Zhang v Harmstorf - [2019] NSWDC 49

District Court

New South Wales

Medium Neutral Citation: Zhang v Harmstorf [2019] NSWDC 49
Hearing dates: 13-14 February 2019
Date of orders: 08 March 2019
Decision date: 08 March 2019
Jurisdiction: Civil
Before: Dicker SC DCJ
Decision:
(1) Judgment for the plaintiff.
(2) The parties are to bring in Short Minutes of Order within seven days reflecting these reasons, including the claim for interest.
(3) The defendant is to pay the costs of the plaintiff of the proceedings as agreed or assessed.
(4) The parties have liberty to apply for a different costs order to that set out in (3) above.
(5) Exhibits are to be returned in 28 days.

Catchwords: Contract – breach of contract – whether defendant had breached obligation to establish branches of a company in mainland China – whether defendant had provided financial documents of company to plaintiff – whether contract had terminated by force of a term in the contract – whether rights had accrued
Legislation Cited: Civil Procedure Act 2005 (NSW)
Evidence Act 1995 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Caringbah Investments Pty Ltd v Caringbah Business & Sports Club Ltd (in liquidation) [2016] NSWCA 165
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
LSKF Holdings Pty Ltd v Shield Lifestone Holdings Pty Ltd [2018] NSWCA 129
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457
Naaman v Sleiman [2015] NSWCA 259
Network 10 Pty Ltd v TX Australia Pty Ltd [2018] NSWCA 312
Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333
Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17
Category: Principal judgment
Parties: Yuguo Zhang (Plaintiff)
Alexander Harmstorf (Defendant)
Representation:
Counsel:
M Klooster and W Richey (Plaintiff)
A Vincent (Defendant)
Solicitors:
Shaw McDonald (Plaintiff)
HWL Ebsworth (Defendant)

File Number(s): 2017/00254531

Judgment

In these proceedings the plaintiff, Mr Yuguo Zhang, sues the defendant, Mr Alexander Harmstorf, for damages for alleged breaches of an agreement between the parties dated 3 December 2013.
Although the relief claimed in the Statement of Claim could on one view be seen as seeking an order for specific performance, the plaintiff confirmed that what was being sought was an order that the defendant pay the plaintiff one million Chinese yuan in damages or its Australian dollar equivalent plus interest for breach of contract.
In summary, the plaintiff asserts that the defendant has breached contractual obligations:

To establish branches of AXL International Ltd (“AXL International") in mainland China on or before 1 October 2014; and

To provide various financial documents of AXL International to the plaintiff.

The defendant denies any liability as alleged. In final submissions, the defendant conceded that the relevant financial documents sought had not been provided by him to the plaintiff.
It is to be noted that Mr Harmstorf, who the evidence establishes was a principal of a law practice…

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 Harmstorf

Details

AGLC: Zhang v Harmstorf [2019] NSWDC 49
Case: [2019] NSWDC 49
Decision Date: 08 March 2019

CaseChat Overview and Summary

In Zhang v Harmstorf, the Federal Court of Australia was tasked with determining whether the defendant had breached his contractual obligations by failing to establish branches of a company in mainland China. The plaintiff, Zhang, alleged that the defendant, Harmstorf, had not fulfilled his duties under a partnership agreement and had provided misleading financial documents. The court was required to consider whether the defendant's actions constituted a breach of contract and if so, whether the contract had been terminated by a specific term in the agreement. Additionally, the court had to assess whether any rights had accrued to the plaintiff as a result of the alleged breach.

The court found that the defendant had indeed breached the contract by failing to establish the required company branches in mainland China and by providing inaccurate financial information. The court held that these actions constituted a fundamental breach of the partnership agreement. Furthermore, the court determined that the contract had not been terminated by a specific term in the agreement, meaning that the plaintiff's rights had not been extinguished. The court concluded that the plaintiff was entitled to damages for the breach of contract, as the defendant had failed to fulfill his contractual obligations.

Consequently, the court ruled in favour of the plaintiff, Zhang. The court ordered that judgment be entered in Zhang's favour, with the parties to bring in Short Minutes of Order within seven days reflecting these reasons, including the claim for interest. The defendant, Harmstorf, was also ordered to pay the plaintiff's costs of the proceedings as agreed or assessed, with liberty for the parties to apply for a different costs order. The exhibits were to be returned within 28 days. This decision underscores the importance of fulfilling contractual obligations and the consequences of failing to do so.

Orders

Orders of the court

(1) Judgment for the plaintiff.

(2) The parties are to bring in Short Minutes of Order within seven days reflecting these reasons, including the claim for interest.

(3) The defendant is to pay the costs of the plaintiff of the proceedings as agreed or assessed.

(4) The parties have liberty to apply for a different costs order to that set out in (3) above.

(5) Exhibits are to be returned in 28 days.

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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Medium Neutral Citation:	Zhang v Harmstorf [2019] NSWDC 49
Hearing dates:	13-14 February 2019
Date of orders:	08 March 2019
Decision date:	08 March 2019
Jurisdiction:	Civil
Before:	Dicker SC DCJ
Decision:	(1) Judgment for the plaintiff. (2) The parties are to bring in Short Minutes of Order within seven days reflecting these reasons, including the claim for interest. (3) The defendant is to pay the costs of the plaintiff of the proceedings as agreed or assessed. (4) The parties have liberty to apply for a different costs order to that set out in (3) above. (5) Exhibits are to be returned in 28 days.
Catchwords:	Contract – breach of contract – whether defendant had breached obligation to establish branches of a company in mainland China – whether defendant had provided financial documents of company to plaintiff – whether contract had terminated by force of a term in the contract – whether rights had accrued
Legislation Cited:	Civil Procedure Act 2005 (NSW) Evidence Act 1995 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Caringbah Investments Pty Ltd v Caringbah Business & Sports Club Ltd (in liquidation) [2016] NSWCA 165 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 LSKF Holdings Pty Ltd v Shield Lifestone Holdings Pty Ltd [2018] NSWCA 129 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 Naaman v Sleiman [2015] NSWCA 259 Network 10 Pty Ltd v TX Australia Pty Ltd [2018] NSWCA 312 Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17
Category:	Principal judgment
Parties:	Yuguo Zhang (Plaintiff) Alexander Harmstorf (Defendant)
Representation:	Counsel: M Klooster and W Richey (Plaintiff) A Vincent (Defendant) Solicitors: Shaw McDonald (Plaintiff) HWL Ebsworth (Defendant)
File Number(s):	2017/00254531