Zhuoying Yu v Kunshan Yi - [2018] SADC 69

District Court of South Australia
(Civil: Application)
ZHUOYING YU v KUNSHAN YI
[2018] SADC 69
Judgment of His Honour Judge Stretton (ex tempore)
24 April 2018
REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - EXTENSION
REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - WHO MAY LODGE AND WHAT INTEREST SUFFICIENT - PARTY TO FAMILY LAW DISPUTE
The plaintiff applied for an order that the time for removal of a caveat be extended. Parties were previously married, and had purchased a property together. The property was registered to the defendant’s name, but the plaintiff had contributed some $200,000 towards the purchase price and a further $70,000 towards furnishings, whereas the defendant took out a loan for the remainder of the purchase price. The plaintiff also contributed to the mortgage payments.
The plaintiff registered a caveat over the property upon the breakdown of the marriage and her exclusion from the premises by the defendant. Family law proceedings followed.
Held:
1. The plaintiff has a good claim in equity for a constructive or other trust as a result of the substantial contributions she made to the property.
2. The balance of convenience favours retention of the caveat.
3. The time for the removal of the caveat is accordingly extended until further order.
4. Parties have liberty to apply.
Real Property Act 1886 (SA); Family Law Act 1975 (Cth), referred to.
Union Finance Pty Ltd v Rateki Pty Ltd No. 2 (2007) SASC 11; Pua Hor Ong & Ors v Wu You Yang Pty Ltd & Ors [2008] SASC 365; Baumgartner v Baumgartner (1987) 164 CLR 137; Gazzola v Gazzola (1990) 92 ALR 45; Woodward v Johnson [1992] 2 Qd R 214; Stowe v Stowe (1995) 15 WAR 363, considered.

ZHUOYING YU v KUNSHAN YI
[2018] SADC 69

STRETTON DCJ (ex tempore): This is an application by the plaintiff Zhuoying Yu that the time for removal of caveat No.12802364, lodged in the Lands Title Registration Office in respect of the land comprised in Certificate of Title register book vol.5987, folio 665, be extended until further order.
That application is supported by the plaintiff's affidavit which, in very brief terms, sets out that she is a 22-year-old woman of Chinese origin who moved to Australia in 2011 on a student visa and met the defendant two years later in a work context. She says that a relationship was formed. They became engaged in 2014 and were married on 28 September 2015.
By way of brief summary, she indicates that she and the defendant were interested in purchasing a house, and eventually located a property they regarded as suitable at 203 Folland Avenue, Northgate, which is the property to which this application relates.
Negotiations took place and at least on the plaintiff's affidavit, the defendant played the significant role in that. He told the plaintiff that she needed to provide some $200,000 towards the house which was eventually purchased for the price of $565,000.
The plaintiff's affidavit conveys that at the defendant’s behest, a finance broker was organised and property was purchased solely in the defendant's name, ostensibly because the defendant told the plaintiff that was necessary so that he could more easily obtain the loan for the remainder of the moneys.
The plaintiff borrowed $200,000 from her parents and contributed it to the purchase of the house. The house was purchased. The plaintiff borrowed a further $70,000 from her parents to decorate the house and buy furniture and other items for it, and subsequently periodically gave the defendant money for the purposes of paying the mortgage. She does not purport to say that only she made contributions towards the periodic mortgage payments.
Unfortunately the relationship broke down and the parties separated, according to the plaintiff, on 11 April 2017, and it is clear from the plaintiff's affidavit that there were, from her perspective, a number of issues between the parties sadly typical of a marital break-up. Relations degenerated between the parties. Property was moved around or interfered with within the house, according to the plaintiff, and ultimately on 17 September 2017, the plaintiff says the defendant changed the locks and purported to exclude the plaintiff from the house, causing her to call the police who informed the parties that they were both entitled to live in the premises.
Given the property was in the defendant's name and the contributions made by the plaintiff and her parents, on 28 September 2017, the caveat was registered by the plaintiff to protect her interests in the property. On 1 November 2017, the defendant commenced family law proceedings and the matter has proceeded in that court.
On 5 April 2018, the plaintiff was informed that the defendant had applied to remove the caveat and hence the application in this court to extend time for removal of the caveat.
The plaintiff submits that her provision of $200,000 of the $565,000 purchase price, causes her to have an equitable interest in the property which she wishes to pursue in this court. Her counsel informs me today that likely within 14 days, and certainly within 28 days, proceedings will be lodged in this court to pursue that equitable interest.
I am mindful that I have not heard evidence from the defendant, nor as to his position apart from that which is reflected in his lawyer's correspondence, annexed to the plaintiff's affidavit, and such as has been conveyed by Ms Ross on the defendant's behalf. That that information is, of necessity limited, given the short time frames involved in hearing this matter before the removal of the caveat by operation of statute. Ms Ross has submitted that her client has also contributed to the property, and that this would all be better dealt with in the Family Court.
Nonetheless, all parties are happy for me to resolve the issue on the limited material provided, on the understanding that the court grants liberty to apply to revisit the caveat issue, depending on further instructions received and available evidence.
Pursuant to section 191(1)(fa) of the Real Property Act 1886, the plaintiff may bring an action to court to establish the validity for claim on which the caveat is based and under sub-section (g) the court may, on the plaintiff's application, extend the period of time for the removal of the caveat until the action in relation to the claim is determined.
The issue is whether the plaintiff has a prima facie case, which justifies the extension of the caveat until trial, see Union Finance Pty Ltd v Rateki Pty Ltd No.2 (2007) SASC 11 and Pua Hor Ong v Wu You Yang Pty Ltd (2008) SASC 365, and whether the balance of convenience also favours retention of the caveat until trial.
On the albeit limited information available to the court, the plaintiff has a good claim in equity for a constructive or other trust, in relation to contributions she made to the property. She has contributed a significant proportion of the purchase price, and the defendant has purported to exclude her from the property.[1]
[1] Baumgartner v Baumgartner (1987) 164 CLR 137; Gazzola v Gazzola (1990) 92 ALR 45; Woodward v Johnston [1992] 2 Qd R 214; Stowe v Stowe (1995) 15 WAR 363.
The defendant's counsel submits that when the court approaches the issue of balance of convenience, it considers that the Family Court has made an interim injunction restraining the defendant from dealing with the property in question, and that it would be more appropriate for all matters pertaining to the property disputes between the parties, together with the matrimonial issues, to be resolved in the Family Court. Counsel for the defendant submits that the injunction adequately protects the plaintiff.
Indeed, section 79 of the Family Law Act 1975 confers a relatively wide power to deal with issues of property as between married couples, in accordance with the Family Law Act, and whatever principles are applicable to an ultimate resolution of the matrimonial issues between the parties.
Be that as it may, the plaintiff has a cause of action in this court, which she is entitled to pursue. The issue that this court faces is clearer and delineated. The plaintiff claims an equitable interest in property solely in the name of the defendant and has, on an interim and prima facie basis, demonstrated a serious question to be tried, and indeed a good case for the establishment of an equitable interest to the extent submitted.
As to the balance of convenience, this court has no idea whether the injunction in the other forum will continue, what criteria will be applied to its maintenance, or indeed whether the issues and principles that will be dealt with in that court will fully deal with the substantive legal issues that this court would focus on, or whether they are just one aspect of the separate mix. I appreciate that the maintenance of separate proceedings in separate jurisdictions as to exactly the same subject matter, may constitute an abuse of process, primarily if done for an improper purpose, or to multiply or maximise legal costs for the other party, but on the material before me there is no indication of that.
I note that the plaintiff has indicated that they will file substantive proceedings at the latest within 28 days, and whilst I do not regard this as relevant for the purposes of today, there are foreshadowed supplementary proceedings by the plaintiff's parents in relation to the money that is said to have been lent to the plaintiff and then used for the purchase of the property in question.
Held:
In the final analysis, in my view, the plaintiff has demonstrated a good prima facie case for equitable relief. Further, the balance of convenience favours retention of the caveat. Accordingly, the time for the removal of the caveat will be extended until further order.
There will be liberty to apply as to the continuance of the caveat, and generally to both parties.