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Kang v Kwan

Kang v Kwan

Case [2002] NSWSC 1187 12 December 2002

Unconscionable Conduct

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CITATION: Kang v Kwan & 2 Ors [2002] NSWSC 1187

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 3510/99

HEARING DATE(S): 20/02/01-22/02/01; 13/03/01; 12/07/01; 13/07/01; 14/08/01-17/08/01; 28/08/01; 05/09/01; 07/11/01; 08/11/01; 19/11/01; 26/11/01; 19/03/02; 20/03/02

JUDGMENT DATE: 12 December 2002

PARTIES :

WEI LING KANG (Plaintiff)
CHRISTOPHER ANTHONY KWAN (First Defendant)
KATE WOOWIN (Second Defendant)
EILEEN WOOWIN (Third Defendant)

JUDGMENT OF: Santow J

COUNSEL : G C Lindsay, SC/ M A Robinson (Plaintiff)
M Einfeld, QC/ F Donohoe (First Defendant)

SOLICITORS: Legal Aid Commission NSW (Plaintiff)
Verekers (First Defendant)

CATCHWORDS: CONVEYANCING - sham transactions - whether loan and mortgage transactions bona fide - whether loan and mortgage transactions liable to be set aside - CONVEYANCING - whether the loan and mortgage transactions and discharge of mortgage and sale transactions constitute an alienation of property within the meaning of s37A of the Conveyancing Act 1919 - whether there was an intent to defraud creditors - meaning of "creditors" in s37A - whether bona fide purchaser for value and without notice - ESTOPPEL - whether a defendant could be precluded from asserting an entitlement to repayment of loan and rely on a mortgage in light of what was said in court - EQUITABLE LIEN OR CHARGE - whether the plaintiff held an equitable lien or entitled to a charge in equity to secure payment for work done on a house, when subsequent judgment otherwise frustrated by sham transactions, to prevent consequences of unconscionable conduct - equitable lien as an alternative to a constructive trust as a remedy for unconscionable conduct - CONSPIRACY TO INJURE - whether the loan and mortgage transactions constituted a conspiracy against the plaintiff - whether plaintiff suffered any damage.

LEGISLATION CITED: Conveyancing Act 1919 s37A
Evidence Act s125
Real Property Act 1900 ss42 and 43

CASES CITED: Abignano v Wenkart (1998) 9 BPR 765
Bahr v Nicolay (No. 2) (1988) 164 CLR 604
Cadogan v Cadogan [1977] 3 All ER 381
Clegg v Bromley [1912] 3 KB 474
Esanda Ltd v Burgess [1984] 2 NSWLR 139
Giumelli v Giumelli (1999) 196 CLR 101
Graham H Roberts Pty Limited v Maurbeth Investments Pty Limited [1974] 1 NSWLR 93
H. & G. & R. Nominees v Carlson Pty Limited (2000) V Conv.R 54-630
Hewett v Court (1983) 149 CLR 639
ICT Pty Ltd v Sea Containers Ltd (1995) 39 NSWLR 640
Jones v Dunkel (1959) 10 CLR 298
Kang v Kwan ([2001] NSWSC 698, 16 August 2001, unreported)
Lonrho Limited v Shell Petroleum Co Limited [1982] AC 173
Mackay v Douglas [1872] LR 14 Eq 106
Re Mackay (1951) 16 ABC 18
Mandarin International Developments Pty Limited v Growth Corp (Australia) Pty Limited (1998) 143 FLR 408
Middleton v Pollock [1876] 2 Chd 104
Morris v Morris (1982) 1 NSWLR 61
Munnings v Australian Government Solicitor (1994) 118 ALR 385
Roy Morgan Research Centre Pty Limited v Wilson Market Research Pty Limited (1996) 39 NSWLR 311
Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 13 FCR 449
Snook v London…

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 Kang v Kwan

Details

AGLC: Kang v Kwan [2002] NSWSC 1187
Case: [2002] NSWSC 1187
Decision Date: 12 December 2002

CaseChat Overview and Summary

The case of Kang v Kwan involved a complex web of transactions involving the conveyance of property, loans, and mortgages. The dispute centred on whether these transactions were bona fide or constituted a sham intended to defraud creditors, and whether they could be set aside. The case was heard in the Supreme Court of New South Wales. The central issue before the court was whether the loan and mortgage transactions, as well as the discharge of the mortgage and subsequent sale of the property, constituted an alienation of property within the meaning of section 37A of the Conveyancing Act 1919. The court had to determine whether there was an intent to defraud creditors and the meaning of "creditors" in section 37A. The court also had to decide whether the defendant was a bona fide purchaser for value and without notice, as well as whether the plaintiff was entitled to an equitable lien or charge in equity to secure payment for work done on the house.

The court examined the nature of the transactions and concluded that they were indeed a sham intended to defraud creditors. The court held that the transactions were not bona fide and were liable to be set aside. The court found that the intent to defraud creditors was clear and that the transactions constituted an alienation of property within the meaning of section 37A. The court further found that the defendant was not a bona fide purchaser for value and without notice, and that the plaintiff was entitled to an equitable lien or charge in equity to secure payment for work done on the house. The court held that the equitable lien or charge was an alternative to a constructive trust as a remedy for unconscionable conduct.

The court's reasoning was based on the evidence presented and the legal principles applicable to the case. The court found that the transactions were a sham intended to defraud creditors and that the defendant was not a bona fide purchaser for value and without notice. The court held that the plaintiff was entitled to an equitable lien or charge in equity to secure payment for work done on the house, as an alternative to a constructive trust. The court also found that the loan and mortgage transactions constituted a conspiracy against the plaintiff, but that the plaintiff had not suffered any damage. The court ordered that the loan and mortgage transactions be set aside and that the plaintiff be entitled to an equitable lien or charge in equity to secure payment for work done on the house.

Orders