Xiao v ACT Commercial Builders Pty Ltd

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SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Xiao v ACT Commercial Builders Pty Ltd

Citation:

[2023] ACTSC 44

Hearing Date:

2 June 2022

DecisionDate:

14 March 2023

Before:

McCallum CJ

Decision:

Appeal dismissed with costs.

Catchwords:

CONTRACTS – Construction – Identification of parties – Objective theory of contract

APPEALS – where parties provided statement of agreed facts to Magistrate including agreement that a contract was signed by a director on behalf of a company – whether Magistrate erred in departing from agreed fact

Legislation Cited:

Corporations Act 2001 (Cth) ss 127, 471B

Court Procedures Rules 2006 (ACT) r 6906

Magistrates Court Act 1930 (ACT) s 274

Cases Cited:

ACT Commercial Builders Pty Ltd and Anor v BBSJ Partners Pty Ltd and Anor (No 2) [2021] ACTMC 17

Ariadne Steamship Co v James McKelvie & Co [1922] 1 KB 518
Australian Securities and Investment Commission v AMP Financial Planning Pty Ltd [2020] FCA 69; 377 ALR 55
Limelight Cinemas Pty Ltd v Beatty [2018] ACTSC 18
Padstow Corp Pty Ltd v Fleming (No 2) [2011] NSWSC 1572
Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154

Ryledar Pty Ltd & Anor v Euphoric Pty Ltd [2007] NSWCA 65; 69 NSWLR 603

Texts Cited:

J D Heydon, Heydon on Contract (Thomson Reuters (Professional) Australia Limited, 2019)

Parties:

Qian Xiao (Appellant)

ACT Commercial Builders Pty Ltd (First Respondent)

Ian Hoare (Second Respondent)

Representation:

Counsel

J Moffett (Appellant)

D Robens (Respondents)

Solicitors

McInnes Wilson Lawyers (Appellant)

Harrington Hall Lawyers (Respondents)

File Number:

SCA 2 of 2022

Decision under appeal: 

Court:  Magistrates Court

Before:  Magistrate Stewart

Date of Decision:          16 December 2021

Case Title:  ACT Commercial Builders Pty Ltd v BBSJ Partners Pty Ltd

Citation: [2021] ACTMC 17

Court File Number:      CS 43 of 2019

McCALLUM CJ:

  1. Mr Qian Xiao appeals from a decision of the Magistrates Court (Magistrate Stewart) holding him liable for a debt to a builder retained to supply the fit-out of a restaurant.  There is no longer any dispute as to the amount owed to the builder.  The central question raised by the appeal is whether the Magistrate erred in finding that Mr Xiao was the party liable for the debt.  Mr Xiao contends that the contract bound a company of which he was a director, BBSJ Partners Pty Ltd, but did not bind him personally.

  1. I have concluded that, while aspects of the Magistrate’s reasoning may have entailed error, the conclusion that Mr Xiao was bound as a party to the contract was correct and that the appeal must accordingly be dismissed.  My reasons are as follows.    

Circumstances in which the dispute arose

  1. The execution of the building contract followed upon the provision of two quotes sent on 1 February 2016 by Mr Ian Hoare, the second respondent and sole director of the first respondent, ACT Commercial Builders Pty Ltd.  Both emails were sent to an email address in the name of Yiwei Xu (also known as Loki Xu) which included “bbsjpartners” as part of…

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Details
Case
[2023] ACTSC 44
Decision Date

CaseChat Overview and Summary

The case of Xiao v ACT Commercial Builders Pty Ltd involved a dispute concerning the formation of a contract for construction services. The plaintiff, Xiao, alleged that the defendant, ACT Commercial Builders Pty Ltd, had breached a contract for building works. The matter was initially heard by a Magistrate in the ACT Civil and Administrative Tribunal, and Xiao subsequently appealed the Magistrate's decision to the Supreme Court of the Australian Capital Territory.

The primary legal issue before the court was whether the Magistrate had erred in departing from the agreed fact that a contract was signed by a director on behalf of the company. Both parties had provided a statement of agreed facts, which included the agreement that a contract had been signed. The plaintiff argued that the Magistrate should have accepted this fact as binding and that the contract was therefore valid. The defendant, on the other hand, contended that there were issues with the identification of the parties and the application of the objective theory of contract.

In dismissing the appeal, the court found that the Magistrate did not err in departing from the agreed fact. The court held that the objective theory of contract applied, which requires a determination of what a reasonable person in the position of the parties would have understood the contract to be. The court found that there was insufficient evidence to support the existence of a valid contract, as the terms were not sufficiently clear and the identification of the parties was problematic. The court further held that the Magistrate's decision was not unreasonable, and therefore, the appeal was dismissed with costs.

Orders

Orders of the court

Appeal dismissed with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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