Yin v Li; Li v Jiang [2022] NSWSC 1512 (7 November 2022)

Yin v Li; Li v Jiang [2022] NSWSC 1512 (7 November 2022)

Intro: This is a case where the vendor, Mr. Li and the purchaser entered into an oral agreement for the sale and purchase of an apartment.

Mr. Li then disputed the purchase price that was registered in the transfer of the Property to Ms. Jiang, the purchaser. He alleges that the purchase price was not the true price they agreed on and that his signature was forged.

Facts:

Ms. Kehui Yin is the plaintiff in the 2018 proceeding and the second defendant in the 2020 proceeding. Mr. Tao Li is the defendant in the 2018 proceeding and the plaintiff and cross-defendant in the 2020 proceeding. Ms. Ruochen Jiang (also known as Kate Jiang) is the first defendant and cross-claimant in the 2020 proceeding.

Both proceedings arise out of an oral agreement made in about October 2015 for the sale by Mr. Li to Ms. Jiang of an apartment at 381 Castlereagh St, Haymarket, New South Wales (the Property).

In the 2018 proceeding, Ms. Yin, the mother of Ms. Jiang, seeks to recover a loan of $95,000 that she claims to have made to Mr. Li on 29 February 2016 for the purpose of putting Mr. Li in sufficient funds to facilitate the settlement of the sale of the Property to Ms. Jiang, in circumstances where the amount required to discharge Mr. Li’s mortgage exceeded the amount that Ms. Jiang contends she was required to pay on settlement.

Ms. Yin also claims pre-judgment interest on the sum of $95,000 pursuant to s 100 of the Civil Procedure Act 2005 (NSW). Mr. Li denies that the payment of $95,000 was a loan.

There is a dispute about the purchase price agreed upon between Mr. Li and Ms. Jiang for the Property. In the 2020 proceeding, Mr. Li now contends that a price of $1,500,000 was agreed upon and claims that $685,000 of that price remains outstanding.

The principal relief sought by Mr. Li is a declaration that he has an equitable charge over the Property to secure payment of that outstanding amount. Ms. Jiang contends that the purchase price was $1,070,000 and claims she has paid the whole sum. Ms. Jiang cross-claims to recover a loan of $159,700 that she claims to have made to Mr. Li in December 2015, together with interest at a rate said to have been agreed upon or pursuant to s 100 of the Civil Procedure Act.

For the reasons that follow, Ms. Yin succeeds on her claim in the 2018 proceeding, Mr. Li fails on his claims in the 2020 proceeding and Ms. Jiang succeeds on her cross-claim in the 2020 proceeding.

Issue:

1) Whether or not the purchase price of $1,500,000 was agreed upon by Mr. Li and Ms. Jiang

2) Whether or not Ms. Jiang forged Mr. Li’s signature.

Ruling:

In closing submissions, counsel for Mr. Li suggested that, if the Court did not find that the agreed purchase price for the Property was $1,500,000, it would be open to the Court to find that the agreed price was some unspecified amount that was more than $1,070,000. For the reasons explained above, I find that Mr. Li agreed to sell and Ms. Jiang agreed to purchase the Property for a fair market value price during their conversation in early October 2015, the market value of the Property was subsequently determined by DK Property Professionals to be $1,070,000, that Mr. Li and Ms. Jiang had a conversation on or shortly after 29 October 2015 in which Mr. Li confirmed his acceptance of the valuation amount of $1,070,000 as the price and that Mr. Li then signed the Transfer in about mid-November 2015 stipulating the price of $1,070,000.

The disputed signature together with the seventeen specimen signatures provided to Ms. Holt was set out in Annexure F to her report. The considerable variation between the specimen signatures identified by Ms. Holt is readily apparent to my inexpert eye.

The two differences in the initial part of the disputed signature identified by Ms. Holt are also visible. To my untrained eye, those two differences appear to be minor having regard to the many variations within the range of specimen signatures. Neither the two differences identified by Ms. Holt nor any other part of the disputed signature satisfies me that, contrary to Ms. Holt’s opinion, the disputed signature was not made by Mr. Li on the balance of probabilities. That is all the more so taking into account the gravity of Mr. Li’s allegation that Ms. Jiang forged his signature on the Transfer.

Mr. Li’s evidence that he agreed to a price of $1,500,000 for the transfer of the Property to Ms. Jiang has been rejected. I have accepted Ms. Jiang’s evidence that they agreed that she would purchase the Property at a fair market valuation price. There is nothing inherently implausible in Mr. Li signing the Transfer stating the price of $1,070,000, being the market value of the Property as determined by the DK Property Professionals valuation of the Property. On the contrary, it is inherently plausible that Mr. Li did sign the Transfer. For those reasons, and for the reasons above, I reject Mr. Li’s denial that the signature of the transferor on the Transfer is his signature.

Ms. Jiang gave evidence that she knew what Mr. Li’s signature looked like in mid-November 2015. However, that does not support a finding that she was capable of reproducing his signature, much less that she did so by forging his signature on the Transfer. As I put to counsel for Mr. Li in closing submissions, it is highly implausible that Ms. Jiang would have forged Mr. Li’s signature in order to procure a transfer of the Property to herself at market value. That would have been implausible even if I had found that the orally agreed price was $1,500,000. Ms. Jiang could have readily walked away from any such oral agreement had she wished to do so after receiving the DK Property Professionals valuation report. An oral agreement, with no acts of part performance as of mid-November 2015, would not have been enforceable by Mr. Li.

Conclusion and orders

On the basis of my findings immediately above, the Court will enter judgment for the plaintiff against the defendant in the 2018 proceeding in the sum of $95,000 plus interest pursuant to s 100 of the Civil Procedure Act in respect of the period from 7 November 2018 to the date of judgment.

I have found that the agreed purchase price for the Property was $1,070,000, being the amount of the DK Property Professionals valuation. I have found that Ms. Jiang has paid the whole of the purchase price of the Property to Mr. Li. Mr. Li’s claim in the 2020 proceeding for a declaration that he has an equitable charge over the Property to give effect to a vendor’s lien securing payment of unpaid purchase money fails.

Counsel for Mr. Li accepted that, if the Court did not find that the oral agreement between Mr. Li and Ms. Jiang was for a sale of the Property for $1,500,000 (or at least something more than $1,070,000), then Mr. Li could not succeed in his claims of unconscionability and estoppel. That is because those claims were founded on Mr. Li’s allegation that the purchase price was $1,500,000, that Ms. Jiang made representations to him to that effect, and that she acted unconscionably in placing before him for signature the Transfer specifying a price of $1,070,000. The unconscionability and estoppel claims fail as a consequence of my findings of fact set out above and Mr. Li is not entitled to any declaration of constructive trust or equitable compensation.

I have found that the $95,000 payment made by Ms. Yin to Mr. Li on 29 February 2016 was not part of the purchase price payable by Ms. Jiang for the Property. Mr. Li is not entitled to the declaration sought in the 2020 proceeding that the $95,000 payment was part payment of the purchase price for the Property.