Cai v Guo

Judgment 1HER HONOUR: The plaintiff seeks an order pursuant to s 140 of the Civil Procedure Act 2005 (NSW) that District Court proceedings commenced by statement of claim in June 2013 be transferred to this Court and a related order that the District Court proceedings be stayed pending the determination of that question. I note that the order for a stay has been effectively overtaken by the hearing in the District Court listed for 26 February 2014 being vacated at which time the matter was re-listed for directions on 17 April 2014 pending resolution of the question of transfer. 2The orders the plaintiff seeks are opposed. The plaintiff relies upon an affidavit from Ying Zhang affirmed on 20 February 2014. Mr Zhang is a solicitor who has carriage of the matter on behalf of the plaintiff's solicitors, Ren Zhou Lawyers. Mr Zhang attests to the circumstances in which the application is made and the basis upon which I ought exercise the discretion in s 140 in his client's favour. He deposes to the fact that on receipt of instructions from the plaintiff in February 2014, after instructions from the plaintiff's previous lawyers were withdrawn, and following his review of the matter at that time, that in his assessment the plaintiff is entitled to equitable relief which is beyond the jurisdiction of the District Court having regard to the operation of s 134 of the District Court Act 1973 (NSW). 3The defendant relies upon an affidavit from his solicitor, Marcus Hangwei Lowe, a paralegal employed by Lin Tang & Company Lawyers, solicitors for the defendant in the proceedings. In that affidavit Mr Lowe complains as to the plaintiff's conduct in the proceedings in the District Court which has delayed preparation of the defendant's case. That complaint was in turn relied upon, amongst other considerations, to ground the submission that there has been a failure on the part of the plaintiff to comply with the mandate in s 56 of the Civil Procedure Act and that I would refuse to exercise the discretion in s 140 in the plaintiff's favour for that reason. 4In addition, the defendant submitted that were the matter to be transferred, the complete recasting of the plaintiff's case for equitable relief would afford him an unfair forensic advantage with costs consequences which the defendant should not be obliged to bear. 5The relief sought in the District Court proceedings was for a liquidated sum of $120,000 plus interest pursuant to what was said to be an oral contract entered into in January 2006 in which the plaintiff agreed to lend the defendant that sum to assist her to purchase a property at Hurstville. The contract was said to be between the plaintiff and the defendant's father who negotiated the loan on her behalf. 6The plaintiff claims that the loan moneys were deposited to the defendant's bank account on 14 February 2006. The terms upon which the funds were advanced, including the term of the loan itself, are not further particularised in the pleadings, save for an amendment to the statement of claim in which it is alleged that the time for repayment of the loan was extended from time to time over a period of six years on the agreed basis that the defendant's father would guarantee repayment of the loan. The defendant's father is not a party to the proceedings. I am informed from the bar table that he resides in China. 7A defence has apparently been filed in the District Court in which the defendant admits receiving $120,000 into her bank account on the given date from the defendant but denies any indebtedness to him. As I understand it, she maintains that the plaintiff was simply the conduit through whom moneys were transferred out of China via Hong Kong, the provenance of the moneys being from her father. In the alternative the defendant maintains that the action in contract is statute-barred. 8Various procedural steps have been taken in the District Court in readiness for the hearing since vacated, including orders for discovery. The defendant complains that there has been delay in the preparation of his case occasioned by the plaintiff's non-compliance with those orders. I understand that has been rectified in recent times. 9The relief sought in the statement of claim under which the plaintiff seeks relief in this Court includes a declaration that the defendant holds the Hurstville property on trust in a notional split of shares equal to the sum presumably said to be advanced by him, an order that the defendant transfer that nominated interest in the property to him as a tenant in common and a further order, pursuant to s 66G of the Conveyancing Act 1919 (NSW), that a trustee be appointed for sale of the property. Alternatively, a declaration is sought that the plaintiff is entitled to a charge on the property in the amount of $120,000 plus interest, since the date of the advance on 14 February 2006. Alternatively, judgment for the plaintiff in the sum of $120,000 and interest pursuant to s 100 of the Civil Procedure Act. 10Although what is said to be a trust underlying the transfer of the funds into the defendant's bank account in February 2006, and the related relief sought is substantially different from that which is sought in the District Court proceedings, that may not of itself be a reason for refusing the application to transfer the proceedings. I do note, however, that since the equitable relief is the dominant relief sought by the proposed proceedings in this court, it would not be subject to the Limitation Act 1969 (NSW) defence pleaded below. 11The defendant does not submit that the evidence upon which the plaintiff's claim is grounded is likely to be different in either proceeding, or that the evidence already assembled is likely to be different and for that reason that there is any particular prejudice occasioned to him were the proceedings transferred to this Court. In addition, as I understand it, the underlying factual question in dispute appears to be the same in both proceedings, namely both the provenance of the moneys deposited to the defendant's bank account, and under whose authority they were transferred from China and receipted by the local bank account. 12As Brereton J acknowledged in Rinbac Pty Ltd v The Owners - Strata Plan No 64972 [2010] NSWSC 656; 77 NSWLR 601 the purpose of the Civil Procedure Act, in particular s 140, is to permit the removal from a lower court to a higher court of proceedings where there is a good reason to do so. Typically, as his Honour observed, that has been when there has been a risk that the jurisdictional limit affecting the lower court would be exceeded. As I have noted, I accept that s 134 of the District Court Act operates to deny the equitable relief sought by the plaintiff were the proceedings in the District Court amended to incorporate the specific relief sought in the proceedings proposed to be filed in this Court. 13His Honour went on to note that other circumstances, namely, where there are complex and important issues or where the proceedings involved allegations of significant notoriety or public importance might justify a transfer of proceedings. Neither of those bases is activated on this application. 14The terms in which s 140 is expressed do not set out any particular considerations which are relevant to the exercise of the discretion. That said, the parties acknowledge, and properly, that the considerations encompassed in s 56 of the Civil Procedure Act bear upon the exercise of discretion. I accept, of course, the force of that submission. 15The overriding purpose, as articulated in s 56 of the Civil Procedure Act and its application in a civil dispute, or where the court is exercising any power under this Act or by the rules of the court, is to facilitate the just, quick and cheap resolution of the real issues in dispute. I also note that a party to proceedings is under a statutory duty to assist the court to further that overriding purpose and to participate in the processes of the court with that outcome in mind. 16Whilst there has been delay occasioned by the plaintiff's non-compliance with certain orders made in the District Court proceedings, I do not regard the plaintiff's conduct to date as disentitling him from seeking to have the proceedings transferred to this Court where, as he contends, the appropriate relief, if made out, would be available to him. 17That said, the proceedings were commenced in the District Court and it was only after a change of solicitor and after a review of the proceedings in preparation for hearing that the application is made involving, as it does, a very substantial recasting of the relief sought. 18I am informed from the bar table through Mr Saunders who appears for the defendant, that the costs generated to date in preparation of the District Court proceedings, proceedings which I note are well advanced, indeed with a hearing date having been recently vacated, are estimated to amount to $35,000. Whilst it is fair to anticipate that some of the work already done will be put to proof of matters in dispute in the proceedings that are proposed to be transferred to this Court, I do not consider that it is fair and equitable that the defendant bear that cost in anticipation of recovering his costs if he is successful. 19Following the preparation of some short minutes, the proceedings will be transferred into this Court on condition that the plaintiff pays to the defendant on or before 10 April 2014, which is a full working week in advance of the next listing in the District Court, the sum of $12,500 representing part of the costs thrown away in the District Court proceedings. 20In the event that those moneys are paid and properly receipted on or before that date, the proceedings, as recast, can be filed in this Court. The order is, in effect, self-executing in the sense that if the costs are not paid the proceedings cannot be filed and the matter will proceed in the way the proceedings have been cast to date in the District Court. I ask the parties to draw up some short minutes which represent my decision, which I am satisfied is a fair and balanced way of taking into account the competing submissions of the parties. 21Orders made in accordance with short minutes of order in the following terms: