Choo v Zhang - [2016] NSWCA 193

Court of Appeal
Supreme Court

New South Wales

Case Name:	Choo v Zhang
Medium Neutral Citation:	[2016] NSWCA 193
Hearing Date(s):	21 July 2016
Decision Date:	5 August 2016
Before:	McColl JA at [1]; Basten JA at [2]; Sackville AJA at [3]
Decision:	1. Appeal allowed. 2. Orders 5 and 6 made on 27 November 2015 be set aside. 3. Orders 5, 6 and 9(c) made on 18 January 2016 be set aside. 4. In lieu thereof, order that the Respondents’ claim against the Appellant be dismissed. 5. The Respondents pay the Appellant’s costs of the Respondents’ claim in the District Court against the Appellant. 6. The Respondents pay the Appellant’s costs of the appeal. 7. The Respondents have a certificate under the Suitors’ Fund Act 1951 (NSW).
Catchwords:	MISLEADING OR DECEPTIVE CONDUCT - partners signed Licence Agreement by which they acquired a licence to conduct a chicken shop business - two partners (claimants) allege a third partner misrepresented the effect of the Licence Agreement - whether the third partner’s statement amounts to the representation alleged by the claimants - whether the third partner’s conduct was misleading or deceptive DAMAGES - assuming the third partner’s conduct was misleading, whether the claimants were entitled to recover the whole of the “licence fee” paid by them - absence of findings to justify recovery of the whole licence fee
Legislation Cited:	Competition and Consumer Act 2010 (Cth), Sch 2, ss 18(1), 87CD, 131, 236(1) Fair Trading Act 1987 (NSW), s 28(1)
Cases Cited:	ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65; 224 FCR 1 Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353 Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592 Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304 Henville v Walker [2001] HCA 52; 206 CLR 459 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; 217 CLR 640 Potts v Miller [1940] HCA 43; 64 CLR 282 Poulet Frais Pty Ltd v Silver Fox Co Pty Ltd [2005] FCAFC 131; 220 ALR 211 Sidhu v Van Dyke [2014] HCA 19; 251 CLR 505 Zhang v Cliffman Pty Ltd (unrep, 27 November 2015, District Court) Zhang v Cliffman Pty Ltd (unrep, 18 January 2016, District Court)
Category:	Principal judgment
Parties:	Hin Tee Choo (Appellant) Guofeng Zhang (First Respondent) Sharon Zhang (Second Respondent)
Representation:	Counsel: Mr T Lynch SC / Mr R Chia (Appellant) Mr J Giles SC / Mr H Grace (Respondents) Solicitors: AHL Legal (Appellant) Somerville Legal (Respondents)
File Number(s):	2015/376032
Decision under appeal:
Court or Tribunal:	District Court of New South Wales
Jurisdiction:	Civil
Date of Decision:	22 June 2015
Before:	Cogswell DCJ
File Number(s):	2013/316835

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to…

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.

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Details

Case: [2016] NSWCA 193
Decision Date: 5 August 2016

CaseChat Overview and Summary

In *Choo v Zhang*, the claimants, two partners in a chicken shop business, alleged that the appellant, their third partner, had made a misrepresentation regarding the effect of a Licence Agreement they had all signed. The dispute concerned whether the appellant's statement constituted a misrepresentation and, if so, whether this conduct was misleading or deceptive under the relevant legislation. The matter came before the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were: first, whether the appellant's statement amounted to the representation alleged by the claimants; and second, assuming the conduct was misleading or deceptive, whether the claimants were entitled to recover the entire licence fee they had paid. The court also considered the sufficiency of findings to justify such a recovery.

The Court of Appeal allowed the appeal, setting aside previous orders made by the District Court. The court found that the claimants had not established their case, and therefore their claim against the appellant was dismissed. The respondents were ordered to pay the appellant's costs of the claim in the District Court and the costs of the appeal, and were granted a certificate under the Suitors’ Fund Act 1951 (NSW).

Orders

Orders of the court

1. Appeal allowed.

2. Orders 5 and 6 made on 27 November 2015 be set aside.

3. Orders 5, 6 and 9(c) made on 18 January 2016 be set aside.

4. In lieu thereof, order that the Respondents’ claim against the Appellant be dismissed.

5. The Respondents pay the Appellant’s costs of the Respondents’ claim in the District Court against the Appellant.

6. The Respondents pay the Appellant’s costs of the appeal.

7. The Respondents have a certificate under the Suitors’ Fund Act 1951 (NSW).

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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