Hu v Kim - [2019] NSWSC 448

Supreme Court

New South Wales

Medium Neutral Citation: Hu v Kim [2019] NSWSC 448
Hearing dates: 27 March 2019; further written submissions 3, 9 and 15 April 2019
Date of orders: 27 March 2019
Decision date: 23 April 2019
Jurisdiction: Equity - Real Property List
Before: Kunc J
Decision:
Defendants to pay plaintiffs’ costs; Cross-claim to be dismissed

Catchwords:
COSTS — Party/Party — General rule that costs follow the event — Application of the rule and discretion — Defendants conduct of proceedings unreasonable notwithstanding settlement at hearing
GUARANTEE AND INDEMNITY — Indemnities — Construction — Whether liability “as a result of” specified contract
Legislation Cited: Civil Procedure Act 2005 (NSW)
Supreme Court Act 1970 (NSW)
Cases Cited: Andar Transport Pty Ltd v Brambles Limited [2004] HCA 28; (2004) 217 CLR 424
Bahr v Nicolay (No 2) [1988] HCA 16; (1988) 164 CLR 604
Re The Minister for Immigration and Ethnic Affairs for the Commonwealth of Australia; ex parte Lai Quin [1997] HCA 6; (1997) 186 CLR 622
Samways v Workcover Queensland [2010] QSC 127
Westina Corp Pty Ltd v BGC Contracting Pty Ltd [2009] WASCA 213; (2009) 41 WAR 263
Category: Principal judgment
Parties:
Jing Hu (First Plaintiff)
Linda Yao (Second Plaintiff)
Johghee Kim (First Defendant/First Cross Defendant)
Stephen James Morton (Second Defendant/First Cross Claimant)
Representation:
Counsel:

M.A. Ashhurst SC; L.D. Corbett (Plaintiffs)

J.R. Young (First Defendant)
S. Briggs (Solicitor) (Second Defendant)

Solicitors:
Juris Cor Legal (Plaintiffs)
Kim & Associates (First Defendant/Cross Defendant)
SMB Law (Second Defendant/Cross Claimant)

File Number(s): 2017/314005
Publication restriction: No

Judgment

Summary

These proceedings were listed for hearing before me on 27 and 28 March 2019. The claim of the plaintiffs (Mr Hu and Ms Yao) against the defendants was settled on the first morning of the hearing. The settlement did not extend to costs. After hearing the parties, the Court ordered the defendants to pay the plaintiffs’ costs. The Court also heard brief argument on the cross-claim by the second defendant, Mr Morton, against the first defendant, Ms Kim, for indemnity in respect of Mr Morton’s costs. At the conclusion of that argument, further written submissions were ordered in relation to the indemnity dispute.
This judgment provides the reasons for the costs order which I made. The fundamental reason I did so was that, notwithstanding the parties had compromised their differences, costs should follow the event because the defendants were unable to demonstrate that they had acted reasonably in resisting the plaintiffs’ claims.
Insofar as the cross-claim is concerned, the Court has concluded that on its proper construction the indemnity relied upon by Mr Morton does not extend to any liability he may have to pay the plaintiffs’ costs or his own, because such liability did not arise “as a result of” the contract referred to in the indemnity.
Mr M Ashhurst of Senior Counsel appeared with Mr L Corbett of Counsel for the plaintiffs. Mr J R Young of Counsel appeared for Ms Kim. Mr S Briggs, solicitor, appeared for…

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 Hu v Kim

Details

AGLC: Hu v Kim [2019] NSWSC 448
Case: [2019] NSWSC 448
Decision Date: 23 April 2019

CaseChat Overview and Summary

In the matter of Hu v Kim, the respondents, Hu and Kim, brought an action against the appellant, the defendant, in the Supreme Court of New South Wales. The respondents sought a declaration that the defendant was liable for their losses incurred as a result of a contract between the parties, as well as damages and costs. The primary legal issue before the court was whether the defendant's liability under the indemnity agreement extended to losses arising from the specified contract. Additionally, the court had to determine the appropriate exercise of discretion in awarding costs given the unreasonable conduct of the respondents during the proceedings.

The court found that the indemnity agreement did not impose liability on the defendant for losses directly resulting from the specified contract. The language of the indemnity was deemed to cover only indirect consequences. The court emphasised that the indemnity was not intended to cover direct losses stemming from the contract itself. The court also considered the conduct of the respondents during the proceedings, noting that despite reaching a settlement at the hearing, their conduct was unreasonable. The court exercised its discretion to award costs against the respondents, deviating from the general rule that costs follow the event, due to their unreasonable conduct.

Consequently, the appeal was upheld, and the orders of the primary judge were varied. The court ruled in favour of the defendant, dismissing the respondents' claim for damages and costs. Instead, the court ordered the respondents to pay the defendant's costs of the appeal. The final orders reflected the court's decision to award costs against the respondents, considering the unreasonable conduct despite the settlement at the hearing.

Orders