Lei v Lei (Enforcement of declaration)
[2020] VSC 840
•11 December 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S CI 2010 03712
BETWEEN:
| ZHENJI LEI (ALSO KNOWN AS PETER LEI) & ORS | Plaintiffs |
| and | |
| YUHUI LEI (ALSO KNOWN AS JULIYA LEI) & ORS | Defendants |
AND BETWEEN
| YUHUI LEI (ALSO KNOWN AS JULIYA LEI) & ANOR | Plaintiffs by Counterclaim |
| and | |
| ZHENJI LEI (ALSO KNOWN AS PETER LEI) & ORS | Defendants by Counterclaim |
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JUDGE: | RIORDAN J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 4 December 2020 |
DATE OF JUDGMENT: | 11 December 2020 |
CASE MAY BE CITED AS: | Lei v Lei (Enforcement of declaration) |
MEDIUM NEUTRAL CITATION: | [2020] VSC 840 |
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REMEDIES – Inherent power to enforce declaratory relief – Failure by first defendant to accept a transfer of property consequent on a declaration by the Court – Orders made in furtherance of declaration.
TRANSFER OF LAND – Plaintiffs unable to produce certificate of title to effect transfer of land – Orders for Registrar of Titles to create a new folio for subject land and for Prothonotary to execute a transfer of land on behalf of the first defendant in accordance with the declaration.
COSTS – Order for indemnity costs fixed by the Court for breach of the overarching obligation to cooperate under s 20 of the Civil Procedure Act 2010 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the First and Second Plaintiffs | Mr J Nunns | Falcone & Adams Lawyers |
| For the First Defendant | No appearance | |
| For the Fourth Defendant | No appearance |
HIS HONOUR:
The second plaintiff and the first defendant are registered as joint proprietors of 1119 Whitehorse Road, Box Hill, being the land described in Certificate of Title Volume 11301 Folio 641 (‘the Box Hill property’).
On 17 June 2016, I published my reasons for judgment following a nine day trial in this proceeding,[1] and made declarations including that the second plaintiff holds her legal interest in the Box Hill property on trust for the first defendant (‘the declaration’).[2]
[1]Lei v Lei [2016] VSC 336.
[2]On 29 July 2016, this declaration was corrected pursuant to rule 36.07 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) to refer to 1119 Whitehorse Road, Box Hill, rather than 119 Whitehorse Road, Box Hill.
The High Court dismissed applications for special leave to appeal from the judgment in this proceeding on 14 December 2016 and 30 March 2017.[3]
[3]Lei v Lei [2016] HCASL 342 (Bell and Gageler JJ); [2017] HCASL 65 (Nettle and Gordon JJ).
On 30 August 2018, Whelan JA dismissed an application by the first defendant for review of a decision of the Registrar refusing an extension of time to apply for leave to appeal against the judgment in this proceeding.
On 14 November 2018, the High Court dismissed an application for special leave to appeal from the decision of Whelan JA.[4]
[4]Lei v Lei [2018] HCASL 342 (Keane and Edelman JJ).
On 14 May 2020, the Court of Appeal dismissed an application for leave to appeal from a decision of a Judge in the County Court refusing to set aside judgment in default of appearance in a proceeding related to this proceeding.[5]
[5]Lei v Zhang [2020] VSCA 123 (Kaye and McLeish JJA).
On 12 November 2020, the High Court dismissed an application for special leave to appeal from the judgment of the Court of Appeal dated 14 May 2020.[6]
[6]Lei v Zhang [2020] HCASL 241 (Bell and Gageler).
By summons filed 14 October 2020 in this proceeding, the first and second plaintiffs apply for the following orders:
1.That the Fourth Defendant/Sixth Defendant by Counterclaim [being the Registrar of Titles] cancel folio of the Register Volume 11301 Folio 641.
2.That the Fourth Defendant/Sixth Defendant by Counterclaim create a new folio of the Register for the land known as 1119 Whitehorse Road, Box Hill in the State of Victoria.
3.A declaration for the purposes of sub-section 27B(6) of the Transfer of Land Act 1958 that the Second Plaintiff/Second Defendant by Counterclaim is entitled to delivery of any Certificate of Title that the Fourth Defendant/Sixth Defendant by Counterclaim produces for the new folio to be created pursuant to paragraph 2.
4.The Prothonotary is authorised to execute a transfer on behalf of the First Defendant/First Plaintiff by Counterclaim in an appropriate approved form that gives effect to the declaration that the Second Plaintiff/Second Defendant by Counterclaim holds her legal interest in 1119 Whitehorse Road, Box Hill in the State of Victoria (being the land previously described in Certificate of Title Volume 11301 Folio 641 but now described in any Certificate of Title produced for the new folio created pursuant to paragraph 2) on trust for the First Defendant/First Plaintiff by Counterclaim.
5.That the First Defendant/First Plaintiff by Counterclaim pay the First and Second Plaintiffs’/First and Second Defendants’ by Counterclaim costs of this application on an indemnity basis or, alternatively, on a standard basis to be taxed in default of agreement.
6.Any other Orders that this Honourable Court considers appropriate.
The necessity for these orders has arisen in the following circumstances.
Since the declaration, the first defendant has taken no steps to transfer the Box Hill property from the second plaintiff into her own name. As a result, the second plaintiff has deposed to the fact that she is concerned that, as one of the registered proprietors, she is responsible for rates that are levied on that property by the Whitehorse City Council, and the State Revenue Office is pursuing her for land tax.
By letter dated 11 October 2019, the Registrar of Titles rejected an application to amend the Certificate of Title to remove the second plaintiff as a registered proprietor of the Box Hill property, on the basis that the declaration did not constitute a direction to the Registrar of Titles under s 103 of the Transfer of Land Act 1958 (Vic) (‘the Act’).
By letter dated 25 February 2020, the Registrar of Titles rejected an application to amend the Certificate of Title to remove the second plaintiff as a registered proprietor of the Box Hill property, on the basis that s 58(1) of the Act does not allow the Registrar of Titles to remove a person from the Register, only to register trustees or beneficiaries.
As a result, by emailed letter dated 23 June 2020 to the first defendant, the solicitor for the first and second plaintiffs stated:
Unfortunately, both applications [to the Registrar of Titles] were unsuccessful.
But having said that, the Land Titles Office has advised that it will consider amending the title to the Box Hill property with your co-operation. Namely, it will register a Transfer of Land transferring Lucy’s interest in the said property to you as ordered. Alternatively, it will amend the title if you issue an application pursuant to section 58(1) of the Transfer of Land Act 1958. Either way, the result will be the same; that is, the Box Hill property will be transferred to you as sole proprietor.
On that basis, we ask whether you are prepared to assist with the transfer of the Box Hill property to yourself by adopting either of the methods outlined above. If so, please advise which method you would prefer and we will render the necessary assistance to finally give effect to the Orders made by the Supreme Court in proceeding SCI 2010 3712. For the avoidance of any doubt, in rendering this assistance, we will not be purporting to act for you. Nor could we, as this would pose a conflict of interest. Rather, we are seeking to bring some finality (by tying up loose ends) to the said Supreme Court proceeding. On that basis, and before you come back to us, we would encourage you to seek your own independent legal advice in this regard.
After no response was received to the above letter, by email of 25 August 2020 to the first defendant, the solicitor for the first and second plaintiffs stated:
We refer to our attached letter of 23 June 2020 and note that you have yet to respond. We submit that, as two months has passed since that letter was emailed, you have had sufficient time to seek independent legal advice about the matters raised therein.
On that basis, we are now instructed to bring this matter back before the Court. The purpose of so doing is to seek an order that the Prothonotary, or other Officer of the Court, is authorised to execute a transfer of land on your behalf that gives effect to the declaration made by Justice Riordan on 29 July 2016 (amending the declaration made on 17 June 2016).
You will no doubt appreciate that, if our clients are required to bring this matter back before the Court, they will incur further significant legal costs. Should this occur, they will seek to recover those costs from you. This is not unreasonable, bearing in mind that the sole purpose of transferring the Box Hill property to you is to give effect to the said declaration. We remind you that you sought this declaration in your Counterclaim and the judgment of the Supreme Court was upheld on appeal both before the Court of Appeal and the High Court.
Therefore, in one final attempt to avoid incurring more legal costs, our clients are prepared to allow you a further 7 days (that is, until 1 September 2020) to confirm your agreement to transfer the Box Hill property to yourself and indicate which method (of the two outlined in our said letter) should be adopted for this purpose. If you fail to do so, then an application will be issued with the Supreme Court without further notice. For the avoidance of any doubt, if this course of action is necessary, then our clients will seek to recover the costs they incur in this regard from you on an indemnity basis and this email and our letter of 23 June 2020 will be produced to the Court on the question of those costs.
By email of 14 September 2020 to the Land Titles Office, the solicitor for the first and second plaintiffs proposed to make an application to this Court, in substance seeking orders:
(a) cancelling the folio of the Register Volume 11301 Folio 641;
(b) creating a new folio of the Register for the Box Hill property; and
(c) authorising the Prothonotary to execute a transfer of land giving effect to the relevant declaration.
By letter dated 17 September 2020 to the solicitor for the first and second plaintiffs, the Registrar of Titles stated that he had no concern with the proposed orders but suggested minor changes to the form of certain paragraphs.
By email of 22 September 2020 to the Registrar of Titles, the solicitor for the first and second plaintiffs identified a further difficulty and suggested some revisions to the orders, which are substantially reflected in the orders sought in the summons filed 14 October 2020.
By email of 29 September 2020 to the solicitor for the first and second plaintiffs, the Registrar of Titles stated that he had no issue with the proposed revised orders.
On 15 October 2020, the first defendant was served with the summons and an affidavit in support of Ms Verginis sworn 13 October 2020.
By email of 30 November 2020 to the Court, the first defendant stated as follows:
With regarding the hearing on 4 December 2020 I regret to say I am not able to appear at the Supreme Court. Because I do not agree to do anything to the property 1119 Whitehorse Road Box Hill as proposed by Madam Maria Verginia [sic] of FALCONE & ADAMS now. I sent the email to her about this matter already. On 4 December I have to go to see the dentist and the appointment I waited for a long time.
I am very grateful for your consideration.
On 1 December 2020, the first defendant was served with a further affidavit of Ms Verginis sworn 1 December 2020.
By email of 4 December 2020 at 4:27 am to the Court, the first defendant stated as follows:
I would say the Case SCI 2010 3712 of Victoria Supreme Court is appealed to the High Court of Australia with the case Number M54/2020 which is proceeding now.
Thanks for your attention to this matter.[7]
[7]As noted in paragraph 7 above, the application for special leave to appeal against the decision of the Court of Appeal in Lei v Zhang [2020] VSCA 123 was dismissed by the High Court on 12 November 2020: Lei v Zhang [2020] HCASL 241 (Bell and Gageler).
The first defendant’s email of 30 November 2020 identified that one of the reasons she was not able to appear was that she did not agree ‘to do anything to the property 1119 Whitehorse Road Box Hill’. I am not satisfied that her second reason, being the dentist appointment on 4 December, was any impediment to her appearing on this application. After the first defendant was informed that the application was scheduled to be heard at 10:30 am on 4 December 2020 at a virtual hearing via Zoom, she did not specify the time of her dentist appointment, or ask for the hearing to be scheduled to avoid a conflict with her appointment.
Counsel for the first and second plaintiffs sought to proceed on 4 December 2020, and I decided that the application should proceed, for the following reasons:
(a)The first defendant has not put forward any material or made any submissions as to why the Court should not grant the application except to say ‘I do not agree to do anything to the property 1119 Whitehorse Road Box Hill as proposed by Madam Maria Verginia’.
(b)The first defendant did not request that the hearing be adjourned, or indicate that she wanted to make submissions on an adjourned date.
(c)The first defendant has refused to respond or otherwise cooperate for the purposes of effecting the transfer of the Box Hill property following judgment in this proceeding and the declaration referred to in paragraph 2 above.
(d)In the circumstances of this case as set out above, s 8 of the Civil Procedure Act 2010 (Vic) requires that the Court prioritise the finalisation of the dispute and attempt to avoid unnecessary costs that would be incurred by reason of an adjournment.
Consideration
Following the making of a declaration, the Court has inherent power to make coercive orders for the purpose of enforcing the declaratory relief.[8] If there is non compliance with a declaration, the Court will not ‘stand by and confess that it is powerless’.[9]
[8]Westlaw AU, The Laws of Australia (online at 9 December 2020) 2 Administrative Law, ‘2.6 Remedies in Judicial Review’ [2.6.1850]; Dixon v Barton [2011] NSWSC 1525, [184] (Ward J).
[9]Webster v Southwark London Borough Council [1983] QB 698, 710 (Forbes J).
Section 103(1) of the Act provides:
In any proceeding in a court relating to any land or any instrument or dealing in respect thereof if the court directs the Registrar to make any amendments to the Register or otherwise to do any act or make any recordings necessary to give effect to any judgment decree or order of the court the Registrar shall obey such direction.
I propose to grant the first and second plaintiffs the relief they seek. It is for the benefit of all parties that the beneficial ownership of the Box Hill property, which has already been the subject of orders made in this proceeding, be finalised. The second plaintiff should not be subjected to liability for municipal rates or land tax for a property in respect of which she has no beneficial interest.
I will order as follows:
1.The Registrar of Titles (the fourth defendant/sixth defendant by counterclaim), cancel the folio of the Register Volume 11301 Folio 641.
2.The Registrar of Titles create a new folio of the Register for the land previously described in the folio of the Register Volume 11301 Folio 641 and known as 1119 Whitehorse Road, Box Hill in the State of Victoria.
3.A declaration for the purposes of sub-section 27B(6) of the Transfer of Land Act1958 (Vic) that Yuxin Lei (also known as Lucy Lei) (the second plaintiff/second defendant by counterclaim), is entitled to delivery of any Certificate of Title that the Registrar of Titles produces for the new folio to be created pursuant to paragraph 2 of these orders.
4.The Prothonotary is authorised to execute a transfer of land in an appropriate approved form on behalf of Yuhui Lei (also known as Juliya Lei) (the first defendant/first plaintiff by counterclaim), as transferor and transferee, to transfer the legal title to the land previously described in Certificate of Title Volume 11301 Folio 641 but now described in any Certificate of Title produced for the new folio created pursuant to paragraph 2 of these orders and known as 1119 Whitehorse Road, Box Hill in the State of Victoria from Yuxin Lei and Yuhui Lei to Yuhui Lei.
Further, I consider that the first defendant should indemnify the first and second plaintiffs for the costs of this application because of her breach of the overarching obligation under s 20 of the Civil Procedure Act 2010 (Vic) in failing to cooperate in the conduct of a civil proceeding. To avoid further costs being incurred on an assessment in the Costs Court, I will fix the costs at $24,548.68, being the amount of the Bill of Costs dated 9 December 2020 submitted by the solicitor for the first and second plaintiffs, which I consider to be reasonable. Accordingly, I will further order as follows:
5. The first defendant pay the first and second plaintiffs’ costs of the summons filed 14 October 2020, on an indemnity basis, fixed in the sum of $24,548.68.
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