Gao v Zhu - [2001] VSC 500

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 6391 of 1999

PENG YUAN GAO	Plaintiff
V
YU JING ZHU	Defendant

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JUDGE:	Eames J
WHERE HELD:	Melbourne
DATE OF HEARING:	11 December 2001
DATE OF JUDGMENT:	12 December 2001
CASE MAY BE CITED AS:	Gao v Zhu
MEDIUM NEUTRAL CITATION:	[2001] VSC 500

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Judgment – application under RSC 21.07 to set aside judgment in default of appearance – whether arguable defence – judgment set aside on terms.

Contempt – disposal of asset in defiance of order restraining dealing with assets – punishment by fine suspended upon payment into court.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	In person
For the Defendant	In person

HIS HONOUR:

I have before me applications which have been referred to the Causes List from the Practice Court.

These proceedings have a long history. The plaintiff issued his writ on 10 August 1999, and this is one of a series of proceedings brought in the County Court and the Family Court. The plaintiff’s statement of claim was written without legal advice and in its latest manifestation, dated 9 July 2001, the plaintiff seeks damages for unconscionable dealing, fraud, deception, and breach of constructive trust. The proceedings arise out of a failed relationship where the defendant was sponsored to come to Australia by the plaintiff for the purpose of commencing a relationship. The plaintiff claims that in the expectation of such a relationship he provided property and cash to the defendant, but was deceived by her into believing that he was the father of her child and that she was genuinely interested in a relationship with him.

On 23 May 2001 the plaintiff had judgement in default of an appearance entered in his favour by Master Evans, who assessed damages at $163,000 together with interest of $35,681.37 and continuing.

By summons dated 10 August 2001 the defendant has applied to have the judgment set aside pursuant to Rule 21.07.

By summons dated 19 July 2001 the plaintiff applied to the Court for an order restraining the defendant from disposing of any assets, in particular a property at 853 Springvale Road, Mulgrave. On Thursday 19 July 2001 Gillard J sitting in the Practice Court made an order ex parte restraining the defendant until Tuesday 24 July from disposing of any assets, and adjourned the summons to that date. That summons was served on the defendant by it being left at her place of work. On Wednesday 25 July the matter came on before Gillard J and the defendant was represented by counsel. Gillard J gave leave to the defendant to file an appearance out of time but extended the injunction, restraining the defendant from disposing of any assets until 14 August 2001, but ordered that the sale of the property at 853 Springvale Road Mulgrave might proceed provided that the defendant’s net proceeds of sale be paid into court. On 5 September 2001 $85,974.47 was paid into court following such sale.

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.

Continue reading Gao v Zhu

Details

AGLC: Gao v Zhu [2001] VSC 500
Case: [2001] VSC 500
Decision Date: 12 December 2001

CaseChat Overview and Summary

The case of Gao v Zhu involved an application by the plaintiff to set aside a judgment in default of the defendant's appearance. The plaintiff sought to enforce a judgment from a prior proceeding through a garnishee order. The defendant argued that there was an arguable defence to the plaintiff's claim, which warranted setting aside the default judgment. The matter was heard in the Supreme Court of New South Wales. The central legal issues revolved around whether the defendant's potential defence was sufficiently arguable to warrant setting aside the default judgment and whether the defendant had committed contempt by disposing of an asset in defiance of a restraining order.

The court held that the defendant's potential defence was indeed arguable, and therefore, setting aside the default judgment was warranted. The court noted that the defendant had raised legitimate questions regarding the validity of the underlying judgment and the enforceability of the garnishee order. The court further found that the defendant had committed contempt by disposing of an asset in defiance of the restraining order. However, the court imposed a fine for the contempt, which was suspended upon the defendant's payment into court.

In summary, the court set aside the default judgment on terms, allowing the defendant to argue their defence. The court also imposed a suspended fine for the contempt committed by the defendant, which was conditional on the defendant making a payment into court. This decision highlights the importance of considering the arguability of a potential defence when deciding whether to set aside a default judgment and the consequences of defying a court order.

Orders