Guang Dong Zhi Gao Australia Pty Ltd v Fortuna Network Pty Ltd - [2009] NSWSC 1170

No judgment structure available for this case.

CITATION: Guang Dong Zhi Gao Australia Pty Limited v Fortuna Network Pty Limited [2009] NSWSC 1170
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 12/10/09 - 16/10/09, 19/10/09 - 21/10/09, 26/10/09 - 27/10/09

JUDGMENT DATE :
4 November 2009

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: Einstein J

DECISION: Parties held to have entered into a contract on the terms provided for by the Deed.

CATCHWORDS: Contract - Deeds - Whether deed only in writing or alternatively only partly in writing - Mode of execution of document purporting to be a deed - Whether or not document invalid for formal reasons - Plaintiffs alternative case that by one of a number of routes that which purported to be signed as deed of release could simply be treated as a binding and enforceable agreement - Estoppel - Holding out-Masters and Cameron - Whether defendant entitled to have deed set aside or varied pursuant to section 87 Trade Practices Act - Principles informing decision as to whether or not an agreement that parties have entered into is wholly in writing or partly in writing and partly oral

LEGISLATION CITED: Corporation Act 2001 (Cwlth)
Conveyancing Act 1919 (NSW)
Evidence Act 1995 (Cwlth)
Sale of Goods (Vienna Convention) Act 1986 No. 119
Trade Practices Act 1974 (Cwlth)

CATEGORY: Principal judgment

CASES CITED: Amalgamated Property Company v Texas Bank [1982] QB 84
Australian Medic-Care Company Ltd v Hamilton Pharmaceutical Pty Limited [2009] FCA 1220
Bank of Australasia v Palmer [1897] AC 540);
Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622
Bolckow v Seymour (1864) 17 CB NS 107; 144 ER 43; 142 RR 272
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 (FC)
Carmichael v National Power Plc [1999] 1 WLR 2042; [1999] 4 All ER 897 (UKHL)
County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193
Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Company Pty Ltd (1975) 133 CLR 72
Deane v The City Bank of Sydney (1904) 2 CLR 198
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471
Finucane v NSW Egg Corporation (1988) 80 ALR 486 (FCA)
Freeman & Lockyer (a firm) v Buckhurst Park Properties ( Mangal) Ltd & Anor [1964] 2 QB 480
Gardiner v Grigg (1938) 38 SR (NSW) 524
Gillespie Brothers & Co v Cheney, Eggar & Co [1896] 2 QB 59
Gordon v Macgregor (1909) 8 CLR 316
Handbury v Nolan (1977) 13 ALR 339 (HCA)
Health Outdoor at 191D-F
Helmos Enterprises Pty Limited v Jaylor Pty Limited [2005] NSWCA 235
Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348
Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133
J Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078; [1976] 2 All ER 930
Jessop v McInteer [2003] QCA 170 (FC)
Liverpool City Council v Irwin [1977] AC 239
Maggs v Marsh [2006] EWCA Civ 1058; [2006] BLR 395
Masterton Homes PTY LTD v Palm Assets Pty Ltd [2009] NSWCA 234
Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507
Moore v Garwood (1849) 4 Exch 681 at 689-90; 154 ER 1388
Nicolazzo v Harb [2009] VSCA 79
Nicom Interiors Pty Ltd v Circuit Finance Pty Ltd (2004) 50 ACSR 25
Norwest Beef Industries Ltd v Peninsular and Oriental Steam Navigation Co (1987) 8 NSWLR 568
NSW Cancer Council v Sarfaty (1992) 28 NSWLR 68
Palmer v Bank of Australasia (1895) 16 NSWLR (L) 219
Prime Constructions v West Bridge Investments [2004] NSWSC 861
Saad v TWT Ltd [1998] NSWCA 199
State Rail Authority (NSW) v Health Outdoor Pty Ltd (1986) 7 NSWLR 170
Stones v Dowler (1860) 29 LJ Ex 122
Torbett v Faulkner [1952] 2 TLR 659 (EWCA)
Turner v Forwood [1951] 1 All ER 746 (EWCA)
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

TEXTS CITED: Handley - Estoppel by Conduct and Election, Sweet and Maxwell 2006,
The Interpretation of Contracts, 4th ed (2007) Sweet & Maxwell

PARTIES: Guang Dong Zhi Gao Australia Pty Limited (Plaintiff)
Fortuna Network Pty Limited (Defendant)

FILE NUMBER(S): SC 50185/06

COUNSEL: Mr F Santisi (Plaintiff)
Mr J Levingston (Defendant)

SOLICITORS: Lawside Lawyers (Plaintiff)
Alexander Lee & Associates (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

Einstein J

Wednesday 4 November 2009

50185/06 Guang Dong Zhi Gao Australia Pty Limited v Fortuna Network Pty Limited

JUDGMENT

The proceedings

1 These proceedings concern the contractual dealings between two groups of companies:

i. the plaintiff Australian company Guang Dong Zhi Gao Australia Pty Ltd [GDA];

ii. its related company incorporated in China , Guangdong Chigo Air-conditioning Co. Ltd[GCAC];

2 GDA was the Australian agent for GCAC.

3 Fortuna was the owner of the registered trademark ‘Blueway’ which it used to sell a range of goods, including air-conditioners. It had been importing and selling air-conditioners from other manufacturers and had established markets in Australia.

The extent of pleadings

4 The parties have managed to produce a very extensive suite of pleadings.

The critical issues

5 The material relationship between the parties was short lived. In essence the whole of the issues fall into the period commencing in August 2005 and terminating in September/October 2006. However during that period the parties entered into a series of agreements which require close attention. This is particularly because the suite of agreements are said by the plaintiff to have terminated with a deed of release. It is that deed of release which forms the fulcrum of an extremely important issue: namely whether or not the deed was valid. That issue includes questions as to:

i. whether or not the deed was wholly in writing or alternatively only partly in writing;

ii. the mode of execution of the document and whether or not it is invalid for formal reasons;

6 The pleadings and the arguments were wide enough to embrace:

i. the plaintiff's claim that the deed of release was valid and enforceable;

purported

see for example paragraph 18 of the Commercial List Statement filed on 13th February 2007

(b) the same somewhat ambulatory approach may be discerned in paragraph 24 of the Commercial List Statement filed on 13th February 2007, where the plaintiff relies upon section 127 of the Corporation Act 2001 and the judicial construction of that provision as to the validity of the third agreement and its enforceability, despite execution without witness;

"so there may be other valid manners of execution, eg by reference by reference to the company Constitution or by estoppel."

iii. close to the commencement of the final oral address the defendant's counsel accepted that he had always understood there to be being litigated, an issue of estoppel raised against the defendant [that is to say an estoppel preventing the defendant from denying that the so-called deed of release could be enforced] [T 629-630].

7 In any event the defendant's pleaded case includes the contention that if, which it denies, it executed the deed of release, it is entitled to have that deed set aside or varied pursuant to section 87 of the Trade Practices Act (Cwlth).

8 Another part of the pleaded issues concerns Fortuna's claim that without its consent and in breach of the contractual arrangements, GDA imported a large number of GCAC air-conditioners with the Blueway trademark into Australia, this also being claimed as a breach of the Blueway Trademark. It is to be recalled that the Convention on the International Sale of Goods (CISG) governs the international trade agreement and disputes.

9 Each party claims damages for alleged breaches by the other of the terms of the contractual arrangements.

Separate question order

10 During the hearing the Court ordered that the issue of liability be first determined.

11 The disputes which appear to have led to the current extremely hotly contested proceedings at least in part concerned the plaintiff's contention that Fortuna failed to account to it for a relevant sales and also concerns the refusal of Fortuna to release particular units.

12 Before travelling further it is appropriate to examine some of the parameters which underpinned the proper approach especially to the decision as to the so-called deed of release. I proceed accordingly.

The principles informing the decision as to whether or not an agreement that parties have entered into is wholly in writing or partly in writing and partly oral

13 In Masterton Homes PTY LTD v Palm Assets Pty Ltd [2009] NSWCA 234 Campbell JA [with as reasons Allsop P and Baston JA agreed] at 90 observed as follows in relation to these principles:

(1) When there is a document that on its face appears to be a complete contract, that provides an evidentiary basis for inferring that the document contains the whole of the express contractual terms that bind the parties: Gillespie Brothers & Co v Cheney, Eggar & Co [1896] 2 QB 59 at 62 per Lord Russell of Killowen CJ; Gordon v Macgregor (1909) 8 CLR 316 at 319-20 per Griffith CJ (with whom O’Connor J agreed), at 322-3 per Isaacs J; Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133 at 143-4 per Isaacs J (with whom Rich J agreed); Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507 at 517 per Dixon CJ, Fullagar and Taylor JJ; State Rail Authority (NSW) v Health Outdoor Pty Ltd (1986) 7 NSWLR 170 at 191G-2C per McHugh JA (with whom Kirby P at 172G-3C and Glass JA at 180G agreed on this point); Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 (FC) at 505-6 [280]-[281], 509 [293] per Allsop J (with whom Drummond and Mansfield JJ agreed); Jessop v McInteer [2003] QCA 170 (FC) at [53] per Muir J (with whom Fryberg J agreed).

(2) It is open to a party to prove that, even though there is a document that on its face appears to be a complete contract, the parties have agreed orally on terms additional to those contained in the writing: Gillespie Brothers at 62 per Lord Russell of Killowen CJ; Gordon v Macgregor at 319-20 per Griffith CJ, at 323 per Isaacs J; Hoyt’s v Spencer at 143-4 per Isaacs J; Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348 at 357 per Latham CJ; Maybury v Atlantic Union Oil at 517 per Dixon CJ, Fullagar and Taylor JJ; Health Outdoor at 191D-F per McHugh JA; Carmichael v National Power Plc [1999] 1 WLR 2042; [1999] 4 All ER 897 (UKHL) at WLR 2047B-D, F-H; All ER 901e-g, 901j-2b per Lord Irvine of Lairg LC (with whom Lords Goff of Chieveley, Jauncey of Tullichettle and Browne-Wilkinson agreed), at WLR 2049C-D, 2050B-D; All ER 903e-g, 904e-h per Lord Hoffmann (with whom Lords Goff of Chieveley and Jauncey of Tullichettle agreed); Saad v TWT Ltd [1998] NSWCA 199 at 6 per Handley JA (with whom Priestley and Powell JJA agreed); Jessop v McInteer at [51] per Muir J; Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 at 483-4 [35]-[36] per Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ. Conversely, it is open to a party to prove that the parties have orally agreed that a document should contain the whole of the terms agreed between them: NSW Cancer Council v Sarfaty (1992) 28 NSWLR 68 at 77A-B per Gleeson CJ and Handley JA.

(3) The parol evidence rule applies only to contracts that are wholly in writing, and thus has no scope to operate until it has first been ascertained that the contract is wholly in writing: Turner v Forwood [1951] 1 All ER 746 (EWCA) at 749F per Denning LJ; Heath Outdoor at 191E, 192A-C per McHugh JA; Norwest Beef Industries Ltd v Peninsular and Oriental Steam Navigation Co (1987) 8 NSWLR 568 at 570B-C per Hope JA (with whom Samuels JA agreed); NSW Cancer Council v Sarfaty at 76G per Gleeson CJ and Handley JA; Branir v Owston Nominees at 508 [287] per Allsop J; County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [8] per Spigelman CJ; Nicolazzo v Harb [2009] VSCA 79 at [90] per Dodds-Streeton JA (with whom Ashley and Neave JJA agreed).

(4) Where a contract is partly written and partly oral, the terms of the contract are to be ascertained from the whole of the circumstances as a matter of fact: Moore v Garwood (1849) 4 Exch 681 at 689-90; 154 ER 1388 at 1391-2; 80 RR 738 at 745-6 per Patteson J delivering the judgment of the Court of Exchequer Chamber; Stones v Dowler (1860) 29 LJ Ex 122 at 124; 121 RR 882 at 884 per Martin B; Bolckow v Seymour (1864) 17 CB NS 107; 144 ER 43; 142 RR 272 at CB NS 121-2; ER 49; RR 282 per Byles J, at CB NS 122; ER 49; RR 282 per Keating J; Palmer v Bank of Australasia (1895) 16 NSWLR (L) 219 at 223-4 per Darley CJ, Windeyer and Cohen JJ (affirmed on a different ground on appeal to the Privy Council in Bank of Australasia v Palmer [1897] AC 540); Deane v The City Bank of Sydney (1904) 2 CLR 198 at 209 per Griffith CJ, Barton and O’Connor JJ; J Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078 at 1083E-F; [1976] 2 All ER 930 at 935a-b (EWCA) per Roskill LJ; Handbury v Nolan (1977) 13 ALR 339 (HCA) at 341 per Barwick CJ, 348-9 per Jacobs J, (Aickin J agreed with both Barwick CJ and Jacobs J), at 346 per Stephen J (but dissenting as to whether the evidence established a partly written and partly oral agreement), (Gibbs J agreed with Stephen J); Finucane v NSW Egg Corporation (1988) 80 ALR 486 (FCA) at 520-1 per Lockhart J; Carmichael v National Power at WLR 2049C-50E; All ER 903f-4h per Lord Hoffmann; Lewison, The Interpretation of Contracts , 4 ^th ed (2007) Sweet & Maxwell at [4.02] and cases there cited. Similarly, finding the terms of a wholly oral contract is a question of fact: Gardiner v Grigg (1938) 38 SR (NSW) 524 at 532 per Jordan CJ (with whom Nicholas J agreed); Torbett v Faulkner [1952] 2 TLR 659 (EWCA) at 661 per Romer LJ; Handbury v Nolan at 346 per Stephen J (with whom Gibbs J agreed); Maggs v Marsh [2006] EWCA Civ 1058; [2006] BLR 395 at [26] per Smith LJ (with whom Moses and Hallett LJJ agreed).

(5) In determining what are the terms of a contract that is partly written and partly oral, surrounding circumstances may be used as an aid to finding what the terms of the contract are: Stones v Dowler at LJ Ex 124; RR 884 per Martin B; Deane v The City Bank of Sydney at 209 per Griffith CJ, Barton and O’Connor JJ; Handbury v Nolan at 341-2 per Barwick CJ, at 346 per Stephen J, at 348-9 per Jacobs J; Liverpool City Council v Irwin [1977] AC 239 at 253C-E per Lord Wilberforce. If it is possible to make a finding about what were the words the parties said to each other, the meaning of those words is ascertained in the light of the surrounding circumstances: Deane v The City Bank of Sydney at 209; Handbury v Nolan at 341-2, 346, 348-9. If it is not possible to make a finding about the particular words that were used (as sometimes happens when a contract is partly written, partly oral and partly inferred from conduct) the surrounding circumstances can be looked at to find what in substance the parties agreed: County Securities v Challenger Group Holdings at [7]-[8] per Spigelman CJ.

J Evans & Son v Anthony Merzario

Hoyt’s v Spencer

Equuscorp v Glengallan Investments

Australian Medic-Care Company Ltd v Hamilton Pharmaceutical Pty Limited

Masters v Cameron - the principles

14 In Masters v Cameron (1954) 91 CLR 353 Dixon CJ, McTiernan and Kitto JJ set out the following three classes:

Class 1
Where the parties have reached finality in regard to all aspects of their agreement, but propose to have the terms restated in a formal document;

Class 2
Where the parties have reached finality in regard to all aspects of their agreement and intend no departure from this agreement, however have agreed that the performance of one or more of the terms is conditional upon the execution of a formal document;

15 The joint judgment in Masters v Cameron made the point [at 360] that in each of the first and second classes there is a binding contract:

i. in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document;

The fourth class

16 McLelland J, in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 decided that “there is in reality a fourth class additional to the three mentioned in Masters v Cameron”. This fourth class was where the parties have reached agreement to be bound immediately and exclusively by certain terms, however they envisage the making of a further contract which will replace the first, this latter contract containing, by consent, additional terms. This decision was recently affirmed by Young CJ in Eq in Helmos Enterprises Pty Limited v Jaylor Pty Limited [2005] NSWCA 235 at [69] but has been approved on many earlier occasions.

Factual findings

17 The convenient approach is to first outline factual findings. An important integer in this approach will include identifying the relevant contractual provisions.

Early 2005

18 In early 2005, GDA approached Fortuna with a request that GCAC supply air-conditioners to Fortuna for sales in the Australian market under the Blueway trademark. In the course of negotiations, Fortuna expressly told GDA/ GCAC to use a soft starter which complied with an Australian standard, and provided a sample.

The agreement(s) of 13 August 2005

19 On 13 August 2005 Fortuna, GCAC and GDA signed the first of the series of agreements : a written supply agreement effective for one year, which provided in a recital that GCAC would manufacture air-conditioners using Fortuna’s trade mark, to be sold to GDA and Fortuna to do the marketing in Australia.

[There were in fact two separate but related parts to the first agreement

i. the first dealing with a number of obligations of the parties and the like and the second dealing with described as Payment Method Agreement and dealing with payment method matters;

20 GCAC was described as the first party; GDA was described as the second party; Fortuna was described as the third party.

21 The first of the two agreements commenced as follows:

22 Articles 1-12 were in the following terms:

Article 1 – Product and Brand

Air-conditions with brand “BLUEWAY” or any other brand or trademark.

Article 2 – Designated Area

Limited to Australia only.

Article 3 – Obligations and Rights of the parties

Obligations and Rights of GCAC

Clause 1. GCAC shall manufacture the air-condition units within the timeframe and according to the quality and quantity as specified by GCA in its quotation or order;

Clause 2. GCAC has the right to choose the materials or parts for the manufacture of air condition units as specified in this Agreement at its absolute discretion provided that all air condition units are manufactured to the level of agreed quality;

Clause 3. GCAC must use the Brand authorized by Fortuna on the air-condition units according to the Authorization Agreement;

Clause 4. GCAC supplies the air condition units of the agreed quantity to GDA, such air condition units manufactured must comply with the quality standard set by the technical agreement as agreed by all three parties. GCAC must also assist GDA of inspection and receipt of the said air condition units;

Clause 5. GCAC shall charge the manufacture fees from GDA according to the agreement.

Obligations and Rights of GDA

Clause 1. In order to assist GCAC’s manufacturing, GDA shall forward or give the quotation or order received from Fortuna to GCAC at least 3 days in advance.

Clause 2. In accordance with the technical agreement, GDA is to inspect and to accept such air condition units.

Clause 3. In compliance with the agreement, GDA is to pay GCAC for all manufacture fees.

Obligations and Rights of Fortuna

Clause 1. In order to maintain the level of production of GCAC and its planning process, Fortuna is to order air condition units from GDA in accordance with its annual sale. Fortuna must order at least 20,000 air condition units annually.

Clause 2. Fortuna guarantees that any authorized use of the Brand does not infringe the rights of any other party.

Clause 3. Fortuna is responsible for the sale and post sale service of all air-condition units manufactured under this Agreement within the Designed Area.

Article 5 – Method of payment and the time limitation

T/T or irremovable Letter of Credit is the method of payment agreed by all three parties. The payment must be made within one month plus 30 days after the delivery of the air condition units, this time limit may be extended for a further 10 to 14 working days provided that there is a valid and reasonable reason.

Article 6 – usage of the Brand and Trademark

The “Blueway” Brand is owned by Fortuna who guarantees the legality, effectiveness of the Brand. Fortuna also guarantees that the use of the Brand under this Agreement does not infringe any other party’s intellectual property right. Fortuna shall supply a written agreement authorizing GCAC to use or affix the Brand in the products manufactured under this Agreement.

Article 7 – After Sale Service

Fortuna shall be responsible for all after sale service its costs within the Designated Area. Provided that the air-condition units sold under this Agreement has met standard or quality as required under the technical agreement agreed by all three parties, if there is any consumer dispute (for example: if the large portion of the air condition units has quality problem), then GDA and Fortuna shall be responsible for the such dispute, and GDA and Fortuna shall bear all costs equally in resolving such dispute problem. GCAC may provide technical support.

Article 8 – Confidentiality

All parties agree that the content of this agreement (including also any information relating to the technical know how or information relating to the air condition units, clients information and other commercial confidential information supplied) is confidential in nature and warrant to each other parties that it will not disclose this agreement and related information to an unrelated party.

Article 9 – Effective Period of the Agreement

This dispute arising from or related to this agreement shall be first solved by negotiation by all three parties. If the three parties cannot resolve such dispute, the said dispute shall be arbitrated by CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITATION COMMISSION, SOUTH CHINA SUB-COMMISSION whose decision shall be final and conclusive.

Article 12

Paraphrasing the first agreement

23 It is useful to paraphrase this first agreement as having relevantly provided:

Article 3

Cl 1: GCAC to manufacture using Blueway trademark;

Cl 4: GCAC supplies GDA;

(2) cl3: GDA to pay GCAC manufacture fee;

(3) cl1: Fortuna to order 20,000 air-conditioners from GDA;

Article 5:

GDA to pay GCAC by T/T or Letter of Credit.

Article 7:

24 Significantly, this agreement does not grant GDA authority to import or sell air-conditioners other than to supply orders made by Fortuna.

The ‘Payment Method’ Agreement

25 This agreement defined GDA as the first party, and Fortuna and Mr Chien Hsuan Lee as the second party. [For simplicity I will refer to the party of the second party as Fortuna]. It provided as follows:

Regarding to the sale of air-condition units in Australia under the Brand name of “BLUEWAY” and such other brand, GDA and Fortuna agree to the following payment method:

1. GDA delivers the air-condition units to Fortuna or Fortuna’s nominee (“the nominee”). Upon the receipt of such air-condition units by the nominee, Fortuna shall be deemed to have received such units from GDA.

2. After the nominee received the air-condition units, Fortuna agrees the nominee to pay directly to GDA within the contractual agreed timeframe, GDA shall treat the payment by the nominee as payment by Fortuna.

3. If the nominee pays to Fortuna, Fortuna shall pay such amount to GDA within three days from the date of receiving such amount from the nominee; if the nominee fails to pay either GDA or Fortuna within the contractual agreed period, Fortuna shall pay such amount to GDA within three days after the expiration of the contractual agreed period. If Fortuna fails to pay GDA within the three-day period, Fortuna or the nominee shall pay GDA the penalty of 5/10000 on any outstanding amount on a daily basis.

4. After GDA receives the payment from the nominee, GDA shall pay 24% of such received payment to Fortuna (in accordance with the actual circumstance, the maximum being 24%) as payment to the sale and marketing expenses (including costs relating to freight, tariff, clearance, storage, after sale service, administrative expenses and commission) incurred by Fortuna.

Any dispute arising from this Agreement shall be solved by negotiation. If the both parties cannot resolve the dispute, the said dispute shall be arbitrated by CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITATION COMMISSION, SOUTH CHINA SUB-COMMISSION and the arbitration is final and shall be enforceable to both parties.

Paraphrasing the Payment Method Agreement

26 Likewise paraphrasing the relevant segments of Payment Method Agreement it provided:

Article 1:

GCAC delivers air-conditioners to Fortuna or nominee.

Article 2:

After Fortuna’s nominee has received air-conditioners, Fortuna to pay GCAC within time frame, GCAC’s receipt from nominee is payment by Fortuna.

Article 4:

The initial shipments

27 GCAC sent the first shipments of 9,146 air-conditioners to Fortuna in late 2005 (the Fortuna Shipments), which Fortuna delivered to various Australian ports and stored in third party operated warehouses in QLD, NSW and WA.

28 The 2005 Fortuna Shipments were sent on FOB Incoterms to Fortuna which used its import licence and paid the transport and import costs from Chinese port of loading to Australian warehouse, including the Australian Customs costs for Entry into Home Consumption.

29 Fortuna then commenced making sales to its customers.

The 8 November 2005 agreement

30 On 8 November 2005 GCAC and Fortuna signed a further agreement for one year which was a hybrid of the Supply and Payment Method Agreements of 13/8/5.0 Paraphrasing this agreement it provided relevantly as follows:

Article 3.1.2

GCAC to manufacture to agreed quality specifications;

Article 3.1.3

GCAC to use Blueway on products strictly with Fortuna’s consent

Article 3.1.4

GCAC to supply within parameters and standards;

Article 3.1.5

GCAC to collect manufacture fee from Fortuna;

Article 3.2.1

Fortuna to order USD50 million annually;

Article 3.2.3

Fortuna responsible for sales and after-sales service within agreed scope;

Article 3.2.4

Fortuna to collect and make appropriate payments;

Article 5

Payment by TT or Sight Letter of Credit (one month plus 30 days plus reasonable extension 10 to 14 days after arrival;

Article 7

Warranty claims are made

31 The first of the problems was quick to emerge. When the 2005 Shipment air- conditioners were delivered to consumers in late November early December 2005, Fortuna began receiving warranty claims from consumers for defects:

100% of model BLR and BCR 70GW had a non-compliant soft starter component. The air-conditioners installed suffered burn-out, and it was necessary to replace all soft starters in delivered and undelivered air-conditioners;

100% of Model 82GW were defective: they had a brittle copper pipe which broke during installation (267 air-conditioners). GCAC remedies this by shipping 267 model 82GW air-conditioners to GDA as replacements for the defective model 82GW air-conditioners;

Model 35GW had an unacceptable noise level from the indoor condenser during operation;

various other manufacturing defects such as a wiring problem, bracket problem and distorted plastic casing, which GCAC concedes.

32 In the result Fortuna was unable to supply further air-conditioners to its customers until the cause of the failures was identified.

The events which followed

33 Fortuna claims to have avoided the two Agreements of 13 August 2005 [the supply agreement and the payment methods agreement] and to have cancelled further orders from GCAC. Fortuna's contention is that the event giving rise to the avoidance was a conversation which occurred in late December 2005 or early January 2006. It also contends that it is not necessary under the Vienna Convention for such a declaration to utilise any more formality than a simple oral avoidance.

34 It contends that under article 51 of the Sale of Goods (Vienna Convention) Act 1986 No 119, where the seller delivers only a part of the goods or if only part of the goods delivered is in conformity with the contract, articles 46 to 50 apply in respect of the part which is missing or which does not conform, so that the buyer may declare the contract avoided in its entirety only if the failure to make delivery completely or in conformity with the contract amounts to a fundamental breach of the contract.

35 Fortuna then requested GCAC’s financial assistance of $80,000 for replacement of the soft starters, and began changing the soft starters using its own resources, including personnel and stock of spare parts.

36 GCAC did not provide any financial assistance but sent four technicians to investigate and assist in replacing soft-starters from about 17 February 2006 to 27 April 2006.

37 However, in early 2006 GDA imported 1,748 GCAC air-conditioners with the Blueway trademark (the GDA Shipments) without the consent of Fortuna, which was in breach of:

i. the 13 August 2005 agreement; and

February/March 2006

38 By February/ March 2006 the summer sales season for air-conditioners was coming to an end, and there was little prospect of selling the unsold air-conditioners, which would continue to incur warehouse costs until the following season commencing summer 2006.

The 24 August 2006 Deed of Agreement -the so-called 'Warehouse Agreement'

39 On 24 August 2006, Fortuna and GDA signed yet a further ‘Deed of Agreement’.

BETWEEN:

FORTUNA NETWORK PTY LTD of 2/200 Woodpark Road, Smithfield in the State of New South Wales known as the “FN”.

AND

GUANG DONG ZHI GAO AUSTRALIA PTY LTD of 8 Short Street, Lidcombe in the State of New South Wales, hereafter known as the “GA”.

WHEREAS:

1. GA owns air-conditioner units that are currently stored at warehouses controlled by FN.

2. GA is relocating and as such will be relocating the air-conditioner units.

3. FN has agreed to release the air-conditioner units to GA on the following terms.

THIS DEED PROVIDES:

(a) FN agrees and acknowledges that at the following locations it holds the specified air-conditioner units, and that these units are owned by GA:

BLR-51GW (138 units).

(ii) Unit 13, 171-183 Woodpark Road, Smithfield NSW 2164: BLR – 70 GW (654 units)

4. GA agrees and acknowledges that it will pay $5,000.00 per unit to FN if it sells any of the air-conditioner units with Blueway trademark.

(b) FN guarantees to use the said spare parts exclusively for the post service of the air-conditioner unit models BLR, BCR, BCB and JC, which has been sold in the Australian market by FN for the warranty period as specified in the documentation supplied when those units were sold. FN acknowledges that GA has a right to check that such spare parts have been properly used by FN, and if not GA has the right to claim damages from FN.

This Deed shall bind the parties hereto and any Executor, Administrator, Transferee, Assignee, Liquidator or Trustee in bankruptcy appointed in respect thereof.

7. Non Disclosure:

The Parties agree not to disclose to any third party the terms of this Deed or the terms of the settlement except as required by law or for the purpose of legal accounting or financial advice. The parties acknowledge that a breach of this term of the Deed will constitute a fundamental breach entitling the aggrieved party to relief by way of injunction.

The Parties hereto warrant that:

(a) Each has taken independent legal advice or has been given the opportunity to take legal advice as to the nature, effect and extent of this Deed;

(b) Neither party ahs made to the other party any promise, representation or inducement or been party to any conduct material to the entry into this Deed other than as set out in this Deed; and

EXECUTED AS A DEED

SIGNED, SEALED & DELIVERED for a and on behalf of
GUAN DONG ZHI GAO AUSTRALIA PTY LTD
in the presence of: …………..….

………………………
Witness

40 These formalities were complied with and the evidence before the court is that the document was signed:

i. on behalf of Fortuna by Mr Chien Hsuan Lee and Mr Jose Lay whose signatures were witnessed by Mr Tao Yu;

Paraphrasing the 24 August Deed of Agreement

41 Here again it is useful to shortly paraphrase this agreement:

Cl 1

Fortuna to release 1,372 air-conditioners to GDA

Cl 2

GDA pay Fortuna $37,086.17 for storage costs

Cl 3

GDA to change Blueway trademark on air-conditioners and all associated documents and return to Fortuna;

Cl 4

Cl 5 GDA to provide spare parts to Fortuna

Subsequent meeting and discussions

42 In or around mid September 2006 there was a meeting and discussions in China between Mr Li and Mr Chein Lee, which culminated in the so-called deed of release of 18 September 2006.

The so-called 'Deed of Release'

43 The so-called Deed of Release was in the following terms:

DEED OF RELEASE

Deed made this 18 ^th day of September 2006

BETWEEN:

GUANGDONG CHIGO AIR-CONDITIONING CO. LTD being a company duly incorporated under company law of the People’s Republic of China and having its address at Penggang Road, Lishui town, Nanbai, Guangdong, China, hereafter known as “GC”, of the first part.

AND

FORTUNA NETWORK PTY LTD (A.C.N. 080 464 501) being a company duly incorporated in the State of New South Wales in the Commonwealth of Australia and having its registered address in the said State at 2/200 Woodpark Road, Smithfield in the State of New South Wales.

AND

GUANG DONG ZHI GAO AUSTRALIA PTY LTD (A.C.N. 111 038 656) being a company duly incorporated in the Sate of New South Wales, in the Commonwealth of Australia and having its registered address in the said State at 8 Short Street, Lidcombe in the State of New South Wales.

WHEREAS:

1. GC manufactures air-conditioners to GA and FN to sell in Australia.

2. The Agreement between GC, GA and FN dated 13 August 2005 (hereinafter called the ‘agreement’) and the agreement between GA and FN Dated 25/08/06 (hereinafter call the “the Deeds of Agreement”) have come to an end.

3. GC & GA wishes to sever relationship with FN.

4. The parties have agreed to terminate any business and/or contractual relationship that exists or may have exited as between themselves, save as provided for in this Deed.

5. The parties agree to be bound by the terms and conditions hereinafter appearing.

6. Without any admissions GC, GA and FN have agreed to settle all matters arising out of their relationship as follows.

THIS DEED PROVIDES:

(a) FN and GA agrees to release all air-conditioners received from GC by shipment; that it holds to GC on the date of this Agreement.

(b) FN And GA aggress and acknowledges that the air-conditioners to be release to GC should match the list of models and quantities attached to this Agreement marked ‘A’.

(a) GA warrants that it will repay its debt totalling $1411762.00 US Dollars owing to GC by 20 March 2007. GA is to repay such debt by accounting or otherwise forwarding 80% of its total monthly sale revenue to GC until the debt is fully satisfied. Parties hereto agree that 5% per day is a reasonable and genuine estimate of the loss and damages suffered by GC as a result of GA’s breach of its obligation under this clause.

(b) After all of air-conditioners have been released to GC, GA agrees to pay FN the sum of $83246.59 after all of air conditioners release to GC in full and final settlement of all relationships between GC, GA and FN. GC As a guarantor refer to this payment.

3. FN agrees and acknowledges that GA can use the ‘BLUEWAY’ trademark and all associated documentation in sale of the air-conditioners that were released pursuant to clause 1 (a) of this agreement and keep all trademark documentation and serial numbers.

(a) GA is obliged to provide all post sale services relating to all air-conditioners sold under the “Blueway” Brand that are manufactured and supplied to FN by GC (see Annexure C).

(b) GA warrants that it will place 3% of its monthly sale revenue into an account styled in the name “Guang Dong Zhi Gao Australia Pty Ltd” with Maria Elsa Lee and Zheng Ye as joint signatory.

(c) GA is entitled to withdraw 20% (100% divided by five years) of the monies deposited under clause 4(b) per year for all costs and expenditures relating to the post sale services it has offered under clause 4 (a).

(d) If the costs or expenditures relating the post sale services exceed the monies received under clause 4(b), GA (with GC as guarantor of GA) shall be personally liable to pay for the excess.

(e) GC is to provide all necessary technical supports and (if necessary) technicians to perform or assist GA to perform the post sale services at the costs of GA. GA shall be entitled to recover such costs from the monies received under clause 4 (c).

5. GA agrees to pay FN any GST payable on the total value of the released air-conditioners on or before 28 October 2006 by bank/company cheque.

(a) GC & GA hereby releases and forever discharges FN, its Directors, Officers, Servants and Agents or any of them from all actions, suits claims, demands, costs and other liabilities of any nature which GC and GA now or at any time may have or but for the execution of this Deed, could or might have had against the FN arising out of or in connection with the relationship between GC & GA and FN, including but not limited to the matters recited herein.

(b) FN hereby releases and forever discharges GC & GA, its Directors, Officers, Servants and Agents or any of them from all actions, suits, claims, demands, costs and other liabilities of any nature which FN now or at any time may have or but for the execution of this Deed, could or might have had against GC & GA, arising out of or in connection with the relationship between FN and GC & GA, including but not limited to the matters recited herein.

The Parties agree not to disclose to any third party the terms of this Deed or the terms of the settlement except as required by law or for the purpose of legal accounting or financial advice. The Parties acknowledge that a breach of this term of the Deed will constitute a fundamental breach entitling the aggrieved party to relief by way of injunction.

The Parties hereto warrant that:

(a) Each has taken independent legal advice or has been given the opportunity to take legal advice as to the nature, effect and extent of this Deed;

(b) Neither party ahs made to the other party any promise, representation or inducement or been party to any conduct material to the entry into this Deed other than as set out in this Deed; and

12, If any provision of this Deed is held to be invalid or unenforceable for any reason, it shall be severable and shall not affect the remaining provisions of this Deed.

16. This deed is signed in three originals, each party hold one and each one has the same effect, Chinese and English edition has same effect.

(a) headings in this agreement are for ease of reference and convenience only and do not affect the meaning, interpretation or construction of this document;

(b) words importing the singular number shall include the plural number and vice versa;

(c) words importing one gender shall include any other gender;

(d) references to recitals, clauses, subclauses, paragraphs, annexures, schedules or reference tables are references to recitals, clauses, subclauses, paragraphs, annexures, schedules or reference tables of or to this agreement;

(e) a reference to this document includes any schedule or annexure;

(f) a reference to this document or any other document includes a reference a reference to it as novated, altered or replaced;

(g) a reference to anything is a reference to the whole and each part of it;

(h) a reference to a party is to the party identified in this agreement;

(i) a reference to a party includes a reference to that party’s executors, administrators, successor and permitted assigns.

(j) a reference to any statute, proclamation, rule, code, regulation, ordinance or other law includes any amendment, consolidation, modification, re-enactment or reprint of it or any statute, proclamation, rule code, regulations and other instruments under it and any consolidations, amendments, re-enactments or replacements of any of them.

(k) a reference to writing includes any communication send by post or facsimile transmission;

(l) a reference to time refers to time in Sydney, Australia;

(m) a reference to a group of persons is a reference to all of them collectively and to each of them individually;

(n) words importing natural persons include partnerships, bodies corporate, association, governments and governmental and local authorities and agencies and vice versa.

(o) an agreement, representation or warranty in favour of two or more persons is in favour of them jointly and severally;

(p) an agreement, representation or warranty made by two or more persons binds them jointly and severally;

(q) where any word or phrase is defined, any other party of speech or other grammatical form of that word or phrase has cognate meaning;

(r) unless otherwise stated, all monetary amounts are in Australian currency;

(s) when one corporation is referred to as a “related body corporate”, “subsidiary”, “holding company”, “ultimate holding company” of or in relation to another corporation, those expressions have the meanings respectively provided by Part 1.2 of the Corporations Law;

(t) “company”, “corporation” and “body corporate” have the meanings respectively provided by the Corporations Act 2001 (Cth);

(u) the word “month” means calendar month and the word “year” means 12 calendar months;

(v) “associate” has the same meaning as in S316 of the Income Tax Assessment Act;

(w) no rule of construction applies to the disadvantage of a party because this agreement is prepared by (or on behalf of) that party; and

EXECUTED AS A DEED

SIGNED, SEALED & DELIVERED for a and on behalf of
GUANDONG CHIGO
AIR-CONDITIONING CO. LTD …………………..
in the presence of:

………………………
Witness

………………………
Print name of witness

SIGNED, SEALED & DELIVERED
for and on behalf of
FORTUNA NETWORK PTY LTD
ACN 080 463 501 by the Authorised
whose signatures appear below
Pursuant to section 127 of
the Corporations Act 2001

Chein Hsuan Lee

Zhen Ye

………………………
Print name of witness

SIGNED, SEALED & DELIVERED for and
On behalf of CHEIN HSUAN LEE

Attachment A to the deed

44 There was an attachment A to the deed of release which was also signed by Mr Chein Hsuan Lee and by Chairman Li at the foot of the page. Above their signatures were written in handwriting the words "To be confirmed and signed by Mrs Maria Elsa Lee and Mrs Zheng Ye. The finding is that there was only one page to the attachment. The further finding is that the attachment was de minimis in the state of affairs as it only related to a final stock take check against the event that there had been some minor change stock take which would require to be taken into account.

Attachment B to the deed

45 Attachment B to the deed has little relevance being no more than a price list. It was also initialled by Mr Li Xin Hao as well as Mr Chein Hsuan Lee.

46 Upon the directors of Fortuna becoming aware that Mr Chein Lee had signed the 18 September 2006 document, in the next day or so Mrs Lay attempted to speak to Mr Li who did not take her call or call her back. On 21 September 2006 Mrs Lay then had a meeting with GCAC personnel and told them Fortuna did not accept the Deed. On their return to Australia, they caused their solicitor to write to GCAC (see letter at CSML5 dated 7 October 2006) advising the document was signed by Mr Chein Lee without any authority to bind Fortuna. Mrs Lay followed up with a phone call to Mr Zhong at GCAC and subsequently on 27 October 2006 Fortuna received a written proposal from GCAC (DD37) but the matter was never resolved.

47 Fortuna contends the 18/8/06 Deed is not binding on it by any test: whether at Equity, by statute and common law.

Examining the manner in which agreements between the party were dealt with-formally or informally in terms of execution

48 There is of course importance to be attached to tracking the degree of formality [or otherwise] exhibited in the manner in which the respective agreements were executed. In the section which follows the agreements are examined from this vantage point.

The first of the agreements of 13 August 2005

49 This agreement was signed in the Chinese language.

50 The evidence was that the first signature was that of the chairman of GCAC but was not witnessed: [T 49.40-50.10]

51 The evidence was that the Chinese characters alongside the Chairman's signature and the signatures of the other persons said that the parties signing or ceiling the documents represented authorised persons [T 50].

52 The evidence was that the next signature on this document was that of a director of GDA namely Mrs Qui Bo.

53 The evidence was that the final signature was that of the director of Fortune - Mr Chein Hsuan Lee [T 51]. He had signed using both Chinese and English characters.

The second of the agreements of 13 August 2005 - the Payment Method Agreement

54 The evidence was that the first signature appearing on this document was that of Mrs Qui Bo the same director of GDA. The next signature was that of Mr Chein Hsuan Lee. Again he signed in both English and Chinese

The deed of agreement entered into on 24 August 2006

55 This agreement was executed in Australia by all parties. It was executed on behalf of Fortuna by Mr Chein Hsuan Lee and another director of Fortuna and by Mrs Zheng Ye on behalf of GDA: [T 52-53].

The deed of release

56 Following the provisions made by way of the ‘operative terms’ of the deed of release, one reaches the section stating “Executed as a Deed" which is the precursor of the place where the respective parties are to sign

57 It is then to be noticed that there was typed provision made in the document for the signing, sealing and delivering of the deed ‘for and on behalf’ of each of GCAC; Fortuna; and GDA.

The signatures for GCAC

58 The evidence was that the first signature was that of Mr Li Xin Hao. He had purported to sign on behalf of GCAC. There was no witness to his signature. But he also initialled the document at the end of the page. .

The signatures for Fortuna

59 Commencing on the same page but at the foot thereof and continuing on the following page, the place provided for the signing, sealing and delivery of the Deed by Fortuna is to be found. It seems that even before Fortuna purported to sign over the page, Mr Chein Hsuan Lee [in like fashion to the manner in which Mr Li Xin Hao had proceeded] also initialled the document at the end of the page

60 Across the final page the signature ostensibly on behalf of Fortuna is to be found: namely that of Mr Chein Hsuan Lee who had spelled his name as well under his signature. There was also no witness to his signature.

The signatures on behalf of GDA

61 Next the section provided for concerning GDA was signed by Mrs Zheng Ye who also printed her name. Likewise there was no witness to her signature.

The separate signature of Mr Chein Hsuan Lee

62 The final part of the document expressly provided for the signing, sealed and delivery signature of Mr Chein Hsuan Lee. He signed against those words.

63 As on the previous page, at the end final page of the part of the document dealing with signatures, one finds the initials of Mr Chein Hsuan Lee and of Chairman Li.

The way forward

64 Ultimately as the reasons which follow make clear, the court can only determine the validity or invalidity of the deed of release, by reference to a combination of:

i. the evidence of the conversations which took place culminating in the execution of that deed; and

65 As has already been pointed out, in determining what are the terms of contract that is partly written and partly oral, surrounding circumstances may be used as an aid to finding what the terms of the contract were. The exercise is an attempt to ascertain whether it is possible to make a finding about what were the words the parties said to each other, and if so, the meaning of those words is to be ascertained in the light of the surrounding circumstances. Further where it is not possible to make a finding about the particular words that were used (as sometimes happens when a contract is partly written, partly oral and partly inferred from conduct) the surrounding circumstances can be looked at to find what in substance the parties agreed.

Aspects of Fortuna’s constitution

66 Before examining the evidence before the Court it is important to keep in mind that Fortuna’s memorandum and articles and provided for a power in the directors to appointment a managing director. Articles 79.1 to 81 provided inter alia as follows:

“ MANAGING DIRECTOR

79.1 The directors may from time to time appoint one or more of their number to the office of managing director for such period and on such terms as they think fit, and, subject to the terms of any agreement entered into in a particular case, may revoke any such appointment….

80.1 The directors may. upon such terms and conditions and with such restrictions as they think fit, confer upon a managing director any of the powers exercisable by them.

80.2 Any powers so conferred may be concurrent with, or be to the exclusion of, the powers of the directors.

67 There is additional provision for managing director at schedule 8 to the Articles of Association.

“SCHEDULE 8: MANAGING DIRECTORS· ADDITIONAL PROVISIONS:

Unless otherwise provided at the time the appointment is made, a Managing Director shall have all of the powers of the directors conferred upon him, shall have the authority to exercise those powers alone and without conferring or meeting with the other director of the company, and such

Legal characterisation

Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd & Anor

The defendants Trade Practices Defence

140 In the event that the Court would find [as has been the finding] that the 18 September 2006 document is binding, the defendant seeks orders pursuant to the Trade Practices Act [Cwlth] section 87 that the deed be set aside or varied.

141 The nature of the variation sought would be:

i. To strike out all causes of the deed of release which inconsistent with the 24 August 2006 Agreement and to insert a number of provisions of the 24 August 2006 document into the deed of release;

The deed made 24 August 2006 and annexed at schedule 1 hereto is incorporated herein and governs the rights and obligations of FN and GA as against each other;

iii. Further clauses 2 (b), 3, 4 and 6 (c) would be deleted.

142 Such a contention cannot stand with the reasons already set out.

Short minutes of order

143 The parties will be required to bring in short minutes of order on which occasion:

i. costs may be argued;

ii. the parties will be given an opportunity to point up any matters which are said to remain for decision in relation to the liability question;

10/11/2009 - typographical - Paragraph(s) Paragraph 44 – second line replace the word “Mao” with the word “Li”Paragraph 46 – fourth line delete the words “and Mr Chein Lee”Paragraph 50 - second line replace "GDAC" with "GCAC"Paragraph 57 – third line replace “GDAC” with “GCAC”Paragraph 58 – replace in heading “GDAC” with “GCACParagraph 58 – second line replace “GDAC” with “GCAC”Paragraph 63 - third line replace the word "Mao" with the word "Li"Paragraph 73 – sub-paragraph ii, second bullet point replace “GDAC” with “GCAC”Paragraph 107 – last line replace “GDAC” with “GCAC”

Citations

Guang Dong Zhi Gao Australia Pty Limited v Fortuna Network Pty Limited [2009] NSWSC 1170

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CITATION:	Guang Dong Zhi Gao Australia Pty Limited v Fortuna Network Pty Limited [2009] NSWSC 1170 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	12/10/09 - 16/10/09, 19/10/09 - 21/10/09, 26/10/09 - 27/10/09
JUDGMENT DATE :	4 November 2009
JURISDICTION:	Equity Division Commercial List
JUDGMENT OF:	Einstein J
DECISION:	Parties held to have entered into a contract on the terms provided for by the Deed.
CATCHWORDS:	Contract - Deeds - Whether deed only in writing or alternatively only partly in writing - Mode of execution of document purporting to be a deed - Whether or not document invalid for formal reasons - Plaintiffs alternative case that by one of a number of routes that which purported to be signed as deed of release could simply be treated as a binding and enforceable agreement - Estoppel - Holding out-Masters and Cameron - Whether defendant entitled to have deed set aside or varied pursuant to section 87 Trade Practices Act - Principles informing decision as to whether or not an agreement that parties have entered into is wholly in writing or partly in writing and partly oral
LEGISLATION CITED:	Corporation Act 2001 (Cwlth) Conveyancing Act 1919 (NSW) Evidence Act 1995 (Cwlth) Sale of Goods (Vienna Convention) Act 1986 No. 119 Trade Practices Act 1974 (Cwlth)
CATEGORY:	Principal judgment
CASES CITED:	Amalgamated Property Company v Texas Bank [1982] QB 84 Australian Medic-Care Company Ltd v Hamilton Pharmaceutical Pty Limited [2009] FCA 1220 Bank of Australasia v Palmer [1897] AC 540); Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 Bolckow v Seymour (1864) 17 CB NS 107; 144 ER 43; 142 RR 272 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 (FC) Carmichael v National Power Plc [1999] 1 WLR 2042; [1999] 4 All ER 897 (UKHL) County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Company Pty Ltd (1975) 133 CLR 72 Deane v The City Bank of Sydney (1904) 2 CLR 198 Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 Finucane v NSW Egg Corporation (1988) 80 ALR 486 (FCA) Freeman & Lockyer (a firm) v Buckhurst Park Properties ( Mangal) Ltd & Anor [1964] 2 QB 480 Gardiner v Grigg (1938) 38 SR (NSW) 524 Gillespie Brothers & Co v Cheney, Eggar & Co [1896] 2 QB 59 Gordon v Macgregor (1909) 8 CLR 316 Handbury v Nolan (1977) 13 ALR 339 (HCA) Health Outdoor at 191D-F Helmos Enterprises Pty Limited v Jaylor Pty Limited [2005] NSWCA 235 Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348 Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133 J Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078; [1976] 2 All ER 930 Jessop v McInteer [2003] QCA 170 (FC) Liverpool City Council v Irwin [1977] AC 239 Maggs v Marsh [2006] EWCA Civ 1058; [2006] BLR 395 Masterton Homes PTY LTD v Palm Assets Pty Ltd [2009] NSWCA 234 Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507 Moore v Garwood (1849) 4 Exch 681 at 689-90; 154 ER 1388 Nicolazzo v Harb [2009] VSCA 79 Nicom Interiors Pty Ltd v Circuit Finance Pty Ltd (2004) 50 ACSR 25 Norwest Beef Industries Ltd v Peninsular and Oriental Steam Navigation Co (1987) 8 NSWLR 568 NSW Cancer Council v Sarfaty (1992) 28 NSWLR 68 Palmer v Bank of Australasia (1895) 16 NSWLR (L) 219 Prime Constructions v West Bridge Investments [2004] NSWSC 861 Saad v TWT Ltd [1998] NSWCA 199 State Rail Authority (NSW) v Health Outdoor Pty Ltd (1986) 7 NSWLR 170 Stones v Dowler (1860) 29 LJ Ex 122 Torbett v Faulkner [1952] 2 TLR 659 (EWCA) Turner v Forwood [1951] 1 All ER 746 (EWCA) Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
TEXTS CITED:	Handley - Estoppel by Conduct and Election, Sweet and Maxwell 2006, The Interpretation of Contracts, 4th ed (2007) Sweet & Maxwell
PARTIES:	Guang Dong Zhi Gao Australia Pty Limited (Plaintiff) Fortuna Network Pty Limited (Defendant)
FILE NUMBER(S):	SC 50185/06
COUNSEL:	Mr F Santisi (Plaintiff) Mr J Levingston (Defendant)
SOLICITORS:	Lawside Lawyers (Plaintiff) Alexander Lee & Associates (Defendant)