William Siu v Rui Fen Li [2011] NSWSC 1453

Supreme Court New South Wales

Medium Neutral Citation: William Siu v Rui Fen Li [2011] NSWSC 1453 Hearing dates: 17, 23 November 2011 Decision date: 23 November 2011 Jurisdiction: Equity Division Before: Black J Decision: Application to file Cross-Claim granted; hearing date vacated Catchwords: PRACTICE AND PROCEDURE - Leave to file Cross-Claim shortly before hearing - Consequential vacation of hearing date Legislation Cited: - Civil Procedure Act 2005 - Property (Relationships) Act 1984 Cases Cited: - Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 Category: Interlocutory applications Parties: William Siu (Plaintiff) Rui Fen Li (Defendant) Representation: Counsel: T.J. Morahan (Plaintiff) J. Merkel (Defendant) Solicitors: Zhang Shijing Lawyers (Plaintiff) Northern Suburbs Lawyers (Defendant) File Number(s): 09/289751

Judgment 1These proceedings were commenced by a statement of claim filed in March 2010 and are listed for hearing for five days commencing 5 December 2011. The plaintiff (Mr Siu) seeks orders that he and the defendant (Ms Li) are beneficially entitled to a property at Stannifer, New South Wales, in shares of approximately 49 percent to Mr Siu and 51 percent to Ms Li and an order for sale of the property. Mr Siu also seeks a money judgment in respect of other amounts. The primary issues between the parties are whether certain moneys were paid to Ms Li as a loan and on the basis that Mr Siu would hold an interest in the property pending repayment of those moneys giving rise to an equitable charge and whether other moneys were paid as loans. 2By notice of motion filed on 11 November 2011 Ms Li seeks leave to file a cross-claim against Mr Siu seeking declarations under section 56 of the Property (Relationships) Act 1984 and orders under section 20 of the Act. The proposed cross-claim seeks to advance allegations that a domestic relationship existed between Mr Siu and Ms Li, in that Ms Li provided domestic services and personal care to Mr Siu in his capacity as a pastor preaching the doctrines of the Seventh-day Adventist Church. I note that there is no suggestion of any de facto relationship between Mr Siu and Ms Li. The factual issues raised by the cross-claim include the existence of the alleged domestic relationship, the extent of non-financial contributions made by Ms Li to Mr Siu's welfare and otherwise the circumstances of the property transactions raised by the primary claim. Minor amendments were made to the proposed cross-claim in a form which was provided to the Court today. 3Ms Li's application for leave to file the cross-claim is supported by an affidavit of Mr Oleh Suchowersky, the solicitor acting for Ms Li in the proceedings. Mr Suchowersky refers to a brief delivered to counsel in late August 2011, a conference in late September 2011 and counsel's advice that sufficient evidence is available to support the claim under the Property (Relationships) Ac t which is sought to be advanced in the cross-claim. Mr Suchowersky also points to Ms Li's personal circumstances and the adverse consequences to her if the property is sold as factors supporting the grant of leave to file the cross-claim. Mr Suchowersky's evidence provides no real explanation of the delay in filing the cross-claim between March 2010 and August 2011 and a limited explanation of the delay since that date arising from the process of the delivery of the brief to counsel and the identification of the cross-claim by counsel. 4Mr Morahan, who appears for Mr Siu, opposes the amendment and, in the alternative, contends that the amendment could only be permitted on the basis that the hearing date is vacated. He contends that the cross-claim raises issues which require investigation by Mr Siu which was not previously necessary, in particular as to the period in which the parties were living in the same household, when each of them travelled to China from time to time over the relevant period; and the extent of Ms Li's assets in China, when it is alleged that a property which may be in the name of her mother is beneficially owned by her. 5Mr Morahan contends that those investigations cannot be completed before the commencement of the hearing on 5 December, and this contention is wholly plausible where the investigations are likely to require subpoenas to third parties and possibly the production of documents from China. Mr Siu's difficulties are exacerbated because, through no fault on his part since the timing of this application is driven by Ms Li, the solicitor with conduct of the matter on his part is currently on his honeymoon until 27 November 2011. Mr Morahan also points to the fact that the cross-claim is significant and Mr Siu is entitled to a proper opportunity to defend it, since the cross-claim could deprive him of, or limit, the success which he would otherwise achieve on establishing the case which he presently pleads. Ms Merkel, who appears for Ms Li, submits that the additional evidence required is in narrow scope and the filing of the cross-claim would not require the vacation of the hearing date. 6I am required to exercise my discretion whether to grant leave to file the cross-claim having regard to sections 56-58 and 64 of the Civil Procedure Act 2005. In particular, section 58 requires the Court to have regard to the dictates of justice and the provisions of sections 56 and 57 when considering an order for the amendment of a document, an adjournment or any other procedural matter. Section 56 identifies the overriding purpose of the just, quick and cheap resolution of the real issues in dispute in the proceedings and section 57 requires the proceedings to be managed having regard, inter alia, to the just determination of the proceedings. 7Notwithstanding the principles established by Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175, I am satisfied that it would be in the interests of justice and consistent with the matters to which I am required to have regard by sections 56-58 and 64 of the Civil Procedure Act to grant leave to Ms Li to file the proposed cross-claim. The cross-claim plainly has the potential to affect the outcome of the proceedings, as Mr Morahan has pointed out in indicating why the hearing would need to be vacated if the cross-claim is permitted to be filed. It follows that denying leave to file the cross-claim has potentially significant adverse consequences for Ms Li, including the significant adverse personal consequences identified in Mr Suchowersky's affidavit. 8I accept that the loss of the hearing date will have some adverse impact on Mr Siu, by delaying the early resolution of the dispute and prolonging his involvement in it, although that impact is mitigated because a caveat is presently in place protecting the interest which he claims in the relevant property. I also have regard to the fact that the loss of the hearing date will have an adverse impact on the efficient disposal of the Court's business, the efficient use of judicial resources and the timely disposal of these and other proceedings. However, this needs to be balanced against the importance of a just outcome of the proceedings, the potential significance of the matters raised and the adverse impact on Ms Li if she were not permitted to agitate these matters. 9Accordingly, I will grant leave to file the Cross-Claim. The question then arises whether the hearing date should be vacated. In my view, the matters to which Mr Morahan has drawn attention require me to take that course. It would, in my view, be wholly unreasonable to allow Ms Li the indulgence which she seeks, where the cross-claim is very late and raises new issues, because of the detriment which she may suffer from being shut out from it, and then deprive Mr Siu of a proper opportunity to investigate the matters raised and lead any additional evidence which he considers necessary. The fact of the importance of the cross-claim to Ms Li and its potential impact on the outcome of the proceedings, which has led me to grant leave to file it, requires that Mr Siu be given a proper opportunity to address it. I am satisfied that Mr Siu would not have such proper opportunity in the short time remaining before the hearing, and I will therefore vacate the hearing date listed before me on 5 December 2011. 10I have heard counsel as to the question of costs. I had indicated a preliminary view that, if Ms Li was granted the indulgence which she seeks, she should be required to pay the costs thrown away by the late filing of the cross-claim including any costs arising from the vacation of the hearing date and invited Ms Li's counsel to seek Ms Li's instructions as to whether she nonetheless wished to proceed with the application for leave to file the cross-claim. Ms Li determined to proceed with the application for leave in the knowledge of that potential consequence. I consider that that is the appropriate order, where there has been no fault on Mr Siu's part leading to this late application for leave, and he will already suffer some detriment by the grant of that application. Ms Merkel points out that the question of the quantum of costs thrown away may not be finally known until the time of a hearing. I accept that is the case, but do not consider that is any reason not to make an order for costs thrown away, including any costs arising from vacation of the hearing date, since the quantum of the costs involved will ultimately be a matter for a costs assessor if not agreed between the parties. 11Although Ms Li has been successful in the motion before me, that motion has been required because the cross-claim was sought to be filed at this late date and the position taken by Mr Siu in respect of the motion has, in my view, been an entirely reasonable one, notwithstanding that he has not prevailed having regard to the matters which I have outlined above. In these circumstances, I consider that Ms Li should also pay the costs of the motion heard before me on 17 November 2011 and today. 12I therefore order that: 1. Ms Li have leave to file a cross-claim in or substantially in the form provided to the Court today which I will mark MFI 1. 2. The hearing of the proceedings listed before me for five days commencing on 5 December 2011 be vacated. 3. Ms Li pay the costs thrown away by the late filing of the cross-claim including any costs arising from the vacation of the hearing date and the costs of the motion heard before me on 17 November 2011 and today. 4. The matter be listed before the Registrar in Equity for further case management on 12 December 2011.