Li v Xin
[2011] VSC 121
•22 MARCH 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. S CI 2009 8906
| PHILLIP YIWEI LI | Plaintiff |
| v | |
| (CINDY) YAN XIN | First Defendant |
| and | |
| THE REGISTRAR OF TITLES | Second Defendant |
---
JUDGE: | HABERSBERGER J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 22 MARCH 2011 | |
DATE OF JUDGMENT: | 22 MARCH 2011 | |
CASE MAY BE CITED AS: | LI v XIN | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 121 | |
---
Trusts – Factory purchased in name of first defendant – Evidence that the property was held on trust for the plaintiff – Nothing paid by first defendant towards purchase of property – Refusal by first defendant to transfer property into plaintiff’s name – No appearance for first defendant at trial.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr E.B. Bloch | Batten Sacks Harvey Bruce |
| For the First Defendant | No appearance | |
| For the Second Defendant | No appearance |
HIS HONOUR:
By a writ issued on 15 September, 2009, the plaintiff, Phillip Yiwei Li, sought relief against the first defendant, Cindy Yan Xin, with respect to a property known as Factory 4, 2-4 Kirkham Road, Dandenong South, being the land described in Certificate of Title, Volume 10968 Folio 923 (“the property”). The property is registered in the name of the first defendant and is subject to a registered mortgage in favour of the Bank of Western Australia Ltd (“Bankwest”). The plaintiff's claim is that the whole of the property is held by the first defendant on trust for the plaintiff.
Following service of the writ, the first defendant instructed solicitors and an appearance was entered and then a defence was filed. Following the filing of an amended statement of claim, an amended defence was filed. Then in November 2010 the solicitors acting for the first defendant filed a notice of ceasing to act. Nevertheless, orders were made prior to this matter coming on for hearing today concerning service of interlocutory orders and notification of the trial at the office of the solicitors formerly acting for the first defendant and at her last known address in Frankston. I am satisfied on the basis of the affidavit of service of Harvey Stephen Bruce, the plaintiff’s solicitor, affirmed on 16 March 2011, that the orders have been complied with and that the first defendant is therefore taken to have notice of the hearing today. However, she did not attend.
The second preliminary issue was one raised by Mr Bloch of counsel, who appeared for the plaintiff. He informed me that a title search of the property had revealed that a caveat had been lodged by someone known as Li Hua Li, claiming to be an equitable mortgagee. The issue was whether the hearing should proceed without Ms Li being notified or added as a party.
On the basis of oral evidence from Mr Bruce concerning a conversation that he had with Henley Wong, the solicitor for the first defendant, on 7 December 2010, I am satisfied that Ms Li, who is apparently the sister-in-law of the first defendant, was well aware of the existence of this proceeding. Mr Wong had advised Mr Bruce that he had made numerous requests for payment of his costs, not only to the first defendant, but also to her husband and her sister-in-law, Ms Li. The issue had some importance given that the caveat lodged by Ms Li was lodged before the caveat lodged by the plaintiff. Nevertheless, I am satisfied that it was appropriate to proceed to hear the plaintiff's claim.
Evidence was given by the plaintiff and by his mother, Lin Qiao, who gave evidence through the services of a solicitor who was able to translate from the Mandarin language into English.
By a contract of sale dated 18 July 2008, a company, Tallowood Pty Ltd sold the factory to "Xin Yan and/or nominees 8 Bailey Court Frankston, Vic, 3199" for the sum of $538,000 payable by a deposit of $53,800 (of which $1000 had been paid) and the balance of $484,200 on 19 September 2008. The evidence of the plaintiff and his mother was to the effect that the real purchaser was the plaintiff. However, because the plaintiff was then only 21 and studying engineering, he was not able to obtain finance from a bank. His parents through their business would have been able to meet the payments on his behalf. Ms Xin, the first defendant, was a family friend. She was approached and agreed to apply for the loan from Bankwest and to hold the property on trust for the plaintiff.
It was at first a little puzzling to me as to why, if the plaintiff was unable to obtain a loan, his parents did not obtain the loan in their own names rather than involving the first defendant, albeit, one who was regarded at that time as a family friend. I was satisfied by the explanation given, in answer to a question from me, that at the time Mrs Qiao was very sick and that her husband wanted to retire. I considered it was supportive of the relationship between the plaintiff and his parents that, in answer to another question from me, Mrs Qiao said that her home was also in the name of her son.
Both the plaintiff and his mother gave evidence that the first defendant has not paid anything towards the purchase of the property or to payment of the mortgage debt owed to Bankwest. I accept that evidence.
There was some confusion arising out of some unsigned agreements between the plaintiff and the first defendant whereby the first defendant would have acknowledged in writing that she held the property on trust for the plaintiff. One document was dated 18 September 2008 and the other 20 March 2009. Evidence was given that in declining to sign those documents, the first defendant said that she was an honourable person and could be trusted. Regrettably, it would appear that this was not the case. The confusion that arose from the first of those documents was that it appeared that the balance of the deposit, namely $52,800, may have in fact been paid by the first defendant. However, further evidence, in particular from the plaintiff's mother, satisfies me that there was a previous agreement made on 4 May 2008 whereby the plaintiff's mother lent the first defendant the sum of $200,000 and that part of the repayment of that loan was used to make the payment of the balance of the deposit of $52,800 payable to the vendor of the property. That, of course, is a payment made by Mrs Qiao on behalf of her son and not a payment made by the first defendant.
The evidence also satisfies me that all payments to Bankwest since the entry into the loan have been made by the plaintiff or on his behalf by one or other of his parents.
Two documents were produced which have the difficulty that much of them were in Chinese writing, but from what I could read of the documents, it supported what was said about them. The first of these documents dated 17 January 2009, was an acknowledgement by the first defendant that the first four monthly payments to Bankwest had been made by or on behalf of the plaintiff. And the second, dated 17 April 2009, which was signed by the first defendant's husband, was an acknowledgement that four later payments had similarly been made by or on behalf of the plaintiff.
The statement of adjustments for the settlement of the purchase of the factory in the name of the first defendant supported the evidence given by the plaintiff and his mother, as documented in the two unsigned agreements, that the balance of the purchase price had not been provided by the first defendant but by or on behalf of the plaintiff.
The agreement between the plaintiff and the first defendant was that at some stage in the future the property held on trust for the plaintiff by the first defendant would be transferred by the first defendant to the plaintiff. Requests for that promise to be honoured have been refused and therefore this proceeding had to be commenced.
As I have said, the first defendant, whilst filing a defence and then an amended defence, has not appeared today and has previously terminated the services of her solicitors. The only positive defence pleaded, as far as I understand it, was that moneys paid to the first defendant by the plaintiff's mother were in payment of the purchase of a business trading as Newfield Soya Bean Food. Mrs Qiao gave evidence that that was the business that she had run for some four years prior to moving into the factory in Kirkham Road, Dandenong South. Mrs Qiao said that the suggestion that she was purchasing the business from the first defendant was completely false.
The situation therefore is that I am satisfied on the uncontradicted evidence of the plaintiff and his mother that this property is held on trust by the first defendant for the plaintiff. I am prepared to make a declaration that the plaintiff has an equity or interest in the property and also a declaration that the first defendant holds the whole of her interest in the property upon trust for the plaintiff.
I will also make an order that the first defendant execute an instrument of transfer of the property in registrable form to convey the legal title thereof to the plaintiff.
Given the difficulties that the plaintiff’s legal advisers have experienced in attempting to serve the first defendant with not only the initiating documents, but also with the more recent court orders and notification of trial, it is reasonably anticipated that there may be difficulty finding the first defendant to serve on her a copy of this order and the instrument of transfer for her to sign. I will therefore also make an order that a copy of this order and of the instrument of transfer for signature by the first defendant, be served on the office of her former solicitors, Henley Lawyers, and that in default of execution and return of the said instrument of transfer within 30 days of such service, the prothonotary be authorised to sign the said instrument of transfer conveying the property to the plaintiff.
Finally, I will order that the first defendant pay the plaintiff’s costs of the proceeding, including reserved costs, such costs to be taxed in default of agreement on a party and party basis.
---
0
0