Nguyen v Nguyen

[2019] NSWSC 1103

Supreme Court of NSW|2019-08-16|Before: Slattery J, Mr J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2019-08-16

Before

Slattery J, Mr J

Source

Original judgment source is linked above.

Judgment (11 paragraphs)

[1]

Judgment

This is the Court's second judgment in these proceedings. The Court's first judgment found that the plaintiff and the defendant had agreed to hold their respective interests in a Terrigal property, in the ratio of 40:60; Nguyen v Nguyen [2019] NSWSC 131 ("the first judgment"), (at [166]).
The Court's first judgment contemplated that the parties would need to undertake an accounting of the receipts and expenditure of each of them in relation to the Terrigal property, in light of the Court's declaration of the parties' respective interests in the property.
This judgment deals with those accounting issues. It assumes a reading of the first judgment. Events, matters and persons are referred to in both judgments in the same way.
The Court fixed the final accounting hearing for Friday, 16 August 2019. On that occasion, Mr B Zipser of counsel continued to appear for the plaintiff, instructed by Thi Truc Mai Dang, of Integrity Legal Specialists.
The defendant, Dr Nguyen, appeared for himself. Mr Shaw of counsel appeared for Dr Nguyen at the main hearing. Dr Nguyen claimed he had engaged Mr J Shaw of counsel to appear again. But Mr Shaw was not present. There appears to have been disagreement between Dr Nguyen and Mr Shaw as to whether he was available to appear on 16 August 2019.
But Dr Nguyen did not seek an adjournment. Moreover, the small amount of money in issue at this stage of the proceedings does not warrant an adjournment to explore the possibility of the attendance of counsel. The matter proceeded.

[2]

Background to the Remaining Accounting Issues

Although the parties have held the Terrigal property since 2001, the remaining accounting disputes between them principally relate to the period from March 2009, when the plaintiff and her husband vacated the property. It is not in dispute that the plaintiff and her husband occupied the Terrigal property as their personal residence up to March 2009. From then on, Ms Nguyen, the plaintiff, received rents for the Terrigal property at different times. At other times the property has been vacant. The character of the occupation of the property changed several times between March 2009 and March 2014. Then from March 2014, Dr Nguyen took control of the property and received the rent from letting it out.
The period in between is the major area of dispute. But as will be seen, issues emerged outside this period. In the accounting hearing, Ms Nguyen claims that the Terrigal property was occupied between March 2009 and March 2014 as follows: 1. March 2009 to January 2010: after Ms Nguyen and her husband stopped living there, she says the property was vacant; 2. January 2010 to 13 August 2010: Ms Nguyen rented the property out and she says received $400 per week in rent; 3. 14 August 2010 to 2 December 2010: Ms Nguyen says the property was vacant again; 4. 3 December 2010 to March 2014: Ms Nguyen rented the Terrigal property out to tenants through the real estate agency, George Brand, and received net rental income; and 5. March 2014 onwards: from this point, Dr Nguyen took control of the property and rented it out using a real estate agent.
The effect of the 2003 variation was that Ms Nguyen and her husband could live in the property and take an adjusted 40% interest in it, but at the price of paying all council and water rates and all maintenance and expenses for the property: the first judgment, (at [94] and [100]). But the obligation to meet all the expenses for the property logically related in the conversation, that was held in 2003, to Ms Nguyen's and her husband's occupation of the property.
Throughout the intermediate period in dispute, March 2009 to March 2014, Ms Nguyen is entitled to 40% of the rents and must bear 40% of most expenditure in relation to the Terrigal property, unless she was in occupation. Dr Nguyen challenged her claim that the Terrigal property was vacant for some part of this period.
In accordance with the Court's directions, Ms Nguyen set out detailed submissions calculating her accounting for each of the sub-periods set out above, and reaching a net figure which she conceded was owing to Dr Nguyen.
It is not necessary to reproduce Ms Nguyen's full calculations in this judgment. They are mostly accepted. The accounting hearing was conducted on the basis that Dr Nguyen accepted the overall logic of the calculation Mr Zipser advanced. But this was subject to the resolution of specific disputes that each party raised about particular items. It is therefore necessary only to indicate the bottom line figures for the accounting and the net position that was calculated, subject to resolution of the disputes. In these reasons, this provisional bottom line is called the "baseline calculation". These reasons then go forward to resolve the particular disputes about individual items of the account.
The resolution of these items will then result in adjustments in the net result of the baseline calculation, that Ms Nguyen concedes through her counsel, Mr Zipser, is payable to Dr Nguyen. These reasons decide the issues of principle and are sufficient for the parties to compete the arithmetical calculations themselves.
The preliminary result of the calculation advanced by Mr Zipser, on behalf of the plaintiff, may be shortly stated. Mr Zipser's baseline calculation concedes that Ms Nguyen must account to Dr Nguyen for the whole period up to early 2014, in the sum of $47,517.37.
Mr Zipser's calculation also shows that from mid-2014 to 30 April 2019 (during which time it is clear Dr Nguyen was in full occupation), Dr Nguyen must account to Ms Nguyen for the sum of $44,127.35. The net position disclosed by the calculation up to 30 April 2019, is that Ms Nguyen must account to Dr Nguyen for the difference between these figures, namely the sum of $3,390.02.
Dr Nguyen then raised specific issues raised by the calculations, to which these reasons now turn.
The disputes fall into general categories: (1) Ms Nguyen contested Dr Nguyen's claimed expenditure on the property including possible double counting; (2) Dr Nguyen contested whether the property was vacant for certain periods, to the intent that Ms Nguyen would have to bear all expenses for those periods, because she was in occupation; (3) Dr Nguyen claimed that Ms Nguyen had not accounted for all the rent she received; and (4) Dr Nguyen brought up some accounting issues that went beyond the March 2009 to March 2014 period.
The final defined issues were reached after discussion with Dr Nguyen and the analysis of his written submissions. His written outline of submissions headed "Summary of Accounting Disagreement" was not the kind of document that the Court had in mind for the accounting hearing. It was a polemical paper that pursued issues beyond an accounting. It took issue with aspects of the first judgment; matters which the Court explained to Dr Nguyen could only be dealt with on appeal and not on an accounting hearing. It criticised Mr Zipser's conduct at the main hearing and engaged in discursive story telling about injustices in other cases. The Court explained to Dr Nguyen that it was more advantageous for him to focus upon the accounting issues.
And he did. After Dr Nguyen orally reiterated his wider complaints about the first judgment, the Court allowed a short adjournment so he could set down on one sheet of paper his final accounting issues. As a result, he produced a document entitled "Issue of Accounting", which the Court has initialled, dated 16 August 2019 and placed with the Court file. It represents the structure of the contest that finally took place on 16 August and identifies the main issues considered below. It dealt (not in this order) with the following issues: 1. council rates in the 2015 financial year; 2. maintenance in the 2015 financial year; 3. home insurance between 2002 and 2013; 4. maximum rent received between March 2009 and April 2011; 5. Ms Nguyen's liability for council rates from March 2009 to May 2010; 6. vacancy or rent from March 2009 to January 2010; and 7. vacancy or rent between August 2010 and December 2010.
These reasons generally deal first with the issues raised by Ms Nguyen then the issues raised by Dr Nguyen.

[5]

Issue Three - Home Insurance between 2002 and 2013

The principal accounting period directed by the Court was to commence in March 2009 and conclude on 30 April 2019. But Dr Nguyen raised an expense of $6,725 that he had incurred for home insurance between 2002 and 2013, as part of the accounting. To the extent that this home insurance was incurred before 2009, there is no prejudice identified to Ms Nguyen by the Court considering it now.
This matter is not included in Ms Nguyen's baseline calculation. If allowed, it was thought this would mean that Ms Nguyen may have to contribute 40% of $6,725 (namely $2,699.60) and add that sum to the net baseline calculation payment to Dr Nguyen. But Ms Nguyen contends that she is not liable to contribute to this sum, as home insurance is not an expense that she agreed to pay in the 2003 variation.
Ms Nguyen's argument is not persuasive on this issue. The Court's findings on the terms of the 2003 variation are set out in the first judgment, (at [93] to [105]). Her own account of the conversation, which the Court accepted, included the second option, which was taken up by Dr Nguyen. That account has her saying to him, "the second option is that I pay for the bathroom renovation, I pay for all council and water rates, all maintenance and expenses to the Terrigal property". In my view, that description of the expenses to be fully covered during her occupation upon the take up of the second option is wide enough to encompass household insurance, which falls within the description of "all…expenses" referable to the Terrigal property during her occupation.
This amount should be allowed wholly in Dr Nguyen's favour up to 2009 when Ms Nguyen was in occupation. This is more than Ms Nguyen had calculated she should pay, but is justified by the agreement she reached in 2003. And Ms Nguyen should contribute to 40% of this expense between March 2009 and March 2014.
This deals with Ms Nguyen's issues. The remaining issues were raised by Dr Nguyen between March 2009 and March 2014.