Nguyen v Hwang

[2020] NSWSC 1082

Supreme Court

New South Wales

Medium Neutral Citation:

Nguyen v Hwang [2020] NSWSC 1082

Hearing dates:

14 August 2020

Date of orders:

14 August 2020

Decision date:

14 August 2020

Jurisdiction:

Common Law

Before:

Garling J

Decision:

(1)   Stand over the Notice of Motion filed 5 June 2020 for directions before the Registrar on 11 September 2020.

(2)   Liberty to apply to restore the matter if a final determination is made by the Tribunal on 19 August 2020. Any such application to be made with 2 days’ clear notice to the Court and the parties.

Catchwords:

CIVIL PROCEDURE — Court administration — Overriding purpose — Just, quick and cheap resolution

Legislation Cited:

Civil Liability Act 2002

Cases Cited:

Not Applicable

Texts Cited:

Australian Consumer Law

Category:

Principal judgment

Parties:

Vo Vien Phuong Nguyen (P)
Chiao Lin Hwang (D)

Representation:

Counsel:
P Hutchinson (P)
F Ashworth (D)

Solicitors:
Gartree Thomson Lawyers (P)
Brightstone Legal (D)

File Number(s):

2019/392822

Publication restriction:

Not Applicable

EX TEMPORE Judgment

Notice of Motion

1. Before the Court today is an application made by Notice of Motion filed 5 June 2020, by the plaintiff. The plaintiff seeks the following orders:

“1 Leave be granted for Vaissade Pty Limited ACN 083 305 060 to be joined as a defendant to the proceedings pursuant to rule 6.19 of the Uniform Civil Procedure Rules 2005.

2.   The plaintiff to file an amended statement of claim within 21 days.

3.   The defendant to file any appearance or defence upon which it is intended to rely within 28 days after the service of the statement of claim.

4.   Costs reserved."

2. On 26 June 2020, the matter came before Justice Wright when he was presiding as the Duty Judge. His Honour stood the Motion over to Friday 24 July 2020 before the Duty Judge. The matter was then adjourned by consent until today.

3. The plaintiff seeks a further adjournment of the Motion. The defendant opposes that course and submits that the Motion ought to be dismissed.

Background

4. A very brief recitation of the background is necessary. By a Statement of Claim filed on 13 December 2019 in this Court, the plaintiff sues the defendant for damages pursuant to a number of provisions of the Australian Consumer Law, and for breach of contract arising out of a commercial transaction which was entered into on 25 May 2015 with respect to a business known as the “St Ives Pharmacy” and which was conducted from premises owned by the company Vaissade Pty Limited (“the Company”).

Local Court Proceedings

5. The defendant in the Supreme Court is the sole director of the Company and is a shareholder in that company. The Company commenced proceedings in the Local Court at Manly against Ms Nguyen for sums said to be outstanding as a consequence of the termination of a lease over the premises in which the pharmacy was conducted.

NSW Civil and Administrative Tribunal Proceedings

6. The Local Court proceedings were transferred to the NSW Civil and Administrative Tribunal (“the Tribunal”) on or about 20 February 2020. They had originally been commenced at the start of August 2019. In the Tribunal, the parties filed points of claim on 17 April 2020 and points of defence on 8 May 2020 respectively.

7. An application has been made by the defendant in the proceedings before the Tribunal, Ms Nguyen (who is the plaintiff here), to transfer those proceedings to this Court. That application is to be heard and likely determined by the Tribunal on 19 August 2020 (namely, next week).

8. The Company, I am told, opposes the transfer. Counsel for the defendant here (who, it is to be recalled, is a shareholder and the sole director of the Company) informs the Court that she does not have instructions to appear in the Tribunal. However, she understands that there is not just token resistance to the transfer.

The Commercial Transaction

9. Counsel for the defendant in these proceedings accepts that the retail lease which was entered into by the Company with Ms Nguyen was negotiated as a part of the entire package involving the sale of the St Ives Pharmacy. That is not a surprising conclusion. After all, as is apparent from the pleadings, it seems that Ms Nguyen purchased the pharmacy as a going concern and continued to conduct the business in the same premises. The Company landlord was the alter ego of the vendor of the pharmacy.

10. The entry into the lease coincided with the entry into the agreement for the purchase of the business.

11. In this Court on the present pleadings, the plaintiff claims damages, and relies on conduct which she says was misleading and deceptive. I do not propose to set out that alleged conduct in detail, because the substance of it is disputed. It is fair to say that, on the pleadings, the misleading and deceptive conduct goes to the value properly to be ascribed to the business as an ongoing concern, including its true financial position, its profitability and the extent of any goodwill.

Discernment

12. Leaving aside for a moment the extent of the evidence which has been served in the proceedings, It is undisputed that the plaintiff has entered into a retail lease, and has been obliged to pay to the landlord moneys legitimately owing under that lease or by reason of its breach of the lease. The lease arose and was entered into as a direct consequence of the purchase of the business. Consequently, if it can be proved that the purchase of the business was caused, or at least in part caused, by misleading and deceptive conduct, it seems to me that it would be open to claim as a head of damages in the misleading and deceptive conduct case any moneys which may have been paid to enter into, and as a consequence of entering into, the lease.

13. Putting it differently, as it seems on the material before me, there is a close connection between the purchase and sale of the St Ives Pharmacy business, any misleading or deceptive conduct which occurred in the course of and surrounding that sale, and the entry into the retail lease. Therefore, any connection between these three events is relevant to the determination of this matter and the proper calculation of damages which may or may not be owing pursuant to that lease.

14. It is inevitable that there will be similar evidence given in this Court and in the Tribunal. It is inevitable that this Court, hearing this claim, and the Tribunal, hearing the claim involving the landlord, will be asked to make findings which affect both claims. The same witnesses are likely to be called.

15. It seems to me to be entirely contrary to the proper conduct of litigation and the overriding purpose of s 56 of the Civil Liability Act 2002 for this Court to take a definitive step in the determination of the proper parties to these proceedings without knowing whether the proceedings before the Tribunal are to be transferred to this Court.

16. The proper, ordinary and most cost-effective way of determining the proceedings in this Court is as follows: first, that this Court be informed of the final decision of the Tribunal as to whether it intends to transfer the proceedings to this Court; and secondly, that this Court proceed with the appropriate course of action based on the outcome of the Tribunal’s decision.

17. If the transfer is made, this Court would then determine the current Motion as to whether the Company is an appropriate party to be joined to these proceedings, or whether it is sufficient and most cost-effective for the two proceedings simply to maintain their current separateness (but proceed together with evidence in one being evidence in the other). That is a determination that can only be made once the Court knows whether the Tribunal is to transfer the proceedings to this Court.

18. On the other hand, if the Tribunal does not transfer the proceedings to this Court, it remains open to the plaintiff in this Court to either proceed with its Notice of Motion or to reformulate it with an order in which it proposes the appropriate way to proceed, in light of what has happened in the Tribunal.

19. In my view it is overwhelmingly in the interests of justice that the Tribunal be given time to make its decision and for these proceedings to await the outcome of that decision.

20. In so saying, I reject entirely the submission made by counsel for the defendant in these proceedings that the relief sought is best determined today because, whatever be the decision in the Tribunal, it cannot affect the Notice of Motion. I do not accept that. In my view, the ordinary unfolding of the proceedings means that the hearing of this Notice of Motion must await the proceedings in the Tribunal.

21. At the moment, I am told that the proceedings are next for hearing in the Tribunal on 19 August 2020. Assuming that the hearing proceeds on that day and that there is a determination, it would then be appropriate to bring this matter back promptly thereafter. However, a cautious approach I would suggest is that parties allow some time before bringing this matter back before this Court, in case the hearing at the Tribunal cannot be completed on the 19 August or a decision is not forthcoming immediately.

Orders

22. In those circumstances I stand this Notice of Motion, being that filed on 5 June 2020, over for directions before the Registrar on Friday 11 September 2020. The Registrar may be persuaded at that time to refer the matter to the Duty Judge.

23. I will grant the parties liberty to apply to the Court to restore the Notice of Motion earlier if, in fact, there is a final determination by the Tribunal on 19 August 2020. That liberty to apply can be exercised on the giving of two days’ notice to the other side and to the Court.

24. I make the following orders:

1. Stand over the Notice of Motion filed 5 June 2020 for directions before the Registrar on 11 September 2020.

2. Liberty to apply to restore the matter if a final determination is made by the Tribunal on 19 August 2020. Any such application to be made with 2 days’ clear notice to the Court and the parties.

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Decision last updated: 18 August 2020