HIS HONOUR: This is a notice of motion, the amended form of which was filed in Court before me, seeking various orders in the substantive proceedings. The substantive proceedings in this matter have been brought by statement of claim filed on 4 December 2023. In short, the plaintiff in the Supreme Court proceedings sues upon a Deed entered into between the plaintiff and Forte Sydney Construction Pty Ltd pursuant to which the plaintiff advanced Forte Sydney Construction Pty Ltd an amount the equivalent of which, in Australian dollars, is $1.3 million. That sum was, on the plaintiff's case, advanced on 1 August 2018 and was repayable on 1 August 2023. The plaintiff claims that the money advanced and interest due have not been repaid and seeks in the proceedings in this Court to recover from the defendant.
The plaintiff's daughter, Juan Sun, is the sole witness for the plaintiff in the proceedings. Her affidavit setting out the background was filed in the substantive proceedings on 17 May 2024. The plaintiff in this Court is the first applicant on the motion. Juan Sun is the second applicant on the motion. The defendant in the substantive proceedings is the first respondent to the motion. Xiaolu Li is second respondent on the motion. She is the sole director of the first respondent. The second applicant had previously been granted power of attorney on 20 February 2024 from her mother to conduct these proceedings and has been instructing the solicitors on the motion in accordance with that power of attorney. The plaintiff has, subsequent to the institution of these proceedings, died. Mr Freeman of counsel appears representing the plaintiff, that is, the plaintiff's estate as well as appearing for the second applicant. Mr Tang appears for both respondents.
The motion seeks various orders. As a result of discussion between the parties a consent position has been reached such that the orders now sought are set out in a draft form of order which has been provided to me. The applicants seek orders as follows:
"1. Leave be granted to the plaintiff/first applicant and the second applicant to file in Court an Amended Notice of Motion.
2. Pursuant to UCPR 7.10, Juan Sun be appointed the personal representative of the Estate of the plaintiff, Meiying Zhao, for the purposes of these proceedings.
3. Pursuant to section 140(1) of the Civil Procedure Act 2005 (NSW), District Court of New South Wales, Sydney Registry, proceedings numbered 2023/00438969 be transferred to this Court and heard together with these proceedings.
4. There be no order as to costs of the plaintiff's Notice of Motion filed 19 July 2024."
By way of background the second applicant, as I have said, is the plaintiff's and first applicant's daughter. The first applicant died in China on 11 May 2024. A death certificate has been provided in evidence annexed to the affidavit of the second applicant. The litigation itself arises out of the purchase and subsequent sale of a property. In 2014 the second applicant purchased a property in Blakehurst for approximately $2 million. The first applicant provided substantial funds for that purpose. The first and second applicant decided to demolish the existing dwelling on the land and rebuild. Ultimately the second applicant engaged the first respondent for the purposes of the demolition and rebuilding on the property.
There was a long period of inaction, according to the evidence filed on behalf of the applicant, ultimately leading to an agreement to transfer the property to the defendant. A total of approximately $4.3 million was to be paid, divided up into $2 million being the price for the property, for the $1 million in relation to money paid to a previous builder, and $1.3 million paid to the defendant in anticipation of building. Subsequent to having reached agreement, according to the plaintiff's case, the defendant, through the second respondent, indicated that it did not have sufficient funds to complete the transaction and as a consequence loan agreements were made. One loan agreement was with the first applicant and a second loan agreement was with the second applicant. Each of the applicants have subsequently brought proceedings with respect to an alleged failure to repay the loans. The first applicant brought her proceedings in this court and the second applicant brought her proceedings in the District Court based on the amounts involved.
As I have indicated, the first applicant has died. Her estate is being dealt with under Chinese law. The beneficiaries of the estate are the second applicant, her sister Xin Sun, and her father, Tianxi Sun. I note that prior to her mother's death, the second applicant had a general power of attorney to conduct proceedings on behalf of the first applicant. That power of attorney has been tendered in evidence as an annexure to the second applicant's affidavit of July 2024.
Turning then to the orders sought by the applicants pursuant to the Uniform Civil Procedure Rules 2005 (NSW). Rule 7.10 provides as follows:
7.10 Interests of deceased person (cf SCR Part 8, rule 16; DCR Part 7, rule 13; LCR Part 6, rule 14)
(1) This rule applies to any proceedings in which it appears to the court -
(a) that a deceased person's estate has an interest in the proceedings, but is not represented in the proceedings, or
(b) that the executors or administrators of a deceased person's estate have an interest in the proceedings that is adverse to the interests of the estate.
(2) The court -
(a) may order that the proceedings continue in the absence of a representative of the deceased person's estate, or
(b) may appoint a representative of the deceased person's estate for the purposes of the proceedings, but only with the consent of the person to be appointed.
(3) Any order under this rule, and any judgment or order subsequently entered or made in the proceedings, binds the deceased person's estate to the same extent as the estate would have been bound had a personal representative of the deceased person been a party to the proceedings.
(4) Before making an order under this rule, the court may order that notice of the application be given to such of the persons having an interest in the estate as it thinks fit.
The second applicant indicates in her affidavit that she consents to and indeed seeks an order under this rule that she be appointed a personal representative of the deceased's estate to conduct the proceedings.
Mr Mo in his affidavit tendered on the application indicates that on 10 July 2024 he had a telephone conversation with Mr Zhichao Cai of Henan Zhong Yu lawyers. He states that he was informed by Mr Cai and accepts that (a) Mr Cai is a qualified lawyer in China; (b) he is acting for the estate of the first applicant in China; and (c) the beneficiaries of the estate of the first applicant in China are the second applicant, Tianxi Sun, being the widower of the plaintiff, and Zin Sun, being the sister of the second applicant. The second applicant also confirms in her affidavit that the beneficiaries of the estate are as indicated in Mr Mo's affidavit.
Mr Cai further stated that the beneficiaries can authorise the second applicant to act on behalf of the estate of the first applicant in the proceedings upon a Chinese official notarial certificate issuing in favour of the second applicant and signed by the beneficiaries authorising the second applicant to deal with all assets of the first applicant in Australia. Such a certificate has been obtained and is annexed to the affidavit of the second applicant.
The Court has a discretion to make the orders sought appointing the second applicant as the personal representative of the estate of the first applicant for the purposes of the proceedings. The basis for proper exercise of the discretion was set out by Robb J in Bayside Council and Estate of Goodman [2019] NSWSC 530 at [197]-[198] as follows:
"197 The proper basis for the exercise of the Court's discretion under UCPR r 7.10(2) should be whether, in all of the circumstances, which will include the opportunity given to all persons interested in the estate of the deceased to defend the claim, the effect of the costs to the plaintiff of the Court's insistence upon the appointment of a representative for the deceased's estate, and the nature and significance of the issues involved, a representative of the estate should be appointed, and if so upon what terms?
198 The present application involves the Court exercising a power given to it by the rules of court, and the interpretation of the provision of such a rule. Section 56(2) of the Civil Procedure Act 2005 (NSW) in clear terms requires the Court to seek to give effect to the overriding purpose when carrying out this task. Sub-section (1) establishes the overriding purpose as being the facilitation of the just, quick and cheap resolution of the real issues in the proceedings. Sight must not be lost of this fundamental principle when determining how UCPR r 7.10 is to be applied in the present case."
I note that in the present circumstances the second applicant has an interest in the proceedings as a beneficiary. However, as I have indicated there is agreement amongst all beneficiaries that the second applicant should take up the role as the personal legal representative of the estate of the first applicant. That agreement is in the context of the fact that the second applicant had been conducting the litigation pursuant to the power of attorney that had been issued to her. It also comes in the context of the reality that the events the subject of the litigation were all the result of dealings between the second applicant and the defendants.
Given those matters, and particularly having regard to the facilitation of the just, quick, and cheap conduct of the proceedings, I am satisfied an order should be made appointing the second applicant as the personal legal representative of the estate of the plaintiff for the purposes of the proceedings.
I turn then to the orders sought pursuant to s 140 of the Civil Procedure Act 2005 (NSW) to transfer the proceedings instituted in the District Court to this court.
Section 140 of the Civil Procedure Act as presently relevant provides as follows:
140 Transfer of proceedings to higher court (cf Act No 9 1973, section 145; Act No 11 1970, section 21B)
(1) The Supreme Court may, of its own motion or on application by a party to proceedings before the District Court or the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the Supreme Court.
(2) The District Court may, of its own motion or on application by a party to proceedings before the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the District Court.
(3) Proceedings in the District Court on a claim for damages arising from personal injury or death are not to be transferred to the Supreme Court under this section unless the Supreme Court is satisfied -
(a) in the case of a motor accident claim or a workplace injury damages claim -
(i) that the amount to be awarded to the plaintiff, if successful, is likely to be more than $1,000,000, and
(ii) that the case involves complex legal issues or issues of general public importance, or
(b) in any other case -
(i) that the amount to be awarded to the plaintiff, if successful, is likely to exceed the jurisdictional limit of the District Court, or
(ii) that there is other sufficient reason for hearing the proceedings in the Supreme Court.
As I have already indicated the proceedings in this Court were instituted by filing a statement of claim on behalf of the first applicant. The evidence in support of that claim has been filed. It comes solely from the second applicant. As I have also indicated, the second applicant commenced separate proceedings in the District Court in relation to a separate loan arising out of the same factual circumstances. That was on the basis of the different amount involved. The second applicant has also provided an affidavit in support of the claim in the District Court proceedings which I understand to be the sole evidence in those proceedings. I have been provided with copies of the statement of claim, the defence and the reply filed in the District Court proceedings.
The basis upon which the transfer is sought is as follows; firstly the common witnesses involved. The second applicant will give evidence both in the proceedings in this Court and the proceedings in the District Court. According to the affidavit of Mr Mo she presently resides in China and will have to travel to Australia to give evidence. While the defendant has not yet filed any evidence it does appear that, to the extent that evidence will be relied upon, Ms Li, being the sole director of the first respondent, will be potentially relevant to both proceedings. As I have already indicated the loans the basis of each of the claims arises from the one transaction. The consequence of that is it will be substantially more efficient to have a single judge determine all the issues between the parties and is likely to result in savings both to the parties and to the estate.
The applicants also point to the risk of inconsistent findings between different courts if the proceedings are to remain separate.
Given the matters to which I have referred I am satisfied that there is sufficient reason within the meaning of s 140(3)(b) to transfer the proceedings in the District Court to this Court. I propose to make the orders sought.
I order as follows:
1. Pursuant to the Uniform Civil Procedure rule 7.10 Juan Sun is appointed the personal representative of the Estate of the plaintiff, Meiying Zhao, for the purposes of these proceedings.
2. Pursuant to s 140(1) of the Civil Procedure Act 2005 (NSW), District Court of New South Wales, Sydney Registry, proceedings numbered 2023/00438969 are transferred to this Court and heard together with these proceedings.
3. There is no order as to costs on the motion.
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Decision last updated: 20 August 2024