Zhang v Chen[2024] QCA 177

SUPREME COURT OF QUEENSLAND

1. [1]
   MULLINS P:  I agree with Brown JA.
2. [2]
   BODDICE JA:  I agree with Brown JA.
3. [3]
   BROWN JA:  The applicant seeks an extension of time to amend and set aside an order for summary judgment in the sum of $637,305.00, ordered by Bradley J on 27 September 2023.

The proceedings

4. [4]
   The plaintiff (now respondent), Ms Chen, is a resident of China and the aunt of the defendant Bin Zhang (now applicant).  Ms Chen issued proceedings in the Supreme Court claiming monies transferred to Mr Zhang in the sum of $1,437,345.00 as damages or a debt, with other alternative bases for relief.
5. [5]
   In these reasons, all references to monetary values in ‘¥’ are to Chinese renminbi (CNY) and ‘$’ are to Australian dollars (AUD).
6. [6]
   According to allegations pleaded in the statement of claim (SOC):

   1. There was an oral agreement between Ms Chen and Mr Zhang (the Agreement) which was based on the following facts:
      1. In or about early June 2019, Ms Chen had a voice call with Mr Zhang on WeChat and requested that Mr Zhang facilitate her transferring her money in China to her son, Mr Yingzhi Mo in Australia, by receiving the monies into his Australian bank account before transferring them to Mr Mo’s bank account;
      2. Mr Zhang verbally agreed to facilitate the transfer and allegedly said words to the effect that he would contact a currency exchange service for Ms Chen to remit the money to him and that he would immediately transfer Ms Chen’s monies to Mr Mo after he received them from Ms Chen.
   2. Pursuant to the Agreement, Ms Chen transferred a total of $1,437,345.00 or ¥7,100,000.00 to Mr Zhang’s bank account when:
      1. on 5 June 2019 she caused the sum of ¥1,200,000.00 or $243,013.00 to be transferred to Mr Zhang (first transfer);
      2. on 19 June 2019 she caused the sum of ¥5,900,000.00 or $1,194,332.00 to be transferred to Mr Zhang (second transfer).
   3. The transfer of the monies was facilitated by a currency exchange service known as Wealthy Asia.
   4. After receiving Ms Chen’s monies, Mr Zhang did not transfer the monies to Mr Mo’s account and, despite demands made to him, Mr Zhang has not transferred or paid Ms Chen’s monies to her.
   5. Mr Zhang purchased a property using Ms Chen’s monies.
7. [7]
   The SOC alleges that Mr Zhang’s failure to pay the monies to Mr Mo or return the monies to Ms Chen:

   1. was in breach of the Agreement, causing loss and damage to Ms Chen in the sum of $1,437,345.00;
   2. further, and in the alternative, was a breach of trust and fiduciary duty; and
   3. in the further alternative, resulted in Mr Zhang being unjustly enriched.
8. [8]
   Although the monies transferred were defined as Ms Chen’s monies, there was no allegation that they were or remained her monies once transferred.
9. [9]
   In his notice of intention of defend and defence, Mr Zhang:

   1. denied that the alleged voice call with Ms Chen took place;
   2. denied that he entered into any agreement with Ms Chen in June 2019 or at any other time;
   3. denied that he received a transfer of money from Ms Chen as alleged;
   4. denied that Ms Chen has made repeated demands for the return of the monies; and
   5. denied that he purchased the property using Ms Chen’s monies, stating that he paid for the property using his own savings and borrowings.
10. [10]
    Prior to the summary judgment being made, a notice to admit facts was sent to Mr Zhang.  That notice sought to admit facts including that:

    1. on or around 5 June 2019, Wealthy Asia facilitated the remittance of funds from CNY to AUD between “Zeyuan Zhao” and Mr Zhang (first transaction); and
    2. on or around 20 June 2019, Wealthy Asia facilitated the remittance of funds from CNY to AUD between Ms Chen and Mr Zhang (second transaction).
11. [11]
    In his response, Mr Zhang admitted a number of facts in relation to monies having been deposited into his bank account. However, his response also recorded the following:

    1. the nominal “Sender” and “Beneficiary” on the Wealthy Asia documents (which were said to be evidence of the transfers to Australia) were not evidence of the owner of the funds remitted or the ownership of the funds once remitted.
    2. funds the subject of the first transaction were transferred from an account in the name of Zeyuan Zhao to Mr Zhang’s account, however, Mr Zhang did not admit that the funds belonged to either him or Zeyuan Zhao;
    3. Mr Zhang did not admit that Ms Chen caused Zeyuan Zhao to transfer the monies the subject of the first transaction on her behalf, noting that no documents had been disclosed verifying the allegation; and
    4. Mr Zhang did not admit that Wealthy Asia facilitated the remittance from CNY to AUD between Ms Chen and Mr Zhang the subject of the second transfer, noting no documents had been disclosed verifying Ms Chen’s ownership.
12. [12]
    The summary judgment application was supported by affidavits from Ms Chen, Mr Yang, Mr Mo and Ms Chen’s solicitor.  Mr Zhang filed an affidavit in defence of the application.
13. [13]
    In his affidavit, Mr Zhang accepted monies had been transferred to his account which he considered came from Mr Mo and stated the monies were not his monies.  However, he denied any agreement with Ms Chen or conversation with her about the transfer of monies.  Mr Zhang deposed to the fact that he transferred a sum of $800,000.00 across two equal tranches on 26 and 27 November 2019 to Mr Mo’s personal assistant at the direction of Mr Mo.  That transfer occurred some several months after Mr Mo transferred $2,100,000.00 to Mr Zhang via Wealthy Asia, which Mr Mo told Mr Zhang was for the purpose of investing.
14. [14]
    On the date of hearing, Ms Chen’s counsel stated that she would not pursue summary judgment in respect of an amount $800,000.00, being the sum which Mr Zhang claimed to have transferred to Mr Mo’s assistant in November 2019.  Summary judgment was sought in respect of the balance of the $1,437,345.00 in the sum of $637,305.00.
15. [15]
    According to the respondent, the only issue on the pleadings for the purpose of the summary judgment claim and payment was whether the money was “from” Ms Chen.  The submissions on the summary judgment application further asserted that the notice to admit facts proved that the remitted monies were from Ms Chen and that the facts sought to be admitted were not disputed by Mr Zhang.  It was submitted therefore that Ms Chen’s entitlement to summary judgment for payment was established.
16. [16]
    Submissions made on behalf of Ms Chen further asserted that, in relation to Mr Zhang stating in his affidavit that he believed the monies paid into his account were from Mr Mo,  that that evidence was answered by Mr Mo in his affidavit.  In that affidavit he stated that the monies claimed were from Ms Chen and he had no entitlement to them.  According to Ms Chen’s counsel, she was agreeable to Mr Mo being joined to the action and the court ordering monies be paid to Mr Mo to address Mr Zhang’s evidence that the monies came from Mr Mo.  It was further submitted that, given neither Mr Zhang nor Mr Mo claimed any interest in the monies and it wasn’t disputed that the monies came from Ms Chen, summary judgment should be given.
17. [17]
    In opposing summary judgment, Mr Zhang’s counsel identified that there were a number of matters in dispute.  It was submitted that the existence of the agreement was a fact in dispute, that the affidavit of Ms Chen was inconsistent with that pleaded agreement and the alleged right to repayment on demand arose out of evidence filed by Ms Chen which was inconsistent with the pleaded case.  Mr Zhang’s counsel noted that the evidence of Mr Mo was inconsistent with both the SOC as well as the affidavit of Mr Zhang.  It was submitted by Mr Zhang’s counsel that Ms Chen’s case required proof of material facts including:

    1. that the funds transferred to Mr Zhang belonged to Ms Chen;
    2. the existence of any oral agreement between Ms Chen and Mr Zhang; and
    3. the terms of any oral agreement so alleged, including whether she was entitled to be repaid on demand.

Decision below

18. [18]
    Justice Bradley gave summary judgment in favour of Ms Chen in the sum of $637,305.00 and otherwise adjourned the application for summary judgment to a date to be fixed.
19. [19]
    His Honour considered that there was no need for a trial in relation to the balance of monies claimed and that Mr Zhang had no real prospect of succeeding.
20. [20]
    His Honour’s reasons were understandably brief given his Honour was in the applications jurisdiction and the way the respondent had framed the relevant issues.  In his Honour’s reasons, Bradley J stated that there were three issues that were said required a determination at trial:

    1. whether Ms Chen owned the funds that were received by Mr Zhang;
    2. whether Mr Mo became the owner of those funds; and
    3. whether the funds were payable to Ms Chen on demand.
21. [21]
    His Honour determined that the evidence adduced by Ms Chen, including from Ms Chen herself and from Mr Mo, established that the plaintiff owned the funds and that Mr Mo did not become owner of the funds.  His Honour therefore considered there was no need for a trial on the first two issues.
22. [22]
    Justice Bradley stated that the third issue, namely whether the funds were payable to Ms Chen on demand, did not arise because Ms Chen had established to the court’s satisfaction she was owner of the funds and therefore entitled to judgment for the part of the funds that remained with Mr Zhang.  He noted it was not alleged that the funds were repayable on some agreed basis such that Ms Chen would need to give some particular notice in order to recover them.  In any event his Honour found that the proceedings had been on foot since June 2022 which gave more than a reasonable time for Ms Chen to give notice she wished to recover the funds.
23. [23]
    His Honour adjusted the proposed amended order on the basis that it sought specific performance of the agreement and no agreement had been proven.

Extension of time

24. [24]
    The present appeal has been filed out of time, some 79 days after the decision.  The applicant therefore requires leave.  The applicant provided two affidavits in support of his application, both of which were subject to many objections.  One affidavit explained the reasons for the delay and the other expanded on the factual circumstances set out in Mr Zhang’s affidavit in the proceedings below.  They were objected to by the respondent given they were in English and Mr Zhang, in both his affidavits sworn 22 December 2023 and 26 July 2024, had deposed to his English being poor and needing the assistance of his ex-wife who apparently translated the English affidavits for him.  She has not provided an affidavit as to her qualifications to do so.  There are therefore questions fairly raised by the respondent as to the reliability and accuracy of the affidavits.
25. [25]
    Given the view the Court takes of the applicant’s prospects of success and the lack of injustice suffered by Ms Chen if the summary judgment is set aside, there is no need for the Court to have regard to the affidavits and it is therefore unnecessary for this court to determine the objections made to the affidavits.

The appeal

26. [26]
    Rule 292(2) of the Uniform Civil Procedure Rules 1999 (Qld) provides that:

3. “(2)
   If the court is satisfied that—

1. the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and

2. there is no need for a trial of the claim or the part of the claim …”

the court may give judgment for Ms Chen against Mr Zhang for all or the part of Ms Chen’s claim and may make any other order the court considers appropriate.

27. [27]
    The Court must be satisfied of both matters in r 292(2)(a) and r 292(2)(b) in order to engage the discretion to grant summary judgment.^[1]  In the present case, for the reasons set out below, both matters were not satisfied and the court’s discretion was not engaged.  Accordingly, summary judgment should not have been granted and the order should be set aside.  In reaching this view this Court, unlike his Honour, had the benefit of a more detailed analysis of the evidence relied upon by the respondent in her application.
28. [28]
    Mr Zhang’s counsel contends that the learned primary judge should have refused the application for summary judgment based on the pleadings and affidavit material before him because:

    1. the affidavit evidence provided on behalf of Ms Chen did not establish that Ms Chen owned the funds sent to Mr Zhang where the payer was listed as being Zeyuan Zhao in respect of the first transfer;
    2. the affidavit evidence did not establish Ms Chen’s ownership of the funds the subject of the second transfer; and
    3. even if it was accepted that the funds received by Mr Zhang came from Ms Chen, there was a live issue as to whether the funds, once transferred, remained Ms Chen’s funds or whether the monies were Mr Mo’s.
29. [29]
    Mr Zhang’s counsel asserts that two critical facts are beyond challenge on the basis of the material below:

    1. that on Ms Chen’s own account, she was engaged in transferring funds on behalf of Mr Zhao, which makes no sense if the funds were said to be her own; and
    2. that of the funds transferred, Mr Mo directed the applicant to transfer $800,000.00 (which was not the subject of the summary judgment), being over half of the total of the monies claimed.  According to the applicant that direction makes no sense unless the funds were Mr Mo’s own or unless there was an arrangement by which Mr Mo was authorised to give such a direction as an agent on behalf of Ms Chen.
30. [30]
    The applicant further submits that it is not clear from the SOC how Ms Chen frames her claim, contending that there can be no possessory claim since on her own case she voluntarily relinquished her possession of the funds.  It is contended that Ms Chen did not prove that she held legal title to the funds and, in the absence of the proof of ownership, she had no cause of action.
31. [31]
    Ms Chen’s counsel sought to maintain that there was no issue raised before Bradley J as to the nature of the transaction between Mr Zhang and Ms Chen in the summary judgment application and that the only issue before the court was whether the respondent was entitled to the funds the subject of the claim.

Consideration

32. [32]
    The points made on behalf of Mr Zhang are properly made and demonstrate that the evidence was not sufficient to establish Ms Chen’s entitlement to summary judgment.
33. [33]
    The difficulty for the respondent in seeking to maintain the judgment below is that, while Mr Zhang admitted receiving funds into his account and claimed no entitlement over them, he did not admit Ms Chen was the party who was entitled to the funds sent and denied having reached any agreement with Ms Chen which was the basis upon which it was pleaded the monies could be recovered as damages for breach of agreement, breach of trust and unjust enrichment.  In his affidavit he gave evidence as to why he believed the monies in his account came from Mr Mo, not Ms Chen.
34. [34]
    The issue for resolution in the context of the summary judgment was never just, as the respondent asserted, whether the monies came from Ms Chen, such that that was the only matter she had to prove.
35. [35]
    As to the issue of who owned the funds, the evidence at its highest suggested that the funds the subject of the first transfer were transferred by Mr Yang’s company “Jilin Longtan District Zhijie Material Distribution Centre” to Mr Zhao.  Mr Yang deposed to having founded that entity and causing it to transfer ¥$3,000,000.00 to Mr Zhao’s account on behalf of Ms Chen as the sole director.  Ms Chen, in her affidavit sworn in support of the application, deposes that she used Wealthy Asia’s services to convert the amount of ¥1,200,000.00 into AUD and transferred them to Mr Zhang’s bank account “on behalf of Mr Zhao”.  That transaction was said to form the basis of the first transaction.  No affidavit was provided by Mr Zhao.  The evidence raises a real issue as to whether Ms Chen not only had transferred her own funds to Mr Zhao, but whether she could maintain any claim to those monies once transferred.  That issue was not resolved on the evidence in the application.  Without it being proved the funds transferred to Mr Zhang were Ms Chen’s and that Ms Chen remained entitled to the funds after they transferred, Ms Chen’s entitlement to the monies was not proved.
36. [36]
    As to the second transaction, while Ms Chen deposed to the funds sent having been in her bank account, she did not provide a copy of the account statements in support of that assertion.  Nor did the documentary evidence attached to Ms Chen’s solicitor’s affidavit advance proof that the monies were from Ms Chen’s bank account any further.  Thus, it was an unproved assertion and ownership or right to possession of the funds was not established, notwithstanding it was in issue on the pleadings and was a fact which was not admitted in response to the notice to admit.
37. [37]
    The SOC relied on the pleaded Agreement as the basis of Ms Chen’s entitlement to claim the monies.  There is arguably a deficiency in the SOC insofar as there is no allegation of any ongoing entitlement of Ms Chen to the monies once transferred.  On the basis of her pleaded claim, the money was to be transferred to Mr Mo immediately without any other conditions or provisos relevant to her retaining the ownership over the monies.  But in any event, summary judgment did not proceed on the basis of the SOC.  Ms Chen in her affidavit did not provide evidence in support of the Agreement pleaded.
38. [38]
    According to Ms Chen’s affidavit, she transferred monies through Wealthy Asia, (which had been recommended by Mr Zhang, a matter which he denies), to Mr Zhang’s account because she wanted to transfer money to her son but, as he was in the United States, no one could access the funds until he returned to Australia.  She deposed to having asked Mr Zhang if she could transfer the funds to his account to be held by him and then transferred to her son’s account upon his return to Australia, “unless” she “directed him to otherwise deal with the funds prior to that happening”, to which Mr Zhang allegedly agreed (emphasis added).  She deposes to the fact that she directed Mr Zhang to transfer any funds to her son and Mr Zhang has failed to do so.
39. [39]
    In the affidavit of Ms Chen, there was some evidence she maintained control over the funds that were transferred.  That evidence was however inconsistent with the facts pleaded in the SOC, which was not amended.
40. [40]
    The basis of the pleaded Agreement and Mr Zhang’s evidence that he acted on direction of Mr Mo were accepted by Ms Chen’s counsel, quite properly, as raising a real issue as to whether Ms Chen had any ongoing entitlement to those monies.  What was not recognised, however, was that excising that amount from the claim for summary judgment did not resolve the issue in relation to the balance of the monies, given the $800,000.00 was apparently the subject of the first and second transfers.  Further, it left summary judgment being sought on a different and arguably inconsistent basis to the relief under the SOC, thus supporting the fact a trial was required of all issues to avoid inconsistent findings.
41. [41]
    Mr Zhang had denied any agreement with Ms Chen.  In his affidavit, Mr Zhang also denied that Mr Mo was in the United States at the time of the transfer of monies, as asserted by Ms Chen, and stated that he had no conversations with Ms Chen on or about June 2019 where they discussed or agreed to transfer monies to his account.  Mr Zhang stated he had several conversations with Mr Mo while he was living at the Gold Coast where Mr Mo had stated that he had wanted to transfer money from China into Mr Zhang’s Australian account to invest.  Mr Mo did not mention his mother, Mr Yang or Mr Zhao in those conversations and had referred to the money as his money.  Mr Zhang therefore assumed the money came from Mr Mo.  He noted on a previous occasion in April 2019, Mr Mo had transferred $2,100,000.00 from China into Mr Zhang’s bank account using Wealthy Asia and he had paid that money out at Mr Mo’s direction.  He further stated that he transferred at the direction of Mr Mo the sum of $800,000.00 in two equal tranches on 26 and 27 November 2019 to Mr Mo’s personal assistant.
42. [42]
    While Mr Mo asserted Ms Chen was entitled to the monies and he had no such entitlement, the evidence was in inadmissible form and only evidence of his opinion.  In his affidavit sworn the day of the hearing of the application, Mr Mo did not address any of the matters raised in Mr Zhang’s affidavit.
43. [43]
    The question of Ms Chen’s ownership or entitlement to claim the monies was not resolved by an affidavit of Mr Mo or Ms Chen.  Further, while Mr Mo stated in his affidavit that he was not entitled to the funds, the question of entitlement is a conclusion and a matter of law,  the determination of which would depend at least in part on the arrangement between Ms Chen and Mr Zhang.  If Mr Mo was entitled to the funds, he was not a party to the proceedings.  An order providing that the funds be paid to him, as proposed on behalf of Ms Chen, did not resolve the legal entitlement to claim the monies given the inconsistency between Ms Chen’s evidence and the pleaded case.
44. [44]
    In the circumstances Ms Chen had not established an entitlement to the monies as claimed in the SOC.  Given the incomplete and conflicting evidence, even if the SOC had been amended to accord with her affidavit, there was still a need for a trial.  Further, given the matters raised by the defence and the response to the notice to admit facts were unanswered by the evidence, it was not shown that Mr Zhang had no real prospect of defending the claim.  The judgment therefore cannot stand.
45. [45]
    Given that I consider that the appeal should succeed, I consider that the extension of time to file the notice of appeal should be granted.
46. [46]
    As each party submitted costs should follow the event, the respondent should pay the applicant’s costs of the appeal and the costs of the summary judgment application on the standard basis.
47. [47]
    The orders that should be made are that:

1. the extension of time to file the notice of appeal is granted;
2. the appeal is allowed;
3. the judgment entered 27 September 2023 is set aside; and
4. the respondent must pay the applicant’s costs of the appeal and the costs of the summary judgment application on a standard basis.