Liu v Lam [2024] NSWSC 1306

Liu v Lam [2024] NSWSC 1306

The Court found a binding contract was formed by execution of the Agreement on 14 May 2018 in Shenzhen, with both parties intending to create legally enforceable relations. The plaintiff was not in partnership with the defendant in respect of the Jiayi debt or the Tianhe proceeds and did not hold funds on trust. The default interest clause in the Agreement constituted a penalty and was unenforceable. No basis for equitable set-off or repayment was found, except that any payments made by the defendant toward the Chinese judgment could be deducted from the final sum. Judgment was for the plaintiff with directions to finalise orders and resolve any outstanding monetary adjustments, interest,...

Parties
Plaintiff: Tuo Liu; Defendant: Kin Lam
Jurisdiction
Australia
Judgment Date
18 October 2024
Procedural Posture
Contract Common Law / Principal Judgment After Final Hearing
Outcome
Judgment for the plaintiff; interest at contractual rate under clause I (0.02% per day) but not the penal rate under clause III; quantum to be adjusted for sums already paid by defendant in China; directions for agreed Short Minutes of Order, further orders on adjustment, interest and costs to be determined.
Legal Topics
Agreement Formation, Offer and Acceptance, Intention to Create Legal Relations, Indemnity, Credibility, Partnership Existence, Penalties in Contracts, Mitigation of Loss, Equitable Set Off
Contract Law Partnership Law Evidence Civil Procedure Agreement Formation Offer and Acceptance Intention to Create Legal Relations Indemnity +5 more

Case Brief

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Parties

Tuo Liu

Plaintiff

Kin Lam

Defendant

Procedural Posture

Contract Common Law / Principal Judgment After Final Hearing

Legal Issues

  1. 1 Whether the Agreement between the parties was executed and constituted a binding contract
  2. 2 Whether the parties intended to create legally enforceable relations under the Agreement
  3. 3 Whether a partnership existed between the parties in respect of the Jiayi Loan Agreement or Tianhe Venture

Ratio Decidendi

The Court found a binding contract was formed by execution of the Agreement on 14 May 2018 in Shenzhen, with both parties intending to create legally enforceable relations. The plaintiff was not in partnership with the defendant in respect of the Jiayi debt or the Tianhe proceeds and did not hold funds on trust. The default interest clause in the Agreement constituted a penalty and was unenforceable. No basis for equitable set-off or repayment was found, except that any payments made by the defendant toward the Chinese judgment could be deducted from the final sum. Judgment was for the plaintiff with directions to finalise orders and resolve any outstanding monetary adjustments, interest,...

Court Disposition

Judgment for the plaintiff; interest at contractual rate under clause I (0.02% per day) but not the penal rate under clause III; quantum to be adjusted for sums already paid by defendant in China; directions for agreed Short Minutes of Order, further orders on adjustment, interest and costs to be determined.

Orders

  • The plaintiff shall file and serve Short Minutes of Order reflecting this judgment within 28 days of publication.
  • If disputed, the defendant may file and serve an alternative form within 35 days.