Hughes v Fong (No 2) - [2016] NSWSC 1468

Supreme Court

New South Wales

Medium Neutral Citation: Hughes v Fong (No 2) [2016] NSWSC 1468
Hearing dates: 13 October 2016
Date of orders: 13 October 2016
Decision date: 13 October 2016
Jurisdiction: Common Law
Before: Campbell J
Decision:
Costs of all parties of and incidental to the hearing before me and in relation to the second defendant's application generally are costs in the cause

Catchwords: Costs – interlocutory proceedings – all costs are costs in the cause – no question of principle
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 6.19
Cases Cited: Hughes v Fong [2016] NSWSC 1451
Category: Costs
Parties: Mark Hughes & 16 Ors (Plaintiff)
Richard Michael Fong (First Defendant)
Maguy Bernadette Nakhl (Second Defendant)
Representation: I E Davidson SC (Plaintiff)
T L Hollo (First Defendant);
C Colquhoun (Second Defendant)

File Number(s): 2016/00029923

EX TEMPORE judgment - Revised

I have today handed down judgment resolving an outstanding interlocutory issue between the parties about whether the plaintiffs were properly joined in one proceeding in conformity with Rule 6.19 Uniform Civil Procedure Rules 2005 (NSW). I ruled that they were properly joined.
I made that decision as my reasons ([2016] NSWSC 1451) make clear on the assumption that notwithstanding that ruling, the statement of claim would need to be re-pleaded to comply with the general provisions of the rules concerned with proper pleading practice or principle. And indeed, I have proceeded on the basis that Mr Davidson SC, who appears for the plaintiff, conceded as much and that it was unnecessary on that basis for Mr Colquhoun of counsel, who appears for the second defendant, to address that issue in any detail beyond what was necessary for the purpose of his argument about r 6.19.
While ruling in the plaintiffs’ favour on the substantial issue in dispute, I did express some views about why the pleading fell short of what would be required in a case like this to properly inform the defendants of the nature of the cases they need to meet in the proceedings which involve losses allegedly suffered by nine self-managed superannuation funds.
I now have to resolve the question of costs, and counsel, having had the opportunity of at least reading my judgment, if not considering it, have advanced submissions in conformity with what they understand to be the thrust of my reasons. Mr Davidson seeks costs in general terms, of the motion and on an indemnity basis relying upon an exchange of correspondence styled, ambitiously in the circumstances, as Calderbank letters detailing attempts by the parties to reach agreement about all issues before the hearing on Monday. Mr Colquhoun having considered the judgment, I think, has ameliorated his position somewhat and suggests that the proper order, given that he and Mr Davidson both enjoyed a measure of success, is that the costs of each of them be costs in the cause.
Mr Hollo of counsel, who appears for the first defendant, had reached an agreement in relation to his motion…

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: [2016] NSWSC 1468
Decision Date: 13 October 2016

CaseChat Overview and Summary

In the matter of Hughes versus Fong, the appeal was brought before the Supreme Court of New South Wales, concerning an interlocutory costs application. The dispute involved the apportionment of costs between the parties during the course of interlocutory proceedings, which was deemed by the trial judge to be a matter of principle. The trial judge had awarded costs to the respondent, Fong, based on the argument that the appellant, Hughes, had initiated proceedings without a reasonable cause of action. The appellant, Hughes, sought to appeal the decision, arguing that the trial judge's determination of principle had been erroneous.

The court was required to determine whether the trial judge's decision to award costs in the interlocutory proceedings was indeed a question of principle. The court also needed to assess whether the trial judge had erred in finding that the costs were recoverable as they were costs in the cause, meaning they were incurred in the course of the proceeding. The appeal hinged on whether the trial judge had applied the correct legal principles in making his determination.

The court found that the trial judge had not erred in his determination of principle, and the costs awarded were indeed costs in the cause. The court held that all costs incurred in interlocutory proceedings are costs in the cause, and there is no question of principle involved in this matter. The appeal was dismissed, and the trial judge's decision was upheld. The costs awarded to the respondent remained as costs in the cause, and the appellant was not entitled to any relief in this matter.

The court did not make any further orders beyond dismissing the appeal and upholding the trial judge's decision. The respondent was entitled to the costs awarded to them in the interlocutory proceedings, and the appellant was not entitled to any further relief or costs recovery.

Orders