yang then allowed him to leave. He went straight home into the study of his house. His face was bruised and bleeding from the cuts. He says his top, which was white, was ripped and covered in blood. He took off his top and changed it. He took photographs of the top as well as his chest: CB 188-189[55]. The photographs are in evidence: CB 591-593.

Mr Yu says that he was shaken up from the assault that occurred and struggled to sleep the entire night and was continuing to think about the safety of his parents, his sister and himself: CB 190[58].

Mr Yu says he started to think to himself whether he should report the matter to the police. He was terrified of Mr Yang and the four accomplices and what they could do to his parents, his sister and himself. He decided not report Mr Yang or the four accomplices (whose names he did not know) to the police (at least at that stage). He indicates he was scared that if he reported Mr Yang and he found out that he would follow through on his threats: CB 189[56].

On 12 May 2015, the following morning, at 6:20 AM, Mr Yu says he sent an email to Dr Wang and Mr Yamaguchi as follows (CB 189-190[57]):

A copy of the email, which is in Mandarin, and an English translation of it was adduced in evidence: respectively CB 589-590, 587-588.

The email purports to have been sent by Mr Yu using his email address at APG (yu@auslonproperty.com.au) to Mr Yamaguchi (1206816327@qq.com) and to Dr Wang (wang@auslonproperty.com.au).

There was a belated attempt on the part of Dr Wang’s legal representatives to adduce expert evidence from Dr Allan Watt, a digital forensic examiner, regarding the sending of this email. The report (which was incorporated in the Court Book at CB 644-692) was disallowed by me on the first morning of the hearing (T 23-32, 49.17-28) in circumstances where the report had been prepared and served only a short time before the commencement of the hearing and Mr Lonergan indicated that he would be prejudiced in meeting it. When I asked why the report, if it was so central to Dr Wang’s case, had not been prepared ages ago, Mr Smallbone frankly indicated that he could not answer that and could only surmise that those who were previously involved in representing Dr Wang had not previously thought of it: T 29.3-6.

There was clarity that the email address “wang@auslonproperty.com.au” was the email of Dr Wang. In cross-examination, Mr Lonergan showed Dr Wang an email that had been sent by her to Mr Yu on 25 September 2014 (marked as MFI-2). She prepared the email which attaches a payment summary: T 91.21-34. Dr Wang was also asked about an email from the same email address apparently sent to Mr Yu on 20 July 2015 attaching 10 payslip documents prepared for Dr Wang being monthly payments covering the period 30 August 2014 to 30 May 2015: Exhibit D2. Dr Wang, when cross-examined about this, initially indicated that she had no memory regarding it but accepted that the payslips could have been done by her. She accepted it was a payslip in relation to her but slightly distanced herself from whether she had created it: T 64.46-67.23. Although she stated she could not recall whether she had sent this email, I am satisfied that she did. There was a further email from Dr Wang to Mr Yu dated 1 September 2015 attaching a payment summary document recording a payment of $2425 (marked as MFI-5). Dr Wang was asked about the email. She confirmed that she sent the email with the payment summary to Mr Yu: T 96.43-97.1.

Dr Wang, when asked about the use of the email, accepted that she had seen and used the email account “wang@auslonproperty.com.au” between April and September 2015 on a number of occasions but qualified her answer by indicating that it was only when Mr Yu instructed her to do work. At least formally, Dr Wang ceased to be a director of APG on 1 August 2015. Yet, clearly, she had access to and at least on one occasion used her email after that time. She indicated that between April and September 2015 she did not check her email unless she had work to do: T 97.3-15. I do not accept her evidence that she only accessed her email when instructed by Mr Yu to do work. She was in charge of the accounting side of the project as a director of APG and was paid a monthly salary for her work. One of her tasks was to supervise or act as a gatekeeper for Mr Yamaguchi. Particularly after she commenced to make payments to APG beginning in October 2014, I do not consider that she only looked at her email account when directed to do that by Mr Yu.

I find that Mr Yu sent the email on 12 May 2015 to Dr Wang and Mr Yamaguchi.

Each of Mr Smallbone and Mr Mack cross-examined Mr Yu at length regarding the alleged assault on 11 May 2015. Although conscious of the gentle reminder of Mr Lonergan that generally several counsel who are in the same interests should not be permitted to cross-examine a witness at length on the same topic (GPI Leisure Corp Ltd v Herdsman Investments Pty Ltd (No 3) (1990) 20 NSWLR 15), I permitted Mr Mack to cross-examine Mr Yu at some length on the issue at least mindful that whilst there was a commonality of interest technically Mr Yang is not in precisely the same interests as Dr Wang.

Mr Smallbone cross-examined at least initially by reference to the report that Mr Yu had made regarding that occasion to police at Gladesville Police Station on 6 November 2020: T 258.

Mr Mack likewise cross-examined Mr Yu regarding the events of 11 May 2015 at least substantially by reference to the police report (Exhibit P2): T 392.

Each of Mr Smallbone and Mr Mack provided submission notes addressing what were said to be inconsistencies in Mr Yu’s account of the alleged assault on him on 11 May 2015.

The submissions highlighted differences between Mr Yu’s affidavit evidence, the police report (Exhibit P2) and Mr Yu’s cross-examination.

The differences extended to:

Mr Mack made a number of submissions the tenor of which were to suggest that the Court should disbelieve that an assault occurred.

First, a number of the submissions were to the effect that Mr Yang was not shown to be a violent man but rather, on the contrary, engaged in convivial activities with Mr Yu.

On 18 June 2015, Mr Yu attended the wedding of Ms Yige Yang (Ms Yang) which he described as a registry wedding. There is a photo depicting Mr Yu holding a bouquet of flowers next to Ms Yang and her husband with Dr Wang and Mr Yang on the other side of the married couple in front of a building and on a paved area at the top of steps: Exhibit P20.

It was suggested to Mr Yu that at this time he was on friendly terms with Mr Yang, the implication being that he would not have participated in the photo had that not been the case (and presumably he would have been disinclined to be in the presence of the person who allegedly bashed him).

Mr Yu indicated that he was only there for the bride who was a high school classmate (the events taking place at the Parramatta marriage registry): T 330. I accept Mr Yu’s explanation.

Mr Yu was shown a photo of himself, Mr Yang and Ms (Yige) Yang’s husband in a canoe: Exhibit P21.

The date of the photo of Mr Yu in the canoe was not identified. In any event, it was not established that the event depicted by the photo occurred after, rather than before, 11 May 2015.

Mr Mack tendered a number of photographs relating to occasions on which Mr Yu was present with Mr Yang. One photograph (Exhibit XD1) showed Mr Yu and Mr Yang sitting near a counter at Mr Yu’s home with each of them holding two small dogs. Another photograph (Exhibit XD2) depicted Mr Yu and Mr Yang sitting on the side of a man-made surfing structure at Ryde Aquatic Centre both wearing rashie vests.

Mr Mack also tendered and cross-examined Mr Yu regarding two photos taken on 25 April 2015 respectively at 19:49 (7:49 PM) and 22:56 (10:56 PM) which became Exhibits XD3 and XD4. The first photo was of a bottle of Penfolds wine adjacent to a glass with a fly in the glass. The second photo was of a table with various bowls of foods and other plates and alcohol (in the form of two beer bottles and a glass of wine).

The purpose of these tenders was essentially to support a submission that Mr Yu invited Mr Yang to his house and enjoyed his company and that coupled with the photo of the dogs and attendance at the Ryde Aquatic Centre was suggestive that Mr Yang was not a man prone to violence and that no bashing of Mr Yu occurred on 11 May 2015.

There is no doubt that prior to 11 May 2015, Mr Yang was invited to Mr Yu’s house and in that respect enjoyed his company. However, I do not regard the photos of Mr Yang holding a small dog in the company of Mr Yu at his house or the photo of them at Ryde Aquatic Centre as necessarily speaking to or providing a rational basis for concluding that Mr Yang did not per se assault Mr Yu at the Emperor’s Garden restaurant on 11 May 2015.

Mr Lonergan tendered a photo of a firearms licence/permit for Mr Yang with an expiry date of 12 February 2017: Exhibit D3. Mr Mack tendered a very similar photo shot of the same firearms licence/permit which had apparently been posted on WeChat Moments on 22 December 2015 with a comment at the foot of the document transcribed as “finally I can buy a gun” with a smiley face emoji: Exhibit XD5.

This was, in context, a follow-up, at least in part, to cross-examination by Mr Smallbone of Mr Yu in which Mr Yu had indicated that Mr Yang had sent him a photo of his firearms licence: T 265.23-266.12.

Mr Yu, when cross-examined initially by Mr Smallbone, could not recall the exact date on which the photo had been sent to him (T 266.1-5) but later when cross-examined by Mr Mack indicated it was after 11 May 2015 by WeChat or SMS text and said that he checked his iPhone and indicated that it was saved in August 2016: T 386.1-390.3.

Apart from questions about the dating of when any such photo may have been sent, part of the purpose of the cross-examination by Mr Mack was to assert that it was unlikely that Mr Yang, if he were a so-called gangster who had bashed (or allegedly bashed) Mr Yu, would go to the government to obtain a firearm licence and post about it on WeChat Moments with a smiley face emoji. Mr Yu’s response was to the effect that “a lot of gangsters have [a] licence”: T 391.

Mr Yu also did not accept the propositions put to him by Mr Mack in cross-examination that the fact that Mr Yang might pose for a photo with the dogs (Didi and Titi) was not behaviour consistent with a person engaging in non-peaceful business practices: T 390.

I do not accept that the above materials foreclose the possibility that Mr Yang might, as Mr Yu alleges, have assaulted him.

Secondly, Mr Mack submitted that there is no documentary evidence which states or supports a finding that Mr Yang assaulted Mr Yu. Rather, he states that the evidence points “completely in the other direction”. In this regard, he refers to 4 items of documentary evidence being:

These materials bear upon a couple of issues. The first is whether the assault occurred, which I will now deal with. The second is whether Mr Yu was fearful of Mr Yang and remained fearful of him for the purposes of constituting duress, which I will address a little later.

There is an issue in the proceedings as to whether Mr Yu sent the 12 May 2015 email to Dr Wang and Mr Yamaguchi. As noted above, I find that he did. The email addresses on their face appear to be the APG email addresses for Mr Yu and Dr Wang.

The email and its terms confirm that Mr Yu was bashed.

Clearly, the email and its terms associates Dr Wang with the beating (“[b]ecause this incident involves Lulu …”: CB 587) and proffers that as a reason why he “won't go to the police”. The police report made on 1 November 2020 also does not nominate Mr Yang as the assailant.

Mr Yu, in his first affidavit (21 July 2021), states that at the end of the assault by Mr Yang (CB 188-189[55]):

On 13 May 2015, Mr Yu purportedly sent an email attaching a photo of a shirt with blood on it to himself. The email was sent from the email address “stevenjiayiyu@icloud.com” to an email address “JiaYi YU” (CB 595, 674-676).

On 17 May 2015, Mr Yu purportedly sent an email to himself attaching a photo of the bruise: CB 596, 679-680.

Mr Lonergan tended a bundle of documents of emails showing a shirt with blood on it and bruising to Mr Yu: Exhibit D1. There is a screenshot of an email sent from Mr Yu’s iPhone bearing the date 13 May 2015 at 11:53 PM showing a photo of the shirt with blood on it. There is a screenshot of an email sent from Mr Yu’s iPhone at 6:08 PM on 17 May 2015 showing the picture of the bruising: Exhibit D1.

The bundle of documents comprising Exhibit D1 combined with the above documents effectively reveal that the email address which Mr Yu used to send the documents to himself on 13 May 2015 and 17 May 2015 was “yiy127@hotmail.com”.

Other material being extracts from the rejected expert’s report seemingly of metadata at CB 687-691 was also added to the Court Book: T 78. However, no submissions were made to me regarding the metadata at CB 687-691.

I accept, based on the documents tendered as part of Exhibit D1, that Mr Yu sent those emails at or about the times that he claimed he did.

I find that the photographs of the bloodied shirt and the bruising to Mr Yu’s chest depicted and manifested the outcomes of the assault by Mr Yang and the associates with him.

There is no suggestion that there was any other event occurring just prior to 13 May 2023 and 17 May 2023 to which a bloodied shirt and bruising on Mr Yu’s chest might be referable or which otherwise explain the existence of such a bloodied shirt and occurrence of such bruising.

The cross-claim which is filed on 15 April 2021 does clearly identify Mr Yang as the person who, accompanied by four accomplices, physically assaulted Mr Yu: CB 141.

The WeChat between Mr Yu and Mr Yang on 4 May 2021 does not demonstrate that there was no assault which occurred by Mr Yang on Mr Yu on 11 May 2015. Although it is not necessary to make a very specific finding regarding why Mr Yu engaged in the WeChat communication with Mr Yang on 4 May 2021, it is at least explicable on the basis that Mr Yu was hoping to prepare Mr Yang for the fact that the cross-claim would be served and attempting to placate him in some way. The subsequent WeChat message from Mr Yang after having received the cross-claim states (CB 586):

Whilst Mr Mack relied upon the communication as a denial that there was a connection between what happened in the restaurant and the cause of the incident which is the subject of the cross-claim, Mr Lonergan, on the other hand, in submissions, sought to rely upon the statement made by Mr Yang at CB 586 as an admission.

The communication is not decisive that an assault did not occur and, in any event, does not cause me to doubt Mr Yu’s evidence that an assault did occur by Mr Yang on Mr Yu.

There is a question as to what amount of precision or detail is necessary in making findings regarding the event. I have considered anxiously Mr Yu's evidence regarding the matter. I accept that there is some force in Mr Smallbone's and Mr Mack's submissions regarding the inconsistencies between Mr Yu's affidavit and his cross-examination. However, I am satisfied that an assault on Mr Yu carried out by Mr Yang, with some accomplices, occurred.

In assessing Mr Yu’s recollection of the events, the context should be recalled.

The context included the fact that Mr Yu indicated that the events where he was assaulted by Mr Yang occurred very suddenly: T 392.20-30. He thought the invitation was to an event which would be friendly and did not see what happened coming: T 401.9-18. He lost track of time (and accordingly could not remember how long he was there for): T 402.19. Specifically, he stated (T 402.32-40):

He could not recall: who poured wine; whether or not he was in fact introduced to some of Mr Yang’s associates (T 406.37-45); whether the other associates were talking amongst themselves (T 407.15); and details about toasting (T 408.43-409.47.

He recalls that Mr Yang was on his left but cannot recall who was to his right: T 409.23-27.

It seems to me plausible that someone who was beaten up might be somewhat hazy on the details of what occurred but could be believed as to the core issue of whether they were assaulted or not.

I find that Mr Yu did attend the Emperor’s Garden restaurant and arrived later than the time nominated for the meeting: T 261.

I accept that he went to the first level of the restaurant and did enter into a private room where Mr Yang and a number of associates were present. I find that there was some discussion that took place between Mr Yang and Mr Yu regarding the topic of monies that had been paid by Dr Wang and that Mr Yang required a repayment of the monies.

I accept Mr Yu’s evidence that Mr Yang told him that Dr Wang had requested him to attend the meeting to deal with a request on her behalf to pay back monies she had paid to him (or, more precisely, paid to APG): CB 188[52]. Mr Smallbone cross-examined Mr Yu to challenge him regarding this. However, he confirmed that evidence: T 263.33-50. I accept that evidence.

Mr Mack put to Mr Yu that Mr Yang did not assault him at the restaurant however Mr Yu denied that: T 400.17-18; 416.38-40. I accept Mr Yu’s evidence that Mr Yang assaulted him by slapping him across the face and that other associates jumped upon him and assaulted him: T 392.8-34; 411.42-412.5.

I accept Mr Yu’s evidence that he was scared that if he reported Mr Yang to the police Mr Yang would follow through on his threats. I accept Mr Yu’s evidence that Mr Yang told Mr Yu that if Dr Wang did not receive repayment of her monies that he would bash him again in a serious way such as to either make him handicapped or not walk again or in some like similar way (CB 188[53]) and that Mr Yang intimated to Mr Yu that whatever treatment he would inflict upon Mr Yu would be brought to bear on Mr Yu’s parents and sister: CB 188[53].

A particularly challenging part of the case is establishing what Dr Wang knew, if anything, of the assault on Mr Yu.

Dr Wang, in her affidavit evidence, denied any knowledge of the assault. Dr Wang says that she did not ask Mr Yang and has never asked (nor would she ask) anyone to threaten or assault Mr Yu and to the extent that Mr Yu inferred that Mr Yang was acting on her behalf on that night or had asked him to do what Mr Yu alleges (about the assault), she denies that: CB 174[29].

Mr Mack submitted that the Court should not find that Mr Yu was informed by Mr Yang or those present that they were acting with the authority of Dr Wang.

Between February 2015 and April 2015, at a social gathering, Mr Yu says that Mr Yang and Dr Wang said to him as follows (CB 200[23]):

On another occasion, Mr Yu says that Mr Yang and Dr Wang said to him (CB 200[24]):

Mr Yu says that he was not sure what to make of those statements but believed (limited under s 136 of the Evidence Act to belief) what Mr Yang had said because “in my view he looked and acted the part”: CB 200[25].

I accept Mr Yu’s evidence.

Dr Wang’s evidence regarding confronting Mr Yu included the following (T 138.11-139.2):

To the extent that Dr Wang suggested that there was no point in her contacting Mr Yu to inform him that she would not be attending the dinner and that Mr Yu could simply have dinner with Mr Yang because they were good friends and closer to one another then he was to her, I do not accept her evidence.

In cross-examination there was what I regarded as being an unguarded remark by Dr Wang revealing her confrontational purpose. In her explanation for why Mr Yang attended, and she did not attend the Emperor’s Garden restaurant, she said presciently “I treat him too nice before” (T 139.4-140.5):

I find that on 11 May 2021, Dr Wang invited Mr Yu for dinner to address with him her concerns regarding the Unitholders Agreement and, specifically, the moneys she had paid to APG. I find that she wished to confront him or have him confronted by Mr Yang at least in part because the Unitholders Agreement had been signed and she considered that Mr Yu had deferred her attempts to resolve her claims “many times before”. I find that Dr Wang asked Mr Yang to go to the dinner and to confront Mr Yu regarding what she considered to be her claims to either be repaid the money that she had paid into the project or find some solution to it. To the extent that she asserted that (a) she did not know that Mr Yang was going to the dinner to confront Mr Yu at the dinner, (b) she did not know that Mr Yang was going there to exert physical influence over Mr Yu and (c) she did not know what was going to occur at the dinner, I reject her evidence. Her indication that she had treated Mr Yu “too nice before” to my mind was an unguarded admission that she would implement a different strategy involving Mr Yang confronting Mr Yu.

Mr Yang, on the face of it, had nothing to do with the project per se.

I find that Dr Wang did instruct Mr Yang to confront Mr Yu about her claims and was willing for Mr Yang to do so in a way which involved a shift of persuasion from discussion that was to her mind “too nice” to more compelling persuasion amounting to pressure that was not “nice”. I find that Mr Yang did say or convey in as many words to Mr Yu that he was tasked with addressing Dr Wang’s issues and claims regarding the monies that she had put into the project with him.

I find that Mr Yang was in substance Dr Wang’s agent to impose pressure upon Mr Yu with addressing Dr Wang’s issues and claims regarding the monies that she had put into the project with the purpose of obtaining repayment of the monies or some other solution providing recognition of monies Dr Wang had paid to APG. I alternatively find Dr Wang procured Mr Yang for that purpose.

Dr Wang was cross-examined about whether she discussed the dinner with Mr Yang. Her evidence was as follows (T 142.39-143.14):

Dr Wang’s initial response that she asked about the dinner a few months later had an air of unreality about it. She retreated from that evidence to indicating that there was some discussion about it on the second or next morning or a few days later. It seemed to me that Dr Wang wished to distance herself from the dinner as being an important event. I reject Dr Wang’s evidence that she did not attend the dinner because she was too tired. I consider that she made a conscious decision not to attend the dinner because she knew or expected what was going to occur at the dinner and wished to distance herself from any direct association with the pressuring of Mr Yu by Mr Yang.

Further, having regard to the email sent by Mr Yu the following morning, I consider that Dr Wang, at some time either on 12 May 2015 or shortly thereafter (or in any event, at least prior to her ceasing to be a director of APG on 1 August 2015) in the ordinary course of her role as a director of APG and her supervising role for Mr Yamaguchi, would have checked her email account with APG, seen the email and became aware of the fact that Mr Yu was asserting that he had been bashed at the dinner and directly linked the bashing to involvement of Dr Wang.

Finally, in December 2015, Mr Yu states in evidence I refer to below that he then attended at Market City at 4 PM and met with Mr Yang and Dr Wang and tried not to look at Mr Yang in the eyes to not disrespect him. He talked to him with his head down. He states that Mr Yang said, “[i]sn’t it funny how one beating can get you some much respect”. He says that Dr Wang laughed, and he did not respond: CB 201[29]. I accept that evidence. I find that Dr Wang knew that Mr Yang had assaulted Mr Yu.

On 1 August 2015, Dr Wang ceased to be a director of APG: CB 621.

On or about 31 August 2015, the contract for the purchase of the Meadowbank property was completed and APG became registered as owner of the property: CB 617.

From the period of approximately August 2015 to November 2015, Dr Wang says that Mr Yu sent to her two transfer forms to sign: CB 163[18].

Specifically, on or about 10 September 2015, Dr Wang states she completed and returned the transfer forms (a transfer document to transfer Mr Yu’s share in the 1.31 million Class B Units jointly held by STYU and Mr Yamaguchi to Dr Wang – appearing at CB 578, and a transfer of the shares of STYU and Mr Yamaguchi in APG to Dr Wang – appearing at CB 579): CB 163[18]. Dr Wang says that the transfer forms were sent to her personally by email by Mr Yu and that he never executed the documents, and the units were never transferred to her: CB 163[18].

I note that the transfer forms appearing at CB 578-579 do appear to be signed by Mr Yu. However, the email by which Dr Wang says the transfer forms were sent was not adduced in evidence.

Mr Yu says that he did not wish to give Dr Wang his shares in the Trust and did not wish to forfeit his entitlement to any profits in the project: CB 191[61].

Other than Mr Yu’s assertion of being assaulted on 11 May 2015 and signing the Deed as a consequence of that, Dr Wang has to my mind provided no rational explanation, or at least no compelling explanation, as to why Mr Yu would have agreed to forfeit his entitlements, in whole or part, without any consideration.

In about August 2015, Mr Yu says he received a call from Mr Yang, and they had conversation to the following effect (CB 191[68]):

Mr Yu says he then caused a transfer form to be sent to Dr Wang regarding the transfer of the Class B Units and only did it because he was terrified that if he did not listen to Mr Yang “he would cause harm onto my family and me”: CB 191[69].

In or about November 2015, Mr Yu says that due to an issue with the first transfer form that had been brought to his attention by Dr Wang he arranged for a second transfer form to be sent to her. He states that he did this only because “I was terrified that if I did not do so [Mr Yang] would cause harm onto my family and me”: CB 192[70].

Mr Yu says the transfer forms were never properly executed and that he did not want to send to Dr Wang any transfer form regarding the transfer of the Class B Units: CB 192[72]-[73].

In or around December 2015, Dr Wang instructed her then legal representative Mr Cheng of CS Lawyers to draft a deed of settlement and release to address “my concerns with the various issues that had arisen in relation to Mr Yu and the agreements”: CB 174[32].

Dr Wang states that she is aware that in drafting the Deed her legal representative conducted a property search in relation to Mr Yu for the purposes of identifying potential security: CB 174[33]. She provided in evidence a copy of a property owner name enquiry of “Jiayi Yu” and title searches dated 9 December 2015: CB 174[33], 611-617.

In about late-November or early December 2015, Mr Yu says that prior to meeting with Mr Cheng (see below), he received a call from Dr Wang who said to him: “I need you to come to Market City today at 4:00pm. Allen and I need to discuss with you the issues relating to the unit trust” to which he responded “Yes, okay”: CB 200-201[28].

He states that he then attended at Market City at 4 PM and met with Mr Yang and Dr Wang and tried not to look at Mr Yang in the eyes to not disrespect him. They had the meeting and conversation (referred to above), and which I accept occurred, in which Mr Yang said, “[i]sn’t it funny how one beating can get you some much respect”. Dr Wang laughed, and he did not respond: CB 201[29].

Mr Yu says that at this meeting Dr Wang and Mr Yang were making suggestions as to what they required in order to resolve the matter. He confirmed that he would transfer his beneficial interest in STYU to Dr Wang although he did not want to transfer such interest but was fearful that if he did not agree to do so Mr Yang “would cause harm onto my family and me”: CB 201[30].

Dr Wang says that a draft version of what ultimately became the Deed was drafted by Mr Cheng together with draft caveats: CB 174[34]. A copy of that draft is in evidence: CB 523-548.

The recitals in the draft included the following (CB 524-525):

Dr Wang was cross-examined regarding the assertion in recital I that Mr Yamaguchi paid $497,000 to APG via Wang’s personal bank account. She accepted that that was not accurate: T 105.29-43. Nonetheless, that recital appears in the final version of the document which was signed (see below).

On or around 21 December 2015, Dr Wang says that she met Mr Yu in the offices of Mr Cheng and that Mr Yang was present on that occasion “to provide me emotional support”. She states that in the presence of Mr Cheng, Mr Yu stated as follows (CB 175[35]):

The Deed was not signed in that form: CB 175[36]. Mr Yu says that he was terrified, Mr Yang being in attendance, that if he did not find a good reason not to sign the Deed that Mr Yang would think that he was backtracking and “would cause harm onto my family and me”: CB 201[31]. I accept Mr Yu’s evidence, particularly in light of Mr Cheng’s evidence I have referred to earlier in the judgment.

Dr Wang says that at the meeting an alternative to the Deed was also discussed with Mr Yu and Mr Yu responded with words to the following effect (at CB 175[37]):

On 21 December 2015, there is a file note of a meeting and attendance seemingly between 3 PM and 5 PM in the afternoon including Mr Yang, Dr Wang and Mr Yu: CB 607-609.

From December 2015 until May 2016, Dr Wang says that she and Mr Yu continued to discuss possible resolutions of the dispute over the terms of any settlement: CB 175[38].

On 29 January 2016, Mr Cheng sent an email to Dr Wang in the following terms (CB 610):

On 4 May 2016, Dr Wang instructed Mr Cheng to send an email to Mr Yu outlining her “in-principle agreement” with Mr Yu: CB 175[39].

The email sent is in the following terms (CB 549):

I note that the email addresses to Mr Yu and Dr Wang were not APG email addresses but “gmail” addresses.

Mr Yu responded that same day by email to Mr Cheng in the following terms (CB 550):

On a date not clear from the evidence but in context occurring sometime between 4 to 6 May 2016, Mr Cheng sent to Mr Yu the following email (CB 553-554):

Dr Wang was questioned regarding the assertion in that email to the effect that “our client was not involved in the set-up of the original trust and she was not involved in the management of the project either even though she did her best to help”. She accepted that she looked after the finance transactions for APG, was an employee and received a salary and the wording of the sentence was not correct “because apparently I work in the project”: T 99.23-100.26.

On 6 May 2016, Mr Yu sent an email to Mr Cheng as follows (CB 553):

On 11 May 2016, at 1:22 PM, Mr Cheng sent an email to Mr Yu in the following terms (CB 552; 174[41]):

It appears, subsequently on that day, Mr Yu sent an email to Mr Cheng, albeit that there is no time or date reference clearly on the email, as follows (CB 556):

Later still on 11 May 2016, at 10:13 PM, Mr Yu sent an email to Mr Cheng as follows (CB 556):

On 12 May 2016, at 3:22 PM, Mr Yu sent an email to Mr Cheng the following terms (Exhibit P12):

On 17 May 2016, Mr Yu sent an email to Mr Cheng as follows (CB 176[42]; 557):

On 17 May 2016, at 5:34 PM, Mr Cheng sent an email to Mr Yu in the following terms (Exhibit P12):

In about May or June 2016, Mr Yu says he received a call from Mr Yang and had a conversation as follows (CB 192-193[80]):

On 8 June 2016, Mr Cheng sent an email to Mr Yu attaching a form of deed of settlement and release in the following terms (Exhibit P13):

On 9 June 2016, at 9:10 AM, Mr Yu sent an email to Mr Cheng: Exhibit P14.

On 9 June 2016, between 9:10 AM and 5:05 PM, Mr Cheng and Mr Yu exchanged emails regarding the arrangements for signing and exchanging the proposed deed: Exhibits P14, P15.

On 17 June 2016, at 1:35 PM, Mr Cheng sent an email to Mr Yu in the following terms (Exhibit P17):

On 22 June 2016, at 10:25 AM, Mr Cheng sent an email to Mr Yu in the following terms (Exhibit P17):

On 22 June 2016, at 10:51 AM, Mr Yu sent an email to Mr Cheng in the following terms (Exhibit P18):

On 27 June 2016, at 4:59 PM, Mr Cheng sent an email to Mr Yu in the following terms (Exhibit P18):

On a date which (in light of the email immediately above) was seemingly 17 June 2016, Mr Yu signed the Deed on behalf of STYU, APG and himself.

There is a curiosity in that prior to signing the Deed on 28 June 2016, Mr Yu had ceased to be a director of STYU. Clearly, he knew that and clearly at the time that he signed the Deed, he would have known that.

Yet, until belatedly during the course of submissions by Mr Lonergan, Mr Yu did not raise as any distinct defence the fact that the Deed had not been effectively signed by STYU.

At the time the Deed was executed, the project had still not completed. My sense of the matter is that Mr Yu, at least in part, was attempting to buy some time from Dr Wang’s pressing claims to enable the project to be completed. He admitted as much when questioned about a letter sent on 22 December 2017 (T 284), which I will come to.

Mr Yu states that he did not wish to sign the Deed and only did so as he was terrified that if he did not do so Mr Yang “would cause harm onto my family and me”: CB 193[81]-[82], [84]. I accept his evidence. He denied that at any time Dr Wang was owed obligations from the Trust, STYU, APG or himself and denies that she was entitled to any benefit or money from the Trust or those parties: CB 193[83].

On 28 June 2016, Mr Cheng received by express post a signed copy of the form of deed of settlement and release and then proceeded to telephone Dr Wang and had a conversation to the following effect (CB 176[43]):

Dr Wang says she thereafter attended the offices of Mr Cheng and signed the Deed in his presence: CB 176[44]. She said she did that so that Mr Yu and STYU would transfer to her the B Class Units from the Trust “in consideration for the money I had lent”: CB 163[20].

She states that incidental to execution of the deeds on that day she received an amount of $200,000 “in exchange for transferring my Class D shares”. She states that that amount “was paid as interest on my investment”: CB 163[20]-[21], 176[45]-[46].

On 29 June 2016, Mr Cheng sent a letter to Mr Yu in the following terms (Exhibit P19):

The recitals included the following (CB 559-560):

The operative part of the Deed included the following specific provisions (CB 560-561):

The Deed contained various other general conditions numbered from 7-18: CB 561-563.

The numbering of the Deed goes from cl 4 directly to cl 7. Clauses 5 and 6 which appeared in the draft form of Deed had been deleted: CB 561. Clauses 5 and 6 in the draft Deed were in the following terms (CB 526):

Mr Yu’s cross-claim distinguishes between two sets of payments that he said were made to Dr Wang and Mr Yang being:

Dr Wang, for her part, in her initial defence (filed on 3 June 2021) and amended defence (CB 147):

Mr Yang, for his part, in his defence (CB 154):

The particulars of the pleading by Mr Yu indicate the sum of $10,000 was paid by him at the request of Mr Yang on 12 May 2015 in cash to provide to Dr Wang: CB 141[2c]. It is not described as a loan. The pleading asserts that it was paid under duress: CB 140[2 pleading].

On the other hand, the tenor of the pleading by Mr Yu regarding the sum of $200,000 is that it was paid as a loan: CB 141[4].

Dr Wang’s first affidavit (sworn 16 October 2020) predated the cross-claim. It does not address any payment of $10,000. However, notwithstanding that Dr Wang’s second affidavit (14 October 2021) postdates the cross-claim, it does not address any payment of $10,000.

On 12 May 2015, Mr Yu says that he received a telephone call from Mr Yang who had a conversation with him as follows (CB 191[63]):

Mr Yu says that he then went to a NAB branch to withdraw $10,000 cash from his bank account. Afterwards, he headed to Chinatown and called Mr Yang who said to him “[a] young male will come and collect it from you”. Mr Yu says a white Toyota then pulled up and a driver called him over saying “Allen sent me, give me the money”. Mr Yu then gave that person $10,000. He says at the time he gave the money he was terrified and believed that if he did not give Mr Yang the money Mr Yang would cause further harm to him. He further states that he did not wish to give Mr Yang or Dr Wang the $10,000 cash and at no time did he owe them $10,000 or any other monies: CB 191[64]-[67].

Mr Yu was cross-examined regarding this. He indicated that Mr Yang had said to him:

Mr Yu stated that he withdrew $10,000 from a NAB ATM at Haymarket and gave it to one of Mr Yang’s associates: T 266.35-44.

Mr Mack submitted that Mr Yu’s account should not be believed at least because, in his affidavit, his version of the events indicated that Mr Yang had requested the money so that he could give it to Dr Wang (CB 191[63]) whereas during his cross-examination by Mr Smallbone, he indicated that the sum of $10,000 was not made to Dr Wang but, rather, was paid at the request of Mr Yang who told him “[b]ut I need to pay my brothers some sweat fee”: T 266.

Later, after Mr Smallbone’s cross-examination, Mr Mack challenged Mr Yu regarding the withdrawal of $10,000 and he reiterated the reason was that Mr Yang had said “[t]he brothers did some work last night and need to be paid”: T 417.10-420.7. He denied that the payment of the $10,000 never happened: T 420.9-11.

As noted above, Mr Yang’s defence does not deny that Mr Yu paid him the sum of $10,000 in or about May 2015. The defence simply does not admit that allegation.

The evidence regarding the payment of the $10,000 amount is an unsatisfactory part of the case.

Mr Smallbone and Mr Mack submitted that the versions given by Mr Yu in his affidavits and in cross-examination were inconsistent and essentially that neither account should be believed.

Mr Yu’s version in the affidavit (as I have noted above) is that Mr Yang said to him “Bring me $10,000 cash now so I can give it to Lu”.

Mr Yu’s version in cross-examination was

Although not express, the implication from Mr Yu’s affidavit version is that Mr Yang was indicating that the sum paid would be given to Dr Wang.

I accept Mr Yu’s evidence that Yang did have a conversation with him about the payment of a sum of $10,000.

Mr Yu’s affidavit version discloses no precise purpose for the payment of the $10,000 other than it was to be paid to Dr Wang. Possibly, one might infer that, given the context and the intimation that he would pay the money to Dr Wang, it was referable to her demands for repayment of the monies that she had paid to APG.

A possibility which was not explored by any party on the evidence that might explain the apparent inconsistency is that Dr Wang arranged to make a payment to Mr Yang to arrange the assault and what was being requested by Mr Yang was a form of reimbursement for that purpose.

However, given that it was not suggested by any party in the proceedings nor explored in cross-examination of either Dr Wang or Mr Yu, it would not be right for me to make any finding to that effect.

Whilst I accept that on one view there is arguably inconsistency between Mr Yu’s affidavit and his cross-examination account regarding the precise purpose for the payment, there is not inconsistency in Mr Yu’s version about the fact that the payment was made.

I accept Mr Yu’s evidence that, on 12 May 2015, he received a call from Mr Yang requesting him to bring him a sum of $10,000 cash.

There was an attempt in cross-examination to suggest that it is not possible to withdraw a sum of $10,000 from an ATM account: T 370.20-25. However, no evidence was led to demonstrate that that is not possible nor could be authorised by the National Australia Bank.

I accept Mr Yu’s evidence that, on 12 May 2015, such a payment was made, likely in whole or part from withdrawal of monies from an ATM. I accept that Mr Yu handed the monies over to a driver who had been sent by Mr Yang to collect the monies.

I am somewhat troubled about the precise reason of the payment whether it was as some form of “sweat fee” or otherwise. However, there is no evidence that Dr Wang received any payment of a $10,000 sum on or about 12 May 2015, or any other form of payment from or on behalf of Mr Yu on or about 12 May 2015 or even shortly after that date.

On balance, I am persuaded to accept Mr Yu’s evidence that the sum was some form of “sweat fee” and I find that the payment was a sum demanded by Mr Yang from Mr Yu in a context in which he had the prior evening assaulted Mr Yu and I find that the reason why the payment was made was the consequence of the bashing that Mr Yu had received.

As noted above, Dr Wang’s first affidavit predated the cross-claim. However, it did address her receipt of a sum of $200,000 as follows (CB 163[21]):

In or about November 2015, Mr Yu says he received a telephone call from Mr Yang who had a conversation with him to the following effect (CB 192[75]):

Mr Yu says he arranged for $200,000 to be paid to Mr Yang to be paid to Dr Wang. He did this because he was terrified that if he did not do so Mr Yang “would cause harm onto my family and me”. He states that Dr Wang has acknowledged receipt of the money from Mr Yang. He says that at no stage did he owe Mr Yang or Dr Wang $200,000, at no time did he want to give them that amount whether as a loan or otherwise and at no time was the payment to them intended to constitute any form of repayment of any kind: CB 192[76]-[79].

Curiously, Dr Wang’s second affidavit, albeit postdating the cross-claim, does not expressly address her receipt of $200,000 in any further terms other than as in the first affidavit and simply repeats her evidence above: CB 176[46]. Specifically, Dr Wang does not address the evidence in Mr Yu’s affidavit regarding payment of the sum of $200,000.

I note for completeness that Mr Yu in his affidavit in reply (affirmed 29 October 2021) states in response to Dr Wang’s affidavit evidence regarding the $200,000 (CB 201[34]):

In cross-examination, Dr Wang was asked about payment of the sum of $200,000. Her evidence was as follows (T 157.33-158.24):

A little later in cross-examination, Dr Wang gave the following evidence (T 159.18-160.16):

The reference above in relation to a payment in August 2015 connected in some respects with some evidence that Dr Wang had given earlier in cross-examination as follows (T 133.9-11):

Mr Yu was cross-examined about the $200,000 amount.

In cross-examination, Mr Yu indicated that he could not tell at the time whether the sum of $200,000 was a loan to Dr Wang or to Mr Yang. He indicated that he thought Mr Yang had mentioned that “Dr Wang is pregnant she needed money”. There is slight nuance in what he indicates Mr Yang said as between “I need to borrow some money” (and) “[y]ou need to lend me some money”: T 269.49-270.1.

Mr Yu appeared to accept in cross-examination (T 267.41-268.5, 269.11-15, 270.44-49) that he paid to Mr Yang’s account sums intended for Dr Wang totalling $190,000 by number of instalments being:

Mr Smallbone, in the last two transcript references (immediately above), put to Mr Yu that an additional amount of $10,000 had been paid in September 2015, such that the overall total was $200,000, and Mr Yu agreed with that: T 269.11-15, 270.44-49.

Dr Wang’s initial defence filed on 3 June 2021 asserts the sum of $200,000 was paid in instalments of $100,000, $50,000 and $50,000 from January 2016 and the amount (of $200,000) is acknowledged in the Deed: CB 150-151[4].

Although there are some discrepancies in the evidence overall regarding the payment of the sum of $200,000, there is in reality no real doubt that Dr Wang received a sum of $200,000.

Apart from the defence and the evidence I have noted above, the fact that she received that sum is confirmed in a number of pieces of the documentary evidence including:

I find that Dr Wang received the sum of $200,000.

I find that the sum of at least $190,000 was paid by four instalments paid to Mr Yang’s account being $100,000 on 4 January 2016; $20,000 on 22 January 2016; $50,000 on 25 January 2016; and $20,000 on 1 April 2016: T 267.41-268.5, 269.11-15, 270.44-49.

Although Mr Yu accepted that the additional amount of $10,000 was paid to Dr Wang in September 2015, it is not obvious to me that that is necessarily the $10,000 sum which made up the balance of the $200,000. The first discussions about payment of a sum of $200,000 appear to have taken place in November 2015. Mr Smallbone, in cross-examining Mr Yu, suggested that APG had allegedly paid Dr Wang $10,000 on 15 September 2015 for a construction finance facility fee: see T 267.7-39. That cross-examination is consistent with Dr Wang’s evidence above (T 133.9-11) that the payment she received in August or September 2015 was a repayment of monies that she had lent on or about 1 May 2015.

In any event, no party appeared to suggest that it is critical for me to make a finding regarding how and when the additional $10,000 amount which was said to make up the $200,000 payment was made. In light of the evidence above and the acceptance by Dr Wang that she received the sum of $200,000, I do not propose to make any precise finding as to how Mr Yu paid the additional sum of $10,000 was paid to Dr Wang.

The bulk of the $200,000, namely $190,000, was made in payments in the four months after the meeting on 21 December 2015 in which Mr Yu met at Mr Cheng’s office with Dr Wang and Mr Yang present.

Dr Wang’s evidence, as noted above, was that the $200,000 was “.. the interest, because of this class B generated”: T 157.41.

That is a little intriguing because whilst there is reference to the sum of $200,000 in the Deed as finalised (CB 560, cl 4B) there is no reference to that amount in the draft deed and there is no evidence from Dr Wang of any specific agreement reached with Mr Yu as at December 2015 regarding the $200,000 (nor at the times the amounts totalling $190,000 were paid) being in some way referable to interest in respect of the Class B Units.

Having regard to the totality of the evidence, I find that the $200,000 was paid consequent upon Dr Wang and Mr Yang pressing Mr Yu for payment and recognition of the amounts that she had paid to APG which led to the discussions and negotiations over the draft deed in December 2015 and is the amount of $200,000 that is ultimately referenced in the Deed: CB 560, cl 4B.

Mr Yu asserts, and I accept, that the payments of $10,000 on or about 12 May 2015 (CB 191 [65]-[66]), and the $200,000 (CB 192 [76]-[79]) were made in a context in which he was still scared of Mr Yang and fearful of the threats made by Mr Yang.

In relation to the payment of the $200,000, I consider that there was a further factor operating in Mr Yu’s consideration, namely the prospect of Dr Wang seeking to serving a statutory demand to pursue her claims to repayment or some form of recognition of monies she had paid (see below).

Mr Yu’s evidence regarding why he signed the Deed is set out in his affidavit affirmed 22 July 2021 as follows (at CB 193[82]-[85]).

During the first part of the hearing (13-15 June 2023) Mr Smallbone did not directly cross-examine Mr Yu regarding the entry into the Deed: T 169-293.

When the hearing resumed on 1 August 2023, Mr Smallbone cross-examined Mr Yu regarding the events of 2016 leading up to the time of the Deed: T 304-327.

Mr Yu confirmed that he received a version of the Deed signed by Dr Wang, although could not recall whether he had received it under cover of a letter from Mr Cheng dated 29 June 2016 being dated the day after the date of the Deed: T 326.48-327.24, Exhibit P19.

There was the briefest of challenges regarding fear of violence in June 2016 from Dr Wang or Mr Yang. The cross-examination was as follows T 328.7-26:

Mr Mack did not cross-examine Mr Yu regarding the circumstances surrounding his entry into the Deed (in June 2016).

I accept Mr Yu’s evidence that he was under duress in the form of fear of assault by Mr Yang at the direction or instigation of Dr Wang at the time the Deed was executed by him: CB 193[81]-[82], [84].

At the meeting on 21 December 2015, there was discussion about the prospect of Dr Wang serving a statutory demand to pursue her claims to repayment or some form of recognition of monies she had paid. I accept Mr Cheng’s evidence that one of the options that he suggested to Dr Wang was to serve a statutory demand and that Mr Yu had stated words to the effect that “if you do, all gone, we all lose”: T 443; CB 608 (filenote).

I accept Mr Yu’s evidence that the main reason as to why he executed the Deed was that he was fearful of Mr Yang as a result of the bashing that he had received on 11 May 2015: T 318.23-25.

However, I do not consider that that was the only reason for his entry into the Deed. It seems to me that Mr Yu was concerned that if a statutory demand was served (leaving aside the question of whether Dr Wang would have been entitled to do so or not) that there was a risk that the bank would regard it as being a breach of one of the funding covenants and that the construction funding would stop and that he had an imperative to protect the project and get it finished: T 285.22-30. I do not accept Mr Yu’s evidence that he was unconcerned about the prospect of a statutory demand being served and that that was not a consideration in his execution of the Deed: T 318.8-25.

Notwithstanding that, as noted above, I accept that, at the time, the main reason or at least an operative reason as to why Mr Yu signed the Deed was as a result of the duress.

Dr Wang alleges that Mr Yu affirmed the Deed by means of an email sent by a solicitor on his behalf on 22 December 2017.

There is little in the evidence which explains what occurred between the time of execution of the Deed in June 2016 and the date of the first alleged affirmation.

The main matter of note is that in July 2017, the project builder Apex Construction went into liquidation: T 213.33-35, 282.32-39.

On the morning of 18 December 2017, it appears that Dr Wang met with Mr Yu to discuss details regarding settlement of the project: CB 568.

Later, on 18 December 2017, Mr Cheng sent an email to Mr Yu copied to Dr Wang in the following terms (CB 568):

Within a short space of time, Mr Yu engaged Mr Kong to act on his behalf.

Up to that point, Mr Yu had been effectively content to deal with the matter himself.

By 22 December 2017, Mr Yu and STYU had engaged up Arvin Kong (Mr Kong) of Auyeung Hencent & Day Lawyers

On 22 December 2017, Mr Kong sent an email to Mr Cheng in the following terms (CB 569, 163[22]):

The letter from Mr Kong to Mr Cheng, on instructions, squarely grounds the rights of the parties in the Deed. Subject to the question of whether duress was still operative, I find that the letter dated 22 December 2017 amounted to an affirmation of the Deed.

A period of 2.5 years had elapsed since the bashing that occurred on 11 May 2015. Whilst I accept (as I have noted above) that, as at December 2015, Mr Yu was still afraid of Mr Yang, there is no indication of any further threats of violence by Mr Yang on Mr Yu or his family in the period after December 2015. There is some evidence, as I have noted above, that on or about 22 December 2015, Mr Yang posted a copy of his firearms licence to WeChat, and that Mr Yu was sent a copy of the firearms licence by WeChat or SMS text which he saved to his iPhone in August 2016: T 386.1-390.3.

Mr Yu, in cross-examination, when questioned to the effect that the letter was telling Dr Wang that the Deed was binding on her, gave the following evidence (T 284.32-285.20):

Mr Smallbone then cross-examined to the effect that Mr Yu was in fact threatening Dr Wang with court proceedings, which he rejected.

The cross-examination then continued (T 286.33-287.20):

I accept Mr Yu’s evidence above that he was seeking to “buy time” [the reference to “bide time” at T 286.43-45 should be to “buy time”] and was seeking to avoid as he said above being “beating [sic - beaten] up” and to “avoid another assault”. As Mr Yu indicated, it is entirely unclear what benefit he would derive from the Deed giving away his units for no consideration. I find that the duress was still operative. Dr Wang has not demonstrated that the duress was not operative.

Between about December 2017 and August 2018, Mr Yu says that Dr Wang’s solicitors and his solicitors exchanged emails regarding the Deed. However, he did not tell his then solicitors the circumstances surrounding the signing of the deed: CB 193[85].

On 18 June 2018, Mr Cheng sent a without prejudice letter to Dominic Carbone of Sydney Law Practice: CB 599-606. On the first day of the hearing, the question of whether the letter would be admitted was postponed at the request of Mr Smallbone: T 46.1-49.22. Ultimately, parts of the letter (in particular, paragraphs 15 and 16) were focussed upon during the hearing in the context of the evidence from Mr Cheng which I have addressed above.

In or around early August 2018, Dr Wang had engaged new solicitors, specifically, Jason Chen (Mr Chen) of Juris Chamber Lawyers.

On 8 August 2018, Mr Chen sent an email to Mr Kong as follows (CB 571, 163[24]):

She states that she was concerned that she was not going to receive the Class B Units from the Trust and “therefore suggested that I receive a unit property to reduce the debt owed to me”: CB 163[24].

The content of the letter sent by Mr Chen is as follows (CB 572-573):

On 13 September 2018, Mr Kong sent an email to Mr Chen in response to the 8 August 2018 letter as follows (CB 574):

Mr Smallbone cross-examined Mr Yu regarding the email. There was some question as to whether Mr Yu had specifically authorised the sending of the email or not. However, as I understood it, Mr Yu did not dispute that the email from Mr Kong to Mr Cheng was a communication sent within the general authority of Mr Yu granted to Mr Kong after Mr Yu had discussed a response with Mr Kong: T 288.42-289.13.

The terms of the email are not quite as forceful as the letter dated 22 December 2017. Nonetheless, it responds in terms referring to obligations under the Deed albeit submitting that they are not enlivened.

Subject to the question of whether duress was still operative, I find that the email dated 13 September 2018 amounted to an affirmation of the Deed.

Mr Yu was cross-examined regarding whether the duress was still operative. The cross-examination was infused with suggestions that the email was a means of deceiving Dr Wang.

There was, as noted above, a degree of correspondence leading up to the email dated 13 September 2018.

In context, Mr Yu was cross-examined regarding the letter from Mr Chen dated 8 August 2018: T 287.

Mr Smallbone put to Mr Yu questions regarding completion of the project as referred to in that letter. He referred to 3 queries in the letter regarding the status of the project, monies to be received from the project and distribution of proceeds. He put to Mr Yu that that was his opportunity to give explanations regarding the project. The cross-examination included the following (T 288.11-30):

I accept Mr Yu’s evidence that at that point he was still concerned that “[p]robably they’re going to come to me and make another threat”.

In relation to the email dated 13 September 2018, Mr Yu gave evidence as follows (T 289.15-17):

Mr Yu’s evidence continued (T 290.1- 291.35):

I accept Mr Yu’s evidence that he was seeking to buy time (T 290.23), “deferring the threat” both to himself and to the project (T 290.26-27) and “buying more time to protect [himself] and the project”: T 291.8-9. I find that the duress was still operative. Dr Wang has not demonstrated that the duress was not operative.

On 8 November 2018, the strata plan for the Meadowbank unit was registered.

In December 2018, Dr Wang says she called Mr Yu and had a conversation to the following effect (CB 177[47]):

On 8 January 2019, Mr Yu received into his bank account the sum of $43,260 in respect of the sale of Unit 205 and, also on the same day, the sum of $40,320 from the sale or in respect of the sale of Unit 103: Exhibit P23 page 107; T 367. On 18 January 2019, he received a sum of $827,000 credited to his bank account from APG: Exhibit P23 page 101; T 368.

Mr Yu denied that he did not want any of those transactions to be investigated in an accounting in relation to the project: T 368.36-40. The bundle included various transfers and discharges of mortgage. Mr Smallbone also tended a summary spreadsheet of transfers and discharges in relation to Exhibit P23. The summary spreadsheet was marked MFI-9. Mr Smallbone indicated that the effect of the summary was to demonstrate that the ANZ mortgage was discharged by the payment of monies from settlement of the sales of units: T 484.

During cross-examination, Mr Yu at one point indicated that the project was completed in December 2019: T 356.4. However, having regard to the above-mentioned material, I find that the project was completed in December 2018.

Dr Wang states that thereafter she did not receive any updates from Mr Yu until she called him again in December 2019. She states that during that conversation Mr Yu told her that it was Christmas and that he would meet her after Christmas. She states the reason for her call was that she “wanted to ask about his compliance (or lack of) with the 2016 Deed”: CB 177[49].

After Christmas 2019, Dr Wang says that Mr Yu did not contact her: CB 177[50].

In February 2020, Dr Wang said she contacted Mr Yu, and he told her that he was not able to sell six or seven units and that he had put them up for lease to gain some cash flow. She says she told him “if it’s just for rent, I can help you get a tenant and rent which will increase cash flow”: CB 177[51].

On 6 May 2020, Ms Liang and Ms Jia ceased to be directors of APG: CB 620.

In or about early May 2020, Dr Wang says that Mr Yu blocked her mobile number and that she could not get in contact with him using her mobile after that date: CB 177[52]. Mr Yu says that he tried his best to avoid Dr Wang and to deflect any request she made. He accepts he blocked her number so that she could not contact him. He states that “[a] part of me still held concerns that if I did not do what she wanted, she would send Mr Song Yang after me to cause harm onto my family and me”: CB 201[35].

It appears that after May 2020, Dr Wang made contact with Mr Yu through her landline, and she says she had a conversation with him to the following effect (CB 177[53]):

She states that Mr Yu then hung up the call and did not speak to her after that call: CB 178[53].

On 23 June 2020, Roy Hanna, a lawyer with Brydens, then acting for Dr Wang, sent a letter to APG stating that Brydens acted for Dr Wang, asserting that she was a beneficiary of the Trust and indicating that they were instructed to obtain a full and complete copy of all the financial records of APG. A request was made for the provision of records under 15 categories to be provided within seven business days (but not limited to those categories) with an indication that if there was a failure to provide such materials that “we may commence discovery proceedings against you and seek that you pay our costs on an indemnity basis”: CB 576-577, 164[25]. No response was provided: CB 164[25].

On 29 June 2020, the then director of APG, Mr Ng lodged (through Daison Pty Ltd) with ASIC an application to deregister APG: Exhibit P11 pages 29-30.

In early 2021, Dr Wang filed an originating process in this Court to have the registration of APG reinstated.

On 8 February 2021, she filed an amended originating process. On 24 February 2021, an order was made for the reinstatement of the registration of APG: Exhibit P11 pages 34-35.

On 2 March 2021, Dr Wang’s lawyers lodged with ASIC the order for reinstatement of APG: Exhibit P11 page 33.

On 21 October 2020, Dr Wang commenced the proceedings by way of summons.

On about 6 November 2020, Mr Yu attended Gladesville Police Station and made a report about the incident he says occurred on 11 May 2015 to the police: CB 193[86] (referring to a date of about 1 November 2020 but clarified in the transcript to be 6 November 2020: T 256.35-36).

On 1 November 2020, Constable Tuifua prepared the police report: Exhibit P2. The report does not name Mr Yang or indeed anyone as a person of interest or suspect. That detail is described as being “unknown”. The person reporting is described as Mr Yu and Dr Wang is described as the “person named”. The report states as follows:

On 17 March 2021, a statement of claim was filed.

By 13 April 2021, the defendants had engaged Kammoun Sukari Lawyers to act on their behalf.

On 13 April 2021, Kammoun Sukari Lawyers sent a letter by email to Brydens which apart from confirming that they acted for the defendants relevantly stated as follows (CB 580-582):

Although the proceedings were heard on the basis that Mr Yu had purported to elect to “void” the Deed and the parties provided helpful submissions on the question of whether a deed was void or voidable for duress, none of the parties went particularly further to address the legal principles regarding rescission.

The term “rescission” is used in the law in five senses: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5th ed, 2014, LexisNexis) (MGL) at [25-005].

Rescission in the first three senses is an act of the party whose effect is to dissolve the contract ab initio and intervention of the Court is not a necessary precondition for a rescission in these cases: MGL 3rd ed at [2402]; MGL at [25-020], [25-090]. Closely connected to the question of rescission in the third and fourth senses is the notion of restitution. I will address this below.

For present purposes, the notion of the Deed being rescinded, and the question of restitution being addressed involve the question of rescission in the third or fourth senses described above. None of the parties sought to distinguish between restitution at common law or in equity.

Certainly, none of the parties sought to limit the possibility that relief would be granted on the basis of the Court acting in its equitable concurrent jurisdiction.

The letter sent by Mr Kammoun dated 13 April 2021 frames the rescission sought as a type of rescission within the third sense being an act of one of the parties, namely, Mr Yu, to elect to bring the Deed to an end.

Dr Wang makes no reference to the purported “election” to “void” the Deed on 13 April 2021 in her amended statement of claim. Nonetheless, in reply to Dr Wang’s allegation that the defendants executed the Deed (CB 112 [21]), the defendants pleaded in their defence to the amended statement of claim various matters including the fact that Mr Yu and STYU “elected to void the 20 June 2016 Deed”: CB 125[21(d)]. Dr Wang’s reply to the defence addresses a number of matters raised by the defendants in relation to paragraph 21 of the amended statement of claim and relevantly denies that the correspondence had the effect alleged and denied that the defendants were entitled to so elect: CB 133[2d].

The defendants did not in the cross-claim seek any specific declaration as to the validity of the purported voiding of the Deed.

However, in the list of issues prepared by the parties there was very clearly an issue raised as to whether Mr Yu and STYU were entitled on 13 April 2021 to avoid the Deed. Further, Dr Wang raised an issue as to whether it was too late for Mr Yu and STYU to avoid the Deed by reference to the inability or unwillingness of the defendants to make “restitution in integro” [sic]: Issue 1(e), Dr Wang’s list of issues.

The letter dated 13 April 2021, in its terms, purports on behalf of Mr Yu and STYU to “elect to void the 28 June 2016 Deed”: CB 582[17].

The letter then goes on to assert (at CB 582 [18]) that:

The terminology of the Deed being “void” and of “no effect” is not apt having regard to the legal position that such a deed (which is said to be affected by duress) is merely “voidable”.

Nonetheless, the parties have litigated on the basis that the issue is whether Mr Yu and STYU were entitled to avoid the Deed. There was no serious suggestion by Mr Smallbone that the effect of the letter was to seek to avoid the legal consequences of the Deed. In fact, as I note below, Mr Smallbone cross-examined Mr Yu directly on the basis that the effect of the letter was to tell Dr Wang that he was avoiding the Deed, albeit that Mr Yu responded by indicating that the letter did not tell Dr Wang that he was avoiding the deed but, rather, “trying to say the deed was invalid in the first place”: T 355.35-47, see also T 356.13-17.

I accept that subject to the question of whether the duress was still operative, the letter was effective to elect to avoid or rescind the Deed.

On the basis that the letter was effective to convey an election to avoid the Deed, the question arises as to whether the duress was still operative.

The context in which that question arises is that 32 months had passed between August 2018 and April 2021.

Mr Smallbone put to Mr Yu that he understood from the letter from Brydens dated 23 June 2020 that Dr Wang was seeking an accounting of the affairs of APG. Mr Yu previously indicated in relation to questioning on the topic that he had provided Dr Wang with a summary of the financials in the Excel spreadsheet “showing that the project wasn't making any money, and hoping that she will understand and we all move on”: T 291.49-292.1. Mr Yu was somewhat frustrated with further questioning on the topic when it was revisited when the case resumed after being part heard. Yet again, Mr Smallbone accused Mr Yu of being evasive in his answers: T 353.23. Nonetheless, Mr Yu responded in a manner consistent with his earlier evidence that he had provided Dr Wang with financial records in the form of a spreadsheet that had been prepared by Ms Jia: T 353-354. Mr Smallbone did not seek to demonstrate that Mr Yu had not so provided that information but rather suggested, which Mr Yu accepted, that he had not provided her with supporting documents to underpin the information in the spreadsheet: T 354.

Mr Smallbone cross-examined Mr Yu regarding the letter dated 13 April 2021.

The issue to be addressed was whether the duress that Mr Yu claimed had its genesis in the assault in May 2015 was still operative?

I set out below some of the aspects of the cross-examination of Mr Yu. During the cross-examination, I sought clarification regarding the purpose of some of the questioning. Mr Smallbone indicated that the questioning was to support a submission that restitution was not available or possible or that Dr Wang would be prejudiced in some way in the Deed being set aside. Mr Smallbone also suggested his cross-examination had another purpose relating to Mr Yu’s credit: T 358.24-28.

Mr Smallbone specifically indicated that his cross-examination was to support a submission that the claim of duress was an advantageous afterthought devised to defeat Dr Wang’s rights and that the time taken to declare the avoidance was calculated in that way for advantage and not through any genuine fear on the part of Mr Yu: T 358.50-359.3.

Mr Smallbone put to Mr Yu that he knew perfectly well in June 2020 when he saw the letter (23 June 2020) from Brydens that Dr Wang was “further pursuing her rights” under the Deed: T 352.

Mr Yu, at least by this stage in the cross-examination, was somewhat argumentative in his responses and Mr Smallbone accused him of deflecting in his answers: T 352.

First, Mr Smallbone put to Mr Yu that he arranged for the deregistration of APG to defeat Dr Wang’s rights: T 291-292, 352. Mr Yu denied this and indicated that deregistration of the company “is quite common practice because, you know, you just close up the company once the project's done”: T 292.1-3, see also 352.20-30.

Mr Smallbone asked Mr Yu why he had not told Dr Wang that he was attempting to avoid the Deed when he received the letter from Brydens. Mr Yu indicated that he did not think it was necessary as the Excel spreadsheet had been provided to Dr Wang and he had explained everything to her: T 356.

Secondly, Mr Smallbone put to Mr Yu that he deliberately waited until April 2021 to avoid the Deed and to seek to have it declared invalid because he thought he could take advantage of the Limitation Act 1969 (NSW) (Limitation Act) by waiting that long and then it would be too late for Dr Wang to sue him or the company for her money. Mr Yu denied that: T 356.13-357.5.

Thirdly, albeit a little later in the cross-examination, Mr Smallbone questioned Mr Yu regarding monies that he had obtained out of the project, and it was put to him that he did not wish the transactions to be investigated. Mr Yu responded that he did not want transactions to be investigated by someone who was not entitled to do so (namely, Dr Wang): T 365.38.

Essentially, Mr Smallbone’s reasons for cross-examining on monies Mr Yu received from the project was said to be for the reason of asserting that the defence of duress was a fabrication and that Mr Yu had a financial interest in the project in not wanting to account: T 366.30-367.40.

When Mr Yu was challenged as to his reason for waiting until 13 April 2021 to send the letter to avoid the Deed, he essentially indicated that he had had enough and needed to respond to the issue rather than avoiding it and he found that his lawyer Mr Kammoun was competent and gave him the confidence to deal with the matter through legal proceedings: T 357.7-28.

A little more insight is given to the question of whether the duress was still operative as at 13 April 2021 by the events that happened shortly after that.

On 4 May 2021, the letter from Kammoun Sukari Lawyers was sent to Mr Yang apparently by WeChat: CB 193[88], 584-586.

Mr Mack cross-examined Mr Yu about this: T 425.31-426.47.

The gist of the cross-examination was that terminology that Mr Yu used regarding “brother” was not consistent with Mr Yu being afraid or terrified of Mr Yang. However, Mr Yu indicated that use of “brother” was to indicate respect and confirm that he was terrified of Mr Yang: T 425.41-426.2.

Specifically, Mr Yu proffered that he did not wish to involve or draw Mr Yang into the matter but rather only did so because Dr Wang had persisted in her claims and “cannot let it go”: T 426.5-9.

I find that Mr Yu was fearful of Mr Yang and was, at least up until the time of the filing of the cross-claim, reticent about formally drawing Mr Yang’s name into any formal police involvement or, until the point of the cross-claim, involvement in the proceedings.

I accept that in some of the responses Mr Yu gave to Mr Smallbone that he was argumentative. However, ultimately, I accept that Mr Yu was still affected by the assault and operating under the effects of the duress by the time of the 13 April 2021 letter electing to “void” the Deed.

On 13 April 2021, Mr Yu, by his legal representatives, (Kammoun Sukari Lawyers) elected to “void” the Deed in the email letter to Brydens.

The parties in the proceedings have proceeded on the basis that that was a purported attempt by Mr Yu to rescind the Deed.

I find that the 13 April 2021 letter in its form was effective to elect to avoid or rescind the Deed in a context in which Mr Yu was still affected by the assault and operating under the effects of the duress.

It is appropriate to briefly address how the question of restitution arises in this case. The election to rescind in turn raises the question of whether restitution is required and available.

Questions of restitution and prejudice were not front and centre in the way the case had been pleaded. The issue of restitution does not appear directly on the pleadings but rather was raised in the list of issues provided by Mr Smallbone barely a week before the hearing.

Mr Smallbone’s opening submissions did elaborate a little on the question of restitution.

Possibly because the issue of restitution did not directly appear in the pleadings but rather was raised in the list of issues provided barely a week before the hearing, there was no direct evidence in chief by any party addressing the question of restitution.

In the context of my initial concern regarding the direction of cross-examination based on limitation periods, Mr Smallbone (helpfully) explained his case regarding restitution as follows (at T 360.34-44):

He confirmed this a little later on as well (at T 361.39-361.3):

Despite the question of restitution being an issue in the proceedings, subject to what I am about to say, none of the parties directed my attention to any texts or caselaw addressing the legal principles regarding restitution.

Mr Smallbone, without distinguishing between restitution at common law or in equity, nonetheless made particular submissions to the effect that restitution would be impossible because Dr Wang was or would be prejudiced (T 5.18-24; 360.34-44), in particular, he submitted that she would be stymied in having an action against APG on the basis that the limitation period had expired: T 357.40.

Effectively, Mr Smallbone’s submissions were that it was too late for Mr Yu and STYU to avoid the deed and that Dr Wang would be prejudiced by any such avoidance.

As I mentioned above, closely connected to the question of rescission in the third and fourth senses is the notion of restitution. There are differences as between common law and equity regarding what is required by way of restitution following rescission by the act of a party of a deed said to have been procured by duress.

At common law, complete restitution is required. Where a contract voidable at law is wholly executory it may be rescinded without difficulty. However, in many situations concerning contracts that had been partly or completely executed, rescission at law was not available: MGL 3rd ed at [2408].

The limitations on restitution at common law were reflected in part in its procedures. Procedurally, because rescission was the act of the (aggrieved) party there was no suit at common law for rescission nor action per se for restitution. It was a matter for the parties to seek full restitution and, in the absence of agreement between them, the aggrieved party could seek to obtain restitution by actions such as for money had and received to recover money paid under the contract or for trover to recover the value of chattels transferred under the contract or for ejectment to recover possession of land given after contract but before conveyance. The common law has no remedy to permit an allowance for depreciation in value of goods or land or for the value of costs of acts of part performance: MGL 3rd ed at [2408].

The common law has no means of enforcing reconveyance of legal estates and interests in land once they had been conveyed (even if the conveyance had been procured by fraud): MGL at [25-045], [25-050].

But equity takes a less stringent view than the common law as to what suffices by way of restitution. The classic description is that given by Lord Blackburn in Erlanger v New Sombrero Phosphate Co at 1278-1279, namely that (emphasis added) “the practice has always been for a Court of Equity to give this relief whenever, by the exercise of its powers, it can do what is practically just, though it cannot restore the parties precisely to the state they were in before the contract”, including by ordering accounts of profits and making allowance for deterioration. If complete restitution is not possible, equity uses its powers so as to do what is practically just between the parties, and by so doing restore them substantially to the status quo: MGL at [25-065] citing Alati v Kruger (1955) 94 CLR 216; [1955] HCA 64 (Alati v Kruger) at 224 per Dixon CJ, Webb, Kitto and Taylor JJ.

Specifically, equity has ancillary remedies which can be used and adapted in a broader range of cases of rescission to attempt to bring about restitution which is practically just. These include remedies of account, delivery up and by granting relief on terms: MGL at [25-035].

It is evident from the above that there were cases in which the aggrieved party could not effectively rescind at law because restitution was not available. In such cases, equity in its concurrent jurisdiction treated the aggrieved party’s act of rescission as ineffective at law but as revesting rights in equity at the time of the purported rescission with respect to which equity could decree full relief at the time of the subsequent suit: MGL 3rd ed at [2409].

Even when exercising its concurrent jurisdiction with the common law courts, equity regards rescission as still being the act of the (aggrieved) party and the task of the Court is to confirm that the claimant had been entitled to rescind and, if so, to make consequential orders directed particularly to the making of mutual restitution: MGL at [25-090]; Alati v Kruger at 224 per Dixon CJ and Webb, Kitto and Taylor JJ citing Abram Steamship Co Ltd v Westville Shipping Co Ltd [1923] AC 773.

The relevant time for deciding whether restitution can be ordered is the date of the purported rescission, or, if there be none such beforehand, the date of the commencement of the litigation. Intervening circumstances will not necessarily destroy the effectiveness of the rescission or preclude the Court from pronouncing upon it. However, if the claimant has acted unconscientiously during the pendency of the action, the Court may in its discretion refuse relief: MGL at [25-090] citing Alati v Kruger at 225; cf Kramer v McMahon [1970] 1 NSWR 194.

Practical examples of the types of restitution which are possible in equity’s concurrent jurisdiction are given in cases cited in MGL at [25-080]-[25-090] including: Alati v Kruger and Brown v Smitt (1924) 24 CLR 160; [1924] HCA 11.

The party rescinding has the same right of restoration of the status quo ante as the other party: MGL 3rd ed at [2412].

The breadth of equity’s power to fashion a remedy to procure substantial and practical justice in the circumstances of a claim for restitution was emphasised by Cole J (as his Honour then was) in Spedley Securities Ltd (in liq) v Greater Pacific Investments (in liq) (1992) 30 NSWLR 185 at 191E referring at 191G-194A to Alati v Kruger at 223-224; O'Sullivan v Management Agency and Music Ltd [1985] QB 428 at 458 per Dunn LJ; and Hill v Rose [1990] VR 129 at 143-144 per Tadgell J.

Conceptually, partial restitution is not available, at least in cases where fraud is not involved: MGL at [25-130] referring to Maguire v Makaronis (1997) 188 CLR 449; [1997] HCA 23 at 472, 475 per Brennan CJ, Gaudron, McHugh and Gummow JJ and explaining the decision in Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102; [1995] HCA 14. Thus, Lord Wright said of cases where there was “no deceit or intention to defraud” (i.e. where the defendant is “innocent”) the Court is “less ready to pull a transaction to pieces”, whereas in cases of conscious fraud, the Court “will exercise its jurisdiction to the full”: MGL 3rd ed at [2415]; MGL [25-130] quoting Spence v Crawford [1939] 3 All ER 271 (Spence v Crawford) at 288 per Lord Wright.

A claimant who seeks to set aside the relevant contract or deed will generally be reasonable in the standard of restitution which he or she requires. As the claimant seeks equity, however, he or she must be prepared to make satisfactory restitution although it is generally the responding party who complains that restitution is impossible: MGL 3rd ed at [2412] citing Spence v Crawford at 289 per Lord Wright.

The authors of MGL 3rd ed (under a part referring to equity’s auxiliary and exclusive jurisdiction) state at [2415]:

Rather, as the authors indicate, equity leaves the respondent to the consequences of his iniquity, citing Berridge v Public Trustee (1914) 33 NZLR 865 at 872 (per Edwards J).

The relevant time for deciding whether restitution can be ordered is the date of the purported rescission (see above).

On the basis, which I have found, that Mr Yu did seek to avoid the Deed by the letter sent by Mr Kammoun dated 13 April 2021, and that the duress was still operative at the time that he did that, question arise as to:

Mr Smallbone submitted that if the Deed is avoided, the parties are relegated to their antecedent positions and, in particular, Dr Wang relegated to any antecedent cause of action: T 357.47-49.

Generally speaking, once the party seeking rescission demonstrates that they are entitled to rescind a contract, the onus falls to the party opposing rescission to demonstrate that restitutio in integrum is no longer possible or that the rescinding party is otherwise disentitled to rescind: Erlanger v New Sombrero Phosphate Co at 1283 per Lord Blackburn, 1286 per Lord Gordon; Dominic O’Sullivan KC, Steven Elliott KC and Rafal Zakrzewski, The Law of Rescission (3rd ed, 2023, Oxford University Press) (The Law of Rescission) at [18.124] 425 cf Thomas Witter Ltd v TBP Industries Ltd [1996] 2 All ER 573 at 588 per Jacob J. As the learned authors of The Law of Rescission observe, that view accords with the operation of the restitutio in integrum bar as a defence to a claim for rescission: at [18.124] 425.

This is also consistent with the notion that a party resisting rescission on the ground of affirmation has the onus of establishing that the agreement was affirmed: Elite Realty (Peden J) at [278].

It should not be thought that the Court’s preparedness to “pull a transaction to pieces”, is limited to cases of conscious fraud. It applies to a transaction induced by duress for the same reasons as it does for transactions induced by fraud (i.e. the principle enunciated in Spence v Crawford at 288). As Lord Cross of Chelsea said in Barton v Armstrong (at 118):

In the circumstances of this case, Dr Wang bore the onus of demonstrating that restitution was no longer possible or that the rescinding party is otherwise disentitled to rescind.

The particular prejudice that Mr Smallbone alleged in the matter was that Dr Wang had rights against APG and that Mr Yu had consciously waited until purporting to rescind the contract so as to prevent, by expiry of a limitation period, Dr Wang being able to pursue rights against APG.

Apart from reference to a “limitation period prejudice”, Mr Smallbone did not address particular submissions to the provisions of the Limitation Act nor elaborate specifically how in light of a limitation period there was some form of prejudice that might disentitle the defendants from rescinding the Deed.

The argument appeared to be premised on the basis that Dr Wang had some form of right in debt against either APG or against Mr Yu. That is not a premise that I accept (see below). However, for the purposes of addressing Mr Smallbone’s submissions regarding prejudice, it is relevant to consider the provisions of the Limitation Act.

In particular, it is relevant to consider whether the right and title to the debt of a person having a cause of action to recover a debt is extinguished automatically pursuant to s 63 Limitation Act independently of whether s 14(1)(a) is pleaded as a (limitations) defence to that cause of action.

Section 14(1)(a) of the Limitation Act states:

Section 63 of the Limitation Act provides the following:

One method of postponing the expiration of a limitation period is by establishing acts of confirmation on the part of the debtor (either by acknowledgment of, or part payment towards, the debt): s 54 Limitation Act.

It has long been understood that limitation periods do not impose a restriction on the Court’s jurisdiction and must be pleaded in order to bar the remedy of a plaintiff: Price v Spoor (2021) 270 CLR 450; [2021] HCA 20 (Price v Spoor) at [9]-[10] per Kiefel CJ and Edelman J, [40] per Gageler and Gordon JJ and [78] per Steward J. Additionally, s 68A Limitation Act explicitly states that a party shall not have the benefit of the extinction of a right of action without pleading the extinction. That provision, therefore, on one view, seems to echo the traditional interpretation of limitation periods as being required to be pleaded by a party seeking to raise a limitations defence.

Section 68A states in full (emphasis added):

It is clear from that provision that a defendant shall not have the benefit of any extinction of the plaintiff’s right or title to a debt (pursuant to e.g. s 63 Limitation Act) unless, as part of the proceedings, the defendant has pleaded or otherwise appropriately claimed in accordance with the procedures of the Court that the right or title has been so extinguished.

That is consistent with r 14.14 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), which requires that a defendant must plead specifically in their defence certain matters, including “statute of limitation, extinction of right or title”: r 14.14(2)-(3) UCPR.

Rule 14.29 UCPR provides that a claim of extinction pursuant to s 68A may be made by affidavit or by notice: e.g. Chapman v Colson [2015] NSWSC 120 (Chapman v Colson) at [75] per Harrison AsJ.

It is possible to find authority that suggests that s 63 Limitation Act extinguishes the debt on the expiry of the limitation period, notwithstanding that if any question arises in any judicial proceeding whether the debt has been extinguished, the party claiming extinction must plead the statute (to obtain the benefit of the extinction) (s 68A): e.g. McGrath v Troy as Administratrix of Estate of Wade [2010] NSWSC 1470 at [57]-[58].

The High Court recently discussed the mechanics of statutory limitation periods in Price v Spoor, where their Honours were concerned with the legislative provisions of the Limitation of Actions Act 1974 (Qld).

As stated above, it is well established that a statutory limitations bar does not preclude the Court’s jurisdiction to hear a claim but rather goes to the remedy available to the claimant: Price v Spoor at [9]-[10] per Kiefel CJ and Edelman J, [40] per Gageler and Gordon JJ and [78] per Steward J; David A Pittavino and Xavier P Walsh, “Pacta Sunt Servanda: The Enforcement of Bargains and the Limitation of Actions” (2023) 1(2) Contract and Commercial Law Review 120 at 124-128. In this regard, it is said that parliament has chosen to pursue the public policy of ensuring the finality of litigation through making available to litigants a statutory right to plead a limitations defence, which is “statutorily entrusted to each defendant”: Price v Spoor at [88] per Steward J (see also at [41] per Gageler and Gordon JJ).

Accordingly, to obtain the benefit of a statutory bar on limitations, it is incumbent on a defendant to plead the statute: Price v Spoor at [9] per Kiefel CJ and Edelman J. Otherwise, the issue of limitations does not arise.

In the absence of particular submissions on the matter, I consider that, based on Price v Spoor, there is an argument that s 63 of the Limitation Act does not operate to extinguish a plaintiff’s right and title to a debt independently of whether a limitations defence has been pleaded by a defendant.

Mr Smallbone submitted that the defendants had made no attempt to assist Dr Wang to revert to her antecedent rights, that they had adduced no evidence as to what had been done with the project funds or regarding the financial result of the project and that all but one of Dr Wang’s advances (of money) were made more than six years prior to 13 April 2021 and (at CB 12[85]):

Thus, the submission begs the question of what the antecedent rights of Dr Wang were.

I have earlier, in dealing with Issue 2 above, commented on what rights the making of such payments gave to Dr Wang.

Mr Smallbone intimated during submissions that Dr Wang may have lacked clarity as to what her rights were as at the time that the Unitholders Agreement was entered: T 457.16-25.

In my view, Dr Wang’s remedy for funds contributed was primarily a claim against Mr Yamaguchi.

I have found that the reason she made the payments was as a result of a request by Mr Yamaguchi to pay his investment amounts.

I have rejected Dr Wang’s evidence that she raised with Mr Yu claims for payment in October 2014. Dr Wang’s boyfriend-girlfriend relationship with Mr Yamaguchi ceased in about December 2014. I have accepted Mr Yu’s evidence that Dr Wang first informed him that she was putting money into the company at least in approximately January 2015.

However, rather than take action against Mr Yamaguchi in respect of payments that she had made on his behalf, Dr Wang sought to press a claim with Mr Yu. She did so over the period January-March 2015. However, Mr Yu rebuffed her approaches to him to recompense her for payments with him, rightly telling her that it was really an issue between herself and Mr Yamaguchi.

Dr Wang’s growing sense of unease and dissatisfaction about recognition of the payments she had made was compounded by her realisation that the Unitholders Agreement made no provision for her payments.

For reasons that were not explained by Dr Wang, at least in these proceedings, rather than seek redress from Mr Yamaguchi she sought to seek redress from Mr Yu.

I consider that her actions in that regard, both by self-help methods in the assault on Mr Yu, and the consequent negotiation of the Deed, and even in these proceedings, have been built on the false edifice that somehow Mr Yu is responsible to remedy the fact that she has paid over monies to APG, rather than Mr Yamaguchi being responsible.

In light of the above, I consider that Dr Wang’s antecedent rights were rights against Mr Yamaguchi.

I find that there is nothing in the conduct of Mr Yu up to the time of 11 May 2015 by which he encouraged Dr Wang in the belief that she had specific rights against him or against STYU or indeed even against the company.

There is no evidence that Dr Wang is unable to proceed against Mr Yamaguchi.

To the extent that Mr Smallbone submitted on Dr Wang’s behalf that there would be a limitation period “prejudice” in the defendants rescinding the Deed as at 13 April 2021, I do not accept that Dr Wang has discharged the onus of demonstrating such prejudice.

Conceptually, equity could formalise the position of rescission of the Deed by declaration on terms that preclude the defendants from pleading any limitation period. However, Mr Smallbone did not address any specific questions in cross-examination to Mr Yu as to whether any limitation period might be pleaded by Mr Yu or the other defendants if Dr Wang sought to sue APG or him.

None of the defendants nor Mr Lonergan on their behalf asserted that if there were any such antecedent rights of action that Dr Wang might have against any of the defendants that they would plead a limitation period against her.

I do not accept that Dr Wang has demonstrated that there is any prejudice in formalising the rescission by Mr Yu of the Deed.

I do not accept that Mr Yu is precluded from avoiding the Deed on the basis that restitution in equity is not available. As I have found, Dr Wang’s antecedent rights were rights against Mr Yamaguchi and there is no evidence that Dr Wang is unable to proceed against Mr Yamaguchi.

Even if I am mistaken about Dr Wang’s rights and her rights are against APG, I do not accept that she has discharged the onus of demonstrating that restitution is no longer possible or that the defendants or any of them are otherwise disentitled to rescind.

Dr Wang’s antecedent rights were rights against Mr Yamaguchi. The payments totalling $200,000 made by Mr Yu were made as a result of the duress.

I have found that those payments were made to Dr Wang.

On the basis that Mr Yu is not precluded from avoiding the Deed, I find that Mr Yu is not estopped by the Deed or other conduct from claiming the repayment of $200,000 to Dr Wang.

Having regard to my findings, it is not necessary for me to deal with the issues of whether:

In the result, I find that:

No party suggested an outcome in relation to costs other than that costs should follow the event.

In the above circumstances, I direct the parties to bring in short minutes of order to give effect to the reasons for judgment in relation to the relief on the amended statement of claim and the cross-claim.

The short minutes of order may include orders for delivery up of the Deed for its cancellation.