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Goo v Sim [2022] NSWSC 420
"That money's for the business, not for you!"
___
If you'd like to contact me my please look for James d'Apice or Coffee and a Case Note on your favourite social media spot - I should pop up right away!
___
Ps claimed they paid $160K cash to D in connection with an online payment business: [3]
D said the $110K was appropriately spent on business expenses and D’s salary, and the $50K was for some units in a unit trust: [5]
The parties’ dealings were informal: a lack of documents, cash only payments, few bank records etc: [6]
One of the Ps facilitated currency exchanges and money transfers between Australia and Korea: [12]
A plan was hatched to expand that business to include online payments, with that work to be done by D: [19], [20], [32]
There was heavily contested evidence about the dealings before the venture kicked off: [34] - [45]
D gave the Ps advice on the Korean requirements for the venture, advising around 100 million Korean Won (~AUD$100K) would be needed: [46] - [49], [50], [53]
D was given $109K in cash from one of the P’s: [61]
On collection of the funds the D signed a “loan agreement” which they understood would later be destroyed: [64], [65], [67]
The funds were transferred to the Korean entity under D’s control, which was created to operate the venture: [69] - [72]
One of the Ps said they paid a further $50K from their safe to D to, the relevant P said, finish the venture: [80]
D denied receiving the $50K payment on that basis: [83], [84]
The venture never traded: [115], [116]
The Ps said D had breached various duties and sought the return of the $160K: [125], [127]
The Court found purpose of the payment of the $110K from the Ps to D was for the venture, and that D accepted the funds on behalf of the venture: [169], [170]
The Court found some, but not all, of the funds were used by D for the venture. Other funds were used for their own benefit e.g. to pay off personal credit cards: [191], [194]
No fiduciary obligations arose between the parties. The Ps had no special vulnerability giving rise to any: [201]
The Court considered no purposive Quistclose trust arose because the evidence showed the parties intended for the $110K to become part of the working capital of the Korean venture: [225]
Crucially, the Ps did not allege that the recipient of the $110K, the Korean entity, owed any obligations to repay any money: [228]
The evidence did not suggest D had stolen the money, meaning a Black v Freedman trust (where a third party who takes the benefit of stolen money must repay it) does not arise: [258]
Further, the D was not obliged to repay the $50K sum. This payment was found to be consideration for D transferring their units in a unit trust (which was done), not a payment made for the venture: [286]
The Ps’ claim was dismissed: [291]
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By James d'Apice
5
22 ratings
"That money's for the business, not for you!"
___
If you'd like to contact me my please look for James d'Apice or Coffee and a Case Note on your favourite social media spot - I should pop up right away!
___
Ps claimed they paid $160K cash to D in connection with an online payment business: [3]
D said the $110K was appropriately spent on business expenses and D’s salary, and the $50K was for some units in a unit trust: [5]
The parties’ dealings were informal: a lack of documents, cash only payments, few bank records etc: [6]
One of the Ps facilitated currency exchanges and money transfers between Australia and Korea: [12]
A plan was hatched to expand that business to include online payments, with that work to be done by D: [19], [20], [32]
There was heavily contested evidence about the dealings before the venture kicked off: [34] - [45]
D gave the Ps advice on the Korean requirements for the venture, advising around 100 million Korean Won (~AUD$100K) would be needed: [46] - [49], [50], [53]
D was given $109K in cash from one of the P’s: [61]
On collection of the funds the D signed a “loan agreement” which they understood would later be destroyed: [64], [65], [67]
The funds were transferred to the Korean entity under D’s control, which was created to operate the venture: [69] - [72]
One of the Ps said they paid a further $50K from their safe to D to, the relevant P said, finish the venture: [80]
D denied receiving the $50K payment on that basis: [83], [84]
The venture never traded: [115], [116]
The Ps said D had breached various duties and sought the return of the $160K: [125], [127]
The Court found purpose of the payment of the $110K from the Ps to D was for the venture, and that D accepted the funds on behalf of the venture: [169], [170]
The Court found some, but not all, of the funds were used by D for the venture. Other funds were used for their own benefit e.g. to pay off personal credit cards: [191], [194]
No fiduciary obligations arose between the parties. The Ps had no special vulnerability giving rise to any: [201]
The Court considered no purposive Quistclose trust arose because the evidence showed the parties intended for the $110K to become part of the working capital of the Korean venture: [225]
Crucially, the Ps did not allege that the recipient of the $110K, the Korean entity, owed any obligations to repay any money: [228]
The evidence did not suggest D had stolen the money, meaning a Black v Freedman trust (where a third party who takes the benefit of stolen money must repay it) does not arise: [258]
Further, the D was not obliged to repay the $50K sum. This payment was found to be consideration for D transferring their units in a unit trust (which was done), not a payment made for the venture: [286]
The Ps’ claim was dismissed: [291]
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