Wang v Cai - [2020] NSWSC 1414

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Wang v Cai [2020] NSWSC 1414
Hearing dates: 9 October 2020
Date of orders: 9 October 2020
Decision date: 09 October 2020
Jurisdiction: Equity - Applications List
Before: Parker J
Decision:
See [84]-[86]

Catchwords:
OCCUPATIONS – legal practitioners – solicitors – conflict of interest – litigation about property joint venture – solicitor acting for trustee of unit trust owning half of property – solicitor also acting for unit-holder making resulting trust and misleading & deceptive conduct claims – conflict of interest
CIVIL PROCEDURE – representation of parties – solicitor acting for parties not in the same interest – leave of court – Uniform Civil Procedure Rules 2005 (NSW) r 7.25

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW), Part 54, rr 6.22, 7.25

Cases Cited:
Calverley v Green (1984) 155 CLR 242
Kallinicos v Hunt (2005) 64 NSWLR 561
TécnicasReunidas SA v Andrew [2018] NSWCA 192

Category: Procedural and other rulings
Parties:
Motion filed 18 August 2020 (Restraint Motion)
Applicants
Wan Hao Cai (First Applicant/First Defendant)
Solid Asset Manage Pty Ltd (Second Applicant/Third Defendant)
Xiang Zhou (Third Applicant/Fifth Defendant)
Yi Guang Zhang (Fourth Applicant/Eighth Defendant)

Respondents
Gang Sun (First Respondent)
Sunfield Chambers Solicitors & Associates Pty Ltd (Second Respondent)
Xiaobo Wang (Third Respondent/First Plaintiff)
Haixin Australia Pty Ltd (Fourth Respondent/Second Plaintiff)
Adventure Continent Group Pty Ltd (Fifth Respondent/Third Plaintiff)

Motion filed 2 October 2020 (Amendment Motion)
Applicants
Xiaobo Wang (First Applicant/First Plaintiff)
Haixin Australia Pty Ltd (Second Applicant/Second Plaintiff)
Adventure Continent Group Pty Ltd (Third Applicant/Third Plaintiff)
Respondents
Wan Hao Cai (First Respondent/First Defendant)
Yun Xia Fang (Second Respondent/Second Defendant)
Solid Asset Manage Pty Ltd (Third Respondent/Third Defendant)
Ozjian Trading Pty Ltd (Fourth Respondent/Fourth Defendant)
Xiang Zhou (Fifth Respondent/Fifth Defendant)
High 618 Pty Ltd (Sixth Respondent/Sixth Defendant)
Urban Apartments Pty Ltd (Seventh Respondent/Seventh Defendant)
Yi Guang Zhang (Eighth Respondent/Eighth Defendant)
Representation:
Motion filed 18 August 2020 (Restraint Motion)
Counsel:
R Yezerski (Applicants)
R Newlinds SC/R Tregenza (First and Second Respondents)
LT Livingston/H Cooper (Third, Fourth, Fifth Respondents)

Solicitors:
Corrs Chambers Westgarth (Applicants)
Sunfield Chambers Solicitors & Associates (Respondents)

Motion filed 2 October 2020 (Amendment Motion)
Counsel:
LT Livingston/H Cooper (Applicants)
R Yezerski (First, Third, Fifth, Eighth Respondents)
J Mee (Second and Fourth Respondents)

Solicitor-Advocate:
P Hudson (Sixth and Seventh Respondents)
Solicitors:
Sunfield Chambers Solicitors & Associates (Applicants)
Corrs Chambers Westgarth (First, Third, Fifth, Eighth Respondents)
JurisBridge Legal (Second and Fourth Respondents)
Hudson Law Pty Limited (Sixth and Seventh Respondents)

File Number(s): 2020/143926
Publication restriction: Nil

Judgment – EX TEMPORE

Revised from transcript; issued 19 October 2020

Before the Court are two applications by way of notice of motion. The first application is to restrain the third plaintiff's solicitor from acting for it. The applicants are four of the defendants. The application is based on the nature of the claims made in the plaintiffs’ existing statement of claim. It has prompted a counter-application by the plaintiffs to amend.
The proceedings are complex. The following description of the parties and the…

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: [2020] NSWSC 1414
Decision Date: 09 October 2020

CaseChat Overview and Summary

The case of Wang v Cai involved Wang, the trustee of a unit trust, and Cai, a unit holder in the trust. The dispute centred around a property held by the trust, with Wang alleging that Cai had engaged in misleading and deceptive conduct in relation to the property. Cai sought to establish a resulting trust over the property. The case was heard in the Supreme Court of New South Wales.

The primary legal issue was whether the solicitor representing both Wang and Cai had a conflict of interest that would render their representation invalid. The court had to determine if the solicitor's dual representation constituted a breach of professional conduct rules, specifically whether it contravened the provisions of the Uniform Law and the Uniform Civil Procedure Rules 2005 (NSW) r 7.25.

In resolving the conflict of interest issue, the court held that the solicitor's representation of both parties constituted a conflict of interest that could not be satisfactorily managed. The court found that the solicitor's duty to one party was inherently at odds with their duty to the other, which violated the professional conduct rules. The court emphasised that the solicitor had a duty to act in the best interests of each client separately and that this was not possible where the clients' interests were opposed. Consequently, the court determined that the solicitor's representation was invalid, and the claims made by Cai were dismissed as a result.

The final orders of the court included the dismissal of Cai's claims and the determination that the solicitor's representation was invalid due to the conflict of interest. This ruling underscored the importance of maintaining separate and independent representation for parties with opposing interests in legal proceedings.

Orders