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Chan v Eastern Blue Pty Ltd

Chan v Eastern Blue Pty Ltd

Case [2021] VSCA 121 12 May 2021

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2020 0110

MICHELLE SIU PIK CHAN	First Applicant
ASSETS CHINA PTY LTD (ACN 093 530 593)	Second Applicant
v
EASTERN BLUE PTY LTD (ACN 620 756 694)	First Respondent
MIAN ZHANG	Second Respondent

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JUDGES:	KYROU and NIALL JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	12 April 2021
DATE OF JUDGMENT:	12 May 2021
MEDIUM NEUTRAL CITATION:	[2021] VSCA 121
JUDGMENT APPEALED FROM:	[2020] VSC 685 (Ierodiaconou AsJ)

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CONTRACT – Contract for sale of business from second applicant to first respondent – Whether contract varied – Contract terminated due to failure of condition precedent that landlord agree to transfer of lease – Magistrate erred in granting contractual relief against first applicant without finding that contract varied to include her as a party.

RESTITUTION – Elements of cause of action for money had and received – Elements satisfied in respect of payment of $50,000 to first applicant.

LEAVE TO APPEAL – Discretion to refuse leave to appeal even if some proposed grounds of appeal have real prospect of success – First applicant refused leave to appeal on basis that allowing appeal and remitting proceeding to Magistrates’ Court would be futile because restitution claim bound to succeed against her.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Ms MSP Chan, in person and on behalf of the second applicant	--
For the Respondents	Ms JR Anthony-Shaw	Nicholas William Albon

KYROU JA
NIALL JA:

Introduction and summary

The first applicant (‘Ms Chan’) is the sole director and shareholder of the second applicant (‘Assets China’). The second respondent (‘Ms Zhang’) is the sole director and shareholder of the first respondent (‘Eastern Blue’).

Assets China is the owner of a brothel business known as ‘Studio 466’ at 466 City Road, South Melbourne. Assets China and the respondents executed a contract dated 6 September 2017 for the sale of the business for $250,000. Under the contract of sale, Eastern Blue was the purchaser and Ms Zhang was the guarantor of Eastern Blue’s obligations. Ms Chan was not a party to the contract of sale.

Clause 3.1(a) of the contract of sale required payment of a deposit of $25,000 into the trust account of Assets China’s solicitor. Clause 6.1 contained a condition precedent that the landlord of the business premises consent to a transfer of the lease to Eastern Blue within 90 days. Clause 26.4 stated that a provision of or a right created under the contract may not be varied except in writing signed by the parties to be bound by the variation.

Even though the contract of sale was dated 6 September 2017, it was not signed by Assets China until 7 September 2017. On that day, a bank cheque dated 7 September 2017 for $25,000 made out to the trust account of Assets China’s solicitor was provided to Assets China. Despite this, the parties initialled a handwritten note on the signed contract acknowledging ‘[r]eceipt of $25,000 on 6 September 2017’. A further bank cheque for…

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 Chan v Eastern Blue Pty Ltd

Details

AGLC: Chan v Eastern Blue Pty Ltd [2021] VSCA 121
Case: [2021] VSCA 121
Decision Date: 12 May 2021

CaseChat Overview and Summary

In the case of Chan v Eastern Blue Pty Ltd, the dispute involved a contract for the sale of a business, with the first applicant (Chan) and the first respondent (Eastern Blue) as the primary parties. Chan sought to enforce a contract for the sale of a business, arguing that the contract had been varied to include her as a party. The second applicant (the landlord) had previously refused to consent to the transfer of the lease, leading to the termination of the contract. The matter was heard in the Supreme Court of New South Wales, with the first applicant seeking to appeal the decision of the Local Court. The court had to determine whether the contract had been varied to include Chan as a party and, if so, whether the first applicant was entitled to the relief she sought.

The legal issues before the court included whether the contract had been varied to include Chan as a party and, if so, whether she was entitled to the relief she sought. Additionally, the court had to consider the elements required to establish a cause of action for money had and received in relation to the $50,000 payment made to Chan. The first applicant argued that the contract had been varied to include her as a party and that she was entitled to the relief sought. The court found that the first applicant had failed to establish that the contract had been varied to include her as a party and that the magistrate had erred in granting her the relief sought without finding that the contract had been varied.

The court's reasoning was that the magistrate had erred in granting the first applicant the relief she sought without finding that the contract had been varied to include her as a party. The court found that the elements of a cause of action for money had and received were satisfied in respect of the $50,000 payment to Chan. The court refused the first applicant leave to appeal on the basis that allowing the appeal and remitting the proceeding to the Magistrates' Court would be futile because the restitution claim was bound to succeed against her. The court found that the appeal would have no effect on the outcome of the proceeding and that the first applicant's proposed grounds of appeal had no real prospect of success. The court concluded that it was in the interests of justice to refuse leave to appeal.

Orders