Lu v Yu

Case [2019] VSC 499 25 July 2019

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2019 01744

OU LU (also known as Lu Ou)	Plaintiff
v
XIN QIANG YU (also known as Li Xiang Yu)	Defendant

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	14 May 2019
DATE OF JUDGMENT:	25 July 2019
CASE MAY BE CITED AS:	Lu v Yu
MEDIUM NEUTRAL CITATION:	[2019] VSC 499

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SUMMARY RECOVERY OF LAND – Application under order 53 – Plaintiff registered as proprietor of the land – Defendant in possession claiming an equitable interest in the land pursuant to an alleged resulting or constructive trust – Muschinski v Dodds (1985) 160 CLR 583; Baumgartner v Baumgartner (1987) 164 CLR 137 – Plaintiff’s claim to possession proceeds on the assumption that the defendant may establish an equitable interest in the land and seeks to recover possession in order to exercise the plaintiff’s right to an indemnity out of the trust assets for her personal liabilities incurred as trustee of the trust – Right of indemnity is an interest in the trust assets and constitutes a first charge upon that property – Plaintiff entitled to possession of the property in priority to the defendant – Jennings v Mather [1902] 1 KB 1; Savage v Union Bank of Australia (1906) 3 CLR 1170; Commissioner of Australian Federal Police v Cornwell (1990) 98 ALR 677; Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360; Hayman v Equity Trustees (2003) 8 VR 557, 566-8 – Order 53 Supreme Court (General Civil Procedure) Rules 2015 (Vic) – Framlingham Aboriginal Trust v McGuiness and Chatfield [2014] VSC 241; Framlingham Aboriginal Trust v McGuiness and Chatfield [2014] VSC 354; Tajon Pty Ltd v Arvanitis [2017] VSC 130, [27]-[34].

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T P Mitchell	Tao Jiang Lawyers
For the Defendant	Mr B Carr	Hone Legal & Conveyancing

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Background......................................................................................................................................... 1

Submissions........................................................................................................................................ 4

Order 53 – recovery of possession................................................................................................... 6

Consideration...................................................................................................................................... 7

Conclusion......................................................................................................................................... 11

HIS HONOUR:

Introduction

The plaintiff (Ms Lu) applies pursuant to order 53 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) to recover possession of land situate at and known as 31 Gertz Avenue, Reservoir, Victoria (Gertz Ave Property).[1] Ms Lu is the sole registered proprietor of the Property. The defendant (Mr Yu) is in possession of, and lives in, the Gertz Ave Property.
[1]The land more particularly described in certificate of title volume 09002 folio 508.

Ms Lu is also registered as proprietor of one other property, Unit 712, 233 Collins Street, Melbourne, Victoria (Collins St Property).[2] Luou Pty Ltd, as trustee of the Luou Family Trust is registered as proprietor of a third property, 98 Doncaster Road, Balwyn North, Victoria (Balwyn Property).[3]
[2]The land more particularly described in certificate of title volume 10523 folio 675.
[3]The land…

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 Lu v Yu

Details

AGLC: Lu v Yu [2019] VSC 499
Case: [2019] VSC 499
Decision Date: 25 July 2019

CaseChat Overview and Summary

The case of Lu v Yu involved the plaintiff, Lu, who was the registered proprietor of certain land, and the defendant, Yu, who claimed an equitable interest in the land based on an alleged resulting or constructive trust. The dispute was heard by the Supreme Court of Victoria. The plaintiff sought an order for possession of the land under the provisions of Order 53 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), based on the assumption that the defendant might be able to establish an equitable interest in the land. The plaintiff's claim was predicated on the need to exercise their right to an indemnity out of the trust assets for personal liabilities incurred as trustee of the trust.

The primary legal issues before the court were whether the defendant could establish an equitable interest in the land and, if so, whether the plaintiff's right to an indemnity out of the trust assets constituted a superior interest that entitled the plaintiff to possession of the property. The court examined the principles set out in Muschinski v Dodds and Baumgartner v Baumgartner to determine the nature and extent of the defendant's equitable interest. The court also considered whether the plaintiff's right of indemnity was an interest in the trust assets and, if so, whether it constituted a first charge upon that property, thereby allowing the plaintiff to recover possession of the land in priority to the defendant.

The court held that the defendant could indeed establish an equitable interest in the land based on the principles of resulting or constructive trust. However, the court also found that the plaintiff's right of indemnity was an interest in the trust assets and constituted a first charge upon that property. Consequently, the plaintiff was entitled to possession of the property in priority to the defendant. The court's reasoning was informed by a series of precedents including Jennings v Mather, Savage v Union Bank of Australia, Commissioner of Australian Federal Police v Cornwell, Octavo Investments Pty Ltd v Knight, and Hayman v Equity Trustees. The court granted the plaintiff's application for possession of the land.

Orders