Pacific Shoji Pty Ltd v Xia

Pacific Shoji Pty Ltd appealed to the Court of Appeal of New South Wales against a judgment of the primary judge in favour of Ms Xia. The dispute concerned claims arising from an employment contract, including allegations of a loan, unpaid commission, and damages for breach of contract.

The Court of Appeal was required to determine whether the primary judge erred in finding that certain moneys paid by Pacific Shoji to Ms Xia were by way of loan, and whether there was sufficient evidence to sustain the primary judge's findings regarding an informal agreement for commission. Further, the court considered whether commission was payable when the sale of the factory was achieved after Ms Xia's employment contract had terminated, and whether Pacific Shoji was permitted to advance a different case on appeal. The court also had to assess whether Ms Xia's concealment of sales to other customers constituted a breach of her employment contract and if Pacific Shoji was entitled to damages for the unpaid price of those goods.

The Court of Appeal found that the primary judge erred in concluding that the moneys paid to Ms Xia were a loan, and therefore set aside that part of the judgment. Regarding the commission claim, the court held that while an informal agreement for commission existed, Pacific Shoji was precluded from arguing on appeal that the sale was not achieved due to Ms Xia's actions, as this was a new case not run at trial. However, the court allowed the appeal in part, reducing the judgment amount awarded to Ms Xia. The court also found that Ms Xia had breached her contract by concealing sales to other customers, but Pacific Shoji failed to establish that this breach caused any loss.

Consequently, the appeal was allowed in part. The judgment in favour of Ms Xia for the loan claim was set aside, and judgment was entered for Ms Xia in a reduced amount for the commission claim, with interest. The parties were directed to agree on the calculation of interest. Pacific Shoji was ordered to pay 60% of Ms Xia’s costs of the appeal.