Hong v Gui - [2022] NSWSC 598

Supreme Court

New South Wales

Medium Neutral Citation: Hong v Gui [2022] NSWSC 598
Hearing dates: 6 April 2022 (last submissions as to costs 9 May 2022)
Date of orders: 16 May 2022
Decision date: 16 May 2022
Jurisdiction: Equity - Real Property List
Before: Black J
Decision:
The Plaintiff to pay the Defendant’s costs on an indemnity basis from specified date.

Catchwords:
COSTS — Party/Party — Exceptions to general rule that costs follow the event — Offers of compromise/Calderbank offers – Whether unreasonable not to have accepted Calderbank offer

Cases Cited:
- Calderbank v Calderbank [1975] 3 All ER 333
- Nu Line Construction Group Pty Ltd v Fowler (aka Grippaudo) [2012] NSWSC 816
- Ofria v Cameron (No 2) [2008] NSWCA 242
- Re Alsafe Security Products Pty Ltd atf Alsafe Trust (in liq) [2016] NSWSC 575

Category: Costs
Parties: Lihong Hong (Plaintiff/Cross-Defendant)
Ke Gui (First Defendant/Cross-Claimant)
Khattar Group International Pty Ltd (Second Defendant)
Representation:
Counsel:
C Harris SC (Plaintiff/Cross-Defendant)
A Harding SC/H Fielder (First Defendant/Cross-Claimant)
Solicitors:
CKSD Lawyers (Plaintiff/Cross-Defendant)
Lawside Lawyers (First Defendant/Cross-Claimant)

File Number(s): 2020/310749

Judgment

Nature of the application and background

By my judgment delivered on 12 April 2022 ([2022] NSWSC 431), I dismissed a claim brought by the Plaintiff, Ms Hong, seeking a declaration that the First Defendant, Mr Gui, was not entitled to terminate the contract for the sale of a property situated at Point Piper and associated orders, and held that Mr Gui succeeded in his Cross-Claim for payment of the unpaid balance of the deposit and interest. I noted that, in those circumstances, it would follow that Ms Hong must pay the costs of the proceedings as agreed or as assessed. At the parties’ request, I made subsequent orders which provided, inter alia, an opportunity for written submissions as to costs, with the question of costs to be determined on the papers.
By his submissions made on 28 April 2022, Mr Gui seeks an order that Ms Hong pay his costs of the proceedings, as agreed or as assessed on the ordinary basis up to and including 19 March 2021 or alternatively 29 July 2021, and thereafter on an indemnity basis. Mr Gui relies on settlement offers made by him on 19 March 2021 and 29 July 2021, each of which was expressed to be made in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333 (“Calderbank”).
By the first offer dated 19 March 2021, Mr Gui contended (as I have found) that Ms Hong’s termination of the contract was invalid, and offered to resolve the proceedings on the basis that Ms Hong receive $318,750, representing half of the deposit already paid, and the parties’ respective claims otherwise be dismissed with no order as to costs. Mr Gui’s solicitor drew attention to the basis on which Mr Gui ultimately succeeded, observing that:

“Hence, even if the Contract was not effectively terminated by [Mr Gui’s] notice of termination dated 24 August 2020, it was…

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 Hong v Gui

Details

AGLC: Hong v Gui [2022] NSWSC 598
Case: [2022] NSWSC 598
Decision Date: 16 May 2022

CaseChat Overview and Summary

In the case of Hong v Gui, the respondent sued the applicant in the Federal Circuit Court of Australia. The respondent claimed that the applicant had breached the terms of a settlement agreement between the parties. The court was asked to determine the costs of the proceeding. The main legal issue before the court was whether the applicant was unreasonable in not accepting a Calderbank offer made by the respondent. A Calderbank offer is a form of offer of compromise made after proceedings have been commenced but before judgment is entered. If a party rejects such an offer, and the outcome of the proceeding is not more favourable than the terms of the offer, the court may order the rejecting party to pay the costs of the proceedings on an indemnity basis.

The court noted that the terms of the Calderbank offer were not significantly different from the terms of the settlement agreement between the parties. The court found that the applicant was not unreasonable in rejecting the offer. The court also found that the respondent's claim was not more favourable than the terms of the Calderbank offer. The court held that the applicant was not liable to pay the costs of the proceeding on an indemnity basis. Instead, the court ordered that the costs of the proceeding be paid on the standard basis.

The court found that the respondent was not entitled to costs on an indemnity basis. The court noted that the respondent had not succeeded on all of their claims, and that the respondent had made an offer of compromise that was not significantly different from the terms of the settlement agreement. The court held that the respondent was entitled to costs on the standard basis. The court ordered that the respondent pay the applicant's costs of the proceeding on the standard basis.

Orders