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Zhang v VP302 SPV

Zhang v VP302 SPV

Case [2009] NSWSC 73 23 February 2009

Contract Formation

Misrepresentation

Unjust Enrichment

Rescission of Contract

Contract Law

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CITATION: Zhang v VP302 SPV & Ors [2009] NSWSC 73

HEARING DATE(S): 18-20 June 2008; 23, 24 and 27 June 2008

JUDGMENT DATE :
23 February 2009

JURISDICTION: Equity

JUDGMENT OF: White J

DECISION: Refer to para 133 of judgment.

CATCHWORDS: CONTRACTS - particular parties - principal and agent - solicitor amended terms of contract for the sale of land without actual authority of plaintiffs - solicitor exchanged amended contracts with other party - solicitor had ostensible authority to exchange contract - binding contract came into existence between the parties - TRADE PRACTICES - misleading and deceptive conduct - whether plaintiffs entered into sale of land contract because of representations made as to future management fees and future value of property - whether reasonable grounds for representations - plaintiffs did not rely on representations as to future management fees - plaintiffs relied on representations as to future value of property - representations not mere puffery - plaintiffs entitled to rescission of the contract and return of the deposit from the first and second defendants - CONTRACTS - unjust contracts - Contracts Review Act - plaintiffs' entry into contract induced by misrepresentations - contract is an unjust contract - if necessary, order for rescission pursuant to the Act

LEGISLATION CITED: Trade Practices Act 1974 (Cth)
Fair Trading Act 1987 (NSW)
Contracts Review Act 1980 (NSW)
Conveyancing Act 1919 (NSW)
Civil Procedure Act 2005 (NSW)

CATEGORY: Principal judgment

CASES CITED: Pianta v National Finance and Trustees Ltd [1964] HCA 61; (1964) 180 CLR 146
Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
Summit Properties Pty Ltd v Comserv (No. 784) Pty Ltd (1981) 2 BPR 9173
CTM Nominees Pty Ltd v Galba Pty Ltd (1982) 2 BPR 9588
Magripilis v Baird [1926] St R Qd 89
Longpocket Investments Pty Ltd v Hoadley (1985) 3 BPR 9606
Rymark Australia Development Consultants Pty Ltd v Draper [1977] Qd R 336
Nowrani Pty Ltd v Brown [1989] 2 Qd R 582
Lockett v Norman-Wright [1925] 1 Ch 56
Eccles v Bryant [1948] 1 Ch 93
Domb v Isoz [1980] 1 Ch 548
Watson v Foxman (1995) 49 NSWLR 315
Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661
Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592
Pappas v Soulac Pty Ltd (1983) 50 ALR 231
Eighth SRJ Pty Ltd v Merity (1997) 7 BPR 15,189
Petty v Penfold Wines Pty Ltd (1994) 49 FCR 282 Jainran Pty Ltd v Boyana Pty Ltd [2008] NSWSC 468
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191
Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359
I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [1999] QSC 320
I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109
Argy v Blunts & Lane Cove…

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 VP302 SPV

Details

AGLC: Zhang v VP302 SPV [2009] NSWSC 73
Case: [2009] NSWSC 73
Decision Date: 23 February 2009

CaseChat Overview and Summary

In Zhang v VP302 SPV, the plaintiffs sought to rescind a contract for the sale of land, alleging that the defendant solicitor had acted without actual authority in amending the contract terms and that the contract was induced by misleading and deceptive conduct. The case was heard in the Supreme Court of Victoria. The primary dispute centred on whether the plaintiffs were entitled to rescind the contract and recover their deposit based on alleged misrepresentations and the absence of actual authority for the contract amendments.

The court was required to determine several legal issues, including whether the defendant solicitor had ostensible authority to exchange the contract, whether the plaintiffs had entered into the contract due to misleading representations, and whether the plaintiffs' reliance on the representations was sufficient to warrant rescission. Additionally, the court needed to consider if the contract could be deemed unjust under the Contracts Review Act 1980 (Vic).

The court found that the defendant solicitor had ostensible authority to exchange the contract, which led to the formation of a binding agreement between the parties. However, the court also determined that the plaintiffs were induced into the contract by misleading representations concerning the future value of the property, although not the future management fees. The plaintiffs did not rely on the representations regarding the management fees. The court held that the representations were not mere puffery and that the plaintiffs' entry into the contract was influenced by these misleading statements. Consequently, the plaintiffs were entitled to rescission of the contract and the return of their deposit. The court concluded that the contract was unjust and ordered rescission under the Contracts Review Act if necessary.

The court ordered that the contract be rescinded, and the plaintiffs were to be returned their deposit from the first and second defendants. This decision underscores the importance of clear authority and the impact of misleading conduct on the enforceability of contracts.

Orders