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Diao v Cohen

Diao v Cohen

Case [2016] NSWSC 96 22 February 2016

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Diao v Cohen [2016] NSWSC 96
Hearing dates: 21, 22, 23 and 24 July and 7 August 2015
Date of orders: 22 February 2016
Decision date: 22 February 2016
Before: Lindsay J
Decision:
Judgment for the plaintiff against the first defendant, in the sum of $281,995, with interest and costs, together with ancillary orders.

Catchwords: CONTRACT – Agreement – Subject to contract – Whether parties intended to be immediately bound - No written agreement signed as contemplated – Held, no contract
RESTITUTION – Moneys had and received – Failure of consideration – Change of position defence – Whether inequitable to require recipient to pay
Legislation Cited: Civil Procedure Act 2005, s 100
Uniform Civil Procedure Rules 2005, rr 42.1, 42.2
Cases Cited: Allen v Carbone (1975) 132 CLR 528
Australian Broadcasting Corporation v XIVTH Commonwealth Games Limited (1988) 18 NSWLR 540
Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560
Baltic Shipping Company v Dillon (1993) 176 CLR 344
Baulkham Hills Private Hospital Pty Limited v GR Securities Pty Limited (1986) 40 NSWLR 622
Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153
Brogden v Metropolitan Railway Co (1877) 2 App Cas 666
David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353
David Securities Pty Limited v Commonwealth of Australia (1992) 175 CLR 353
Eccles v Bryant and Pollock [1948] Ch 93
Empirnall Holdings Pty Limited v Machon Paull Partners Pty Limited (1988) 14 NSWLR 523
Equuscorp Pty Limited versus Haxton (2012) 246 CLR 498
Masters v Cameron (1954) 91 CLR 353
Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1
Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1
0rmwave Pty Limited v Smith [2007] NSWCA 210
Roxburgh v Rothmans of Pall Mall Australia Limited (2001) 208 CLR 516
Sindel v Georgiou (1984) 154 CLR 661
TMA Australia Pty Ltd v Indect Electronics & Distribution GMBH [2014] NSWSC 409
Turner v Bladin (1951) 82 CLR 463
Universal Music Australia Pty Ltd v Pavlovic [2015] NSWSC 791
Walton’s Stores (Interstate) Limited v Maher (1988) 164 CLR 387
Category: Principal judgment
Parties: Gin Zhu Diao (plaintiff/cross defendant)
Robin Cohen (first defendant/cross claimant)
Office Deals Pty Limited ACN 141870840 (second defendant/cross claimant)
Representation:
Counsel:
R Parsons (plaintiff/cross defendant)
JC Kelly SC and DF Elliot (defendants/cross claimants)
Solicitors:
Lyon Lawyers (plaintiff/cross defendant)
David Legal (defendants/cross claimants)

File Number(s): 2013/00153598

Judgment

LINDSAY J: The central question in these proceedings is whether, upon an objective assessment of the evidence, the plaintiff and the first defendant (at any time between January and October 2011 or thereabouts) reached a concluded agreement for the plaintiff to buy, and for the first defendant to sell, 49% of the share capital in the second defendant. The basic principles (summarised in Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1 at [59]-[63] and Masters…

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 Diao v Cohen

Details

AGLC: Diao v Cohen [2016] NSWSC 96
Case: [2016] NSWSC 96
Decision Date: 22 February 2016

CaseChat Overview and Summary

The case of Diao v Cohen involved a dispute regarding a contractual agreement for the sale of a property. The plaintiff, Diao, claimed that the defendant, Cohen, had entered into a binding contract for the sale of a property at a specified price. Cohen argued that the agreement was only subject to the preparation of a formal written contract and that no binding contract had been formed. The matter was heard in the Supreme Court of New South Wales.

The primary legal issue the court had to determine was whether the parties had intended to be immediately bound by the terms of the oral agreement, or if the agreement was merely a preliminary step pending the execution of a formal written contract. The court examined the conduct of the parties and the language used in their communications to ascertain their intentions. The court also considered whether there was any evidence of a written contract being contemplated and executed.

The court found that the parties had not intended to be immediately bound by the oral agreement. The absence of a signed written contract, as well as the conduct and communications of the parties, indicated that the agreement was subject to the preparation of a formal written document. The court further held that, in the absence of a binding contract, Cohen was not required to pay the purchase price to Diao. The court rejected Diao's claim for restitution based on the failure of consideration, finding that Cohen had not unjustifiably enriched himself at Diao's expense.

The court ordered that Diao's claim for specific performance and damages be dismissed, and that Cohen's cross-claim for the return of the deposit paid by Diao be allowed. The court held that it would be inequitable to require Cohen to return the deposit, given that Diao had occupied the property for a period of time and had derived some benefit from it. The court ordered that Cohen was entitled to retain the deposit as compensation for the use and occupation of the property by Diao.

Orders