Lee v Klean King Pty Ltd[2023] QDC 24

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   This is a dispute (mainly) over the correct balance of a running loan account operated by the defendant Klean King Pty Ltd and one of its former directors and current shareholders, the plaintiff, Mr John Kap Lee.  The resolution appeared hindered by a number of factors including that many of the disputed payments occurred over 13 years ago; the books and records of Klean King – (to the limited extent they were kept at the relevant time) are shambolic; and most of the witnesses are South Korean nationals who required the aid of an interpreter to give their evidence. But at trial, the court was greatly assisted by the parties (through their respective legal representatives), conveniently agreeing on many facts and focusing on the just and expeditious resolution of the real issues in dispute.^[1] 
2. [2]
   To this end, the parties agreed two central matters:

   1. (a)
      First: that between September 2007 and January 2013 various payments totalling $452,756 were made by Mr Lee to Klean King on the loan account; and
   2. (b)
      Secondly: that between February 2009 and 25 March 2013 various payments totalling $310,735.85 were made by Klean King to Mr Lee on the loan account.
3. [3]
   Mr Lee’s claim is for the difference in these sums – namely that he is owed $142,020.15 as a debt under the loan account.^[2] Klean King concedes it owes Mr Lee this amount but by way of defence and counterclaim alleges that the loan account needs to be adjusted further to allow for:  

   1. (a)
      cash payments of $5,000 and $10,000 and an electronic bank transfer of $88,032 it allegedly made to Mr Lee in December 2010; and
   2. (b)
      further payments totalling $146,080 made to Mr Lee (as loan repayments – or loans)  between January 2009 and March 2013.
4. [4]
   In the wash, Klean King’s overall debt claim is for the sum $107,091.85.^[3] It also makes a discrete claim for the return of a payment of $5,905.83 it made to Mr Lee on 20 May 2013 (following his resignation as a director on 17 May 2013) on the basis that it was made under a mistake of fact.
5. [5]
   It follows that three issues emerge for my determination:^[4]

   1. (a)
      Issue One: Did Klean King pay amounts of $5,000 and $10,000 cash and $88,032 by way of bank transfer to Mr Lee in December 2010?
   2. (b)
      Issue Two: Were the various payments from Klean King to Mr Lee between January 2009 and March 2013 (totalling $146,080) loan account payments?
   3. (c)
      Issue Three: Is Klean King entitled to repayment or restitution in the sum of $5,905.83 on the basis this amount was paid to Mr Lee under a mistake of fact?

Credit issues

6. [6]
   Before addressing these issues in the context of the relevant facts it is necessary to set out my credit findings. 
7. [7]
   Mr Lee gave evidence before me through an interpreter.^[5] There are obvious impediments to a non-English speaking witness giving evidence in court. Even allowing for answers getting lost in translation and being infected by cultural and legal differences, I found Mr Lee’s oral evidence generally unreliable for a number of reasons: 

   1. (a)
      First, he had little if any recollection of individual payments. For example, his pleaded case was that he made a $10,00 cash payment on 4 October 2012 but at trial he could not recall this payment being made. Mr Lee’s lack of recollection is not surprising given the passage of time and the lack of records kept by the directors of Klean King. His ultimate concession (at the end of the trial) that this part of his case was not made out was a reasonable one given the state of the evidence.
   2. (b)
      Secondly, despite the fact that he was a relatively experienced businessman in South Korea, his lack of understanding of his obligations as an Australian director (and of financial transactions generally) was abundantly apparent.  For example he conceded at trial that his sworn affidavit evidence about a payment of $100,000 to Klean King in 2009 (in other proceedings) was incorrect;^[6] and he was plainly ignorant about his obligations to declare income and to keep business records in any capacity.
8. [8]
   Despite this finding, I am satisfied that Mr Lee did his best to be truthful though aspects of his evidence were clearly distorted and reconstructed.  But the same can be said of nearly all of the witnesses who gave evidence in this case.
9. [9]
   The current directors of Klean King who gave evidence before me – Mr Kim, Mr Shim and Mr Hur – presented with varying grasps of English. Mr Kim and Mr Hur gave evidence with the aid of an interpreter.  All of these men appeared (unsurprisingly) with imperfect memories of transactions, conversations and unrecorded meetings that occurred many years earlier. Their evidence reflects the ad hoc and chaotic way the business was run. For example, Klean King initially denied that there was an agreement between it and Mr Lee for Mr Lee to be paid $1,000 interest on his outstanding loan account – but subsequently this fact was admitted. All three also appeared oblivious to their obligations as directors; and there was a blatant undertone of reconstruction to their evidence – well exemplified by what happened after Mr Lee resigned (as discussed under Issue Two below).

10. [10]
    But overall, I am not satisfied that any of the witnesses in this case were necessarily dishonest or intentionally misrepresented the situation. I am satisfied that they all told the truth as they saw it but that their recollections were clouded by the passage of time, language and cultural barriers and distorted by too much talk with each other and others.^[7]

11. [11]
    Ultimately, I have assessed the evidence of each of the witnesses having regard to the objective facts with particular regard to contemporaneous documentary evidence and upon a consideration of where the onus of proof lies and upon my satisfaction to the requisite standard - on the balance of probabilities.

Relevant facts

12. [12]
    For some time prior to 2007 Mr Lee ran a cleaning supply wholesaling company called “Shin Sung Total Company” in South Korea.  In 2007 he sold that company to his nephew, Young-Wan Jang.
13. [13]
    Klean King was incorporated on 27 August 2003 but did not adopt the name Klean King Pty Ltd until August 2007. The directors and shareholders of Klean King are as follows:^[8]

    1. (a)
       Ben Hur from 27 August 2003 to date (and as company secretary for this period);
    2. (b)
       Jin-Tae Kim from 27 August 2003 to date;
    3. (c)
       Huyn Soo (Paul) Shim from 14 November 2008 to date; and
    4. (d)
       Mr  Lee from 23 November 2007 to 17 May 2013.^[9]
14. [14]
    There was a dearth of evidence about the nature of Klean King’s business but  underneath the Klean King letterhead appears the words “cleaning products/ food packaging/ homeware” so it is reasonable to assume as I do that the company was involved in the wholesale supply of such items.  It was not clear what role each of the directors actually played in the day to day operations of the company. Although there was some evidence that at some point Mr Lee provided management and warehousing services to the company.
15. [15]
    Prior to 2009, the directors did not receive any regular payments from Klean King but in January 2011 they all resolved (although there is no record of this resolution or any evidence about the terms of these payments) that they should each receive income of $30,000 per annum.  These monthly payments were recorded in payslips. 
16. [16]
    Relevantly, and in addition, between January 2009 and March 2013, Klean King made periodic payments to Mr Lee. The uncontested evidence about the amounts and method of payments of these periodic payments over the years is as follows:

    1. (a)
       in the 2009 financial year, the periodic payments amounted to a total of $15,000 paid by bank deposit and $2,500 paid in cash;
    2. (b)
       in the 2010 financial year, the periodic payments amounted to a total of $36,000 paid by bank deposit and $500 paid in cash;
    3. (c)
       in the 2011 financial year, the periodic payments amounted to a total of $21,000 paid by bank deposit and $9,599 paid in cash;
    4. (d)
       in the 2012 financial year the periodic payments amounted to a total of $28,481 paid in cash; and
    5. (e)
       in the 2013 financial year the periodic payments amounted to a total of $32,500 paid in cash.
17. [17]
    The characterisation of these periodic payments is dealt with under the heading “Issue Two” below. But relevantly there are no payslips relating to these payments. Nor was there any evidence that Mr Lee declared the payments as income for tax or any other purpose.
18. [18]
    The evidence (or lack of it) is consistent with how Klean King conducted its affairs – that is with lack of formality and process. For example:

    1. (a)
       There is no evidence of an employment agreement or other contractual agreement by which Mr Lee or the other directors were entitled to payment of wages or any specific amounts in respect of work performed by Klean King;
    2. (b)
       There is no evidence of formal declarations of dividends; and
    3. (c)
       There is no record of any formal minutes of meetings.
19. [19]
    From about 2010, Mr Shim kept a written record (using his descriptions) of the cash, income and expenditure of Klean King (separate from those recorded in the Klean King income statements). This record was initially kept in Korean but later in English. This document is described as the cash fund management document (the CFM). The cash payments identified in the CFM were not recorded in any other Klean King financial record. Although Mr Shim originally referred to the CFM as his individual personal record it was conceded by Klean King that it is a company document. This concession was a reasonable one, in light of the overwhelming evidence which I accept, that all of the other directors knew about this document and its contents. For example, Mr Shim  said that he did not show the directors the CFM every month but there were some months that he did. He even recalled Mr Lee asking him to print it out on occasions. Mr Hur (the company secretary) said that he was aware of the CFM and trusted Mr Shim. His evidence was that Mr Lee was “quite involved” in the cash transactions as well as Mr Shim. He agreed that the CFM was shown to Mr Lee on occasions.
20. [20]
    Critically and as discussed under Issue Two below, this document did not characterise any of the periodic payments as loan repayments.  
21. [21]
    For the financial years 2009, 2010, 2011 and 2012, Klean King’s financial statements and tax returns were prepared by Cartills Accountants. During those years, Klean King was receiving and making cash payments but Cartills was not given the CFM or even made aware of the cash income or the cash payments. Unsurprisingly those cash amounts were then not reflected in the financial statements prepared by Cartills.
22. [22]
    Klean King only started recording wages or fees to the directors from 2011 – that is when the directors resolved to pay themselves an income and payslips were issued.
23. [23]
    In late 2012 or early 2013, CYS Accountants were appointed as Klean King’s accountants. Mr Charlie Choi, an employee of this company, was provided with details of Klean King’s cash income and cash payments for previous years. He was tasked with amending the 2010/2011 and 2012 income year statements and tax returns to account for these cash amounts. 
24. [24]
    Mr Choi’s evidence which I accept is that:

    1. (a)
       he reviewed and adjusted the company’s financial records to reflect the fact that there was a large amount of income from cash sales that was not included in the company’s original tax returns and financial records; and
    2. (b)
       part of those cash sales had been distributed to the directors with the distributions not reflected in the official company books or financial reports or tax returns.
25. [25]
    In 2013, the relationship between Mr Lee and the other directors deteriorated for several reasons: including a dispute about the nature and amounts of the periodic payments; and the balance of the loan account. Mr Lee was subsequently removed as a director on 17 May 2013 and Klean King paid him the sum of $5,905.83 on his employment as a director ending. The controversy over this payment is discussed under the Issue Three heading below.
26. [26]
    Later in 2013, Mr Lee sought relief for unfair dismissal in the Fair Work Commission but the Commission determined that Mr Lee had not been an employee of Klean King.

Issue One: Did Klean King pay amounts of $5,000 and $10,000 cash and $88,032 by way of bank transfer to Mr Lee in December 2010?

27. [27]
    It is convenient to deal with the alleged payments of $5,000 and $10,000 separately from the payment of $88,000. 

Payments of $5,000 and $10,000

28. [28]
    Klean King claims that it made payments of $5,000 on 9 December 2010 and $10,000 on 10 December 2010 to Mr Lee in reduction of the loan account. Mr Lee claims these payments were not made to him.
29. [29]
    I am satisfied that these payments were made as alleged by Klean King for the following reasons:

    1. (a)
       First, the bank statements of Klean King evidence withdrawals of those amounts on those dates;
    2. (b)
       Secondly, income statements which form part of Klean King’s accounting records (the notations of which are prima facie evidence of the facts asserted)^[10] include the following notations:

       1. an entry for 9 December 2010 which states “BRANCH WITHDRAWAL BY LEE” in the sum of $5,000; and
       2. an entry for 10 December 2010 which states “WITHDRAWAL BY LEE” in the sum of $10,000.
    3. (c)
       Thirdly, there is no evidence to contradict the income statement which on its face is a contemporaneous record of the payment nor is there any cogent evidence to doubt its accuracy. For example Mr Lee:

       1. had no clear recollection of any individual transactions. At its highest his evidence about the specific payments of $5,000 and $10,000 was that he could not recall receiving those payments;
       2. accepted that he received various cash payments from Klean King, and he often used cash to remove the stress of using ATMs and EFT; and
       3. was unequivocal about whether or not he received a cash payment from Klean King in a sum greater than $10,000.
30. [30]
    I therefore find that the loan account must be adjusted by $15,000 in Klean King’s favour to take this sum into account.  

The payment of $88,032

31. [31]
    Klean King pleads that it made a payment of $88,032 to Mr Lee by way of telegraphic transfer on 13 December 2010.^[11] This payment is denied by Mr Lee.^[12]
32. [32]
    Klean King’s bank statements reflect that it paid out the sum of $88,032 on 13 December 2010 and its income statement records a notation of “PAYMENT TO LEE” in that amount. Again, Klean King relies on the income statement as a contemporaneous business record and evidence of the fact that the sum of $88,000 was a payment by Klean King to Mr Lee.^[13]
33. [33]
    Despite its pleading, the uncontroversial evidence is that Klean King did not in fact pay any part of the $88,032 directly to Mr Lee. Rather, the sum of $88,000 was telegraphically transferred to the Shin Sung Total Company. Mr Jang was called by Mr Lee and gave telephone evidence with the aid of an interpreter. Mr Jang’s evidence which I accept was that $88,000 was paid to his company for cleaning goods supplied to Klean King. He produced a document as an example of a shipment of goods to Australia by him. Klean King criticised the fact that Mr Jang did not  produce the exact invoice or shipping note to explain this payment. But this issue overlooks that this issue was confined by the pleadings. Mr Lee prepared for trial (as he was entitled to do) on the basis that there was a telegraphic transfer of $88,032 made directly to him – and assuming such an allegation to be rebuttable by the evidence that the payment was in fact made to the Korean Bank account of the Shin Sung Total Company (or its director) and not to him. That was a reasonable assumption to have made. Klean King’s pleaded case was not that a payment of $88,032 was made on behalf of Mr Lee or for his ultimate benefit. This pleading issue was raised by Mr Lee at the outset of the trial but Klean King did not seek leave to amend its case.
34. [34]
    Given it is uncontroversial that the $88,000 was paid by telegraphic transfer to someone other than Mr Lee, I am satisfied that Klean King’s case must fail.
35. [35]
    But regardless of that finding even if such a case was pleaded (or falls within the current pleading), I am not satisfied that Klean King has discharged its burden to prove that the $88,000 electronically transferred to the Shin Sung Total Company was a loan repayment to Mr Lee for four reasons:

    1. (a)
       First, there was no evidence from any of the directors that there had been a request by Mr Lee to make such a payment in this way; 
    2. (b)
       Secondly, Mr Jang denied that it was possible that a payment for Mr Lee was received through this account;
    3. (c)
       Thirdly, Mr Lee’s evidence which I accept was that he did not receive a payment of $88,000 from Shin Sung Total Company or Mr Jang; and
    4. (d)
       Fourthly, it is a curious amount for a loan repayment.
36. [36]
    It follows that I am not satisfied that the loan account must be adjusted by $88,000 (in favour of Klean King) to take into account this payment.

Issue two: nature of the periodic payments

37. [37]
    Klean King submits that the periodic payments ought to be categorised as either loan repayments of Mr Lee’s earlier loans to Klean King or a loan from Klean King to Mr Lee. I am not satisfied that there is sufficient evidence to support a finding as to the latter because there is no evidence of a request by Mr Lee for such loans nor is there any evidence of such a loan agreement (written, oral or implied).
38. [38]
    It follows that the real question is whether the periodic payments were loan repayments to Mr Lee. The onus rests with Klean King to establish this. Mr Lee bears no onus to prove any particular characterisation of the payments.^[14]
39. [39]
    The starting point for any consideration of the nature of the periodic payments is the general principle that “where money is paid it is to be applied according to the will of the payer, and not of the receiver.^[15] 
40. [40]
    That principle operates whether the “will of the payer” is communicated to the receiver. For example, in Caltabiano v Electrical Commission of Queensland (No. 1) [2010] 1 Qd R 100 Fraser JA observed that an “undisclosed subjective intention to appropriate is not itself effective.”^[16] However, in the absence of an express communication, an inference of the payer’s intention may be drawn from the  circumstances of the case.^[17] 
41. [41]
    The issue of whether the periodic payments are properly characterised as loan account payments is therefore resolved by a consideration of what was said and done between the parties, or the objective circumstances as known to both parties and not by reference to “any uncommunicated subjective state of mind.”^[18] 
42. [42]
    Mr Lee relies on the records in the CFM as supporting his case. Klean King submits that there is no evidence that Mr Lee actually knew about or relied upon those notations at the relevant time.^[19] But this submission is a distraction and overlooks that the crucial issue is what was objectively communicated to Mr Lee by Klean King’s words, actions and the surrounding circumstances. In this sense, reliance is irrelevant. Regardless and as my findings at paragraph 19 above reveal, I am satisfied that Mr Lee knew of and was shown the CFM from time to time.  

Objective evidence of the intention of Klean King

43. [43]
    The parties differ as to the objective evidence of Klean King’s intention. Mr Lee submitted that the company records are objective evidence of Klean King’s intention but Klean King submitted that the various descriptions of the periodic payments as wage, salary, share or bonus were merely a statement of uncommunicated subjective intention. 
44. [44]
    I am satisfied that there is an underlying inconsistency in Klean King’s argument.  On the one hand it asks the Court to treat the company records (that is the bank statements and the CFM) as evidence as to the timing and amount of the payments but not as to what the nature of the payments were. But in the case of the periodic payments, these documents are the only records that those payments actually occurred. Overall, I prefer Mr Lee’s submissions on this point. I am therefore satisfied that these records are objective evidence of the communicated intention of not only the timing and amounts of the payments but as to the nature of the payments. These records were official company documents. At the time Mr Lee was a director of the payer (Klean King) and so it follows that Klean King’s internal records are not an uncommunicated record private to the payer. 
45. [45]
    I am also satisfied that far from being evidence of uncommunicated subjective intention, the CFM is objective evidence of communicated intention for the reasons set out in the following three paragraphs.
46. [46]
    First, the periodic payments which Klean King made to Mr Lee by way of bank deposits in 2009 to 2011 usually described the payments as “wages” through notations that appeared on Mr Lee’s bank statements. It is true that Mr Lee did not speak English but his evidence which I accept as entirely plausible is that his children assisted him with his banking. But even if these descriptions were not translated to Mr Lee – the point only goes to reliance (which is irrelevant) and does not deprive the bank statements of their character as objective evidence of the communicated will of the payer.^[20] 
47. [47]
    Secondly, Mr Lee’s evidence (which I accept as corroborated by Mr Shim as discussed below) was that in 2010 he was told by the internal Klean King accountant that regular payments that he had been receiving from Klean King (which he understood to be wage payments) were to be treated as loan payments. His evidence was that he confronted the other directors about what was going on and was told that there was a mistake which would be corrected.  Mr Kim denied that Mr Lee was told that the recording of the regular payments as loan repayments was a mistake, and that the accountant would be instructed to correct it. But I reject his evidence on this issue as it is inconsistent with the evidence of Mr Shim who was the person entrusted by the other directors with the task of maintaining the CFM. Mr Shim’s evidence (which I accept) was that Mr Lee came to the other directors in 2010 as he had been told that regular payments he was receiving from Klean King were being recorded not as wages but as loan repayments. Mr Shim did not recall Mr Lee being upset but he agreed that he or one of the other directors told Mr Lee that this was “just a mistake” that would be fixed.  I am therefore satisfied that as at the end of 2010 the discussion between the directors was that the periodic payments Mr Lee was receiving from Klean King were not to be treated as loan repayments but rather as wage payments.
48. [48]
    Thirdly, Klean King’s argument that the periodic payments ought to be treated as loan repayments does not make common sense given what in fact occurred. Mr Hur and Mr Shim both gave evidence that there was a meeting of directors of Klean King in 2013 (after Mr Lee was removed as a director) at which the remaining directors agreed to treat payments previously made as wages as loan repayments. Obviously, if the periodic payments had been made as loan repayments there would be no need for the other directors to correct the records to change the status of those payments.  The latter finding is supported by the following three matters:

    1. (a)
       First, Mr Hur’s evidence that after the dispute with Mr Lee, the directors asked the accountants to amend the amount of the cash flow of the company to reflect the fact that the cash payments that were made to Mr Lee were loan repayments on the basis that as directors, they were responsible for the “company’s situation” and the way to solve the situation was to recharacterise these monies as loan repayments;
    2. (b)
       Secondly, prior to instructing the accountants to correct the records, all of the remaining directors agreed that they needed to be responsible for the company and to treat the payments previously made as wages as loan repayments. This decision was made when Mr Lee was no longer a director; and
    3. (c)
       Thirdly, the decision to change the status of the payments was made after Mr Lee ceased to be director because Mr Lee threatened to take the cash book and material to the Australian Tax Office and to report the company. Mr Lee tried to reconcile things but the other directors were advised to remove him from the director’s role and that the cash book record would cause some problems, so it was decided to amend that book.  Mr Shim’s evidence was consistent with Mr Hur’s version of events that the decision to correct the financial records to change the status of the cash distributions was made after Mr Lee ceased to be a director. 
49. [49]
    At the end of the evidence, the parties provided a useful loan table agreeing the dates,  amounts and outlining their respective submissions about the nature of each of the periodic payments in dispute.^[21] 
50. [50]
    I have considered this table carefully and I am not satisfied that Klean King has discharged its onus to satisfy me that the periodic payments (in dispute) were made to Mr Lee as loan repayments for three reasons:

    1. (a)
       First, there are no contemporaneous records that the payments were made as loan repayments;
    2. (b)
       Secondly, there is no cogent oral evidence to support a finding that the periodic payments were made to Mr Lee as loan repayments; 
    3. (c)
       Thirdly, the contemporaneous written records [the CFM and banking records in evidence] record the majority of the periodic payments as either a wage, salary, share or bonus. Where there is no notation for a payment it is reasonable to infer as I do, that the nature of that payment is the same as the other payments that are recorded^[22] and that the undescribed payment is therefore not a loan repayment.   
51. [51]
    This finding is  consistent with the evidence of the remaining Klean King directors in cross-examination that the payments were first characterised as loan repayments after Mr Lee exited the company in 2013.
52. [52]
    I therefore find that each of the periodic payments (totalling $146,080) made by Klean King to Mr Lee were not made as loan repayments. It follows that the loan table does not need to be adjusted in Klean King’s favour to take into account this sum. 

Issue three: restitution claim of $5,904.83

53. [53]
    The parties agree that on 20 May 2013 Klean King paid the sum of $5,904.83 to Mr Lee for :^[23]

    1. (a)
       redundancy in the amount of $3,724.42 and
    2. (b)
       unused annual leave in the amount $2,181.41.
54. [54]
    Klean King alleges (and Mr Lee does not admit) that:^[24]

    1. (a)
       when making the payment Klean King mistakenly believed that it had a legal obligation to pay redundancy pay and annual leave to Mr Lee;
    2. (b)
       Klean King’s mistaken belief was because Mr Lee as a non-employee director did not have a legal entitlement to redundancy pay and annual leave; and
    3. (c)
       but for these mistakes, Klean King would not have made the payment of $5,905.83 to Mr Lee. 
55. [55]
    This pleaded case needs to be considered in the context of the facts.
56. [56]
    On 24 April 2013, Klean King gave Mr Lee notice that a general meeting had been called for 17 May 2013 and it was intended that the meeting would consider a resolution for Mr Lee’s removal as a director.  This letter referred to Mr Lee’s employment ending as a result of the proposed resolution.
57. [57]
    On 17 May 2013, Klean King sent Mr Lee a letter (on Klean King letterhead) with the subject line “Termination of your employment by reason of redundancy”.^[25] Relevantly this letter said that “up until today” Mr Lee had “been employed by the company as a director” but that as a result of a meeting of shareholders held that day his “employment will end immediately”. The letter also stated relevantly as follows:

“Based on your length of service, your notice period is 4 weeks.  Instead of receiving that notice you will be paid the sum of $2,509.62 plus the redundancy entitlement set out below.

Due to your employment ending because of redundancy you will also be paid redundancy pay of $3,764.42 in accordance with the national employment standards.

You will also be paid unused annual leave of $2,193.41 and superannuation up to and including your last day of employment.”

58. [58]
    This letter was prepared by Klean King’s solicitor and signed by Mr Hur.
59. [59]
    Klean King submitted that it is Mr Hur’s state of mind that is relevant for assessing any mistake made by Klean King^[26] and that the money was paid by Klean King under Mr Hur’s mistaken belief that Klean King  was under an obligation to pay that money. I accept that it is the state of mind of the person who decides to make the payment for a company which is relevant.^[27] But the evidence in this case is that all of the directors knew about the letter at the relevant time  – and had discussed what should be paid at the meeting to remove Mr Lee.
60. [60]
    Klean King submitted that the true circumstances at the time of the letter were that:

    1. (a)
       First, Mr Lee was not an employee of Klean King and that he had no legal entitlement to redundancy payments or any other legal entitlement to payments; and
    2. (b)
       Secondly, Mr Hur’s decision to pay Mr Lee was a result of his mistaken belief (through adopting the advice he was given) that Mr Lee was an employee with redundancy and leave entitlements. 
61. [61]
    I accept the fact that a payment has been caused by a mistake (either one of law or fact) and is sufficient to give rise to a prima facie obligation on the part of a respondent to make restitution.^[28]  But I am not satisfied that the evidence establishes that Mr Hur or any of the remaining directors made this payment to Mr Lee because they were under the mistaken belief that he was an employee with redundancy and leave entitlements.
62. [62]
    The overwhelming evidence which I accept is that in April 2013 the remaining directors considered  Mr Lee was a “salaried director” who they wanted to remove as quickly as possible because he made threats to report the company to the Tax Office.^[29] The company (through Mr Hur) sought advice from its solicitor and accountant to remove Mr Lee. There was no evidence about what instructions were given to these advisors.  But nothing turns on this because the effect of the evidence which I accept is that at the time of the payment none of the remaining directors considered that Mr Lee was an employee. For example:

    1. (a)
       Mr Kim believed that Mr Lee was a director and that the monies were part of the procedure for excluding him as a director;
    2. (b)
       Mr Hur did not think that Mr Lee was entitled to be paid as if he was an employee; and
    3. (c)
       Mr Shim did not think Mr Lee was an employee and he was not under the impression that the payment had to be made.
63. [63]
    It follows that I am not satisfied that Klean King’s resitutionary claim has been made out and I therefore dismiss that claim.

Conclusion and orders

64. [64]
    It follows from the above analysis that the balance of the loan account is $127,020.15. I therefore order that the defendant pay the plaintiff the sum of $127,020.15.
65. [65]
    I direct that the parties bring in final orders reflecting this order together with any interest claimed (and calculations) and costs by 4.00pm Thursday 2 March 2023.
66. [66]
    If these orders cannot be agreed, the parties are to email my associate (by 4.00pm Thursday 2 March 2023) to request a date for a short hearing and determination of these issues at a time convenient to the court and the legal representatives.