Cao v Apollo Phoenix Resources Pty Ltd (No 3) - [2019] FCA 1779

FEDERAL COURT OF AUSTRALIA
Cao v Apollo Phoenix Resources Pty Ltd (No 3) [2019] FCA 1779

File number: NSD 1037 of 2018

Judge: MARKOVIC J

Date of judgment: 31 October 2019

Catchwords: COSTS – applications for lump-sum costs orders – whether costs should be assessed on a lump-sum basis – whether costs fairly and reasonably incurred – applications allowed

Legislation:
Federal Court of Australia Act 1976 (Cth) s 43(3)(d)

Federal Court Rules 2011 (Cth) r 40.02(b)

Cases cited:
LFDB v MS S M (No 2) [2018] FCA 2062

Sandalwood Properties Ltd (Subject to a Deed of Company Arrangement) v Huntley Management Ltd (No 2) [2019] FCA 647

Date of hearing: 29 July 2019

Registry: New South Wales

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Corporations and Corporate Insolvency

Category: Catchwords

Number of paragraphs: 59

Counsel for the Plaintiff: Mr C Carter

Solicitor for the Plaintiff: Australian Business Lawyers & Advisors

Counsel for the First Defendant: Mr P Silver

Solicitor for the First Defendant: Mills Oakley

Counsel for the Second and Third Defendants: Mr D M Fairweather

Solicitor for the Second and Third Defendants: Fairweather Litigation

ORDERS

NSD 1037 of 2018

BETWEEN:
ZHONG CAO

Plaintiff

AND:
APOLLO PHOENIX RESOURCES PTY LTD ACN 158 977 881

First Defendant

CHRISTOPHER JOHN DAWS
Second Defendant

JOHN TIMOTHY KINGSWOOD
Third Defendant

IN THE INTERLOCUTORY APPLICATION:

BETWEEN:
APOLLO PHOENIX RESOURCES PTY LTD ACN 158 977 881

First Applicant

CHRISTOPHER JOHN DAWS
Second Applicant

JOHN TIMOTHY KINGSWOOD
Third Applicant

AND:
ZHONG CAO

Respondent

JUDGE:

MARKOVIC J

DATE OF ORDER:

31 OCTOBER 2019

THE COURT ORDERS THAT:
1.The plaintiff pay the first defendant’s costs on a lump-sum basis in the amount of $402,615.34.
2.The plaintiff pay the second and third defendants’ costs on a lump-sum basis in the amount of $201,442.65.
3.The plaintiff pay the first defendant’s costs of its amended interlocutory application filed on 30 July 2019.
4.The plaintiff pay the second and third defendants’ costs of their interlocutory process filed on 20 May 2019.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
MARKOVIC J:

On 25 March 2019 I made orders dismissing this proceeding as against the first defendant (Apollo Phoenix) pursuant to s 20 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and r 5.23 of the Federal Court Rules 2011 (Cth) (Rules) because the plaintiff (Mr Cao) failed to appear at the hearing and as against the second and third defendants (Messrs Daws and Kingswood) pursuant to r 19.01(1)(c) of the Rules because Mr Cao failed to comply with an order made by Gleeson J on 18 March 2019 requiring him to pay a specified sum into Court for security for their costs. At that time I also made orders granting leave to the defendants to apply for lump-sum costs orders by filing and serving any application and affidavit in support by 17 May 2019: see

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: [2019] FCA 1779
Decision Date: 31 October 2019

CaseChat Overview and Summary

The matter before the court was an application for costs by the defendants, Apollo Phoenix Resources Pty Ltd, and the individual defendants, Messrs Daws and Kingswood, against the plaintiff, Mr Cao. The dispute arose from proceedings related to an investment and subsequent litigation. The court was required to determine whether the costs claimed by the defendants were fairly and reasonably incurred and whether they should be assessed on a lump-sum basis.

The primary legal issue was whether the costs claimed by the defendants were justifiable and should be awarded on a lump-sum basis rather than itemised. The court considered the nature and necessity of the costs incurred, the conduct of the parties, and whether the costs were proportionate and reasonable in the circumstances. Additionally, the court examined the respective positions of the parties and the outcomes of the proceedings to ensure fairness in the allocation of costs.

The court found that the defendants' costs were fairly and reasonably incurred and were proportionate to the nature of the proceedings. It was determined that the lump-sum basis was appropriate given the extensive nature of the litigation and the complexity of the issues involved. Consequently, the court allowed the applications for lump-sum costs orders, setting the amounts to be paid by the plaintiff to the defendants. This decision reflected the court's assessment of the fairness and reasonableness of the costs and the outcomes of the litigation.

The orders made by the court mandated that Mr Cao pay the first defendant's costs in the amount of $402,615.34 and the second and third defendants' costs in the amount of $201,442.65 on a lump-sum basis. Furthermore, the plaintiff was ordered to pay the costs of the defendants' interlocutory applications, ensuring that all costs related to the proceedings were covered. The court's orders were designed to reflect the outcomes of the litigation and to ensure that the defendants were appropriately compensated for their costs.

Orders

Orders of the court

1. The plaintiff pay the first defendant’s costs on a lump-sum basis in the amount of $402,615.34.

2. The plaintiff pay the second and third defendants’ costs on a lump-sum basis in the amount of $201,442.65.

3. The plaintiff pay the first defendant’s costs of its amended interlocutory application filed on 30 July 2019.

4. The plaintiff pay the second and third defendants’ costs of their interlocutory process filed on 20 May 2019.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I am satisfied that an order should be made that Mr Cao pay Messrs Daws and Kingswood’s costs on a lump-sum basis in the amount of $201,442.65.CONCLUSION I will make orders that Mr Cao pay Apollo Phoenix’s and Messrs Daws and Kingswood’s costs on a lump-sum basis in accordance with these reasons. As Apollo Phoenix and Messrs Daws and Kingswood have been successful I will also make an order that Mr Cao pay their costs of the Costs Applications. In that regard I note that the amounts claimed and which have been determined as payable on a lump-sum basis include amounts for the costs of preparation for and appearance at the hearing of the Costs Applications. Thus no further amount will be payable by Mr Cao to Apollo Phoenix or Messrs Daws and Kingswood in relation to those costs orders.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	NSD 1037 of 2018
Judge:	MARKOVIC J
Date of judgment:	31 October 2019
Catchwords:	COSTS – applications for lump-sum costs orders – whether costs should be assessed on a lump-sum basis – whether costs fairly and reasonably incurred – applications allowed
Legislation:	Federal Court of Australia Act 1976 (Cth) s 43(3)(d) Federal Court Rules 2011 (Cth) r 40.02(b)
Cases cited:	LFDB v MS S M (No 2) [2018] FCA 2062 Sandalwood Properties Ltd (Subject to a Deed of Company Arrangement) v Huntley Management Ltd (No 2) [2019] FCA 647
Date of hearing:	29 July 2019
Registry:	New South Wales
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Category:	Catchwords
Number of paragraphs:	59
Counsel for the Plaintiff:	Mr C Carter
Solicitor for the Plaintiff:	Australian Business Lawyers & Advisors
Counsel for the First Defendant:	Mr P Silver
Solicitor for the First Defendant:	Mills Oakley
Counsel for the Second and Third Defendants:	Mr D M Fairweather
Solicitor for the Second and Third Defendants:	Fairweather Litigation

NSD 1037 of 2018
BETWEEN:	ZHONG CAO Plaintiff
AND:	APOLLO PHOENIX RESOURCES PTY LTD ACN 158 977 881 First Defendant CHRISTOPHER JOHN DAWS Second Defendant JOHN TIMOTHY KINGSWOOD Third Defendant
IN THE INTERLOCUTORY APPLICATION:
BETWEEN:	APOLLO PHOENIX RESOURCES PTY LTD ACN 158 977 881 First Applicant CHRISTOPHER JOHN DAWS Second Applicant JOHN TIMOTHY KINGSWOOD Third Applicant
AND:	ZHONG CAO Respondent

JUDGE:	MARKOVIC J
DATE OF ORDER:	31 OCTOBER 2019