Jian Jun Zhang v Yuhui Lei
[2020] VCC 450
•12 August 2019 (Revised 22 April 2020)
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-19-02706
| JIAN JUN ZHANG | Plaintiff |
| v | |
| YUHUI LEI | Defendant |
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JUDGE: | HIS HONOUR JUDGE COSGRAVE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12 August 2019 | |
DATE OF RULING: | 12 August 2019 (Revised 22 April 2020) | |
CASE MAY BE CITED AS: | Jian Jun Zhang v Yuhui Lei | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 450 | |
REASONS FOR RULING
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Kohn | Lincolns Lawyers & Consultants |
| For the Defendant | The defendant appeared in person |
HIS HONOUR:
1 I have before me an application by the defendant, YuHui Lei (“Lei”) by way of summons filed 25 July 2019 to set aside default judgment entered by the plaintiff, Jian Jun Zhang (“Zhang”) on about 4 July 2019.
2 The history of the dispute between the parties was well canvassed in a fairly detailed affidavit filed by Zhang in opposition to the application. It explained that, in July 2010, proceedings were issued against Zhang, Lei, and others in the Supreme Court of Victoria in relation to a property in Box Hill, trespass of a property in Balwyn, and the beneficial ownership of shares in a company.
3 Zhang alleged that he made an agreement with Lei around January 2012, under which he would defend the Supreme Court litigation and Lei would indemnify him against all loss and damage suffered by reason of him defending that proceeding. He duly did, consistent with the agreement, defend the proceeding.
4 In June 2016, Justice Riordan of the Supreme Court delivered written reasons for judgment. In about September 2016, the court made orders, amongst others, that Zhang and Lei pay the plaintiff’s costs of the proceeding, including costs reserved, such costs to be taxed on a standard basis.
5 Lei filed a notice of appeal from the decision of Justice Riordan to the Court of Appeal. Zhang did not have any involvement in the appeal and did not participate in the hearing before the Court of Appeal. It appears that Lei’s application to appeal was filed late and so in April 2018, she made an application for leave to appeal to the Court of Appeal out of time.
6 A Registrar rejected the application and on about 23 April 2018, Lei filed a further application to have the decision of the Registrar reviewed by a Court of Appeal judge. On 30 August 2018, Justice Whelan dismissed the application and ordered that Lei pay the respondent’s costs on an indemnity basis.
7 Subsequent to that, Lei filed an application for special leave to the High Court. Zhang had no involvement in that proceeding either. Exhibited before me was a copy of the orders made by Justices Keane and Edelman of the High Court, dismissing the application for special leave to appeal.
8 It appeared that the proceeding which began in the Supreme Court as proceeding 3712 of 2010, came to an end by virtue of the High Court refusing leave to appeal. On about 19 October 2018, a Registrar of the Costs Court, Registrar Conidi, ordered that the costs of the first and second plaintiffs (in the Supreme Court proceeding) be taxed and allowed in the sum of $465,000. Zhang was not involved in the taxation. He said that Lei told him that the taxation had nothing to do with him and that she would sort it out.
9 Later, a warrant for seizure and sale was made in respect of three properties in which Zhang has an interest; one in Glen Waverley, one in Ringwood East, and one in East Burwood. In January 2019, Zhang received a document entitled Notice to Judgment Debtor from the sheriff’s office, which was also addressed to Lei.
10 In his affidavit, Zhang said that, having received that notice, he had a conversation with Lei regarding the payment of the Supreme Court judgment debt. It is contended that during that conversation, Lei said that she would pay the debt, that she would sell the Box Hill property, and that there would be enough to pay all of the judgment debt and costs.
11 According to Zhang, Lei said that the notice and judgment debt had nothing to do with him and Lei promised to pay all the costs. Zhang did not need to do anything. Subsequently, on 30 April 2019, Zhang received a letter from the sheriff’s office which said a warrant for seizure and sale had been lodged in relation to his property at Townsend Street, Glen Waverley.
12 Having received that letter, Zhang issued proceedings in this court in June 2019. I read the affidavit of service in respect of the writ and statement of claim and am satisfied the documentation was served on Lei and she did not file a notice of appearance or a defence. Lei did not dispute service in her affidavit material.
13 On 4 July 2019, Zhang obtained default judgment. It is that default judgment which Lei sought to set aside. Lei filed two affidavits in relation to the application, one on 25 July and one on the date of the hearing. The first affidavit said that it appears the Supreme Court case that I have already referred to is still proceeding in the Court of Appeal in Victoria and the High Court at the present and that certain documents were submitted earlier this year.
14 It seems a little puzzling, in circumstances where the High Court dismissed the application for special leave in November last year, that Lei claimed the Supreme Court proceedings were still on foot.
15 Lei also claimed that she did not file a defence as she was waiting upon the County Court to provide her with a document, being a form 46A summons.
16 Lei confirmed that she and Zhang were defendants in a court case and said that, from 2011 to 2014, she paid Zhang’s legal fees to the solicitor and barrister, and that Zhang paid nothing. Lei maintained that Zhang drafted a document in his handwriting and asked her to sign it. She confirmed that she effectively agreed to pay the legal costs according to orders made by the High Court in the event that the case was lost.
17 That evidence seemed to be significantly more consistent with Zhang’s case than Lei’s case, and rather suggested that Lei agreed to indemnify Zhang in respect of the litigation in the event that orders adverse to them were made by the court. Those orders have certainly been made and have not been successfully appealed.
18 There also seemed to be a complaint that there was a claim for the judgment amount without notice. In circumstances where there was an affidavit of service and Lei did not dispute service, I can only infer that service was effected.
19 The second affidavit by Lei relates to a handwritten document handed up dated 21 January 2019. Lei said that her signature does not appear on that document. She said she did not know who wrote the document, but that it was not her signature.
20 The document was relevant but was certainly not decisive of anything in the proceeding, given that the initial agreement and the one relied upon by the plaintiff was made in 2012. I note, also, that the alleged Lei signature on the page in question appeared to be like other uncontested examples of Lei’s signature in the affidavits and other documentation.
21 Lei did not deny having made the 2012 agreement with Zhang.
22 The well known factors which the court must take into account in dealing with these applications have been set out in cases such as Kostokanellis v Allen[1] and Lubura v Nezirevic.[2]
[1][1974] VR 596.
[2](2013) 42 VR 43.
23 The most important factor to consider is the question of whether a defendant has a defence on the merits which has a real prospect of success as opposed to a fanciful prospect of success. In my view, the material does not raise any defence sufficiently arguable to satisfy this criterion.
24 There was the complaint about the signature. However, Lei did not deny the 2012 agreement which Zhang relied upon.
25 As far as I could ascertain, there was no explanation by Lei for her failure to appear or defend the proceeding initiated against her. She seemed to have some familiarity with litigation, and she conducted the appeal in the Supreme Court and the application for leave in the High Court. I accept that Lei acted promptly to set aside the judgment once the default judgment was entered and I also accept that there would be no irreparable prejudice suffered by Zhang if the judgment was set aside.
26 However, I am not satisfied that there is a sufficiently arguable defence on the material before me to warrant setting aside the default judgment. As a result, I dismiss the application. If Lei has more compelling material which evidences a defence which has more than a fanciful chance of success, she is at liberty to make another application. I order that the defendant’s summons filed 26 July 2019 be dismissed.
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