Meng v Wang - [2022] NSWSC 833

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Meng v Wang [2022] NSWSC 833
Hearing dates: 2, 3, 4, 5, 12 May 2022; further written submissions on costs ending 26 May 2022
Date of orders: 12 May, 23 June 2022
Decision date: 23 June 2022
Jurisdiction: Equity
Before: Parker J
Decision:
See [105]-[106]

Catchwords:
EQUITY – specific performance – agreement for purchase of shares, to be satisfied in part by transfer of purchaser’s share of land co-owned with vendor – purchaser obliged to buy the shares rather than only having an option to do so – purchase price to be paid within a reasonable time – purchaser in control of company in meantime – before time for payment arrives vendor removes assets used in conduct of company’s business so as to pressure purchaser to pay – unclean hands – relief refused – plaintiff remitted to claim for judgment at law – costs

Legislation Cited:
Conveyancing Act 1919, s 66G
Crimes Act 1900, s 118
Supreme Court Act 1970, s 63
Uniform Civil Procedure Rules 2005 r 42.1

Cases Cited:
Akierman Holdings Pty Limited v Akerman (No 3); In the matter of Akierman Holdings Pty Limited (No 2) [2021] NSWSC 869
Black UhlansIncorporated v Crime Commission (NSW) [2002] NSWSC 1060
Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1
Fitzgerald v Masters (1956) 95 CLR 420
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Rudi’s Enterprises Pty Ltd v Jay (1987) 10 NSWLR 568
Turner v Bladin (1951) 82 CLR 463
Wickham Hill Investment Pty Ltd v Ding [2019] NSWSC 631

Category: Principal judgment
Parties: Zihui Meng (Plaintiff/Cross-Defendant)
Binbin Wang (Defendant/Cross-Claimant)
Representation:
Counsel:
J Mee (Plaintiff/Cross-Defendant)
N Kabilafkas (Defendant/Cross-Claimant)
Solicitors:
JurisBridge Legal (Plaintiff/Cross-Defendant)
SHL & Associates Lawyers (Defendant/Cross-Claimant)

File Number(s): 2020/213480
Publication restriction: Nil

Judgment

In May I heard an application for specific performance. The plaintiff sought to enforce an alleged contractual obligation on the part of the defendant to pay $378,000 for the plaintiff’s shares in two proprietary companies. The contract provided that the purchase price was to be satisfied, in part, by the transfer of the defendant’s share of a property co-owned with the plaintiff. It was that aspect of the matter which resulted in the application to this Court for specific relief.
The hearing took place over four days beginning on 2 May. At the end of the hearing on 5 May, I announced my conclusions on the issues which had been debated. I adjourned the proceedings to 12 May for argument, to the extent necessary, on the form of orders and costs.
On 12 May I heard further argument and made an order dismissing the plaintiff’s application for specific performance. As I will describe, the dismissal of that application was not the end of the proceedings. The remaining claims for relief were the subject of further directions.
In this judgment I set out the reasons for the conclusions that I reached on 5 May and…

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 Meng v Wang

Details

AGLC: Meng v Wang [2022] NSWSC 833
Case: [2022] NSWSC 833
Decision Date: 23 June 2022

CaseChat Overview and Summary

The case before the court involved Meng as the plaintiff and Wang as the defendant. The dispute centred around an agreement for the purchase of shares in a company. The plaintiff was to satisfy part of the purchase by transferring his share of land co-owned with the defendant. The agreement stipulated that the plaintiff was obliged to buy the shares and not merely hold an option to do so. The purchase price was to be paid within a reasonable time, during which the plaintiff would retain control of the company. Before the time for payment arrived, the defendant removed assets used in the conduct of the company’s business in an attempt to pressure the plaintiff to pay.

The court had to determine whether the plaintiff was entitled to specific performance of the agreement, and if so, whether the defendant's actions constituted a breach that would affect the plaintiff’s ability to obtain such relief. The key issues were whether the plaintiff was bound to complete the purchase despite the defendant’s removal of the company’s assets and whether the defendant’s actions constituted an unclean hands doctrine, thereby barring equitable relief.

The court found that the plaintiff was indeed obliged to purchase the shares and not merely have an option to do so. However, the defendant’s actions in removing the company’s assets were seen as an attempt to exert undue pressure on the plaintiff. The court held that the defendant’s actions were unconscionable and constituted unclean hands, thereby barring the plaintiff from obtaining specific performance. The court further held that the plaintiff should be remitted to seek a legal remedy for the breach of contract instead of equitable relief. As a result, the plaintiff's claim for specific performance was dismissed, and costs were awarded against the plaintiff.

Orders