Shi v Zhong [2021] NSWDC 419

District Court New South Wales

Medium Neutral Citation: Shi v Zhong [2021] NSWDC 419 Hearing dates: 11 August 2021 Date of orders: 17 August 2021 Decision date: 17 August 2021 Jurisdiction: Civil Before: Gibson DCJ Decision: Order: (1) Judgment for the plaintiff for $224,247.78 with liberty to apply in relation to the calculation of interest on the judgment sum. (2) Defendant pay plaintiff's costs, with liberty to apply in relation to the calculation of the sum sought by way of gross sum costs order pursuant to s 98 of the Civil Procedure Act 2005 (NSW). (3) Exhibits retained until further order. Catchwords: CONTRACT – guarantee – no issue of principle Legislation Cited: Civil Procedure Act 2005 (NSW) s 98 Conveyancing Act 1919 (NSW) ss 23C and 54A Cases Cited: Nash v Council of the New South Wales Bar Association [2013] NSWCA 466 Watson v Foxman (1995) 49 NSWLR 315 Category: Principal judgment Parties: Plaintiff: Mr Yongcheng Shi

Defendant: Mr Chen Zhong Representation: Solicitors: Plaintiff: Juris Chamber Lawyers File Number(s): 2020/00253476 Publication restriction: nil

Judgment

The plaintiff's claim 1. The plaintiff is the owner of leased premises in Wollongong. The defendant is a director of a company which, in or about October 2017, entered into a written lease for annual rent of $121,000 payable by monthly instalments of $10,083.33 per month. The defendant was the guarantor for the lease. 2. The lessee began failing to meet its rental commitments in or about August 2018. On 16 August 2018, the defendant and another director of the company met the plaintiff and his mother at a shop in Hurstville New South Wales, where they informed the plaintiff that they would stop running their business and terminate the lease. In or about mid-September 2018, the lessee ceased to trade. The shop was closed and the lessee left the premises without paying rent and outgoings. 3. The plaintiff, by statement of claim filed on 31 August 2020, brings proceedings against the defendant pursuant to the guarantee, for recovery for arrears of rent, outgoings costs and damages and loss of rent and legal expenses. 4. The defendant, in a defence filed on 16 October 2020, did not deny signing the guarantee but made the following assertions: 1. He sought to deny the guarantee on the basis that it "did not comply with legal procedures" (paragraph 2(a)); 2. He stated that his lack of English meant that he did not know or understand "the guarantor issue" without "full explanation and assistance" (paragraph 2(c)); 3. He complained that the rent was too high (paragraph 2(e)) and was fraudulent; 4. He denied any breach of the lease (paragraph 3); 5. He asserted that the lessor, at the meeting in Hurstville, had orally agreed to terminate the business on 8 September and not to hold the defendant liable for any loss, as well as giving up all rights under the lease and at common law to claim any damages or loss. In other words, the termination of the lease was at the will of both parties and there were no issues in dispute and thus no breach (paragraph 3(a)). This was the main defence at the hearing; 6. He asserted that the plaintiff had agreed to return the bank guarantee of $30,250 but had failed to do so and additionally had not accounted to him for $100,000 for the chattels in the store; and 7. He stated that the plaintiff had failed to mitigate his loss and damage.