IN THE SUPREME COURT OF VICTORIA	Not Restricted	
AT MELBOURNE
Common Law Division
Property List
S ECI 2020 04101

ZHILONG YANG & ANOR
(according to the Schedule attached)	Plaintiff	
		
v  		
		
JUN YUE & ORS
(according to the Schedule attached)	Defendant	

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JUDICIAL REGISTRAR:	Irving JR	
WHERE HELD:	Melbourne	
DATE OF HEARING:	15 February 2021	
DATE OF RULING:	10 March 2021	
CASE MAY BE CITED AS:	Yang & Anor v Yue & Ors	
MEDIUM NEUTRAL CITATION:	[2021] VSC 102	

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PRACTICE AND PROCEDURE – Application for summary judgment – Plaintiffs seek summary judgment on claims relating to the First and Second Defendants’ properties – Where agreement documented in a foreign language and subject to different interpretations – Where meaning of terms of agreement a key issue in dispute – Whether a full hearing is appropriate – Civil Procedure Act 2010 (Vic), ss 61, 63 and 64 – Silver Chef Rentals Pty Ltd v Makong Australia Pty Ltd [2019] VSC 703 – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158; (2013) 42 VR 27 – Hausman v Abigroup Contractors Pty Ltd (2009) 29 VR 213.  

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiffs	Mr L Magowan	Lin Legal & Associates	
			
For the First to Fourth Defendant	Mr M Singh, solicitor		
			
For the Fifth Defendant			

JUDICIAL REGISTRAR:
Introduction
1	On 19 November 2020 Mr Yang and Ms Zhang (‘the Plaintiffs’) applied for summary judgment pursuant to s 63 of the Civil Procedure Act 2010 (Vic).  The Plaintiffs’ application is opposed by Mr Yue and Ms Hu (‘the First and Second Defendants’), Mr Qiaoxi Yu (‘the Third Defendant‘) and Jin Xin Australia Pty Ltd (‘the Fourth Defendant‘).  The Third Defendant is the son of the First and Second Defendants.  The Fourth Defendant is a company controlled by the First and Second Defendants that holds their hotel interests.
2	The underlying dispute between the parties, explained in more detail below, involves the status of caveats lodged by the Plaintiffs over property owned by the First and Second Defendants.  The Plaintiffs claimed a caveatable interest in those properties after the First and Second Defendants did not repay sums of money provided to them by the Plaintiffs.  The Third and Fourth Defendants guaranteed the First and Second Defendants’ obligation to repay the money to the Plaintiffs.  
3	For the reasons outlined below, I have decided to dismiss the Plaintiffs’ summary judgment application.
Material relied upon by the parties
4	In their summary judgment application the Plaintiffs rely upon:
(a)	the amended summons dated 19 November 2020;
(b)	the affidavit of Zhilong Yang affirmed 28 October 2020;
(c)	the further affidavit of Zhilong Yang affirmed 11 February 2021;
(d)	the Plaintiffs’ submissions dated 29 October 2020; and
(e)	the Plaintiffs’ submissions dated 5 February 2021.  
5	In opposition to the Plaintiffs’ summary judgment application the First and Second Defendants and their guarantors rely upon:
(a)	the affidavit of Jun Yue affirmed 21 December 2020; and
(b)	the outline of First, Second, Third and Fourth Defendants’ submissions dated 21 December 2020.
Background
6	The Plaintiffs say that between 2010 and 2013 they provided the First and Second Defendants with funds which the First and Second Defendants used to invest in Victorian real property and one or more Victorian hotel businesses that are operated by the Fourth Defendant.  The Plaintiffs say that, while the First and Second Defendants made some repayments during that period, by the end of December 2012, the First and Second Defendants still owed the Plaintiffs $600,000.
7	According to the Plaintiffs, in December 2012 they met with the First and Second Defendants at the First and Second Defendants’ hotel in East Melbourne.  The Plaintiffs say that at that meeting there was discussion in Chinese about when the First and Second Defendants would repay the Plaintiffs.  The First Defendant offered to transfer 50% of the shares in the Fourth Defendant to the Plaintiffs on the basis that the Plaintiffs would pay a service fee of $100,000 and the balance of $500,000 would be a used as a ‘guarantee fund’ to ensure that the Plaintiffs returned the shares to the First and Second Defendants once they settled in Australia.
8	On 15 March 2013, the Plaintiffs entered into a written agreement with the First and Second Defendants broadly reflecting the oral agreement reached in December 2012.  The agreement was documented in the Chinese language.  Under that agreement the Plaintiffs agreed to pay a $100,000 service fee to accept a temporary transfer of 50% of the shares in the Fourth Defendant.  The Plaintiffs were to re-transfer the shares to the First and Second Defendants within 60 days of the Plaintiffs obtaining Australian permanent residency visas.  
9	The Plaintiffs were granted permanent residency visas in around May 2016.  
10	The Plaintiffs say that around May 2016 they again met with the First and Second Defendants at the East Melbourne hotel to discuss when they would be repaid.  The Plaintiffs say that at that meeting the First Defendant indicated that he and his wife intended to sell their hotel interests to repay the Plaintiffs but that they needed time to conduct the sale.  The Plaintiffs say that at this meeting the First and Second Defendants offered their four Victorian properties as security for the loan.
11	On 31 May 2016 the Plaintiffs and the First and Second Defendants signed a Loan Repayment Agreement.  This agreement was also documented in the Chinese language.  By this agreement the parties agreed to extend the date for the First and Second Defendants to repay the $500,000 (plus interest) to 31 May 2018.  In return the First and Second Defendants offered their ‘assets and equities’ as security and the Fourth Defendant guaranteed the First and Second Defendants’ repayment of the loan.  
12	On 9 June 2017 the Second Plaintiff re-transferred her 50% shareholding in the Fourth Defendant to the Second Defendant.  
13	In May 2018 the Plaintiffs again met the First and Second Defendants at the East Melbourne hotel.  They discussed, again in Chinese, when the First and Second Defendant would repay the Plaintiffs.  According to the Plaintiffs, at this meeting the First Defendant reiterated his intention to sell the hotels to repay the loan and interest, requesting more time to effect the sale due to a fall in the market.  The Plaintiffs requested that the Third Defendant guarantee the First and Second Defendants’ loan.
14	On 31 May 2018 the Plaintiffs and the First to Third Defendants signed a further Repayment Agreement.  This agreement was also documented in the Chinese language.  Under this agreement the date for repayment of the loan was extended to 31 May 2019, the First and Second Defendants continued to offer their assets as security for the loan and the Third and Fourth Defendants were named as guarantors.  
15	Each of the 2013, 2016 and 2018 written agreements was documented in the Chinese language.  In the written agreements the First and Second Defendants are referred to as Party A and the Plaintiffs as Party B.  
16	For the purposes of the summary judgment application the Plaintiffs placed into evidence each agreement in the original Chinese with English translations undertaken and certified by a NAATI accredited translator.  The First and Second Defendants also placed into evidence the 2018 agreement in both the original Chinese and in English, translated by a different certified NAATI accredited translator.
17	It is common ground between the parties that the 2018 agreement superseded the agreement of 31 May 2016 which in turn superseded the agreement of 15 March 2013.  For the purpose of the summary judgment application, argument centred on the effect of clauses 8 and 9 of the 2018 agreement.  
18	The Plaintiffs’ translation of those clauses is as follows:
Eight.  Any dispute arising out of this agreement is subject to the jurisdiction of the Chinese courts where Party B is located, and is to be dealt with by Chinese Laws and regulations.
Nine.  All parties confirm that for the convenience to claim right or enforcement effect, Party B can issue proceedings or apply to the local court of where Jin Xin Australia Pty Ltd is located, when it is permitted by the proceeding laws of Jin Xin Australia Pty Ltd, to acknowledge and enforce the judgement (sic) made by the Chinese court stated in item Eight, to be dealt with by Chinese Laws and regulations.
19	The First to Fourth Defendants’ translation of those clauses is as follows:
Clause 8
Any dispute arising from this agreement should be dealt with by a law court of China where Party B is located in accordance with Chinese Laws.
Clause 9
At the same time, all parties agree that, for convenience and better enforcement outcome, lawsuits may be submitted to a local court of the location of JIN XIN AUSTRALIA PTY LTD or permits may be applied for from a local court near the location of JIN XIN AUSTRALIA PTY LTD to enforce the decision or decisions made by a Chinese court as mentioned in Clause 8.  Chinese Law should apply in these circumstances.
20	Around May 2019 the Plaintiffs again met the First and Second Defendants at the East Melbourne hotel.  The Plaintiffs say that at this meeting the First Defendant indicated that the hotels remained unsold and the market poor.  The First Defendant reiterated that the Plaintiffs’ loan was secured against the First and Second Defendants’ properties.  The First Plaintiff says that he told the First and Second Defendant that unless they sped up the selling process, the First Plaintiff would take steps to sell the First and Second Defendants’ properties.
21	On 24 September 2020 the First Plaintiff spoke to the First Defendant in the Chinese language by telephone.  In that conversation the First Plaintiff says that he told the First Defendant that he knew the First Defendant had sold one of his hotels.  According to the First Plaintiff, the First Defendant complained of financial difficulties but offered to transfer to the Plaintiffs, on around 9 October 2020, one of his three properties, free of encumbrances, in lieu of the loan repayment.
22	On 26 September 2020 the Plaintiffs instructed their solicitor to lodge caveats over the First and Second Defendants’ properties.  
23	On 20 October 2020 the Victorian Registrar of Titles (‘the Registrar’) gave the Plaintiffs’ notice of the pending land transfer of one of the First and Second Defendants’ properties.  
24	As a result of this notification, on 28 October 2020, the Plaintiffs commenced a legal proceeding in the Supreme Court of Victoria seeking an injunction prohibiting the Registrar of Titles removing their caveats, declarations confirming the Plaintiffs’ caveatable interests, declarations of the amount owed by the First and Second Defendants (and their guarantors) to the Plaintiffs and orders for possession and sale of the First and Second Defendants’ properties.
25	On 30 October 2020 the Plaintiffs provided an undertaking as to damages to the Court and the Court ordered the Registrar not to remove the Plaintiffs’ caveat from the property that was the subject of the pending land transfer unless directed to do so by a Court or on the signed withdrawal of the caveat by the Plaintiffs.
The parties submissions
26	The First to Fourth Defendants oppose the Plaintiffs’ caveats remaining on their titles and any declaration of debt sought by the Plaintiffs.  The basis of their opposition is that the parties to the 2018 agreement have always intended that any dispute relating to that agreement should be dealt with according to Chinese Law in the law courts of China.  They say that:
(a)	the parties have expressly selected Chinese Law as the applicable law of the agreements;
(b)	the parties, by their agreement, have agreed to submit to another jurisdiction, being the courts of the Peoples’ Republic of China;
(c)	the common law of Australia recognises that where there is an agreement to submit to another jurisdiction, courts will require the parties to abide by their agreement unless there are compelling reasons not to do so;
(d)	the Plaintiffs have not provided any justification for commencing proceedings in Australia; 
(e)	the Plaintiffs have failed to plead Chinese Law as required by the 2018 agreement; 
(f)	the case raises a number of complex issues which arise out of Chinese Law and can only be determined there; and 
(g)	an Australian court will need to engage expert witnesses and translators to merely determine the intention of the parties as to where the dispute should be determined.
27	The Plaintiffs say that the issue in this case is narrow, that it will not benefit from further evidence and can be easily answered in accordance with established law.
28	According to the Plaintiffs the real dispute in this case is whether, under the terms of the 2018 agreement, the parties have exclusively chosen the Chinese jurisdiction and Chinese Law as governing the 2018 agreement and any dispute arising out of it.  
29	The Plaintiffs rely on four principal arguments to demonstrate that the parties have not done so:
(a)	the wording of the terms of the 2018 agreement does not provide exclusive jurisdiction to the Chinese courts; 
(b)	properly understood, the subject of this proceeding is not a dispute under the 2018 agreement but rather enforcement of it, which, pursuant to the terms of the 2018 agreement is to be exercised where Jin Xin Australia Pty Ltd is located, i.e.  Victoria, Australia; 
(c)	the First to Fourth Defendants have submitted to the jurisdiction by filing notices of appearance in this proceeding and by not filing an application disputing the jurisdiction of the Court; and 
(d)	to the extent that there is a dispute, it is limited to the choice of applicable law and taking into account the circumstances of the contract, the natural jurisdiction for the 2018 agreement is Victoria, Australia.  
30	In reply, the First to Fourth Defendants say that they entered appearance in this matter following the interim injunction hearing on 30 October 2020 as a result of being ordered to do so by the Court.  Order 2 made on 30 October requires the First and Second Defendants to file and serve a notice of appearance forthwith.  The First Defendant filed a notice of appearance on 4 November 2020.  The Second to Fourth Defendants filed a notice of appearance on 18 November 2020 in compliance with a further order of the Court made on 17 November 2020. 
31	In addition the First to Fourth Defendants deny the money provided by the Plaintiffs was used to purchase their properties or their hotel businesses. The First Defendant says, without providing any detail, that he was threatened and blackmailed by the First Plaintiff to sign the 2016 and 2018 agreements.  
Applicable principles
32	In Silver Chef Rentals Pty Ltd v Makong Australia Pty Ltd & anor, Justice Sloss summarised the well-established principles applicable to a grant of summary judgment:
In Victoria, the requirements which must be satisfied in order for a plaintiff to obtain summary judgment have recently been considered and aptly summarised by Matthews JR in Padella Pty Ltd v Elliott.  For convenience, I have largely adopted those principles as distilled by Matthews JR, which are set out below.
Section 61 of the CPA permits a plaintiff to make an application for summary judgment on the ground that the defendant’s defence or part of that defence has no real prospect of success.  Section 63 of the CPA provides that, subject to s 64, the Court may give summary judgment in a civil proceeding ‘if satisfied’ that a defence has ‘no real prospect of success’.
Section 64 of the CPA provides that:
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because – 
(a)	it is not in the interests of justice to do so; or
(b)	the dispute is of such a nature that only a full hearing on the merits is appropriate.
In Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd, the Court of Appeal stated the relevant test to be applied in determining an application for summary judgment made under ss 61 and 63, as follows:
(a)	the test for summary judgment under s 63 of the [CPA] is whether the respondent to the application for summary judgment has a “real” as opposed to “fanciful” chance of success;
(b)	the test is to be applied by reference to its own language and without paraphrase or comparison with the “hopeless” or “bound to fail test” essayed in [General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125];
(c)	it should be understood, however, that the test is to some degree a more liberal test than the “hopeless” or “bound to fail” test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d)	at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
Section 7(1) of the CPA sets out its overarching purpose, which is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.  Section 9 of the CPA requires the Court to have regard to these purposes in making any order or giving any direction in a civil proceeding.
Where a plaintiff in a civil proceeding seeks to bring an application for summary judgment under s 61 of the CPA, it must be made in accordance with Order 22 of the Rules.
Rule 22.04 of the Rules sets out the material required to be filed in support of an application for summary judgment.  It provides as follows:
(1)	An application shall be made by summons supported by an affidavit – 
(a)	Verifying the facts on which the claim or the part of the claim to which the application relates is based; and
(b)	Stating that in the belief of the deponent the defence to the claim or the defence to the relevant part of the claim – 
(i)	Has no real prospect of success; or
(ii)	Has no real prospect of success except as to the amount of the claim or as to the amount of the relevant part of the claim.
(1)	Where a statement in a document tends to establish a fact within paragraph (1) and at the trial of the proceeding the document would be admissible by or under the Evidence (Miscellaneous Provisions) Act 1958, the Evidence Act 2008 or any other Act to verify the fact, the affidavit under paragraph (1) may set forth the statement.
(2)	An affidavit under paragraph (1) may contain a statement of fact based on information and belief if the grounds are set out and, having regard to all the circumstances, the Court considers that the statement ought to be permitted.
(3)	The plaintiff shall serve the summons and a copy of the affidavit or affidavits and of any exhibit referred to in the affidavit or affidavits on the defendant not less than 14 days before the day for hearing named in the summons.
Rule 22.05 of the Rules provides:
(1)	The defendant may show cause against the application by affidavit or otherwise to the satisfaction of the Court.
(2)	An affidavit under paragraph (1) may contain a statement of fact based on information and belief if the grounds are set out.
(3)	Unless the Court otherwise orders, the defendant shall serve a copy of any affidavit and of any exhibit referred to in the affidavit or affidavits on the plaintiff not less than three days before the day for hearing named in the summons.
The requirements set out in rr 22.04 and 22.05 were considered by the Court of Appeal in Hausman v Abigroup Contractors Pty Ltd.  In relation to an affidavit in support of an application for summary judgment, the Court of Appeal stated that what ‘must be verified are the facts necessary to establish a good cause of action’.  Once the plaintiff has established the elements of its cause of action, there is ‘something akin’ to a shifting of the evidential burden to the defendant.
With regard to the equivalent of what is now r 22.05, the Court of Appeal stated as follows:
[62]	… Assuming the plaintiff’s application is properly made, there will be judgment for the plaintiff unless the defendant shows cause against the application to the satisfaction of the court.  The Rule provides that the defendant can show such cause ‘by affidavit or otherwise’.
[63]	The defendant must satisfy the Court that, in respect of the claim to which the application for judgment relates, a question ought to be tried, or there ought for some other reason to be a trial of that claim.  The Court, if so satisfied, will give the defendant leave to defend and the proceeding will continue to trial in the ordinary way.  The Court will normally require an affidavit by, or on behalf of, the defendant before it will be satisfied that the defendant is entitled to leave to defend.  The standard of diligence required of the defendant in preparing a case in opposition to the application, especially if under pressure of time, is perhaps not as high as that required in preparing for trial.
[64]	Nonetheless, the defendant is required to use reasonable diligence to put before the Court, albeit in a summary form, all the evidence relied on in the defence.  In that regard, it would generally be regarded as an injustice to the plaintiff to introduce for the first time, on appeal, evidence which was readily available for the hearing of the application, but was not produced.  An affidavit filed by the defendant may contain a statement of fact based on information and belief.
[65] 	The authorities suggest that an affidavit in opposition to an application for summary judgment must provide sufficient particulars to enable the defendant case to be properly understood.  A bald denial that the defence is indebted to the plaintiff will not suffice.  The affidavit should, so far as practicable, deal specifically with the plaintiff’s claim and the facts set out in the supporting affidavit to establish that claim.  It should state clearly and concisely what the defence is, and identify the facts relied upon in support of that defence.
Those principles from Hausman extracted above remain good law since the advent of the CPA.
Analysis
33	As is the usual practice of the Court in determining applications of this kind, I shall avoid, to the extent possible, providing my views of the merits of the parties’ cases.
34	At the hearing the First to Fourth Defendants appeared to concede that the parties had not exclusively chosen the Chinese courts as the forum for the resolution of their dispute but had chosen Chinese Law as the proper law of their contract.  This concession appeared to be somewhat in conflict with the First to Fourth Defendants’ written submissions, which, while not always easy to follow, do appear to assert that the parties have made an express choice of the Chinese jurisdiction. While it is unnecessary to decide whether this concession was properly made, it is clear that the jurisdiction and law governing the 2018 agreement can only be determined through a close examination of the terms of that agreement.  
35	In this case the terms of the original 2018 agreement are in the Chinese language and the parties have provided translations of that agreement that are different in material aspects. There is no single translation of the terms of the 2018 agreement which are agreed by the parties.
36	The Plaintiffs submit the use and meaning of the words ‘is subject to the jurisdiction of the Chinese courts’ in clause 8 does not grant exclusive jurisdiction to the Chinese courts.  It is apparent that the term ‘subject to’ does not appear in the First to Fourth Defendants’ translation of clause 8.  In their translation the term used is ‘should be dealt with by a law court of China’.  The wording used in each of the two competing translations is capable of supporting a range of meanings from exclusivity to a mere preference for the jurisdiction of the Chinese courts.  
37	In these circumstances I am satisfied that the defence of the First to Fourth Defendants, that the parties to the 2018 agreement have submitted to another jurisdiction, cannot be said to have no real chance of success.  
38	The Plaintiffs, relying on their translation of the terms, contend that the parties to the 2018 agreement have not made an exclusive choice of law.  The Plaintiffs argue that clause 9 permits the parties to commence legal action in the Victorian courts.  Their translation of that clause includes the words ‘to claim right or enforcement effect Party B can issue proceedings or apply to a local court of where Jin Xin Australia Pty Ltd is located’.  
39	The First to Fourth Defendants argue that the parties to the 2018 agreement, by its terms, have made an exclusive choice of Chinese Law as the law governing the agreement.  The First to Fourth Defendants’ translation of clause 9 contains materially different wording, ‘for convenience and better enforcement outcome, lawsuits may be submitted to a local court of the location of JIN XIN AUSTRALIA PTY LTD’.  Unlike the Plaintiffs’ translation, the translation contended for by the First to Fourth Defendants refers to enforcement but not a claim for rights.  
40	Neither the Plaintiffs nor the First to Fourth Defendants made submissions about how the Court should interpret the meaning and effect of clause 9 in light of the phrase ‘to acknowledge and enforce the judgement (sic) made by the Chinese court’ (the Plaintiffs’ translation) which appears, on its face, capable of being read as conditioning the types of applications that the parties can make to the Victorian courts.
41	The difficulties of ascertaining the definitive meaning of the wording of the 2018 agreement, given the differing translations, is apparent from the above.  In my view, given the range of meanings supported by the competing translations of the 2018 agreement, the First to Fourth Defendants’ argument that parties have chosen the Chinese Law as the law of their agreement cannot be said to have no real prospect of success.  
42	The Plaintiffs alternatively submit that, even if the parties have chosen Chinese Law as the law governing the contract, the Court can and should decide that the natural law of this contract is the law of Victoria.  
43	In order to ascertain the system of law with the closest connection to a contract, a court will examine a number of factors including but not limited to, the place of contracting, where the contract is to be performed, the language and form of the contract, the residence of the parties, if the contract concerns land, the location of that land and, if the contract relates to borrowing, the residence of the lender.  The Plaintiffs assert that the Chinese courts are not capable of granting the remedy they claim in this proceeding, being declarations of the validity of their caveats.  
44	In my view, the exercise of ascertaining the natural law of the 2018 agreement is of such a nature that, even if I was of the view that the First to Fourth Defendants’ case had no real prospect of success, only a full hearing on the point is appropriate.  Such an exercise will involve the analysis of the wording of the agreement, findings as to the circumstances in which the agreement was struck and, if a finding is made that the parties have chosen Chinese Law as the exclusive law of the agreement, the exercise of judgment as to whether that choice should be displaced.  In my view this is not a question easily answered in accordance with established law and thus not an appropriate exercise to be conducted on a summary judgment application.
Conclusion
45	For the reasons set out above, I will dismiss the Plaintiffs’ application for summary judgment.
46	I will also order that the Plaintiffs pay the First to Fourth Defendants’ costs of and incidental to the summary judgment application.

SCHEDULE OF PARTIES

		
	S ECI 2020 04101	

BETWEEN:		

ZHILONG YANG	First Plaintiff 	
		
MEILING ZHANG	Second Plaintiff	
		
- v -		
		
JUN YUE	First Defendant	
		
YUN HU	Second Defendant	
		
QIAOXI YU	Third Defendant	
		
JIN XIN AUSTRALIA PTY LTD (ACN 133 695 987)	Fourth Defendant	
		
REGISTRAR OF TITLES	Fifth Defendant