Qu v Kuang

LEGISLATION CITED : Uniform Civil Procedure Rules r 36.5(2)

Bromley v Forestry Commission of NSW [2003] NSWCA 252 Brunninghausen v Glavanics (1999) 46 NSWLR 538 Carter v Roberts [1903] 2 Ch 312 CASES CITED : Derrawee Pastoral Co Pty Ltd v McConochie (NSWCA, Handley JA, 24 February 1995, unreported) Gilbert v Endean (1878) 9 Ch D 259 Kara Kar Holdings Pty Ltd v Brookton Holdings Ltd (NSWCA, 27 March 1997, unreported) Meeham v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146 Pollicino v Pollicino [2000] NSWCA 4

TEXTS CITED : Spencer Bower, Res Judicata, 3rd Ed (1996) Butterworths, London

PARTIES : Wei Li Qu (plaintiff) Anna Xue Kuang (defendant)

COUNSEL : Mr S Brennan (plaintiff) Mr R Horsley (defendant)

SOLICITORS : Gregory J Goold Solicitors (plaintiff) O'Hara & Company Solicitors (defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY LIST

4826/05 Wei Li Qu v Anna Xue Kuang JUDGMENT (ex tempore) 1 HIS HONOUR: In these proceedings the plaintiff Wei Li Qu claimed an order that her mother, the defendant Anna Xue Kuang, discharge a mortgage which she had given over a property at Taren Point and retransfer the property to Ms Qu, alleging that Ms Kuang had forged Ms Qu's signature as transferor on the transfer by which Ms Kuang became registered proprietor. Ms Kuang opposed Ms Qu's claim, but lest she fail in her defence cross-claimed reimbursement of contributions made by her by way of repayments made by her in reduction of the original mortgage loan obtained from Wizard when the property was first purchased in Ms Qu's name, and also outgoings paid by her in respect of the property. The fundamental issues on the claim were the intention of the parties at the time of acquisition of the property, and the source of funds for that purpose.

2 On 24 July 2008, Gzell J gave judgment [Qu v Kuang [2008] NSWSC 727] after a hearing of three days in which the determinative factor was the relative credit of the protagonists in circumstances where there was no documentary evidence supporting one version of the events against the other. His Honour preferred Ms Qu's version, concluding that the funds for the purchase of the property were provided, at least substantially, by or on behalf of Ms Qu, and made orders (1) that Ms Kuang discharge the mortgage over the property and (2) that Ms Kuang transfer the property to Ms Qu.

3 However, his Honour also found that Ms Kuang was entitled to succeed on her cross-claim. His Honour said (at [60]): If Ms Kuang made mortgage repayments from her own funds she did so with no intention of benefiting Ms Qu. Ms Qu comes to equity and must do equity. In my view the proper course is that Ms Qu reimburse Ms Kuang for any payments she made from her own funds under the original mortgage of the Taren Point property and any outgoings with respect to the property.

4 His Honour then made some observations about the effect of evidence given by an accountant, Mr Abrams, as to quantification of Ms Kuang's contributions. I do not understand his Honour to have made any findings as to those amounts, but simply to have made observations as to the effect of Mr Abrams' evidence, if correct: 61 If the figures deduced by Mr Abrams are accurate there would appear to be a contribution by Ms Kuang of $187,181.36 when the original Wizard home loan was paid out together with mortgage repayments of $4,330.56 in 1998, $31,090.88 in 1999, $95,050.00 in 2000 and $49,300.00 in 2001, a total of $366,952.80. If the outgoings for rates, water rates, land tax, insurance and repairs and maintenance that Mr Abrams found are accurate, her contributions increase to $426,033.52. On the other hand, Ms Qu is entitled to payments through Mr Kit and a Mr Ton that I have found were for mortgage repayments. If Mr Abrams figures are correct they totalled $84,148.18 and if his rent figures are accurate, Ms Qu is entitled to a further $75,901.53 together with any other rent that was received from 2006 onwards. As the owner of the Taren Point property she was entitled to its rents. In the absence of proof of any other contributions from either party, the result would be an entitlement in Ms Kuang for reimbursement of $265,983.81 reduced by any additional rent not shown in Mr Abrams' Annexure 5.

5 That amount must be seen in the context that the mortgage which Ms Kuang is required to discharge secured, at least originally, an amount of some $800,000.

6 Accordingly, His Honour made a further order to the effect that if the parties do not agree on an amount for reimbursement to Ms Kuang within 14 days, Ms Qu pay her such amount (if any) that an Associate Judge determined to have been contributed by her from her own funds to payments under the Wizard mortgage together with payments of rates, water rates, land tax, insurance, repairs and maintenance and any other outgoings on the property. His Honour ordered Ms Qu to pay Ms Kuang's costs of the cross-claim, if liable to reimburse her; otherwise Ms Kuang was to pay Ms Qu's costs of the cross-claim. Finally, his Honour adjourned the proceedings to the Registrar's list on 31 July, no doubt to enable directions to be made in respect of the inquiry.

7 Since his Honour's judgment, Ms Kuang has attempted to file a Notice of Intention to Appeal, which the Court is informed was rejected by the Registry on the basis that there was not yet a final decision from which an appeal could be brought as of right. If that be so then, with respect, the view taken by the Registry is wrong: although at common law a judgment for damages to be assessed is interlocutory and the subsequent judgment quantifying those damages is regarded as the final judgment; in equity, a judgment on liability with a reference for an inquiry is regarded as a final judgment, and the decision on the subsequent inquiry is regarded as interlocutory [see Spencer Bower, Res Judicata, 3rd Ed (1996) Butterworths, London, [159]; cited in Brunninghausen v Glavanics (1999) 46 NSWLR 538, 562 [122] (Handley JA); Kara Kar Holdings Pty Ltd v Brookton Holdings Ltd (NSWCA, 27 March 1997, unreported); Derrawee Pastoral Co Pty Ltd v McConochie (NSWCA, Handley JA, 24 February 1995, unreported); Bromley v Forestry Commission of NSW [2003] NSWCA 252, [13]; Pollicino v Pollicino [2000] NSWCA 4, [2], [7]; Meeham v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146, [35]].

8 Following the listing of the matter before the Registrar, it was referred to Associate Justice McLaughlin who, apparently at the request of the parties, on 15 August 2008, referred it back to Gzell J on a date to be arranged with his Honour's Associate. An arrangement for that purpose has since been made on 12 September 2008. The purpose is said to be to clarify what it was that his Honour intended the Associate Judge to inquire into and certify. I must say it does not appear to me to be significantly in doubt that the Associate Judge was required to inquire into and certify the amounts that Ms Kuang had contributed from her own funds to payments of the Wizard mortgage and to payments of rates, water rates, land tax, insurance, repairs and maintenance and other outgoings in respect of the Taren Point property.

9 Orders 1 and 2 made by his Honour did not specify a time for compliance. Uniform Civil Procedure Rules r 36.5(2) provides that if a judgment or order requires a person to do an act but does not specify a time within which he or she is required to do the act, the court may by order require the person to do the act within a specified time. An order which requires a person to do an act but does not specify a time is not ineffectual, but until the time is fixed by a subsequent order is unenforceable, at least by committal or sequestration [Gilbert v Endean (1878) 9 Ch D 259, 266; Carter v Roberts [1903] 2 Ch 312].

10 Ms Qu seeks leave to file in court a Notice of Motion claiming orders that Ms Kuang supply all keys to the property (including any copies) to Ms Qu by 2 September at 12pm, and that Ms Kuang comply with the orders made by Gzell J in respect of Ms Qu's claim by Friday 5 September 2008 at 12pm. I take this to be an application under UCPR r 36.5 to fix a time for compliance with orders 1 and 2 made by Gzell J.

11 The application is resisted chiefly on the basis that the order for discharge of the mortgage and subsequent retransfer of the property to Ms Qu is intertwined with the order on the cross-claim for reimbursement of the amount of Ms Kuang's contributions. For Ms Qu, Mr Brennan submits that the judgments on the claim and on the cross-claim are independent and are not interconnected. I disagree. As I think is apparent from the reasoning of Gzell J, his Honour, in the passage to which I have referred and set out above (paragraph [60], at [3] above], pointed out that Ms Qu coming to equity must do equity. That means, as I understand his Honour's judgment, that it is a condition of her entitlement to equitable relief that she fulfil those obligations which equity imposes on her - namely, the obligation to make reimbursement. In that way, it can be seen that her obligation to give reimbursement is very much intertwined with her right in equity to recover the property and have the mortgage over it discharged.

12 The practical justice of this is, I think, also reasonably evident. The ability of Ms Kuang to discharge the mortgage will obviously be affected by the amount which is available to her for that purpose, and in particular the amount which she recovers by way of reimbursement. To the extent that she has expended funds for the benefit of Ms Qu in reduction of the Wizard mortgage and on payment of outgoings in respect of the property, her ability to discharge the mortgage will be reduced until those amounts are restored to her.

13 It may be that I misunderstand Gzell J's approach and intent, and if that be so, it will remain possible for the matter to be ventilated before his Honour when it goes before him on 12 September. But as I apprehend the matter at the moment, the order for discharge of the mortgage and retransfer is fundamentally connected with the order for reimbursement, and his Honour would have contemplated that they all be performed contemporaneously - Ms Qu fulfilling her obligation to do equity as a condition of getting the relief to which she is entitled in equity at the same time.

14 Accordingly, upon the undertaking of Gregory Goold to pay the appropriate filing fees, I grant leave to the plaintiff to file a Notice of Motion in the form initialled by me, dated this day and placed with the papers. I order that the motion be returnable instanter. I dispense with further service of the motion. I decline to make the orders sought in the motion. I adjourn the further hearing of the motion to 12 September 2008 before Gzell J. I order that the plaintiff pay the defendant's costs of today.

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