By summons filed on 8 January 2021, the first plaintiff, Rebecca Ye, and the second plaintiff, UCER Investment and Resources and Management Pty Ltd ("UCER") appealed judgments entered against them, or at least one of them, in the Local Court granted in favour of the first defendant, Yu Chen.
The judgment had been given on 11 December 2020 in favour of Ms Chen for the judgment sum of $72,350.66 together with interest which ultimately totalled the sum of $86,019.33.
I have briefly reviewed the learned Magistrate's reasons. In short, Ms Chen alleged that she provided to Ms Ye and UCER the sum of USD$50,000 on account of migration services, which were not provided and that when confronted with this, Ms Ye effectively guaranteed their repayment.
Ms Ye's defence was a comprehensive denial that she had ever had anything to do with Ms Chen or the provision of migration services to her. The learned Magistrate dealt with this sharp dispute over the facts by comprehensively resolving them in favour of Ms Chen.
I am in no position whatsoever to assess the merits of any appeal from the Magistrate's decision. However, it must be noted, that, given it is restricted to either a question of law or a mixed question of fact and law, then the plaintiffs appear to have a reasonably difficult task in front of them. Further, of some relevance to these applications, is that on the Magistrate's findings, Ms Ye appears to have engaged in what could at least be described as sharp conduct.
Before the Court are two notices of motion, both dated 16 March 2021. They both arise out of the terms of a stay granted by the learned Magistrate, to which I will turn. One of the motions seeks relief removing UCER as a party and orders for the ultimate dismissal of the appeal. I have already indicated that the duty list is not the place for summary judgment applications.
I would add that, given that an appeal from the Local Court should be a matter that does not consume significant resources, summary judgment applications for appeals on questions of law will very rarely be entertained in advance of the hearing of the final appeal.
The principal motion before the Court concerns another motion filed bearing the date 16 March 2021, which came before Bellew J on 18 March 2021. It seeks various orders arising out of the stay, which I will shortly describe, including an asset preservation order. In the end result, his Honour granted an order ex parte to the effect that, until further order of the Court, Ms Ye was to be restrained from disposing or dealing with, otherwise dissipating any portion of any funds derived from the sale of the property in which she has an interest in Auburn.
As noted, the learned Magistrate granted a stay of the judgment. In particular, on 10 February, her Honour made orders that the judgment be stayed on various conditions. It was originally proposed that the defendants pay the sum of $86,019.33 into a controlled monies account. Instead, her Honour ordered that the sum of $236,000 be paid into that account. The sum of $236,000 reflects, as I understand it, the judgment sum which, as I have noted, had grown to $86,019.33, with the balance of approximately $150,000 said to represent the plaintiff in the lower court, that is Ms Chen's, costs.
Her Honour ordered that those monies be paid into an account by 10 March as a condition of the stay.
Generally, events unravelled from there. In an affidavit bearing the date 19 March 2021, sworn on this application, Ms Ye says that, as a result of the issue of a writ that no doubt led to the application for a stay, she organised to borrow the sum of $86,019.33 and paid those funds into a controlled account pending an appeal. She said she then learned in February she had to organise another $150,000 to be paid into her solicitor's controlled money account as a condition of the stay. She said that from that time she sought to make arrangements to borrow the full sum of $236,000. She says that on 9 March she paid the $86,019.33 into her current solicitor's trust account, on the basis it cannot be withdrawn without an order of the court.
In relation to the remaining $150,000 she says she has been trying to arrange finance and that, ultimately, on 26 February 2021 she signed a sales agency agreement to list for sale a property at Auburn. She says that decision was a difficult one because her elderly parents have nowhere to live if that house is sold. She says that on 19 March 2021, which I note was after Bellew J's orders, she took the property off the market.
In his submissions, counsel for Ms Chen was scathing of this chronology. He noted that if these were the steps taken by Ms Ye during this period, no one had notified his client to that effect. He noted that his client was suspicious of Ms Ye's conduct. This is no doubt part due to the history of the relations between the parties, but also by, as I have said, her failure to advise of what was going on. Counsel also noted that the making of the orders by Bellew J did not necessarily require the sale to not proceed, instead they were directed to the use of the sale proceeds.
When the matter returned this morning, counsel for Ms Chen sought a smorgasbord of orders, all directed to, or centred around, the enforcement of the Magistrate's stay. This included orders about the dissipation of the sale proceeds; orders requiring Ms Chen to provide copies of contracts associated with the sale; an order that Ms Ye provide an affidavit as to her assets and that she also appear before the Court to be questioned as to those assets; an order that the $86,000 to be paid into Ms Ye's solicitor's trust account be released to Ms Chen; and that the proceedings be stayed until such payment has been made.
Counsel for Ms Ye and UCER advised the Court that he and his solicitor had only come into the matter since 10 March 2021. He stated that efforts are being made to locate the transcript and the exhibits and obtain Ms Ye's previous solicitor's file, so as to put the appeal in shape. He opposed the breadth of the orders sought by counsel for Ms Chen. While not consenting, he appeared to accept the need for a continuation of an order made by Bellew J which is directed to the dissipation of the proceeds of the sale derived from the sale of the property at Auburn. He expressed concern about an order for the payment over of the $86,000, to Ms Chen, given that Ms Chen was located overseas, apparently in Canada. He submitted that payment would tend to frustrate his client's appeal if it was successful.
The only way to resolve this imbroglio is to return to the terms of the Magistrate's stay orders. In that regard two things should be noted. First, from the moment of this matter came into this Court on appeal, then while the Local Court was not robbed of the ability to grant a stay, control over the execution of the Local Court's orders ultimately rests with this Court and not the Local Court. As part of this Court's jurisdiction to hear the appeal, this Court has the power to ultimately determine the terms of any stay of the orders made below going forward.
Second, notwithstanding that, some considerable deference is warranted to the opinion of the Magistrate in hearing the matter below. As I have said, at least at a factual level, the learned Magistrate comprehensively rejected Ms Ye and UCER's case. The only way to characterise their conduct, as found by the Magistrate, is as having involved sharp conduct.
While a stay conditional on payment of the full amount of costs and judgment would ordinarily seem somewhat onerous as a condition of a stay, that assessment has to be seen in light of the fact that the Magistrate had the ability to observe the parties, consider their respective cases and resolve them.
Going forward, in my view the best and, in fact, the only appropriate course is as follows. I will order that the sum of $86,019.33 which has been paid into Ms Ye's solicitor's trust account, be paid over to Ms Chen's solicitors. However, they are not to further dissipate the sum to Ms Chen given her location overseas.
Second, I will amend the terms of the stay for the payment of the balance of the $150,000 to give Ms Ye until the end of May 2021 to secure that sum as a condition of the ongoing stay.
Third, I will continue order 2 made by Bellew J concerning the dissipation of the funds from the sale, although the order will be amended to refer to net proceeds of the sale; that is, it will not stop deductions from the sale proceeds of expenses such as advertising or the real estate agent's costs.
Fourth, one condition of the stay will be that Ms Ye will have to give seven day's advance notice of any proposal to sell the subject property; and if it proceeds by way of auction, seven day's advance notice of the reserve price.
Fifth, Ms Chen will have to file an affidavit which sets out all of her and UCER's assets and liabilities within 14 days.
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Orders
(1) Set aside the stay orders granted by Stapleton LCM on 18 February 2021. In lieu thereof, order that:
(i) The sum of $86,019.33 currently held by Ms Ye's solicitors be paid within four working days to the trust account of Ms Chen's solicitors, but not be further dissipated by them without an order of the Court.
(ii) The judgment of the Local Court, the subject of this appeal, be stayed pending determination of the appeal on condition that on or before 31 May 2021, the appellants pay the further sum of $150,000 into Ms Chen's solicitor's trust account, which if paid are not to be further dissipated by them without further order of the court.
(2) On or before 5pm on Thursday 1 April 2021, Ms Ye is to file and serve an affidavit setting out all her assets and liabilities and all the assets and liabilities of UCER Investment and Resources Management Pty Ltd held within this country and abroad.
(3) Until further order, Ms Ye is restrained from disposing of or dealing with or otherwise dissipating the net proceeds of any funds derived from the sale of property comprised in Lot 17 in Deposited Plan 7118 and known as 26 Happ Street Auburn other than to comply with Order 1(ii).
(4) Ms Ye is to provide the solicitors for Ms Chen seven days' advance written notice of:
(a) her intention to place for sale the property comprised in Lot 17 in Deposited Plan 7118 and known as 26 Happ Street Auburn; and
(b) if it is proposed to sell that property by auction, to notify of the reserve price.
(5) The plaintiffs pay the defendant's costs of today.
(6) The notice of motion dated 16 March 2021 seeking 11 orders, be otherwise dismissed.
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Decision last updated: 25 March 2021