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Zhou v Mindarie Drive Pty Ltd

Zhou v Mindarie Drive Pty Ltd

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Case Copied 16 June 2023 57 min read

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JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   ZHOU -v- MINDARIE DRIVE PTY LTD [2023] WADC 63
CORAM:   BOWDEN DCJ
HEARD:   3-6, 11 & 14 APRIL 2023
DELIVERED          :   16 JUNE 2023
FILE NO/S:   CIV 947 of 2020
BETWEEN:   WEN JUN ZHOU
Plaintiff
AND
MINDARIE DRIVE PTY LTD
First Defendant
TOMAS BRIONES AGUIRRE
Second defendant
DANIEL BRYAN SANBROOK
Third Defendant
BARRY MILES BOOTH
Fourth Defendant
JENNIFER ROSE BOOTH
Fifth Defendant

Catchwords:

Loan agreement - Breach of guarantee and indemnity - Rescission of deed - Unconscionable conduct - Statutory unconscionable conduct - Undue influence - Misrepresentation and misleading and deceptive conduct - Affirmation of contract - Jurisdiction of District Court to provide equitable remedies

Legislation:

Nil

Result:

Judgment for the plaintiff

Representation:

Counsel:

Plaintiff	:	Mr P Lafferty
First Defendant	:	No appearance
Second defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	Mr G D Maher
Fifth Defendant	:	Mr G D Maher

Solicitors:

Plaintiff	:	Armeli & Molony Lawyers
First Defendant	:	Not applicable
Second defendant	:	Not applicable
Third Defendant	:	Not applicable
Fourth Defendant	:	Laird Lawyers Commercial Lawyers
Fifth Defendant	:	Laird Lawyers Commercial Lawyers

Case(s) referred to in decision(s):

Abram Steamship Co Ltd (in liq) v Westville Shipping Co Ltd (in liq) [1923] AC 773
Agripay Pty Ltd v Byrne [2011] QCA 85; [2011] 2 Qd R 501
Allcard v Skinner (1887) 36 Ch D 145
Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 [2022] HCA 38
Australian Competition and Consumer Commission v Geowash Pty Ltd (Subject to a Deed of Company Arrangement) (No 3) [2019] FCA 72
Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd [2021] FCAFC 40
Australian Securities and Investments Commission v Kobelt [2019] 368 ALR 1
Bainbrigge v Browne (1881) 18 Ch D 188
Bank of New South Wales v Rogers [1941] HCA 9; (1941) 65 CLR 42
Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30
Brunker v Perpetual Trustee Co (Ltd) [1937] 57 CLR 555
Clay v The State of Western Australia [2023] WASCA 77
Commercial Developments Pty Ltd (t/as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers' Compensation) Ltd (1991) 5 WAR 208
Dialogue Consulting Pty Ltd v Instagram, Inc [2020] FCA 1846; (2020) 291 FCR 155
Evans v Benson & Co [1961] WAR 12
Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395
Goldsworthy v Brickell [1987] Ch 378
Gunn v Meiners [2022] WASCA 95
Immer (No 145) Pty Ltd v The Uniting Church in Australia Property Trust (NSW) [1993] HCA 27; (1993) 182 CLR 26
Jenyns v Public Curator (Qld) [1953] HCA 2; (1953) 90 CLR 113
Johnson v Buttress [1936] HCA 41; (1936) 56 CLR 113
Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392
Khoury v Government Insurance Office of New South Wales [1984] HCA 55; (1984) 165 CLR 622
Matthews v Bayview…

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] WADC 63
Decision Date: 16 JUNE 2023

CaseChat Overview and Summary

In the matter of Zhou v Mindarie Drive Pty Ltd, the court addressed a dispute between a borrower and a lender regarding a loan agreement, breach of guarantee and indemnity, and the rescission of a deed. The borrower, Zhou, claimed that the lender, Mindarie Drive Pty Ltd, engaged in unconscionable conduct, undue influence, misrepresentation, and misleading and deceptive conduct. The case was heard and determined by the District Court of Western Australia.

The central legal issues before the court involved whether the lender had engaged in unconscionable conduct and undue influence when inducing the borrower to enter into a loan agreement and guarantee. Additionally, the court examined whether the lender had made misrepresentations or engaged in misleading and deceptive conduct. The court also had to determine whether the borrower had affirmed the contract and whether the District Court had the jurisdiction to provide equitable remedies.

The court found that the lender had engaged in unconscionable conduct by taking advantage of the borrower's vulnerability. The court held that the lender's conduct was marked by a lack of conscience, as it exploited the borrower's disadvantageous position. The lender's actions were considered oppressive, as they knowingly took advantage of the borrower's special disadvantage. Furthermore, the court held that the lender had exercised undue influence over the borrower, which affected the borrower's decision-making capacity. The lender's conduct was deemed to have caused the borrower to enter into the loan agreement and guarantee under circumstances that were not equitable. Consequently, the court granted the borrower's request for rescission of the deed.

In light of the findings, the court held that the lender's conduct constituted statutory unconscionable conduct, undue influence, misrepresentation, and misleading and deceptive conduct. The court affirmed the contract's rescission and ordered the lender to compensate the borrower for any losses incurred. The court also confirmed its jurisdiction to provide equitable remedies in this matter.

Orders