Zheng v Jin

[2024] NSWSC 567

Supreme Court

New South Wales

Medium Neutral Citation:

Zheng v Jin [2024] NSWSC 567

Hearing dates:

13 May 2024

Date of orders:

14 May 2024

Decision date:

14 May 2024

Jurisdiction:

Equity

Before:

Hmelnitsky J

Decision:

(1) Order that the proceedings be dismissed pursuant to UCPR r 13.4.

(2)   Mr Zheng pay Ms Jin’s costs as agreed or assessed.

Catchwords:

CIVIL PROCEDURE — Summary disposal — Dismissal of proceedings — Abuse of process — where six separate proceedings on same issue — whether issue estoppel — no question of principle

Legislation Cited:

Family Law Act 1975 (Cth) ss 79, 79A

Limitation Act 1969 (NSW) ss 47, 48

Uniform Civil Procedure Rules 2005 (NSW) rr 13.4, 14.28

Cases Cited:

Blair v Curran (1939) 62 CLR 464; [1939] HCA 23

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Chao Zheng (Plaintiff/Respondent)
Jun Jin (Defendant/Applicant)

Representation:

Counsel:

J Rodgers (Defendant/Applicant)

Solicitors:

Monaco Law (Defendant/Applicant)
Plaintiff appeared in person

File Number(s):

2024/31780

Publication restriction:

Nil

JUDGMENT (ex tempore, revised)

1. This is an application to dismiss proceedings commenced by Mr Chao Zheng, sometimes called “Donald Zheng”. The application is brought by the defendant, Ms Jun Jin. I will refer to Ms Jin as “the applicant” and to Mr Zheng as “the respondent”.

2. By his statement of claim in the substantive proceeding, the respondent seeks relief in the following form:

“Within 60 days from the judgment:

1. The Defendant shall repay to the Plaintiff his trust money of A$50,000.00 which was misappropriated and converted by her.

2. The Defendant shall repay to the Plaintiff the profits of A$10,000.00 made by the Defendant from her conversion of Plaintiff’s trust money.

3. The Defendant shall repay to the Plaintiff his funds in his Term Deposit in the sum of CNY250,000.00 or its equivalent Australia [sic] dollars misappropriated and converted by the Defendant.

4. Pre-judgment interests [sic] under s 100 of Civil Procedure Act NSW for each property above in order 1,2 and 3 as the Court thinks fit.

5. Costs.”

3. The second prayer for relief is said to be for profits made from share trading with the money that is the subject of the first prayer for relief.

4. This application is brought by Notice of Motion filed 27 February 2024 that was subsequently amended in Court with leave. The relief sought in the Amended Notice of Motion is as follows:

“1. The proceedings be dismissed pursuant to UCPR 13.4;

2. In the alternative that the proceedings be struck out pursuant to UCPR 14.28; and

3. The plaintiff pay the defendant’s costs on the indemnity basis in a lump sum to be fixed by the Court.”

5. The applicant initially also sought to have the respondent declared a vexatious litigant, but that prayer for relief was abandoned in the Amended Notice of Motion.

Background

6. The applicant and the respondent were formerly married. They divorced on 15 March 2002. Since that time, the respondent (the applicant’s former husband) has brought a multiplicity of proceedings against the applicant, including the present proceeding.

7. In 2007, the respondent commenced a proceeding in the Family Court of Australia, out of time and with leave. The proceeding was an application for alteration of property interests under s 79 of the Family Law Act 1975 (Cth). It was transferred to the Federal Magistrates Court, heard over a period of several days, and dismissed by Federal Magistrate Altobelli in April 2010: [2010] FMCAfam 373. The report of his Honour’s reasons is anonymised and so to try to maintain that anonymity I will refer to those proceedings and to his Honour’s reasons in fairly general terms, where possible.

8. An issue before Federal Magistrate Altobelli was the identification of the property in relation to which the s 79 orders were sought. The parties were in dispute as to which of them was entitled to the AUD50,000 savings, as well as the RMB250,000, that are the subject of the pleading now before me. His Honour identified the assets that were, in his view, relevant to the application before him and concluded that the parties’ assets had been divided on their separation in a just and equitable fashion. His Honour therefore refused to make an order pursuant to s 79 adjusting the parties’ respective interests in any such property, including the Australian dollar and Chinese renminbi amounts just referred to.

9. I particularly note that his Honour referred to the RMB250,000 sum at [42]. His Honour said:

“Each party has a different version about how this fund was created, who held it, what happened to and why, but the fact is that each agrees it should in included in the balance sheet. For this reason there is no need to go into this hugely contentious territory.”

10. His Honour then recorded that each party had a different explanation as to who had contributed particular funds and as to who was entitled to it following their separation.

11. His Honour concluded that there had been equal contribution to the asset pool. In explaining that conclusion, his Honour said at [56]:

“A conclusion of the equality of contribution means little unless understood in the context of what the parties had at separation in 2000, almost a decade ago. The wife’s evidence in this regard … seems to be the best evidence in this regard, except as to values of property. It accounts for the 250,000RMB. It incorporates over $50,000 of cash savings, and items such as furniture and a motor vehicle. It captures the essence of the contributions asserted by both parties.”

12. After recounting some further matters concerning the applicant wife’s assertions about her contribution to the assets, his Honour found “on the balance of probabilities, that the wife retained these funds at separation”: at [58].

13. His Honour then noted at [59]:

“The most likely scenario, therefore, is that at about the time of separation, the husband retained whatever interest he had in Rooms 301 and 302, his furniture and his care. The wife retained cash of about $50,000 and RMB 250,000 investment.”

14. As I have already mentioned, those amounts are the same amounts of which the Respondent now seeks repayment in his first and third prayers for relief. Rooms 301 and 302 are apparently properties in Shanghai.

15. Having expressed those conclusions, his Honour declined to make an order under s 79 for any adjustment of property on the basis that Ms Jin’s retention of the funds in issue was just and equitable.

16. An appeal to the Full Court of the Family Court was dismissed: [2012] FamCAFC 50. That Court (comprising Finn, May and Thackray JJ) also dealt with the claim for the profit made on share trading, which is the second prayer for relief in this proceeding (at [160]-[164]). The Court held there was no complaint to be made about Federal Magistrate Altobelli’s finding that there was no occasion to alter the parties’ interests in any property, including cash.

17. By a further originating application filed on 1 February 2013, amended on 17 April 2013, the respondent sought ten orders in the Family Court of Australia pursuant to s 79A of the Family Law Act. The respondent relevantly sought repayment (with interest) of RMB250,000, repayment of savings of $60,000, and payment to the respondent of what was described as share trading profit of $10,000.

18. On 22 April 2013, the applicant wife sought the summary dismissal of that proceeding. Her application was determined by Stevenson J in a judgment delivered in June 2013: [2013] FamCA 637. Her Honour summarily dismissed the respondent’s application and said (at [29]):

“All of the issues which the husband now seeks to traverse were raised by him either at trial or before the Full Court and, in some instances, in both venues. The husband has thus ventilated these issues previously and been wholly unsuccessful. In reality, he now seeks to relitigate issues which have been previously traversed because he is dissatisfied with the result.”

19. The respondent again appealed to the Full Court of the Family Court of Australia, which appeal was dismissed: [2014] FamCAFC 234. The Court (comprising Thackray, Ainslie-Wallace and Ryan JJ) held (at [71]) that there was “no prospect of the husband persuading a court to exercise its discretion to set aside the order of the Federal Magistrate”, although the Court held that some of the individual grounds of complaint may have had substance.

20. On 6 May 2015, the High Court refused special leave to appeal from the decision of the Full Court of the Family Court of Australia: [2015] HCASL 67. Bell and Gageler JJ held that the application did “not disclose any reason to doubt the correctness of the decision of the Full Court.”

21. Thereafter followed a period of relative calm.

22. On 29 January 2018, the respondent filed a statement of claim in this Court in which he sought relief against the present applicant, against her husband, against her mother and against another relative. The central issue in that claim was as to whether the applicant wife had misappropriated the sum of RMB250,000 at about the time of their separation and whether each of the defendants was, in some or other fashion, liable to repay that amount to him.

23. On 1 May 2018, Ward CJ in Eq (as her Honour then was) struck the statement of claim out, apparently pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) rule 14.28, at least as against the present applicant. Her Honour gave liberty to serve an amended pleading within 21 days, and also gave liberty to the parties to re-list the mater before the duty judge, either on an application by the plaintiff for leave to amend or on an application by the first and second defendants to dismiss the proceedings.

24. Thus, the matter came back before Lindsay J sitting as the duty judge on 31 May 2018. By that time, the respondent had formulated an amended pleading dated 18 May 2018, in which he sought relief in the following form:

“1. Held the 2^nd defendant [Ms Jin] be liable to pay back Plaintiff’s term deposit of CNY(RMB) 250,000 (Chinese Yuan), or equivalent Australian currency.

2. Costs

3. Interest”.

25. On 31 May 2018, Lindsay J summarily dismissed the proceeding, and ordered that Mr Zheng pay Ms Jin’s costs (as well as the costs of the first defendant in that proceeding) on the ordinary basis. The respondent has not paid those costs, although it appears they have been neither assessed nor has payment been demanded.

26. There followed a further five and a half years of calm before these proceedings were commenced in January of this year.

These proceedings

27. I have already referred to the relief sought in these proceedings. It is to be noted that the respondent, in his statement of claim, essentially admits that he seeks that which he has been, in substance, seeking all along in the previous actions to which I have referred. Clause 11 of the Statement of Claim is in these terms:

“In current litigation, the Plaintiff claims the same as he consistently claimed in the past litigations e.g. the ownership and recovery of his two property held by the Defendant on trust for the Plaintiff under Australian trust laws, the Defendant misappropriated Plaintiff’s both property for conversion.” [sic.]

28. The applicant now seeks summary relief on two alternative bases, namely UCPR 13.4 and 14.28.

29. UCPR r 13.4 relevantly provides:

“(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings--

(a) the proceedings are frivolous or vexatious, or

(b) no reasonable cause of action is disclosed, or

(c) the proceedings are an abuse of the process of the court,

the court may order that the proceedings be dismissed generally or in relation to that claim.”

30. UCPR r 14.28 provides:

“(1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading--

(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or

(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or

(c) is otherwise an abuse of the process of the court.”

Disposition

31. Dealing first with UCPR r 13.4, the applicant’s principal contention is that the proceedings involve a re-litigation of issues already determined between the same parties by Altobelli FM and then in the subsequent Family Court proceedings.

32. Proceedings will be regarded as an abuse of process where they involve the re-litigation of an issue that was resolved by earlier proceedings, either expressly or by necessary implication: see Blair v Curran (1939) 62 CLR 464; [1939] HCA 23.

33. The respondent’s principal complaint in these proceedings concerns his entitlement to what is said to be “trust” property, being the cash amounts of AUD50,000 and RMB250,000, which he alleges the applicant wrongly appropriated to her own benefit some 24 years ago.

34. However, so far as I can tell, the parties’ respective claims to these cash sums were some of the very matters in issue before Altobelli FM. His Honour ultimately rejected the respondent’s claim for orders adjusting the parties’ property interests under s 79 of the Family Law Act, having first satisfied himself that such an outcome was just and equitable. As I read his Honour’s reasons, those conclusions rested, at least in part, on the proposition that as at the conclusion of the marriage, the cash sums of AUD50,000 and RMB250,000 were in the possession of the applicant; that is, that she was entitled to those sums at that time.

35. Mr Zheng argued that the observations which Altobelli FM made about the AUD50,000 and the RMB250,000 were examples of the learned federal magistrate “casually commenting” on the evidence. He submitted that the federal magistrate was in fact kept in darkness about the true facts and that what he said about the cash was not a relevant finding for the purposes of an issue estoppel. I disagree. The proceedings concerned the parties’ respective entitlement to property, including the cash now in dispute. His Honour may have rejected the parties’ evidence about many aspects of that issue, but his Honour nevertheless reached conclusions about the property (including the cash) that he took into account in concluding that it was just and equitable that the respondent husband’s application under s 79 be dismissed.

36. That being so, the respondent is prevented by an issue estoppel from seeking to assert his entitlement to those funds in the present proceedings. If he were to attempt to do so, he would be traversing one of the matters already decided by Altobelli FM. A judgment in the respondent’s favour on his current claim would necessarily be inconsistent with one of the key factual underpinnings of the conclusions reached by Altobelli FM. That is because any such judgment would be to the effect that the applicant was, contrary to what Altobelli FM held, not entitled to the cash sums of AUD50,000 and RMB250,000 after all.

37. However, even if I am wrong in that primary conclusion, Mr Zheng’s claim is one that could and should have been brought at the same time as his original s 79 application before Altobelli FM in any event. If the true position is that Altobelli FM did not actually decide what the property of the marriage was and that the parties’ entitlement to these funds was not actually in issue before him, then that seems to me to be entirely a circumstance of the respondent’s own making. The question of the parties’ entitlements to the AUD50,000 and the RMB250,000 was intimately connected with all of the other issues in dispute before the Federal Magistrate. At the time of those proceedings, the respondent was already fully aware of the circumstances which he now says support his claim to the AUD50,000 and RMB250,000 amounts. Yet the respondent offers no plausible explanation as to why the present claims were not articulated at the same time as everything else he had to say about the property of the marriage before the Federal Magistrate There seems to me to be no reason why the matters which the respondent now seeks to agitate could not have been agitated at that time.

38. It follows that if, contrary to my primary conclusion, the present question was not determined by Altobelli FM, I find that it was entirely unreasonable of the respondent not to raise his present claims at the same time as all of the other issues that were resolved at that time: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45.

39. The applicant places much reliance on all of the other litigation between the parties in support of her contention that these proceedings are an abuse of process or that they are otherwise frivolous and vexatious. In my view, that other litigation has some relevance to the present application but is not of itself determinative, at least to the conclusions I have expressed thus far.

40. As to the s 79A application, together with the associated appeal and special leave application, it is apparent that the respondent was seeking, essentially, to set aside the reasons of Altobelli FM on a basis that included the very arguments he now wishes to assert in this Court. The fact that the s 79A application was dismissed is not a circumstance on which I am willing to place much weight so far as the present application is concerned. No doubt the Family Court was correct to dismiss that application, but the orders dismissing the application do not suggest any necessary conclusion as to the underlying arguments regarding the respondent’s claim to the cash amounts to which I have referred. Rather, as I read what was said by all of the learned judges who dealt with that application, they saw the s 79A application as an attempt to traverse a matter already resolved by Altobelli FM, at least insofar as it dealt with the sums now in dispute. That is, they reached the same conclusion as I have already expressed as to what Altobelli FM actually decided. The s 79A proceedings therefore did not involve any substantive resolution of the arguments which Mr Zheng, the respondent, now seeks to press.

41. The 2018 litigation in this Court is in a similar category. I do not consider that the respondent’s claims as articulated in his Statement of Claim amount to an abuse of process by reason of the fact that the respondent’s previous pleadings were struck out on two separate occasions by judges of this Court. As I read the transcript of what occurred on those previous occasions, the orders made by both Ward CJ in Eq (as her Honour then was) and Lindsay J granted Mr Zheng liberty to replead his case, which is what has now occurred. Neither of those learned judges expressed any view as to the substance of Mr Zheng’s case.

42. Nonetheless, I do rely on each of the matters just mentioned (namely, the earlier family court litigation concerning s 79A and the 2018 litigation in this court) together with some further matters to which I will refer shortly, in reaching a further alternative conclusion, which is that these proceedings should otherwise be dismissed under r 13.4 even if I am wrong about the existence of an issue estoppel or an Anshun estoppel.

43. The two additional matters that I wish to refer to are these. First, the claims which the respondent now brings appear to me to be obviously statute barred. The cause of action on which he relies is based on a breach of trust, possibly a fraudulent breach of trust. Paragraph 8 of the statement of claim asserts that the parties separated on 10 October 2000 and that “she absconded with the Plaintiff’s trust money of $50,000”. Paragraph 11 asserts that the applicant misappropriated both sums. In relation to the sum of RMB250,000, it is specifically asserted that the applicant stole and misappropriated the funds on a day eight months after final separation, namely some time in the 2001 calendar year. The applicable limitation period is therefore 12 years: see Limitation Act 1969 (NSW) s 47(1), or six years if fraud is not alleged: see Limitation Act s 48(a). Even if I make every possible assumption in the respondent’s favour in identifying when, on the pleaded facts, that cause of action arose, the only available conclusion is that the cause of action in relation to both cash sums arose well prior to 12 years before the time the respondent filed his statement of claim in these proceedings.

31. The respondent accepts, or seems to accept, that the facts relevant to resolving his claims for breach of trust (or, perhaps, the fraudulent breach of trust) occurred more than 12 years ago. His argument, however, is that time does not run for the purposes of the Limitation Act while there is litigation on foot in which the particular cause of action is being pursued. He says that because he has been so consistently pursuing his arguments for so many years, he has not fallen foul of either s 47 or s 48 of the Limitation Act.

32. The respondent is wrong about how time is to be reckoned under the Limitation Act. The present action was commenced on 25 January 2024 when the Statement of Claim was filed. On any view of the facts asserted in the Statement of Claim, the respondent seeks relief on a cause of action that arose more than 12 years prior to that date.

33. It is generally undesirable for limitation questions to be determined on a summary basis prior to trial: see Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55 at [31]. However, where the position is clear, it may be appropriate to do so. In the present case, I am unable to discern any reasonable basis for the respondent’s assertion that the claim is not statute barred. If that were the only matter, I would be slow to conclude that the proceedings should be dismissed on a summary basis. However, the existence of the other discretionary considerations to which I will shortly refer make this a case in which it is appropriate to consider the limitation point now. In my view, the respondent’s attempt to bring these claims despite the apparent bar presented by ss 47 and 48 of the Limitation Act is an additional reason for the proceedings to be dismissed summarily at this stage.

34. The second additional discretionary consideration is that, even if I am wrong about the existence of an issue estoppel or an Anshun estoppel, I would find that these proceedings are just one more attempt by the respondent to avoid the consequences of his failure to achieve a property settlement on terms acceptable to him in 2010. The dispute is old and stale. At least when measured against the emotional and financial cost associated with resolving it, the dispute concerns a relatively minor amount of money. There has been inordinate delay in bringing the claims; that delay is unexplained. The critical facts that would be in dispute largely relate to what the respondent calls the “circumstances” of the parties’ marriage. Those facts mostly occurred almost a quarter of a century ago. Some of them are even more ancient. There has been no explanation for the delay between May 2018 (when a materially identical claim was struck out by Lindsay J with liberty to replead) and January 2024 (when the present proceeding was commenced). These matters are reason enough to conclude that the proceedings are frivolous and vexatious within the meaning of UCPR r 13.4 and that they should, for that reason, be dismissed.

35. I am therefore satisfied that the attempted re-litigation of this matter constitutes an abuse of this Court’s processes and is frivolous and vexatious in the relevant sense. It would seem that the respondent continues, as the Full Court of the Family Court of Australia held in the first proceeding there determined, “to cause great inconvenience and expense to the wife”. The litigation serves only to continue to harass the respondent’s ex-wife over claims which have been fully ventilated and determined.

Conclusion

49. These conclusions mean that there is no need to consider the alternative claim that the pleading be struck out under r 14.28.

50. The applicant sought that costs be fixed in a lump sum. That seems to me to be appropriate in light of the circumstances to which I have referred.

51. For these reasons, I will order that the proceedings be dismissed pursuant to UCPR r 13.4.

52. [Discussion of costs – the applicant had no evidence of what costs had been incurred.]

53. Therefore, the orders of the Court will be:

1. Order that the proceedings be dismissed pursuant to UCPR r 13.4.

2. Mr Zheng pay Ms Jin’s costs as agreed or assessed.

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Decision last updated: 14 May 2024