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Fang v Sun (No 2)

Fang v Sun (No 2)

Case [2014] NSWSC 1194 4 September 2014

Costs

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Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Linjing Fang v Xiaodan Sun & Ors (No. 2) [2014] NSWSC 1194
Hearing dates: 10 June 2014
Decision date: 04 September 2014
Jurisdiction: Equity Division
Before: Slattery J
Decision:
Indemnity costs awarded. Compound interest up to judgment awarded at the RBA rate plus 4 per cent at yearly rests. Adjustments made to the principal judgment sum increasing it by $39,000.

Catchwords:
PROCEDURE - costs - indemnity costs - departing from the general rule that costs follow the event - conduct of the parties - whether the defendant's misconduct justifies the award of indemnity costs to the plaintiff -

INTEREST - which rate of interest should be applied - principle that where a party found to be in dishonest breach of fiduciary duty, interest may be claimed at a higher rate - whether interest payable at ordinary rate or compound rate.
JUDGMENTS - adjustment to judgment sum - Court reserved for further consideration whether a further sum of $50,000 should be included in the judgment sum - plaintiff acknowledges that $11,000 should be deducted from the judgment sum.
Legislation Cited: Supreme Court Practice Note Gen. 16
UCPR, r 42.1
Cases Cited: Briginshaw v Bringinshaw (1938) 60 CLR 336
Degman Pty Ltd (In Liq) v Wright (No. 2) (1983) 2 NSWLR 354
Linjing Fang v Xiaodan Sun & Ors [2014] NSWSC 713
Southern Cross Commodities Pty Ltd (in Liq) v Ewing (1987) 11 ACLR 818
Thomas v SMP (International) No. 6 [2010] NSWSC 1311
Category: Costs
Parties: Plaintiff: Linjing Fang
First defendant: Xiaodan Sun
Second defendant: Mal Soon Park
Third defendant: Chong Hung Park
Fourth defendant: Zozoen Pty Limited (ACN 139 566 528)
Representation: Counsel:
Plaintiff: M. Pesman SC; C. Alexander
First & Third: G.W.McGrath SC
Solicitors:
Plaintiff: Albert Yau, Yau & Wang Lawyers
First & Third Defendants: Derek Xu, Jurisbridge Legal

File Number(s): 2013/25078
Publication restriction: No

Judgment

This is the Court's second judgment in these proceedings. It follows upon the Court's principal judgment, given 10 June 2014: Linjing Fang v Xiaodan Sun & Ors [2014] NSWSC 713. Both judgments should be read together; events, persons and things are referred to in this judgment in the same way as they are in the principal judgment.

The principal judgment found that the defendant, Ms Sun, had engaged in misleading and deceptive conduct by concealing the true purchase price of a restaurant business from the plaintiff, Ms Fang. The Court also found that, through this misrepresentation, the defendant breached her fiduciary duty to the plaintiff. Judgment was entered in favour of the plaintiff in the amount of $654,850.

The principal judgment, at [122-124], invited the parties to advance further submissions in respect of three unresolved issues: (1) whether the plaintiff could show that an additional advance of $50,000 had been misapplied by the defendant; (2) what was the appropriate rate at which interest should be awarded up to judgment; and (3), whether the plaintiff is entitled to costs on the indemnity basis. This 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 Fang v Sun (No 2)

Details

AGLC: Linjing Fang v Xiaodan Sun (No. 2) [2014] NSWSC 1194
Case: [2014] NSWSC 1194
Decision Date: 04 September 2014

CaseChat Overview and Summary

The case of Fang v Sun (No 2) involved a dispute between the parties regarding costs and interest in a legal matter that had been previously adjudicated. The court was tasked with determining whether the defendant's misconduct warranted the award of indemnity costs to the plaintiff and whether interest should be applied at an ordinary or compound rate. The case was heard in the relevant Australian court, where the judge considered the conduct of the parties and the applicable legal principles.

The legal issues before the court included whether the defendant's conduct justified the award of indemnity costs to the plaintiff and, if so, at what rate interest should be applied. The court considered the general rule that costs follow the event and the principle that where a party is found to be in dishonest breach of a fiduciary duty, interest may be claimed at a higher rate. The court also considered the plaintiff's acknowledgment that $11,000 should be deducted from the judgment sum and reserved for further consideration the question of whether a further sum of $50,000 should be included in the judgment sum.

After considering the conduct of the parties and the applicable legal principles, the court determined that the defendant's misconduct justified the award of indemnity costs to the plaintiff. The court also determined that interest should be applied at a higher rate due to the defendant's dishonest breach of fiduciary duty. The court ordered that the interest be applied at a compound rate. Finally, the court adjusted the judgment sum by deducting $11,000 and reserving for further consideration the question of whether a further sum of $50,000 should be included in the judgment sum.

Orders