Wu v Zhao

1. [1]

   The plaintiff, as executor of the will of his father Yun Shu Wu, sued the defendant, who was his sister, for repayment of the balance of a loan made by the parents of the parties to the defendant on 21 November 2002. The loan was for $73,000. The defendant had repaid part of the loan with the result that the plaintiff was claiming $57,939.

2. [2]

   The defendant asserted that she repaid the balance of the loan on 18 July 2009 at the Bankstown Aged Care Facility where her parents resided. In support of that she relied upon a document signed by her parents and two other family members which acknowledged the loan and said “this amount of loans (sic) has been repaid off (sic) in full”. The defendant also relied on a Limitation Act 1969 (NSW) defence on the basis that the loan was repayable on demand and proceedings had not been commenced within six years of the loan being made.

3. [3]

   The proceedings were heard before Magistrate Price in the Local Court at the Downing Centre. The Magistrate rejected the defence based on the Limitation Act but held that, because there were equally competing versions of what occurred in relation to the repayment of the loan, he could not be satisfied on the balance of probabilities that any debt remained owing at the time that it would have passed to the estate of the plaintiff’s father. Accordingly, his Honour entered a judgment for the defendant and ordered the plaintiff to pay the defendant’s costs.

4. [4]

   The plaintiff now appeals to this Court in reliance on s 39 of the Local Court Act 2007 (NSW). Although two grounds were originally pleaded in the summons, only ground one is now relied upon. That ground is as follows:

The documents relating to the loan

1. [5]

   A number of documents tendered in evidence were translations of documents written and signed in Mandarin. The loan agreement was one such document. In translation it provided:

2. [6]

   The document relied upon by the defendant to establish that she had repaid the loan provided in translation:

3. [7]

   The plaintiff gave evidence in his affidavit that a few days before his mother died on 31 May 2010 she gave him an envelope containing documents. She said to him in Mandarin words to the following effect:

4. [8]

   After his father died in July 2014 the plaintiff opened the envelope. He found two certificates written in Mandarin signed by his parents and his brother Hao Wu. One of the documents, described in the proceedings as Annexure C to Exhibit 1, in translation, read as follows:

5. [9]

   The other document, described as Annexure D to Exhibit 1, in translation, read:

6. [10]

   There was also tendered in the proceeding an email from the defendant to the plaintiff of 11 January 2016. That email became Exhibit 3. In translation, it read in part:

7. [11]

   A further document tendered in the proceedings which became Exhibit 4 was, in translation, headed “A Detailed List of Parents' Money Expenditure Managed by Ying ZHAO”. The document disclosed the following:

8. [12]

   A further document was tendered and became Exhibit 5. In translation it said this:

9. [13]

   The judgment of the Magistrate was given on 19 December 2017. The summons was filed on 9 February 2018. An extension of time is therefore needed by the plaintiff. The explanation for the delay in filing the summons is that there was a delay in obtaining the transcript and reasons for judgment from the Local Court. It is not suggested that there is any prejudice to the defendant by the delay. The explanation is a reasonable one and the delay is for a relatively short period. An extension of time should be granted.

10. [14]

    The defendant purported to file a Notice of Contention on 10 April 2018. The Notice of Contention should have been filed within 14 days of the date of filing of the summons: r 50.11(3) Uniform Civil Procedure Rules 2005 (NSW). No leave was sought for the late filing of the Notice of Contention. At the hearing the defendant said that she would not rely on the Notice of Contention.

The judgment of the Magistrate

1. [15]

   The learned Magistrate delivered an ex tempore judgment after lunch on the second day of the hearing. The evidence and submissions concluded before lunch on that day. His Honour first noted that it was a decision delivered without the benefit of the transcript.

2. [16]

   His Honour went on to say this:

Submissions

1. [17]

   The plaintiff submitted that there were six key factual issues which required resolution in the reasons of the Magistrate. Those issues were these:

2. [18]

   The plaintiff submitted that the judgment does not deal with most of those factual issues. To the extent that they were mentioned, the reasoning was not appropriate, not proper, and did not grapple with the issues that presented themselves.

3. [19]

   The defendant submitted that the plaintiff repeatedly treats the failure to give an adequate statement of reasons as an error of law as an excuse to challenge the adequacy of the reasons of the court below on factual matters.

4. [20]

   In relation to ground 1(a), the defendant submitted that because the Magistrate found it was equally probable that the defendant did repay the loaned monies as that she did not, his Honour did not fail to make such a finding.

5. [21]

   In relation to ground 1(b), the defendant submitted that the Magistrate did resolve the issue of credit between the witnesses by accepting that each of them was honest, but by not accepting that any of them was reliable.

6. [22]

   In relation to ground 1(c) concerning findings from documents, the defendant submitted that the Magistrate made a finding that Annexure C of Exhibit 1 was signed on 18 July 2009 which was correct. The defendant submitted that it was a significant document which supported the defence. On the other hand, the Magistrate was not persuaded about Annexure D because there was a dispute about its signature. It was said that those findings demonstrate that the claim in ground 1(c) is baseless.

7. [23]

   In relation to ground 1(d), the defendant submitted that not making reference to every document in the judgment does not amount to an error of law. The fact that his Honour did not mention Exhibit 3 did not mean he did not consider it. The email of 11 January 2016 was a document created some seven years after the events and his Honour had already considered the document when it was tendered in evidence. The defendant submitted that the email was not determinative of any issue because, as his Honour noted during the hearing, it was not, on its face, relevant to the issues.

8. [24]

   The defendant submitted that when his Honour found on the balance of probabilities that the competing versions of the facts given by the plaintiff and the defendant were equally probable, he clearly did so because he found all witnesses unreliable although honest.

9. [25]

   The defendant submitted that the plaintiff’s submissions did not seriously engage with the question whether the relevant reasons were adequate in their extent, but concentrated on the question of whether the Magistrate’s conclusion might have been different if he had made alternative findings in relation to documents and credit. In this way, the plaintiff was seeking to raise a question of fact.

10. [26]

    The defendant submitted that the reasons do not have to extend to every matter of fact or law which was raised in the proceedings. The defendant submitted that many of the complaints by the plaintiff were complaints about the Magistrate’s findings of fact.

Consideration

1. [27]

   In my opinion, the Magistrate failed to give adequate or proper reasons in relation to a number of issues in the proceedings which needed to be determined. Indeed, his Honour simply failed to resolve a number of issues.

2. [28]

   The first issue concerned Annexure C. This was the document referred to in [8] above, being one of the documents given to the plaintiff by his mother. The defendant’s version of the document is set out at [6] above. It relevantly said that the document was evidence of, or certification, that the defendant had borrowed $73,000 from her parents in November 2002 and that it had been repaid in full.

3. [29]

   It was the defendant’s evidence in her affidavit of 20 October 2017 that three copies of what she described as the “loan repayment receipt” were signed. The first copy was kept by her parents, the second copy was kept by her, and the third copy was kept by her brother Hao Wu.

4. [30]

   The significant matter touching this document is that the copies of the documents retained by Hao Wu and the parents, the latter of which made its way to the plaintiff in the envelope referred to at [7] above, contained three signatures only. Those signatures were of the father, the mother and Hao Wu. The certificate put in evidence by the defendant at the hearing contained a fourth signature being the signature of Di Wu, another brother of the plaintiff and the defendant. In that regard, it is relevant to note that there was a dispute about whether Mr Di Wu was actually present at the meeting on 18 July.

5. [31]

   It was necessary for the Magistrate to make a finding about whether Mr Di Wu was present at the meeting because that was an issue at the hearing. Whether he was present or not was relevant to the authenticity of the document that the defendant put forward which contained Mr Di Wu’s signature, although the other two copies of the same document did not do so. Coupled with that is the unexplained fact that, although Mr Di Wu was, on the defendant’s account, a witness to the document, he was never given a copy of it. On the other hand Mr Hao Wu was given a copy of it but his copy was not signed by Mr Di Wu.

6. [32]

   Secondly, there was an issue about whether any money was in fact paid to the parents on that occasion notwithstanding whether the document just discussed was signed. The defendant said in paragraph 6 of her affidavit that she repaid the balance of $73,000 in full to her parents at the Bankstown Aged Care Facility on that day. She said it was paid in cash. The defendant’s husband, Huai Bin Xu, said that the defendant repaid the balance of $73,000 to her parents at the Bankstown Aged Care Facility. In his affidavit he did not say if he saw her do that or in what form the payment was made. In cross-examination he said that he saw the money but he could not say if it was in 50s or 100s, and he didn’t pay close attention to how the money was paid.

7. [33]

   Mr Di Wu in his affidavit says nothing about money being paid. Mr Hao Wu’s was asked in cross-examination if he could have missed any exchange of documents or envelopes, and he said (T 19/12/17 p 12):

8. [34]

   I observe in passing that if the money was repaid in cash as the defendant asserts, even if it had all been in one-hundred dollar notes, the repayment would have consisted of a sizeable bundle of money. In addition, if it was counted, that would have taken some time, raising issues about the evidence or lack of it regarding the exchange, from those present at the meeting.

9. [35]

   The Magistrate says nothing in his reasons about whether money was repaid on that day.

10. [36]

    Thirdly, Annexure D to the plaintiff’s affidavit (set out at [9] above) needed to be considered in resolving the principal issue of whether the money had been repaid. That document was purportedly signed on the same date by the parents and Mr Hao Wu. Mr Hao Wu says that this was one of two documents that the defendant produced and asked him and his parents to sign at the same time as the repayment note was signed. Both the defendant and her husband are silent about this document.

11. [37]

    The Magistrate referred to Annexure D by first noting that it arguably created some form of evidence about a balance of about $56,000 having not been paid off. His Honour then returned to Annexure D a few paragraphs later by noting that the defendant strongly denied that she signed the document. It was not suggested by anyone that the defendant had signed the document, and the document does not bear her signature. Moreover, that observation by the Magistrate did not engage with what the document asserted, particularly when it had been signed by the parents on the same occasion and, on its face, was inconsistent with the assertion that the defendant had repaid the money. Indeed, during the hearing the Magistrate said this of Annexure D (T 18/12/17 p 43):

12. [38]

    Fourthly, the evidence required consideration of two other documents being Exhibits 4 ([11] above) and 5 ([12] above). The Magistrate did not refer to these documents at all.

13. [39]

    As to Exhibit 4, the Magistrate was somewhat critical of counsel for the plaintiff for producing this document during the trial without having disclosed it in the filed evidence. The Magistrate asked its provenance and counsel said, without demur by the defendant, that it had been handed to the plaintiff by the defendant. After the defendant looked at both the original and translation of it she indicated that she had no objection and it was admitted as Exhibit 4. In her evidence she denied writing the document.

14. [40]

    On its face, the document appears to be an accounting by the defendant of monies she had expended in looking after her parents. Significantly, the third- last entry reads:

15. [41]

    Exhibit 5 was tendered in the same way. Counsel for the plaintiff said a copy of it had been shown to the defendant. The brother Hao Wu said that it was a document handed to him by the defendant. He said:

16. [42]

    These were significant documents which bore upon the issue of whether the money had been repaid, upon the defendant’s credit and upon Hao Wu’s credit, given the denials about writing them and her assertion that Exhibit 5 was written by Hao Wu. The Magistrate noted at the time the documents were tendered (T 19/12/17 p 9):

17. [43]

    Exhibit 5 was also dated the same date as the meeting where the money was said to have been repaid. On one view it gave credence to the second document found by the plaintiff in the envelope given to him by his mother, but that meant the Magistrate needed to determine who wrote it.

18. [44]

    All of these matters meant that it was not possible for the Magistrate to determine the matter without making an assessment of the credit, at least, of the defendant and Hao Wu, and that assessment was likely to go to their honesty because of what was contained in the documents and what was asserted and denied about who wrote the documents. The learned Magistrate’s reference to Coote v Kelly; Northam v Kelly [2017] NSWCA 192 was not to the point. In that case it was not suggested that any witness was not honest. The critical matter was whether the witnesses were reliable. In the present case, the issues raised by the documents and the seemingly inconsistent evidence went to the honesty of the defendant and the other persons said to have been present at the Aged care Facility on 18 July 2009.

19. [45]

    Coupled with those assessments was a determination about the genuineness of a number of the documents which pointed in different directions on the principal issue of whether the money had been repaid.

20. [46]

    Although, in relatively rare cases, a judicial officer might reach a conclusion that, in the light of competing evidence, a plaintiff had failed to discharge its onus on the balance of probabilities, it would be necessary for the judicial officer concerned to consider the competing evidence to show how he or she could not be satisfied that the onus had been discharged.

21. [47]

    In Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430 Meagher JA, having discussed the requirement to provide sufficient reasons and referred to what was said in Mifsud v Campbell (1991) 21 NSWLR 725 at 728 and Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 281, went on to say (at 443):

22. [48]

    In Palmer v Clarke (1989) 19 NSWLR 158 Kirby P (with whom Samuels JA agreed) said (at 170):

23. [49]

    In Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 Allsop P (with McColl JA agreed) said at [2]:

24. [50]

    In Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 McColl JA said at [66]:

25. [51]

    Bearing in mind the principles expressed in those cases, I consider that the learned Magistrate has not provided adequate reasons for his decision. He has failed to make credit findings where that was necessary. He has failed to consider documentary evidence which bore upon the credit of witnesses and a determination of the issue in question in the proceedings.

26. [52]

    Contrary to the submissions of the defendant, the challenges made by the plaintiff to the Magistrate’s reasons were not attempts to challenge factual findings but to demonstrate that the Magistrate ought to have made findings one way or the other on particular matters that were before him for resolution.

Conclusion

1. [53]

   The approach taken by the Magistrate demonstrates that the proceedings were not determined according to law. Neither party made submissions about whether, if I was minded to remit the matter, the matter should be remitted to a magistrate other than the Magistrate who first heard the proceedings.

2. [54]

   In Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39 Davies and Foster JJ said (at 42):

3. [55]

   In Sellers v Marchant [2008] NSWSC 120 Price J had reason to cite that passage with approval in a case where a magistrate had refused to recuse himself on the remittal of a matter that he had first heard before the appeal. Price J said:

4. [56]

   In the present case it was the Magistrate’s failure to make necessary credit findings, and his view that no such findings were needed, that made his reasons inadequate. However, his ultimate conclusion was that, because the evidence was fairly evenly balanced, the plaintiff had failed to discharge he onus. In reaching that view, there might be a reasonable apprehension of bias if the matter was to be heard by the same Magistrate.

5. [57]

   Accordingly, I make the following orders: