Xu v Jinhong Design & Constructions Pty Ltd

Case [2011] NSWCA 277


Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277
Hearing dates:18 and 19 July 2011
Decision date: 08 September 2011
Before: Basten JA at [1]
Macfarlan JA at [33]
Sackville AJA at [117]
Decision:

(1)Appeal allowed in part.

(2)Set aside orders 1 to 5 inclusive made at first instance on 10 June 2010.

(3)Remit the proceedings to the Common Law Division, to be heard by a judge other than the primary judge, to determine the respondent's contract claim but only insofar as it claims damages of $147,159 in respect of part of the original contract sum unpaid and $90,000 arising out of an alleged written variation of the building contract entered into in November 2004, and to make consequential orders.

(4)Direct that:

(a)within seven days of the date of this judgment the appellants file and serve written submissions as to the costs orders that should be made in respect of the proceedings at first instance and on appeal;

(b)the respondent file and serve its submissions as to those orders within seven days thereafter; and

(c)the appellants file and serve any reply within a further seven days.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

CONTRACT - whether primary judge erred in finding that the appellants promised for consideration to sign forms of guarantee

CONTRACT - guarantees - whether form of guarantee of obligations under building contract covered oral variations to building work when building contract required variations to be agreed in writing

CONTRACT - building - whether Home Building Act requires variations as to the work to be performed under a contract to be in writing - Home Building Act 1989 s 6 and s 7 considered

TRADE PRACTICES - misleading and deceptive conduct - builder contended that directors of property owner represented that they would sign forms of guarantee when they had no intention of doing so - whether primary judge erred in finding that representations made and constituted misleading and deceptive conduct
Legislation Cited: Builders Licensing Act 1971
Building Services Corporation Act 1989
Fair Trading Act 1987
Fair Trading Amendment (Australian Consumer Law) Act 2010
Home Building Act 1989
Home Building Regulation 2004
Uniform Civil Procedure Rules 2005
Cases Cited: Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167
Bill Acceptance Corporation Ltd v G.W.A. Ltd (1983) 78 FLR 171
Biogen Inc v Medeva plc [1997] RPC 1
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Costa v The Public Trustee of New South Wales [2008] NSWCA 223
Davis v Veigel [2011] NSWCA 170
Edwards v…

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AGLC
Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277
Case
[2011] NSWCA 277
Decision Date

CaseChat Overview and Summary

In *Xu v Jinhong Design & Constructions Pty Ltd*, the Court of Appeal of New South Wales considered an appeal from a decision of the primary judge concerning a building contract dispute. The appellants, directors of a property owner, appealed against findings that they had promised for consideration to sign forms of guarantee for the respondent builder's obligations. The respondent had also alleged misleading and deceptive conduct by the appellants.

The central legal issues before the Court of Appeal were whether the primary judge erred in finding that the appellants had made a promise to sign guarantees for consideration, and whether the form of guarantee contemplated oral variations to the building work when the contract required such variations to be in writing. Additionally, the court had to determine if the primary judge erred in finding that representations made by the appellants constituted misleading and deceptive conduct, specifically concerning their intention to sign the guarantees. The court also considered the application of the *Home Building Act 1989* (NSW) to variations of building contracts.

The Court of Appeal allowed the appeal in part. It set aside certain orders made at first instance and remitted the proceedings to the Common Law Division. The matter was to be heard by a different judge to determine the respondent's contract claim, specifically concerning unpaid portions of the original contract sum and damages arising from an alleged written variation to the building contract. The court also directed the parties to make submissions regarding costs orders for both the first instance proceedings and the appeal.

Orders

Orders of the court

(1)Appeal allowed in part.

(2)Set aside orders 1 to 5 inclusive made at first instance on 10 June 2010.

(3)Remit the proceedings to the Common Law Division, to be heard by a judge other than the primary judge, to determine the respondent's contract claim but only insofar as it claims damages of $147,159 in respect of part of the original contract sum unpaid and $90,000 arising out of an alleged written variation of the building contract entered into in November 2004, and to make consequential orders.

(4)Direct that:

(a)within seven days of the date of this judgment the appellants file and serve written submissions as to the costs orders that should be made in respect of the proceedings at first instance and on appeal;

(b)the respondent file and serve its submissions as to those orders within seven days thereafter; and

(c)the appellants file and serve any reply within a further seven days.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

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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