Supreme Court New South Wales Medium Neutral Citation: Yu v Wang [2021] NSWSC 1280 Hearing dates: 8 October 2021 Date of orders: 8 October 2021 Decision date: 08 October 2021 Jurisdiction: Common Law Before: Beech-Jones CJ at CL Decision: The plaintiff's notice of motion filed 23 July 2021 is dismissed. In respect of the defendants' notice of motion filed 16 August 2021: (1) The proceedings be stayed until further order. (2) Nothing in order (1) precludes any party from exercising liberty to apply to lift the stay or enter final orders in the proceedings. (3) The plaintiff is to pay three-quarters of the defendants' costs of both motions. Catchwords: PRACTICE AND PROCEDURE – stay of proceedings – related proceedings in Federal Circuit and Family Court (Division 2) – no express power to transfer – Division 2 Court should determine all issues in dispute – stay granted Legislation Cited: Family Law Act 1975 (Cth) Federal Circuit and Family Court of Australia Act 2021 (Cth), s 52, s 134 Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW). Cases Cited: Valceski v Valceski [2007] NSWSC 440 Waters v Durrant [2015] FCCA 2419 Wigmans v AMP Limited [2021] HCA 7; (2021) 95 ALJR 305 Category: Procedural rulings Parties: Yunyun Yu (Plaintiff) Richie Lin Ze Wang (First Defendant) Harveston Wellness Proprietary Limited (Second Defendant) Representation: Counsel: D Healey (Plaintiff) M Condon SC (Defendants) Solicitors: JC Legal Practice (Plaintiff) Juris Cor Legal (Defendants) File Number(s): 2021/125710 EXTEMPORE Judgment (Revised from transcript) 1. Before the Court are two notices of motion. One notice of motion was filed on 23 July 2021 by the plaintiff, Yunyun Yu, seeking leave to amend her statement of claim and other ancillary orders. The other notice of motion was filed on 16 August 2021 by the two defendants, being Richie Wang and Harveston Wellness Proprietary Limited ("Harveston"), seeking an order that the proceedings be stayed until further order. Background 1. To address both motions it is necessary to describe the background to the proceedings. Ms Yu filed her statement of claim on 5 May 2021, naming Mr Wang and Harveston as defendants. The statement of claim seeks a judgment debt against both defendants in the amount of $610,000, as well as declarations that Harveston holds certain property on trust for her to the extent of her contribution. 2. The statement of claims pleads that Mr Wang is a director and secretary of Harveston. It further pleads that, in March 2007, Ms Yu as lender and Mr Wong as borrower, agreed that he would borrow from her the sum of $650,000 on various terms, and that in breach of that agreement he failed to repay the loan. It was also pleaded that, around the time the money was lent, it was advanced to Harveston for the purpose of what appears to be a property purchase, or perhaps a property development. 3. On or around 19 May 2021, being shortly after these proceedings were commenced, Ms Yu commenced separate proceedings in what was then known as the Federal Circuit Court and what is now known as the Federal Circuit and Family Court of Australia (Division 2) (the "Division 2 Court"), seeking parenting orders for her child. Mr Wang is the father. 4. On or about 18 June 2021, Mr Wang filed a response. He also sought parenting orders but also property orders, the effect of which was to adjust various property interests between them. Those orders included an order requiring Ms Yu to withdraw these proceedings. 5. As I understand it, his claim for property orders invoked the jurisdiction exercised by the Division 2 Court in respect of persons in a de facto relationship conferred by Pt VIIAB of the Family Law Act 1975 (Cth). At this point, it is sufficient to note that, within that part, s 90ST specifies that it is the duty of the Court hearing the proceedings to "as far as practical make such orders as will finally determine the final relationships between the parties to the de facto relationships and avoid further proceedings between them". Proposed Amendments 1. As noted, on or about 23 July 2021, Ms Yu filed her application for leave to amend her statement of claim. The amendments add a series of assertions that the defendants contend amount to the pleading of either non-material facts or evidence. It is necessary to describe them because those amendments strongly support the defendants' application for a stay. 2. The proposed amendments plead that the other directors of Harveston are Mr Wang's mother and father. As "background" they plead that, from September 2016 onwards, various ancillary loans were made to Mr Wang but then repaid. 3. Of particular significance are various pleadings that contend that events said to be relevant to the loan occurred during the course of a personal relationship between Ms Yu and Mr Wang. The amendments seek to add a pleading that Ms Yu became pregnant with their son, and that Mr Wang agreed to make payments for their son's care and welfare. The proposed amendments allege that various particularised sums were paid by Mr Wang to Ms Yu in 2018, and then again from July 2019 to February 2021. The amended pleading characterises those payments as being made for the care and welfare of their son. 4. The proposed amendments allege that, in July 2019, the "romantic relationship" between Ms Yu and Mr Wang deteriorated and then ended. It also seeks to plead the fact that parenting orders were sought by Ms Yu, and that property orders have been sought by Mr Wang. 5. Legally, the gravamen of the changes is to seek to plead a primary case that a loan was made not to Mr Wang, but to Harveston, and an alternative case that the loan was made to Mr Wang. The claims that property was held on trust are sought to be withdrawn, given as I understand it the property has now been disposed of. 6. Insofar as the application to amend was resisted, the basis for the refusal was, as I have indicated, an overall contention that what was being sought to be pleaded were facts that were either not material to the cause of action or just evidence. In response to that contention, counsel for Ms Yu submitted that those allegations were included so that the defendants would be put on notice of what facts were relied on, which is not in answer to their contention. 7. By way of an example to demonstrate the overlap between these proceedings and the proceedings in the Division 2 Court, counsel for Ms Yu explained that the materiality of pleading of the various payments that were made by Mr Wang was to foreshadow that Ms Yu would be contending that those payments were made for the care of their child, and not as repayments for the loan. The Stay Application 1. The basis for the defendants' application for a stay is that the Division 2 Court is able to deal with all aspects of the dispute between the parties, including the matters raised in these proceedings, and that effectively the interests of justice warrant the one court dealing with all those matters. 2. It was accepted by counsel for the plaintiff that the Division 2 Court has an accrued, or at least associated jurisdiction, enabling it to deal with his client's claim made against Mr Wang and Harveston in these proceedings. 3. Even so, to make good the contention that it did, Senior Counsel for the defendants, Mr Condon SC, referred me to various authorities concerning the accrued jurisdiction of the Family Court (see Valceski v Valceski [2007] NSWSC 440) as well as authorities within the Division 2 Court confirming the existence of its own accrued jurisdiction (see for example, Waters v Durrant [2015] FCCA 2419.) There is no doubt that the Division 2 Court is conferred with an associated jurisdiction (see Federal Circuit and Family Court of Australia Act 2021 s 134). The question of the existence and scope of any accrued jurisdiction may depend upon its absence of status as a superior court of record (see ss 9 and 10). That said, I am proceeding on the basis accepted by all that it does have jurisdiction to deal with the claim made by Ms Yu in these proceedings. In particular, in determining the asset pool as between Ms Yu and Mr Wang, one of the first matters that that court will have to determine is the existence of an alleged debt, and if it does exist, whether Mr Wang made any repayments in respect of it, as well as the value of any rights Ms Yu may have in respect of Harveston. 4. To that end, I note that Mr Condon SC informed the Court that Harveston will not oppose any application for its joinder to the proceedings in the Division 2 Court. 5. In the ordinary course, the appropriate way to deal with the defendants' application would be to transfer the matter to the Court that is seized of the related case. If the proceedings had been pending in what was formerly known as the Family Court and is now known as the Federal Circuit and Family Court of Australia (Division 1), (the "Division 1 Court"), then the power to do so is conferred on this Court by s 6 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW). However, no such express power is conferred in respect of the Division 2 Court, a matter which it seems to me is an unfortunate omission. 6. I had considered whether the appropriate course would be to nevertheless transfer the proceedings to the Division 1 Court on the basis that the Chief Justice of the Division 1 Court could then transfer the proceedings to the Division 2 Court (see Federal Circuit and Family Court of Australia Act 2021, s 52). However, that power of transfer appears to be limited to proceedings which are "family law and child support proceedings", which in turn is defined to be a proceedings in which the Division 2 Court has original jurisdiction under s 132. These proceedings do not appear to be a case of that kind. I say "appears" because there was no detailed argument addressed to this. Ultimately, questions appertaining to the power of the Division 1 and Division 2 Courts to transfer matters between themselves are not matters that I should express any final view upon. A Stay Should be Granted 1. In considering whether or not to grant a stay, the starting point is that the interests of justice warrant a single court dealing with the entirety of the dispute between the parties. That factor strongly supports the granting of a stay on the understanding that the Division 2 Court will resolve all matters between the parties. 2. While the working hypothesis of all involved is that the Division 2 Court can deal with the issues in this Court, it is absolutely clear that this Court cannot deal with all the issues raised in the application for property orders commenced by Mr Wang. 3. Counsel for Ms Yu nevertheless raised a number of matters which he considered warranted the refusal of a stay. He noted that his client's proceedings brought in this Court were the first in time, In the context of the issues at stake, I do not consider that factor warrants much weight; see Wigmans v AMP Limited [2021] HCA 7; (2021) 95 ALJR 305 at [107]. 4. Further, he relies on evidence sworn by the solicitors for Ms Yu, contending that to stay these proceedings pending the determination of the proceedings in the Division 2 Court, will cause extra cost and delay. 5. So far as delay is concerned, one of those solicitors who has experience in the Division 2 Court, estimates that it will take approximately three to five years to "traverse the Federal Circuit Court system and commence its final hearing and judgment". The solicitor also contends that, should these proceedings be stayed and the same issue litigated in the Division 2 Court, he estimates that "additional costs of in excess of $56,650, including the additional costs of briefing counsel and their costs, would be incurred". He also points to the costs that would be thrown away to this time. 6. I do not accept that either matter warrants refusing the grant of a stay. Insofar as delay is concerned, the assumption of Ms Yu's solicitor that this matter will be heard reasonably quickly in this jurisdiction, is not well founded. Given the fact these proceedings have only just been commenced, and the delay to criminal trials that was occasioned by the pandemic with consequential further delays for the listing of civil cases throughout 2022 and perhaps beyond, I expect that this matter would not obtain a final hearing date until well into 2023 at the earliest. 7. However, even leaving that aside, the contention about delay fails to analyse the matter by reference to how proceedings will unfold. Even if this matter was to continue to a final hearing in this Court, and the result was that the Court was to find that Mr Wang was indebted to Ms Yu, it seems to me overwhelmingly likely that this Court would stay any execution of such a debt pending the outcome of the proceedings in the Division 2 Court. When faced with the possibility that one party to the litigation might enforce a debt against another in circumstances where the Division 2 Court was addressing such important matters as parenting arrangements and the overall division of assets between the two parties, I find it very difficult to accept that this Court would allow enforcement of any debt that may be found to exist. 8. On that basis, allowing this matter to continue will not lead to any speedier justice for the parties. 9. In so far as costs are concerned, I am puzzled by the suggestion that extra costs over and above those that would be incurred if this matter was heard in this Court compared to the Division 2 Court. If this matter was now to be stayed, and the matter was to be litigated in the Division 2 Court as part of an overall dispute between the parties, then unless it is suggested that the practitioners in the Division 2 Court are charging more than this Court, a matter which would be irrelevant, or in the absence of being told of some particular inefficiency in hearings in the Division 2 Court, which I was not, I cannot see how it would be more expensive. To the contrary, it seems to me that it would be likely that lesser costs would be incurred from not having two sets of lawyers having to look at the parties' relationship or the same lawyers look at it twice. 10. As for the costs that have been incurred to date that may be thrown away, that is a factor, but it must be remembered the proceedings are still at an early stage. 11. A further matter that was raised was that there at an application has been brought by Ms Yu in the Division 2 Court for what I understand is their equivalent of summary judgment, based on a contention that she was not in a de facto relationship with Mr Wang. The materials that are before me reveal a substantial debate about the extent of their relationship. But even based on Ms Yu's amended pleading, there is an acceptance that they were in a romantic relationship for a year, that the relationship was sexual, and that they have a child. It is not for me to make any advance determination of what the Division 2 Court may decide on this issue. It suffices to note that Mr Wang's contention that he was in a de facto relationship with Ms Yu appears to be more than just merely colourable. The only way in which I can address the stay application is on the basis that the Division 2 Court would continue to hear Mr Wang's proceedings. 12. Otherwise, if the Division 2 Court was to determine at an early stage that it did not have jurisdiction to grant property orders, then the appropriate course would be for Ms Yu to apply to lift the stay that I will grant. 13. It follows from the above, that I am very much satisfied that the proceedings should be stayed, on the basis that one court, namely the Division 2 Court, should determine all the property issues in dispute between Ms Yu and Mr Wang, including the matters the subject of these proceedings. 14. Given that conclusion, it is not appropriate for me to determine whether or not to grant leave to amend the statement of claim. It will be a matter for the Division 2 Court to ascertain the form of pleading, if any, that it requires of the parties in making their respective cases. It suffices to note that the defendants' objections to the form of the pleadings appear to have substance. Orders 1. The appropriate orders in relation to the plaintiff's notice of motion will be that it will be dismissed. The orders in relation to the defendants' notices of motion is that I will grant the stay. 2. Accordingly, I order that the plaintiff's notice of motion filed 23 July 2021 be dismissed. 3. In respect of the defendants' notice of motion filed 16 August 2021, I order: (1) That these proceedings be stayed until further order. (2) That nothing in in order 1 precludes any party from exercising liberty to apply to lift the stay or enter final orders in the proceedings. [The parties addressed on costs] 1. Mr Condon SC seeks the costs of both motions. Mr Healey resists that, on the basis that not having determined the motion to amend on its merits, the Court is not in a position then to determine that the defendants were ultimately successful. 2. One difficulty in making different costs order between the two motions is that there was is considerable overlap and interrelationship between the two motions. The best course to avoid a costs assessment becoming unduly expensive, is to allow the defendants a proportion of the costs of both motions. In doing so, I bear in mind the fact that the defendants' resistance to the application to amend was in substance ancillary to the application for a stay. 3. Accordingly, I will order the plaintiff to pay three-quarters of the defendants' costs of both motions. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 October 2021