Federal Court of Australia

Liu v Miller-Kovacs, in the matter of Privato Enterprises Pty Limited [2025] FCA 1296

ORDERS

THE COURT DECLARES THAT:

A. The Form 484 filed with the Australian Securities Investments Commission (ASIC) on 27 March 2024 was ineffective in transferring title in the shares held by each of the plaintiffs in the fourth defendant to the first, second and third defendants.

THE COURT ORDERS THAT:

1. The first and second defendants are to pay the amount of $100,000 to each of the plaintiffs, Jinlan Lui and Aixiu Yu, together with the sum of $14,666.08 to each of them by way of pre-judgment interest from 15 January 2024 pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth).

2. By 7 November 2025, the plaintiffs are to take all necessary steps to execute instruments of transfer of their shares in the fourth defendant, to the first, second, and third defendants, such that each of those defendants will hold 400 shares in the fourth defendant.

3. By 14 November 2025, the defendants are to take all necessary steps to lodge a validly executed Form 484 with ASIC recording the transfers of shares in the fourth defendant the subject of the instruments of transfer to be executed pursuant to Order 2 above.

4. The defendants are to pay the plaintiffs’ costs of the proceeding.

5. In the event the costs of the proceeding are not agreed, the plaintiffs are to file and serve a Costs Summary in accordance with [4.10] to [4.12] of the Court’s Costs Practice Note (GPN-COSTS), not exceeding 6 pages in length, by 4.30 pm on Friday, 14 November 2025.

6. The defendants are to file and serve any Costs Response in accordance with [4.13] and [4.14] of the Costs Practice Note, not exceeding 6 pages in length in respect of the costs sought by the plaintiffs, by 4.30 pm on Friday, 28 November 2025.

7. The plaintiffs are to file and serve any submissions in accordance with [4.15] of the Costs Practice Note, limited to 3 pages, by 4.30 pm on Friday, 12 December 2025.

8. The defendants are to file and serve any submissions in accordance with [4.15] of the Costs Practice Note, limited to 3 pages in respect of the costs sought by the plaintiffs, by 4.30 pm on Friday, 12 December 2025.

9. The quantum of the lump sum for the costs of the plaintiffs pursuant to Order 4 of these orders shall be determined by a Registrar of the Court in such manner as the Registrar determines to be appropriate, including by oral hearing, or on the papers.

10. The fourth defendant’s cross-claim is dismissed.

11. The fourth defendant is to pay the cross-defendants’ costs of and incidental to the cross-claim, as taxed or agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

HALLEY J:

A.    Introduction

1 It is perhaps unexceptional that a largely undocumented cash purchase of a massage and adult services business might give rise to a substantial dispute between the vendors and the purchasers and ensuing litigation. What is exceptional in this case is the extent and nature of the fundamentally inconsistent claims made by the parties to the transaction as to the purchase price and the amount in fact paid by the purchasers to the vendors.

2 In this case, the sale and purchase of the massage and adult services business operated by the fourth defendant, Privato Enterprises Pty Ltd ACN 664 376 952 (Privato) at Hornsby in the northern suburbs of Sydney (Business) was effected by a sale and purchase of shares in Privato in January 2024.

3 The plaintiffs, Jinlan Liu (also known as Amanda) and Aixiu Yu (also known as Lily)  contend that they, together with the third defendant, Ruixiang Xin (also known as Anna), purchased 100% of the shares in Privato from the first defendant, Jordan Miller-Kovacs, the second defendant, Yuan Tian (also known as Hong) and Anna for $300,000. They contend that $30,000 was paid in cash by way of a deposit on 11 January 2024, and the balance of $270,000 was paid on 15 January 2024 in cash and by way of a RMB bank transfer to an account in China. The terms upon which Amanda and Lily purchased the shares from Jordan, Hong and Anna were not recorded in any formal written agreement.

4 Anna and Hong contend that the purchase price to be paid by Amanda and Lily for the shares in Privato was $50,000, of which $30,000 was paid in cash on 11 January 2024, but no further payments were made by either Amanda or Lily. They contend that the failure of Amanda and Lily to pay the balance of the purchase price and their refusal to provide financial records of the Business constituted a repudiation of the agreement to purchase the shares in Privato.

5 Jordan did not appear at the hearing of the proceeding and did not advance any submissions.

6 The principal issues to be determined in this proceeding are the terms upon which Amanda and Lily acquired 100% of the shares in Privato in January 2024 from Jordan, Hong and Anna, the amounts paid for the purchase of the shares and by whom and in what manner such payments were made.

7 For the reasons that follow, I have resolved these issues by weighing the fundamentally conflicting evidence of the parties against contemporaneous documents, in particular WeChat text messages and banking records, and the inherent logic of events.

8 I have ultimately concluded that the contentions of the plaintiffs as to the terms upon which they acquired the shares in Privato and the amounts paid for the shares must be accepted, and the relief they seek by way of orders requiring the repayment, with interest, of the money that they paid for the shares in Privato must be granted.

9 I have referred to the four Mandarin parties in these reasons for judgment, each of whom have very limited English, by their anglicised first names, as those were the names that the parties were referred to in the agreed dramatis personae, oral and written submissions and in cross-examination. I have also referred to Jordan Miller-Kovacs, and Lily’s husband, Simon Parks, by their first names for consistency. In doing so, I mean no disrespect to any of them.

10 When I refer to the “Defendants” in these reasons, I am collectively referring to the defendants who have defended the allegations made against them in this proceeding, that is, Privato, Hong and Anna. When I refer to the “defendants” (lower case), I am collectively referring to all the defendants in this proceeding, that is, Jordan, Privato, Hong and Anna. At the time the defence was filed in the proceeding by Longton Legal (now Longton Blackwell), it acted for all defendants, but on 20 January 2025, Jordan filed a notice informing the Court that he had terminated his retainer of Longton Legal and he had not appointed another lawyer to represent him. Jordan did not take any active role in the proceeding after that date and did not appear at the hearing.

11 For readability, and given the manner in which the parties referred to the purchase both at the time and in their evidence, I have, generally throughout these reasons for judgment, referred to the purchase as the purchase of the Business, rather than the purchase of shares in Privato.

B.    Background Facts

12 The following background facts were agreed between the parties.

13 On 8 December 2022, Privato was registered, and Jordan was appointed as its sole director and secretary.

14 On 9 December 2022, Privato entered into a lease of Shop F, 187 Peats Ferry Road, Hornsby (Premises) with Mayharlow Pty Ltd (Lease). The Lease was for a term of three years commencing on 9 December 2022 and ending on 8 December 2025.

15 Since 9 December 2022, Privato has been conducting the Business known as ‘187 Hornsby’ from the Premises.

16 On 14 December 2022, Hong and Anna were appointed as directors of Privato.

17 From 14 December 2022, Jordan, Hong and Anna were the directors of Privato and each held 400 ordinary shares of Privato’s issued share capital of 1,200.

18 On 11 January 2024, Amanda met with Jordan, Anna and Hong at the Premises (11 January Meeting), where (a) a document was signed by Amanda and Hong, titled “Deposit for Contract of Business Sale” (11 January Document), and (b) Amanda gave $30,000 in cash to Jordan, Anna and Hong.

19 On or about 15 January 2024, Amanda and Lily entered into an agreement with Jordan, Anna and Hong to purchase shares in Privato (Purchase Agreement). It was agreed that Jordan would remain a director and secretary of Privato only until an Australian citizen could be found to replace him as a director of Privato.

20 On 15 January 2024, Amanda and Lily met with Jordan, Anna and Hong (15 January Meeting) at the office of Austone Countability Pty Ltd at suite 49, 1 Railway Parade, Burwood (Accountant’s Office). During the 15 January Meeting, the board of Privato held a board meeting, whereby resolutions were passed, as set out in the minutes of the board meeting (15 January 2024 Resolutions), pursuant to which (a) Anna and Hong ceased being directors of Privato, (b) Jordan remained the sole director and secretary of Privato, and (c) Anna and Hong ceased being shareholders of Privato. Following the resolutions passed at the board meeting, the 1,200 ordinary issued shares of Privato were held as follows: (a) Amanda held 792 shares, (b) Lily held 396 shares, and (c) Jordan retained 12 shares.

21 That same day, following the 15 January Meeting, a Form 484 was lodged with the Australian Securities and Investments Commission (ASIC) giving effect to the arrangements described above (First Form 484), and 250,000 RMB was transferred to a Chinese bank account of Hong’s son.

22 In the period following the 15 January Meeting until 23 April 2024, (a) Jordan did not disclose the banking passwords of Privato’s bank account to Amanda or Lily, (b) Jordan did not pay any money to Amanda or Lily from Privato’s bank account, (c) Jordan paid himself money from Privato’s bank account, and (d) Amanda and Lily conducted the Business and lived in accommodation at the rear of the Premises (Granny Flat).

23 On 29 January 2024, Amanda, Lily and Simon attended a meeting at the Accountant’s Office  (29 January Meeting) at which Amanda, Lily and Simon signed resolutions (29 January Minutes). Jordan did not attend the meeting and did not sign any resolutions.

24 On 23 March 2024, Amanda, Lily and Jordan had a disagreement at the Premises, and Amanda and Lily were asked to leave the Premises. Amanda and Lily have not returned to the Premises or performed any function in the Business since that time.

25 On 25 March 2024, Jordan left a letter to Amanda and Lily at the Granny Flat (25 March Letter).

26 On 27 March 2024, Robert V Read & Associates lodged a Form 484 numbered 7ECQ41694 at 1.47 pm for Privato with ASIC (Subsequent Form 484).

27 Following the lodging of the Subsequent Form 484, ASIC recorded (a) Hong and Anna as directors with Jordan, (b) Jordan as the secretary of Privato, and (c) each of Hong, Anna and Jordan holding 400 shares in Privato.

C.    Witnesses

C.1.    Overview

28 The assessment of the credibility and reliability of evidence given by witnesses in a proceeding in which fundamentally inconsistent accounts are advanced in sworn affidavits and oral evidence on oath or affirmation is a challenging but critical task for any judicial officer.

29 It is well established that trial judges should be careful not to place undue reliance on the appearance or demeanour of witnesses in giving oral evidence and rather should, as far as possible, make factual findings on disputed issues on the basis of contemporary materials, objectively established facts and the apparent logic of events: Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [31] (Gleeson CJ, Gummow and Kirby JJ).

30 That caution is even more important in circumstances, as in the present cases, when lay witnesses are giving oral evidence through interpreters in cross-examination and are being questioned about documents that have been translated, albeit by NAATI accredited translators, from Mandarin to English.

31 Consistent with these principles, I have assessed the credibility and reliability of the evidence given by the witnesses in this proceeding by reference to the content of contemporaneous documents, in particular WeChat text messages, and the apparent logic of events.

C.2.    The plaintiffs’ witnesses

32 Amanda and Lily gave affidavit evidence and were cross-examined with the assistance of an interpreter.

33 After giving due consideration to the difficulties of being cross-examined through an interpreter, I am satisfied that both Amanda and Lily answered questions directly, without prevarication, and that their evidence, with one exception, was internally consistent and consistent with contemporaneous objective evidence and the inherent logic of events. The one exception was Amanda’s evidence with respect to the 11 January Document.

34 In addition, Simon gave affidavit evidence for the plaintiffs and was cross-examined. I am satisfied that he answered questions directly and without prevarication, and his evidence was both consistent with contemporaneous objective evidence and the inherent logic of events.

C.3.    The Defendants’ witnesses

35 Both Anna and Hong gave evidence on affidavit and were cross-examined with the assistance of an interpreter.

36 Neither Anna nor Hong was a satisfactory witness. I have formed that view principally not by regard to their appearance or demeanour in giving evidence but rather because of  the extent to which their evidence was (a) inconsistent with the inherent logic of events and contemporaneous documents, and (b) internally inconsistent and evolved when they were challenged in cross-examination. I accept that at times, the inconsistencies in their evidence may have been due to language and translation issues, but I am satisfied that each was given every opportunity to clarify the inconsistencies during the course of their cross-examination but failed to provide any coherent or plausible explanation for them.  At times, Anna’s evidence, in particular,  was inherently implausible and could not be accepted, in particular her denials of providing funds to assist in the purchase by Amanda and Lily of the shares in Privato.

37 I treated with considerable caution the evidence of Anna and Hong and placed little, if any weight on it, except to the extent that it was consistent with the inherent logic of events and  contemporaneous events or contained admissions against interest.

D.    The agreements reached between the parties

D.1.    Overview

38 The parties agreed that the following issues needed to be resolved as to the existence and the terms of the agreements between them:

(a) was an agreement made on 11 January 2024, and if so, what were the terms of the agreement?

(b) was there an agreement made between Amanda, Lily and Anna on or about 13 or 14 January 2024 to the effect that Amanda and Lily would purchase all the shares in Privato, and one third of the shares purchased by Amanda and Lily would be held on trust for Anna?

(c) was there an agreement made on 15 January 2024, and if so, what were the terms of the agreement?; and

(d) what amount was paid by Amanda and Lily to Jordan, Hong and Anna pursuant to any agreements between the parties, and from 15 January 2024, what amounts, if any, remained unpaid or owing pursuant to any agreements between the parties?

D.2.    11 January 2024 Agreement

39 On the day prior to the 11 January Meeting, Anna and Amanda exchanged the following WeChat text messages (10 January texts):

Amanda:     Should Cici be required to come when paying the deposit tomorrow?

Anna:         Tomorrow morning, you, my friend and I will go to breakfast together and talk about cooperation and then pay the deposit

Anna:         Definitely

Amanda:     Okay, shall I stay here tonight?

Anna:         Yes, I will go to see Cici early and we will meet together

Amanda:     Yes, have a meeting and tell Sister Hong that the [Money Bag Emoji] has not been taken out today and whether tomorrow is okay

Anna:        Yes

Amanda:     Ok

40 The 10 January texts establish that Anna proposed to meet with Amanda and Cici prior to the 11 January Meeting to discuss “cooperation” between them and the payment of a deposit for the proposed purchase of the Business.

41 The 11 January Document signed by Amanda, Jordan, Hong and Anna at the 11 January Meeting was a handwritten document in Mandarin. The NAATI certified translation in evidence of the 11 January Document was in the following terms:

Deposit for Contract of Business Sale

This is to certify that the deposit for the sale and purchase contract of 2 Dural St, Hornsby (187F Petes Ferry Rd, Hornsby) is thirty thousand Australian dollars ($30,000), and the balance is twenty thousand Australian dollars ($20,000), which includes the residential property contract of (189 Petes Ferry Hornsby (2b Dural St, Hornsby). If either party decides to back out, the deposit will not be returned or double the amount shall be paid as a compensation (if the seller decides not to sell, he/she shall repay 60,000 Australian dollars to the buyer; if the buyer decides [translator's note: missing text] buy, the deposit will not be returned). After discussion by both parties. the settlement shall be made on l8 January.

42 The Defendants submit that the Court should find that on 11 January 2024, Amanda entered into a binding contract with Jordan, Hong and Anna to purchase the Business for $50,000 and paid a deposit of $30,000, of which $10,000 had been provided by Amanda and $20,000 had been provided by Cici. Contrary to the submissions of the Defendants, I do not accept that Cici had paid $20,000 of the $30,000 deposit paid by Amanda at the 11 January Meeting. Rather, I am satisfied, consistently with the 10 January texts and the amount paid following the subsequent withdrawal of Cici and introduction of Lily, that Amanda, Anna and Cici each provided $10,000 towards the $30,000 paid by Amanda to Anna, Hong and Jordon at the 11 January Meeting.

43 The Defendants submit that (a) the 11 January Document provides objective evidence that the purchase price for the Business was $50,000, and (b) the evidence given by Amanda when challenged about the purchase price in the 11 January Document should be rejected. They submit that it should be rejected because (a) Amanda introduced new evidence for the first time in cross-examination that was contrary to her affidavit evidence-in-chief, and (b) there was no logical or cogent reason why she would have signed a document that was “in stark contrast to the true agreement” that she claims was reached on 11 January 2024 in relation to the purchase price for the Business.

44 In her affidavit evidence, Amanda stated that she overlooked that the total price for the Business was stated in the 11 January Document to be $50,000 and only became aware that the purchase price was not correct the following day. In contrast, in cross-examination, she stated that she had raised her concern about the purchase price at the 11 January Meeting before she had signed the 11 January Document, and Anna had told her (as interpreted):

Yes. I asked the question why 50,000 for the shop since the price was 300,000. So they said okay. Even Anna said it is okay, “When it comes to time to sign a contract, this is useless.”

45 When pressed as to how she came to sign the 11 January Document which stated that only a further $20,000 was payable, Amanda claimed that (a) it was only a receipt for the payment of the deposit of $30,000, (b) the figures would be changed at the time the sale contract was signed, and (c) at the time she signed the 11 January Document, she was told (as interpreted):

… I was told that to write down $50,000. Hong told me at that time when it is time to make full payment, they wanted the payment in cash for the purpose of avoiding tax payment.

46 I accept Amanda’s evidence in cross-examination was inconsistent with her affidavit evidence but it is consistent with the subsequent logic of events, in particular, the payments made at the 15 January Meeting, as explained at [55] – [93] below.

D.3.    15 January 2024 Agreement

47 It is convenient to address both the terms of any agreement reached on or about 15 January 2024 and the amounts paid pursuant to the agreement together. In the absence of any written purchase agreement the amounts paid and the identity of those who paid them necessarily inform the content of any agreement reached for the acquisition of the Business.

48 As explained at [19] above, the parties agree that on or about 15 January 2024, Amanda and Lily agreed to purchase the Business from Jordan, Anna and Hong pursuant to the Purchase Agreement. The terms of the Purchase Agreement, however, were not reduced to writing.

49 The 15 January 2024 Resolutions and the subsequent lodgement of the First Form 484 with ASIC on 15 January 2024 establish that the settlement of the Purchase Agreement occurred on 15 January 2024.

50 The share transfers, which were the subject of the 15 January 2024 Resolutions, did not provide for any shares to be retained or to be transferred to Anna. Nevertheless, as I explain below, I am satisfied that Anna contributed one third of the purchase price of $300,000 and, for all practical purposes, retained a significant involvement in the Business that was consistent with her retaining a one third interest in the Business. Moreover, the WeChat text exchange that she had with Amanda, as I refer to below at [87], makes plain that Anna was proceeding on the basis that she had retained a one third interest in the Business notwithstanding the share transfers the subject of the 15 January 2024 Resolutions.

51 Both Amanda and Lily gave evidence that Amanda brought $220,000 in cash to the 15 January Meeting, and, after it had been counted, $90,000 was given to Jordan, $90,000 was given to Anna, and $40,000 was given to Hong.

52 In a supplementary affidavit affirmed by Amanda on 26 March 2025 (Amanda’s supplementary affidavit), Amanda annexed two photographs that she stated had been sent to her by Jordan on 22 March 2025 (Jordan photographs). The Jordan photographs showed a large amount of cash being counted in the course of the 15 January Meeting.

53 The Defendants submit that the Court should not accept the evidence of Amanda and Lily – that $220,000 passed between the parties at the 15 January Meeting – because (a) there was no evidence that the purchase price had changed since the figure of $50,000 stated in the 11 January Document, (b) no receipt was requested or issued for the amount, notwithstanding that a receipt for a much smaller amount was provided on 11 January 2024 and the fact that (on the plaintiffs’ case) part of the $50,000 of the purchase was being paid to the foreign bank account of a third party, (c) there was no objective evidence that recorded the payment of $220,000 on the day, (d) WeChat text messages sent between Anna and Amanda on 15 January 2024, which I refer to at [66] below, used language that the $90,000 was only “advanced” to Amanda and only “for the time being”, and (e) subsequent WeChat text messages exchanged between Anna and Amanda on 17 March 2024, which I refer to at [87] below, confirmed that “Anna loaned money to Amanda to purchase the Business”.

54 The Defendants submit that for these reasons, the Court should find that (a) the purchase price payable under the Purchase Agreement was $50,000 not $300,000, (b) $90,000 was lent by Anna to Amanda at the 15 January Meeting to be repaid “once the Business got better”, and (c) no money was paid in the course of the 15 January Meeting “to purchase the shares”.

55 I do not accept these submissions as they are fundamentally inconsistent with the inherent logic of events, the WeChat text messages sought to be relied upon by the Defendants, and other contemporaneous documents.

56 Necessarily, in the absence of any contemporaneous record of the purchase price in a written agreement the amount paid for the Business by the plaintiffs must inform and be highly probative of what had been orally agreed as the purchase price. In rejecting the submissions advanced by the Defendants as to the purchase price and the amounts paid under the Purchase Agreement I have had regard to the following evidence and findings.

57 First, I accept the evidence given by Amanda as to how the purchase price for the Business of $300,000 was determined.

58 Both Amanda and Anna gave evidence of a conversation that they had with each other in December 2023. Their respective accounts of the conversation were very different.

59 Amanda gave evidence that in December 2023, Anna had offered to sell the Business to her for $360,000, to which she responded that the Business was only worth $280,000. She stated that Anna then (a) offered to reduce the sale price to $300,000, (b) suggested that Anna, Amanda, and a third party purchase the Business together, and (c) requested that Anna’s involvement was to be kept confidential, with no one being told that Anna was purchasing a one third interest.

60 Anna gave evidence that she had never had the conversation with Amanda referred to at [59] above but conceded that “there may have been some discussion about the business”.

61 The Defendants submit that Anna’s evidence should be accepted because (a) Amanda had conceded in cross-examination that she was not aware of the income and expenses of the Business, (b) Amanda’s evidence that Anna had previously told her the Lease for the Business still had five years to run, and her boss at Artarmon had told her what the Business was worth, only emerged after she had confirmed her affidavit evidence was accurate and there was nothing she wished to add, (c) it was inherently improbable that Amanda would simply adopt the opinion of her friend as to the value of the Business without reservation, (d) Amanda’s evidence was inconsistent with the inherent logic of events and contemporaneous documents because, less than a month later, Amanda signed a written agreement that stated the purchase price for the Business was $50,000, and (e) there was no objective evidence to substantiate Amanda’s evidence.

62 I do not accept these submissions.

63 The explanation given by Amanda is inherently plausible given her lack of financial sophistication, the inherent logic of events, the amounts of money paid to Jordan, Hong and Anna on 11 and 15 January 2024, and the absence of any explanation advanced by Anna as to how the purchase price was determined, other than assertions in support of the alleged purchase price of $50,000 recorded in the 11 January Document that the Business was “not generating profits” and “[t]he business was not good”.

64 Second, I am satisfied that Anna gave Amanda $100,000 in cash at the Burwood railway station on her way to the 15 January Meeting.

65 Amanda gave evidence that Anna gave her $90,000 at the Burwood train station, which was intended to be Anna’s contribution to the purchase price of the Business, but Anna contends that no money was handed over until the 15 January Meeting.

66 Shortly prior to their meeting at the Burwood train station, Amanda and Anna exchanged the following WeChat text messages (as translated and with the author of each message added) (15 January texts):

Amanda:     I called you but you didn’t answer. We are moving house and have to leave first.

Wait for you at the train station.

Sister Hong, meet at the train station in 10 minutes.

Anna:         I’m going to give you the money in advance.

Amanda:     How long will it take you to arrive

Anna:     Lily gave me the deposit of another 10,000 and I have exactly 100,000.

10 minutes or so

I’ll will give you the money when you enter the train station

Amanda:     Okay

Anna:         I’m only 2 stops away

Amanda:    I only have 80,000 here, still short of 10,000

Anna:         I’ll give you 10,000, you can use Lily’s deposit for the time being

You have 80,000 in hand, Lily’s deposit is supposed to be given to me; you can keep it and use it for the time being.

It’s 90,000 together.

90,000 is enough for you

Have you entered the train station?

Amanda:     I will come in soon

Anna:        I have arrived

Amanda:    What number

What number are you at

I’m at the train station, what number are you at

Anna:         You say your friend(s) raised an extra 40,000 for you and it’s enough

Raised it from 3 people

Amanda:     OK, dear.

67 The Defendants submit that Amanda’s evidence that the money was handed over at the Burwood train station should not be accepted because (a) it makes no sense to hand over money at a train station, when the parties were going to the Accountant’s Office, which would have provided a more private forum to do so, (b) her evidence was inconsistent in that she also gave evidence that Amanda gave her $90,000 “on the train”, and (c) her subsequent evidence that the money was handed to her at the Burwood train station is not corroborated by any objective evidence, as the 15 January texts rise no higher than Anna intended to provide the money to Amanda at the Burwood train station.

68 The explanations provided by Amanda and Lily of the circumstances in which Anna provided the $100,000 to Amanda prior to the 15 January Meeting are more plausible than the belated acknowledgement by Anna, explained below, that she handed $100,000 to Amanda at the 15 January Meeting.

69 The handover of the money at the Burwood train station was consistent with both the content of the 15 January texts, including Anna’s texts that “I’m going to give you the money in advance” and “I’ll give you the money when you enter the train station”, and the evidence that both Amanda and Lily gave that Anna did not want anyone to know that she was the source of the $100,000. Amanda’s evidence that money was to be given “on the train” can readily be discounted, as it is clearly inconsistent with both the 15 January texts and the inherent logic of events, and is an error that might readily be explained by language issues or abbreviating “train station” to “train”.

70 For these reasons, I am satisfied that Anna gave Amanda $100,000 in cash at the Burwood railway station prior to the 15 January Meeting.

71 Third, the evidence given by Anna and Hong concerning the handover of cash at the 15 January Meeting was most unsatisfactory and can be given little weight. The more plausible explanation for Anna providing $100,000 in cash to Amanda immediately prior to the 15 January Meeting was that it represented Anna’s one third share of the purchase price outstanding for the shares in Privato in an amount of $90,000 and an amount of $10,000 that Lily had given to Anna as her deposit following Cici’s withdrawal from the proposed purchase of the Business.

72 Both Anna and Hong claimed in their first affidavits that neither Amanda nor Lily handed any cash to them or Jordan at the 15 January Meeting.

73 Anna, however, recanted from that position after she was provided with a copy of Amanda’s supplementary affidavit. In her second affidavit affirmed on 9 April 2025, Anna gave the following evidence:

4.    In January 2024, Amanda approached me and asked me to lend $100,000 to her.

5.    On 15 January 2024, I carried $100,000 in cash with me and handed that cash to Amanda during the meeting in the accountant's office at Burwood.

6.    The cash being counted in the photos in Annexures E and F of Amanda's Affidavit was the $100,000 that I lent to Amanda. Hong was helping me counting the cash.

7.    Amanda and I agreed that she would either pay back the $100,000 or transfer 33.3% of the shares in Privato Enterprises Pty Ltd ACN 664 376 952 to me in the future.

8.    On 19 April 2024, Zhiwei Zheng, who was assisting Amanda and I to negotiate the loan and transfer of shares, sent a message to me, stating that “33% of the shares will be transferred back to you.”

74 Hong, similarly, recanted from her position that no money was exchanged at the 15 January Meeting when she was provided with a copy of Amanda’s supplementary affidavit. In her second affidavit, also affirmed on 9 April 2025, Hong gave the following evidence:

3.    During the meeting on 15 January 2024, Anna handed over $100,000 in cash to Amanda. I helped Anna with counting the cash. During the meeting, Amanda and Anna mentioned that the money was lent by Anna to Amanda. I am not aware of the reason Anna lent the money to Amanda.

75 The change in the sworn evidence given by Anna and Hong when confronted with the Jordan photographs reflects very poorly on their credit as witnesses and materially diminishes the weight that can be given to their evidence in the proceeding.

76 Fourth, the belatedly advanced loan explanation could only be plausible if it was a loan that was made in connection with the purchase of the shares in Privato. The suggestion that Anna would simply lend Amanda $90,000 (or $100,000 as asserted by Anna and Hong in their supplementary affidavits) in cash in response to a request from Amanda independently of the purchase of the Business is risible and inherently implausible. Equally implausible is the following evidence given by Anna as to why she provided a $90,000 loan to Amanda in cash at the 15 January Meeting:

HIS HONOUR: And why did you have to give her $90,000 on 15 January?

THE INTERPRETER: Because when Amanda purchased this shop, I actually asked Cici to purchase together with her. After deposit was paid, Cici text me that night saying she’s sick, couldn’t do this business, so she wanted to withdraw. Amanda said since deposit was paid and money couldn’t be returned – I feel – I feel bad for her because after she purchased this shop, she had to get girls and put on advertisement, renovation, and purchase new things. Therefore, I helped her. And I knew she needed help. Her life was not very happy. Her son and her sisters were not in a good relationship with her. Also, while Amanda worked in my shop, she helped me a lot. So she need money, and I help her.

HIS HONOUR: And you lent her $90,000 to help her?

THE INTERPRETER: Yes.

HIS HONOUR: And on what terms? When did you expect to be repaid?

THE INTERPRETER: So at that time it was agreed that when the business is getting better, then she could pay part of that money to me and then pay me back month by month.

77 The evidence given by Anna reflects the extent to which Anna was prepared to proffer additional evidence in the course of the hearing in an attempt to address inconsistencies between her affidavit evidence and the evidence as it emerged in the course of the proceeding – specifically regarding the denial that any cash was handed over at the 15 January Meeting.

78 The 15 January Meeting was being held to finalise the purchase of the shares of Anna, Hong and Jordan in Privato, and as made clear in the 15 January texts, the money being brought by Anna was to facilitate the purchase of those shares. The Defendants, however, cannot accept that almost self-evident proposition because it is inconsistent with their contention that the purchase price of the Business was only $50,000. Moreover, on the Defendants’ case, the suggestion that Anna lent $90,000 to Amanda at the 15 January Meeting but none of Jordan, Hong or Anna requested payment of the alleged outstanding balance of $20,000, is also implausible.

79 Fifth, the absence of any receipt for the payment is explicable given the lack of any commercial sophistication in the parties, the absence of any reference to a purchase price for the Privato shares in the 15 January 2024 Resolutions or the share transfers, and the difference between the payment of money by way of a deposit and the payment of money at a meeting in the course of which (a) a board meeting is held approving the purchase, and (b) documents are filed with ASIC confirming the change of ownership of the shares in Privato.

80 Sixth, in the course of the 15 January Meeting, Lily also arranged for the equivalent of $50,000 to be transferred in RMB from bank accounts of her brother, Huosheng [Wensheng] Yu, to a bank account of Hong’s son, Wenyu Wang. The transfers are recorded in translated electronic bank receipts confirming that 80,000 RMB was transferred from an account ending in 2571, and 170,000 RMB from an account ending in 9075 from Huosheng Yu to Wenyu Yang on 15 January 2024.

81 The provision of the $50,000 by Lily to Hong pursuant to the 250,000 RMB transfer on 15 January 2024 was subsequently corroborated by its replacement with a $50,000 cash payment.

82 On 28 January 2024, Lily and Hong exchanged the following WeChat text messages (as translated and with the author of each message added):

Lily:     How are you, Sister Hong?

Lily:     Can you do me a favour, give me your account number, and I will ask my husband to transfer the money to you?

Lily:     Then you can ask your son to transfer the RMB back to my younger brother

Lily:     Because I borrowed the RMB

Hong:     Dear, the transfer is not Okay, my bank is not Okay

Lily:     Then I will give you cash tomorrow, Sister Hong

Hong:     You give me cash any day when it is convenient for you

Hong:     Okay dear

Hong:     Burwood? Are you coming to Burwood?

Hong:     What time, dear?

Hong:     I make arrangement for things in China

Lily:     Okay, Sister Hong, I’ll contact you tomorrow when my husband takes out the cash

Lily:     Okay, I’ll send you my family member's account number

Lily:     I’ll also send you the account number tomorrow, tell your son to transfer the cash back to me, thank you

Hong:     Okay, it has to be before noon, I'm leaving Burwood at 1 o'clock tomorrow

Hong:     No problem, dear

Lily:     Oh, okay, then I'll talk to my husband today and see if he can take some money out.

83 On 5 February 2024, Lily left the following WeChat voice messages on Hong’s iPhone (as translated):

[at 1.48pm] Sister Hong, how are you? I would like to ask you, will you be in the museum today? Will you be in the museum this afternoon? I would like to exchange the money with you, and take back RMB worth of 30,000, exchange money and get 150,000 RMB back. Alas, I borrowed money from others, and they urgently need to use it during the Chinese New Year, and they are urging me. I only raised 30,000. As for the remaining 20,000. I will take it out after a while, gradually take it out and give it to you. Please exchange it with me. Thank you [emoji]. Please tell me when you will be in the museum? Will you be in [the museum] this afternoon?

[at 3:16 pm] Sister Hong, wait for me for 2 minutes, we are waiting for the bank to have money withdrawn, and we can withdraw all of it for you, and will give you all of it, the full amount of 50,000 in one time.

84 I am satisfied that, notwithstanding what might appear to be overly literal translations of WeChat text and voice messages in Mandarin, it is apparent from these messages that (a) Lily wanted Hong to accept a transfer of RMB from her husband, Simon, in substitution for the RMB that she had borrowed from her brother, Huosheng Yu, (b) Hong wanted cash in exchange for the RMB that Lily had borrowed from her brother, and (c) Lily agreed to pay $50,000 in cash in substitution for the 150,000 RMB that she had paid to Hong’s son,  Wenyu Wang, which Lily had borrowed from her brother, and (d) by 3.16 pm on 5 February 2024, Lily and her husband, Simon, had arranged to withdraw $50,000 in cash from Simon’s bank account to pay to Hong in return for Hong remitting the RMB that Lily had borrowed from her brother.

85 The subsequent transfers of 20,000 RMB on 5 February 2024, and of 100,000 RMB and 130,000 RMB on 6 February 2024, from Wenyu Wang to Huosheng Yu, are confirmed by translated copies of transaction receipts issued by the Bank of China Corporation Limited.

86 Both Lily and her husband, Simon, gave evidence, which I accept, that on the afternoon of 5 February 2024, Lily gave Hong $45,000 in cash in a black plastic bag and, subsequently, $5,000 in a white envelope, in exchange for the return of the 250,000 RMB from Hong’s son to Lily’s brother. It is corroborated by the objective evidence, including (a) transaction receipts supplied by the Bank of China showing the repayment of the 250,000 RMB referred to at [85] above, (b) bank statements of Simon’s business transaction account with the Commonwealth Bank of Australia, showing substantial cash withdrawals of money, and (c) account information and a list of transactions in the period between 29 January 2024 and 12 February 2024 of Simon and Lily’s joint account with the Commonwealth Bank of Australia, showing substantial cash withdrawals of money, in an aggregate amount of $20,000. Simon gives evidence, which I accept, that the cash withdrawals were made for the purposes of “buying the shares in Privato Enterprises, repayment of loans and payments to Hong”. The bank statements of Simon’s business transaction account include a record of a $5,000 cash withdrawal made on 5 February 2024. This corroborates Simon’s evidence that he withdrew an additional $5,000 from his bank account on that date and placed it in a white envelope, after Lily had told him that there was only $45,000 in the black plastic bag that she had handed to Hong earlier that day, in his presence.

87 Seventh, on or about 17 March 2024, Amanda and Anna exchanged the following WeChat text messages (as translated and with the author of each message added) (17 March texts):

Amanda:    This shop is not even worth 200,000

Anna:    If you think I cheated you, I will be the same as before and handle it together with you, 33.3 shares.

If you and Lily want to do it, you guys give me 50,000 when the “ghost” signs it. The balance shall be recorded on an IOU in favour of me. If [you] don’t want to do it, Hong and the “ghost” will give you guys 200,000

[translator’s note: “ghost”, should be “ghost man”, a common Cantonese slang term for Westerners]

When things happen, they need to be solved, right? No one wants to cheat you. Things have happened and we need to work together to solve them

17 March 2024 10:13 pm

We have arguments every day but haven’t solved the problem

88 Construing an English translation of a WeChat text message in Mandarin does present challenges, but in context, it is tolerably clear that Amanda is complaining to Anna that the Business is not even worth the $200,000 that she and Hong paid for their shares in Privato, and Anna is denying “cheating” Amanda. Anna then gives Amanda three choices, (a)  the current position remaining – “I will be the same as before and handle it together with you, 33.3 shares”, (b) Amanda and Lily buying out Anna’s one third share by paying her $50,000 with an IOU for the balance of $50,000  – “If you and Lily want to do it, you guys give me 50,000” and “The balance shall be recorded on an IOU in favour of me”, or (c) Amanda and Lily being bought out by Jordan and Hong for $200,000 – “If [you] don’t want to do it, Hong and the “ghost” will give you guys 200,000”.

89 I do not accept Anna’s evidence that the reference to Hong and Jordan giving back $200,000 was a typographical error and should have been an offer that they would give back $20,000, as that was the amount that they received from Amanda on 11 January 2024. It is an implausible claim in the context of Amanda’s complaint that the business was “not even worth $200,000” and Anna’s offer for Amanda and Lily to give her $50,000 and an IOU for the balance, if they wished to “do it” independently of Anna.

90 The 17 March texts also establish that Amanda and Anna have been working closely together in the Business since the 15 January Meeting – “We have arguments every day but haven’t solved the problem”. Again, evidence that is consistent with Anna retaining, in substance, a one third interest in Privato after the 15 January Meeting.

91 The 17 March texts between Anna and Amanda are more consistent with a “purchase” than a “loan” explanation for the $100,000 provided by Anna to Amanda at the 15 January Meeting.

92 Eighth, the purchase price of $300,000 for the Business is further and significantly corroborated by a letter dated 22 August 2024, from Longton Legal to Future Strategic Pty Ltd, the solicitors acting for Amanda and Lily (Longton Legal Letter). At that time, Longton Legal were acting for Jordan in addition to Anna, Hong and Privato. The Longton Legal Letter was written in response to a letter from Future Strategic dated 14 August 2024. The Longton Legal Letter included the following reference to a purchase price of $300,000:

Background

3. In or around January 2024, Jordan, [Hong] and [Anna] had oral discussions with your clients about a potential sale of shares in the Company (Agreement) to your clients.

Agreement

4.    It was agreed that your clients would obtain all of the shares in the Company subject to your clients paying a total of $300,000.00 (Payment) to Jordan, [Hong], and [Anna] (Agreement).

93 Perhaps the most remarkable aspect of the contention in the Longton Legal Letter that the purchase price in the Purchase Agreement was $300,000 is that Longton Legal, notwithstanding that they acted for the defendants in this proceeding, took no steps to clarify or explain on what basis they advanced that contention in the Longton Legal Letter. I can only infer in the absence of any evidence form Longton Legal, that the letter was written on instructions from the defendants and consistently with the principles in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 9 and Blatch v Archer (1774) 1 Cowp 63; (1774) 98 ER 969, any evidence that they had given would not have assisted the defendants in their contention that the purchase price for the Business was only $50,000.

D.4.    Outstanding payments

94 I am satisfied that there were no amounts remaining to be paid under the Purchase Agreement after 15 January 2024, noting that the 250,000 RMB paid to Hong by the transfer to her son on 15 January 2024 was subsequently replaced by an equivalent payment of $50,000 in cash to Hong on 5 February 2024.

95 It was not until 22 August 2024 that the first suggestion was made that the purchase price was not paid in full on 15 January 2024. The Longton Legal Letter of that date included the following claim:

5.    On or around 15 January 2024, Jordan, [Hong], and [Anna], out of a gesture of good will, mistakenly placed as it turns out, authorised the transfer of some (but not all) of their shares to your clients prior to receiving your clients' Payment.

96 Longton Legal then went on to assert in their  letter that (a) at “no stage” did their clients receive the “Payment” following their “good will transfer of the shares”, (b) that failure constituted a repudiation of the “Agreement”, which was accepted by their clients, and (c) the “goodwill share transfers”, which were “mistakenly made”, were reversed.

97 Longton Legal acknowledged that Amanda and Lily had made a payment to Jordan, Anna and Hong “seemingly as a partial payment toward their obligations pursuant to the Agreement”. They asserted, however, that Amanda and Lily “took it upon themselves to strip large sums of money” from the Business, and these sums exceeded the amount of the partial payment they have made.

98 I do not accept the contention advanced in the Longton Legal Letter that the plaintiffs had not provided the full purchase price of $300,000 at or prior to the 15 January 2024 Resolutions being passed at the 15 January Meeting and the lodgement of the Subsequent Form 484 with ASIC.

99 First, such a contention is contradicted by the evidence of the payments made in the course of the 15 January Meeting, together with the payment deposit of $30,000 at the 11 January Meeting.

100 Second, the contention is inherently implausible, given the absence of any complaint between 15 January 2024 and 21 August 2024 that any amount was outstanding. The absence of any reference to outstanding amounts in the 25 March Letter – where Jordan complained about being denied access to financial data and alleged this constituted a “breach of conduct in the companies shareholder agreement, and the Corporations Act” – is particularly telling. It could readily be expected that if significant amounts were outstanding on the purchase price for the Business, an equivalent complaint would have been made by Jordan in the 25 March Letter.

101 For these reasons, I am satisfied that Amanda and Lily provided $220,000 in cash to Anna, Hong and Jordan at the 15 January Meeting.

102 There was some conflict in the evidence as to the amounts contributed by Amanda, Lily and Anna to the $220,000 in cash that was handed over at the 15 January Meeting. Amanda gave evidence that $90,000 of the $220,000 was the money that Anna gave her at the Burwood train station. Lily gave evidence that she gave Amanda $50,000 in cash while they were walking to the 15 January Meeting from the Burwood train station. These figures, however, are not completely consistent with the more objective and contemporaneous evidence provided in the 15 January texts. Those texts suggest that Anna provided $100,000 – “Lily gave me the deposit of another 10,000 and I have exactly 100,000”, Amanda provided $80,000 – “I only have 80,000 here, still short of 10,000” and Lily provided $40,000 – “You say your friend(s) raised an extra 40,000 for you and it’s enough”.

103 On balance, I am satisfied that $100,000 was provided by Anna (of which $10,000 was Lily’s deposit), $80,000 was provided by Amanda, and $40,000 was provided by Lily.

104 The First Form 484 with ASIC recorded that Amanda, Lily and Jordan all held their shares in Privato beneficially. Nevertheless, I am satisfied that both Amanda and Anna had agreed that Anna would retain a one third interest in Privato after the settlement of the purchase of the Business.

E.    Validity of 25 March 2024 share transfers

105 The Subsequent Form 484 lodged by Robert V Read with ASIC on 27 March 2024 purported to record that on 25 March 2024, (a) Hong and Anna were appointed as directors of Privato, (b) Amanda and Lily were no longer shareholders in Privato, (c) each of Jordan, Hong and Anna held 400 shares in Privato.

106 The filing of a Form 484 is not sufficient to constitute a transfer of title in shares. Section 1071B(2) of the Corporations Act 2001 (Cth) (Corporations Act) provides that a company must only register a transfer of shares if a proper instrument of transfer has been delivered to the company. Neither Amanda nor Lily were aware of the Subsequent Form 484, which purported to record the transfer of their Privato shares back to Jordan, Hong and Anna, until their solicitors, Future Legal, received a letter from Longton Legal dated 22 April 2024 asserting:

Your clients are not the current shareholders of Privato Enterprises Pty Ltd ACN 664 376 952.

107 On 30 April 2024, Future Legal wrote to Longton Legal asking them to confirm whether they acted for Privato, or the current director of Privato, or both of them, and asked to be urgently provided with all “documents, minutes of meeting, signed share transfer documentation and any other instruments your client (or director) relied upon in effecting the transfers on the ASIC Register” as noted on the Subsequent Form 484.

108 Later that day, Longton Legal responded to Future Legal’s letter of 30 April 2024, confirming they acted for Jordan in his personal capacity but then stated, “[w]e are not instructed in relation to the matters raised in your letter in relation to the transfer of shares”. No documents were provided in response to Future Legal’s request for documents relied upon in effecting the transfers of the plaintiffs’ shareholding in Privato.

109 Moreover, no documents were tendered by the defendants in evidence in this proceeding purporting to provide any proper instrument of transfer for the purposes of s 1071B of the Corporations Act.

110 In the absence of any evidence of any instrument of transfer, I am satisfied that the transfers of shares purported to have been recorded in the Subsequent Form 484 were ineffective to transfer title in the shares that Amanda and Lily held in Privato. I am therefore satisfied that the orders sought by the plaintiffs in their Amended Originating Process could be made under s 1322(4)(b) of the Corporations Act to correct the ASIC register. As Colvin J relevantly held in Day, in the matter of A Bliss Clinic Pty Limited v Goodwin [2020] FCA 826 at [23]:

In Re Seabay Kitchen Pty Ltd [2019] NSWSC 790, Black J found in proceedings where ASIC’s register was sought to be rectified that ‘the Court has power to rectify the register under s 1322(4)(b)’ and that ‘there is a public interest in the adoption of a proper process for changes in directors and shareholders and for notifications to ASIC of directors and shareholdings’: at [13]. The power extends to require rectification where the underlying process that led to the notice in the register is invalid: Re MIG Property Services Pty Limited (No 2) [2012] VSC 606 and Re Centura Global Holdings Pty Limited [2016] NSWSC 62.

111 Given the relief that the plaintiffs seek, however, I do not consider it is necessary to make any order pursuant to s 1322(4)(b) of the Corporations Act. As matters currently stand, the plaintiffs remain the owners of the shares in Privato because the purported transfer of their shares in Privato was ineffective. As explained below, however, the plaintiffs seek orders that the amounts that they paid for the shares in Privato should be repaid rather than their ownership of the Privato shares be corrected on the ASIC register. Hence there would be no real utility in making an order correcting the ASIC register as the relief sought by the plaintiffs would necessarily also require them to transfer their shares in Privato back to the defendants, given the earlier purported transfers recorded in the Subsequent Form 484 were ineffective to pass title to the defendants.

F.    Repudiation and termination of the Purchase Agreement

112 It is well established that the test for repudiation is whether the conduct of one party conveys to a reasonable person, in the position of the other party, a renunciation either of the contract as a whole or of a fundamental obligation under it: DCT Projects Pty Ltd v Champion Homes Sales Pty Limited [2016] NSWCA 117 at [39] (Gleeson JA with whom Macfarlan JA and Sackville AJA agreed), and the cases cited therein.

113 The only repudiation pleaded by the defendants is the alleged failure of the plaintiffs to pay the balance of $20,000 that they claim was owing on the purchase price of $50,000 under the Purchase Agreement. Given my finding that the purchase price under the Purchase Agreement was $300,000 which was paid in full by 15 January 2024, the pleaded alleged repudiation must necessarily fail.

114 In their opening submissions, however, the Defendants also contended that an alleged failure by the plaintiffs to produce financial information to Jordan in response to a request that he made for the information also constituted a repudiation of the Purchase Agreement by the plaintiffs.

115 In their written closing submissions, the Defendants contended that the plaintiffs’ conduct – when viewed objectively and in addition to the alleged failure to pay the balance of $20,000 owing under the Purchase Agreement – was sufficient to constitute unpleaded repudiations of the Purchase Agreement. The conduct relied upon included, (a) a refusal and failure to provide financial information about Privato in response to requests from Jordan, as the sole director of Privato, on or before 23 March 2024 or at all, which was requested to ensure that Privato could comply with its reporting obligations on that date, (b) a failure to repay Anna for one month’s rent that she had paid on behalf of the plaintiffs, (c) a failure to repay Anna $90,000 that she had advanced to Amanda on 15 January 2024, and (d) a failure to repay Anna a further $13,000 that she had advanced to Amanda.

116 I am not persuaded that any of those unpleaded allegations were capable of constituting a repudiation by the plaintiffs of the Purchase Agreement.

117 First, Jordan alleged that his request for the plaintiffs to provide financial information was made in a meeting that he had with Amanda and Lily on 23 March 2024 at the Premises. In the 25 March Letter, Jordan stated that the 23 March 2024 meeting had been held “in an attempt to resolve a dispute with a previous staff member regarding an overdue debt”, and that at the meeting, he had requested that they provide “books/jobsheets” and “cash on hand within the business” for the period “15.1.2024 to 23.3.2024” and that “[a]s the director, I am required to report on the BAS (Business Activity Statement)”. Jordan further claimed in the 25 March Letter that as “shareholders within the business”, the withholding of financial information by Amanda and Lily was a “breach of conduct in the companies shareholders agreement, and the Corporations Act”. Jordan concluded the 25 March Letter by stating:

Furthermore, please provide the original company jobsheets, rosters, books and records by the close of business today 5pm 25/03/2024. Failure to do so will result in further action

118 It is not apparent how any failure to provide the financial information requested by Jordan could constitute a repudiation of the Purchase Agreement. No term is pleaded or alleged in the Purchase Agreement requiring the plaintiffs to provide financial information to Jordan. I am satisfied that the alleged request by Jordan for the provision of financial information was manifestly contrived. The alleged “shareholders agreement” is not identified, and the meeting was apparently called for a very different purpose, namely, the resolution of a dispute with a “former staff member regarding an overdue debt”. Further, even if it were assumed that Jordan was attempting to prepare a quarterly Business Activity Statement for Privato for the third quarter of FY 2024/2025,  (a) Jordan would require the financial information he requested for the period up to 31 March 2024, not 23 March 2024, and (b) there was no imperative that he receive the information by no later than 5.00 pm on 25 March 2024, as the quarterly Business Activity Statement for the third quarter of FY 2024/2025 would not have to be lodged until 28 April 2024.

119 Second, it is not apparent how the amounts alleged to be owing by the plaintiffs to Anna could constitute a repudiation of the Purchase Agreement. No term is pleaded or alleged in the Purchase Agreement with respect to any payments advanced or to be advanced by Anna to the plaintiffs. Further, the alleged outstanding amounts that had been advanced by Anna only emerged in the course of the hearing. If in truth, such amounts were outstanding to Anna, one could have expected that Anna might have made some attempt prior to the hearing to recover those amounts. There was no evidence of any such attempts being made. Ultimately the determination of any disputed amounts is a matter for Anna to resolve with Amanda and Lily independently of this proceeding.

G.    Oppression and Unconscionable conduct contentions

G.1.    Overview

120 The plaintiffs contend that the conduct of the affairs of Privato, and/or acts or omissions of Privato, were oppressive within the meaning of s 232 of the Corporations Act. They further contend that the conduct of Jordan, Hong and Anna was unconscionable contrary to s 21 of the Australian Consumer Law (ACL), being Schedule 2 to the Competition and Consumer Act 2010 (Cth).

G.2.    Factual findings

121 The following factual findings are relevant to the oppression and unconscionable conduct cases advanced by the plaintiffs in this proceeding.

122 First, Amanda gave evidence, that I accept, that a meeting was arranged at the Accountant’s Office on 29 January 2024 with Jordan to enable Lily’s husband, Simon, to replace Jordan as the sole director and secretary of Privato and to transfer Jordan’s remaining shareholding in Privato to Simon.

123 Jordan did not attend the 29 January Meeting. Amanda exchanged a series of WeChat text messages with Jordan in the period between 10.28 am and 12.26 pm in which she repeatedly asked Jordan when he expected to arrive at the meeting, in the course of which Jordan made the following representations:

Yes. I’m stuck in traffic. Please go in and start, all we need are signatures.

...

I’m still in traffic it’s terrible. If the documents are signed by Lilly’s husband, all I need to do is sign. The accountant can email and post everything. Please don’t wait on me,

…

I’m still on my way. I’ll sign and bring the documents with me to Hornsby after so your not waiting. Very sorry the inconvenience

124 At approximately 12.30 pm on 29 January 2024, each of Amanda and Lily, as shareholders, and Simon, in a stated capacity as a director, signed the 29 January Minutes. The signature of Amanda on the scanned copy of the 29 January Minutes in evidence appears only faintly, but in view of her affidavit evidence that she signed the minutes, I accept that she signed the 29 January Minutes. The document had been prepared by Privato’s accountant, Daniel Hu, providing for (a) the resignation of Jordan as a director and secretary of Privato, (b) the appointment of Simon as a director and secretary of Privato, and (c) the transfer of Jordan’s remaining 12 shares in Privato to Simon.

125 The 29 January Minutes list Jordan as an attendee at the 29 January Meeting. In light of the representations made in WeChat text messages between Jordan and Amanda referred to at [123] above, this appears to be a mistake likely caused by the minutes having been prepared in advance of the meeting and subsequently not amended. Moreover his listing as an attendee further supports a finding that Jordan was expected to be present at the 29 January Meeting.

126 Notwithstanding the representations made by Jordan in his WeChat text messages to Amanda on 29 January 2024, Jordan did not subsequently sign the 29 January Minutes. Amanda gave evidence, which I accept, that when she pressed Jordan in the weeks following 29 January 2024 about signing the 29 January Minutes, he consistently responded with words to the effect of, “I will, I will soon”.

127 Second, at no time in the period after 15 January 2024, notwithstanding the settlement of the sale of the Business on 15 January 2024, were Amanda or Lily able to access Privato’s bank account. The Defendants accept that Jordan (a) did not disclose the banking passwords of Privato’s bank account to either Amanda or Lily, (b) did not pay any money to Amanda or Lily from Privato’s bank account, and (c) paid money to himself from Privato’s bank account after 15 January 2024.

128 Third, Amanda gave the following unchallenged evidence of the events surrounding their exclusion from the Business, which I accept. At approximately 8.00 pm on the evening of 23 March 2024, Jordan, Anna and Hong attended the Premises and requested that Amanda and Lily accompany them to a room in the Premises, locked the door to the room, took the mobile phones of Amanda and Lily and placed them on a high shelf beyond their reach, and then had a three hour meeting arguing about whether Jordan had the right to request financial documents from Amanda and Lily. The meeting only concluded at approximately 11.00 pm, when the police arrived. Amanda and Lily complained to the police that they were the new owners of the Business, and Jordan was trying to exclude them from the Business. The police responded that the dispute was “a corporate matter”, and Amanda and Lily should go to their “granny flat and retain a lawyer”.

129 Fourth, as explained at [105] above, on 27 March 2024, the defendants caused Robert V Read to lodge the Subsequent Form 484 purporting to unilaterally transfer the shares of Amanda and Lily in Privato to Jordan, Hong and Anna.

130 Fifth, it was common ground that, from 23 March 2024, the Business was conducted by one or more of Jordan, Hong and Anna to the exclusion of Amanda and Lily, and no repayment was made to Amanda or Lily of the funds that they had advanced for the purchase of the Business.

G.3.    Oppression

Legal principles

131 Section 232 of the Corporations Act provides that the Court may make an order under s 233 of the Act if the conduct of the company’s affairs, or an actual or proposed act or omission by or on behalf of the company, or a resolution or proposed resolution of the members or a class of members of the company, is oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity (s 232(e)). The list of orders that the Court can make under s 233 is not exhaustive and includes an order requiring a person to do a specified act.

132 In Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62, the Full Court stated at [9] (Siopis, Rares and Davies JJ):

The test of unfairness requires an objective assessment of the conduct in question with regard to the particular context in which the conduct occurs. The question is whether objectively in the eyes of the commercial bystander there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the conduct or decision fair. As the test is objective, whether or not the conduct is oppressive will not depend upon the motives for what was done. It is the effect of the acts that is material.

(Footnotes omitted.)

133 Notwithstanding that the test is objective, in Wilmar Sugar Australia Ltd v Mackay Sugar Ltd [2017] FCAFC 40; (2017) 345 ALR 174 the Full Court observed at [73] (Dowsett, Jagot and White JJ):

While the test is objective, in the sense that the purpose or motive of the decision-maker cannot be determinative, purpose or motive may nevertheless be relevant. For example, if the decision-maker was motivated to make a decision to achieve some particular unfairness against a member, that fact might enable it to be concluded more readily that the effect of the decision is as the decision-maker intended (namely, unfair).

Consideration

134 I am satisfied for the following reasons that the conduct of the defendants that I have identified at [122] – [130] above, constitutes evidence, when viewed objectively, of actual or proposed acts or omissions by or on behalf of Privato, or a resolution or proposed resolution of the members or a class of members of Privato, that in the eyes of a commercial bystander was so unfair that a reasonable decision-maker would not have thought the conduct or decision was fair.

135 First, the failure of Jordan to sign the 29 January Minutes was contrary to the admitted arrangement that he would resign as a director of Privato once the plaintiffs had identified an Australian citizen to replace him. The failure to resign and agree to the appointment of Simon as a director of Privato had the practical effect of precluding the plaintiffs from being able to manage all necessary aspects of the Business.

136 Second, the refusal to provide banking passwords to the plaintiffs denied them access to Privato’s bank account and at the same time permitted Jordan to (a) continue to access the bank account for his own benefit, and (b) prevent the plaintiffs from accessing those accounts to meet the ongoing liabilities of the Business. The plaintiffs may have had access to cash payments made by clients of the Business, but they could not access payments made by credit card to Privato’s bank account.

137 Third, the exclusion of the plaintiffs from the Business after 23 March 2024, by reason of the conduct of Jordan, Hong and Anna, was in flagrant contravention of their entitlement to operate the Business pursuant to their acquisition of their shares in Privato under the Purchase Agreement.

138 Fourth, the ownership of shares is a valuable right. In the absence of an express right in a company’s constitution or a shareholders agreement authorising an appropriation of shares, shareholders have a legitimate expectation that, unless some exceptional circumstances arise, they will be able to retain their shares until they wish to sell them or the company is wound up:   Gambotto v WCP Ltd (1995) 182 CLR 432 at 456 (McHugh J). The purported transfer of the plaintiffs’ shares pursuant to the Subsequent Form 484 was made for no consideration and without the consent or even knowledge of the plaintiffs and in the absence of any contractual right or capital reduction.

139 Fifth, the failure to refund any of the consideration paid by the plaintiffs for their shares in Privato following the exclusion of the plaintiffs from the Business after 23 March 2024 was manifestly unjust.

G.4.    Unconscionable conduct

Legal principles

140 Section 21 of the ACL relevantly provides that a person must not, in trade or commerce, in connection with the acquisition of services from a person, engage in conduct that is, in all the circumstances, unconscionable.

141 Section 22 of the ACL sets out a non-exhaustive list of the matters to which the Court may have regard in determining whether a person has contravened s 21, including most relevantly for present purposes in s 22(1)(l) the extent to which the supplier of the service acted in good faith.

142 In the following much quoted statement of the correct judicial approach to allegations of unconscionable conduct, including under the ACL, the Full Court in Paciocco v Australia and New Zealand Banking Group Ltd (2015) 236 FCR 199; [2015] FCAFC 50 observed at [296] (Allsop CJ, Besanko and Middleton JJ):

The working through of what a modern Australian commercial, business or trade conscience contains and requires, in both consumer and business contexts, will take its inspiration and formative direction from the nation’s legal heritage in Equity and the common law, and from modern social and commercial legal values identified by Australian Parliaments and courts. The evaluation of conduct will be made by the judicial technique referred to in Jenyns. It does not involve personal intuitive assertion. It is an evaluation which must be reasoned and enunciated by reference to the values and norms recognised by the text, structure and context of the legislation, and made against an assessment of all connected circumstances. The evaluation includes a recognition of the deep and abiding requirement of honesty in behaviour; a rejection of trickery or sharp practice; fairness when dealing with consumers; the central importance of the faithful performance of bargains and promises freely made; the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage; a recognition that inequality of bargaining power can (but not always) be used in a way that is contrary to fair dealing or conscience; the importance of a reasonable degree of certainty in commercial transactions; the reversibility of enrichments unjustly received; the importance of behaviour in a business and consumer context that exhibits good faith and fair dealing; and the conduct of an equitable and certain judicial system that is not a harbour for idiosyncratic or personal moral judgment and exercise of power and discretion based thereon.

Consideration

143 I am satisfied that the conduct of the defendants that I have identified at [122] – [130] above, also constitutes evidence of conduct that, is at least, (a) contrary to the faithful performance of bargains and promises freely made and fair dealing or conscience, (b) antithetical to a reasonable degree of certainty in commercial transactions, (c) conduct that requires the reversibility of enrichments unjustly received; and (d) inconsistent with behaviour in a business and consumer context that exhibits good faith and fair dealing.

144 In summary, the conduct of Jordan, Anna and Hong in selling their shares in Privato, receiving payment for those shares and then, while retaining that payment, purporting to transfer the shares back to themselves, without notice or consent, and excluding the plaintiffs from the Business they had acquired by reason of their acquisition of shares in Privato was clearly offensive to conscience.

145 I am also satisfied that the conduct of the defendants was “in connection with” the supply or acquisition of services for the purposes of s 21 of the ACL.

146 Section 2(1) of the ACL provides that the term “services” “includes … any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce…”.

147 I am satisfied that a right to acquire a share pursuant to a purchase agreement in a company conducting a business falls within s 2(1) of the ACL. As Markovic J stated in Tameeka Group Pty Ltd v Landan Pty Ltd (No 3) [2016] FCA 733 in the context of a right conferred on an entity or its nominee under a call option to acquire certain premises on the terms of sale annexed to the call option, at [164]:

In my opinion the Call Option confers a right, benefit or privilege that is, or is to be, granted in trade or commerce. The right, benefit or privilege that is granted, or is to be granted, is the entitlement to acquire the Premises at an agreed price upon exercise of the Call Option pursuant to clause 2 of the Option Deed. As the Full Court said in Obeid, the definition of services should not be read exhaustively. The Full Court specifically observed at [52] that while the definition includes services that would come within the ordinary meaning of that word it also includes services not within the ordinary meaning “eg rights or interests in relation to real or personal property”. There is no contrary intention in the substantive provision, s 21, which would dictate a different outcome.

148 This view is supported by the following observations of Allsop CJ, Mansfield and Middleton JJ in Obeid v Australian Competition and Consumer Commission (2014) 226 FCR 471; [2014] FCAFC 155 (referred to by Markovic J in Tameeka Group in the paragraph set out above) at [52], made in the context of a right to participate in the expression of interest process, which involved applying for the minister’s consent leading to the grant of the necessary approvals for mining activities:

Looking at the text of the definition “services” there is no reason to conclude the term “includes” is exhaustive. While it includes services that would come within the ordinary meaning of that word, it also includes services not within the ordinary meaning (for example rights or interests in relation to real or personal property)…

149 Further, the expression “in connection with” the supply or acquisition of services should be given a broad interpretation, and the impugned conduct does not have to take place at the time that services are supplied or acquired: Tameeka Group at [165], citing by analogy statements made by Mansfield J in Australian Competition and Consumer Commission v Woolworths (South Australia) Pty Ltd [2003] FCA 530; (2003) 198 ALR 417 at [55] in the context of s 87B of the Trade Practices Act 1974 (Cth).

H.    Relief

H.1.    Legal principles

150 The principles governing the exercise of the discretion conferred by s 233 of the Corporations Act were recently summarised by Goodman J in Chief Disruption Officer Pty Ltd as Trustee for the McDonald Family Trust v Michel, in the matter of Laava ID Pty Ltd (No 4) [2023] FCA 25 at [12]-[21], by reference to established authorities, which summary I respectfully adopt and relevantly distil as follows:

(a) once the discretion has been enlivened by a finding of oppression, the Court has a broad discretion as to the remedy to be imposed;

(b) the Court should seek to grant the relief that is best suited to address the particular oppressive conduct should be granted;

(c) the relief granted by the Court should be commensurate with the oppression found to have occurred and no more intrusive than what is necessary to place the oppressed minority in a position equivalent to what it would have been but for the oppression;

(d) a buy-out order should not be made if a less drastic remedy, consistent with the termination of the oppression is available;

(e) the question of the appropriate remedy to be granted is to be determined as at the date that the discretion under s 233 is to be exercised.

151 Section 21 of the ACL falls within Chapter 2 of the ACL.

152 Section 236 of the ACL provides that a person who has suffered loss or damage because of the conduct of another person that was in contravention of a provision of Chapter 2 or 3 of the ACL may recover the amount of the loss or damage against that person or any person involved in the contravention.

153 As the Full Court explained in Husseini v Girchow Enterprises Pty Ltd [2024] FCAFC 143 at [115] (Feutrill J, with whom Derrington and Stewart JJ agreed), s 236 has at least five discrete elements:

…First, it identifies the legal norms the contravention of which gives rise to a cause of action under the section. Second, it identifies the persons by and against whom that action lies. Third, it specifies the harm for which the action lies as the suffering of loss or damage. Fourth, it stipulates a causal requirement that the claimant’s harm must be ‘because of’ the contravention. Last, it identifies the measure of compensation as ‘the amount of the loss or damage’ suffered: Marks v GIO Australia Holdings Ltd [1998] HCA 69; 196 CLR 494 at [95] (Gummow J); I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; 210 CLR 109 at [50] (Gaudron, Gummow and Hayne JJ). Questions of causation and damage are principally concerned with the last two of these elements.

H.2.    Consideration

154 I am satisfied that the appropriate relief to be granted to the plaintiffs by reason of the contraventions that I have found of s 232 of the Corporations Act and s 21 of the ACL would be the making of  orders that Jordan and Hong pay an amount of $100,000 to each of Amanda and Lily, together with interest from 15 January 2024, pursuant to s 233(1)(j) of the Corporations Act, or, alternatively, that Jordan and Hong pay damages in an amount of $100,000 to each of Amanda and Lily, together with interest from 15 January 2024, pursuant to s 236 of the ACL.

155 As submitted by the plaintiffs, (a) they have been excluded from the Premises and the Business since about 23 March 2024, (b) the Lease expires on 8 December 2025, and (c) the present financial position of the Business has not been disclosed. In these circumstances and given the extent of the oppressive and unconscionable conduct, in my view, relief in the form of a return of the purchase price that Amanda and Lily paid for their shares in Privato is (a) best suited to address the particular oppressive conduct,  (b) commensurate with the oppression that I have found to have occurred, (c) no more intrusive than what is necessary to place Amanda and Lily  in a position equivalent to what it would have been but for the oppression, and (d) equivalent  to the loss or damage that Amanda and Lily have suffered because of the unconscionable conduct of Jordan, Hong and Amanda.

156 As I have found that Anna personally contributed $100,000 of the $300,000 consideration paid for the shares in Privato under the Purchase Agreement, I have concluded that although Anna engaged in the oppressive and unconscionable conduct, any orders pursuant to s 232 of the Corporations Act or s 236 of the ACL should only be directed at Jordan and Hong.

157 In all the circumstances I consider that the more appropriate relief to be granted are orders pursuant to s 233(1)(j) of the Corporations Act, rather than s 236 of the ACL, because that more directly addresses the impugned conduct of the defendants.

158 Finally, given the relief that that plaintiffs seek and my conclusion that the Subsequent Form 484 was ineffective to transfer the plaintiffs’ shares in Privato to Jordan, Hong and Anna it will also be necessary to make orders that (a) the plaintiffs transfer their shares in Privato back to Jordan, Hong and Anna, and (b) the defendants take all necessary steps then to lodge a validly executed Form 484 with ASIC for those share transfers.

I.    Cross-Claim

159 Privato filed but ultimately did not press a cross-claim seeking an account, equitable damages or equitable compensation from the plaintiffs as cross-defendants with respect to allegedly large amounts of cash that the plaintiffs had taken from the Business in the period from 15 January 2024 to 23 March 2024 in contravention of their fiduciary duties to Privato or, alternatively, on the basis of unjust enrichment.

160 In closing submissions, counsel for the Defendants confirmed that he did not wish to be heard against an order that the cross-claim filed by Privato should be dismissed with costs.

J.    Disposition

161 Orders will be made that Jordan and Hong are to pay each of Amanda and Lily $100,000, together with pre-judgment interest from 15 January 2024. The defendants are to pay the plaintiffs’ costs of the proceeding, and those costs are to be determined on a lump sum basis. I see no reason why costs should not follow the event. The plaintiffs have been successful, and the defences advanced by the defendants have failed.

162 Further, orders will be made that (a) the plaintiffs transfer their shares in Privato back to Jordan, Hong and Anna, and (b) the defendants take all necessary steps then to lodge a validly executed Form 484 with ASIC for those share transfers.

163 Finally, orders will be made dismissing the cross-claim filed by Privato and providing that Privato is to pay the costs of the cross-defendants as taxed or agreed.

Associate:

Dated:    24 October 2025

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