Tran v Guan (No 2)

[2021] NSWDC 804

District Court

New South Wales

Medium Neutral Citation:

Tran v Guan (No 2) [2021] NSWDC 804

Hearing dates:

30 and 31 March 2021

Date of orders:

1 April 2021

Decision date:

01 April 2021

Jurisdiction:

Civil

Before:

P Taylor SC DCJ

Decision:

(1)   Refuse the plaintiffs' application seeking orders 2 and 3 in notice of motion filed 25 March 2021.

(2)   Reserve any question of the defendants' costs of the application.

(3)   Confirm the previous directions made on 23 March 2021.

(4)   Confirm the continuation of the hearing.

Catchwords:

CIVIL PROCEDURE — Hearings — Expedition – Part heard – Health of plaintiff

Legislation Cited:

Civil Procedure Act 2005, s 56, s 57, s 58, s 59, s 60

Category:

Procedural rulings

Parties:

Victor Toan Tran (first plaintiff)
Tamvic Pty Ltd (second plaintiff)
Binghua Guan (first defendant)
Guixing Jian (second defendant)
Walter Yaolong Guan (third defendant)
Perennial Growth Pty Ltd (ACN 166 554 721) (fourth defendant)

Representation:

Counsel:
Mr G Drew (plaintiffs)

Solicitors:
Meridian Lawyers (plaintiffs)

File Number(s):

2020/301522

Publication restriction:

None

Judgment

Introduction

1. Victor Tran and his company, Tamvic Pty Ltd, seek orders for damages and for the delivery of property located on premises owned by Mr Binghua Guan and Ms Guixing Jian.

2. The trial has commenced, but has been adjourned part-heard until 28 June 2021. Mr Tran seeks that:

“a. if the proceeding can be transferred part-heard to an alternative judge; and

b. listed for hearing on a date before 28 June 2021;

i. on both liability and damages (estimate 4 days); or

ii. on the question of liability only (detinue and conversion) to be determined separately and in advance of the question of damages (estimate of 2 days),

that the orders of Taylor DCJ be vacated and the proceeding listed before that other judge on the first available date for further directions.”

Background

3. Mr Tran was a tenant of property owned by Mr Binghua Guan and Ms Jian where Mr Tran operated a dental practice, initially in his personal name and subsequently through his company, Tamvic.

4. In 2020, relations between Mr Binghua Guan and Ms Jian, as owners, and Mr Tran, as tenant, deteriorated. There were allegations of non-payment of outgoings and notices issued about an intention to terminate the lease.

5. Mr Tran accepts that he failed to pay the monthly rent in June, July and August 2020, and on 19 August 2020, the lease was terminated under clause 12.

6. Clause 12 relevantly provides:

“CLAUSE 12 FORFEITURE AND END OF LEASE

When does this lease end?

12.1   This lease ends -   

12.1.1 on the date stated in item 3 in the schedule; or

12.1.2 if the lessor lawfully enters and takes possession of any part of the property; or

12.1.3 if the lessor lawfully demands possession of the property.

12.2   The lessor can enter and take possession of the property or demand possession of the property if-

12.2.1   the lessee has repudiated this lease; or

12.2.2   rent or any other money due under this lease is 14 days overdue for payment; or

12.2.3 the lessee has failed to comply with a lessor's notice under section 129 of the Conveyancing Act I919; or

12.2.4 the lessee has not complied with any term of this lease where a lessor's notice is not required under section 129 of the Conveyancing Act 1919 and the lessor has given at least 14 days written notice of the lessor's intention to end this lease.

12.3   When this lease ends, unless the lessee becomes a lessee of the property under a new lease the lessee must-

12.3.1   return the property to the lessor in the state and condition that this lease requires the lessee to keep it in; and

12.3.2   have removed any goods and anything that the lessee fixed to the property and have made good any damage caused by the removal.

Anything not removed becomes the property of the lessor who can keep it or remove and dispose of it and charge to the lessee the cost of removal, making good and disposal.”

7. By their son, Walter Guan, Mr Binghua Guan and Ms Jian took possession of the property for a short period on 19 August 2020. Mr Tran made some payments, including in respect of outstanding rent, and the parties agreed to allow Mr Tran to occupy the premises until 27 August 2020. On that date, Mr Tran was locked out from the premises and his occupation ceased. Shortly thereafter, Mr Tran’s licence to practise dentistry was suspended by the regulatory authority and remains suspended.

8. Proceedings were commenced by summons on 20 October 2020, initially against Mr Binghua Guan and Ms Jian after Mr Tran’s solicitors made written demands on 8 September and 6 October 2020.

9. Proceedings were listed for a hearing on 3 December 2020. Largely due to the request of the defendants to obtain legal advice and representation and their failure to obtain that representation, the trial dates in December 2020 and subsequently on 11 February 2021 were vacated and cost orders were made against the defendants. During that period, Mr Walter Guan and his company, Perennial Growth Pty Ltd, were joined to the proceedings and an order was made for a separate hearing on liability.

10. The matter was listed for a hearing on 18 March 2021, and on that day, I was assigned the matter. It came with an estimate for a hearing of half a day. The parties deny that they were responsible for that estimate as there were four large lever arch folders of evidence comprising about 31 affidavits and documentary exhibits. The defendants themselves were self-represented.

11. The first and second defendants could not speak fluent English and addressed the Court through an interpreter. There were no pleadings, statement of issues or chronology. And there was no agreement as to which, if any, of the 71 items or groups of items then claimed by Mr Tran were on the premises when Mr Binghua Guan and Ms Jian regained possession permanently on 27 August 2020. The estimate of half a day for the trial was hopelessly unrealistic.

12. Due to the need for completion of certain preparatory matters to identify the real issues in dispute, judicial commitments I had listed the next day, and the commitment of one of the defendants on the Monday, the hearing was adjourned at the end of Thursday, 18 March 2021 to continue on Tuesday, 23 March 2021. It was recognised that the parties might not be able to continue beyond that day due to commitments of the parties. Directions were made for the preparation of a Scott Schedule in respect of the claimed items, so as to identify which items were agreed to be on the property as at 27 August 2020.

13. I also granted leave for Tamvic to be joined as a plaintiff and required the defendants to identify any loss claimed under the lease, with a view to the trial determining all the matters in dispute between the parties.

14. During that intervening period, I read the four volumes of affidavit and documentary evidence.

15. On Tuesday, 23 March 2021 the trial continued. Mr Walter Guan arrived an hour late for court without any reasonable explanation. During the course of the day, the evidence-in-chief of the parties comprising the four volumes and other material was formally read and some limited objections dealt with. No time convenient to the parties and the Court was thereafter available in the immediate days thereafter. The matter was listed at the first available date on 28 June 2021 before me part-heard. Various directions were made to ensure that the hearing would, in late June, continue until it concluded.

This hearing

16. On 25 March 2021, Mr Tran filed his motion. In substance, the motion would have the effect of vacating the existing trial and re-listing the matter before another judge at an earlier date.

17. Vacation and re-listing of the matter before another judge was recognised to only have utility in achieving an earlier determination of the proceedings if an early hearing date could be found. In the ordinary course, there would be no earlier listing of the matter, and likely a substantial delay in the hearing date unless the matter was listed with a two-day estimate. That is a matter to which I will return.

18. The primary matter relied on by Mr Tran was a confidential affidavit dealing with his health. I granted leave to the plaintiffs to rely upon that affidavit without service of an annexure and parts of two paragraphs, substantially in accordance with a motion seeking that relief, because the lack of legal representation of the defendants precluded any order that access to confidential parts be limited to the lawyers of the defendants only. I noted that because those parts of the affidavit were not disclosed to the defendants, I would need to treat them with added caution.

19. The evidence of Mr Tran's health was given by his solicitor, and annexed some medical notes. The evidence did not include a medical report and thus the conclusion properly to be drawn from the notes was less than certain. It is, for example, only a matter of inference from doctor’s notes whether the possible outcomes indicated in the notes are due to the proceedings, the prolongation of them, the adverse financial effect on Mr Tran of the end of the lease, the suspension of his dental licence or of the retaining of items that once were his, including his dental chair, other equipment, and patient records.

20. I do not wish wrongly to understate the trauma and anxiety that litigation can produce, but there was no specific evidence addressing a three-month delay against a one or two-month delay.

21. The defendants’ unsatisfactory conduct in having a hearing date vacated twice, the procedural injunctions contained in ss 57 to 60 of the Civil Procedure Act 2005, the adverse impact of delay in achieving justice, including delay and the time between commencement and determination of proceedings, the indulgences said to have been granted to the defendants, and the need for proportionality of the costs to the importance and complexity of the matters in dispute, were also identified as relevant to Mr Tran’s application.

22. Mr Tran claims that the adverse health outcomes to him of the continuation of the proceedings until at least late June 2021, together with the adverse impact of the uncompleted proceedings on Mr Tran's ability to earn an income without his dental equipment and records, and the history of the proceedings, warrant the orders sought in the motion.

23. So far the proceedings reveal the following potential issues:

1. Which of the items or groups of items once part of Mr Tran’s dental practice remained on the premises when Mr Binghua Guan and Ms Jian regained possession on 27 August 2020.

2. Did those items become the property of Mr Binghua Guan and Ms Jian on 27 August 2020 either:

1. because of the terms of cl 12.3 properly construed; or

2. because, if cl 12.3 properly construed allowed Mr Tran or Tamvic Pty Ltd a reasonable time to remove those items, a reasonable period for removal of the items had elapsed.

3. Did the ongoing suspension of Mr Tran’s licence from September 2020 impact on any obligation to return any of the claimed items to him.

4. The quantum of any damages, including:

1. the value of the items not returned;

2. the impact of the non-return of the items on the income of Mr Tran, and the profits and value of Tamvic Pty Ltd; and

3. the amount of any monies owing by Mr Tran under the lease, either for rent, outgoings or for make good costs.

24. The determination of the ownership of goods left behind by a tenant after a lease has ended has historically been something of a vexed question. Plainly the proper construction of clause 12.3 is relevant, but that proper construction may depend also on other clauses of the lease and the surrounding factual matrix at the time the lease was entered. The question of what is a reasonable period to remove the items and whether it has been satisfied here is also a matter of some complexity. Both of these issues are further complicated by the apparent debate about which items were left on the premises.

25. Mr Tran has bought new premises and has foreshadowed the business alternatives said to be available to him of retaining a locum to conduct the practice, on the one hand, or selling the equipment, on the other. The question of Tamvic’s loss of profit and business value is complicated by these alternatives and by Mr Tran’s licence suspension.

Conclusion

26. It is not a common event for proceedings to be vacated partway through a hearing, where there is neither a recusal nor health issues affecting the judge. A too ready reallocation of a matter partway through a hearing may give rise to questions, real or perceived, about judge shopping and the possible wasted time in costs in the hearing today.

27. The primary matter of concern to the Court is to conclude the proceedings justly as soon as possible. This concern is reinforced by the matters in ss 56 to 60 of the Civil Procedure Act, by Mr Tran's health concerns, and by the circumstances that Mr Binghua Guan and Ms Jian are New Zealand residents needing to be in Australia for the trial while complications arising from COVID-19 and quarantine periods persist. That need is emphasised by evidence that the New Zealand Police reported their home in New Zealand having been broken into whilst they were in Australia.

28. In my view, if the matter were to be recommenced before another judge, it would not likely be concluded within less than three days. A new judge would need to reread the evidence and may require different steps to be taken to bring the matter justly and quickly to its conclusion. Even the period of three days would require minimal cross-examination.

29. In my view, the proceedings are likely to be determined earliest if I remain the trial judge. That would also avoid the waste of that part of the trial already held. Principally for this reason, but being cognisant of the other matters raised, I refuse the application, reserve any question of the respondents’ costs and confirm the previous directions made, including that the trial will recommence on Monday, 28 June 2021 at 10am to continue until concluded.

Orders

30. The orders of the Court are:

1. Refuse the plaintiffs' application seeking orders 2 and 3 in notice of motion filed 25 March 2021.

2. Reserve any question of the defendants' costs of the application.

3. Confirm the previous directions made on 23 March 2021.

4. Confirm the continuation of the hearing on Monday, 28 June 2021 at 10am part heard before P Taylor SC DCJ.

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Decision last updated: 18 July 2022