ONE DIRECTION REAL ESTATE PTY LTD [2025] SADC 119

First Applicant: SOLID TIMES PTY LTD No Attendance Second Applicant: ONE DIRECTION REAL ESTATE PTY LTD Counsel: MR S. OWER KC - Solicitor: ADELTA LEGAL Respondent: MR F. WANG - : SELF REPRESENTATION Hearing Date/s: 25/11/2024, 26/11/2024, 27/11/2024, 28/11/2024, 29/11/2024, 04/12/2024, 16/12/2024, 17/12/2024, 18/12/2024, 23/01/2025 File No/s: CIV-22-010562 B DISTRICT COURT OF SOUTH AUSTRALIA (Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. SOLID TIMES PTY LTD, ONE DIRECTION REAL ESTATE PTY LTD v WANG [2025] SADC 119 Judgment of his Honour Judge Burnett 10 October 2025 EQUITY - TRUSTS AND TRUSTEES - IMPLIED TRUSTS - CONSTRUCTIVE TRUSTS EQUITY - TRUSTS AND TRUSTEES - IMPLIED TRUSTS - CONSTRUCTIVE TRUSTS - UNCONSCIONABLE CONDUCT The second applicant, One Direction Real Estate Pty Ltd (One Direction), seeks a declaration that the property owned by the respondent, Mr Feng Wang, at 77 MacKinnon Parade, North Adelaide (the Property), is held on constructive trust for himself and One Direction and that the terms of that trust include that the Property be sold and the net proceeds of sale be divided equally between One Direction and Mr Wang or in such other manner as determined by the Court. Solid Times Pty Ltd, One Direction and Mr Wang entered into a joint venture which is recorded in an agreement dated 4 May 2018 and an addendum to that agreement (collectively, the JVA) pursuant to which the Property was to be acquired, renovated and sold. Under the JVA, Mr Wang was nominated as the purchaser of the Property. The JVA provided that Solid Times would hold a 50% interest in the joint venture assets and One Direction and Mr Wang would each hold a 25% interest in those assets. The JVA further provided that the JVA would terminate when the Property was sold and that on termination the net proceeds would be distributed in accordance with the parties’ respective interests. The JVA did not contain provisions which compelled Mr Wang to sell the Property. The Property was purchased pursuant to the JVA on 30 November 2018 and Mr Wang became the legal owner of the Property. Each of the joint venture partners contributed to the payment of the deposit and purchase price in accordance with their respective interests. A mortgage was taken out with RAMS/Westpac with Mr Wang as the mortgagor. Up to about January 2022, each of the joint venture partners contributed to the mortgage and other outgoings associated with the Property in -- 1 of 36 -- accordance with their respective interests. The renovation works to the Property commenced in about December 2019 and were completed in May 2022. The cost of the renovation works were paid for by the joint venture partners according to their respective interests in the joint venture. The relationship between Solid Times and One Direction on the one hand and Mr Wang on the other hand deteriorated such that in January 2022, One Direction and Solid Times lodged caveats over the Property. They did so because: (1) Mr Wang failed to provide financial documents and information about the joint venture expenses when requested to do so and (2) of the behaviour of Mr Wang when the Property was listed for sale in November 2021. Further, in 2020, Mr Wang caused the mortgage with RAMS to be paid out and a new mortgage entered into with ANZ without the knowledge or consent of Solid Times and One Direction. Mr Wang, has since 2022, used the Property for his personal and business purposes on occasions. Mr Wang has not complied with Court orders in relation to the appointment of an agent to sell the Property. On 19 May 2024, Mr Wang entered into a Deed of Release with Solid Times pursuant to which Mr Wang agreed to pay the sum of $740,000 to Solid Times in full and final settlement of the Dispute (which was defined as the dispute relating to the Property, the right title and interest over the Property and the joint venture agreement). Solid Times and Mr Wang agreed to release each other from all claims in relation to the Property. Solid Times agreed to withdraw its caveat over the Property and agreed to its claim in these proceedings being dismissed. Mr Wang paid $740,000 to Solid Times. Mr Wang has not agreed to the sale of the Property and the distribution of the net proceeds of sale according to the JVA. Held: (1) One Direction is entitled to a declaration that Mr Wang holds the Property on a constructive trust for the sale of the Property, with the net proceeds to be applied first, to the discharge of any mortgage over the Property then to refund the contributions made by Mr Wang (which will include the contributions made by Solid Times) and One Direction with the surplus to be distributed as to 25% to One Direction and 75% to Mr Wang. (2) The assets of the joint venture include the land. The joint venture has failed because, inter alia, Mr Wang asserts that he is entitled to the legal and beneficial ownership of the Property, that the mortgage account is his personal account and that One Direction is not entitled to a share of the surplus on the sale of the Property. (3) The claim for constructive trust is based on a joint venture that has failed. The basis of such a claim is that equity will not permit a party to retain the benefit of property where it would be unconscionable for them to do so: Muschinski v Dodds (1985) 160 CLR 585 applied. The joint endeavour constructive trust may extend to a commercial joint venture when the joint venture agreement does not make provision for the circumstances that have occurred: John Nelson Developments Pty Ltd v Focus National Developments Pty Ltd [2010] NSWSC 392, Makaritis v Makaritis (No 2) [2022] NSWSC 1690 applied. (4) The breakdown of the joint endeavour must occur without attributable fault of the applicant. That requirement is part of the question whether it is unconscionable for the other party to retain the benefits of the joint endeavour: Austin v Hornby [2005] NSWSC 1059, Makaritis v Makaritis (No 2) [2022] NSWSC 1690 applied. There has been no such fault on the part of One Direction. The breakdown of the joint venture was caused by the conduct of Mr Wang. Defences of lack of clean hands or illegality fail because, inter alia, any alleged conduct of One Direction (in acting as agent for the vendor when the Property was purchased) does not relate to the equity sued for. (5) The terms of the constructive trust require the repayment of contributions and then the distribution of the surplus. These terms accord with the type of order made in Baumgartner v Baumgartner (1987) 164 CLR 137 and in Woods v McKinlay (No 2) [2021] NSWSC 1510. The unconscionability which equity seeks to address is the denial of the interest of the person who is not the legal owner but it does so by taking into account the contribution made by the parties. -- 2 of 36 -- (6) The terms of the constructive trust may provide for a number of different ways in which the surplus on the sale of the Property may be distributed including that the surplus be distributed equally or that the surplus be distributed according to ratios set out in the JVA or that it be distributed according to the ratios of the respective contributions of the parties. (7) Although equity favours the notion of practical equality, there may be circumstances where an adjustment is required to avoid an injustice: Baumgartner v Baumgartner (1987) 164 CLR 137 and Woods v McKinlay (No 2) [2021] NSWSC 1510 applied. In the circumstances of the present case, there would be an injustice if the surplus was distributed equally between One Direction and Mr Wang. One Direction did not contribute to the acquisition or the extinguishment of the interest of Solid Times which occurred as a result of the settlement between Mr Wang and Solid Times and the payment made by Mr Wang to Solid Times. The unconscionability of Mr Wang that provides the basis for the imposition of the constructive trust, is the denial of the 25% beneficial interest of One Direction that is provided for in the JVA. Further, the actual intention, as expressed in the JVA, was that One Direction would hold a 25% beneficial interest in the Property. One Direction has done nothing, nor contributed any further money, that would provide any basis for the increase of that proportion. In these circumstances, there is to be a term of the constructive trust that One Direction receives 25% of the surplus on the sale of the Property after the repayment of contributions. Land Agents and Business Agents (Sale and Conveyancing) Act 1984 (SA) s 24G; Uniform Civil Rules 2020 (UCR) rr 67.2(a), 67.2(c), referred to. 3 Apples Childcare Centre Pty Ltd v MMC Pacific International Pty Ltd [2023] VSC 21; Austin v Hornby [2011] NSWSC 1059; Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1; Baumgartner v Baumgartner (1987) 164 CLR 137; Booth v Cerreto [2023] NSWSC 1574; Cherry v Steele Park (2017) 96 NSWLR 548; Commissioner of Taxation v The Trustee for the Michel Hayes Family Trust (2019) 273 FCR 567; Davey v Herbst, Herbst and Bray (No 2) [2012] ACTCA 19; Dering v Earl of Winchelsea (1787) 1 Cox 318; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; Yango Pastoral Company Pty Ltd v First Chicago Australia Pty Ltd (1978) 139 CLR 410; Woods v McKinlay (No 2) [2021] NSWSC 1510; West v Mead [2003] NSWSC 161; Victoria v Tatts Group Ltd (2016) 90 ALJR 392; St John Shipping Corp v Joseph Rank Ltd [1957] 1 QB 267; Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; Shepherd v Doolan [2005] NSWSC 42; Robertson v Adams (1922) 31 CLR 250; Rinehart v Hancock Prospecting Pty Ltd; Rinehart v Rinehart (2019) 267 CLR 514; R v Deputy Commissioner of Taxation (WA) (1987) 72 ALR 365; Onesteel Manufacturing Pty Ltd v Bluescope Steel (AIS) Pty Ltd (2013) 85 NSWLR 1; NSW Trustee and Guardian v Togias [2022] NSWCA 225; Muschinski v Dodds (1985) 160 CLR 583; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; Moody v Cox and Hatt [1917] 2 Ch 71; Makaritis v Makaritis (No 2) [2022] NSWSC 1690; John S Chappel Pty Ltd v D K Pett Pty Ltd (1971) 1 SASR 188; John Nelson Developments Pty Ltd v Focus National Developments Pty Ltd [2010] NSWSC 150; In re Mahmoud and Ispahani [1921] 2 KB 716; Harry Goudias Pty Ltd v Akakios (2007) 87 SASR 93; Hansen v Noble [2021] NSWSC 138; Grubisa v Zhou [2025] NSWSC 942; Franklins Pty Ltd v Metcash Trading Pty Ltd (2009) 76 NSWLR 603; Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215; Elisha v Vision Australia Ltd [2024] HCA 50, applied. -- 3 of 36 -- -- 4 of 36 -- SOLID TIMES PTY LTD, ONE DIRECTION REAL ESTATE PTY LTD v WANG [2025] SADC 119 Civil jurisdiction Introduction 1 These proceedings involve a dispute between the second applicant, One Direction Real Estate Pty Ltd (One Direction or the applicant) and the respondent Mr Feng Wang (Mr Wang or the respondent) concerning a property at 77 Mackinnon Parade, North Adelaide (the Property). The proceedings previously also included a claim by the first applicant, Solid Times Pty Ltd (Solid Times) against Mr Wang. Solid Times and Mr Wang have settled that claim. 2 The Property is held in the sole name of Mr Wang. One Direction claims that it, Solid Times and Mr Wang, entered into a joint venture for the acquisition, renovation and sale of the Property. It is not disputed that the parties entered into a joint venture agreement which is recorded in an agreement dated 4 May 2018 and an addendum to that agreement (collectively, the JVA). The JVA provided that Solid Times will hold a 50% interest in the joint venture assets and One Direction and Mr Wang will each hold a 25% interest in those assets. One Direction claims that the joint venture has failed and that it is entitled to a declaration that Mr Wang holds the Property as a constructive trustee and that the terms of that trust include that the Property be sold, and that the net proceedings of sale: (a) be distributed equally between One Direction and Mr Wang; or (b) be distributed by reference to the same proportions as their contributions; or (c) be distributed 25% to One Direction and 75% to Mr Wang. One Direction contends that the Court could alternatively make orders in a two stage process where first the contributions made by One Direction and Mr Wang are returned and then the surplus is distributed in the manner specified. 3 Mr Wang’s position is unclear but he does not accept that One Direction has any interest in the Property. In his defence dated 12 December 2012 (FDN 95), he pleads that One Direction is entitled to the return of a sum of money that was paid at settlement for the purchase of the Property. He pleads that One Direction is not entitled to the return of the money that was paid to Solid Times for the renovation and extension as those monies were paid for “profit making purposes” that involved Solid Times and not Mr Wang. In his written closing submissions, Mr Wang submitted that One Direction is not entitled to the return of the purchase money or the monies that were paid to Solid Times for the renovation and extensions but is entitled to return of the monies paid in respect of mortgage repayments. However, he then submits that these payments were to support the renovation process and not ownership. Mr Wang denies that he holds the Property as a constructive trustee but says that any entitlement of One Direction to share in the net proceeds of sale should be determined according to these principles. 4 The following issues arise for determination in these proceedings: -- 5 of 36 -- [2025] SADC 119 2 (1) The proper construction of the JVA and in particular whether that agreement included the purchase of the Property; (2) Has the joint venture failed such that One Direction is entitled to a declaration that Mr Wang holds the Property as a constructive trustee? (3) Is there any conduct of One Direction that disentitles it to the remedy of a constructive trust? (4) Are there any defects in the work that was undertaken on the Property which either would require rectification or affect the sale of the Property? (5) What are the terms of the constructive trust (if the Court determines that such a trust should be declared) and in particular what are the terms concerning the repayment of expenses and the distributions of the net proceeds of sale? (6) What expenses were paid by One Direction, Solid Times and Mr Wang and in particular, should the taking out of the mortgage in the name of Mr Wang be considered to be a contribution that he has made to the acquisition of the Property? Has the Property been exclusively used by Mr Wang since 2022 and what adjustments should be made for that use? The Trial 5 Three witnesses gave evidence on behalf of One Direction. The primary witness was Mr Yun Liu, who is a director of that company. Mr Liu is commonly known by the English name, Zac. Mr Liu gave evidence about the entry into of the JVA, the payment of expenses related to the joint venture, including mortgage payments, the renovation of the Property, the use of the Property, listing the Property for sale and attempts to sell the Property, the breakdown of the relationship with Mr Wang including the failure of Mr Wang to provide relevant financial documents and the lodging of a caveat over the Property. 6 Mr Liu was a credible and reliable witness and I accept his evidence. Much of his evidence was supported by documentation and was not the subject of dispute. There was nothing in his cross-examination that caused me to doubt his evidence. There was some dispute about the breakdown of the relationship between the parties. I accept the evidence of Mr Liu on this topic and that Mr Wang failed to provide financial documentation concerning the joint venture. 7 Mr Trevor Dunsford, a valuer, gave evidence about the current value of the Property. This is not a case where orders are sought based on the value of the Property. One Direction seeks orders relating to the sale of the Property and a division of the proceeds of sale. The value of the Property is therefore not material to those orders, except perhaps as an indication of the value when the Court is framing its orders. Mr Dunsford conducted a residential kerbside valuation. There -- 6 of 36 -- [2025] SADC 119 3 was some cross-examination about the expertise of Mr Dunsford and his knowledge of the North Adelaide area but it was not suggested that his appraisal was wrong. In these circumstances, I accept the evidence of Mr Dunsford. 8 Mr Frank Carbone, a private investigator, gave evidence about the current use of the Property. I accept that Mr Carbone made certain observations but consider that this evidence provides little assistance to the Court in determining the issues between the parties. 9 Mr Wang did not call any witnesses other than himself. Mr Wang gave evidence about his personal background, the circumstances surrounding the entry into of the joint venture, the payment of expenses relating to the joint venture, the renovation of the Property, the discharge of the mortgage with RAMS (which is a division of Westpac) and its replacement with ANZ, the condition of the Property, the listing of the Property for sale and attempts to sell the Property, his response to requests for financial documents relating to the joint venture and his current use of the Property. 10 Mr Wang’s evidence was not satisfactory. His evidence about his response to requests for financial information from Solid Times and One Direction was evasive and sometimes non-responsive. His evidence about the payment of his share of the deposit and balance of the purchase price was also evasive. He was not prepared to admit that these amounts represented his 25% interest in the Property through the joint venture. His evidence that he had purchased the Property in May 2018 did not have any rational foundation. His evidence that he did not know the identity of a Mr Wen G Wang, a person who made a payment to RAMS under the mortgage was not believable. His evidence that he did not know the source of the $83,981.74 that was used, along with the new loan from ANZ, to discharge the RAMS mortgage was not believable. Mr Wang has not complied with the Court order made on 30 November 2022 (exhibit A31) relating to the production of documents. In all of these circumstances, I have doubts about the credibility of the evidence of Mr Wang. I do not go as far, as the respondent contends, that his evidence should only by accepted when corroborated. However, when his evidence conflicts with the evidence of Mr Liu, I prefer the evidence of Mr Liu. 11 Notwithstanding the evidence of the witnesses that has been described above, it is the documentary evidence that is critical to the determination of this case. Factual background Purchase of the Property and entry into of the joint venture and the JVA 12 I make the findings of fact set out below which are the subject of either documentary or unchallenged evidence and are not in dispute. 13 Up to about 30 November 2018 a Mr Paul Mellor (deceased) and later his executors (the vendors), were the owners of the Property. On about 15 September -- 7 of 36 -- [2025] SADC 119 4 2017, the vendors entered into a contract for the sale of the Property to Xuan Tian and/or nominee. Mr Tian was a director of Solid Times (and was commonly referred to as Tony). The other director of Solid Times was Mr Yang Shao (commonly known as Brady). Mr Liu was the selling agent for the Property on behalf of the vendors. 14 Initially, there was a joint venture between Mr Tian, Mr Shao and Mr Liu in relation to the purchase of the Property, although that agreement was not reduced to writing. Mr Tian was unable to borrow sufficient funds to complete the purchase of the Property. He may have been able to source the necessary funds from overseas but that would have taken some time and the funds were not able to be obtained in a timely manner so he arranged for Mr Wang to become involved in the joint venture. At that time, Mr Liu did not know Mr Wang. 15 On 4 May 2018, Mr Wang, Mr Liu and Solid Times entered into and signed the JVA (exhibit A3). It is not clear on the evidence as to how that document was prepared. In 2022, there was an addendum to the JVA whereby Mr Liu’s interest was replaced by One Direction (exhibit A4). Mr Liu is and was the sole director and shareholder of One Direction (exhibit A2). I will set out the terms of the JVA later in these reasons. For present purposes, the JVA recorded that Mr Wang had acquired an estate in fee simple in the Property. That was plainly incorrect as at 4 May 2018, Mr Wang had not acquired such an interest. 16 Mr Wang was nominated as the purchaser under the contract with the vendors. It is not clear when Mr Wang was nominated as the purchaser. Mr Liu gave evidence that it was the difficulty facing the original joint venture partners in borrowing funds that led to the involvement of Mr Wang in the joint venture. Mr Liu said that he did not have any role in the nomination of Mr Wang as the purchaser and said that there was no discussion about why the Property was not purchased in the name of all three joint venture partners rather than in the sole name of Mr Wang. A valuation that was prepared for the purposes of assessing security (exhibit R55) establishes that by 16 April 2018 it was contemplated that Mr Wang would be the purchaser of the Property. The JVA assumes that Mr Wang would be the purchaser of the Property. It is clear that at least by 27 September 2018, Mr Wang was to be the purchaser of the Property as on that date RAMS sent a letter to Mr Wang unconditionally approving a loan of $825,000 for the purchase of the Property (exhibit A10). 17 On 30 November 2018, settlement of the Property occurred and Mr Wang became the registered proprietor. The purchase price was $1,100,000. A deposit of $30,000 was paid. Mr Liu and Mr Wang each contributed $7,500 towards that deposit (being 25% each of the amount of the deposit). Solid Times paid $15,000 (being 50% of the deposit). After the receipt of the loan funds from RAMS in the sum of $824,000, the balance of the purchase price was $315,939.23 (settlement statement dated 16 November 2018, exhibit A9). Mr Liu gave evidence, that Mr Liu and Mr Wang each contributed the sum of $78,988.50 to the balance of the purchase price and Solid Times contributed $157,977.23. Those sums are -- 8 of 36 -- [2025] SADC 119 5 confirmed by the settlement statement. Again, by those payments, Mr Liu and Mr Wang each paid 25% of the balance and Solid Times paid 50%. Payments of amounts due under the mortgage and rates and taxes and other incidental expenses 18 Mr Wang advised Mr Liu that the total monthly payments that were due under the mortgage with RAMS were $4,600. Mr Liu said that he was not provided with any documentation which showed that amount but that he and Solid Times were advised of that sum by Mr Wang in a WeChat message. Mr Liu gave evidence to this effect which I accept. Mr Wang did not dispute this evidence. The evidence accords with the payments that were made by Solid Times and One Direction. 19 Mr Liu gave evidence that One Direction paid $1,150 per month in respect of the mortgage into the bank account of Mr Wang and Solid Times paid the sum of $2,300 per month. Mr Wang agreed that these payments were made. These sums represented 25% and 50% respectively of the $4,600 which they had been advised were the amounts due each month under the mortgage. Mr Wang agreed that these amounts were paid each month by One Direction and Solid Times and said that they were paid by agreement. In fact, the amount due under the mortgage was $3,469.74 per month. Mr Wang said that he paid some of the expenses such as insurance for the Property from this account. 20 One Direction and Solid Times continued making those payments until January 2022. I accept the evidence of Mr Liu that the reason why One Direction and Solid Times did not make payments after January 2022 was that they had requested financial documents from Mr Wang including in relation to the amount of the monthly mortgage repayments but those documents were not provided. In total, One Direction paid the sum of $42,550 in mortgage repayments, which included the mortgage payments to both RAMS and then ANZ, when ANZ replaced RAMS as the mortgagee. 21 One Direction also made payments of land tax, water rates and council rates up to January 2022. Examples of such payments are set out in exhibits A50 and A51. Mr Wang gave evidence in chief that he paid “on his own” the bundle of invoices from SA Water (exhibit R61), emergency service levies (exhibit R69), City of Adelaide council rates (exhibit R70), land tax from Revenue SA (exhibit R71), insurance premiums (exhibit R 72) and gas accounts from Energy Australia (exhibit R77). In cross-examination, Mr Wang said that he was not in a position to say whether the accounts of SA Water, the emergency service levy, council rates, land tax and insurance were paid out of the mortgage account to which Solid Times and One Direction contributed an amount in excess of the monthly mortgage payments. Mr Wang did not produce any documentary evidence to show that the accounts were not paid out of the mortgage account. 22 I find that the payment of these amounts were from the mortgage account as they related to expenses of the joint venture. The amounts paid by Solid Times and One Direction into the mortgage accounts were in excess of their proportion of the -- 9 of 36 -- [2025] SADC 119 6 amount due solely for the mortgage. There is no reason why Mr Wang would make these payments personally. Mr Wang agreed in cross-examination that it was normal for him to use this account to pay some of the expenses. Discharge of RAMS/ Westpac mortgage and replacement with an ANZ mortgage 23 In September 2020, Mr Wang discharged his mortgage with RAMS/Westpac (exhibit A21) and took out a new mortgage with ANZ. I accept the evidence of Mr Liu that he was not advised of that change and did not know that ANZ had become the mortgagee or that the RAMS mortgage had been discharged. Mr Liu said that Mr Wang advised him that the bank account details for the payment of the mortgage had changed but he did not say, nor did Mr Liu enquire, why that change had occurred. Mr Wang agreed that he gave Mr Liu a new account number but said that he could not recall whether he advised him that the loan with RAMS had been discharged and a new loan with ANZ had been taken out. I accept the evidence of Mr Liu. If Mr Liu had been advised of the change of mortgagee without his knowledge, it would be expected that would be a matter that he would recall and would have led him to make further enquiries. 24 The documentary evidence establishes that the amount borrowed under the new ANZ mortgage was less than the balance outstanding on the RAMS mortgage when it was discharged. The documentary evidence establishes that there was an additional payment made by Mr Wang in the sum of $83,981.74 to discharge the RAMS mortgage that was additional to the amount borrowed under the ANZ mortgage. Although the evidence is not clear as to how that payment was made, I am satisfied that it was made either by Mr Wang or for his benefit and that he should receive the benefit of that payment. Renovation and Extension Works 25 Following Mr Wang’s purchase of the Property, renovations and an extension to the existing house on the Property were carried out. Development Plan Consent was granted by the City of Adelaide on 8 November 2018 (exhibit A14) and subsequently development approval was granted on 3 March 2020 (exhibit A15). Solid Times undertook those works as the builder. Mr Wang entered into a contract with Solid Times to undertake that building work (exhibit R56). In that contract, the costs were estimated to be $600,000 but ultimately exceeded that amount. The contract provided that the works were to commence on 1 December 2019 and be completed on 31 August 2020. Mr Wang gave evidence that the works commenced on 1 December 2019 but were not completed until about May 2022 when the City of Adelaide issued a compliance letter. Solid Times rendered invoices to One Direction (exhibits A33 to A48, excluding A15 and A16) in amounts which represented 25% of the amount charged for that work. That percentage is evident from the invoices. In total, One Direction paid the sum of $238,826.41 to Solid Times for the building work. Mr Wang also paid the sum of $222,776.41 for that work. These matters were not in dispute and are largely confirmed by documentary evidence. -- 10 of 36 -- [2025] SADC 119 7 26 The compliance letter was ultimately issued by the City of Adelaide in May 2022 (exhibit A18). Based on this document and the evidence of Mr Liu, I find that the building works were completed by no later than May 2022. Listing of the Property for sale in 2019 and 2021 27 The Property was listed for sale in 2019 and 2021. In 2019, One Direction was the agent for that listing. This listing was prior to the building works being carried out. On this occasion, the Property was on the market only for a short time. Mr Liu gave evidence that all of the parties, including Mr Wang, agreed to withdraw the Property from the market after a few weeks. Mr Wang said that it was Mr Liu who decided to take the Property off the market. Nothing turns on that point. 28 The Property was placed on the market again in November 2021. Mr Liu said at that time, all of the members of the joint venture, including Mr Wang, agreed to attempt to sell the Property. At that time, the building work had almost been completed. Mr Liu gave evidence that Mr Wang engaged, without his knowledge, Mr Manna Chan of Ray White, Norwood, to act as the agent on the sale of the Property. Mr Wang gave evidence that it was Brady (Mr Shao) from Solid Times who arranged for Ray White to be engaged, but that he agreed to that appointment. The Property was withdrawn from the market after a couple of weeks because of concerns raised by the City of Adelaide about a heritage listing and some issues with the facade of the building. These concerns were raised following an inspection by a council officer on 18 November 2021 and formalised in a letter to Solid Times dated 6 December 2021 (exhibit A16). On 30 November 2021 (exhibit A 24), Mr Liu drafted an email for Mr Wang to send to Mr Chan. Mr Wang agreed that Mr Liu drafted that email and Mr Wang sent it. That email was sent but the Property remained on the market. Mr Liu rang the agent and then discussed the issue with Mr Wang. Mr Wang refused to answer any questions about the matter. Ultimately, Mr Wang was directed at a meeting with Mr Liu and representatives of Solid Times, to remove the listing of the Property. 29 I prefer the evidence of Mr Liu in relation to the marketing of the Property in November 2021. I find that Mr Wang arranged for the appointment of Mr Chan, without the knowledge of Mr Liu and further that Mr Wang did not immediately take the Property off the market when instructed to do so by the other joint venturers. I make these findings first, because I prefer Mr Liu’s evidence to the evidence of Mr Wang and have doubts about the credibility and reliability of Mr Wang’s evidence. Secondly, Mr Liu’s evidence is consistent with the admitted evidence about the drafting of the email. Deterioration of the relationship between One Direction and Mr Wang, the lodging of the caveats and requests for financial information 30 The relationship between Solid Times and One Direction on the one hand and Mr Wang on the other hand deteriorated such that on 11 January 2022 and 14 January 2022 respectively (exhibits A25 and A26), One Direction and Solid -- 11 of 36 -- [2025] SADC 119 8 Times lodged caveats over the Property. Mr Liu gave evidence that there were two reasons why the caveat was lodged by One Direction. They were (1) the failure of Mr Wang to provide financial documents; and (2) the behaviour of Mr Wang when the Property was listed for sale in November 2021. I have already dealt with the conduct in relation to the listing. Mr Liu gave evidence that in January 2022, the project was about to be completed but that because Mr Wang refused to provide the financial documents, they could not calculate the expenses of the project. 31 In relation to the requests for financial documentation, Mr Liu gave evidence that on multiple occasions during the construction stage, he had requested, by telephone, WeChat groups and in person, that Mr Wang provide the monthly mortgage statements and loan details. Mr Liu said that Mr Wang did not respond to those requests or provide the documents. The We Chat message dated 26 January 2022 (exhibit A67 and A67A) records Mr Tian sending a message that states “The main point is that the statement is already with you, David [Mr Wang]. All the expenses are handled on your side. There are some parts that we haven’t dealt with ourselves-for example the payments that you have made directly. I also feel that it is most convenient and complete when you organise it”. Mr Liu said that Mr Wang refused to reply. A further WeChat message from Mr Xuan dated 11 February 2022 states that “you have the statement, just update the numbers directly.” Mr Wang said that he was not sure that the message was sent to him. The content of the message and its timing suggests that it was sent to Mr Wang. 32 In cross-examination, Mr Wang said that he was not sure whether he sent any financial information (other than a RAMS loan document in order to purchase the Property), including any loan statement to One Direction. In answer to a question whether the RAMS loan was interest only or capital and interest, Mr Wang was unable to provide an answer. 33 There was a meeting of the joint venture partners on 7 March 2022. Mr Wang attended by audio or video. Mr Liu attended by video and Tony [Mr Tian] from Solid Times was present. At that meeting, Mr Wang was asked to provide updated loan documents and he responded no comment. Subsequent to that meeting, Solid Times and One Direction retained lawyers and in about April or May 2022 sent a claim letter to Mr Wang. No response was received to that letter. In cross- examination, Mr Wang agreed that there was a meeting. The following answers were given: 34 Q: 35 And during the course of that meeting you were asked to provide loan documents. 36 A: 37 I remember this actually happened. 38 Q: 39 And in response you said “no comment”. 40 A: 41 Yes -- 12 of 36 -- [2025] SADC 119 9 42 Q: 43 And you did not provide any financial documents. 44 A: 45 I think, you know, I needed something that what you are using is too extreme. 46 Q: 47 You were asked at the meeting to provide an updated loan document to calculate the expense of the project; do you agree or disagree. 48 A: 49 I cannot remember. 50 Q: 51 And you said in response to that “no comment” Do you agree or disagree. 52 A: 53 I cannot remember. 54 Mr Wang agreed that he had received requests for financial information from Solid Times and One Direction. Mr Wang said that Solid Times had all of the information relating to the renovation and extension works. In an affidavit sworn by Mr Wang in these proceedings on 9 November 2022, Mr Wang said “My mortgage of this property is my private information. I have never disclosed to the first and second applicant. In addition, I have not agreed to disclose those information to them.” Ultimately, after some prevarication, Mr Wang said that he remembered that he did not give Solid Times and One Direction details of his mortgage. 55 I find that One Direction made requests of Mr Wang for the provision of financial information relating to the loan documents in late 2021 and in early 2022 but did not receive that information. I have come to this conclusion for the following reasons: (1) that was the evidence of Mr Liu which I accept; (2) Mr Wang accepted in evidence that requests had been made for the provision of the financial documents and he could not produce any document which recorded or evidenced their production; (3) in his affidavit of 9 November 2022, Mr Wang accepted that he did not provide the information; (4) in evidence, Mr Wang said that he could not recall whether or not he provided the financial documentation to One Direction and Solid Times; and (5) Mr Wang has maintained the position that he is the owner of the Property and that the mortgage is his business. Use of the Property 56 Mr Liu gave evidence that he does not have keys or a password to the security system so as to be able to access the Property. He said that the locks were changed in about January 2022. He said that he last accessed the Property in about June or July 2020. He said that security cameras that were installed during the course of construction showed Mr Wang at the Property with a female in about March or April 2022. Mr Liu said that the cameras were removed by Mr Wang in about June- August 2022. Mr Liu said that in discussions in the WeChat group at the commencement of construction, the joint venturers agreed that they would prefer -- 13 of 36 -- [2025] SADC 119 10 that no-one lived at the Property during the construction period or after construction and before the Property was sold. Mr Liu said that he agreed that Mr Wang did not need permission to enter the Property. 57 Mr Carbone gave evidence that he attended outside the Property on 22 -25 and 28 November 2024. He was not able to enter the Property. He said that he observed furniture at the Property which looked as though a business was being run from the Property but was not consistent with someone living at the Property. He did not observe anyone at the Property. 58 Mr Wang gave evidence that the Property has always been vacant. He said that since May 2022, he comes to the Property to undertake some maintenance work and some finishing work. He said that he also arranged the furniture and was responsible for it. He agreed that he was in the Property in the way depicted in the video but says that only showed that he was inside the Property and that he had a right to enter the Property because he had spent a lot of money purchasing it. In cross-examination, he agreed that he had a key to the Property and that he used the Property. When asked how frequently he went to the Property, he said “when I went there or when property need some work, I would go there. You know, actually visit there when necessary.” He said that the Property was furnished but he did not live there or conduct a business from the premises. When a video was put to Mr Wang showing him present at the Property with some young women he replied “ I’m the owner and occupier of this property, so is there a reason I can’t go there”? He said that he had held parties to promote the Property for sale. An ASIC extract (exhibit A 65) for We Wines Pty Ltd (Mr Wang’s company) records that Mr Wang, as the officeholder of the company, resided at the Property. 59 I make the following findings concerning use of the Property since the completion of the renovation work in about May 2022. Mr Wang has had the use of the Property since that time although he does not live there. He uses the Property for socialising from time to time. He conducts some business activities there. One Direction does not use the Property. 60 I have come to these finding for the following reasons: (1) Mr Wang has accepted that he uses the Property from time to time; (2) the video evidence shows him doing so; (3) Mr Liu does not have access to the Property and resides in Queensland; (4) Mr Wang views himself as the owner of the Property and therefore is able to do what he likes with the Property; (5) Mr Wang described in the ASIC extract for We Wines Pty Ltd that he lived at the Property; (6) Mr Carbone’s observations are consistent with the Property being used for business purposes. Settlement between Mr Wang and Solid Times 61 On 19 May 2024 (exhibit A5), Mr Wang entered into a Deed of Release with Solid Times pursuant to which Mr Wang agreed to pay the sum of $740,000 to Solid Times in full and final settlement of the Dispute (which was defined as the dispute relating to the Property, the right title and interest over the Property and the joint venture agreement). The parties agreed to release each other from all -- 14 of 36 -- [2025] SADC 119 11 claims in relation to the Property. Solid Times agreed to withdraw its caveat over the Property and to its claim in these proceedings being dismissed. I accept the evidence of Mr Wang that the $740,000 has been paid to Solid Times. 62 The effect of the Deed of Release is that Solid Times has relinquished its claim that it has an interest in the Property in equity. What the Deed does not do is specify how any equitable interest that Solid Times held should be dealt with or how the payments that it had made under the JVA should be treated. Value of the Property 63 Mr Dunsford performed a kerbside appraisal of the Property. This is not a case which required a determination of the precise value of the Property. What was important was ascertaining whether there was likely to be a surplus on the sale of the Property as that might have relevance to the exercise of the Court’s discretion when determining what orders should be made. Mr Dunsford assessed the value of the Property in the sum of $4,050,000 (exhibit A7). He said that he had undertaken all the normal checks and investigations that he would perform when conducting a more comprehensive valuation. Mr Dunsford said that he relied on photographs and was able to make a reasonably confident assumption as to the quality of the finishes and building work. 64 In cross-examination, Mr Wang accepted the sum of $4,050,000 as an amount for which the Property might be sold. 65 In the circumstances of this case, it is not necessary to determine the precise value of the Property. I am satisfied that the sale of the Property will render a surplus after the payment of the purchase price, the costs of the renovation and the payment of the mortgage and other costs associated with the holding of the Property. I consider that it is likely that the sale price for the Property will be around $4,000,000. Condition of the Property 66 Mr Wang gave evidence about the condition of the Property. He said that there were some cracks in the walls and some scratches and stains and some water damage. He said that the biggest issue was water leaking. On about 5 May 2022, a statement of compliance was sent to the City of Adelaide. In that statement, Solid Times stated that it had performed the building work in accordance with the contractual documents. Mr Wang certified that the building work was consistent with the development approval. The Council sent an email in which it stated that all on-going non-compliance had been made good. The Council had on 18 November 2021 carried an inspection and by letter dated 6 December 2021 raised heritage issues and some other issues of a minor nature (exhibit A16). Mr Wang signed a contract to sell the Property (with no counterparty) in November 2024 in which the purchase price was specified as $4,050,000. As there was no counterparty to that contract, that document has no legal status. Presumably, Mr Wang signed the document to demonstrate that he was willing to sell the -- 15 of 36 -- [2025] SADC 119 12 Property for that sum. He gave evidence that he would sell for that amount. There was no evidence about the costs of rectification. 67 I find that any defects were relatively minor and the condition of the Property did not in any way render it incapable of being sold or that the sale price will not yield a surplus. I make these findings for the following reasons: (1) the defects described by Mr Wang were relatively minor. The photographs tendered by Mr Wang (exhibit R74) support that conclusion; (2) Mr Wang believed that the Property could sell for $4,050,000 and had signed a contract (without a counterparty) to that effect; (3) Mr Wang had provided the certificate in May 2022 that the building work had been completed; (4) the Council had approved the works at about that time following an inspection by the Council in November 2021; (5) there was no evidence as to the cost of any rectification work or that the defects would affect the price that might be obtained upon the sale of the Property. 68 Mr Wang submits that One Direction is liable for any defects in the building work. There is no basis in law or fact for that submission. The building contract was, on my finding, part of the joint venture. Court orders 69 On 30 November 2022, the Court made an order that Mr Wang inter alia provide all documents relating to accounts and receipts of the expenditure of the joint venture, all documents relating to monies borrowed by him in respect of the joint venture and all documents relating to the re-financing of the loan and the current loan statement in respect of amounts owed and secured by the Property. In response to that order, on 28 December 2022, Mr Wang provided 4 emails to the solicitors of Solid Times and One Direction (exhibit A90). Mr Wang exercised his privilege against self-incrimination during cross-examination in these proceedings in refusing to answer questions about his compliance with that order. 70 An examination of that material produced by Mr Wang on 28 December 2022 demonstrates that Mr Wang had not provided any loan statement of ANZ (the current mortgagee) or all documents relating to the payment of loan amounts or the re-financing. 71 The parties attended a mediation on 13 June 2023 (see exhibits A81 and A82). The Heads of Agreement entered into at the mediation (exhibit A81) provided that by 30 June 2023 the parties appoint an independent agent. The parties were unable to agree on the appointment of an agent and on 9 November 2023, the Court ordered that Mr Andrew Fox of Fox Real Estate be appointed as the agent. Mr Wang agreed in cross-examination that he did not sign the agreement to appoint Mr Fox as the agent until the Court ordered him to do so on 6 February 2024. It is also clear from the communications between Mr Fox and Mr Wang (exhibit A84) that, at the very least, Mr Wang was uncooperative in the sale process. Mr Wang threatened Mr Fox with legal proceedings (exhibit A86). -- 16 of 36 -- [2025] SADC 119 13 Terms of the JVA 72 As discussed previously, the JVA was dated 4 May 2018. An addendum to the JVA had the effect of replacing Mr Liu as one of the joint venturers with One Direction. In the Recitals, the JVA referred to Mr Wang having acquired an estate in fee simple in the land at 77 Mackinnon Avenue, North Adelaide (which was defined in the agreement as the land) at an unspecified time prior to the entry into of the JVA. That was not correct. I accept One Direction’s submission that although recitals are part of the agreement, they are not operative terms1 and a mistake or misdescription in the recitals does not provide a ground to set aside an agreement.2 In any event, there was no plea or contention by Mr Wang that the agreement should be set aside on this ground. The JVA also defines the commencement date as 15 September 2017 (being the date when the contract was entered into to purchase the Property) and provides that the joint venture commences on that date. That date obviously pre-dates the involvement of Mr Wang and the entry into of the JVA. However, the commencement date is not material to the rights and obligations of the parties under the JVA. There is no evidence to support a finding, as Mr Wang contends, that, what he describes as the “backdating, constituted a deliberate attempt by Mr Liu to obtain an advantage”. 73 The project is referred to in the Recitals and in the Definitions of the JVA in virtually identical terms. 74 The following are the critical terms of the JVA: Definitions “acquisition finance” means the borrowings undertaken by the first party [Mr Wang] for the acquisition of the land. “commencement date” means the 15th day of September 2017. ‘the joint venture” means the joint venture between the parties established pursuant to clause 2 hereof [clause 2 referred to the joint venture to carrying on the project]. “joint venture assets” at any time means the land and all property of every kind and nature whatsoever owned or acquired by or on behalf of the parties for the purpose of the joint venture and owned by the parties at that time. “the project’ means doing the extension and renovation works on the existing house of the land and the sale of the land and all of the activities implementing or related to the affairs of the joint venture. Joint Venture [2.1] The parties hereby formally agree to engage in an unincorporated joint venture for the purposes of carrying out of the project. 1 Franklins Pty Ltd v Metcash Trading Pty Ltd (2009) 76 NSWLR 603, [379]; [2009] NSWCA 407. 2 Davey v Herbst, Herbst and Bray (No 2) [2012] ACTCA 19, [91]. -- 17 of 36 -- [2025] SADC 119 14 [2.2] The respective interests of the parties are as follows: Feng Wang: 25% Yun Liu [One Direction] 25% Solid Times 50% [2.3] The parties confirm, with respect to the joint venture assets, that they beneficially own those as tenants in common in accordance with their respective interests. [2.4] Each party hereby commits its interest to the joint venture and agrees to do all things necessary to enable the project to be carried out. Term and Termination [3.1]The joint venture shall commence on the commencement date [which was defined as 15 September 2017] and terminate on the date that the land or the balance remaining is sold. [3.2] On the termination of the joint venture the net proceeds thereof shall be divided between the parties in the ration [sic] as set out in cluse [sic] 2.2 hereof. Finance [4.5(a)] The parties shall contribute all moneys required to meet the expenses of the project (including, and without limiting the generality of the foregoing, the acquisition finance) equally and promptly when the same fall due. Determination of the claim of One Direction The proper construction of the Joint Venture Agreement and whether it includes the purchase of the land 75 Mr Wang has contended that the JVA is limited to the extension and renovation of the Property and does not include the land itself. He makes that contention based on the fact that he is the sole owner of the Property, that the JVA records (wrongly) that he had, at the date of the JVA, acquired the Property and that the JVA does not make any reference to the joint venturers acquiring the Property. The effect of that contention is that the terms of the JVA are ambiguous. 76 The task of construing a commercial agreement is to be undertaken by determining what a reasonable business person would have understood by the words of that contract.3 The analysis is an objective one.4 That task requires consideration of the language used by the parties, the circumstances addressed by the contract and the commercial purposes or objects to be secured by the contract.5 In the usual case, that task can be undertaken by reference to matters internal to 3 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, [35]; [2014] HCA 7; Summarised in Grubisa v Zhou [2025] NSWSC 942, [65]. 4 Onesteel Manufacturing Pty Ltd v Bluescope Steel (AIS) Pty Ltd (2013) 85 NSWLR 1, [61]; [2013] NSWCA 27. 5 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, [47]-[51]. -- 18 of 36 -- [2025] SADC 119 15 the contract. In Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd, French CJ, Nettle and Gordon JJ stated:6 In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning. However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals. Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations. Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption "that the parties ... intended to produce a commercial result. Put another way, a commercial contract should be construed so as to avoid it "making commercial nonsense or working commercial inconvenience. (citation omitted) 77 However, where a term of a contract is capable of more than one meaning , the Court will also look to the surrounding circumstances. Thus in Rinehart v Hancock Prospecting Pty Ltd; Rinehart v Rinehart,7 Kiefel CJ, Gageler, Nettle and Gordon JJ held: As the Full Court concluded: "[c]ontext will almost always tell one more about the objectively intended reach of such phrases than textual comparison of words of a general relational character". There may be cases which have to be resolved largely, if not entirely, by reference to the language of the arbitral clause in question. But this is not such a case. The background to and the purposes of the Deeds, as reflected in their terms, point clearly 6 (2015) 256 CLR 104, [47]-[51]. 7 (2019) 267 CLR 514; [2019] HCA 13. -- 19 of 36 -- [2025] SADC 119 16 to arbitral clauses of wide coverage with respect to what was to be the subject of confidential processes of dispute resolution.8 It is well established that a commercial contract should be construed by reference to the language used by the parties, the surrounding circumstances, and the purposes and objects to be secured by the contract. It could not have been understood by the parties to these Deeds that any challenge to the efficacy of the Deeds was to be determined in the public spotlight. Especially is this so with respect to the Hope Downs Deed.9 (citations omitted) 78 Recent authority suggests that the Court can look to the surrounding circumstances to determine whether the terms of the contract are susceptible to more than one meaning. Thus, in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd,10 the Court said that what Mason J in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales did not say was how the ambiguity in the construction of a term in a contract might be identified. Leeming JA in Cherry v Steele Park11 (and cited with approval by Steward J in the Commissioner of Taxation v The Trustee for the Micheal Hayes Family Trust) (Hayes Family Trust)12 held that the statements of Mason J were directed as to how the ambiguity might be resolved, rather than how it was identified. Leeming JA in Cherry v Steele Park13 observed that the approach taken by the High Court in Victoria v Tatts Group Ltd14 and Simic v New South Wales Land and Housing Corporation15 suggested that ambiguity was a conclusion rather than a pre- condition of the admissibility of surrounding circumstances. In other words, evidence of surrounding circumstances could be admitted to determine if there was any ambiguity. More recently in Elisha v Vision Australia Ltd,16 Gageler CJ, Gordon, Edelman, Gleeson and Beech-Jones JJ held that the meaning of the contract is to be determined by what a reasonable person would have understood the terms to mean. This requires consideration of the common intention of the parties by reference to the object and text of the provisions as well as the surrounding circumstances. The common intention is to be understood as referring to what a reasonable person would have understood by the language in which the parties have expressed their agreement. 79 In the present case, the terms of the JVA and its commercial purpose unequivocally establish that the joint venture included the purchase of the land and was not limited to the extension and renovation of the existing dwelling. The clauses of the JVA that mandate that conclusion are: (1) the definition of joint venture assets to include any land or property owned or acquired for the purposes 8 Ibid, [26]. 9 Ibid, [44]. 10 (2015) 256 CLR 104, [110]-[111]. 11 (2017) 96 NSWLR 548, [83]; [2017] NSWSC 295. 12 (2019) 273 FCR 567, [30]; [2019] FCACFC 226. 13 (2017) 96 NSWLR 548, [28]; [2017] NSWSC 295. 14 (2016) 90 ALJR 392; [2016] HCA 5. 15 (2016) 260 CLR 85; [2016] HCA 47. 16 [2024] HCA 50, [38]. -- 20 of 36 -- [2025] SADC 119 17 of the joint venture. The Property is such land. The joint venture cannot be carried out without the use of the land; (2) the respective interests of the parties are the specified percentages. That can only mean the percentage of the Property as developed: (3) the parties confirmed in the JVA that with respect to the joint venture assets, they beneficially held those interests as tenants in common in accordance with their respective interests. That clause therefore provides that One Direction holds a 25% interest in the Property; (4) on termination of the joint venture, the net proceeds were to be divided between the parties according to their respective interests. The joint venture was terminated on the sale of the Property. The parties were therefore entitled to a percentage of the proceeds of the sale of the land, as developed. There could be no entitlement to any proceeds if the land was excluded; (5) the parties were required to contribute all moneys to meet the expenses of the project including the acquisition finance which was defined as the borrowings undertaken by Mr Wang for the acquisition of the land. It would make no commercial sense if the parties were required to meet the acquisition costs of the land but received no interest in the land. 80 The purpose of the joint venture would wholly fail if the land itself was not part of the joint venture. In such an event, Solid Times and One Direction would have no interest in the joint venture that would be capable of realisation. There would be no commercial reason why, in those circumstances, Solid Times and One Direction would contribute to the costs of the acquisition, renovation and extension of the existing house on the Property. 81 Even if the JVA was susceptible to more than one meaning, there is nothing in the surrounding circumstances that points to a different construction nor did Mr Wang identify or make any submissions about such matters. 82 For the reasons that have been identified, I find that the land was part of the joint venture and JVA. Has the Joint Venture Agreement failed such that One Direction is entitled to a declaration that Mr Wang holds the Property as a constructive trustee 83 One Direction has sought a declaration that Mr Wang holds the Property as a constructive trustee for One Direction and Mr Wang equally or in such other proportions as the Court determines. The claim for the constructive trust is based on the failure of the joint venture. One Direction claims that the object of the joint venture was to acquire the Property, renovate and extend the existing house on the Property and then sell the Property and distribute the proceeds to the joint venture parties. One Direction contends that the joint venture has failed because Mr Wang has failed to comply with requests and court orders to provide financial information and documentation about the joint venture, has used the Property, and has asserted that he is entitled to the legal and beneficial ownership of the Property. One Direction submits that because the terms of the JVA did not provide for these circumstances, the principles relating to the imposition of a constructive trust arise. -- 21 of 36 -- [2025] SADC 119 18 84 The Courts have shown a willingness to impose a constructive trust requiring the legal owner of the land to hold land on trust for another in circumstances where the other person has made contributions to the acquisition, maintenance or renovation of property pursuant to a joint endeavour or relationship which has failed in circumstances where blame cannot be attached to either party. 85 In Muschinski v Dodds,17 the High Court found that the parties held their respective legal interests in common upon trust for each other, to repay each his or her respective contributions to the venture. Deane J (Mason J agreeing), held that it was appropriate to impose a constructive trust in the circumstances of that case to give effect to the general equitable principle which restores to a party contributions which he or she made to a joint endeavour which fails when the contributions have been made in circumstances in which it was intended that the other party should enjoy them. Deane J held that where there are contractual provisions which deal with the consequences of the failure of a joint venture or endeavour, they will ordinarily apply. Deane J went on to say where there are not applicable contractual provisions or the applicable provisions were not framed to meet the contingency of the premature failure of the joint venture, other rules (including the imposition of a constructive trust) may apply.18 86 The underlying basis of the constructive trust is founded on unconscionable conduct. As Deane J held in Muschinski v Dodds:19 Like most of the traditional doctrines of equity, it operates on legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct ... the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of the money or other property contributed by one party on that basis and for the purpose of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specifically provided that that other party should so enjoy it. The content of the principle is that in such a case equity would not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do. 87 In Muschinski v Dodds,20 Deane J held that the collapse of the joint venture with the consequent preclusion of the attainment of the commercial objectives permitted the imposition of the constructive trust. 88 Subsequent cases have applied the statement of principle set out in Mushinski v Dodds. In Baumgartner v Baumgartner21, Mason CJ, Wilson and Deane JJ held that following the breakdown of the relationship between the parties, the assertion by one party that the funds were his property beneficially to the exclusion of any interest of the other party, amounted to unconscionable conduct which attracts the 17 (1985) 160 CLR 583, 614; [1985] HCA 78. 18 Ibid, 618-619. 19 (1985) 160 CLR 583, [14]; [1985] HCA 78. 20 Ibid, 619. 21 (1987) 164 CLR 137. -- 22 of 36 -- [2025] SADC 119 19 intervention of equity and the imposition of a constructive trust at the suit of the respondent. 89 The asserted unconscionability in this case is similar to the unconscionability that was found in John Nelson Developments Pty Ltd v Focus National Developments Pty Ltd (John Nelson). In that case, Ward J held: There is no dispute that Focus/Mr Adamo have made substantial contributions to a joint venture, the consideration for which has wholly failed. They anticipated (and bargained for) a benefit in terms of a share of the proceeds of sale of the land which was to be developed (and potentially in any profit from construction costs). The sale of the property in 2007 made such a benefit wholly unobtainable. It seems to me unconscionable for JND to seek to retain the whole of the contributions made by Focus to the project in circumstances where it otherwise retains the whole of the proceeds of sale of the land. 90 The doctrine of a joint endeavour constructive trust is not limited to cases involving a personal relationship and may extend to a commercial joint venture.22 It will apply to an enterprise where there is no express or implied agreement that governs the dispute.23 In John Nelson,24 Ward J held that a joint venture failed because the joint venture agreement, did not, on its proper construction, make provision for the circumstances that had happened in that case. Parker J in Makaritis v Makaritis (No 2)25(Makaritis No 2) made a similar statement when he held that the whole point of the failed joint endeavour doctrine was that it covered a situation which the parties have not addressed namely the failure of the endeavour which would leave one party with an unexpected windfall.26 In 3 Apples Childcare Centre Pty Ltd v MMC Pacific International Pty Ltd,27 Osborne J held that because the basis of the imposition of the constructive trust was the failure of the joint venture without attributable fault on the part of the party advancing the claim, it would be unconscionable for the recipient party to retain the benefit of the contributions because that could not have been intended. Osborne J went on to hold that it was the retention of the benefit in circumstances which were not intended or provided for.28 That is what has occurred in the present case. 91 In Shepherd v Doolan,29 the Court referred to the following statement from Campbell J in West v Mead 30 as to what an applicant must establish for the Court to make an order imposing a constructive trust: ... a plaintiff needs to establish there is indeed a joint endeavour between the parties, in which expenditure is shared for the common benefit. It is also necessary to identify what the scope of that joint endeavour is. ... Further, for any couple, the scope of the joint 22 John Nelson Developments Pty Ltd v Focus National Developments Pty Ltd [2010] NSWSC 150, [329] citing Liquor National Wholesale Pty Ltd v The Redrock Pty Ltd [2007] NSWSC 392, [42]. 23 Muschinski v Dodds (1985) 160 CLR 585, 611. 24 [2010] NSWSC 150. 25 [2022] NSWSC 1690. 26 Ibid, [163]; See also Woods v McKinlay (No 2) [2021] NSWSC 1510, [244]-[250]. 27 [2023] VSC 21, [248]. 28 Ibid, [254]. 29 [2005] NSWSC 42, [32]-[33]. 30 [2003] NSWSC 161, [59]. -- 23 of 36 -- [2025] SADC 119 20 endeavour they are engaged in might change from time to time. If, within the scope of a joint endeavour ...an asset is acquired, as a result of contributions both parties have made, and for a purpose of the ongoing joint endeavour of the parties, this gives rise to the presumption that the beneficial interest ought be shared equally. That presumption can be displaced if one party is able to show that the contributions, both financial and non- financial, to that asset should be regarded as unequal. 92 Thus the matters that One Direction must establish are:31 (1) The formation of a joint endeavour between the parties; (2) The acquisition of property pursuant to that joint endeavour; and (3) The premature termination (or failure) of the joint endeavour leaving one party with a legal interest which that party was not intended to enjoy beneficially in those circumstances. 93 In the present case, there is no doubt that a joint endeavour was formed between Solid Times, One Direction and Mr Wang as evidenced by the terms of the JVA. There has been the acquisition of property. I have found that the joint venture included the Property and the Property was part of the joint venture assets. The first two matters have been established. 94 One Direction must also establish that there has been a failure of the joint venture which has left Mr Wang with the sole legal interest in the Property which he was not intended to enjoy beneficially. 95 There has been a premature termination or failure of the joint venture. The joint venture requires the purchase of the Property, the renovation and extension works, the sale of the Property and the distribution to the parties according to the respective interests specified in the JVA. There has been a purchase of the Property and an undertaking of renovation and extension work but there has been no sale of the Property or distribution of the proceeds of sale. 96 There are a number of matters relied upon by One Direction in support of its contention that the joint venture has failed. They are: (1) The continued failure of Mr Wang to respond to requests for financial documents and his position that he was not obliged to provide that documentation because he was the owner of the Property; (2) Mr Wang’s lack of co-operation in providing financial records relating to the joint venture; 31 Woods v McKinlay (No 2) [2021] NSWSC 1510, [231]. -- 24 of 36 -- [2025] SADC 119 21 (3) Mr Wang’s discharge of the RAMS mortgage and taking out a new mortgage with ANZ without the knowledge or consent of Solid Times or One Direction; (4) Mr Wang’s lack of co-operation in relation to the listing of the Property for sale including with Mr Fox; (5) The fact that the Property has not been sold and there is no mechanism, without a Court order, that will require Mr Wang to sell the Property and distribute funds according to the terms of the JVA; (6) Mr Wang’s failure to comply with the Court orders made on 18 November 2022 concerning the provision of documents; (7) Mr Wang’s use of the Property; (8) Mr Wang’s assertions that he is entitled to the legal and beneficial ownership of the Property and that the mortgage account is his personal account; (9) Mr Wang’s position that One Direction is not entitled to repayment of all of its contributions and is not entitled to any share of the surplus on the sale of the Property. 97 When taken individually, not all of these matters would be sufficient to form a conclusion that the joint venture had failed. Taken collectively, I am satisfied that a finding should be made to that effect. The joint venture reached a certain point (the renovation and extension of the existing house on the Property have been completed) but has not continued past that stage. Mr Wang has evidenced an intention not to proceed with the sale of the Property and the distribution of the surplus according to the terms of the JVA. Mr Wang has asserted that he is the sole legal and beneficial owner of the Property, which is inconsistent with the continued operation of the Property. The joint venture has failed because it, and the terms of the JVA, cannot be carried out. This failure has continued over a number of years. Without the intervention of the Court, Mr Wang will continue to retain and use the Property as if he were the sole beneficial owner. It was not intended that Mr Wang would enjoy the Property beneficially. 98 I therefore find that the joint endeavour has failed. Are there any reasons as to why a constructive trust should not be imposed? 99 The breakdown of the joint endeavour must occur without attributable fault on either side. The relevant fault must be the fault of the applicant.32 In Makaritis v Makaritis (No 2),33 Parker J observed that there were few cases, if any, where 32 Austin v Hornby [2011] NSWSC 1059, [172]-[176]. 33 [2022] NSWSC 1690. -- 25 of 36 -- [2025] SADC 119 22 relief has been refused because the breakdown in the relationship was the fault of the applicant.34 As Parker J held in Makartitis (No 2), once the relationship has broken down, it is hard to justify allowing the other party to retain any windfall no matter how badly the applicant may have behaved unless that behaviour in some way makes the recovery of the applicant’s contribution unconscionable. Ward J in Austin v Hornby35 reached a similar conclusion when she held that the question whether a joint endeavour has come to an end as a result of attributable blame is treated as part of the question whether it is unconscionable for the other party in those circumstances to retain the benefits of the joint endeavour. 100 There was no evidence that there was any conduct on the part of One Direction that led to the breakdown of the joint venture. It was the actions and conduct of Mr Wang that led to the breakdown. There was no conduct on the part of One Direction that would make unconscionable the recovery of its contribution and share of the surplus, on the sale of the Property. 101 Mr Wang has contended that One Direction should be denied any form of equitable relief, including a declaration that he holds the Property on a constructive trust, because One Direction does not come to the Court with clean hands. He contends that the lack of clean hands arises from the circumstances in which the Property was acquired from the previous owner (the vendor). It is not disputed that Mr Liu acted as the agent of the vendor when that Property was acquired by Mr Wang. The contract was originally between the vendor and Solid Times and/or nominee. Mr Wang was nominated as the purchaser. It is also not disputed that by the time of settlement Mr Liu had an interest in the JVA and was entitled to 25% of the net sale proceeds under the JVA. At the time that the contract was entered into, Mr Liu had an interest in the Property by way of the informal joint venture agreement. At that time, it was not intended that Mr Tian or Solid Times would be the sole beneficial owner of the Property. 102 In these circumstances, Mr Liu and later One Direction had an interest in the Property. Mr Wang contends that Mr Liu contravened s 24G of the Land Agents and Business Agents (Sale and Conveyancing) Act 1984 (SA) and therefore does not come to the Court with clean hands. Section 24G provides: An agent who is authorised by a person (the "vendor") to sell land or a business must not obtain, or be in any way concerned in obtaining, a beneficial interest in the land or business. Maximum penalty: in the case of an aggravated offence—$100 000 or imprisonment for 2 years; in any other case—$50 000 or imprisonment for 1 year. (2)-(7)… 34 Ibid, [168]. 35 [2005] NSWSC 1059, [172]. -- 26 of 36 -- [2025] SADC 119 23 (8) The court by which a person is convicted of an offence against this section may order the person to pay to the vendor any profit that the person has made, or is, in the opinion of the court, likely to make, from a dealing with the land or business to which the offence relates. (9) If an agent obtains a beneficial interest in land or a business that the agent is authorised to sell, the agent must not demand, receive or retain commission or expenses in respect of the sale or purchase of the land or business unless— (a) the Commissioner has approved the agent obtaining the benefit under subsection (5); and (b) the Commissioner has, when giving that approval, also approved the receipt of the commission or expenses. Maximum penalty: in the case of an aggravated offence—$20 000; in any other case—$10 000. Maximum penalty: (a) in the case of an aggravated offence—$100 000 or imprisonment for 2 years; (b) in any other case—$50 000 or imprisonment for 1 year. 103 The clean hands defence is based on the premise that a person who comes to equity must come with clean hands. There are a number of reasons why Mr Wang is unable to make out this defence. 104 First, the defence has not been pleaded. The obligation is on the part of a respondent to plead a specific defence. Under UCR 67.2(a), a respondent must set out the affirmative facts relied upon to establish their defence. Mr Wang has not done so in the present case. Further, under UCR 67.2(c), a party must give fair notice of the party’s case to the opposing party so as to avoid the opposing party being taken by surprise at or in preparation for trial. Mr Wang has not complied with that requirement. 105 Secondly, there is no evidence that One Direction has come to the Court with a lack of clean hands. Even if it is accepted that One Direction or Mr Liu has contravened the Land Agents and Business Agents (Sale and Conveyancing) Act that does not mean that he has come to equity with a lack of clean hands. There was no evidence concerning what knowledge the vendor of the Property had about Mr Liu or One Direction’s interest in the Property. The vendor was not called to give evidence and Mr Liu was not cross-examined on this topic. 106 Thirdly, to establish a defence of unclean hands, the impropriety on the part of the applicant must display an immediate and necessary relationship to the equity -- 27 of 36 -- [2025] SADC 119 24 sued for,36 that is the applicant’s misconduct must be directly related to the respondent’s wrongful actions. In this case, the equity sued for is a constructive trust. The applicant’s earlier conduct does not relate to the joint venture and its breakdown or the imposition of a constructive trust. The earlier conduct on the part of the applicant does not in any way relate to Mr Wang. 107 Mr Wang also appears to contend that the contravention of the Land Agents and Business Agents (Sale and Conveyancing) Act rendered the joint venture void or Mr Liu’s or One Direction’s interest in the joint venture void. 108 I do not consider that the defence of illegality is made out. I have come to this conclusion for four reasons. First, Mr Wang has not pleaded any defence of illegality. A party seeking to rely on this defence is required to “clearly, specifically, and with detailed particulars” plead the defence of illegality.37 Mr Wang has not done so. 109 Secondly, the Land Agents and Business Agents (Sale and Conveyancing) Act renders conduct unlawful. It does not render, expressly or by implication, any contract connected with that conduct unlawful. The courts do not generally hold a statute intends to interfere with the rights and remedies conferred by contract.38 Sangster J in John S Chappel Pty Ltd v DK Pett Pty Ltd 39 held that the court should be very slow to reach this conclusion. This is especially so when a loss would be caused to an innocent person, the vendors of the Property.40 In Yango Pastoral Company Pty Ltd v First Chicago Australia Pty Ltd,41 Mason J (as he then was) held that where Parliament has provided a penalty, that is the measure of the deterrent which it intends to operate in respect of non-compliance with the Act and it is not for the court to hold that further consequences should flow. 110 Thirdly, it does not follow that because the contract renders it an offence for one party to enter into a contract, that the contract is unenforceable.42 The vendors of the Property have not engaged in any conduct that would justify a finding that the contract was unenforceable. 111 Fourthly, even if the court concluded that a contractual provision was unenforceable, the court would not grant relief to Mr Wang because that provision was unenforceable.43 One Direction does not seek any relief in respect of the contract whereby the Property was purchased from the vendors. 36 Moody v Cox and Hatt [1917] 2 Ch 71, 87-88; R v Deputy Commissioner of Taxation (WA) (1987) 72 ALR 365, 388; Dering v Earl of Winchelsea (1787) 1 Cox 318, 319; 29 ER 1184. 37 Harry Goudias Pty Ltd v Akakios (2007) 87 SASR 93, [29]; [2007] SASC 81. 38 St John Shipping Corp v Joseph Rank Ltd [1957] 1 QB 267, 288; John S Chappel Pty Ltd v D K Pett Pty Ltd (1971) 1 SASR 188,197; Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215, 243. 39 Ibid. 40 Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215, 227-228. 41 (1978) 139 CLR 410, 428. 42 Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1, [44]; [2007] HCA 38; In re Mahmoud and Ispahani [1921] 2 KB 716, 730. 43 Robertson v Adams (1922) 31 CLR 250, 258. -- 28 of 36 -- [2025] SADC 119 25 112 I have already addressed the contention of Mr Wang about the defects which he alleges exist in the Property. I have found that any defects are minor and will not prevent the sale of the Property. Accordingly, they do not affect the order for the imposition of a constructive trust or the terms of that trust. 113 It follows that One Direction is entitled to a declaration that Mr Wang holds the Property on constructive trust for himself and One Direction (Solid Times’ interest having been extinguished by reason of the Deed of Settlement). The imposition of the constructive trust is not unfair or disproportionate as it is necessary for One Direction to recover its contributions and share in the surplus on the sale of the Property. Terms of the Constructive Trust 114 The next issue that arises are the terms of the constructive trust. Three matters require determination. First, as One Direction raised in its opening, should the terms of the constructive trust include a two-step process whereby contributions are repaid and the surplus then distributed or alternatively a one-step process where the net proceeds of sale are simply distributed between the parties. Secondly, do the terms include the distribution of any surplus beyond the contributions that have been made by One Direction or as Mr Wang contends, is he intitled to the entire surplus. Thirdly, should the surplus be distributed equally between One Direction and Mr Wang or in some other way. 115 As to the first matter, I consider that the terms of the constructive trust require the repayment of contributions and then the distribution of the surplus. Such an order accords with the type of order made in Baumgartner v Baumgartner44 and the order made by Parker J in Woods v McKinlay (No 2).45 The unconscionability which equity seeks to address is the denial of the interest of the person who is not the legal owner but it does so by taking into account the contributions made by the parties. 116 As to the second and third matters, there are a number of different ways that the surplus on the sale of the Property could be distributed. First, as Mr Wang contends, the contributions made by the respective parties could be repaid (either wholly or in part) and he receive the entire surplus. Secondly, as One Direction contends, the contributions could be repaid and the surplus distributed equally between Mr Wang and One Direction (on the basis that equity favours equality). Thirdly, the contributions could be repaid and the surplus distributed equally according to the ratios set out in the JVA (i.e. One Direction receive 25%). A subsidiary question that arises if that approach is followed, is how the interest of Solid Times should be accounted for. Fourthly, the contributions could be repaid and the surplus distributed according to the ratios of the respective contributions 44 (1987) 164 CLR 137. 45 [2021] NSWSC 1510, [291] and see [13]. -- 29 of 36 -- [2025] SADC 119 26 of the parties. For example, if one party contributed 60% of the expenses, they would be entitled to 60% of the surplus. 117 In Mushinski v Dodds, the order that was made was that a constructive trust was declared which provided for the sale of the property in question, the repayment of the parties’ respective contributions (and of any outstanding debt) and the division of any residue in equal shares.46 Mason CJ, Wilson and Deane JJ held: Equity favours equality and, in circumstances where the parties have lived together for years and have pooled their resources and their efforts to create a joint home, there is much to be said for the view that they should share the beneficial ownership equally as tenants in common, subject to adjustment to avoid any injustice which would result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind. 118 There may be some cases where an adjustment is required to avoid an injustice. Thus, in Baumgartner v Baumgartner,47 it was said: The court should, where possible, strive to give effect to the notion of practical equality, rather than pursue complicated factual inquiries which will result in relatively insignificant differences in contributions and consequential beneficial interest. We do not think, however, that the difference in the present case can be regarded as relatively insignificant. 119 In Woods v McKinlay (No 2),48 Parker J referred to a decision in West v Mead,49 where Campbell J noted that the Baumgartner approach reflected the principle that it was generally just for the parties’ share of jointly acquired assets to reflect the contributions made to the purchase price rather than for the property to be divided into equal shares which would reflect the principle that equity is equality. In NSW Trustee and Guardian v Togias,50 the Court also rejected an equal division of the proceeds where the parties’ contributions to the joint endeavour had not been equal. 120 In de facto cases, such as Mushinski v Dodds and Baumgartner v Baumgartner, there may be a powerful reason why equity would favour equality. In cases of a common intention constructive trust, the quantum of the beneficial interest in the property will be that which the parties agreed upon or intended.51 That inquiry is based on their actual intention, not their presumed intention.52 If the actual intention cannot be ascertained, it was held that the starting point is then the maxim equity favours equality but that principle can and should be displaced where the parties have made unequal contributions.53 46 Woods v McKinlay (No 2) [2021] NSWSC 1510, [262]. 47 (1987) 164 CLR 137, 157. 48 [2021] NSWSC 1510, [269]. 49 [2003] NSWSC 161, [55]-[56]. 50 [2022] NSWCA 225. 51 Hansen v Noble [2021] NSWSC 138, [43]; Shepherd v Doolan [2005] NSWSC 42, [41]. 52 Ibid. 53 Ibid, -- 30 of 36 -- [2025] SADC 119 27 121 In the present case, I reject the first means of distribution, proposed by Mr Wang, that some contributions be returned to One Direction but that One Direction not participate in the surplus. Such a distribution of the proceeds of the joint venture, ignores that the money was contributed by Solid Times and One Direction as part of a joint venture. There was no intention on the part of One Direction that its entitlement would be limited to a return of its contributions. Such a distribution would render an injustice to One Direction and a windfall to Mr Wang. One Direction would bear a substantial portion of the risk with no prospect of any advantage. Mr Wang would benefit from the arrangement which would make no commercial sense from the perspective of One Direction. No principle of equity would favour such a distribution. 122 The second means of distribution, propounded by One Direction, was that the contributions be repaid and that the surplus be distributed equally between the parties. That proposal was based on the principle to which reference has been made that equity favours equality. In the circumstances of the present case, I consider that such a distribution would be unjust. It would provide a benefit to One Direction of one half of the interest that had been held by Solid Times (Solid Times previously holding a 50% interest in the assets of the joint venture including the proceeds of sale). One Direction did not in any way acquire or contribute to the acquisition of the interest of Solid Times (or the extinguishment of that interest). Mr Wang paid $740,000 to settle the claim made by Solid Times. The Deed of Settlement did not specify what happens to the interest of Solid Times once settlement was affected but it can be presumed that Mr Wang was acquiring any interest that had been held by Solid Times. Certainly, there was no intention on the part of Mr Wang and Solid Times that the interest of One Direction would increase as a result of the settlement. In these circumstances, I consider that the correct approach is to treat the payment of the $740,000 as a payment between Solid Times and Mr Wang pursuant to which Mr Wang acquired the interest of Solid Times under the JVA (to be repaid its contributions and share in the surplus) and not just as a contribution to the joint venture by Mr Wang. 123 Further, the basis of imposition of a constructive trust is the unconscionability of Mr Wang, as the legal owner of the Property, asserting an entitlement to the whole of the beneficial interest in the Property, while denying the entitlement of One Direction. The unconscionability involves the denial of the 25% interest that One Direction held under the JVA and the denial of the repayment of the contributions made by One Direction. There is no unconscionability in denying that One Direction was entitled to a 50% interest in the Property. 124 Still further, the parties had an actual intention, expressed in the JVA, as to how the funds obtained upon the sale of the Property should be distributed. The actual intention was that One Direction would receive 25% of the net proceeds. One Direction has done nothing, nor contributed any further money, that would provide any basis for the increase of that proportion. Mr Wang provided the money to Solid Times in settlement of the claim by that company. -- 31 of 36 -- [2025] SADC 119 28 125 The third possible means of distribution of the net proceeds upon the sale of the Property, is that One Direction receive 25% of the net proceeds, being the proportion that is set out in the JVA as its entitlement. Such a distribution accords with the proportion that is set out in the JVA. It accords with the common intention of the parties as expressed in that agreement. There is nothing in conscience, that justifies One Direction receiving an additional proportion based on the settlement between Mr Wang and Solid Times. I consider that the terms of the constructive trust should reflect that One Direction receive 25% of the net proceeds of sale. 126 By way of completeness, a fourth possible means of distribution of the net proceeds of sale is that the proceeds be divided to reflect the contributions made by the parties. That is, the surplus be distributed according to the same ratio as the contributions made by the parties. In the present case, on the available evidence, Solid Times has contributed 43.77% of the contributions, One Direction 21.88% and Mr Wang 34.35%. 127 A distribution of the surplus according to the ratio of contributions by the joint venture partners was the approach taken by Campbell J in West. It was also considered, but rejected, by Kunc J in Booth v Cerreto54 as a possible means of distribution. Kunc J rejected the approach, inter alia, because (a) the parties had not turned their mind as to how the proceeds should be distributed; and (b) the respondents in that case had not fulfilled their side of the bargain and it would be unjust for the respondent to be entitled to a greater share of the surplus because of the accident of their contributions exceeding the contributions of the applicant. 128 I do not consider that a division based on the proportion of contributions should be made in the present case. Such a division ignores the terms of the JVA. It further ignores the circumstances in which One Direction and Solid Times ceased making mortgage payments in January 2022, namely the failure of Mr Wang to provide them with financial documentation and co-operate in the sale of the Property. Mr Wang also had the exclusive use of the Property since January 2022. In accordance with the reasoning of Kunc J in Booth, it is an accident that the contributions of Mr Wang have exceeded the contributions of One Direction and that occurred because of the breaches of the JVA by Mr Wang. Further, the additional contributions made by Mr Wang occurred after the completion of the renovation and extension work and there is no suggestion that it was anything beyond the passage of time subsequent to the completion of the work that has led to the increased value. Timing of the constructive trust 129 In Muschiniski v Dodds, Deane J imposed a constructive trust at judgment.55 He recognised that, although remedial in nature, the constructive trust reflected rights and obligations which were in existence when the circumstances which gave 54 [2023] NSWSC 1574, [65]. 55 (1985) 160 CLR 583, 614. -- 32 of 36 -- [2025] SADC 119 29 rise to them occurred.56 Parker J in Makaritis v Makaritis (No 3)57 followed that approach and ordered that a declaration be made on final judgment but said that the agreed breakdown date of the joint venture remained relevant in determining the quantum of the parties’ entitlements under the trust. 130 I consider that approach to accord with the principles of the constructive trust and do justice between the parties. There is no reason why the trust should be imposed at some earlier point of time. Contributions to be repaid 131 It is not disputed that each of Solid Times, One Direction and Mr Wang have made contributions to the acquisition of the Property, the renovations and extension of the existing house on the Property, mortgage repayments, payments of rates and taxes and other incidental holding costs. It is also not disputed that both Solid Times and One Direction ceased making payments in about January 2022 when their requests for information from Mr Wang were not met. 132 The Court takes a broad brush approach when determining the extent of the contributions made by the parties. The documentary evidence establishes that the contributions listed below have been made by the parties. However, I do not propose to make a formal finding as to the contributions made by the parties and will give Mr Wang the opportunity to provide evidence as to further payments made by him up to the date that final orders are made and any incidental payments. 133 Solid Times has paid the sum of $15,000 towards the deposit for the purchase of the Property and the sum of $157,977 to the balance of the purchase price. One Direction has paid the sum of $7,500 towards the deposit for the purchase of the Property and the sum of $78,988.50 to the balance of the purchase price. Mr Wang has paid the sum of $7,500 towards the deposit for the purchase of the Property and the sum of $78,988.50 to the balance of the purchase price. 134 The payments of the deposit and purchase price are not in dispute and confirmed by the settlement statement (exhibit A9) and the evidence of Mr Liu. Mr Wang’s contention that Solid Times and Mr Liu did not contribute financially to the purchase of the Property in November 2018 should therefore be rejected. 135 Solid Times has paid mortgage repayments of $48,300 to RAMS (exhibit A62) and $36,800 (exhibit A28) to ANZ which payments were made up to January 2022. It appears that Solid Times’ share of rates and taxes and some other expenses were paid out of these monies that were paid into the RAMS and ANZ mortgage accounts. One Direction has paid mortgage repayments of $24,150 to RAMS (exhibit A62) and $18,400 (exhibit A28) to ANZ which payments were made up to January 2022. It appears that One Direction’s share of rates and taxes and some other expenses were paid out of these monies that were paid into the RAMS and 56 Makaritis v Makaritis (No 3) [2023] NSWSC 409, [12]. 57 Ibid. -- 33 of 36 -- [2025] SADC 119 30 ANZ mortgage accounts. Mr Wang, in his written submissions, accepts this payment was made. Mr Wang has paid the mortgage repayments of $27,000 to RAMS (exhibit A62) and $161,122.54 (exhibit A28) to ANZ which payments were made up to December 2024. It appears that Mr Wang’s share of rates and taxes and some other expenses were paid out of these monies that were paid into the RAMS and ANZ mortgage accounts. 136 Again, I do not understand there to be any dispute about these payments and they are supported by the documentary evidence. 137 Mr Wang has paid (or the sum was paid for his benefit) the sum of $83,981.76 upon the discharge of the RAMS mortgage and the taking out of the ANZ mortgage. Although there is some doubt about the source of these funds, there is no dispute that the payment was made and Mr Wang is entitled to take that payment into account. 138 Solid Times has paid incidental expenses in the sum of $3627.50 (exhibit A50 and A62) to the RAMS account and the sum of $1312.10 to the ANZ account (exhibit A51 and A28). One Direction has paid incidental expenses in the sum of $1813.50 (exhibit A50 and A62) to the RAMS account and the sum of $656.05 to the ANZ account (exhibit A51 and A28). It is not clear what incidental expenses may have been paid by Mr Wang. 139 Solid Times’ share of the cost of the building works was in the sum of $477,652.82 (Solid Times carried out the building works). I am prepared to find that the value of that work was in that sum. Under the terms of the JVA, expenses were to be paid in the ratio of 50% by Solid Times, 25% by One Direction and 25% by Mr Wang. This sum accords with that ratio. Further, Mr Wang gave evidence that the cost of the building work exceeded the budgeted amount. Again, this sum broadly accords with this figure. One Direction paid the sum of $238,826.41 (exhibits A33-A49) for the building works. Mr Wang accepted this payment was made but submitted that it should be treated as a separate matter between Solid Times and One Direction. There is no basis for that submission. The payment was made pursuant to the JVA and for the purposes of the joint venture. There is no logical reason why it could be characterised as anything else. Mr Wang paid the sum of $222,776.41 for the building works (exhibit R73). Mr Wang admitted that he did not pay the last invoice. Mr Wang in his written submission accepts this was the amount that he paid for the building work. 140 One Direction has calculated the total of the contributions and subject to adjustment, are as follows: • $740,669.65 (or 43.77% of the total contributions) by Solid Times; • $370,334.46 (or 21.88% of the total contributions) by One Direction; -- 34 of 36 -- [2025] SADC 119 31 • $581,329.19 (or 34.35% of the total contributions) in the case of Mr Wang. 141 There are two contentious matters regarding the extent of the contributions that have been made by the parties. First, Mr Wang submits that he should be given the benefit of the contribution to the purchase price of the Property represented by the mortgage. The sum of $824,000 was paid towards the purchase price by RAMS as the mortgagee. Mr Wang contends that as the mortgage was in his sole name, that contribution should be allocated to him. I reject that submission. I have found the Property was an asset of the joint venture. The acquisition of the Property was also for the purposes of the joint venture. The joint venture partners equally contributed to the mortgage repayments until January 2022 when Mr Wang failed to provide the requested financial documentation. Mr Wang holds the Property on trust for himself and One Direction and Solid Times (until the Settlement Agreement between Mr Wang and Solid Times). Put in another way, Mr Wang was not solely responsible for the mortgage under the JVA. He would not have been responsible for any shortfall if the mortgage was unable to be repaid on the sale of the Property. Such a finding accords with the decision in Booth v Cerreto58 where credit was only given to the respondent in whose name the mortgage was held for the payment of interest on the mortgage (in the case of an interest only mortgage) and not the mortgage amount itself. 142 The second question that arises in relation to the determination of the re- payment of the contributions is how to take into account the contributions that have been made by Solid Times given the settlement agreement that was entered into between Solid Times and Mr Wang. The settlement agreement does not provide for any assignment of the interest of Solid Times to Mr Wang. It does not state what is to happen to the interest of Solid Times. I consider that the contributions made by Solid Times should be taken into account and repaid to Mr Wang prior to the distribution of the surplus to Mr Wang and One Direction. I have come to this conclusion for two reasons. First, Mr Wang has paid the sum of $740,000 for the extinguishment of the claim that Solid Times has as a consequence of the failure of the joint venture. The claim of Solid Times had two components, the repayment of the contributions made by it and an entitlement to receive 50% of the surplus. Mr Wang did not make that payment for the benefit of One Direction. He made the payment for his own benefit and therefore the benefit of that payment should be taken into account when determining the terms of the constructive trust. One Direction should not be entitled to a windfall in the sense of either lesser reductions for contributions or an increase in the percentage of the surplus to which it was entitled, because of the settlement between Mr Wang and Solid Times. Secondly, the basis for the imposition of the constructive trust is the unconscionability in denying One Direction’s interest that it had because of the joint venture. That interest was to be re-paid its contributions and have a 25% interest in the surplus after the contributions of all of the parties should be re-paid. 58 [2023] NSWSC 1574, [51]. -- 35 of 36 -- [2025] SADC 119 32 143 The precise amount of the repayments will need to be determined at the date of sale as Mr Wang will or may incur further expenses in the period up to settlement including further payment of mortgage and rates and taxes. Conclusion 144 For the reasons that have been expressed, the appropriate order is that there will be a declaration that Mr Wang holds the Property by way of a constructive trust for the benefit of himself and One Direction and that it be a term of the trust that the Property be sold, with the net proceeds to be applied first, to the discharge of any mortgage over the Property (provided that the funds obtained from the mortgage have been used for the purposes of the joint venture), then to refund the contributions made by Mr Wang (which will include the contributions made by Solid Times) and One Direction with the surplus to be distributed as to 25% to One Direction and 75% to Mr Wang. 145 I direct that the applicant brings in minutes of order that reflect these reasons and to include orders that are proposed about the sale process. I will hear the parties on the precise amount of the contributions that have been made. I will also hear the parties as to costs. -- 36 of 36 --