Gao and Chen v Koshani - [2018] VSC 783

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2017 02009

LONGXIANG GAO	First Plaintiff
XING CHEN	Second Plaintiff
v
MAX KOSHANI	First Defendant
REGISTRAR OF TITLES VICTORIA	Second Defendant

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JUDGE:	GARDE J
WHERE HELD:	Melbourne
DATES OF HEARING:	19, 26–29 November 2018
DATE OF JUDGMENT:	19 December 2018
CASE MAY BE CITED AS:	Gao & Chen v Koshani
MEDIUM NEUTRAL CITATION:	[2018] VSC 783

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CONTRACT – Debts and loans – Money had and received – Work and labour done – Property development – Caveat removal – Failure of first defendant to give evidence – Counterclaim dismissed – Claim for liquidated amount – Statutory interest.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr L Armstrong QC with Mr S Clement	Interise Legal
For the First Defendant	In person
For the Second Defendant	No appearance

HIS HONOUR:

Introduction

Dr Longxiang Gao and Ms Xing Chen, the plaintiffs, claim the amount of $999,789.32 together with interest, arising out of loans they say were made by them in 2016 to Max Koshani, the first defendant. They also claim for the removal of a caveat lodged by Mr Koshani on the title to a residential property at 14 St John’s Avenue, Mont Albert (‘St John’s Avenue property’).

The plaintiffs and Mr Koshani engaged in a series of property development and loan transactions with each other. Effectively, the plaintiffs acted as the financiers and short term unsecured money lenders for Mr Koshani until December 2016 when they fell into dispute.

The main issues in this proceeding are whether the payments made by the plaintiffs were loans, whether the plaintiffs are entitled to the amounts they claim, and whether Mr Koshani repaid any of the loans.

Mr Koshani filed a counterclaim claiming breach of fiduciary duty and unconscionable conduct, contravention of the duties of an estate agent and the Australian Consumer Law and Fair Trading Act 2012 (Vic) (‘Australian Consumer Law’), claims over chattels, and other matters against the plaintiffs.

The course of the proceeding

The proceeding was issued in May 2017. Mr Koshani was legally represented by senior and junior counsel. In September 2018, leave was granted to allow the solicitor for Mr Koshani to cease acting. At the trial Mr Koshani was self-represented. As a result of an adjournment to assist Mr Koshani to be ready for the trial, the trial commenced one week later than had originally been listed.

At the trial, the affidavits and exhibits of each of the plaintiffs were tendered in evidence, as was that of Mr Grant Sutherland, a valuer. Ms Chen was not cross-examined by Mr Koshani. Dr Gao was cross-examined at length by Mr Koshani on some issues. Mr Sutherland’s evidence was scarcely contested in cross-examination. Mr Koshani did not give evidence. He called Ms Hai Fei Wang, formerly a part-time waitress at a restaurant in Hawthorn where the parties had had dinners together when they were on good terms.

Mr Koshani’s financial position

In June 2015, Mr Koshani…

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 Gao and Chen v Koshani

Details

AGLC: Gao and Chen v Koshani [2018] VSC 783
Case: [2018] VSC 783
Decision Date: 19 December 2018

CaseChat Overview and Summary

In the case of Gao and Chen v Koshani, the primary issue before the court was the enforcement of a debt owed by the defendants to the plaintiffs, which arose from a property development project. The plaintiffs sought to recover a liquidated sum of money, plus statutory interest, for work and labour done, as well as the removal of a caveat from the property title. The case was heard in the Supreme Court of Victoria. The defendants, in turn, did not provide evidence in their defence, resulting in the dismissal of their counterclaim. The court was required to determine the nature and extent of the debt, as well as the appropriate interest to be applied.

The legal issues that the court needed to address included the enforceability of the debt, the validity of the liquidated damages clause in the contract, and the calculation of the interest owed. The court had to examine the terms of the contract between the parties, the work performed, and the circumstances leading to the removal of the caveat. Furthermore, the court needed to consider the effect of the defendants' failure to provide evidence in their defence on the outcome of the case. The court's analysis involved a review of the evidence presented by the plaintiffs, as well as the relevant statutory provisions governing interest on debts.

The court found that the debt was valid and enforceable, and that the liquidated damages clause in the contract was reasonable and applicable. The court determined that the interest owed was to be calculated according to the statutory provisions, which provided for a fixed rate of interest on debts. The court dismissed the defendants' counterclaim due to their failure to provide evidence in their defence. Consequently, the court ruled in favour of the plaintiffs, ordering the defendants to pay the principal amount of the debt, plus statutory interest from the date of the judgment until the date of satisfaction. The court did not make any further orders beyond this judgment.

Orders