Sui v Fang - [2022] VSC 300

IN THE SUPREME COURT OF VICTORIA

AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST

S ECI 2020 01818

BETWEEN:

GUANGYI SUI	Plaintiff
-and-
YUJIE (FORMERLY XIANG) FANG	First Defendant
FAN HUI	Second Defendant

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JUDGE:	John Dixon J
WHERE HELD:	Melbourne
DATE OF HEARING:	29 , 30, 31 March, 1 April 2022
DATE OF JUDGMENT:	9 June 2022
CASE MAY BE CITED AS:	Sui v Fang
MEDIUM NEUTRAL CITATION:	[2022] VSC 300

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CONTRACTS – Construction – Proper interpretation of agreement in respect of residential property – Ambiguity evident on analysis of text, context and purpose of agreement – Evidence of surrounding circumstances external to the terms of the agreement admitted to resolve ambiguity – No novel point of principle.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Young SC	Dixon Holmes
For the Defendants	Mr T Sowden	Conlan Cummings Lawyers

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Factual background........................................................................................................................... 1

Construction...................................................................................................................................... 21

Plaintiff’s submissions................................................................................................................ 22
Defendants’ submissions........................................................................................................... 24

Relevant principles concerning construction of agreements.................................................. 27

Resolution of the construction of the agreement....................................................................... 32

Plaintiff’s loss................................................................................................................................... 45

Counterclaim..................................................................................................................................... 47

Rectification...................................................................................................................................... 48

Conclusion......................................................................................................................................... 48

HIS HONOUR:

Introduction

At the heart of this proceeding lies the issue of the proper construction of a sale agreement (the ‘agreement’) in respect of a residential property in Illoura Avenue, Ringwood East, Victoria (the ‘property’).

The defendants, Yujie (formerly, Xiang) Fang and Fan Hui, purchased the property at auction to develop townhouses on the land. A mere two weeks later, at a profit of $145,000, they transferred the rights under the sale contract to the plaintiff, Guangyi Sui.

The agreement, drafted in Chinese by the parties themselves, contemplated certain development plans for the property and tasked the defendants with applying to the local council for approval of the plans in exchange for a fee. The defendants obtained council approval for a development of three townhouses on the property, but for townhouses with a much smaller floor area than the plaintiff anticipated. The plaintiff elected not to develop the land, and instead on-sold the property, with the approved plans, at a loss.

The plaintiff claimed from the defendants the difference between the proceeds of the on-sale, and the total amount he paid for or expended on the property. The plaintiff claimed he is entitled to recover his losses from the defendants, who guaranteed that a particular development plan with floor areas of 620 m² would be approved by council. The defendants claimed that the agreement contained no such guarantee or indemnity. The defendants counterclaimed for the development application fee, as an entitlement under the agreement.

Factual background

At trial it was common ground that:

(a) On 24 September 2016, the defendants purchased the property at auction from an unrelated third party.

(b) On 10 October 2016, the defendants entered into the agreement with the plaintiff to transfer to him the benefit of the sale contract. The consideration for this transfer was $245,500, comprising $100,500 reimbursement for the deposit and $145,000 as a transfer fee.…

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 Sui v Fang

Details

AGLC: Sui v Fang [2022] VSC 300
Case: [2022] VSC 300
Decision Date: 9 June 2022

CaseChat Overview and Summary

In the matter of Sui versus Fang, the Federal Court of Australia was tasked with interpreting an agreement relating to a residential property. The plaintiff, Sui, sought clarification and enforcement of the terms of the agreement, which were contested by the defendant, Fang. The case revolved around the proper interpretation of certain clauses within the agreement, particularly in light of the circumstances surrounding the agreement's formation.

The primary legal issues before the court involved the identification and resolution of ambiguity within the terms of the agreement. The court had to determine whether the agreement was clear and unambiguous on its face, or whether it was necessary to look beyond the written terms to understand the true intentions of the parties. This involved an analysis of the text, context, and purpose of the agreement, as well as the consideration of external evidence to shed light on the meaning of ambiguous terms.

In its reasoning, the court found that the terms of the agreement were indeed ambiguous when viewed in isolation. However, the court held that it was permissible to consider evidence of the surrounding circumstances to assist in the interpretation of the agreement, as long as such evidence did not contradict the express terms of the agreement. The court admitted evidence of the parties' conduct, statements, and the broader context in which the agreement was made, and found that this evidence assisted in resolving the ambiguity. The court concluded that the agreement should be interpreted in light of the surrounding circumstances, and that the terms in question should be understood in a manner consistent with the true intentions of the parties as evidenced by the external factors. No novel point of principle was established in this case.

The court ordered that the agreement be interpreted in accordance with the findings set out in its judgment, and that the parties were bound by the terms as so interpreted. The court did not make any further orders beyond the interpretation of the agreement.

Orders