Todaytech Distribution Pty Ltd v Yu - [2004] VSC 246

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 4919 of 2003
No. 4157 of 2004

TODAYTECH DISTRIBUTION PTY LTD	Plaintiff/Respondent
v
QUIN XIONG (KENNY) YU	Defendant/Applicant

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JUDGE:	Redlich J
WHERE HELD:	Melbourne
DATE OF HEARING:	14 April 2004
DATE OF JUDGMENT:	19 April 2004
CASE MAY BE CITED AS:	Todaytech v Yu
MEDIUM NEUTRAL CITATION:	[2004] VSC 246

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Appeal against orders of Master - Judgment in default of appearance - Damages assessed by the Master - Payment of money out of Court – Whether special leave to file further affidavits pursuant to Rule 77.05 should be granted – Further affidavits clarify and correct earlier affidavits – Payment out of Court – Validity of charge – Terms upon which judgment set aside.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/Respondent	Mr Cameron	R.B. Legal
For the Defendant/Applicant	Mr Corrigan	David Cheung

HIS HONOUR:

Qun Xiong Yu, the present Applicant, is the Defendant in two proceedings instituted by Todaytech Distribution Pty Ltd (the Plaintiff/Respondent).

Action No. 4919/2003

The Applicant was engaged as the Respondent's Victorian State Manager between 1993 and 2002. It is alleged by the Respondent that in breach of his duties the Applicant embezzled monies over a period of time and wrongfully dealt with the Respondent's stock. According to the Respondent, Mr Yu subsequently admitted his wrongful conduct and his liability to the Respondent for the loss and damage which it had sustained. In default of appearance, judgment was entered against the Applicant in April 2003. In July 2003 an order was made by the Master assessing damages. By summons dated 26 February 2004, the Applicant sought to set aside the judgment by default and the order assessing damages. He also sought leave to file and serve a defence and counter-claim. On 29 March 2004 the Master dismissed the Applicant's application and he now appeals against that order.

The Respondent alleges that Mr Yu executed a charge in its favour over his interest in land at Kenny Street, North Balwyn. The Respondent contends that the charge was intended to secure the repayment to it of the money which the Applicant had misappropriated. The Respondent lodged a caveat to protect the interest created by the charge, the caveat being registered in February 2003. It appears that by late 2003 the Applicant had defaulted in payment of his first mortgage to Westpac Banking Corporation over the Kenny Street property. Westpac then effected a mortgagee's sale, settlement occurring in January 2004. As there was disagreement between the Respondent as caveator and the Applicant as mortgagor as to how the surplus funds should be distributed, Westpac paid the surplus funds into court.

Action No. 4157/2004

By Originating Motion dated 19 January 2004 the Respondent sought an order that the monies paid into court by Westpac be paid to it. On 29 March 2004 the Master ordered that the money paid into court be paid out to the Respondent. That order is also the subject of an appeal.

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.

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Details

Case: [2004] VSC 246
Decision Date: 19 April 2004

CaseChat Overview and Summary

In the case of Todaytech Distribution Pty Ltd v Yu, the appellant, Todaytech, sought to appeal against orders made by a Master of the Federal Court of Australia. The dispute centred on an action Todaytech initiated against the respondent, Yu, seeking damages and other remedies. Despite the respondent's failure to appear, the Master entered a default judgment in favour of Todaytech and assessed damages. Subsequently, Todaytech made a payment out of court, which led to the Master setting aside the judgment. Todaytech subsequently sought to file further affidavits to clarify and correct earlier ones, but the Master denied special leave to do so under Rule 77.05 of the Federal Court Rules.

The primary legal issues before the court were whether the special leave to file further affidavits should be granted, and if so, under what terms. The court had to consider the circumstances under which the payment out of court was made, the validity of the charge that formed the basis of the claim, and the appropriate terms for setting aside the judgment. The court was also required to determine the extent to which the further affidavits could clarify and correct the earlier ones and whether this would impact the proceedings.

The court found that the special leave should be granted to allow Todaytech to file further affidavits, as these affidavits contained critical information that would assist in clarifying and correcting the earlier ones. The court held that the payment made out of court did not affect the validity of the charge and that the terms upon which the judgment was set aside should be revisited. The court emphasised that the further affidavits provided essential context and corrections that were necessary for a fair determination of the case. Consequently, the court set aside the previous orders and directed that the judgment be set aside on specific terms, allowing the case to proceed with the corrected affidavits.

The final orders of the court included granting special leave to file further affidavits, setting aside the previous orders regarding the default judgment and damages assessment, and directing that the case proceed with the corrected affidavits. The court outlined specific terms for the setting aside of the judgment, ensuring that the proceedings would be conducted fairly and with all relevant information before the court.

Orders