Xiao v ACT Commercial Builders Pty Ltd - [2023] ACTSC 44

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:

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.

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

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…

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: [2023] ACTSC 44
Decision Date: 14 March 2023

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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