Kai Ling (Australia) Pty Ltd v Rosengreen - [2019] NSWCA 3

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Kai Ling (Australia) Pty Ltd v Rosengreen [2019] NSWCA 3
Hearing dates: 6 December 2018
Decision date: 05 February 2019
Before: Basten JA at [1];
Sackville AJA at [2];
Barrett AJA at [6]
Decision:
Appeal dismissed with costs

Catchwords: CONTRACTS – formation – novation – requirements for effective novation of contract by substitution of party – whether option to purchase land novated in favour of substituted grantee.
Legislation Cited: Conveyancing Act 1919 (NSW), s 38
Cases Cited: ALH Group Property Holdings Pty Ltd v Chief Commissioner of State Revenue (2012) 245 CLR 338; [2012] HCA 6
Fu Tian Fortune Pty Ltd v Park Cho Pty Ltd [2018] NSWCA 282
Olsson v Dyson (1969) 120 CLR 365; [1969] HCA 3
United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49
Vickery v Woods (1952) 85 CLR 336; [1952] HCA 7
Category: Principal judgment
Parties: Kai Ling (Australia) Pty Ltd (Appellant)
Robert Daniel Rosengreen (Respondent)
Representation:
Counsel:
Mr Garry McGrath SC/Mr A Norrie (Appellant)
Mr G Laughton SC/Mr J O’Sullivan (Respondent)
Solicitors:
Ma & Company Solicitors (Appellant)
Stacks Champion Legal (Respondent)

File Number(s): 2018/242893
Decision under appeal

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity Division

Citation:

[2018] NSWSC 1068

Date of Decision:

12 July 2018

Before:

Lindsay J

File Number(s):

2015/355348

HEADNOTE

[This headnote is not to be read as part of the judgment]

On 30 April 2015, Mr Rosengreen granted to Saadie Group Pty Ltd (“Saadie Group”), by deed, an option to purchase certain land. On 3 May 2015, Mr Michael Saadie presented to Mr Rosengreen a single sheet of paper in the same form as the execution page of the deed of option, save that the grantee was named as Kai Ling (Australia) Pty Ltd (“Kai Ling”) instead of Saadie Group. The sheet already bore the signatures of two persons on behalf of Kai Ling. Mr Michael Saadie (who was the father of the sole director of Saadie Group and was not an officer of Kai Ling) asked Mr Rosengreen to sign the sheet, saying that “we may need to change the name of the grantee but it does not change anything”. Mr Rosengreen signed as requested and gave the sheet back to Mr Michael Saadie. Kai Ling contended at trial that the events of 3 May 2015 had brought about a novation of the option contract so that Kai Ling was the holder of the option in the place of Saadie Group. The primary judge dismissed the proceedings. Kai Ling appealed.

The Court held, dismissing the appeal with costs

Barrett AJA; Basten JA and Sackville AJA agreeing:

(1) The evidence did not establish that Mr Michael Saadie acted with the authority of Kai Ling in dealing with Mr Rosengreen on 3 May 2015.

(2) There was accordingly no basis for a finding that there had been created among Mr Rosengreen, Saadie Group and Kai Ling…

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: [2019] NSWCA 3
Decision Date: 05 February 2019

CaseChat Overview and Summary

Kai Ling (Australia) Pty Ltd (Kai Ling) appealed a decision of the Supreme Court of New South Wales concerning the alleged novation of a contract for the option to purchase land. The dispute arose between Kai Ling and Rosengreen, the original grantor of the option. The appeal was heard by the Court of Appeal of New South Wales.

The central legal issue before the Court of Appeal was whether the option to purchase land, originally granted by Rosengreen to a company named G.J. & R. Pty Ltd, had been effectively novated in favour of Kai Ling as the substituted grantee. This required the court to determine the requirements for an effective novation of a contract by the substitution of a party under New South Wales law.

The Court of Appeal considered the principles governing novation, which requires the consent of all parties to the original contract, including the original party being released and the new party undertaking the obligations. The court found that the evidence did not establish that Rosengreen had agreed to release G.J. & R. Pty Ltd from its obligations under the option agreement and to accept Kai Ling as the sole party bound by its terms. Consequently, the court held that there had been no effective novation.

The appeal was dismissed, and Kai Ling was ordered to pay Rosengreen's costs.

Orders

Orders of the court

Appeal dismissed with costs

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Kai Ling (Australia) Pty Ltd v Rosengreen [2019] NSWCA 3
Hearing dates:	6 December 2018
Decision date:	05 February 2019
Before:	Basten JA at [1]; Sackville AJA at [2]; Barrett AJA at [6]
Decision:	Appeal dismissed with costs
Catchwords:	CONTRACTS – formation – novation – requirements for effective novation of contract by substitution of party – whether option to purchase land novated in favour of substituted grantee.
Legislation Cited:	Conveyancing Act 1919 (NSW), s 38
Cases Cited:	ALH Group Property Holdings Pty Ltd v Chief Commissioner of State Revenue (2012) 245 CLR 338; [2012] HCA 6 Fu Tian Fortune Pty Ltd v Park Cho Pty Ltd [2018] NSWCA 282 Olsson v Dyson (1969) 120 CLR 365; [1969] HCA 3 United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49 Vickery v Woods (1952) 85 CLR 336; [1952] HCA 7
Category:	Principal judgment
Parties:	Kai Ling (Australia) Pty Ltd (Appellant) Robert Daniel Rosengreen (Respondent)
Representation:	Counsel: Mr Garry McGrath SC/Mr A Norrie (Appellant) Mr G Laughton SC/Mr J O’Sullivan (Respondent) Solicitors: Ma & Company Solicitors (Appellant) Stacks Champion Legal (Respondent)
File Number(s):	2018/242893
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2018] NSWSC 1068 Date of Decision: 12 July 2018 Before: Lindsay J File Number(s): 2015/355348