District Court New South Wales Medium Neutral Citation: Cao v Yu & Anor [2016] NSWDC 296 Hearing dates: 26 September 2016 Date of orders: 14 November 2016 Decision date: 14 November 2016 Jurisdiction: Civil Before: Judge Levy SC Decision: 1. The notice of motion filed by the second defendant applicant on 26 August 2016, as amended, seeking dismissal or alternatively striking out of the proceedings, pursuant to UCPR r 13.4 and r 14.28, is dismissed; 2. The second defendant applicant is to pay the plaintiff respondent's costs of the dismissed motion; 3. Liberty to apply on 7 days' notice if further or other orders are required; 4. The proceedings are listed before the List Judge for case management directions at 10.00am on Monday 28 November 2016. Catchwords: PRACTICE & PROCEDURE – applications for dismissal pursuant to UCPR r 13.4 and for strike out pursuant to UCPR r 14.28 Legislation Cited: Civil Procedure Act 2005, s 98 Uniform Civil Procedure Rules 2005, r 13.4, r 14.28 Cases Cited: Cao v Liu, 2012/275052, District Court, unreported, 6 September 2013 Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 Yu v Cao [2015] NSWCA 276 Category: Procedural and other rulings Parties: Ping Cao (Plaintiff/Respondent) Barrie Goldsmith t/as Goldsmith Lawyers (First defendant) George Yu (Second defendant/Applicant) Representation: Counsel: Mr KP Smark SC (Plaintiff/Respondent) Mr R Rasmussen (Second defendant/Applicant) Solicitors: Fitzpatrick Solicitors Pty Ltd (Plaintiff/Respondent) Etheringtons (Second defendant/Applicant) File Number(s): 2015/352100 Publication restriction: None Judgment Notice of motion 1. The second defendant applicant, Mr George Yu, seeks to invoke UCPR r 13.4 and UCPR r 14.28 to have these proceedings brought by the respondent plaintiff, Mr Ping Cao, either dismissed or struck out. Nature of the substantive case 1. The substantive proceedings in which the motion has been brought, involve claims of alleged professional negligence and breach of contract alleged against the plaintiff's former solicitor, the first defendant, Mr Barrie Goldsmith t/as Goldsmiths Lawyers, and a co-extensive claim against the second defendant, Mr George Yu, pleading a cause of action in deceit. Procedural background 1. The substantive proceedings arise from antecedent defamation proceedings brought by the plaintiff, Mr Ping Cao, who had instructed the first defendant, Mr Barrie Goldsmith to act as his solicitor. The defendant in those proceedings was Ms Shengrong Liu, also known as Mrs Yu, the wife of Mr George Yu, the second defendant in these proceedings. 2. On 8 September 2013, after a 12 day hearing before another Judge of this Court, those defamation proceedings resulted in the entry of a verdict and judgment for the defendant: Cao v Liu, 2012/275052, District Court, unreported, 6 September 2013. 3. On 14 September 2015, that first instance decision was reversed on appeal: Yu v Cao [2015] NSWCA 276. Consequent upon the dismissal of those proceedings on appeal, the plaintiff brings the present proceedings against his former solicitor, Mr Goldsmith and Mr Yu. 4. Mr Goldsmith did not participate in the hearing of the present notice of motion because the second defendant did not seek any interlocutory relief against him. Accordingly, the proceedings against Mr Goldsmith remain on foot, and they are the subject of other outstanding interlocutory processes which are not relevant to the consideration of the present application. 5. The claim against Mr Yu relates to evidence that emerged in other proceedings to the effect that he took steps and conduct in the name of his wife, which then led to the earlier dismissed proceedings to which he was not a party. Issue 1. The matter at issue in the present motion is whether, according to the principles of estoppel, the respondent plaintiff is precluded from maintaining the present proceedings against the second defendant applicant, Mr Yu. Evidence 1. The evidence tendered on the motion was in affidavit form. The second defendant applicant relied upon parts of the affidavit of his solicitor, Ms Mitchell, sworn on 17 March 2016. The applicant also relied upon parts of the affidavit of the plaintiff's solicitor, Mr Fitzpatrick, sworn on 30 May 2016. 2. The evidence in those affidavits variously comprised emails, including some written in the Chinese language, and correspondence between the respective solicitors, as well as the published decisions in the related defamation proceedings, namely the 14 September 2014 first instance decision in this Court, and the subsequent judgment of the Court of Appeal: Yu v Cao [2015] NSWCA 276. 3. In support of the relief claimed in this application, the second defendant applicant relied on selected passages of those decisions to assert an estoppel, particularly in the decision of the Court of Appeal: [18]; [21]; [73]; [92]; [102]; [109]; [158]; [167]; [174]; [182]; [189]. Facts relevant to the present motion 1. The cited appeal proceedings involved the consideration of a non-party procedural costs order, made at first instance, in favour of Mr Cao against Mr Yu in the failed underlying defamation proceedings brought by Mr Cao against Ms Liu (also known as Mrs Yu). The subject matter of those proceedings involved published emails claimed to have been defamatory. The issue at that trial was who had in fact sent the email in question. 2. At that trial, it was determined that on the disclosed facts, Mr Yu ought to have been a defendant to those proceedings. That finding, and the dismissal of the claim against Ms Liu (Mrs Yu), resulted in the entry of a verdict for the defendant. In that case, the trial judge was persuaded that an exceptional non-party costs order should be made against Mr Yu because it was Mr Yu's conduct which had brought about the litigation: s 98(1)(b) of the Civil Procedure Act 2005. On appeal, that exceptional cost order was set-aside. 3. In the present proceedings, on behalf of Mr Yu, his legal representatives sought to make an estoppel argument by relying on particular cited paragraphs of the judgment on appeal. Consideration 1. In my view, a fundamental obstacle the second defendant applicant faces in pursuit of this application is that, although Mr Yu ought to have been a party to the previous proceedings which resulted in the decision in Yu v Cao [2015] NSWCA 276, in fact he was not a party. 2. Although that cited decision canvassed relevant actions by Mr Yu, his only procedural participation in those earlier proceedings was in relation to a summary non-party costs order where he was self-represented. 3. Once that position is recognised, it is plain that not only were the parties to the respective proceedings different with regard to the matters at issue, but the causes of action (defamation as opposed to costs) were also different, whereas the present proceedings, insofar as they relate to Mr Yu, invoke a claimed cause of action in deceit. 4. In my view, the fact that Mr Yu gave evidence at the earlier trial, which evidence was found to have been untruthful, as was observed in Yu v Cao [2015] NSWCA 276, at [73], is immaterial. He was not a relevant party to those proceedings. 5. Mr Yu's only involvement, other than as a witness, was as the recipient of an exceptional costs order made pursuant so s 98 of the Civil Procedure Act 2005. This was because, as a non-party, his actions, which were argued to have involved deceit on his part, had brought about the litigation. This related to his misleading use of his wife's Anglicised name to convey a false impression that she had sent the email which was complained of in those proceedings. That was the cause of Mr Cao suing Ms Liu (Mrs Yu), even though Mr Yu had a relevant connection to those proceedings: [171]; [174]. The conclusion reached on appeal, was that the finding that Mr Yu's conduct had deceived Mr Cao, was held to be not open on the evidence: [182]. 6. I consider that in those circumstances, the claimed estoppel does not relevantly arise. The respondent plaintiff pointed to the decision on appeal in Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231, and the principles of res judicata, and various forms of estoppel referred to in that judgment at paragraphs [72] – [77]. In essence, the effect of that decision on appeal was to confirm that the principles of estoppel in litigation only arise when in disputes between identified parties, the claimed rights and obligations of the parties in the same interest or capacities are identical with the circumstances in which estoppel is claimed, and those rights and obligations have been conclusively resolved or quelled. 7. In Habib, at [81], [101] and [107], dealing with the principle commonly referred to as Anshun estoppel, it was made clear that such an estoppel only arises where matters properly belonging to the litigation, being the same question, have been the subject of a definitively pronounced final judgment. 8. That latter conclusion requires that the matter upon which final judgment has been pronounced, and in respect of which a claim of estoppel is made, must relate to an issue that was open to be determined in the proceedings. 9. The issues in the respective cases of Cao v Yu and the present case, are fundamentally different. There is no sound evidence to suggest an attempt is being made to litigate the same matters or questions that have already been contested and quelled as between the parties. 10. It follows that the notice of motion seeking the dismissal or the striking out of the plaintiff's proceedings, must fail. Disposition 1. I therefore find that the second defendant applicant has failed to achieve the relief sought in the amended notice of motion. Costs 1. It follows that the costs incurred by the plaintiff respondent in resisting the orders sought in that notice of motion should be paid by the second defendant applicant. Orders 1. I make the following orders: 1. The notice of motion filed by the second defendant applicant on 26 August 2016, as amended, seeking dismissal or alternatively striking out of the proceedings, pursuant to UCPR r 13.4 and r 14.28, is dismissed; 2. The second defendant applicant is to pay the plaintiff respondent's costs of the dismissed motion; 3. Liberty to apply on 7 days notice if further or other orders are required; 4. The proceedings are listed before the List Judge for case management directions at 10.00am on Monday 28 November 2016. ********** 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: 14 November 2016