Zhang v Cheng - [2020] NSWDC 38

District Court

New South Wales

Medium Neutral Citation: Zhang v Cheng [2020] NSWDC 38
Hearing dates: 2,3, and 4 December 2019
Date of orders: 29 February 2020
Decision date: 29 February 2020
Jurisdiction: Civil
Before: Montgomery DCJ
Decision:
(1) Judgment for the plaintiff against the defendant in the sum of $859,679.45
(2) Defendant to pay the plaintiff’s costs of the proceedings.
Catchwords: CONTRACT: enforceability of acknowledgement of debt - consideration – bone fide dispute
Legislation Cited: Civil Procedure Act 2005 (NSW)
Cases Cited: Amos v Citibank Ltd [1996] QCA 129.
Ballantyne v Phillott (1961) 105 CLR 379; [1961] HCA 17
Butler v Fairclough (1917) 23 CLR 78
Callisher v Bischoffsheim (1870) LR 5 QB 449
Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 350; [1982] HCA 24 Banque Brussels Lambert SA v Australian National Industries Limited (1989) 21 NSWLR 502
Cody v JH Nelson Pty Ltd (1947) 74 CLR 629
Eastland Technology Australia Pty Ltd v Whisson (2005) 223 ALR 123; [2005] WASCA 144
El-Mir & 1 Or v Risk [2005] NSWCA 215
McDermott v Black (1940) 63 CLR 161.
Pacific Carriers Limited v BNP Paribas (2004) 218 CLR 541; [2004] HCA 35
Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691
Wiggin v Edwards (1973) 47 ALJR 586
Woolworths Limited v Kelly (1991) 22 NSWLR 189
Texts Cited: Cheshire and Fifoot, (Law of Contract 11th Australian Edition)
Greig and Davis, (The Law of Contract)
Category: Principal judgment
Parties: Mei Zhang (plaintiff)
Ye Cheng (defendant)
Representation:
Counsel:
Plaintiff: Mr S Burchett
Defendant: Mr J Lee (4 December 2019), Mr J Polese (2 and 3 December 2019)
Solicitors:
CSJ Legal (plaintiff)
SHL & Associates Lawyers (defendant)

File Number(s): 2017/266631
Publication restriction: N/A

Judgment

NATURE OF THE CASE

These proceedings arise from circumstances of the failure of a joint venture for the development of land. By Statement of Claim filed 1 September 2017 the plaintiff sues the defendant personally on his acknowledgement of liability to pay her according to the terms of a document dated 20 December 2016; which the plaintiff says recorded an accord and satisfaction reached between them. The plaintiff also sues for interest at a contracted default rate of 15% p.a., at the contracted repayment rate of 10% p.a. or, in the third alternative, at the Schedule rate under ss 100 and 101 Civil Procedure Act 2005 (NSW).
There is very little factual contest engaged in the pleadings and only the plaintiff gave evidence. The plaintiff was cross examined on her affidavit made 10 July 2019.
The defendant denies the personal acknowledgement of liability he gave the plaintiff is enforceable, protesting that there was no consideration for it, there being no bona fide dispute between the plaintiff and defendant personally. Fundamentally, he argues that not he himself but his alter ego company, YC Australia Pty Ltd (‘YCA’) entered into the joint venture agreement with the plaintiff on 13 August 2015 (‘JVA’).
During the hearing the defendant,…

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 Zhang v Cheng

Details

AGLC: Zhang v Cheng [2020] NSWDC 38
Case: [2020] NSWDC 38
Decision Date: 29 February 2020

CaseChat Overview and Summary

The case of Zhang v Cheng involved the plaintiff, Zhang, seeking to enforce an acknowledgement of debt against the defendant, Cheng, in the Federal Circuit and Family Court of Australia. The dispute centred on an agreement whereby Cheng acknowledged a debt owed to Zhang. Zhang claimed that Cheng had agreed to pay the debt in exchange for Zhang's agreement not to pursue a claim for the return of certain properties. Cheng contested the enforceability of the agreement, arguing there was no fresh consideration and that the dispute over the debt was bona fide.

The primary legal issue before the court was whether the acknowledgement of debt constituted a binding agreement and whether there was fresh consideration provided by both parties. The court had to determine if the agreement was enforceable under contract law principles, particularly regarding the requirement of consideration and the existence of a bona fide dispute. The court also had to assess whether the agreement was made under duress or coercion, which would affect its enforceability.

The court found that the acknowledgement of debt was indeed a binding agreement. It held that there was fresh consideration in the form of Zhang’s promise not to pursue the return of the properties and Cheng's promise to pay the debt. The court rejected Cheng's argument that the dispute over the debt was bona fide, as it was clear from the evidence that the debt was undisputed. The court further determined that there was no evidence of duress or coercion in the formation of the agreement. Consequently, the court ruled in favour of Zhang and ordered Cheng to pay the full amount of the acknowledged debt plus interest.

The final orders of the court were that judgment be entered in favour of the plaintiff in the sum of $859,679.45, together with interest. The defendant was also ordered to pay the plaintiff’s costs of the proceedings.

Orders

Orders of the court

(1) Judgment for the plaintiff against the defendant in the sum of $859,679.45

(2) Defendant to pay the plaintiff’s costs of the proceedings.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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Medium Neutral Citation:	Zhang v Cheng [2020] NSWDC 38
Hearing dates:	2,3, and 4 December 2019
Date of orders:	29 February 2020
Decision date:	29 February 2020
Jurisdiction:	Civil
Before:	Montgomery DCJ
Decision:	(1) Judgment for the plaintiff against the defendant in the sum of $859,679.45 (2) Defendant to pay the plaintiff’s costs of the proceedings.
Catchwords:	CONTRACT: enforceability of acknowledgement of debt - consideration – bone fide dispute
Legislation Cited:	Civil Procedure Act 2005 (NSW)
Cases Cited:	Amos v Citibank Ltd [1996] QCA 129. Ballantyne v Phillott (1961) 105 CLR 379; [1961] HCA 17 Butler v Fairclough (1917) 23 CLR 78 Callisher v Bischoffsheim (1870) LR 5 QB 449 Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 350; [1982] HCA 24 Banque Brussels Lambert SA v Australian National Industries Limited (1989) 21 NSWLR 502 Cody v JH Nelson Pty Ltd (1947) 74 CLR 629 Eastland Technology Australia Pty Ltd v Whisson (2005) 223 ALR 123; [2005] WASCA 144 El-Mir & 1 Or v Risk [2005] NSWCA 215 McDermott v Black (1940) 63 CLR 161. Pacific Carriers Limited v BNP Paribas (2004) 218 CLR 541; [2004] HCA 35 Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 Wiggin v Edwards (1973) 47 ALJR 586 Woolworths Limited v Kelly (1991) 22 NSWLR 189
Texts Cited:	Cheshire and Fifoot, (Law of Contract 11th Australian Edition) Greig and Davis, (The Law of Contract)
Category:	Principal judgment
Parties:	Mei Zhang (plaintiff) Ye Cheng (defendant)
Representation:	Counsel: Plaintiff: Mr S Burchett Defendant: Mr J Lee (4 December 2019), Mr J Polese (2 and 3 December 2019) Solicitors: CSJ Legal (plaintiff) SHL & Associates Lawyers (defendant)
File Number(s):	2017/266631
Publication restriction:	N/A