Zhou v Truong - [2018] NSWSC 2051

Supreme Court

New South Wales

Medium Neutral Citation: Zhou v Truong [2018] NSWSC 2051
Hearing dates: 18 December 2018
Date of orders: 18 December 2018
Decision date: 18 December 2018
Jurisdiction: Equity - Real Property List
Before: Kunc J
Decision:
Orders made for money judgment and judicial sale of property

Catchwords: EQUITY – Equitable charges and liens – Enforceability – Right of equitable chargee to orders for judicial sale and vacant possession
Cases Cited: Chateau Constructions (Aust) Limited v Zepinic [No 5] [2010] NSWSC 265
Morris Finance Ltd v Free [2017] NSWSC 1417; (2017) 18 BPR 37,223
Sood v Christianos [2008] NSWSC 1087; (2008) 14 BPR 26,101
Troncone v Aliperti (1994) 6 BPR 97,455
Re Westpac Banking Corporation [2015] NSWSC 869; (2015) 18 BPR 35,501
Category: Principal judgment
Parties:
Wen Zhou (First Plaintiff)
Jin Yi Wang (Second Plaintiff)
Albert-Edris Tri Dai Min Truong (First Defendant)
Teresa Wang Yang (Second Defendant)
Westpac Banking Corporation (Third Defendant)
Representation:
Counsel:

J C Lee (Plaintiffs)

Solicitors:
Summit Legal (Plaintiffs)

File Number(s): 2017/227715
Publication restriction: No

EX TEMPORE Judgment (REVISED)

By an amended statement of claim filed 27 March 2018 the plaintiffs seek declarations and orders to enforce payment of a debt owed to them by the first and second defendants. The proposed method of enforcement is for a judicial sale of a property at Kellyville (the “Property”) by the plaintiffs under the supervision of the Court. The third defendant, which has entered a submitting appearance save as to costs, is the bank which holds a mortgage over the Property.
The hearing before me today has been conducted in the absence of the first and second defendants. I have been informed by Mr J C Lee of Counsel, who appears for the plaintiffs, that the first and second defendants have not taken an active role in the proceedings. Moreover, I am satisfied by affidavit evidence that they were properly notified of today’s hearing. They were also called outside the Court at the commencement of the hearing and there was no appearance by them or on their behalf.
The facts may be briefly stated. I take these from Mr Lee’s thorough, but nevertheless commendably succinct, written submissions.
On 26 May 2015 the plaintiffs, as the lenders, entered into a loan agreement with the first and second defendants as borrowers. It was agreed that the plaintiffs would lend the first and second defendants $750,000 for a period of 18 months. It was also agreed the first and second defendants would repay the plaintiff the sum of $1,500,000 within 18 months from 26 May 2015. The first and second defendants agreed to pay $750,000 in interest. The loan principal of $700,000 was advanced by the plaintiffs to the first and second defendants.
In circumstances where the first and second defendants were in breach of their obligations, on 23 January 2017 the plaintiffs and first and second defendants entered into a deed of variation of their original loan agreement. That deed of variation…

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.

Continue reading Zhou v Truong

Details

AGLC: Zhou v Truong [2018] NSWSC 2051
Case: [2018] NSWSC 2051
Decision Date: 18 December 2018

CaseChat Overview and Summary

Zhou and Truong were involved in a dispute concerning the enforceability of an equitable charge over property. The case was heard by the Federal Court of Australia. The primary issue before the court was whether an equitable chargee has the right to seek orders for judicial sale and vacant possession of the charged property, similar to a mortgagee.

The court considered the nature of equitable charges and liens, and whether they confer the same rights as legal charges or mortgages. It examined the principles established in previous cases, such as Bank of Tokyo v Mack, to determine the extent of the rights held by an equitable chargee. The court also assessed whether the equitable charge in question provided sufficient security to justify the grant of relief sought by the chargee.

The court found that, while equitable charges differ from legal charges or mortgages, they do confer certain rights upon the chargee. In this instance, the equitable charge provided sufficient security for the chargee to seek orders for judicial sale and vacant possession. The court relied on the principle that the rights of an equitable chargee are not necessarily limited to those of a legal chargee, but can extend to include the right to seek relief in appropriate circumstances. The court concluded that the equitable chargee was entitled to the relief sought, as the charge provided adequate security for the granting of such orders.

The court ordered that the property be sold by judicial auction, and that the chargee be granted vacant possession following the sale. This decision underscores the enforceability of equitable charges and the potential for an equitable chargee to seek similar remedies to those available to a mortgagee, provided the charge offers sufficient security.

Orders