Cheng v Guan [2016] NSWSC 969

Supreme Court New South Wales

Medium Neutral Citation: Cheng v Guan [2016] NSWSC 969 Hearing dates: 29 June 2016 Date of orders: 13 July 2016 Decision date: 13 July 2016 Jurisdiction: Common Law Before: Harrison AsJ Decision: The Court orders that:

(1) The appeal is dismissed.

(2) The decision of his Honour Magistrate Wilson dated 18 December 2015 is affirmed.

(3) The amended summons filed 29 February 2016 is dismissed.

(4) The plaintiff is to pay the defendant's costs on an ordinary basis as agreed or assessed. Catchwords: APPEAL – Local Court – whether payments made pursuant to loan – no error in reasons of Magistrate – appeal dismissed – no point of principle Legislation Cited: Local Court Act 2007 (NSW) Cases Cited: Acuthan v Coates (1986) 6 NSWLR 472; 24 A Crim R 304 Bradley v Matloob [2015] NSWCA 239; 72 MVR 194 Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; 53 NSWLR 153 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603; 264 ALR 15 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Stoker v Adecco Gemvale Constructions Pty Ltd [2004] NSWCA 449 Swain v Waverley Municipal Council [2005] HCA 4; 220 CLR 517 Tolson v Roads and Maritime Services [2014] NSWCA 161; 201 LGERA 367 Category: Principal judgment Parties: Hong Cheng (Plaintiff) Ping Guan (Defendant) Representation: Counsel: A Norrie (Plaintiff) C O'Neill (Defendant)

Solicitors: Diligence Lawyers & Migration Agents (Plaintiff) MurdochCheng Legal Practice (Defendant) File Number(s): 2016/11883 Publication restriction: Nil Decision under appeal Court or tribunal: Local Court, Downing Centre Jurisdiction: General Citation: Nil Date of Decision: 18 December 2015 Before: Wilson LCM File Number(s): 2015/60814

Judgment 1. HER HONOUR: This is an appeal from the decision of a Local Court Magistrate that involves the alleged non repayment of two loans. The Magistrate entered judgment in favour of the defendant. 2. By amended summons filed 29 February 2016 the plaintiff seeks firstly, that the appeal be upheld; secondly, the orders made on 18 December 2015 be set aside; and thirdly, an order that the proceedings be remitted to the Local Court for rehearing and determination by a different Magistrate in accordance with law. 3. The plaintiff is Hong Cheng, who was also the plaintiff in the Local Court proceedings. The defendant is Ping Guan, who was also the defendant in the Local Court proceedings.

The appeal 1. Section 39 of the Local Court Act 2007 (NSW) provides that a party who is dissatisfied with a judgment or order of the Local Court may appeal to the Supreme Court, but only on a question of law. 2. Section 41(1) of the Local Court Act provides that this Court may determine an appeal either (a) by varying the terms of the judgment or order; or (b) by setting aside the judgment or order; or (c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions; or (d) by dismissing the appeal. 3. In Swain v Waverley Municipal Council [2005] HCA 4 at [2]; 220 CLR 517 at 519, Gleeson CJ reiterated that in the common law system of civil justice, the trial process determines the issues between the parties. The system does not regard the trial as merely the first round in a contest destined to work its way through the judicial hierarchy until the litigants have exhausted either their resources or their possibilities of further appeal.

The pleading framework in the Local Court 1. By statement of claim ("S/C") filed 26 February 2015, the plaintiff brought proceedings against the defendant for recovery of the sum of $37,000 which she alleged was advanced to the defendant under two loan contracts. 2. So far as the first loan contract is concerned, the plaintiff pleaded that on 7 June 2014, she paid to the defendant the sum of $17,000 repayable on demand ("the first payment") (S/C [2]). As for the second loan contract, the plaintiff pleaded that on or about 18 September 2014, she paid to the defendant the sum of $20,000 repayable on or before 1 November 2014 ("the second payment") (S/C [3]). 3. The plaintiff pleaded that it was a condition of each loan that the defendant would pay interest of 10% per month on the balance remaining due to the plaintiff. The plaintiff sought interest at the rate of 10% per month or, in the alternative, if that rate was disallowed or reduced, such lower rate as the court deemed fit (S/C [4]). 4. By defence dated 23 March 2015, the defendant denied owing the plaintiff any money and said that the first payment of $17,000 was the plaintiff's investment in a foreign corporation and that, with respect to the alleged second payment, no money was given to her by the plaintiff on or about 18 September 2014.

Hearing in the Local Court 1. On 24 September 2015, Mr Bradford of counsel appeared for the plaintiff and Mr O'Neill of counsel appeared for the defendant before Magistrate Wilson ("the Magistrate"). 2. The hearing in the Local Court took place over a period of two days, being 24 September 2015 and 28 October 2015. The plaintiff relied upon her affidavit sworn 17 August 2015 and that of Baoshan Yan sworn 24 July 2015. The defendant relied upon her affidavit sworn 8 September 2015, the affidavit of Lanying Xiang sworn 8 September 2015 and the affidavit of Ana Zhoa sworn 8 September 2015. 1. The plaintiff, the defendant, Ms Xiang and Ms Yan gave evidence and were cross examined at the hearing. The defendant also relied upon the expert report of Steve Dubedat, a forensic document examiner, dated 12 June 2015. This report was tendered but Mr Dubedat was not cross examined.

The Magistrate's reasons 1. On 18 December 2015, The Magistrate gave written reasons for decision. His Honour correctly stated that the onus on the plaintiff was to prove her case on the balance of probabilities in relation to both alleged loan contracts. The Magistrate stated that the key issue in the proceedings was to decide firstly, what was the true character of the alleged two payments; and secondly, whether in fact the defendant ever received the second payment (J [5]). His Honour identified the issue so far as the alleged first payment of $17,000 was concerned was whether it was a loan and not an investment (J [14]). So far as the alleged second payment of $20,000 is concerned, the issues in dispute were firstly, whether this cash payment was actually made; and secondly, whether the payment was a loan and not an investment (J [21]). 2. The plaintiff alleged that both contracts were partly written and partly oral. The Magistrate dealt with the first payment and then the second payment, making findings in relation to each payment, and finally reached his conclusion.

The first payment 1. The defendant acknowledged that she had received the first payment of $17,000 in cash on 7 June 2014 but denied that the payment was a loan and alleged that the money was given to her to invest in a foreign company called Power8 (J [3]). 2. The plaintiff stated: "…I paid to her $17,000 in cash. In my presence the defendant signed the receipt written in Chinese. …" (Aff, [6]). 1. The receipt is dated 7 June 2014 and is written in Chinese characters ("the first receipt"). It translates as follows: "Receipt My name is Ping GUAN, now I received Seventeen Thousand Australian Dollars from Hong CHENG. This amount is meant to let me keep it for her temporarily." (Aff, Annexure B.) 1. The defendant submitted firstly, that the receipt did not record a loan; secondly, that the moneys were to be held temporarily; thirdly, no repayment method was recorded in the receipt; and finally, there was no mention of interest (J [9]). 2. If there had been an agreement between the parties that the defendant was to pay interest at a rate of 10% per month (120% per year) it would have to have been made orally as there is no mention of interest in the receipt. 3. In Ms Yan's affidavit (Ex 2 in the Local Court), her evidence is that the plaintiff introduced her to the defendant at a dinner at a Chinese restaurant in Burwood. Ms Yan stated: "… I heard Miss Cheng say to the defendant words to the effect "I won't invest in these companies but if you can guarantee a 10% per month return you can borrow money from me. I want to have a guaranteed return and the money has to be repaid within a few months. I don't want risk." After some further discussion the defendant said to Miss Cheng "Alright I will borrow from you $17,000 repayable on demand. The interest payable will be 10% per month paid when the money is repaid to you."" (Aff, [4]; J [10]). 1. This evidence indicates that the first payment of $17,000 was a loan and that there was an oral agreement between the parties that the defendant was to pay interest at the rate of 10% per month. However, in cross examination, Ms Yan could not recall the date on which she met the plaintiff and defendant (T12.34-37, 28/10/2015). In re-examination, Ms Yan confirmed she did not know the name of the restaurant (T15.26-27, 28/10/2015). 2. In her affidavit, the defendant set out a conversation she had had with the plaintiff on 7 June 2014 at the Red Chilli Sichuan Restaurant in Burwood. For ease of understanding, I have used "plaintiff" and "defendant" in place of the speaker's names. The defendant stated: "On 7 June 2014, the plaintiff and I met at Red Chilli Sichuan Restaurant in Burwood. At that time, we had a conversation in Mandarin with words to the effect of: Plaintiff: I can invest $17,000 into Power8. I will pay you cash now, can you help me set up the account? I won't transfer the funds – I have cash with me today. If you sign this loan receipt, I will give you the cash to open the account. The plaintiff then took out a piece of paper with words written in English for me to sign. Defendant: This is not a loan, it is your own investment. If you want to invest, then invest, if not, then don't invest. You will earn 8% per month with USD50,000. If you refer other friend to Power8, you will be able to earn a referral commission. Plaintiff: I am very interested in this investment but do not have sufficient cash to invest yet. Defendant: How about we invest in it together, you invest AUD17,000 to open the account in my name so we can get the 8% interest, and I will invest the rest. I will pay you your portion of the interest. However, I will not sign the loan receipt because it is not a loan and I do not understand English. Plaintiff: OK, but you cannot just take my money without signing anything in writing. Defendant: I will sign an acknowledgement in Chinese that I have received your $17,000. The plaintiff then wrote on a piece of paper in Chinese that I acknowledge receiving $17,000 from the plaintiff (the "Acknowledgement of Receipt") – this is referred to in Annexure A of the plaintiff's affidavit affirmed on 17 August 2015." (Aff, [14].) 1. The Magistrate referred to this paragraph in his reasons at [11], although he did not set it out in full, probably because his reasons for judgment were handwritten. In the defendant's version of the agreement there is no mention of interest. 2. The Magistrate then stated: "Under cross examination the plaintiff attempted to explain the exact details of the arrangement she made with the defendant and why such details were not contained within her affidavit (Exhibit 1). The plaintiff's evidence in this regard was most unhelpful and somewhat vague and evasive. It should also be noted that the defendant under cross examination did not impress me particularly with regard to the lack of documentation regarding the alleged investments made on behalf of the plaintiff." (J [12].) 1. The Magistrate commented that on the evidence before him, it was difficult to determine whether the first payment was a loan or an investment. The Magistrate stated: "… I must say that a large part of the evidence tends to support the proposition made by the defendant that it was in fact an investment, particularly with regard to the $1000.00 payment paid to the plaintiff by the defendant in September 2014." (J [13].) 1. The Magistrate's reasons must be read as a whole. Although not in chronological order, the Magistrate does summarise the significant bulk of the evidence when he says there was no doubt that many transactions took place, and that there were overseas trips as well as conveyancing transactions (J [22]). 2. So far as the first payment is concerned, his Honour concluded: "The onus on the plaintiff is to prove her case on the balance of probabilities that the payment of $17000 was a loan and not a investment. I do not consider that the plaintiff has made out her case to the requisite standard of proof and therefore her claim must fail." (J [14].)

The second payment 1. The plaintiff maintained that the sum of $20,000 was paid to the defendant in cash. The defendant denied ever receiving this sum of money (J [4]). 2. Annexed to the plaintiff's affidavit is an undated document ("the second receipt") that reads: "I, Hong CHENG hereby agree to lend $AUD 20,000 (twenty thousand Australian dollars) to Guan Ping on this day (put date). Guan Ping hereby agrees to repay this amount ($AUD $20,000) to Hong CHENG in full on or before (date) 01/11/2014. …" (Aff, Annexure E.) 1. This document was signed by the defendant. Unlike the first receipt, the second receipt was written in English. 2. The Magistrate observed that the second receipt is not witnessed nor does it mention interest. He also stated that the plaintiff had exhibited her bank statement which shows a withdrawal of $8,000 on 17 September 2014 and a further withdrawal of $3,600 on 18 September 2014 but pointed out that these sums clearly do not total $20,000. His Honour made a finding that there was no persuasive evidence that the money taken out of the bank account was in fact handed to the defendant (J [17]). 3. The Magistrate stated that again the plaintiff's evidence in chief did not support any claim for interest being made either orally or within the second receipt nor explain why the second receipt was in English rather than Chinese, given that the defendant denied that she could read English (J [18]). 4. The Magistrate once again made a finding that the plaintiff's and the defendant's oral evidence were totally conflicting in relation to the second payment. This time the Magistrate recorded that both parties were most unhelpful and unreliable in giving their evidence and it was very difficult for the Court to make findings of fact based on their evidence (J [19]). 5. Where the evidence of the plaintiff and defendant were at odds, the plaintiff submitted that the contemporaneous documentary evidence should be afforded greater weight. However, the Magistrate did not find the written documents helpful as he said: "… the documentary evidence in particular the two receipts are somewhat lacking as to any precision that could assist the court." (J [20].) 1. So far as the second receipt is concerned, the Magistrate stated that the plaintiff bears the onus of proof, firstly, that a cash payment of $20,000 was made; and secondly, that the payment was a loan and not an investment. The plaintiff relied solely on the second receipt. The Magistrate noted: "… that the defendant has not provided satisfactory documentary evidence which could be expected in such an arrangement. On that basis the plaintiff says that the only conclusion that can be reached is that the payment was a loan." (J [21].) 1. The Magistrate concluded in relation to the second receipt: "On the evidence it cannot be determined with any accuracy as to what exactly was intended by the parties. There was no doubt that many transactions took place, there were overseas trips and also conveyancing transactions. As to whether the payment was a loan or an investment or whether in fact the plaintiff provided the payment to the defendant cannot be determined on the evidence. The plaintiff's case for the second payment must also fail." (J [22] & [23].) 1. His Honour ordered the plaintiff to pay the defendant's costs as agreed or assessed. 2. I turn now to consider the grounds of appeal.

Grounds of appeal

Ground 1 – post contractual conduct 1. The first ground of appeal is whether the Magistrate erred by using conduct subsequent to the contracts, namely the $1,000 payment, to construe the nature of the contracts in circumstances where that subsequent conduct was not being used by the Magistrate as evidence probative of surrounding circumstances at the time of the contracts (J [13]). 2. On appeal, counsel for the plaintiff relied upon written submissions prepared by Ms Natalie Obrart of counsel who did not appear at the hearing. The submission in this Court is that it is not a permissible course to use subsequent conduct to construe a written contract in accordance with the objective theory of contract: see Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603; 264 ALR 15. Therefore, counsel for the plaintiff submitted, the use of the payment of $1,000 to determine whether the contract was a loan or an investment contract constitutes an error of law, particularly in light of the disregard by the Magistrate of the only contemporaneous written evidence of the contract being the first receipt. 3. This is a surprising submission given that the plaintiff's submission in reply in the Local Court (Ex 1 in this Court, at [7]) was in direct contradiction to that made in this Court. The plaintiff's written submission in reply in the Local Court was that post contractual conduct of this kind can and should, at least in the circumstances of this case, be taken into account in determining the character of the first payment: see Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; 53 NSWLR 153. 4. Hence in the Local Court the plaintiff urged the Magistrate to take the $1,000 payment into account in construing the alleged loan yet on appeal submitted that if the Magistrate did so, it constituted an error of law. In any event, the Magistrate did not take the payment of $1,000 into account in construing the loan contract, rather he made a finding that the payment of $1,000 was evidence supporting the finding that the first payment was an investment, not a loan. There is no error of law and this ground of appeal fails.

Grounds 2 and 3 – Whether the Magistrate provided sufficient reasons 1. The second and third grounds of appeal are whether the Magistrate erred in law firstly, by failing to give adequate reasons identifying the findings of fact or the parts of the evidence which formed the basis for the finding that the first and second payments were investments and not loans (J [13]); and secondly, by failing to give adequate reasons as to why the plaintiff had not met the requisite burden of proof (J [14]). Counsel for the plaintiff submitted that the Magistrate failed to give proper reasons outlining the parts of the evidence he took into consideration, aside from the $1,000 payment: see Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 278-279 ("Soulemezis").

The law 1. A Magistrate is obliged to provide adequate reasons and to not do so constitutes an error of law: see Stoker v Adecco Gemvale Constructions Pty Ltd [2004] NSWCA 449 at [41] per Santow JA (Mason P and Sheller JA agreeing). 2. There are many decisions on the topic of the judicial obligation to provide reasons. I need only mention a few. 3. In Soulemezis, McHugh J at 281 stated: "In a case where a right of appeal is given only in respect of a question of law, different considerations apply from the case where there is a full appeal. An ultimate finding of fact, which is not subject to appeal and which is in no way dependent upon the application of a legal standard, can be treated less elaborately than an issue involving a question of mixed fact and law. If no right of appeal is given against findings of fact, a failure to state the basis of even a crucial finding of fact, if it involves no legal standard, will only constitute an error of law if the failure can be characterised as a breach of the principle that justice must be seen to be done. If, for example, the only issue before a court is whether the plaintiff sustained injury by falling over, a simple finding that he fell or sustained injury would be enough if the decision simply turned on the plaintiff's credibility. But, if, in addition to the issue of credibility, other matters were relied on as going to the probability or improbability of the plaintiff's case, such a simple finding would not be enough." 1. Finally, in Bradley v Matloob [2015] NSWCA 239; 72 MVR 194 Leeming JA stated: "[17] It is well established that where there is a real conflict in the evidence, it is necessary to "engage with, or grapple or wrestle with the cases presented by each party": see for example Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [116], Coote v Kelly [2013] NSWCA 357 at [39]-[52] and Keith v Gal [2013] NSWCA 339 at [109]-[119]. As was said in Redbro Investments Pty Ltd v Ceva Logistics (Australia) Pty Ltd [2015] NSWCA 73 at [53], the point of the metaphor of "grappling" is that it is not sufficient to set out the conflicting evidence and conclude, without analysis, that the judge prefers one body to another: Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187; 66 NSWLR 186 at [28]. There are two overlapping reasons for this. The first appears from the often quoted statement by McColl JA in Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [66]: 'Where it is apparent from a judgment that no analysis was made of evidence competing with evidence apparently accepted and no explanation is given in the judgment for rejecting it, it is apparent that the process of fact finding miscarried.' [18] The second emerges from the opening paragraph of the joint reasons of Mason P, Ipp and Tobias JJA in Whalan v Kogarah Municipal Council [2007] NSWCA 5 at [1]: '[J]udges' duties to give reasons are ... designed to ensure that a judge wrestles adequately with the issues in the case, to enable appellate accountability and to provide basic fairness to the losing party.'" 1. Counsel for the defendant submitted that this Court needs to approach the Magistrate's decision in the context of his Honour providing reasons for judgment in a busy Magistrate's Court. Therefore, the focus needs to be upon the substance of what the Magistrate said and did. Any other approach impose an intolerable burden on Magistrates: see Acuthan v Coates (1986) 6 NSWLR 472 at 479; 24 A Crim R 304 at 310 per Kirby P at 479. I agree and, taking these circumstances into account and reading the judgment as a whole, it has to be determined whether the Magistrate engaged or grappled or wrestled with the cases presented by each party so that the losing party can understand why she lost. 1. The plaintiff submitted that the Magistrate did not sufficiently outline the parts of the "large part of the evidence" that he relied upon in finding that the first payment was a payment for an investment and not a loan and this amounts to an error of law. According to counsel for the plaintiff, the large part of the evidence which the Magistrate had regard to may or may not have included [14] of the defendant's affidavit as referred to by the Magistrate (J [11]) and may or may not have included other evidence, including part of the defendant's oral evidence and the contemporaneous receipt for payment which was the only contemporaneous document of the transaction. 2. Counsel for the defendant submitted that the reasons provided by the Magistrate, while brief, reflect the evidence presented and expose the basis upon which that evidence was relied upon by the Magistrate to come to his conclusion. The defendant submitted that the Magistrate found it difficult to determine whether the first payment was a loan or an investment and that the Magistrate made no finding that the payment was in fact an investment, just simply that he was not satisfied it was a loan. 3. The defendant further says that in arriving at his finding, the Magistrate referred to a significant body of evidence, the plaintiff's affidavit, the first receipt and its terms, the plaintiff's corroborating witness and the defendant's affidavit. 4. Contrary to the plaintiff's submissions, the Magistrate referred to and dealt with the issue in dispute, namely, whether the money was a loan or an investment opportunity (J [14]). His Honour referred to the first receipt which he reproduces in his judgment (J [8]) and then extracts the evidence of Ms Yan who covers the alleged conversation between the plaintiff and defendant as to interest, which was not mentioned in the receipt. Ms Yan's evidence is not entirely helpful to the plaintiff as she says the parties were talking about an investment. Hence, the Magistrate was not able to explain the exact details of the arrangements the plaintiff made with the defendant and why such details were not contained within the plaintiff's affidavit. His Honour found the plaintiff's evidence most unhelpful and somewhat vague and evasive. In these circumstances it is difficult to make findings of fact to support the plaintiff's case. 5. The plaintiff further submitted that the Magistrate did not give sufficient reasons for his finding that the plaintiff had not discharged her onus of proof. The issues in dispute were of narrow compass. In my view, the Magistrate provided sufficient reasons. 6. The defendant submitted that the plaintiff bore the burden of proving that the payment was a loan and that was not in dispute. In the context of a partly oral and partly written contract case, where the plaintiff's oral evidence was not accepted, the defendant says it was clear both that the plaintiff's case would fail and why it was that the Magistrate did not prefer the plaintiff's oral evidence over and above the uncontroverted facts. 7. The Magistrate expressed in his reasoning what the conflicts were in the plaintiff's and defendant's evidence both in relation to the meeting where the moneys were discussed and the conflict in the oral evidence about interest and whether the payment was made. 8. The plaintiff had to prove her case that the $20,000 was a loan. Because of the conflict in the evidence the Magistrate could not decide what was intended by the parties and the plaintiff did not discharge her onus of proof. In my view the Magistrate gave sufficient reasons. This ground of appeal fails.

Other grounds: introduction 1. Before I deal with the remaining grounds of appeal, it is appropriate that I set out a passage from Tolson v Roads and Maritime Services [2014] NSWCA 161; 201 LGERA 367 where Basten JA (Beazley P and Preston CJ of LEC agreeing) referred to challenges on appeal to the fact finding exercise undertaken by a trial judge. 2. Basten JA stated: "53 These challenges were directed to the fact-finding exercise undertaken by the trial judge. In order to demonstrate that they involved an erroneous decision on a question of law, the appellants were confronted with the authority of this Court that a finding of fact which could be characterised as "perverse" or "illogical" does not raise a point of law: Azzopardi v Tasman UEB Industries Pty Ltd (1985) 4 NSWLR 139 at 156-157 (Glass JA, Samuels JA agreeing). However, as the Court has subsequently noted, an erroneous finding of fact may demonstrate a basic misunderstanding of the case brought by the claimant, so as to demonstrate that the tribunal has failed to address and determine the issues before it and has thus failed to exercise its jurisdiction: State Super SAS Trustee Corporation v Cornes [2013] NSWCA 257 at [11]-[12]. It is therefore necessary to consider whether an error of this kind has been established in the present case."

Ground 4 – documentary evidence 1. The fourth ground of appeal is whether the Magistrate erred in law by disregarding relevant evidence being the receipt for payment which was the only contemporaneous evidence and the only documentary evidence (J [14] and [17]). This ground of appeal is a challenge to the Magistrate's fact finding exercise. 2. The plaintiff submitted that the Magistrate made no reference to the first receipt for the first payment in his findings and that the first receipt was the only contemporaneous document relating to the first payment. 3. As previously stated, His Honour reproduced the first receipt (J [8]) and summarised the defendant's submissions that the document records no payment method, no date for repayment and no mention of interest (J[9]). His Honour then referred to Ms Yan's evidence, which the plaintiff submitted supported her claim that the plaintiff and defendant agreed to interest of 10% per month but in relation to an investment, followed by the defendant's evidence of a conversation with the plaintiff concerning whether the money was a loan or an investment opportunity and finally the plaintiff's unhelpful, somewhat vague and evasive oral evidence in which the plaintiff attempted to supplement the deficiencies in the document. In my view, his Honour did not need to repeat what was contained in the first receipt but rather, in light of what was stated there, needed to look to the surrounding facts and circumstances to construe the document. That is precisely what the Magistrate did. There is no error of law and this ground of appeal fails.

Ground 5 – expert evidence 1. The fifth ground of appeal is whether the Magistrate erred in law by not having regard to relevant evidence being the undisputed expert forensic evidence confirming that the defendant signed the second receipt. At trial a report of an expert forensic document examiner, Mr Dubedat, who had been retained by the defendant, had been tendered. Mr Dubedat concluded: "… that the "Guan Ping" signature on document Q1 is very probably a genuine signature of the writer of the specimen "Guan Ping" signatures on or reproduced on documents S1 to S10. This opinion is qualified due to; (1) the reproductive nature of a number of specimen signatures, and; (2) not being able to examine the questioned document and signature in a laboratory environment with further equipment." (CB 191, [14].) 1. The defendant's evidence at trial was evasive on this topic but she did concede that the signature appearing in Chinese characters on the second receipt was in fact hers (T36.36-50; T37.1-11, 28/10/2015). That meant that the issue of whether the defendant signed the second receipt was no longer in dispute. In these circumstances there was no need for the Magistrate to refer to the expert's report. This ground of appeal fails.

Ground 6 – irrelevant consideration? 1. The sixth ground of appeal is whether the Magistrate erred in law by relying upon an irrelevant consideration being that the second receipt was not witnessed, where it was not in dispute that it was signed by the defendant (J [16]). The fact that the second receipt was not witnessed was merely one of the surrounding circumstances. It is relevant to the fact finding process as to the construction of the document. 2. The plaintiff submitted that in respect of the second payment, there were three contemporaneous documents, namely the two bank withdrawal records and the second receipt. There was also the report of Mr Dubedat who found that on balance the defendant's signature was on the second receipt. According to the plaintiff, the Magistrate failed to refer to the expert evidence linking the defendant to the receipt and instead relied upon the fact that the receipt was not witnessed and did not refer to interest. The plaintiff says that if the signature is shown by the evidence to be that of the defendant then considerations of whether or not the signature is witnessed or mentions interest become irrelevant. Further, the plaintiff submitted that the Magistrate's failure to properly deal with the most significant piece of documentary evidence being the second receipt signed by the defendant constituted an error of law. 3. The defendant says that this ground of appeal appears to be based on a misapprehension that interest was not a relevant consideration to the plaintiff's case. As the defendant has pointed out, the plaintiff expressly pleaded that the second loan agreement contained an interest term of 10% per month. Hence, this was a fundamental part of her case in relation to the second loan. That meant that the plaintiff was locked into a case where she needed to supplement the second loan document with oral evidence. 4. The plaintiff's submission is misguided. The Magistrate referred to the fact that the two bank withdrawals did not total $20,000, the alleged amount of the second loan. The Magistrate expressly referred to the second receipt (J [15]) and then made a series of obvious observations about the contradictory nature of the plaintiff's oral evidence as compared with the second receipt. His Honour then arrived at his finding that the two bank withdrawals did not total $20,000, the alleged amount of the loan (J [17]). There is no error of law. This ground of appeal fails.

Ground 7 – burden of proof 1. The seventh and final ground of appeal is whether the Magistrate misdirected himself in law as to the nature of the plaintiff's burden, erroneously finding that in order to discharge her burden of proof the plaintiff was required to prove her case with accuracy (J [22]). Counsel for the plaintiff relied on his written submissions and did not make oral submissions. The plaintiff submitted in writing that the Magistrate found that the intention of the parties could not be determined with any accuracy (J [22]). So far as this ground is concerned, counsel for the plaintiff submitted that it appeared that the Magistrate applied this standard of proof to the plaintiff where the plaintiff was only required to prove her case on the balance of probabilities. 2. The defendant submitted that given the failure to substantiate that the money the subject of the second loan was even transferred, the Magistrate could not find the intention of the parties with any accuracy. The defendant says that there was no accuracy or certainty regarding the terms of the second loan and the payment of moneys pursuant to the terms of the second loan. The defendant argued that the Magistrate correctly made a finding that the plaintiff had not proved her case and this was made in light of the plaintiff's partially oral and partially written case, there is no error of law and accordingly this ground of appeal must fail. 3. The Magistrate did not misdirect himself as to the nature of the plaintiff's burden of proof. The onus was on the plaintiff to prove that the loan was an investment. She did not discharge her onus of proof on the balance of probabilities that the payment of $20,000 was a loan. The Magistrate could not be satisfied that it was a loan because he could not determine with any accuracy what exactly was intended by the parties. The Magistrate considered that there was no doubt that many transactions had taken place in the past and there were overseas trips as well as conveyancing transactions. However, whether the payment was a loan or an investment or whether in fact the plaintiff provided the payment to the defendant could not be determined by the Magistrate on the evidence before him. As stated, the Magistrate decided that the plaintiff did not discharge her onus of proof and satisfy him that on the balance of probabilities the arrangement was a loan. There is no error of law and this ground of appeal fails. 4. The result is that the appeal is dismissed. The decision of his Honour Magistrate Wilson dated 18 December 2015 is affirmed. The amended summons filed 29 February 2016 is dismissed. 5. Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendant's costs on an ordinary basis as agreed or assessed.

The Court orders that: (1) The appeal is dismissed. (2) The decision of his Honour Magistrate Wilson dated 18 December 2015 is affirmed. (3) The amended summons filed 29 February 2016 is dismissed. (4) The plaintiff is to pay the defendant's costs on an ordinary basis as agreed or assessed.

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