Ye v Chen (No 3)

Rebecca Ye, the first plaintiff, and Ucer Investment and Resources Management Pty Ltd, the second plaintiff (Ucer), sought leave to appeal against a judgment in favour of Yu Chen, the defendant, entered against them in the Local Court by Stapleton LCM on 11 December 2020. On 27 April 2022, I granted the plaintiffs leave to appeal on some grounds, but dismissed the appeal: Ye v Chen [2022] NSWSC 494 (the principal judgment). On 20 May 2022, I ordered the plaintiffs to pay the defendant’s costs of the proceedings: Ye v Chen (No 2) [2022] NSWSC 630. Ms Ye, but not Ucer, has sought leave to appeal to the Court of Appeal against my judgment. Her summons for leave to appeal is returnable on 4 July 2022 before the Registrar of the Court of Appeal.

Ms Chen applied to have certain amounts released to her in satisfaction of her judgment against Ucer, which is not the subject of an application for leave to appeal. Before addressing whether she is entitled to release of the funds, it is necessary to set out in summary form the background to the orders.

The judgment sum ordered by the Local Court was $72,350.66 together with interest, which, by 9 February 2021, amounted to $3,668.67. The plaintiffs filed a summons for leave to appeal in this Court on 8 January 2021.

By notice of motion filed in the Local Court on 2 February 2021, the plaintiffs applied to the Local Court for a stay of the judgment, pending determination of the appeal to this Court. On 10 February 2021, the Local Court made the following orders, which were entered on 18 February 2021. The orders stayed the judgment and the writ of levy of property on condition that Ms Ye and Ucer pay into a controlled monies account the sum of $236,000 (being $86,000 for the judgment sum and $150,000 for costs which had not yet been agreed or assessed). The controlled monies account was to be in the name of Ms Ye and Ucer’s solicitors.

On 16 March 2021, Ms Chen filed a notice of motion regarding the stay granted by the Local Court. Following a hearing before Beech-Jones J on 22 March 2021, his Honour made the following orders:

The reasons for his Honour’s orders are in Ye v Chen [2021] NSWSC 272. The orders made by Beech-Jones J remain in force.

In [114] of the principal judgment, I said:

Ms Chen seeks an order that the sum of $236,000, plus interest, be released to her forthwith. Mr Harrison, who appeared on her behalf, submitted that the monies were paid by Ms Ye and Ucer as a condition of the stay and that, as the judgment against Ucer is final and cannot be affected by the decision of the Court of Appeal (there being no application for leave by Ucer), at least the principal and interest ought be released to Ms Chen. He also submitted that, once the costs are assessed, Ms Chen is entitled to the amount of $150,000 in the controlled account if the costs are assessed at that or a greater amount. If the costs are assessed at less than that figure, he submitted that Ms Chen is entitled to the figure assessed.

Mr Cheema, who appeared on behalf of Ms Ye, resisted any order being made in respect of the monies which were the subject of the orders made by Beech-Jones J on 22 March 2021. He adduced evidence which established that the monies paid as a condition of the stay came from Ms Ye’s own funds and not Ucer’s funds. He argued, on this basis, that Ms Chen had no right to these funds on the basis of her, admittedly unassailable, judgment against Ucer. He submitted that the orders made by Beech-Jones J ought remain in place until the determination of the matter in the Court of Appeal. He contended that the release of the monies would, inevitably, prejudice Ms Ye because Ms Chen lives overseas and therefore the monies, once released, could not readily be recovered. He submitted that no order should be made in respect of the $150,000 because the costs orders could be affected by the ultimate decision of the Court of Appeal.

Ms Chen is presently entitled to the amount of $89,875.62 (being $72,350.66 as principal and $17,524.96 in interest to 8 June 2022), being the amount of the judgment ordered in her favour against Ucer, in respect of which there is no application for leave to appeal. These funds are in Ms Chen’s solicitor’s account, having been paid into that account as a condition of a stay granted to Ms Ye and Ucer, a company of which she is the sole director. I do not regard it as relevant that the monies were paid by Ms Ye rather than Ucer, since both sought and obtained the benefit of the stay of the judgment which was entered against them jointly and both sought to challenge the judgment ordered against them in the proceedings before me. The basis for the liability of Ucer and of Ms Ye was different (as appears from the principal judgment), but the judgment was in the same amount, being the amount which Ms Chen had paid Ucer for the lodgement of her visa application, which was not actually lodged. They are, therefore, jointly and severally liable for the judgment debt.

I do not consider that any order ought be made to release any amount with respect to costs. The costs order made by Stapleton LCM did not differentiate between Ms Ye or Ucer. If Ms Ye obtains leave from the Court of Appeal and if her appeal is allowed, the costs order made against her by Stapleton LCM may be affected. In these circumstances, I would be loath to interfere with the present regime concerning the $150,000.

In respect of the principal sum of the judgment, there is much to be said for an order that the amount of $89,875.62 be paid to Ms Chen from her solicitor’s trust account established in accordance with the orders of Beech-Jones J. As referred to above, Ms Chen’s entitlement to this sum from Ucer cannot be affected by the decision of the Court of Appeal. However, Mr Cheema has already indicated that if I order this amount to be released, he will be instructed to challenge this order in the Court of Appeal and has asked me to stay the order for a period of 14 days to enable a challenge to be brought. This application will occupy valuable time and resources of the Court of Appeal, in circumstances where the leave application and, if leave is granted, the appeal are likely to be listed relatively soon, in any event.

These proceedings have been lengthy and costly. It is desirable that they be brought to an end as quickly and as efficiently as justice and the resources of the Court permit. In these circumstances, I consider it to be appropriate not to vary the orders made by Beech-Jones J. These orders can be varied by the Court of Appeal when it considers Ms Ye’s challenge to my order dismissing the appeal from the Local Court against her.

Mr Cheema originally proposed that the costs of the application for variation be costs in the appeal. However, he withdrew that submission and proposed that the costs of the application follow the event. Mr Harrison submitted that the costs of the application for variation ought follow the event.

Ms Ye has been successful in resisting the application for variation of the orders made on 22 March 2021. However, as reflected in my reasons above, I have refused Ms Chen’s application for practical and pragmatic reasons arising from the dictates of Part 6 of the Civil Procedure Act 2005 (NSW) (the Act) which require me, when making orders, to seek to give effect to the overriding purpose of the Act “to facilitate the just, quick and cheap resolution of the real issues in the proceedings”: s 56 of the Act. I refrained from making an order for release of the principal sum on the basis that it can reasonably be expected that the final determination of the proceedings in the Court of Appeal will be imminent. If, for some reason, that does not eventuate, the orders of 22 March 2021 can be revisited by that Court.

In these circumstances, I consider the appropriate costs order to be that the costs of the application for variation be the respondent’s costs in the appeal. The effect of this order is that if leave to appeal is refused or if leave is granted and the appeal is dismissed, Ms Ye will be liable to pay Ms Chen’s costs of the variation application. However, if Ms Ye is successful on appeal, there will be no order as to the costs of the variation application.

For the reasons given above, I make the following orders: