First Plaintiff/First Defendant by Counterclaim v First Defendant/First Plaintiff by Counterclaim

Supreme Court of Victoria|2016-08-31|Before: VICKERY J

PRACTICE AND PROCEDURE - Separate questions stated to be addressed upon and ruled upon by judgment sequentially at the conclusion of the whole of the evidence in a 'sequential trial'- Order for trial of three questions at the conclusion of the evidence in a first tranche of stated questions - Questions of pivotal importance to the determination of the real issues in dispute -Advantages of the 'sequential trial' model in commercial litigation of considerable complexity -Supreme Court (General Civil Procedure) Rules 2015, Rule 47.04 - Civil Procedure Act 2010 (Vic), ss 7, 8, 9, 47 and .

1 This proceeding arises from the management of investments in Australia undertaken by the Hoh family of Malaysia, or parts of the Hoh family. The investments were property investments made in Victoria. Questions as to the beneficial ownership of the property investments is the subject matter of the litigation.

2 The Hoh Family was headed by Hoh Ying Chye ('Hoh Senior') who was married to Madam Yow Yow Mui ('Madam Yow'). They are both now deceased. They had seven children.

3 Hoh Senior passed away on 21 April 1988. Before his death, Hoh Senior delivered instructions for his will which included the following prayer:

These are my last instructions to my children, grand-children and their descendants and it is my sincere wish that they will be faithfully carried out.

...

It is my deepest and dearest wishes that my children and descendants will continue to love and help each other when I am gone. Take heed of the old saying "Harmony within the Family promotes prosperity". The way to achieve such harmony as taught by ancient sages is to cultivate the virtues of filial piety and brotherly love.

4 It is tragic for the Hoh family that these wishes of Hoh Senior have not to date been fulfilled, culminating in the present litigation of Wagnerian proportions and cost - not only in financial terms, but also in exacerbating the strains within the family which have driven it to this point.

5 However, it is never too late. No dispute, however seemingly intractable, is incapable of resolution by the agreement of the parties, provided the conditions are in place which encourage them to commit to finding a solution to their problem.

6 The seven children of Hoh Senior and Madam Yow were:

(1) Robert Hoh Kiang Chan ('Robert'), who passed away on 24 December 2007;

(2) Linda Hoh Yuet Ngo ('Linda'), who passed away in 1959;

(3) Maureen Yuet Ming Oborn (nee Hoh) ('Maureen', also nicknamed "Binky" by the Hoh family);

(5) George Hoh Kiang Po ('George') - the Third Plaintiff. George's mistress for a time was Choy Fong Yik ('Sylvia');

(6) Frank Hoh Kiang Ngan ('Frank', also nicknamed 'Uncle Fatty' by the Hoh family) - the First Defendant;

(7) Richard Hoh Kiang Seong ('Richard', also nicknamed 'Uncle Mouse' by the Hoh family).

7 Disputes have divided the Hoh family into three factions.

8 In the period 1997 - 1998 Derek and Richard split from the Hoh family following their refusal to sign bank guarantees to support loans to the family company, Sharikat Ying Mui Sendirian Berhad ('SYM') and their desire to have their shareholdings in SYM paid out. In August 2002, Derek and Richard commenced a proceeding to wind up SYM which was unsuccessful.

9 For the purposes of the present litigation, the family has divided into two further factions.

10 On the one side is the faction led by George (the Third Plaintiff), supported by Maureen and Han Kayet Hoh ('Han') (the Fourth Plaintiff) who is George's nephew, being the son of George's brother Robert (now deceased). Han stepped into the shoes of Robert upon his death.

11 On the other side is the faction led by Frank (the First Defendant), supported by his wife Pooi Yoke Lim Hoh ('Pooi' also nicknamed 'Kit' by the Hoh family) (the Second Defendant) and their children, Lynn Yook Lien Hoh ('Lynn') (the Third Defendant) (who was Frank's daughter), Ian Han Lok Hoh ('Ian') (who was Frank's son) (the Fourth Defendant); and Dominic Weng Khong Low ('Dominic'), who is Lynn's husband.

12 Sharikat Ying Mui Sendirian Berhad ('SYM') is a company that was founded by Hoh Senior. It was the original source of the Hoh family wealth and prosperity.

13 SYM is a private limited company incorporated in Malaysia on 26 September 1968. The original subscribers of SYM's shares were Hoh Senior and Madam Yow, each holding one share.

14 The principal activities of SYM were property investments, the letting of properties, investments in pawnshop businesses, trading in gold and jewellery, and general trading.

15 SYM also owned shares in the following pawnshop companies incorporated and operating in Malaysia (collectively the 'Pawnshops'):

(1) Choong Teck Pawnshop Sdn Bhd (incorporated on 8 May 1998);

(2) Cheong Fatt Pawnshop Sdn Bhd (incorporated on 9 May 1998);

(3) Choong Thye Pawnshop Sdn Bhd (incorporated on 28 January 2004); and

(4) Choong Yee Pawnshop Sdn Bhd (incorporated on 11 June 1997).

16 Ying Mui Pty Ltd ('Ying Mui') is the First Plaintiff. The shareholders of Ying Mui are presently George (the Third Plaintiff), and Han (the Fourth Plaintiff). George is also a director of Ying Mui.

17 Ying Mui was originally incorporated to purchase and hold a property in the Sydney suburb of Longueville called the 'Red House'. The Red House was sold in the period 1997-1998.

18 From about 6 July 2001 until 18 November 2011 Ying Mui carried on the business of trustee, initially as trustee for the Hoh Family Trust, which after 16 February 2002, became the Ying Mui Trust.

19 Amore Corporation Pty Ltd ('Amore') is the Second Plaintiff.

20 Lokit Investments Pty Ltd ('Lockit') is the Fifth Defendant. Frank is a director of Lockit.

21 Lumarkye Pty Ltd ('Lumarkye') is the Sixth Defendant. The directors of Lumarkye are Dominic Weng Khong Low ('Dominic') and You Keun Hoo (known as 'Vgene' or 'Aunty You').

22 Frosthollow Pty Ltd ('Frosthollow') is the Seventh Defendant. The sole director and shareholder of Frosthollow is Frank's daughter Lynn.

23 Frosthollow is presently the trustee of two family discretionary trusts, the Ying Mui Trust and the Amore Trust ('Amore Trust'), which are also central actors in the case. The First Plaintiff, Ying Mui, is the former trustee of Ying Mui Trust and the Second Plaintiff, Amore, is the former trustee of the Amore Trust.

24 Other central corporate entities in the proceeding are:

(a) Olrey Pty Ltd ('Olrey') (the Eighth Defendant), whose sole director is Frank's daughter Lynn;

(b) The FRG Investments Trust, a discretionary trust of which Olrey is the trustee;

(c) FRG Investments Ltd (an acronym for Frank, Robert & George), incorporated in the British Virgin Islands;

(e) Opesco Investments Pty Ltd ('Opesco'), which was incorporated in Hong Kong in 1988;

(f) Artimax Investment Ltd ('Artimax'), which was incorporated in Hong Kong as a limited company on 22 October 1999. At the time of incorporation, the only registered shareholders and directors were Robert, George and Frank. Upon Robert's death on 24 December 2007, George and Frank became the only directors of Artimax;

(i) The Woolshed Unit Trust, of which Lumarkye is the trustee;

(j) The River Venture Unit Trust, of which River Ventures Pty Ltd is the trustee;

25 Robert was married to Daisy Sui Keng Hoh ('Daisy'). Their son Han Keyet Hoh ('Han') is the Fourth Plaintiff.

26 As earlier noted, Robert passed away on 24 December 2007.

27 By his will dated November 1964, Daisy was appointed to be the sole executrix of Robert's estate (the 'Estate'), and was bequeathed and devised all of Robert's property absolutely. On 12 October 2012, probate in respect of the Estate was granted to Daisy in Hong Kong. The Estate included Robert's one share in Artimax.

28 The following events are summarised in the findings made by the High Court of Hong Kong in the case reported as Hoh Han Keyet v Artimax Investment Ltd and Others.[1] The facts of this case, supported by the evidence, give rise to similar findings.

29 As the sole executrix and beneficiary of the Estate, Daisy elected to register Han as the holder of Robert's Share. By an instrument of transfer dated 13 December 2012, Daisy transferred Robert's Share to Han as a gift.

30 By a letter dated 17 December 2012, Daisy requested Artimax's Board of Directors to effect the Transfer.

31 On 20 December 2012, George, in his capacity as a director of Artimax, issued a Notice of Board of Directors Meeting to convene a meeting on 28 December 2012 to (1) approve the Transfer from Daisy to Han, and (2) Han's name be entered in Artimax's register of members as the holder of Robert's Share.

32 On 28 December 2012, Frank's solicitors wrote to George stating that Frank would not attend the meeting as he needed to see evidence of Daisy's right to administer the Estate in Hong Kong and the instrument of transfer before considering the proposed transfer.

33 The board meeting of Artimax did not take place on 28 December 2012 as Frank was absent and no quorum was formed.

34 On 3 January 2013, Chartac Secretaries Limited (the Company Secretary of Artimax) provided Frank's solicitors with (1) the Probate, (2) the Request for Registration of Share Transfer dated 17 December 2012 signed by Daisy seeking the Transfer and (3) an instrument of transfer dated 13 December 2012 signed by Daisy and Han.

35 On 3 January 2013, George issued another Notice of Board of Directors Meeting to convene a board meeting of Artimax on 11 January 2013 to consider and vote on the two proposed resolutions set out in the Notice of 20 December 2012.

36 On 10 January 2013, Frank's solicitors wrote to George and Daisy stating that (1) the 3 shares in Artimax have always been held on trust for SYM, (2) SYM would direct the shareholders of Artimax to transfer their shares to SYM within 28 days and (3) the proposed transfer of Robert's Share to Han would be inappropriate since it was held on trust for SYM.

37 The proposed board meeting of Artimax did not take place on 11 January 2013 as Frank did not attend the meeting and no quorum was formed.

38 On 28 June 2013, Han issued a writ in the High Court of Hong Kong (the 'Hong Kong proceeding') seeking: (1) a declaration that he is the legal and beneficial owner of Robert's Share, and (2) an order that his name be entered in Artimax's register of members as the holder of Robert's Share.

39 By counterclaim, SYM sought (1) a declaration that Robert's Share and the one share in Artimax registered in George's name are held on trust for SYM and (2) consequential orders for the issuance of new share certificates in SYM's name and rectification of Artimax register of members.

40 The central issue in the Hong Kong proceeding was therefore whether the shares in Artimax were held by the registered shareholders on trust for SYM. Frank and SYM's case in the Hong Kong proceeding was that the shares in Artimax were held by the three registered shareholders on (1) an express trust, or (2) alternatively a common intention constructive trust, for SYM,

41 On 30 June 2016 the High Court gave judgment in favour of Han and dismissed SYM's counterclaim, in the case reported as Hoh Han Keyet v Artimax Investment Ltd and Others.[2] The judgment at first instance is presently the subject of an appeal.

42 This proceeding has extraordinary breadth and has generated a very large number of issues to be determined. Factually, the issues span more than fifteen years of complex commercial activity, and involve numerous actors and commercial entities. Many documents have been generated by these activities for the Court to consider, contained in the Court Books and Supplementary Court Books. Further, a considerable number of causes of action have been pleaded which call for close analysis and determination. The Further Amended Statement of Claim extends to 464 paragraphs of pleadings; and contains 56 prayers for relief, together with 8 Schedules of Particulars.

43 These factors call for special management of this trial. In particular, the provisions of the Civil Procedure Act 2010 (Vic) (the 'CPA') should be invoked during the course of this trial in order to further the overarching purpose of the CPA, as best as it is possible to achieve it.

44 In particular the following provisions of the CPA required this to be done:

(a) the overarching purpose of the CPA, which is to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute (s 7(1) of the CPA);

(b) the Court's statutory obligation to give effect to the overarching purpose, including in the conduct of a trial (ss 8 and 9 of the CPA);

(c) the exercise of judicial powers of case management in accordance with the principles set out in the Act (s 47 of the CPA);

(d) the Court's power to order and direct trial procedures and the conduct of the hearing to further the overarching purpose pursuant to s 49, which may be given during a hearing (s 49(2)(b) of the CPA); and which may include orders as to the mode of trial (s 49(3)(i) of the CPA); and

(e) the power of the Court to give a direction or make any order it considers appropriate as to the order in which addresses are made (s 49(3)(a) of the CPA); and

(f) pursuant to the power of the Court to make any other appropriate orders to further the overarching purpose (s 49(1) of the CPA).

45 Order 47.04 of the Supreme Court (General Civil Procedure) Rules 2015 (the 'Rules of Court') provides a useful facility for management of the trial:

R 47.04

Separate trial of question

The Court may order that -

(a) any question in a proceeding be tried before, at or after the trial of the proceeding, and may state the question or give directions as to the manner in which it shall be stated;

(b) different questions be tried at different times or places or by different modes of trial. [Emphasis added]

46 Although r 47.04, when it is used by the Court, is most commonly used to state a preliminary question prior to the trial of the principal proceeding, the rule specifically contemplates that any question in a proceeding may be stated for trial 'at or after' the trial of the proceeding. One possible use of the rule which is open according to its text, is for the trial Judge to take the following steps, with a view to conducting a 'sequential trial':

(a) conduct the trial by first taking in all of the evidence;

(b) at an appropriate time during the trial, if appropriate to do so, state questions to be addressed in final address in tranches;

(c) hear the first tranche of final addresses which are confined to addressing the first tranche of questions stated; and

(d) then deliver judgment on the first tranche of questions stated, before proceeding to the next tranche, and so on, until the case is complete.

47 In Murphy v State of Victoria & Anor[3] the Court of Appeal[4] endorsed the principles relied upon by the trial Judge[5] in stating separate questions. The Court of Appeal adopted with approval the following principles [citation of authorities omitted]:

A separate trial should be ordered under r 47.04 only with great caution and only in a clear case.
The attraction of trials of issues rather than of cases in their totality, 'are often more chimerical than real', so that separate trials should 'only be embarked upon when their utility, economy and fairness to the parties are beyond question'.
The advantages of trying separate questions for one party may unfairly disadvantage another party, including because the questions will be determined without the benefit of all the evidence relevant to the proceeding.
There should be no trial of a separate question on the basis of assumed facts unless the facts are agreed or can readily be determined judicially. Otherwise, the parties remain free to dispute the relevant facts at any later trial.
As a general rule, it is inappropriate to order that a preliminary issue be isolated for determination unless the determination of the issue in favour of the plaintiff or the defendant will put an end to the action, or where there is a clear line of demarcation between issues and the determination of one issue in isolation from the other issues in the case is likely to save inconvenience and expense.
Factors which tell against making order under r 47.04 include that the separate determination of the question:
1. may give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial;
2. may result in significant overlap between the evidence adduced on the hearing of the separate question and at trial; possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding; and

c. may prolong rather than shorten the litigation.

48 However, Murphy,[6] both at first instance and on appeal, was decided in a different context to the present. In that case the preliminary questions were stated for determination prior to the trial of the evidence in the principal proceeding.

49 Where, on the other hand the evidence is heard in full prior to the hearing and determination of the stated questions, a number of the concerns with the separate question process fall away. In particular, principle 3 (absence of the benefit of all the evidence relevant to the proceeding); principle 4 (proceeding on the basis of assumed facts); 6a. (significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial); and 6b (significant overlap between the evidence adduced on the hearing of the separate question and at trial), will not apply in the 'sequential trial' model. This happens because all of the evidence is heard first, prior to the hearing of submissions on stated tranches of questions, and prior to the Court delivering judgment on those questions.

50 Further, conducting a trial using the 'sequential trial' model is not the trial of a 'preliminary question'. It is a mode of trial for the conduct of the principal proceeding, and is a tool for the management of a trial in the appropriate case. The power to employ a trial model such as this resides principally in the provisions of the CPA. In this context, r 47.04 may be employed as a useful vehicle to give effect to the objects of the CPA, however is not the sole repository of the power.

51 For these reasons, the case law relating to the statement of separate questions pursuant to r 47.04, which have hitherto been confined to considering cases where a true 'preliminary question' has been under scrutiny, needs to be viewed in a significantly different context, when a 'sequential trial' model of trial management is under consideration.

52 In my opinion, in this case, significant advantages will be achieved if the 'sequential trial' model is adopted in this case. The advantages are:

(a) The hearing of submissions and delivery of judgment on three significant issues in the case at the earliest possible time in the sequence will narrow the issues for addresses and the judgment in the balance of the proceeding by the elimination of a number of alternative ways in which the balance of the case is advanced;

(b) Consistently with the CPA, in particular s 7(2)(c), the adoption of the sequential trial model will give to the parties the maximum opportunity to resolve the proceeding by any appropriate dispute resolution process;

(c) The sequential trial model will also enable the Court to hear and determine important issues in the case in a focussed fashion, and thereby promote the objective of efficiency and timely resolution of those issues in accordance with the overarching purpose of the CPA.

53 For these reasons, after hearing the parties on the issue, I have determined that three questions should be stated in the first tranche of questions. Although the answer to these questions will not resolve the entire proceeding, I take the view that they will be pivotal to its ultimate disposition and the determination of the real issues in dispute in the proceeding overall.

54 Further, and in any event, again having heard the parties on the issue, I have determined that all issues as to quantum in the proceeding be heard and determined at a separate trial at a later point, should that become necessary.

55 Accordingly, pursuant to Order 47.04 of the Rules of Court I order that:

The trial and determination of all issues as to quantum in the proceeding be heard and determined at a separate trial.

The trial proceed as presently scheduled in relation to the calling of all evidence in the case (subject to any rulings as to the admissibility of the evidence).
Final Addresses, and delivery of judgment shall be subject of questions further stated pursuant to Order 47.04 of the Rules of Court.

4. The first tranche of questions (the 'First Tranche Questions') to be stated are:

(1) In or about April 2001, or at any other and what time, was the alleged Joint Investment Agreement (the 'JI Agreement') formed between George, Frank and Robert Hoh to undertake property investment in Victoria through the vehicle of Ying Mui Pty Ltd, if so:

(b) was property investment in Victoria subsequently undertaken by George, Frank and Robert Hoh pursuant to the JI Agreement?

(2) If not, in or after April 2001, was any or all property investment in Victoria undertaken by the Hoh family:

(a) for and on behalf of the family company, SYM; and/or

(b) pursuant to the alleged benevolent purpose; and/or

(d) and if so, should any and what assets be held wholly or partly on a resulting and/or a constructive trust for SYM?

(3) Did Lumarkye, in receiving the Sydenham property and Lot 202 from Ying Mui, knowingly receive trust property? If so, is Lumarkye a constructive trustee with respect to the Sydenham property and Lot 202 or is required to pay compensation to Ying Mui?

At the conclusion of the evidence, the parties are to deliver final addresses limited to the First Tranche Questions.
The Court will then reserve and deliver its judgment on the First Tranche Questions.
The Court will then determine whether it is appropriate to state any further tranches of questions to be dealt with in a similar fashion, so as to determine the proceeding in a just, and the most efficient, timely and cost-effective manner possible.
The Court will not make any final orders in any part of the proceeding until the whole of the proceeding has been dealt with in order to preserve any rights of appeal with final orders not made until the conclusion of the trial.

57 Whilst it is appreciated that the approach reflected in these management orders is somewhat novel, and involves a novel use of Order 47.04, nevertheless the extraordinary breadth and number of issues generated by this case, which span more than fifteen years of complex commercial activity, and involve numerous actors and commercial entities and many documents to consider, all call for special management of the trial in order for the overarching purpose of the CPA to be achieved as best as it is possible to achieve it.

58 At each stage of the trial, the parties will be presented with the opportunity to determine the proceeding by agreement including that achieved by any appropriate dispute resolution process agreed by the parties or as ordered by the Court in accordance with s 7(2) of the CPA. Further, at each stage the parties will also be presented with an opportunity to exchange offers of compromise.

[3] [2014] VSCA 238 ('Murphy').

[4] Nettle AP, Santamaria and Beach JJA.

[6] Murphy v State of Victoria & Anor [2014] VSCA 238.

Court (General Civil Procedure) Rules 2015

Supreme Court (General Civil Procedure) Rules 2015

At a glance

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