Ching Lung Chan and Ying Lin v Ching Ha Chan [No 2]
[2020] VSCA 78
•1 April 2020
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2018 0135
| CHING LUNG CHAN and YING LIN | Appellants |
| v | |
| CHING HA CHAN [No 2] | Respondent |
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| JUDGES: | MAXWELL P, TATE and FORREST JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | Determined on the papers |
| DATE OF JUDGMENT: | 1 April 2020 |
| MEDIUM NEUTRAL CITATION: | [2020] VSCA 78 |
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COSTS – Appeal allowed against orders for recovery of land under County Court Civil Procedure Rules 2018, Order 53 – Discretion – General rule that costs follow the event applied – No order as to costs of proceeding below.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Mr J D S Barber | Juris Nexus Lawyers |
| For the Respondent | In person |
THE COURT:
On 5 March 2020, the Court delivered judgment in relation to a dispute between Ching Ha Chan (‘Carol’) and her brother Ching Lung Chan (‘Michael’) and his wife Ying Lin (‘Lisa’) over the ownership of land.[1] Carol is the registered proprietor of two units in Bundoora, and Michael and Lisa rented a room in one of the units. They alleged that Carol used moneys provided by Carol and Michael’s parents to purchase the two units, and that Carol held the unit in which they lived on trust for Michael. Carol denied holding the unit on trust, and brought summary proceedings in the County Court to evict Michael and Lisa after they ceased paying rental. In the court below Michael and Carol were self-represented litigants, while Carol was represented by legal practitioners. The judge made orders under Order 53 of the County Court Civil Procedure Rules 2018 in favour of Carol for the summary recovery of land.
[1]Chan v Chan [2020] VSCA 40 (‘Primary reasons’).
Michael and Lisa sought to appeal from that decision. They were represented by counsel in this court, while Carol now appeared as a self-represented litigant. This Court granted leave to appeal and allowed the appeal.[2] We found that the summary procedure for recovery of land is neither available nor appropriate because, in the circumstances of the case, it is arguable that Michael and Lisa are not licensees to whom Order 53 could apply, but tenants at will, to whom the summary procedure does not apply; and, in any event, there is a relevant contest of fact between the parties in relation to whether there is a constructive trust. This may be based on principles of proprietary estoppel or on the existence of a common intention or joint endeavour. The issue of the status of Michael and Lisa as tenants at will was not raised in the Court below.
[2]For convenience, in what follows we refer simply to ‘the appeal’.
Carol was not able to be present at the time that we delivered judgment. The Court made orders on 5 March 2020 in the following form:
1. The applications by the parties to rely on further affidavit evidence are refused.
2. Leave to appeal is granted.
3. The appeal is allowed.
4. The orders made on 2 October 2018 by her Honour Judge A Ryan are set aside and in their place it is ordered that the application for summary judgment is refused.
5. The proceeding is referred to the County Court for further directions.
6.The applicants file submissions on costs of no more than 3 pages by Friday 13 March 2020.
7. The respondent file submissions in reply on costs of no more than 3 pages by Friday 20 March 2020.
On 13 March 2020, Michael and Carol filed written submissions seeking their costs of the application for leave to appeal and the appeal. They submit that the Court should exercise its discretion to award costs in their favour on the basis that they were successful and the basic rule is that costs follow the event. Although they acknowledge that a successful party may be refused costs where the appeal has succeeded on a point which the party did not raise in the court below, they submit it would be unfair to do so in this case where Michael and Lisa were then unrepresented, and where that Court ought, in any event, have come to the conclusion that the summary procedure was not appropriate because of the contested issues of fact. The question of whether Michael and Lisa were tenants at will or licensees is a complex one, requiring consideration of extensive authority, and, they submit, beyond the capacities of self-represented litigants with a limited command of English.
Michael and Lisa also seek their costs in the court below. Those costs comprise the cost of retaining a solicitor after the hearing below to seek a stay of execution of the judgment and a stay of execution of the warrant for possession. Those stays were sought by way of a summons filed 8 May 2019, and were granted by another judge of the County Court on 10 May 2019, with costs reserved.
Finally, out of fairness, Michael and Lisa note that Carol should be entitled to seek an indemnity certificate pursuant to s 4(1)(b) of the Appeal Costs Act 1998.
In her written submissions on costs filed on 20 March 2020, Carol seeks an indemnity certificate.
In relation to costs generally, Carol submits that Michael and Lisa should be held accountable for their decision not to seek legal advice initially, as a result of which Carol has ‘now accrued an unnecessary legal debt’. She contends that if Michael and Lisa had sought such advice, it is reasonable to assume a different decision would have been reached and the appeal would not have been necessary. She also says that Michael and Lisa have been living in Unit 1 rent free since 2017 and profiting from rent charged to the occupants of the other rooms in the unit, while Carol, as owner and mortgagee, has been obliged to pay the mortgage without any contributions from these ‘rent’ monies. She also alleges that Michael and Lisa have breached mediation agreements.
Carol also asks this Court to consider making an order that she pay only a proportion of Michael and Lisa’s costs. She says she has been left out of pocket for almost $60,000 after Michael and Lisa failed to pay the legal costs that were ordered below. This has meant that Carol has had to pay this debt at $2,000 per month. She has been unemployed since 2018 following the birth of her son, and her husband is also currently unemployed. She is not in a financial position to pay Michael and Lisa’s legal costs.
In our opinion, with respect to the costs in this Court, we consider that the basic rule should apply that costs follow the event. Michael and Lisa have been wholly successful in the appeal. Although Michael and Lisa did not raise the issue of whether they were tenants at will or licensees before the primary judge, we considered that the summary procedure was not available in the circumstances of the case because of the contested issues of fact independently of the question of their status.[3] In other words, Michael and Lisa would have succeeded on the appeal regardless of the question of their status.
[3]Primary reasons [79].
We also consider that Carol’s reliance on the rent-free occupancy of Unit 1 by Michael and Lisa does no more than reagitate the substantial questions in the proceeding that can only be resolved at trial.
We consider that the Court should exercise its discretion to order that Carol pay the costs of Michael and Lisa of the application for leave to appeal and the appeal on the standard basis.
In relation to the costs of the proceeding below, we consider that each party ought to bear their own costs. The submissions made by Carol did not appear to grapple with the affidavit material that had been filed by Michael and Lisa. The position of Michael and Lisa was unclear. Moreover, it is in this forum that the failure of Michael and Lisa to raise the question of their status (as licensees or tenants at will) is relevant, albeit explicable. Had that issue been raised, the judge may have immediately given directions that the matter proceed to trial or embarked upon an inquiry that revealed the complexity of the factual dispute between the parties.[4] The costs orders made by the judge below have been set aside. We shall order that, with respect to the proceeding below, there be no order as to costs.
[4]Primary reasons [78].
We grant Carol an indemnity certificate pursuant to s 4(1)(b) of the Appeal Costs Act 1998 and that will be noted under ‘Other matters’.
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