Special leave granted by the High Court, 23 April 2010 s304/2009 [2010] HCATrans 97
New South Wales
Court of Appeal
CITATION:
Chen v Marcolongo; Chen v Lym International Pty Ltd [2009] NSWCA 326
HEARING DATE(S):
8 & 9 July 2009
JUDGMENT DATE:
13 October 2009
JUDGMENT OF:
Allsop P at 1; Giles JA at 28; Young JA at 30
DECISION:
40118/09 1. Appeal allowed 2. The declaration and orders of the Court made on 18 March 2009 and entered on 23 March 2009 in favour of the first respondent, Mrs Marcolongo, be set aside. 3. Order that Mrs Marcolongo’s proceedings be dismissed with costs. 4. Order that Mrs Marcolongo pay the costs of the appeal but Mrs Marcolongo to have a certificate under the Suitors’ Fund Act 1951. 40119/09 1. Appeal allowed in part. 2. Vary the order made by the Court on 18 March 2009 and entered on 19 March 2009 as follows: "(A) Delete orders 4 and 5 and substitute: 4. Order that upon the plaintiffs and Westpac Banking Corporation agreeing that there can be an assignment of registered mortgage AC 5480628 to the first defendant with no future liability on the appellant or upon the first plaintiff tendering to the appellant the amount of money necessary to discharge the said mortgage, the appellant forthwith execute a transfer in registrable form of the Units in favour of the first plaintiff and do all things and take all other steps necessary to convey the Units to the first plaintiff. (B) Delete the words from order 8 "and to certify the results of the inquiry to the Court" and insert the words “and to give judgment for the party or parties whom such inquiry finds liable to pay monies to some other party.” (C) Delete order 9(c). (D) (i) delete from order 17(a) the words "and Mrs Marcolongo";
(ii) add to the end of order 17(c) "provided that this order 17(c) shall cease to have effect upon the judgment in order 12 and the judgment in order 13 both being fully satisfied". (E) Delete from order 18(a) the words "and Mrs Marcolongo". (F) Add new order 24: "Liberty to any party to apply to a judge of the Equity Division on 5 days' notice to discharge any order that may have become otiose by way of changing circumstances and generally". 3. Order that the order for costs below stand. 4. Order that the appellant pays 95% of the costs of the first, second and third respondents and the whole of the costs of the fourth respondent as a submitting respondent. 5. The parties have 14 days to make any protest about the form of order or any clerical mistake in these reasons.
CATCHWORDS:
EQUITY – general principles – fiduciary obligations – scope and extent – conflict of interest and duty – fiduciary used power of attorney to sell property to himself – whether to set aside conveyance – obligation of plaintiff to do equity. - CONVEYANCING – s…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Chen v Marcolongo [2009] NSWCA 326
Case
[2009] NSWCA 326
Decision Date
CaseChat Overview and Summary
The case of *Chen v Marcolongo* involved an appeal to the New South Wales Court of Appeal concerning a fiduciary's use of a power of attorney to sell property to himself and a claim under section 37A of the *Conveyancing Act 1919* (NSW) to declare a conveyance void due to an alleged intent to defraud creditors. The primary dispute revolved around the validity of a conveyance of units and the standing of a party to bring proceedings under section 37A.
The court was required to determine whether a conveyance, where a fiduciary used a power of attorney to sell property to himself, should be set aside. Additionally, the court had to consider whether a person with a claim for unliquidated damages in tort, pending in the District Court, qualified as a "creditor" for the purposes of section 37A of the *Conveyancing Act*, and whether such a person had standing to seek a declaration that a conveyance was void due to an intent to defraud creditors. The court also considered whether dishonesty was a necessary element to establish an intent to defraud under section 37A.
The Court of Appeal allowed the appeal in part, setting aside certain declarations and orders made in favour of the first respondent, Mrs Marcolongo. The court reasoned that the first respondent lacked the necessary standing to bring proceedings under section 37A of the *Conveyancing Act* as her claim for unliquidated damages did not render her a "creditor" in the context of that section. The court also varied other orders, including those relating to the conveyance of units and the discharge of a mortgage, and made consequential orders regarding costs.
Orders
Orders of the court
40118/09
1. Appeal allowed
2. The declaration and orders of the Court made on 18 March 2009 and entered on 23 March 2009 in favour of the first respondent, Mrs Marcolongo, be set aside.
3. Order that Mrs Marcolongo’s proceedings be dismissed with costs.
4. Order that Mrs Marcolongo pay the costs of the appeal but Mrs Marcolongo to have a certificate under the Suitors’ Fund Act 1951.
40119/09
1. Appeal allowed in part.
2. Vary the order made by the Court on 18 March 2009 and entered on 19 March 2009 as follows:
"(A) Delete orders 4 and 5 and substitute:
4. Order that upon the plaintiffs and Westpac Banking Corporation agreeing that there can be an assignment of registered mortgage AC 5480628 to the first defendant with no future liability on the appellant or upon the first plaintiff tendering to the appellant the amount of money necessary to discharge the said mortgage, the appellant forthwith execute a transfer in registrable form of the Units in favour of the first plaintiff and do all things and take all other steps necessary to convey the Units to the first plaintiff.
(B) Delete the words from order 8 "and to certify the results of the inquiry to the Court" and insert the words “and to give judgment for the party or parties whom such inquiry finds liable to pay monies to some other party.”
(C) Delete order 9(c).
(D) (i) delete from order 17(a) the words "and Mrs Marcolongo";
(ii) add to the end of order 17(c) "provided that this order 17(c) shall cease to have effect upon the judgment in order 12 and the judgment in order 13 both being fully satisfied".
(E) Delete from order 18(a) the words "and Mrs Marcolongo".
(F) Add new order 24: "Liberty to any party to apply to a judge of the Equity Division on 5 days' notice to discharge any order that may have become otiose by way of changing circumstances and generally".
3. Order that the order for costs below stand.
4. Order that the appellant pays 95% of the costs of the first, second and third respondents and the whole of the costs of the fourth respondent as a submitting respondent.
5. The parties have 14 days to make any protest about the form of order or any clerical mistake in these reasons.