Chen v Marcolongo; Chen v Lym International Pty Ltd

40118/09 Yu Po Chen (Appellant) Leonilda Marcolongo (First Respondent) Lym International Pty Ltd (Second Respondent) PARTIES: 40119/09 Yu Po Chen (Appellant) Lym International Pty Ltd (First Respondent) Westpac Banking Corporation (Fourth Respondent) Limin Yang (Second Respondent) Yang Liu (Third Respondent)

40118/09 D R Pritchard SC/J C Hewitt (Appellant) T A Alexis SC/DH Mitchell (First respondent) COUNSEL: T S Hale SC/S Wells (Second respondent) 40110/09 R Pritchard SC/J C Hewitt (Appellant) T S Hale SC/S Wells (First, second and third respondents) Submitting appearance (Fourth respondent)

40118/09 Middletons (Appellant) Dunstan Legal (First respondent) SOLICITORS: Unsworth Legal Pty Ltd (Second respondent) 40119/09 Middletons (Appellant) Unsworth Legal Pty Ltd (First, second and third appellants) Henry Davis York (Submitting appearance) (Fourth respondent)

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT MEDIUM NEUTRAL CITATION: Lym International Pty Ltd v Chen; Marcolongo v Lym International Pty Ltd [2009] NSWSC 98; [2009] NSWSC 167; [2009] NSWSC 182

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40118/09 40119/09

ALLSOP P GILES JA YOUNG JA

12 November 2009 Chen v Marcolongo; Chen v Lym International Pty Ltd (No 2) Judgment 1 THE COURT: On 13 October 2009, the Court made orders on the two appeals. The Court gave the parties 14 days to propose any variation to the orders, because the appeals were complex. Some matters were sought by way of correction, which are not controversial. Some matters required written argument. These reasons are to be understood in the light of the helpful and short submissions of the parties.

The Marcolongo Appeal 2 The first dispute concerns whether Mrs Marcolongo should pay Lym International's costs of the trial. We think she should. Lym International was joined to the action. To an extent it participated in the hearing. The order for costs against it by the primary judge shows that. How much is involved will be a matter for assessment. Order 3 should remain unaltered. 3 There should be a variation to order 4 that limits Mrs Marcolongo's obligation to pay the costs of the appeal to those of Mr Chen. This was not contested. Lym International filed a submitting appearance on the appeal. 4 An order numbered 5 should be inserted providing for the return of $60,000 paid into Court for security for costs of the appeal. That order should be stayed, however, at least until the disposition of the application for special leave which, it is said, Mrs Marcolongo intends to file. If special leave be refused, the order can take effect forthwith. If leave be granted, the stay can remain in place until the disposition of the appeal. Given the evidence and issues in the case there is no basis to think that, if we are wrong in our dealing with the appeal, Mr Chen would now be good for the costs of the appeal in this Court. There is no particular prejudice to Mr Chen identified. It should be clear, however, that the funds are not security for the costs of the High Court appeal (if any) or for the costs of the special leave application, but for the costs of the appeal in this Court. Thus the terms of the stay subject to further order by this Court or the High Court would be that order 5 be stayed:

(a) until the dismissal or withdrawal of any special leave application filed by Mrs Marcolongo; or

(b) until 20 November 2009, if no special leave application is filed and served by that date; or

(c) if special leave be granted until the disposition by judgment or otherwise of any appeal to the High Court.

The Lym International Appeal 5 Various amendments are made by consent, they being:

(a) certain mistakes in the substituted paragraph 4:

(ii) changing "first defendant" to "first plaintiff" on line 4; and

(iii) changing "appellant" to "first defendant" whenever appearing.

(b) After (A) dealing with deleted orders 4 and 5, there should be inserted:

(B) Add new order 7(l): "the amount of the just allowances which should be made to the first defendant" (C) Delete from Order 9(a) the words "and (k)" and substitute, ", (k) and (l)".

(c) Insert a paragraph in the following terms: (x) Delete order 19(c) 6 Dispute centres upon changes to Order 9. The following changes (marked in bold) were sought by Mr Chen: "Delete order s 9(a)(ii), 9(a)(iii) and 9(c) and delete from order 9(b) the words "subject to paragraph (c) of this order." 7 Mr Chen also sought the addition of an Order 24. 8 Lym International wanted further amendments to order 9(a)(i) and a variation to Order 24 as proposed by Mr Chen. 9 As to Order 9(a)(ii) and (iii), Mr Chen says that this reflects the upholding of ground 31 which covered, in terms, the sums payable in favour of the first, second and third respondents. Plainly the reasons of Young JA at [343] and [344] were dealing with Ms Yang and Jasmine and ground 31 was upheld to that extent. This requires the deletion of Order 9(a)(iii), but not 9(a)(ii). Order 9(a)(ii) will not be deleted. 10 As to the amendments to Order 9(a)(i), Lym International seeks an amendment to Order 9(a)(i) to reflect any payment under the new order 4. Mr Chen opposes it as unnecessary and as creating the risk of double counting. We do not think that such risk is real. There is merit in the proposed order. We do accept, however, the drafting suggestion of Mr Chen as to the use of the phrase "as a result of" rather than "upon." 11 There was no other opposition to the changes to Order 9 suggested by Mr Chen. 12 There was no opposition to the variation to Order 24 suggested by Lym International. 13 Thus Order 9(a)(i) will be amended to read as follows: "9(a)(i) The sum of the amounts found and certified under Order 7(c), (g), (i) and (j) together with any sums paid by the first plaintiff or on its behalf pursuant to Order 4 in the discharge of Mortgage AC548062S or the amount of any liability incurred by it as a result of the assignment of the said Mortgage to it." 14 Order 24 will be added in the following form: "Liberty to any party to apply to a Judge of the Equity Division on 5 days' notice to discharge any order that may have become otise by way of changing circumstances and generally including liberty to apply to vary any of these Orders in the event that the second defendant takes possession of or sells any of the units referred to in the declaration in Order 3." 15 For the sake of good order, clarity and completeness we will revoke the totality of the orders of the Court dated 13 October 2009 in both CA 40118/09 (the Marcolongo Appeal) and CA 40119/09 (the Lym International Appeal) and substitute self contained orders for each of the appeals. 16 A reformulated set of orders is as set out below.

Revoke the orders of the Court dated 13 October 2009 and in place order:

The declaration and orders of the Court made on 18 March 2009 and entered on 23 March 2009 in favour of the first respondent, Mrs Marcolongo, be set aside.

Order that Mrs Marcolongo's proceedings be dismissed with costs.

Order that Mrs Marcolongo pay the costs of Mr Chen of the appeal but Mrs Marcolongo to have a certificate under the Suitors' Fund Act 1951 (NSW).

Subject to Order 6 below, order that the sum of $60,000 paid into Court on behalf of the appellant as security for costs together with interest accumulated thereon be paid out forthwith to the Solicitor for the appellant.

Subject to further order, stay order 5: (a) until the dismissal or withdrawal of any special leave application filed by Mrs Marcolongo; or (b) until 20 November 2009, if no special leave application is filed and served by that date; or (c) if special leave be granted, until the disposition by judgment or otherwise of any appeal to the High Court.

Revoke the orders of the Court dated 13 October 2009 and in place order:

2. Vary the order made by the Court on 18 March 2009 and entered on 19 March 2009 as follows:

(A) Delete orders 4 and 5 and substitute: "4. Order that upon the plaintiffs and Westpac Banking Corporation agreeing that there can be an assignment of registered mortgage AC 548062S to the first plaintiff with no future liability on the first defendant or upon the first plaintiff tendering to the first defendant the amount of money necessary to discharge the said mortgage, the first defendant forthwith execute a transfer in registrable form of the Units in favour of the first plaintiff and do all things and take all other steps necessary to convey the Units to the first plaintiff."

(B) Add new Order 7(l): "the amount of the just allowances which should be made to the first defendant."

(C) Delete from Order 8 the words "and to certify the results of the inquiry to the Court" and insert the words "and to give judgment for the party or parties whom such inquiry finds liable to pay monies to some other party." (D) Delete from Order 9(a) the words "and (k)" and substitute ", (k) and (l)".

"The sum of the amounts found and certified under Order 7(c), (g), (i) and (j) together with any sums paid by the first plaintiff or on its behalf pursuant to Order 4 in the discharge of Mortgage AC548062S or the amount of any liability incurred by it as a result of the assignment of the said Mortgage to it."

(F) Delete Orders 9(a)(iii) and 9(c) and delete from Order 9(b) the words "subject to paragraph (c) of this order".

(G) (i) delete from Order 17(a) the words "and Mrs Marcolongo";

(ii) add to the end of Order 17(c) "provided that this order 17(c) shall cease to have effect upon the judgment in Order 12 and the judgment in Order 13 both being fully satisfied".

(H) Delete from order 18(a) the words "and Mrs Marcolongo".

(J) Add new order 24: "Liberty to any party to apply to a Judge of the Equity Division on 5 days' notice to discharge any order that may have become otiose by way of changing circumstances and generally including liberty to apply to vary any of these Orders in the event that the second defendant takes possession of or sells any of the units referred to in the declaration in Order 3."

4. Order that the appellant pays 95% of the costs of the first, second and third respondents and the whole of the costs of the fourth respondent as a submitting respondent.

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