Chiou & Ors v Wang & Ors [2000] QSC 251

'"i ' State Reporting ~ JC 00, ;;,I._)/ Bureau TRANSCRIPT OF PROCEEDINGS Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION MUIR J No 4933 of 2000 JIANN-SHAN CHIOU and TE-WAN HONG and HSI-TSUN WANG and HUANG MA-LI WANG and THE COMMONWEALTH DEPARTMENT OF IMMIGRATION AND MULTICULTURAL AFFAIRS BRISBANE o oDATE 20/06/2000 JUDGMENT REVISED COPfE5 ISSUED State Reporting Bureau Oatec,ly/ ~ /Q-0 I First Plaintiff Second Plaintiff First Defendant Second Defe·ndant Third Party l'l1111r, Tit<.: I.aw Courts, Gt·111·g1: Str<.:d, Brisl1:t11l', () ..tfl()() Tdcpliont:: (07) J2-t7 -t.i{,() F:n: (07) J2-t7 .5.5.l2 -- 1 of 9 -- 20062000 T12/BC5 M/T 7761/2000 (Muir J) HIS HONOUR: The plaintiffs obtained judgment for approximately $2,511,000 aga:.nst the first defendant in action 2190 of 2000 in this Court. The first defendant is the former husband of the second defendant. An order for dissolution of their marriage was made on 3 April 2000. In about 1990, the defendants purchased land at Robertson, and in 1993 they built a house on it. The title was held by them as joint tenants or tenants in common, I am not sure which, in equal shares. By Memorandum of Transfer dated 9 August 1999 the first defendant transferred his share in the property to the second defendant in consideration of love and affection. The second defendant has now sold the property, settlement having taken place yesterday. Pursuant to an undertaking given to the plaintiffs, one half of the proceeds of sale - namely, $1,800,000 - is held in trust by the second defendant's solicitors. The plaintiffs seek an injunction to restrain the first defendant from dealing with that property pending the determination of this action. The second defendant makes a cross-application seeking orders that the action be permanently stayed or struck out as against the second defendant and that the plaintiffs pay the second defendants costs of and incidental to the application and the action. 2 JUDGMENT 10 20 30 40 50 60 -- 2 of 9 -- 20062000 T12/BC5 M/T 7761/2000 (Muir J) The basis of the plaintiffs' claim in the action is that the transfer by the first defend.tnt to the second defendant was an alienation of the subject property which fell within section 228(1) of the Property Law Act 1974. The plaintiffs' claim is one which essentially is based on inferences to be derived from a variety of facts. Without purporting to be exhaustive, I will briefly outline the substance of the plaintiffs' case. There is evidence that commencing in December 1997 the plaintiffs lent large sums of money to the first defendant which moneys were repayable in June 1999. In June 1999 the first defendant requested and was given an extension of time within which to pay to 15 September 1999. In consideration of the extension, the first defendant agreed to pay additional interest. Further sums were lent and further extensions were granted. In October 1999 and November 1999 post-dated cheques provided as a means of effecting repayment of the loan moneys were dishonoured. At the time of transfer of the half interest in the property, that half interest was the first defendant's only asset in Australia. At that time there is evidence which if accepted would support findings that: a. The defendant was in severe financial difficulty. b. The first defendant knew he would be unable to repay the plaintiffs. 3 JUDGMENT 10 20 30 40 50 60 -- 3 of 9 -- 20062000 T13-14-15/MT1 M/T 7761/2000 (Muir J) c. The first defendanc believed that the plaintiffs would attempt to l~vy execution against his half interest at some time in the foreseeable future. There is some evidence to the effect that in the event of a contested property settlement (that is a dispute in the Family Court of Australia over property between the two defendants) it is highly likely that there would have been no adjustment of property rights in favour of the second defendant and even less likelihood that the whole of the first defendant's interest in the subject land would have been ordered to be transferred to the second defendant. There is no evidence of negotiations in respect of the terms 10 20 of any property settlement. It is submitted by Mr Gotterson 30 QC, who leads Mr Ma for the plaintiffs, when these and other matters are taken into consideration the plaintiffs have shown a serious question to be tried. He submits, and I accept, that the balance of convenience is strongly in the plaintiffs' favour. The only disclosed disadvantage to the second defendant from the granting of an injunction depending, of course, on the form it takes, is that moneys will be tied up pending trial. Mr Fraser QC for the second defendant points to evidence which he submits demonstrates that there's no room for the application of section 228 of the Property Law Act. Again, without attempting to be exhaustive such matters include: 4 JUDGMENT 40 50 60 -- 4 of 9 -- 20062000 T13-14-15/MT1 M/T 7761/2000 (Muir J) a. A conversation bet'veen the defendants in about February 1999 in w:1ich the first defendant is alleged to have adrised the second defendant that he would transfer l1is share of the property to her by way of property settlement. b. Preparation of transfer documents by the second defendant's solicitors in about February 1999. c. A letter by those solicitors to the first defendant requesting payment of maintenance on 8 October 1999. d. Evidence that the first the applicants heard of the first defendant's possible financial difficulty was in October or November 1999. 10 20 These matters and others to which Mr Fraser points ~ demonstrate that the plaintiffs have formidable hurdles to surmount in order to succeed and, of course, in order to succeed they need to succeed under both section 228(1) and (3) of the Property Law Act. Nevertheless, I am of the view that a serious question to be tried has been made out. Also relevant to my determination are the matters the subject of or which provide the foundation for the second defendant's application. This is the third attempt by the plaintiffs to obtain injunctive relief. There was an earlier application in this Court in 2190 of 2000. The action was struck out as against the second defendant as disclosing no sustainable cause of action. There is an 5 JUDGMENT 40 50 60 -- 5 of 9 -- 20062000 T13-14-15/MT1 M/T ''761/2000 (Muir J) appeal pending against that decision but the plaintiffs have not prosecuted the appeal. The other matter was an action in the Federal Court in which, to put it broadly, the applicants sought an injunction against the second defendant pending a determination of bankruptcy proceedings against the first defendant in the Federal Court. The claim against the second defendant relied on section 121 (1 )(b) of the 10 Bankruptcy Act. It is submitted that this application is an 20 abuse of process because: a. An appeal is pending in another action in which substantially the same relief is sought b. Section 238 of the Property Law Act although not relied on in the hearing at first instance in the Supreme Court in 2190 of 2000 could and should have been relied on. c. Substantially the same relief was sought in the Federal Court proceedings and section 238 could and should have been relied on in those proceedings as well. It is also contended that by reference to authorities such as Port of Melbourne authority and Anshun Pty Ltd (1981) 147 CLR 589 and Chamberlain v. Deputy Commissioner of Taxation (1988) 164 CLR 502, that the plaintiffs are estopped from pursuing the claims against the second defendant except by way of appeal in the action. 6 JUDGMENT 30 40 50 60 -- 6 of 9 -- 20062000 T13-14-15/MT1 M/T 7761/2000 (Muir J) In my view it is plain that _f there is a sustainable case of estoppel, which I rather .Joubt, it can hardly be said that it is such as to preven: the plaintiffs from having a serious question to be tried or triable issue in these proceedings. Generally, the same considerations apply to the abuse of process contention but in that case I rather think that the question of whether or not relief in respect of any abuse of process be granted raises discretionary considerations. The facts are not such as to lead me to the conclusion that if there has been an abuse of process the plaintiffs should thereby fail on this application. What I have read of the material strongly suggests to me that the applications 10 20 particularly in the Supreme Court but also in the Federal 30 Court were somewhat hastily mounted and ill conceived. Even the Federal Court proceedings were essentially interlocutory in nature and none of the matters proceeded to the stage where there was a final determination of the issues which the plaintiffs seek to raise in this action. A singularly telling factor, in my mind, is that if the injunction is not granted the plaintiffs may well successfully prosecute the action but be left without remedy 40 at the end of the day. In making that assertion I take into 50 account the submissions made to me by Mr Fraser QC that there is no evidence of any attempt by the second defendant to dissipate any funds. 60 7 JUDGMENT -- 7 of 9 -- 20062000 T13-14-15/MT1 M/T 7761/2000 (Muir J) Having regard to the history of this matter, though, any order which is to be made mu.;t afford some protection to the second defendant against the various costs which have been incurred in the ill-fated proceedings. She should also be protected against failure on the part of the plaintiffs to diligently prosecute any proceedings. Another factor which is relevant is that this litigation is of a relatively straightforward nature and it should be 10 possible to bring it on for trial within a matter of months. 20 HIS HONOUR: It seems to me that the broad justice of this matter requires that the plaintiffs pay those costs. Having 30 the appeal from the other action and this action proceeding at the same time was an abuse of process. If it were only that there may be more force, I think, in Mr Gotterson's submissions than there are but this conduct was part of a broader pattern of ill-fated litigation which has as I have 40 said had the effect of unnecessarily increasing costs. I order the plaintiffs pay the second defendant's costs of and incidental to the application filed by her by leave today, such costs to be assessed except that in so far as such costs include costs of counsel or solicitors appearing on 50 the application such costs are reserved. 60 8 JUDGMENT -- 8 of 9 -- 20062000 T13-14-15/MT1 M/T 7761/2000 (Muir J) In other words, the costs of the actual hearing are reserved to be dealt with at the same time as the costs on the plaintiffs' application. HIS HONOUR: I order that the second defendant's application be dismissed. HIS HONOUR: In case I did not mention this I will order as per draft on your application, Mr Gotterson. 9 JUDGMENT 10 20 30 40 50 60 -- 9 of 9 --