Liao v Zhu [2008] NSWSC 28

New South Wales Supreme Court

CITATION : Liao v Zhu [2008] NSWSC 28

HEARING DATE(S) : 30 January 2008

JUDGMENT DATE : 30 January 2008

JURISDICTION : Equity Division

JUDGMENT OF : Windeyer J

DECISION : Order that plaintiff's claim be dismissed.

CATCHWORDS : CONTRACTS - oral agreement for commissions to sub-agent - head agency contract wrongfully terminated - substitute agreement either oral or written for percentage of judgment sum in accordance with share entitlements in the second defendant - plaintiff had no shares and accordingly no claim.

CATEGORY : Principal judgment

Shao Qiang Liao (Plaintiff) PARTIES : Peter Tao Zhu (First Defendant) Australian Chinese Sports Connections Pty Limited (Second Defendant)

FILE NUMBER(S) : SC 6349 of 2005

COUNSEL : M Sneddon (Plaintiff) No Appearance (Defendants)

SOLICITORS : Raymond Lee & Associates (Plaintiff) No Appearance (Defendants)

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IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WINDEYER J

WEDNESDAY 30 JANUARY 2008

6349/05 SHAO QIANG LIAO v AUSTRALIAN CHINESE SPORTS CONNECTIONS PTY LIMITED & ORS

JUDGMENT

1 HIS HONOUR: In this matter the plaintiff sues two defendants both involved with the sale of tickets to the 2000 Olympic Games held in Sydney. It is clear enough from the material before me that the plaintiff has done work on the basis of what can be best described as indefinite arrangements with the defendants, which was to bring about the sale of Olympic club memberships for the Olympic Games. The original basis being that those memberships would be sold for $8,000 each and the plaintiff would receive 10 per cent of that amount for each membership sold. 2 There was litigation in this Court between the first defendant and the Sydney Organising Committee of the Olympic Games, (SOCOG), as a result of which the first defendant obtained a substantial verdict ultimately upheld in the High Court of Australia. Because SOCOG, or another body on encouragement from SOCOG, had terminated the contract which Mr Zhu had for the sale of the memberships, the agreement for the 10 per cent, which would have favoured the plaintiff, was of no value. The plaintiff was concerned about the work he had done and, according to paragraph 9 of the Statement of Claim, an agreement was entered into under which the first defendant would sue SOCOG and the second defendant would pay to the plaintiff "an amount equal to 20 per cent x 40 per cent of the proceeds of such proceedings", and that the plaintiff would forego his claim to commission, namely, the 10 per cent commission to which I have referred. It is claimed that there was an implied term that the first defendant would pay the specified amounts of the proceeds of the court proceedings to the second defendant, to allow the second defendant to give effect to this because it was the second defendant with which the plaintiff claims to have entered into the original contract, albeit Mr Zhu had the contract with SOCOG. 3 Under the terms of the judgment in favour of the first defendant, the sum of $4,234,319 was paid, thus the pleaded claim is for 20 per cent of 40 per cent of the amount recovered, namely, $338,745.52. It is admitted that this amount has not been paid to the plaintiff. 4 In the defence, in paragraph 12, the defendants admit that the first defendant has not paid the sum of $338,745.52 to the second defendant and that the second defendant has not paid that amount to the plaintiff, but say that the first defendant has paid an amount exceeding the sum of $338,745.52 to the second defendant. It is on that basis that the plaintiff claims a judgment against the second defendant for that amount. 5 When the problem with SOCOG arose and the plaintiff found that Mr Zhu was the only plaintiff in the proceedings against that body, he was unhappy about this. He discussed it with Mr Zhu, who said that when the court case was successful, then he, the plaintiff, would get at least 10 per cent of the amount of compensation received. The plaintiff did not accept that, but later there was a further meeting when the plaintiff said to Mr Zhu that the 10 per cent promised was too low, and Mr Zhu said to him, "increase to 20 per cent, then the amount of compensation obtained from SOCOG will be distributed according to the share allotments in the company. The money will be paid to the company and then distributed between us." The plaintiff asked whether this was proper and Mr Zhu said that it was a matter concerning the internal management of the company and he would call a directors' meeting to make the decision and that "when the company receives compensation, you will have 20 per cent of the amount according to share allotment", to which the plaintiff said, "that sounds fine to me". 6 The plaintiff asked for a confirmation letter and Mr Zhu said the company will hold a meeting and he would give him a letter. The plaintiff said, naturally enough, that he did not care how he got it but he wanted 20 per cent of the money, which I add is more than he now seeks. Some weeks later he was given a document signed by Mr Zhu on the letterhead of the Australian Chinese Sports Connections which, among other things, said: The requirements for Mr Liao Shao Qiang to receive 20 per cent of the shares from Zhang Zhao Ming are: