Tiao v Lai [No 2]
[2010] WASCA 189 (S)
•23 SEPTEMBER 2010
TIAO -v- LAI [No 2] [2010] WASCA 189 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2010] WASCA 189 (S) | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:64/2009 | 19 APRIL 2010 & 18 OCTOBER 2010 | |
| Coram: | OWEN JA BUSS JA MURPHY JA | 23/09/10 | |
| 3/12/10 | |||
| 14 | Judgment Part: | 1 of 1 | |
| Result: | Orders made | ||
| B | |||
| PDF Version |
| Parties: | CHENG CHIH TIAO HUI PIN WANG LEVEL HOLDINGS PTY LTD SHENG CHIN LAI AUSTRALIAN CHINESE CONFUCIUS-MENCIUS SAINT TAO CENTRE INC |
Catchwords: | Orders to be made upon appeals being allowed Turns on own facts |
Legislation: | Nil |
Case References: | Tiao v Lai [No 2] [2010] WASCA 189 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : TIAO -v- LAI [No 2] [2010] WASCA 189 (S) CORAM : OWEN JA
- BUSS JA
MURPHY JA
DECISION : 3 DECEMBER 2010 FILE NO/S : CACV 64 of 2009 BETWEEN : CHENG CHIH TIAO
- HUI PIN WANG
First Appellants
LEVEL HOLDINGS PTY LTD
Second Appellant
AND
SHENG CHIN LAI
First Respondent
AUSTRALIAN CHINESE CONFUCIUS-MENCIUS SAINT TAO CENTRE INC
Second Respondent
(Page 2)
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : JOHNSON J
Citation : LAI -v- TIAO [No 2] [2009] WASC 22
File No : CIV 1442 of 2005
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : JOHNSON J
Citation : LAI -v- TIAO [No 2] [2009] WASC 22 (S)
File No : CIV 1442 of 2005
Catchwords:
Orders to be made upon appeals being allowed - Turns on own facts
Legislation:
Nil
Result:
Orders made
Category: B
Representation:
Counsel:
First Appellants : Mr B D Campbell
Second Appellant : Mr M C Hotchkin
First Respondent : Mr M D Howard SC
Second Respondent : Mr J Yong
(Page 3)
Solicitors:
First Appellants : Mony de Kerloy
Second Appellant : Hotchkin Hanly Lawyers
First Respondent : Tan & Tan Lawyers
Second Respondent : Lex Legal
Case(s) referred to in judgment(s):
Tiao v Lai [No 2] [2010] WASCA 189
(Page 4)
1 OWEN JA: I agree with Buss JA.
2 BUSS JA: On 23 September 2010, this court published its reasons for allowing the appeal by the first appellants (Mr Tiao and Mr Hui Wang) and the appeal by the second appellant (Level Holdings). See Tiao v Lai [No 2] [2010] WASCA 189.
3 Also, on 23 September 2010, programming orders were made for the filing and serving of written submissions as to the orders that should be made, in addition to allowing the appeals. Written submissions were then filed and served on behalf of Mr Tiao and Mr Hui Wang, Level Holdings and the first respondent (Mr Lai), but not on behalf of the second respondent (the Association). On 18 October 2010, counsel for each of Mr Tiao and Mr Hui Wang, Level Holdings and Mr Lai made oral submissions.
4 Lex Legal are the lawyers on the record for the Association. Mr Yong of that firm appeared at the hearing on 18 October 2010. In an affidavit sworn 6 October 2010, Mr Yong deposes, relevantly, that Lex Legal have been unable to obtain instructions from the foundation members of the Association in relation to whether they wish Lex Legal to continue to act for the Association. The affidavit sets out in some detail the endeavours that have been made to obtain instructions. Mr Yong applied for leave to cease acting for the Association. The application was not pursued at the hearing on 18 October 2010, and leave was not granted.
5 These are my reasons for the orders I would make, in addition to allowing the appeals. My reasons must be read together with the reasons I published in Tiao [No 2].
The trial judge's declarations and orders
6 On 22 May 2009, the trial judge made declarations and orders, as follows:
IT IS DECLARED THAT:
1. All natural persons named in the List of Contributors compiled from a marble plaque displayed in the Temple belonging to the Australian Chinese Confucius-Mencius Saint Tao Centre Inc ('Association'), situated at Lot 42 Warton Road, Canning Vale, WA, being the persons named in the annexure in Chinese and its English translation to this order, are the only ordinary members of the Association ('Members').
(Page 5)
- 2. Sheng Chin Lai, Cheng Chih Tiao, Yung Sen Chou, Hui Pin Wang and Song Tyan Kuo are the only foundation members, and the only board members, of the Association.
3. Except as provided in declarations 1 and 2, there are no other members of the Association.
4. The General Meeting held on 26 February 2005 was invalid.
5. All resolutions passed by persons purporting to be office bearers or members of the Association are invalid and not binding on the Association including:-
a. general meetings held on 26 February 2005, 16 July 2006, 8 October 2006, 4 March 2007 and 14 October 2007; and
b. board meetings held on 28 June 2006, 27 August 2006, and 12 February 2007.
6. Conal O'Toole, Solicitor and Butcher Paull & Calder, were not validly engaged as solicitors for the Association.
7. Cheng Chih Tiao was not authorized by the Board or by the members of the Association to enter into the contract between Level Holdings Pty Ltd and the Association dated 11 May 2004 (the Level Holdings contract) in respect of the land being Lot 42 on Diagram 64776 in Certificate of Title 1660 Folio 668 ('Land').
[Mr Lai] and [Mr Tiao and Mr Hui Wang] having given an undertaking to refrain from creating any disturbance or acting in any intimidating way, prior to, at or after the general meeting towards [Mr Lai], members of the Association, and/or their families
IT IS ADJUDGED AND ORDERED THAT:-
1. There be judgment for [Mr Lai].
2. [Mr Lai], Yung Sen Chou and the Members are not to be denied access to the property of the Association including the Temple situated at Lot 42 Warton Road, Canning Vale ('Property') and all financial records of the Association.
3. [Mr Tiao and Mr Hui Wang] do pay [Mr Lai's] costs of the action, including reserved costs, to be taxed if not agreed and paid by [Mr Tiao and Mr Hui Wang] within one month from the date of taxation or agreement.
4. [Mr Tiao and Mr Hui Wang] and Song Tyan Kuo be and are permanently restrained from giving effect to or further proceedings with the Level Holdings contract.
(Page 6)
- 5. Once the Association has held a General Meeting, elected a board of directors, identified is financial position and passed a resolution at a validly convened general meeting which identifies the extent to which the development of the land under the Level Holdings contract needs to be reversed, there be liberty to apply for an order that [Mr Tiao and Mr Hui Wang] do restore the Land to its original condition as it stood prior to 11 May 2004 at their own costs.
6. A General Meeting of the Association is to be convened in accordance with the terms of the constitution to appoint a new board and is to be held within 60 days from the date of this order.
7. [Mr Lai] is to take all necessary steps under the Association's Constitution to convene, organize and chair the general meeting referred to in order 5.
8. No new members shall be admitted to the Association between the date of this order and the holding of the general meeting.
9. [Mr Tiao and Mr Hui Wang] be and are restrained from operating or opening any bank accounts of the Association or any bank account in which funds of the Association are held until the conclusion of the general meeting referred to in order 6.
10. [Mr Tiao and Mr Hui Wang] pay [Mr Lai's] costs of the hearing on 6 March 2009 and 22 May 2009, to be taxed if not agreed.
11. All monies paid by the Association to Conal O'Toole, Butcher Paull & Calder or Peter McGowan of counsel be repaid to the Association by [Mr Tiao and Mr Hui Wang] jointly and severally within one month with interest at 6% per annum payable from 22 June 2009.
12. Liberty to apply with 48 hours' notice until such time as the general meeting referred to in order 6 has been held and a new board elected.
7 I will consider each declaration and order in turn and decide whether it should be set aside or varied.
Declaration 1
8 The appellants and Mr Lai were agreed that declaration 1 should be set aside. I am satisfied that it is proper that declaration 1 should be set aside.
(Page 7)
Declaration 2
9 The appellants and Mr Lai were agreed that declaration 2 should not be set aside or varied. I am satisfied that it is proper that declaration 2 should remain in the form in which it was made.
Declaration 3
10 The appellants and Mr Lai were agreed that declaration 3 should be set aside. I am satisfied that it is proper that declaration 3 should be set aside.
11 There should, instead, be a declaration that, as at 22 May 2009, there were no ordinary members of the Association.
Declaration 4
12 By declaration 4, the trial judge declared that the general meeting held on 26 February 2005 was invalid. Her Honour made this declaration on the basis of the following findings:
(a) Mr Tiao did not give notice of the meeting to Mr Lai or another foundation member, Yung Sen Chou [456], [519].
(b) The members of the Association were not provided with sufficient information to make an informed decision to sell part of the Association's assets or to ratify any action taken to achieve that result [494].
(c) The meeting was not convened by a decision of the board of the Association or at the request of at least 20 members of the Association [511].
(d) Inadequate notice of the meeting was given [521], [522].
(e) The validity of the meeting (including the validity of the resolutions allegedly passed at the meeting) was specifically raised on the pleadings: her Honour's supplementary reasons [15].
13 The findings at par [12] (a), (b), (c) and (d) above were not challenged by Mr Tiao and Mr Hui Wang or by Level Holdings in the appeals. Also, those findings have not been vitiated or falsified by the issues which have been determined by this court. The findings in question are sufficient to sustain declaration 4 despite this court's conclusions,
(Page 8)
- including the conclusion that, as at 22 May 2009, the Association did not have any ordinary members.
14 Declaration 4 should not be set aside or varied.
Declaration 5
15 The trial judge made a specific finding that the general meeting held on 26 February 2005 was invalid [583]. Her Honour did not, however, make any specific findings as to the validity of any of the other general meetings or any of the board meetings referred to in declaration 5. See [583] and also see her Honour's supplementary reasons [13].
16 It appears that the trial judge included the other general meetings (that is, the meetings apart from the meeting held on 26 February 2005) and the board meetings in the declaration of invalidity within declaration 5 on the basis of the following submission made by counsel for Mr Lai and recorded in her Honour's supplementary reasons:
In relation to declaration 6 [sic: 5], counsel for the plaintiff explained that, although no specific findings were made in relation to the validity of these meetings, the fact of invalidity flows from the finding that no board meeting was held on 8 February 2005 and hence the 38 applicants whose membership was alleged to have been approved at that meeting were not members of the Association. It was apparent from the evidence that the attendees at the meetings referred to in declaration 6 [sic: 5] were from that same group of applicants who were found not to be members. Consequently, the meetings were invalid as there was not a quorum of members [13].
17 I have decided that declaration 4 should not be set aside or varied. It follows that declaration 5 should remain to the extent that it relates to the resolutions passed or purportedly passed at that meeting.
18 However, declaration 5 should otherwise be set aside.
19 It appears that, to a material extent, her Honour declared invalid the resolutions passed at the general meetings held on 16 July 2006, 8 October 2006, 4 March 2007 and 14 October 2007 on the basis of her erroneous construction of the Association's constitution, including those provisions which are concerned with membership.
20 Also, it appears that, to a material extent, her Honour declared invalid the resolutions passed at the board meetings held on 28 June 2006, 27 August 2006 and 12 February 2007 on the basis of her erroneous
(Page 9)
- construction of the Association's constitution, including those provisions which are concerned with membership.
21 It is difficult to ascertain the basis on which her Honour declared invalid all resolutions passed at every other general meeting and every other board meeting of the Association, but, again, it appears to have been based to a material extent upon her Honour's erroneous construction of the Association's constitution, including those provisions which are concerned with membership.
22 Declaration 5 should be varied so that it applies only to the resolutions passed or purportedly passed at the general meeting held on 26 February 2005.
Declaration 6
23 The trial judge made declaration 6 on the basis of the following findings:
(a) Mr O'Toole was engaged by Mr Tiao and Mr Hui Wang in reliance on a resolution purportedly passed at the general meeting held on 26 February 2005 [25], [36] - [37], [464], [583].
(b) Her Honour found that the meeting in question was invalid and in consequence the resolutions purportedly passed at that meeting were invalid.
24 These findings were not challenged by Mr Tiao and Mr Hui Wang or by Level Holdings in the appeals. The findings in question have not been vitiated or falsified by the issues which have been determined by this court. The relevant findings are sufficient to sustain declaration 6 despite this court's conclusions, including the conclusion that, as at 22 May 2009, the Association did not have any ordinary members.
25 Declaration 6 should not be set aside or varied.
Declaration 7
26 The appellants and Mr Lai were agreed that declaration 7 should be set aside. I am satisfied that it is proper that declaration 7 should be set aside.
(Page 10)
Order 1
27 The appellants and Mr Lai were agreed that order 1 should be set aside. I am satisfied that it is proper that order 1 should be set aside.
Order 2
28 Order 2 should be varied by deleting the words 'and the Members' as a result of this court's conclusion that the Association does not have any ordinary members.
29 However, order 2 should otherwise remain undisturbed. My reasons are as follows. The trial judge found that:
(a) Mr Lai and Yung Sen Chou are foundation members.
(b) There had been a mixing of funds between the Association's money and Mr Tiao's and Mr Hui Wang's money, and the Association had not maintained proper accounting records [251] - [272], [577].
30 These findings were not challenged by Mr Tiao and Mr Hui Wang or by Level Holdings in the appeals. The findings in question have not been vitiated or falsified by the issues which have been determined by this court. The relevant findings are sufficient to sustain order 2 apart from deleting the words 'and the Members'.
31 Subject to the variation I have mentioned, order 2 should not be set aside or varied.
Order 3
32 Order 3, which deals with the costs of the action, should be set aside.
33 It was submitted on behalf of Mr Lai that the question of costs in the action should be remitted for determination by a judge of the General Division. That is not appropriate. This court is in a position to make the requisite determination.
34 There is no reason why the costs of the action should not follow the event.
35 Mr Lai should be ordered to pay Mr Tiao's and Mr Hui Wang's costs of the action, including reserved costs, to be taxed.
(Page 11)
Orders 4 - 8
36 The appellants and Mr Lai were agreed that orders 4 - 8 should be set aside. I am satisfied that it is proper that orders 4 - 8 should be set aside.
Order 9
37 Mr Tiao and Mr Hui Wang are two of the five surviving foundation members. The restraint imposed by order 9 was to continue until the conclusion of the general meeting referred to in order 6; that is, the general meeting that was to be held within 60 days from the date on which the trial judge made the order (in other words, within 60 days after 22 May 2009). I have decided that order 6 should be set aside. On the information and other material before this court, there is no proper basis for maintaining the restraint imposed by order 9. It should be set aside.
Order 10
38 The appellants and Mr Lai were agreed that order 10 should be set aside. I am satisfied that it is proper that order 10 should be set aside.
Order 11
39 The trial judge made order 11 on the basis of her finding that Mr Tiao was not authorised to engage solicitors on behalf of the Association: [25], [36] - [37], [464], [583]. See also [76] - [92] of her Honour's supplementary reasons.
40 This finding was not challenged by Mr Tiao and Mr Hui Wang or by Level Holdings in the appeals. The relevant finding has not been vitiated or falsified by the issues which have been determined by this court. The finding is sufficient to sustain order 11 despite this court's conclusions in the appeal, including the conclusion that, as at 22 May 2009, the Association did not have any ordinary members.
41 Order 11 should not be set aside or varied.
Order 12
42 The appellants and Mr Lai were agreed that order 12 should be set aside. I am satisfied that it is proper that order 12 should be set aside.
(Page 12)
New declaration
43 As I have mentioned at [11] above, a new declaration should be made that as at 22 May 2009 there were no ordinary members of the Association.
Mr Tiao's and Mr Hui Wang's costs of the action
44 As I have mentioned at [34] above, there is no reason why the costs of the action should not follow the event.
45 I would order Mr Lai to pay Mr Tiao's and Mr Hui Wang's costs of the action, including reserved costs, to be taxed.
46 Also, Mr Lai should be ordered to repay to Mr Tiao and Mr Hui Wang all sums paid by Mr Tiao and Mr Hui Wang to Mr Lai by way of costs (and interest) in the action plus interest on each such sum at the rate of 6% per annum calculated from the date of payment by Mr Tiao and Mr Hui Wang of the particular sum up to the date of repayment by Mr Lai.
Level Holdings' costs of the hearings in the action on 21 September 2006 and 12 June 2009
47 I would order Mr Lai to pay Level Holdings' costs of the hearings in the action on 21 September 2006 and 12 June 2009 to be taxed. These costs should be taxed on a party/party basis. Despite the submissions to the contrary made on behalf of Level Holdings, I am not persuaded that there has been any relevant misconduct or any other circumstances which justify an order for costs on an indemnity basis.
Mr Tiao's and Mr Hui Wang's costs of their appeal
48 In my opinion, there is no reason why Mr Tiao and Mr Hui Wang should not have the costs of their appeal. The usual rule that costs follow the event should be applied.
49 I would order Mr Lai to pay Mr Tiao's and Mr Hui Wang's costs of their appeal, including any reserved costs, to be taxed.
50 I would not order the Association to pay Mr Tiao's and Mr Hui Wang's costs of their appeal. The real protagonists in relation to this appeal were Mr Tiao, Mr Hui Wang and Mr Lai. Although the Association initially opposed this appeal, its stance changed
(Page 13)
- (appropriately) shortly before the commencement of the hearing. It then informed the court and the other parties that it would abide the outcome.
Level Holdings' costs of its appeal
51 In my opinion, there is no reason why Level Holdings should not have the costs of its appeal. The usual rule that costs follow the event should be applied.
52 I would order Mr Lai and the Association to pay Level Holdings' costs of its appeal, including any reserved costs and the costs of the application to review Pullin JA's decision to allow Level Holdings to be joined as a party to the appeal, to be taxed.
53 The subject matter of Level Holdings' appeal was the Level Holdings Contract between Level Holdings and the Association. Although the Association made concessions on some issues, it did not concede the appeal.
54 Level Holdings sought an order that Mr Lai and the Association pay its costs of:
(a) Level Holdings' application to be joined as a party to the appeal; and
(b) Mr Lai's and the Association's application to review Pullin JA's decision on the joinder application,
on an indemnity basis.
55 I am not persuaded that there has been any relevant misconduct or any other circumstances which justify ordering Mr Lai or the Association to pay any costs of Level Holdings on an indemnity basis.
The Suitors' Fund
56 Senior counsel for Mr Lai informed the court that no application would be made on behalf of Mr Lai for an indemnity certificate under the Suitors' Fund Act 1964 (WA).
The injunction granted by Master Newnes
57 The appellants and Mr Lai were agreed that the injunction granted by Master Newnes on 19 April 2005, and extended on 13 June 2005, restraining Mr Tiao and Mr Hui Wang and the Association from giving effect to, or proceeding further with, the Level Holdings Contract, should
(Page 14)
- be discharged. I am satisfied that it is proper that the injunction should be discharged.
Outstanding disputes between some or all of the parties
58 In Tiao [No 2], I said:
It remains necessary to consider whether this court should merely set aside declaration 7 and order 5 and discharge the interlocutory injunction granted by Master Newnes on 19 April 2005 and extended by him on 13 June 2005, and leave it to Level Holdings or the Association (or Mr Lai) to commence fresh proceedings to determine the validity and enforceability of the Level Holdings Contract and to claim declaratory or other relief including, for example, a decree for specific performance and damages in the case of Level Holdings, and damages in the case of the Association. Alternatively, the court could, in addition to setting aside declaration 7 and order 5 and discharging the interlocutory injunction, remit the action from which this appeal has been brought to a judge of the general division of the Supreme Court for the purpose of determining all outstanding issues between Level Holdings and the Association (and Mr Lai). This would involve (probably) an amendment to the writ of summons, the joinder of Level Holdings, and new or amended pleadings, including an amended statement of claim by the Association (and Mr Lai) and a counterclaim by Level Holdings [128].
59 Mr Tiao and Mr Hui Wang and Level Holdings submitted that any outstanding disputes between some or all of the parties should be resolved, if necessary, by the commencement of new proceedings. The remnants of the action that was before the trial judge should not be remitted either to her Honour or to another judge of the General Division.
60 Mr Lai submitted that the action should be remitted to a judge of the General Division.
61 I have no doubt that the proper and efficient course (given the unhappy history of the litigation between the parties) is for this court not to make an order for remittal but, instead, to leave it to one or other of the parties to commence fresh proceedings, if necessary, to resolve any and all outstanding disputes, including those disputes in the action which have not been the subject of a final determination on the merits by this court in the appeals or by the trial judge (to the extent that her Honour's findings, declarations and orders remain or remain as varied by this court).
62 MURPHY JA: I agree with Buss JA.
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