Fong v Shi - [2007] SASC 72

SUPREME COURT OF SOUTH AUSTRALIA
(Appeal from a Master: Civil)
FONG v SHI
[2007] SASC 72
Judgment of The Honourable Justice Anderson
8 March 2007
CONVEYANCING - LAND TITLES UNDER THE TORRENS SYSTEM - CAVEATS AGAINST DEALINGS - LAPSE, REMOVAL AND WITHDRAWAL
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PAYMENT INTO COURT, AND OFFERS TO SETTLE OR CONSENT TO JUDGMENT
APPEAL AND NEW TRIAL - APPEAL GENERAL PRINCIPLES - ADMISSION OF FRESH EVIDENCE
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT
TRANSFER OF ACTION TO DISTRICT COURT
Appeal against decision of a Master to remove action to District Court - original action before Supreme Court was application to extend caveat until conclusion of proceedings in a related matter in the District Court - parties came to agreement that plaintiff remove caveat and that the defendant sell property and pay proceeds into court - defendant applied to transfer matter to District Court - whether Master erred in transferring matter to District Court - exact terms of the agreement unclear -whether the terms of the agreement are recorded in the records of the Supreme Court - whether there were any issues left to transfer - whether money had been paid into court to abide result of District Court action.
Held: appeal dismissed - the Master did not err in transferring matter to District Court - the terms of agreement cannot be decided on records of Supreme Court - application to call fresh evidence refused - remaining issues to be decided in District Court if necessary
Real Property Act 1886 (SA), s191, referred to.

FONG v SHI
[2007] SASC 72
Introduction

This matter has a long and complex history. It has been frustrated by some fundamental errors of process, with the result that there are now two concurrent matters being run in the Supreme Court and in the District Court. All issues should have been pursued in one court.
This is an appeal from a decision of a Master of this Court. The Master ordered that the Supreme Court action be transferred to the District Court.
Background
The background to this matter is as follows. In July 2001, Jian Shi, the father of the respondent, entered into a loan agreement with the appellant whereby the appellant loaned Jian Shi a sum of Renimbi Yuan 650 000 (Renimbi is the currency of the People’s Republic of China and Yuan is a denomination of this currency). This loan agreement was written in Chinese.
Pursuant to the loan agreement, the respondent’s father agreed to repay this money to the appellant before October 2003. The respondent’s father used the loan monies to purchase a property at 42 Henry Street Ottoway SA on 7 December 2001.
In October 2003, the respondent’s father failed to repay the loan. This resulted in the appellant registering a caveat over the land on 4 May 2004. This was followed on 16 June 2004 by the appellant issuing the…

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

Case: [2007] SASC 72
Decision Date: 8 March 2007

CaseChat Overview and Summary

The case of Fong v Shi involved a dispute over a loan agreement and subsequent property transactions. Jian Shi, the father of the respondent, borrowed a substantial sum of money from the appellant, Fong, in 2001. The loan agreement was in Chinese and stipulated repayment by October 2003. Upon default, Fong registered a caveat over the property purchased by Jian Shi using the loan money. Following further negotiations, the respondent undertook to repay the loan in two instalments, with the first payment made in 2004. However, the second instalment was not paid by the agreed deadline, leading to the re-lodgement of the caveat. The appellant then commenced legal proceedings in both the Supreme Court and the District Court to enforce the payment of the outstanding amount.

The central legal issues revolved around the interpretation of the terms of the agreement between the parties, specifically whether the payment into court was intended to await the outcome of the Supreme Court proceedings or the District Court action. The appellant argued that the payment should abide the outcome of the Supreme Court matter, while the respondent contended that it should relate to the District Court action. Additionally, the court had to consider the admissibility of fresh evidence and whether the Master's orders and remarks could sufficiently determine the agreement's terms.

The court, presided over by Justice Gray, concluded that the orders and remarks from the Masters did not provide a clear enough interpretation of the agreement's terms. The remarks and orders were not definitive and could be interpreted in multiple ways, leading the court to reject the appellant's application to present additional evidence. The court found that the matter was not sufficiently clear to resolve based on the existing records alone and that it was inappropriate to interpret the terms without a clearer understanding of the parties' intentions. Consequently, the court decided that the matter should be resolved in the District Court if necessary, as it had jurisdiction over the proceedings.

The final orders of the court were to reject the appellant's application to present further evidence and to decline the submission that the payment into court should abide the outcome of the Supreme Court matter. The matter was to be resolved in the District Court, where the specific terms of the agreement could be more thoroughly examined through evidence from both parties.

Orders

Orders of the court

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Background

Background to the litigation

This is an appeal from a decision of a Master of this Court. The Master ordered that the Supreme Court action be transferred to the District Court.Background The background to this matter is as follows. In July 2001, Jian Shi, the father of the respondent, entered into a loan agreement with the appellant whereby the appellant loaned Jian Shi a sum of Renimbi Yuan 650 000 (Renimbi is the currency of the People’s Republic of China and Yuan is a denomination of this currency). This loan agreement was written in Chinese. Pursuant to the loan agreement, the respondent’s father agreed to repay this money to the appellant before October 2003. The respondent’s father used the loan monies to purchase a property at 42 Henry Street Ottoway SA on 7 December 2001. In October 2003, the respondent’s father failed to repay the loan. This resulted in the appellant registering a caveat over the land on 4 May 2004. This was followed on 16 June 2004 by the appellant issuing the respondent’s father with a letter of demand for payment of the loan in Australian dollars for an amount of $110 000 principle plus $22 804.65 interest. On 20 July 2004 the appellant and the respondent entered into a deed of undertaking whereby the respondent voluntarily undertook liability for repaying the amount of RMB 800 000 (consisting RMB 650 000 principle, plus interest) in two instalments of RMB 400 000 by no later than 30 December 2004. Upon the signing of the deed, the appellant withdrew the caveat on 5 October 2004 in order to enable the respondent to mortgage the property Whilst on 5 October 2004 the respondent paid the appellant the first instalment of $69 019, the respondent failed to pay the second instalment by 30 December 2004. The respondent told the appellant that further time was required to subdivide and develop the land in order to obtain the funds required to pay the second instalment. The parties then agreed that the period for the payment of the second instalment would be extended. On 9 March 2006 the appellant discovered that, contrary to the assertion made by the respondent, namely that the property was being subdivided and developed, the property was in fact advertised for sale. On 5 April 2006 the appellant lodged a caveat over the land and then on 6 April 2006 sent a letter to the respondent demanding payment of the second instalment plus interest and advised that the caveat would not be removed until the respondent paid the second instalment. On 11 May 2006 the respondent lodged an application to remove the caveat. On 17 May 2006 the appellant commenced action 772 of 2006 in the District Court of South Australia to recover the second instalment and interest on the second instalment.The Supreme Court Action On 19 May 2006 the appellant commenced this action in the Supreme Court. It was an application pursuant to section 191 of the Real Property Act 1886 (SA) to have the caveat extended until the finalisation of the District Court matter. The apparent reason for this matter being lodged in the Supreme Court, rather than in the District Court, was because of an administrative error by the District Court Registry, which, according to the parties, incorrectly informed the appellant that the District Court did not have jurisdiction to hear the matter. On 24 May 2006, 7 June 2006 and 7 August 2006 the Master made interlocutory orders to extend the time for removal of the caveat. It is worth noting that the District Court did in fact have jurisdiction to hear the matter.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Mr Lazarevich submitted that the transcript was of limited value as Mr Slattery had no involvement in, and only a peripheral understanding of, the Supreme Court matter. Mr Lazarevich also pointed out that the comments of Mr Slattery, were in response to an application by the respondent to adjourn the matter, which was made without notice and occurred during the course of the hearing. I have not derived any assistance from what was said on a previous occasion in the District Court on the discrete matter relating to an adjournment. Conclusion Having regard to the arguments presented by both parties I find myself in a position where I cannot make any conclusion from the court records as to what the terms of agreement between the parties were. There are indications which in different ways support the arguments put forward by both sides. It is not possible from a combination of orders and remarks made by Masters to interpret the intention of the parties. It is my view that it would be inappropriate for me to do so unless it was clear cut. It is not clear cut in this case. Mr Stevens may well be right in his submission that the only way to determine what the agreement was is to hear evidence about it from both sides. There are affidavits which have been filed in the District Court. It was in respect of those affidavits that I declined Mr Stevens' application to tender them as evidence before me relating to the terms of the agreement. The deponents of those affidavits would need to be cross-examined. There may be other evidence that would assist but as at present advised the matter is, in my view, incapable of resolution on the mere orders of the Court together with the accompanying remarks. In any event the matter should be resolved in the District Court, if indeed the Judge considers it necessary to do so. Having rejected Mr Stevens' application to present this further evidence I am of the view that there would be a prejudice in my interpreting the matter in the way suggested by Mr Lazarevich. I will illustrate the difficulty I face. On 15 August 2006 the Master noted that the defendant would ‘not object to paying the…proceeds of the sale into court to abide the outcome of the District Court action’. This remark was made before the parties entered into the final agreement. The orders of the Master on this occasion required that the respondent draft and file a copy of the anticipated settlement statement and draft minutes of order. If these documents were still in draft form then the agreement had not been finalised and accordingly I cannot find that the term ‘abide the outcome of the District Court action’ was a term of, or is evidence of a term of, the final agreement between the parties. In comparison, the fiat from the hearing before another Master on 18 August 2006 can be seen as a contemporaneous record of the agreement between the parties as it was at this hearing that the minutes of order requested by the Master was presented to the Court and accepted. The relevant order was not actually made until 21 August 2006 due to an administrative delay but it seems that the terms of the agreement were not materially altered over the course of this delay. Judge Burley in his remarks made it clear that the money was to be paid into the Supreme Court Suitors Fund. I think that this shows that it was at least possible that at the time of the agreement it was the understanding of the parties and the Court that the monies were being paid into the Supreme Court to abide the outcome of the Supreme Court matter.

Ratio Decidendi

Legal Principle Established

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