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Chen v Fang

Chen v Fang

Case [2019] NSWSC 960 30 July 2019

Costs

Limitation Periods

Abuse of Process

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Chen v Fang [2019] NSWSC 960
Hearing dates: On the papers
Date of orders: 30 July 2019
Decision date: 30 July 2019
Jurisdiction: Equity
Before: Darke J
Decision:
Leave granted to Cross-Claimants to discontinue Cross-Claim on the basis that the Cross-Claimants pay the Cross-Defendants’ costs of the Cross-Claim on the ordinary basis.

Catchwords:
COSTS – discontinuance of proceedings – whether positive ground or good reason to depart from the default position under Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), r 42.19 – cross-claimants guaranteed repayment of a loan under a Deed of Loan and Deed of Guarantee – where cross-claimants filed a Cross-Claim seeking to be discharged from various agreements including the Deed of Loan and Deed of Guarantee – where loan subsequently repaid by borrower – whether repayment of loan rendered Cross-Claim futile due to a supervening event – only part of Cross-Claim rendered futile by reason of the repayment – no reason to depart from the default position under UCPR r 42.19
COSTS – discontinuance of proceedings – terms of discontinuance – application by cross-defendants for the cross-claimants to pay indemnity costs – whether Cross-Claim raised hopeless or futile claims – whether pursuit of Cross-Claim involved an abuse of process – where pleadings in Cross-Claim were in certain respects deficient – whether cross-claimants unnecessarily prolonged the prosecution of the Cross-Claim – costs assessed on the ordinary basis
Legislation Cited: Competition and Consumer Act 2010 (Cth), s 87, Sch 2
Uniform Civil Procedure Rules 2005 (NSW), rr 13.4, 42.19
Cases Cited: Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365
Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32
Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302
Fordyce v Fordham (2006) 67 NSWLR 497; [2006] NSWCA 274
McGuirk v University of New South Wales [2009] NSWSC 1424
One.Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548
Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11
Ralph Lauren 57 Pty Limited v Byron Shire Council [2014] NSWCA 107; (2014) 199 LGERA 424
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Category: Costs
Parties: Changqui Chen (Plaintiff/First Cross-Defendant)
Leo Shi Ran Fang (First Defendant/First Cross-Claimant)
Weixiong Liu (Second Defendant/Second Cross-Claimant)
Newton Park Pty Ltd (Third Defendant/Second Cross-Defendant)
Peter Lord (Third Cross-Defendant)
Jingxiong Liang (Fourth Cross-Defendant)
The International Equine Group Pty Ltd (Fifth Cross-Defendant)
Representation:
Counsel:
Mr F Santisi (Plaintiff/First Cross-Defendant)
Mr J Baird (First Defendant/First Cross-Claimant and Second Defendant/Second Cross-Claimant)
Mr A Hopkins (Third Defendant/Second Cross-Defendant, Third and Fifth Cross-Defendants)
Solicitors:
Goh Lawyers (Plaintiff/First Cross-Defendant)
Ark Capital Advisors (First Defendant/First Cross-Claimant and Second Defendant/Second Cross-Claimant)
Prime Lawyers (Third Defendant/Second Cross-Defendant, Third and Fifth Cross-Defendant)

File Number(s): 2015/52202
Publication restriction: None

Judgment

Introduction

These proceedings were commenced by the plaintiff Changqui Chen in February 2015. By his Summons, Mr Chen sought a judgment…

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.

Continue reading Chen v Fang

Details

AGLC: Chen v Fang [2019] NSWSC 960
Case: [2019] NSWSC 960
Decision Date: 30 July 2019

CaseChat Overview and Summary

The case of Chen v Fang involves a dispute between the parties in relation to a loan agreement and a deed of guarantee. The cross-claimants in this case sought to be discharged from various agreements, including the Deed of Loan and Deed of Guarantee. The dispute arose when the cross-claimants filed a Cross-Claim seeking to be discharged from these agreements, but subsequently, the loan was repaid by the borrower. The cross-defendants applied for the cross-claimants to pay indemnity costs on the basis that the Cross-Claim was hopeless or futile and that the cross-claimants unnecessarily prolonged the prosecution of the Cross-Claim. The primary legal issue before the court was whether the repayment of the loan by the borrower constituted a positive ground or good reason to depart from the default position under UCPR r 42.19, which provides that the party discontinuing proceedings must pay the other party's costs unless there is a positive ground or good reason not to do so.

The court found that the repayment of the loan by the borrower did not render the entire Cross-Claim futile due to a supervening event. Instead, only part of the Cross-Claim was rendered futile by reason of the repayment. The court held that there was no reason to depart from the default position under UCPR r 42.19, and therefore, the cross-claimants were liable to pay the cross-defendants' costs of the proceedings. The court also found that the Cross-Claim was not hopeless or futile, and that the cross-claimants did not unnecessarily prolong the prosecution of the Cross-Claim. However, the court found that the pleadings in the Cross-Claim were in certain respects deficient, and that the cross-claimants should pay indemnity costs to the cross-defendants for the time spent dealing with those deficiencies.

The final orders of the court were that the cross-claimants were liable to pay the cross-defendants' costs of the proceedings on the ordinary basis, and that the cross-claimants were liable to pay indemnity costs to the cross-defendants for the time spent dealing with the deficient pleadings in the Cross-Claim. The court did not find that the Cross-Claim was hopeless or futile, nor did it find that the cross-claimants unnecessarily prolonged the prosecution of the Cross-Claim. However, the court did find that the pleadings in the Cross-Claim were deficient, and that the cross-claimants should be liable to pay indemnity costs to the cross-defendants for the time spent dealing with those deficiencies.

Orders