Fine China Capital Investment Limited v Qi (No 5)

[2024] FCA 415

FEDERAL COURT OF AUSTRALIA

Fine China Capital Investment Limited v Qi (No 5) [2024] FCA 415

File number(s):

VID 560 of 2023

Judgment of:

O’CALLAGHAN J

Date of judgment:

23 April 2024

Catchwords:

COSTS –­ appropriate order as to costs of interlocutory applications –­ where both parties were largely unsuccessful –­ where ordered that each party is to bear their own costs of the applications

Legislation:

Federal Court of Australia Act 1976 (Cth) s 43

Cases cited:

DSE (Holdings) Pty Ltd v InterTAN Inc (2004) 51 ACSR 555; [2004] FCA 1251

Fine China Capital Investment Limited v Qi (No 4) [2024] FCA 343

LFDB v SM (No 2) [2017] FCAFC 207

Division:

General Division

Registry:

Victoria

National Practice Area:

Commercial and Corporations

Sub-area:

Corporations and Corporate Insolvency

Number of paragraphs:

10

Date of last submission/s:

22 April 2024

Date of hearing:

Determined on the papers

Counsel for the Applicant:

L De Ferrari SC

Solicitor for the Applicant:

AJH Lawyers

Counsel for the Respondent:

N H Ferrett KC

Solicitor for the Respondent:

Carswell & Company

ORDERS

VID 560 of 2023

BETWEEN:

FINE CHINA CAPITAL INVESTMENT LIMITED (COMPANY NO. 2039738)

Applicant

AND:

TAO QI

Respondent

ORDER MADE BY:	O’CALLAGHAN J
DATE OF ORDER:	23 APRIL 2024

THE COURT ORDERS THAT:

1.Each party is to bear their own costs of:

(a)the respondent’s interlocutory application dated 1 December 2023; and

(b)the applicant’s interlocutory application dated 13 February 2024.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J:

1. On 8 and 12 March 2024, I heard a number of interlocutory applications. 

2. In Fine China Capital Investment Limited v Qi (No 4) [2024] FCA 343, I dismissed the following:

   (a)the respondent’s applications:

   (i)for summary judgment on the basis that the proceeding is an abuse of process;

   (ii)for summary judgment of those of the applicant’s claims based on “reflective loss”;

   (iii)to strike out the further amended originating application;

   (iv)to strike out the further amended statement of claim; and

   (b)the applicant’s applications:

   (i)for leave to reinstate CSJH (Australia) Pty Ltd;

   (ii)for leave to bring a statutory derivative action in the name of CSJH;

   (iii)for leave to file a new originating application and new statement of claim (based on the assumption that the above applications for leave would be granted);

   (iv)to strike out the whole of the respondent’s defence.

3. I made an order that the respondent, Mr Tao Qi, be given leave to amend paragraph 14 of his defence.

4. I also ordered that the applicant, Fine China Capital Investment Limited, file and serve a second further amended originating application and statement of claim which complied with my order of 23 October 2023.  This was to address the applicant’s misconceived attempt to join a second respondent, MAWF Australia Pty Ltd, to the proceeding.

5. I now have to consider the question of costs of the applications, having received brief written submission from the parties.

6. As the respondent’s counsel submitted, the effect of the court’s orders was that:

   (a)the respondent failed on its applications for judgment;

   (b)the respondent enjoyed some small success on the applications to strike out insofar as the court accepted, despite the applicant’s plainly arguable resistance, that MAWF had never been legitimately joined to the proceeding and that the claims against it therefore had to be struck out.

   (c)the applicant failed on its applications for leave; and

   (d)the applicant enjoyed minimal success on its application to strike out the defence, insofar as the court accepted the submission that the respondent’s case that he did not sign the trust deeds as alleged must be specifically pleaded.

7. It follows that both sides were largely unsuccessful in the relief they sought.

8. The court’s discretion to award costs is established by section 43 of the Federal Court of Australia Act 1976 (Cth). The discretion is unfettered, though obviously to be exercised judicially. See DSE (Holdings) Pty Ltd v InterTAN Inc (2004) 51 ACSR 555; [2004] FCA 1251 at [14] (Allsop J). See also LFDB v SM (No 2) [2017] FCAFC 207 at [7] (Besanko, Jagot and Lee JJ).

9. It is true, as counsel for Fine China submitted, that more hearing time was occupied by Mr Qi’s abuse of process of application.  It is also true that Fine China’s entitlement to be registered as a member of CSJH has not been finally decided.  But each party put the other on notice that their applications were bound to fail, as they largely did, and this is not an appropriate case for the making of differential costs orders — including because the costs associated with a taxation of such costs would be disproportionate.

10. In my view, in all those circumstances each party should bear their own costs in relation to the hearing on 8 and 12 March 2024.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O’Callaghan.

Associate:

Dated:       23 April 2024