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H & Q Cafe Pty Ltd v Hu

H & Q Cafe Pty Ltd v Hu

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Case Copied 19 October 2022 50 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2022 04030

IN THE MATTER OF H & Q CAFE PTY LTD (ACN 624 852 179)

H & Q CAFE PTY LTD (ACN 624 852 179) (and others according to the Schedule)	Plaintiffs
v
RAYMOND BING HU (and others according to the Schedule)	Defendants

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JUDGE:	Connock J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 October 2022
DATE OF JUDGMENT:	19 October 2022 ex tempore; revised 21 October 2022
CASE MAY BE CITED AS:	H & Q Cafe Pty Ltd & Ors v Hu & Ors
MEDIUM NEUTRAL CITATION:	[2022] VSC 632

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COSTS — Leave to discontinue proceeding — Rules 25.03 and 63.15 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — No adjudication on merits — The costs ‘starting point’ on discontinued proceedings — Plaintiffs effectively capitulated or surrendered — Yue’e Zhao v Suzhou Haishun Investment Management Co Ltd [2020] VSCA 34; Re Minister for Immigration and Ethnic Affairs;ex parte Lai Qin (1997) 186 CLR 622 applied — Leave to discontinue proceeding seeking a freezing order and ancillary order — Rules 37A.05(5)(a) and (b) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — Freezing order application against a third party — Ancillary order against a third party — Meaning of ‘a process in the Court’ under r 37A.05(5)(b) — Prospective costs order in a proceeding not ‘a cause of action’ for the purposes of r 37A.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — Leave to discontinue granted to the plaintiffs — Costs orders against the plaintiffs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S Rubenstein	Verge Legal
For the First Defendant	Mr S Wang (Solicitor)	Hall & Wilcox
For the Second and Third Defendants	No appearance

HIS HONOUR:

Introduction and summary

By their originating process filed on 10 October 2022 the plaintiffs sought:

(a) a freezing order against the third defendant, Ms Guan (Guan Freezing Order), restraining her from disposing of, diminishing or dealing with the land and property at 48 Deakin Street, Bentleigh East, Victoria, being the land contained in Certificate of Title Volume 08067 Folio 170 (Bentleigh Property), pursuant to rule 37A.05(5) of the Supreme Court (General Civil Procedure) Rules 2015 (Rules), alternatively the inherent jurisdiction of the court; and

(b) an ancillary order against the first defendant, Mr Hu (Hu Ancillary Order), who is Ms Guan’s former husband, requiring Mr Hu to make and serve an affidavit disclosing full information regarding his assets wherever they are located pursuant to rule 37A.03 of the Rules, or the inherent jurisdiction of the court.[1]

[1]The plaintiffs did not press their application for joinder of parties that was referred to in the originating process. They had filed a summons seeking to amend the originating process to remove this aspect of the relief sought. This amendment application was not heard because the plaintiffs sought…

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: [2022] VSC 632
Decision Date: 19 October 2022 ex tempore; revised 21 October 2022

CaseChat Overview and Summary

In the matter of H & Q Cafe Pty Ltd v Hu, the dispute arose from a claim for a freezing order and ancillary order against a third party, which was subsequently discontinued by the plaintiffs. The case was heard in the Supreme Court of Victoria. The primary legal issues before the court involved the circumstances under which leave to discontinue proceedings could be granted, the implications of such a decision on the costs associated with the proceedings, and the interpretation of specific provisions within the Supreme Court (General Civil Procedure) Rules 2015 (Vic).

The court addressed whether the plaintiffs were entitled to discontinue the proceedings without an adjudication on the merits, and if so, what the implications would be for costs. The plaintiffs sought to rely on Rules 25.03 and 63.15 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) to discontinue their claims. The court considered the precedents set in Yue’e Zhao v Suzhou Haishun Investment Management Co Ltd [2020] VSCA 34 and Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622, which indicated that leave to discontinue could be granted if the plaintiffs effectively capitulated or surrendered. Additionally, the court examined whether the freezing order application and the ancillary order against the third party constituted 'a process in the Court' under Rule 37A.05(5)(b) of the Rules. The court determined that a prospective costs order in a proceeding was not 'a cause of action' for the purposes of Rule 37A.05.

The court found that the plaintiffs' decision to discontinue the proceedings effectively constituted a surrender or capitulation, warranting the grant of leave to discontinue. The court further held that the costs 'starting point' principle applied, meaning that the plaintiffs would bear their own costs and the costs of the defendant, as they had effectively abandoned their claims. The court granted leave to discontinue the proceedings and made corresponding costs orders against the plaintiffs.

In conclusion, the court's decision underscored the importance of the procedural rules in determining the consequences of discontinuing proceedings, particularly in relation to costs. The plaintiffs' decision to discontinue the proceedings without an adjudication on the merits led to a costs order against them, reflecting the principle that the party initiating litigation bears the risk of its outcome.

Orders