WING YIP HOLDINGS PTY LIMITED v CHANG [1996] NSWCA 561

WING YIP HOLDINGS PTY LIMITED vy CHANG

SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

CLARKE, MEAGHER and SHELLER JJA 12 July 1996

[1996] NSWCA 561

DEED — acknowledgment of debt — whether enforceable agreement — novation — repayment by instalments — summary termination for lack of causation of action

Sheller JA. The appellant, Wing Yip Holdings Pty Limited, carried on a food supply business in Chinatown, Sydney. In an amended statement of liquidated claim filed in the District Court on 23 January 1987, they sued the respondents, Wai Lin Chang and Elizabeth Wing Pin Chang, on a document entitled "Acknowledgment of Debt', which was dated 12 November 1985 and signed by the respondents, to recover the amount of $46,327.76. The respondents acknowledged by the document that this amount was jointly and severally due by them to the appellant. They refused to pay it.

In September 1991 an amended defence and cross claim was filed. In the cross claim the respondent sought, amongst other things, a declaration that there was no contract between the parties, or, alternatively, an order declaring the agreement to be unenforceable or void.

On 8 April 1992 the respondents filed a notice of motion for an order that the statement of claim be struck out on the ground that it did not disclose a cause of action. This application came before his Honour Judge Kirkham, who, on 6 May 1994, struck out the appellant's statement of liquidated claim with costs and gave a verdict for the respondents on the cross claim with costs of that action. It is from those orders that the appellant brings this appeal.

His Honour held that the acknowledgment of debt was neither under seal nor made nor expressed to be made for valuable consideration and was thus unenforceable. In order to understand this matter it is necessary to set out the background facts. In 1985 a company called Sugona Pty Limited operated a Chinese restaurant known as the Ming Sing Restaurant. The appellant supplied goods to the restaurant. The shareholders of Sugona included Mr Wing Yip Yee and the respondents. The shareholders decided in October 1985 not to continue operating the restaurant. At that time Sugona owed the appellant the amount now claimed. Negotiations as to the terms upon which the respondentswould take over the restaurant were entered into and led to the execution of a deed on 8 November 1985.