Baccello Pty Ltd as trustee for the Mondello Family Trust v Qin Chen as trustee for the Cao Family Trust [No 2] - [2017] WADC 65

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: BACCELLO PTY LTD as trustee for the MONDELLO FAMILY TRUST -v- QIN CHEN as trustee for the CAO FAMILY TRUST [No 2] [2017] WADC 65

CORAM: WAGER DCJ

HEARD: ON THE PAPERS

DELIVERED : 11 MAY 2017

FILE NO/S: CIV 980 of 2014

BETWEEN: BACCELLO PTY LTD as trustee for the MONDELLO FAMILY TRUST
Plaintiff
AND
QIN CHEN as trustee for the CAO FAMILY TRUST
First Defendant
WEI DONG CAO
Second Defendant

Catchwords:

Costs - Preliminary issues

Legislation:

Nil

Result:

The defendants pay the plaintiff's costs in connection with the trial of preliminary issues determined on 30 March 2017 to be taxed if not agreed

The defendants are not required to pay the plaintiff's costs until the matter reaches finality either by judgment or settlement

The parties are required to attend mediation before a registrar of this court before the matter proceeds further

Representation:

Counsel:

Plaintiff:     Mr S Tribble
First Defendant              :     In person
Second Defendant         :     In person

Solicitors:

Plaintiff:     Arns & Associates
First Defendant              :     Not applicable
Second Defendant         :     Not applicable

Case(s) referred to in judgment(s):

Bacello Pty Ltd as trustee for the Mondello Family Trust v Qin Chen as trustee for the Cao Family Trust [2017] WADC 45
Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39
Nikolaou v Papasavas, Phillips & Co (No 2) [1989] HCA 11; (1989) 166 CLR 394

WAGER DCJ: On 30 March 2017 I delivered judgment on preliminary issues in this matter.
The issues were:
1.Whether the plaintiff was or became aware of the usage of leased premises in question as a brothel and if so, when the plaintiff became aware of that usage.
2.Whether the lease in question was void in whole or in part as a consequence of the above finding.
I found that the plaintiff was not aware and did not become aware of the usage of the leased premises as a brothel at the relevant time. The lease was not void in whole or in part.
The reasons relevant to my findings are in Bacello Pty Ltd as trustee for the Mondello Family Trust v Qin Chen as trustee for the Cao Family Trust [2017] WADC 45.
The first defendant did not take part in the trial of preliminary issues. The second defendant was self‑represented. When I handed down my decision and findings the second defendant orally opposed the plaintiff's application that costs be awarded in their favour. I therefore requested and received written submissions on behalf of the plaintiff and from the second defendant so that I could consider the question of costs further. I am dealing with this issue on the papers filed.
The general rule is that the successful party to any action or matter will recover their costs: Rules of the Supreme Court 1971, O 66 r 1(1). The court has a broad discretion as to costs, however it is incumbent upon the unsuccessful party to satisfy the court that there are good reasons why it should not pay the other party's costs: Nikolaou v Papasavas, Phillips & Co (No 2) [1989] HCA 11; (1989) 166 CLR 394, 407; Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 [5].
The plaintiff was the successful party in relation to the trial of the preliminary issues. The defendant argues however that additional to the preliminary issues, substantive matters still need to be determined at trial and therefore the question of costs should not be considered until all issues have been determined and the matter has been finalised.
Having perused the court file it appears that none of the parties applied to have a trial of preliminary issues. The history is that the plaintiff filed chamber summonses against the first defendant and the second defendant to strike out their respective defences and counterclaims and seeking orders for further and better particulars in respect of the second defendant's defence. The applications were listed before Deputy Registrar Hewitt on 10 December 2015. On that date the deputy registrar raised that a trial of the preliminary issues was needed before the matter proceeded further. A trial of preliminary issues was strongly opposed by counsel for the plaintiff, Mr Houghton, who argued that the plaintiff would then be required to effectively have two trials and that a trial of preliminary issues would not address the state of the defendants' pleadings.
Counsel appearing on behalf of the first defendant, Mr Sim, said (ts 16):
Given that if the plaintiff did in fact knew [sic] about the nature of the business, and I do submit that the contract would be indeed void and claims would not be able to proceed. In regards, to, sir, your suggestion that a trial be held on this issue, we do concur and we do push for it to proceed …
The second defendants' view was not given nor sought.
Counsel for the first defendant went onto say (ts 16) '… and we (indistinct) the object to the striking out application today … made by the plaintiff.'
The deputy registrar responded in no uncertain terms 'Well, the pleading is rubbish. I mean Mr Houghton's on a winner there. It has to be revised.'
The defendants were ultimately ordered to have the carriage of the trial of preliminary issues. The preliminary issues trial was listed for hearing on 27 – 29 October 2015, however the defendants failed to comply with orders made and did not pay the required fees.
On the plaintiff's application the trial dates were vacated.
Notice was subsequently issued that the case was on the inactive cases list on 20 January 2016. The plaintiff applied for the matter to be removed from the inactive case list and for a springing order in respect of the defendants' non‑compliance with orders dated 14 September 2016.
Ultimately at a listing conference before Registrar Kingsley on 20 June 2016 the matter was listed for the three day period of 21 ‑ 23 November 2016. Register Kingsley made a number of orders in respect of the preparation of witness statements and trial documents.
The defendants did not comply with those orders and failed to prepare trial bundles. The plaintiff chose to prepare the bundles in order to ensure that the matter proceeded on the listed dates. The plaintiff also challenged the admissibility of the contents of the first defendant's witness statements. Although orders relevant to the defendants' witness statements had been made on 20 June 2016 and the plaintiff had objected to inadmissible content the admissibility of the statements was not dealt with until the preliminary issues trial commenced.
Prior to the start of the preliminary issues trial the court advised the second defendant that he had the obligation to ensure that a qualified interpreter was present at trial given that he required the services of an interpreter as did some of the second defendant's witnesses. The second defendant did not make arrangements and accordingly, the trial was adjourned for a period on the first morning so that an interpreter could attend.
I have commented on the second defendant's demeanour during the course of the preliminary issues trial in my reasons for decision, however once the trial commenced it was completed within the listed period of three days.
Although the matter has now been proceeding for some time, the plaintiff's applications to strike out the defence and counterclaim of the first defendant and second defendant have never been considered and may need to be dealt with before the matter can be finalised.
Given my preliminary findings, if the matter proceeds to trial the issues to be determined will relate to compliance with the relevant lease between the plaintiff and the defendants. The defence and counterclaim issues of whether the defendants complied with the lease, whether a $10,000 bond was being held by the plaintiff and whether the defendants paid expenses in respect of the leased premises are matters that may need to be determined. The issue of whether the lease is void has been dealt with.
I find that the plaintiff did not contribute to any delays in respect of the trial of issues and was the successful party in respect of both questions that were determined.
I am satisfied that the plaintiff is entitled to costs that follow the event in respect of the preliminary issues trial.
I order that the defendants pay the plaintiff's costs in connection to the trial of preliminary issues determined on 30 March 2017 to be taxed if not agreed.
However, the preliminary issues are not the only issues. Potentially triable questions relating to the lease remain outstanding. It may be that these issues could be dealt with without the matter proceeding to trial. It is regrettable that the parties have not attended mediation in the past. In part this is because the first defendant has had no role in the proceedings, the second defendant is self‑represented and the preliminary issues trial took some time to be listed and determined. It is important that the parties attend mediation in order to attempt to resolve the outstanding issues before the matter proceeds to a substantive trial date.
Accordingly, I order that the parties attend mediation before a registrar of this court before the outstanding issues are listed for trial.
Given that the matter is still on foot, I also order that the defendants not be required to pay the plaintiff's costs until this matter reaches finality either by judgement or by settlement.