I Minh Holdings Pty Ltd v Chuang
[2021] VSC 760
•24 November 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST - GARDE J
S ECI 2019 02520
| I MINH HOLDINGS PTY LTD (ACN 601 650 293) (and others according to the Schedule attached) | Plaintiffs |
| v | |
| IVAN LI CHUANG (and others according to the Schedule attached) | Defendants |
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JUDGE: | GARDE J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 October 2021 |
DATE OF JUDGMENT: | 24 November 2021 |
CASE MAY BE CITED AS: | I Minh Holdings Pty Ltd v Chuang |
MEDIUM NEUTRAL CITATION: | [2021] VSC 760 |
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PRACTICE AND PROCEDURE – Security for costs – Relevant factors – Costs relating to third party claim – Whether SARPD Oil International Limited v Addax Energy SA [2016] EWCA Civ 120 should be followed in Victoria – Security for costs ordered – Corporations Act 2001 (Cth) s 1335(1); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 62.02.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs/ Defendant by Counterclaim | Mr J Styring | Hunt & Hunt |
| For the Fourth Defendant/ Plaintiff by Counterclaim | Mr L Magowan | Christopher William Legal |
| For the Sixth Defendant | Mr N Lontos | |
| For the First Third Party | Mr A Potter of Colin Biggers & Paisley |
HIS HONOUR:
Introduction
By a summons filed 27 August 2021 (‘summons’), Shelley Weisler, the fourth defendant, seeks security for the costs of the proceeding from I Minh Holdings Pty Ltd (ACN 601 650 293) (‘Minh’), the first plaintiff. The application is made under r 62.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) and s 1335(1) of the Corporations Act 2001 (Cth) (‘Act’). Minh opposes the application.
Background
In 2018, Minh was the registered proprietor of the land contained in Certificate of Title Volume 8353 Folio 717 located at 23 Carawatha Road, Doncaster, Victoria 3108 (‘property’).
In late February 2018, Jerry Triantos of Express Money Service Pty Ltd (ACN 110 272 574), the sixth defendant (‘Express Money’), contacted Myer Jeruzalski, a principal solicitor of Ajzensztat Jeruzalski & Co (‘AJC’), seeking a loan for Minh to be secured by a mortgage over the property. On 6 March 2018, AJC contacted Dion Weisler, the husband of Shelley Weisler, offering an investment in a loan of $1,852,500 on a 12% pa interest rate payable monthly in advance for a term of one year. The loan was to be secured by a first mortgage over the property at a loan to value ratio of about 65%. Mr Weisler accepted the offer on 7 March 2018, and on 11 March 2018 advised AJC that Ms Weisler would be the lender. She retained AJC as her solicitors to handle the transaction.
On 8 March 2018, AJC sent a letter of offer to Minh for a mortgage advance of $1,852,500. Minh’s directors at the time, Ivan Chuang (the first defendant) and Tuan Lam, accepted the offer and signed various documents. One of those documents was a disbursement authority.
The disbursement authority authorised various deductions from the loan principal, including for three months’ interest payable in advance and certain costs. The net balance of the loan principal of $1,767,248.30 was payable on the written direction of Minh.
On 16 March 2018, a series of emails were exchanged between Minh, Express Money and AJC, the result of which was that $250,000 and $38,000 of the loan principal were paid to Express Money, while amounts of $1,326,854.70 and $152,500 were paid to KIG Holdings Pty Ltd (ACN 607 330 021) (‘KIG’), the second defendant.
The principal issue in the proceeding is whether the emails individually or collectively constituted a written direction for the purposes of the disbursement authority. The issue turns on whether Mr Chuang had, and exercised, authority for the disbursement of the funds to Express Money and KIG. No monies were ever repaid to Ms Weisler.
On 15 January 2019, Ms Weisler served Minh with a notice to pay under s 76 of the Transfer of Land Act 1958 (Vic), stating that Minh had defaulted by failing to pay interest after 16 June 2018 and claiming interest at the higher rate and costs. In January 2019, Ms Weisler took possession of the property which was subsequently sold by mortgagee’s sale. Minh failed in an application to stop the sale.
In August 2020, the plaintiffs sought an interlocutory injunction requiring Ms Weisler to pay the proceeds of sale of the property into Court. Again the application was unsuccessful. The net proceeds of the settlement of the sale of the property of about $2,072,937 were paid to Ms Weisler on or about 23 November 2020. Minh now claims damages and other relief from Ms Weisler.
Ms Weisler denies Minh’s allegations and says that the funds lent were properly disbursed. She counterclaims against Minh for damages, and has issued a third party proceeding against AJC on the basis that if she is liable to Minh, AJC acted in breach of their professional duties as her solicitors and failed to exercise reasonable skill and care.
Weisler’s evidence
Ms Weisler relied on the affidavit of Bronwyn Goddard, an experienced solicitor. She deposed that she has reason to believe that Minh will be unable to pay Ms Weisler’s costs of the proceeding if she is successful at trial. Ms Goddard says that:
(a) Minh has a paid up capital of $100;
(b) property searches show that Minh does not own any real estate in Victoria; and
(c) Minh’s solicitor did not respond to a letter requesting evidence of Minh’s assets.
Ms Goddard notes that Ms Weisler had no direct involvement in the details of the transaction at the heart of the dispute. Her involvement was limited to signing documents and providing funds.
She also deposed that the initial focus of the proceeding was Minh’s application in June 2019 to restrain Ms Weisler from selling the property, and then in August 2020, Minh’s application to require her to pay the proceeds of sale of the property into Court. The present focus is the trial of the proceeding listed for 1 August 2022 on an agreed estimate of twelve days.
Although the provision of security for costs by Minh was raised in September 2019, the issue of security for costs was only again raised by Ms Weisler in July 2021. Ms Goddard said that the timing of the application was informed by changes in the circumstances of the case. They included the sale of the property and the amendment of Minh’s claim. Ms Goddard said that she did not believe that an application for security for costs made earlier would have been successful.
Ms Goddard said that if the security sought was granted and the proceeding stayed because the security was not forthcoming, Ms Weisler would not pursue her counterclaim against Minh, or a third party claim against AJC. Subsequently, Ms Goddard confirmed that if the Court ordered Minh to provide security for Ms Weisler’s costs, Ms Weisler would discontinue her counterclaim against Minh.
Ms Goddard assessed Ms Weisler’s future costs up to and including trial on the standard basis at a total cost of $415,939 (including GST), made up of:
(a) $212,130 for Ms Weisler’s costs of the claim by Minh; and
(b) $203,809 for AJC’s costs of the third party claim.
Minh’s evidence
Minh relied on the affidavits of Mark Pennini, its solicitor, filed 15 September 2021, and Anna Sango, an experienced solicitor and costs consultant, filed 20 October 2021.
Mr Pennini said that apart from a company search of Minh, he had not identified any request by Ms Weisler during the course of the mortgage transaction for accounts, balance sheets, or profit and loss statements to show Minh’s ability to repay any monies owed by Minh under the mortgage transaction.
He said that Minh’s costs of the proceeding were personally funded by Mr Liu, the second plaintiff, on the basis that the funding constituted a debt owed by Minh to Mr Liu. As at 1 September 2021, Minh’s indebtedness to Mr Liu for Minh’s costs was approximately $1,444,710. The debt was repayable only if Minh were successful in the proceeding.
Ms Sango deposed that the reasonable quantum of the security for future costs sought by Ms Weisler was $129,217.81 (ex GST), including both the costs that she would incur in defence of the proceeding, and those that she may be ordered to pay AJC if Minh’s claim were dismissed.
Ms Weisler’s submissions
Ms Weisler submitted that the Court should grant security and fix quantum in accordance with Ms Goddard’s assessment.
She made the following main points:
(a) While ordinarily merit was a neutral factor, Minh’s claim was implausible and tenuous.[1] Mr Liu, who now controls Minh, was at the relevant time a minority shareholder and not a director. He subsequently purchased a majority interest, but was unhappy with the conduct of Mr Chuang and Mr Lam in relation to the mortgage transaction. Mr Chuang was a director of Minh, and was now a bankrupt.
[1]See Adelaide (SA Pools & Spa) Manufacturing and Installation Pty Ltd v Westcourt General Insurance Brokers Pty Ltd [2016] SASC 60, [36] (Doyle J); Huntingdale Village Pty Ltd (recs & mgrs apptd) v Korda [2015] WASCA 101, [56].
(b) Ms Weisler was entitled to assume that, as a director and agent of Minh, Mr Chuang was authorised to provide a written direction in accordance with the disbursement authority. He provided an email authority on 16 March 2018 to release the funds.
(c) The dispute arose out of a loan of $1,852,500 secured by first mortgage against real property which ultimately sold for $2,072,937.43. Ms Weisler had entered into a contract with a known solvent company which was the registered proprietor of real property, and secured her funds by registered mortgage. She had not voluntarily accepted significant risk.
(d) Ms Weisler had no direct involvement in the details of the transaction at the heart of the dispute. Her involvement was limited to signing relevant documents and providing funds. She acted at all times through AJC as her agent. In the normal course, if successful, she would be entitled to recover her own costs and those of AJC which she had been ordered to pay.
(e) There had been no unreasonable delay in the application for security for costs.
(f) After the property was sold and settled, the issues in the proceeding narrowed. It was now possible to seek security for costs.
(g) According to an email from Minh’s solicitor dated 26 August 2021, Mr Liu and Ms Liang were then resident in China.
In oral submissions, Ms Weisler said that the delay had benefited Minh, as security for costs could only be sought prospectively. There was no evidence of any prejudice to Minh.
There were two likely orders as to costs if Minh failed on its claim:
(a) an order that Minh pay Ms Weisler’s costs of and incidental to the proceeding, such costs to include the costs of the third party claim, to be taxed by the Costs Court; and
(b) an order that Ms Weisler pay AJC’s costs of and incidental to the proceeding, such costs to be taxed by the Costs Court.
As to the claim for security for costs in relation to AJC’s costs of the proceeding, Ms Weisler submitted that:
(a) the Court should follow the decision of the English Court of Appeal in SARPD Oil International Limited v Addax Energy SA, where security for costs had been ordered against the plaintiff in relation to the costs likely to be awarded to a third party against the defendant if the plaintiff’s claim and the third party claim were unsuccessful;[2]
[2][2016] EWCA Civ 120, [24]-[25] (Longmore and Sales LJJ, Baker J) (‘Sarpd’).
(b) Ms Weisler was in a situation analogous to a back to back contract. If she lost against Minh, she was likely to succeed against AJC. However, if she succeeded against Minh, she would fail against AJC and in all likelihood be ordered to pay AJC’s costs. Where a defendant will have to pay a third party’s costs if the claim fails, a defendant ought to be able to get security for those costs as well as his own costs as against the plaintiff in an appropriate case;[3]
(c) in the Federal Court decision of Pegasus Gold Inc v Bateman Project Engineering Pty Ltd, Mathews J held that in exceptional circumstances a security for costs order might be made against a plaintiff including the costs that a defendant might be ordered to pay a third party, albeit that in the circumstances of that case the defendant was not entitled to such an order;[4] and
(d) Australian authority misapproaches the issue and the English authority should be accepted as correct.
[3]Referring to ibid [27].
[4][1999] FCA 1734, [30] (‘Pegasus Gold’).
Minh’s submissions
Minh described in detail the lengthy interlocutory history of the proceeding since it was commenced. The principal issue was whether a written direction was given by Minh in accordance with the disbursement authority. The emails on 16 March 2018 did not constitute such a written direction.
As to the prospects of success, Minh submitted that a bare written direction apparently authorised by Mr Chuang was insufficient for the purposes of the disbursement authority. The relevant email:
(a)was not directed to AJC;
(b)said nothing as to the authority or capacity of the person who sent it, or on whose behalf it was sent; and
(c)contained matters not written by the apparent sender of the email.
As to delay, Minh submitted that:
(a) Mr Liu had personally funded Minh’s costs of the proceeding exceeding $1,444,710 as a debt owed to him;
(b) Minh had not adduced evidence that if security for costs were ordered its funding from Mr Liu would no longer be available;
(c) the forensic choice made by Ms Weisler earlier in the proceeding not to seek security for costs despite statements that she intended to do so should cause the application to fail;
(d) Ms Weisler had bided her time to await the improvement of her position. She had consented to numerous orders and participated in directions hearings without seeking security for costs; and
(e) it was oppressive to Minh for her now to seek security for costs.
As to the assumption of risk, Minh submitted that Ms Weisler had voluntarily entered into the mortgage transaction without any inquiry into the financial position or cash flow of Minh. There was no credit assessment and no documentation suggesting that Ms Weisler had assessed Minh’s ability to repay the proposed loan. Ms Weisler had engaged in pure asset-based lending, and had assumed the risk that Minh might be impecunious.
Minh relied on Australian authority to the effect that the costs of a third party proceeding were not properly the subject of a security for costs order against the plaintiff.[5]
[5]Health & Life Care Ltd (recs and mgrs apptd) v Price Waterhouse (1993) 11 ACSR 326, 328 (Olsson J) (‘Health & Life Care’).
Minh submitted that the Court had no jurisdiction to order security in relation to any third party costs which Ms Weisler might be ordered to pay. The words ‘plaintiff’ and ‘defendant’ in r 62.02 of the Rules were significant, and did not embrace the costs of a defendant in a third party proceeding. Similarly, s 1335(1) of the Act did not extend to the awarding of security for costs to a defendant against a plaintiff in relation to the costs of a third party proceeding.
Court’s powers
Rule 62.02 of the Rules provides:
(1) Where –
…
(b)the plaintiff is a corporation … and there is reason to believe that the plaintiff has insufficient assets in Victoria to pay the costs of the defendant if ordered to do so;
…
(f) under any Act the Court may require security for costs –
the Court may, on the application of a defendant, order that the plaintiff give security for the costs of the defendant of the proceeding and that the proceeding as against that defendant be stayed until the security is given.
The words ‘defendant’ and ‘plaintiff’ are defined in r 62.01 as follows, unless the context or subject matter otherwise requires:
defendant includes any person against whom a claim is made in a proceeding;
plaintiff includes any person who makes a claim in a proceeding.
The word ‘proceeding’ is defined in r 1.13 as follows, unless the context or subject matter otherwise requires:
any matter in the Court commenced by writ or originating motion or as otherwise provided by or under any Act or these Rules;
Section 1335(1) of the Act provides:
Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.
In Livingspring Pty Ltd v Kliger Partners, the Victorian Court of Appeal held that although the wording in r 62.02 and s 1335(1) was not identical, the applicable principles have been developed and applied on the assumption that they apply equally to the rule of court and to the statutory provision.[6] The burden of proof that the power to require security for costs should be exercised rests on the party seeking security.[7]
[6](2008) 20 VR 377, 381.
[7]Ibid 383.
Court’s discretion
Minh accepted that jurisdiction to order security for costs had been enlivened in relation to the principal proceeding, but not in relation to the third party proceeding.
Once jurisdiction has been enlivened, it is well established that the court has an unfettered discretion to order security for costs.[8]
[8]Ariss v Express Interiors Pty Ltd (in liq) [1996] 2 VR 507, 514 (Phillips JA); Epping Plaza Fresh Fruit & Vegetables Pty Ltd v Bevendale Pty Ltd [1999] 2 VR 191, 195–196 (Winneke P and Phillips JA) (‘Epping Plaza’).
In Colmax Glass Pty Ltd v Polytrade Pty Ltd, Derham AsJ observed that:
In exercising the discretion whether to order a company to give security for costs the court must carry out a balancing exercise. It must weigh the injustice to the plaintiff if it is prevented from pursuing a proper claim by an order for security, against the injustice to the defendant if no security is ordered and at trial the plaintiff’s claim fails and the defendant is unable to recover costs from the plaintiff ... The Court will properly be concerned not to allow the power to order security to be used as an instrument of oppression, but also it will be concerned not to be so reluctant to order security that an impecunious company can use its inability to pay costs to put unfair pressure on the defendant ...[9]
[9][2013] VSC 311, [19] (citations omitted) (‘Colmax Glass’).
The discretionary factors raised by the parties in their submissions were:
(a) Minh’s impecuniosity;
(b) prospects of success;
(c) voluntary assumption of risk;
(d) delay; and
(e) oppression and prejudice to Minh and Mr Liu.
Minh’s impecuniosity
It is not contested that Minh is impecunious and has insufficient assets to meet an adverse costs order. Minh is able to conduct the proceeding only through loans made by Mr Liu, which are repayable only if Minh is successful in the proceeding.
It is plain that if Ms Weisler is successful in the proceeding, Minh does not have the financial capacity to pay the costs of the proceeding. Minh’s impecuniosity, and its inability to pay Ms Weisler’s costs if she is successful in the proceeding, are impelling reasons why security for costs should be ordered.
Prospects of success
Both Minh and Ms Weisler submitted that their prospects of success were high.
As was said by the plurality of the Court of Appeal in Epping Plaza, it is usually not possible or practicable to reach a very clear view about the merits of a plaintiff’s claim, and a detailed examination of the merits is scarcely warranted.[10] In this case, a great deal depends on the exchange of emails on 16 March 2018 which resulted in the disbursement of the funds. What happened on that day is yet to be fully explained and understood. The Court is yet to hear relevant evidence from the authors of the emails.
[10]Epping Plaza (n 8), 199.
In a ruling made on 21 August 2020, I held that Minh’s claim involved serious issues to be tried. This was not disputed. I also noted that at the trial, the Court will have the benefit of oral and documentary evidence.
I remain of the view that there are serious issues to be tried in the proceeding. Without the evidence of witnesses, it is undesirable to speculate upon or seek to unravel the events or emails of 16 March 2018. All that can be said is that Minh and Ms Weisler both have prospects of success, but that the position remains unclear with competing submissions as to what was written, by whom, and as to the identity and authority of the apparent signatories of the emails.
Voluntary assumption of risk
In Letore Pty Ltd v Associated International Finance Pty Ltd,[11] McDonald J held that it was a relevant consideration that the defendant had entered into a voluntary contractual relationship with the plaintiff company involving a large sum of money. It was to be assumed that at the time the defendant entered into the transaction, it considered that it was financially prudent and worthwhile to do business with the plaintiff.
[11](Supreme Court of Victoria, McDonald J, 28 May 1993) (‘Letore’).
Letore was followed in ACN 006 577 162 Pty Ltd (formerly Harrop Engineering Australia Pty Ltd) v Beauville Pty Ltd, where Derham AsJ held that the assumption of risk factor weighed heavily against the grant of security for costs because at the time when the defendants entered into the relevant agreements, they knew of the plaintiffs’ impecuniosity and should be taken to have assumed the risk that if proceedings were commenced by the plaintiffs to enforce the agreements, they would be sued by impecunious plaintiffs.[12]
[12][2014] VSC 298, [22] (‘Harrop’).
In Mecrus Pty Ltd v Industrial Energy Pty Ltd, Murphy J accepted as a relevant consideration that where it may be said that a defendant voluntarily assumed the risk of a corporate plaintiff’s financial position, it may be unfair to order security for costs.[13]
[13][2015] FCA 103, [68]–[74], citing Letore (n 11), Denward Lane Pre Cast Panels Pty Ltd v Cornerstone Constructions Australia Pty Ltd [2008] VSC 144, Industrial Conveying (Aust) Pty Ltd v SKM Recycling Pty Ltd [2012] VSC 588, Coca-Cola Amatil Victoria Ltd v PAA Enterprises Pty Ltd [2003] VSCA 135, and Harrop (n 12).
Analysis
Ms Weisler acted at all times through AJC. They invited her through her husband to enter into the loan transaction. Apart from signing documents and providing funds, she had no involvement in the transaction with Minh at all.
AJC made all of the arrangements with Minh and Express Money. The loan was secured by a first mortgage over residential property in Doncaster on the basis of a $2.85 million valuation provided by In Property Valuations Pty Ltd as at 2 March 2018. On the material that I have, Ms Weisler had no appreciation that there was any significant risk in making the loan on the advice of AJC.
The inquiries which AJC made about Minh and its capacity to repay will be the subject of evidence at trial. While they acted as her agents, it is undesirable to speculate ahead of the trial regarding their inquiries as to Minh’s financial position and creditworthiness.
I accept Ms Weisler’s submission that the cases relied on by Minh as to assumption of risk are readily distinguishable. Ms Weisler did not conduct any business, or make a contract to supply goods or services. She acted through solicitors, and signed documents and provided funds as advised by them. I do not consider that the voluntary assumption of risk factor applies against Ms Weisler in this case.
Delay
Security for costs was first raised by Ms Weisler in correspondence in September 2019, but not pursued until July 2021.
In her affidavit, Ms Goddard sought to explain the delay by reference to the changing character of the proceeding. In June 2019, the parties were concerned with an application by Minh to obtain an interlocutory injunction restraining Ms Weisler from selling the property. They were later engaged in an application by Minh for an interlocutory injunction requiring Ms Weisler to pay the proceeds of sale into court, which was dismissed in August 2020. Ms Goddard said that she did not consider that an application for security for costs could have been successfully made earlier in the proceeding prior to the sale and settlement of the property.
Ms Goddard also highlighted that Minh’s claim had been progressively refined over time and had only recently assumed its current form.
There is some merit in these explanations, although they do not entirely explain why it took over two years from the commencement of the proceeding for the application for security for costs to be made.
In United Commercial Projects Pty Ltd v PHHH Investments No 2 Pty Ltd, Whelan JA discussed the significance of delay in making an application for security for costs and said:
Delay is always a relevant matter. Its significance will depend on the facts of each case. Delay will be of greater significance where there is evidence of prejudice. Generally, it cannot be presumed that delay, even substantial delay, is prejudicial.[14]
[14][2019] VSCA 192, [39], referring to PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48.
Minh has not adduced evidence of any prejudice consequent upon delay. Mr Liu has provided funding to Minh during the proceeding. There is no evidence that his debt funding of Minh would have been affected by an order for security for costs. Mr Liu has not deposed that he would be unable to provide further funding for Minh to continue the proceeding. The amount of security for costs likely to be awarded is only a fraction of the amount that he has already expended.
Ms Weisler observed with some justification that the most significant effect of her delay in applying for security for costs was to reduce the amount of security that the Court might order as the proceeding progresses towards trial.
I consider that the delay in making the application has some, but not significant, weight in the exercise of my discretion as to security for costs.
Oppression and prejudice to Minh and Mr Liu
Minh submitted that the application was oppressive and prejudicial to Minh and to Mr Liu. This arose from the fact that there had been statements of intention on behalf of Ms Weisler that an application for security for costs would be brought, but no application had been made. It was suggested that Minh might reasonably have considered that Ms Weisler had waived or elected not to bring such an application.
I do not accept these submissions. They are not supported by evidence. There is no affidavit from Mr Liu or Ms Liang. Minh has actively prosecuted the litigation at considerable cost, refining its statement of claim on a number of occasions and pressing interlocutory applications against other parties. There is no sign that it suffered oppression or prejudice, or considered that Ms Weisler had eschewed any intention of bringing a security for costs application. Rather than oppression or prejudice, it is more likely that Ms Weisler’s failure to bring an application for security for costs was seen by the plaintiffs as a matter of good fortune in the conduct of the proceeding.
Other factors
In Colmax Glass, Derham AsJ collected a list of factors that were often relevant in the exercise of the Court’s discretion as to security for costs.[15] The list is helpful, but not exhaustive. It is appropriate to mention some factors not raised by the parties during the hearing.
[15]Colmax Glass (n 9), [20].
Impecuniosity caused by the defendant
It was not suggested by Minh that its impecuniosity was caused by Ms Weisler, and no evidence was provided to this effect. On the material that I have, it seems most likely that Minh’s impecuniosity was caused by the actions of its directors in and around 2018 which led to the dissipation of its assets.
Stultification of the claim
It was not suggested that an order for security for costs would stultify Minh’s claim. Rather, the absence of evidence from Minh suggests that the present arrangements whereby Minh is debt funded by Mr Liu are likely to continue to the end of the proceeding.
Overlapping counterclaim
Minh will not face the situation where its claim is stayed or potentially stayed while continuing to face a counterclaim arising from the same or overlapping facts. Ms Goddard has undertaken on behalf of Ms Weisler that the counterclaim will be abandoned if security for costs is ordered against Minh.
Conclusion
I am satisfied that security for costs should be ordered. The principal consideration that leads to this conclusion is that Minh is without assets and is debt funded by Mr Liu. In practical terms, Mr Liu is conducting the litigation through the corporate shield of Minh. Ms Weisler is exposed to the risk of litigation, but has no recompense in costs if she is ultimately successful. It is unfair that one party should be able to operate through a corporate shield without assets, while the opposing party is fully at risk in the litigation. Apart from signing documentation and providing funds, Ms Weisler was not involved in the disbursement of the loan monies. She acted through AJC.
I am not satisfied that the countervailing factors, whether taken individually or collectively, are sufficient to outweigh the need for security to be provided if justice and fairness are to be achieved between Minh and Ms Weisler.
I will order that security for costs be provided by Minh.
Costs of the third party claim
Ms Weisler submitted that the security for costs to be provided should include an estimate of the costs likely to be ordered in favour of AJC against Ms Weisler in the event that Minh’s claim against Ms Weisler fails.
Australian authorities
There is a divergence between Australian and English authority as to whether security for costs arising from the costs of a third party claim should be ordered. It is convenient to review the Australian authorities before turning to the English authorities.
In Health & Life Care, Olsson J considered an application for security for costs under the relevant court rule and under s 1335(1) of the Corporations Law, which was in an identical form to s 1335(1) of the Act.[16]
[16]Health & Life Care (n 5).
His Honour observed that:
the costs of [third party] proceedings are not, in any event, normally properly the subject of an order for security for costs. Such proceedings are, in substance, a separate action brought by a defendant which, for reasons of procedural convenience, are combined with the trial of the principal proceedings between the plaintiff and defendant. As to such proceedings the party bringing them is, in practical terms, a plaintiff. Dependent upon the outcome of the principal proceedings, the third party proceedings may or may not prove to be redundant.[17]
[17]Ibid 328.
As to the same issue, McPherson J said in Bruce Pie & Sons Pty Ltd v R.H. Mainwaring, English and Peldan:
As a matter of principle, however, it is not easy to see why the plaintiff should be required to provide security for the costs of proceedings by the defendants against third parties. It is true that, apart from the plaintiff’s act in instituting the action, there would be no third party proceedings. But, as a matter both of history and substance, such proceedings really represent a separate action brought by the defendant which, for reasons of convenience, are allowed to be combined with the principal action and its trial. As regards those proceedings the defendant is in the position of a plaintiff and as such is not entitled to security for costs. Furthermore, if in this case the defendants succeed in defeating the plaintiff’s claim, then the third party proceedings will in a sense be shown to have been redundant. On that footing there would be no justification for charging the plaintiff with the cost of them. The same is true if the plaintiff succeeds against the defendants but they fail in their claim against the third parties. If both plaintiffs and defendants succeed in their claims the latter may reasonably expect to recover their costs (including costs awarded to the plaintiff) against the third parties. In any event, there is no compelling reason why the plaintiff should be required to finance the defendants’ claim against some additional party whom the plaintiff has chosen not to sue.[18]
[18](1985) 1 Qd R 401, 403–404 (‘Bruce Pie’).
In Reed Constructions Pty Ltd (scheme manager appointed) v Redelman,[19] the issue was whether the costs that a defendant could be ordered to pay to another defendant or cross-defendant were ‘costs of the defendant’. Giles CJ held:
The plaintiff submitted that there was no power pursuant to s 1335 of the Corporations Law or [the relevant rule] to order that it provide security for costs representing costs payable by the first defendant to the second defendant. S 1335 refers to security for “the costs of the defendant” in relation to any action or other legal proceedings”, while [the rule] refers to security for the costs of the defendant of and incidental to the proceedings”. The plaintiff contended that proceedings was confined to the claims by the plaintiff against the defendant: the first defendant contended that “proceedings” was of wide import and encompassed the claims in the originating process and the claims in any cross-claims. …
The question is whether costs which a defendant is ordered to pay to another defendant or to a cross-defendant are “costs of the defendant”. I do not think they are. Those words refer to costs payable by the defendant to its solicitor and counsel, to expert witnesses, by way of disbursements, and otherwise as expenditure in the defendant’s prosecution of the proceedings. They do not extend to costs of another party to the proceedings which the defendant is ordered to pay to the other party. Those costs are costs of the other party by whom they are payable, and do not become the costs of the defendant party when the defendant is ordered to pay them: vis-à-vis the defendant, they are no more and no less than costs of the other party which the defendant is ordered to pay. There is no enlargement by virtue of the words “and incidental”, because the costs are still not costs of the defendant by virtue of being incidental to the proceedings.
[19]Reed Constructions Pty Ltd (scheme manager appointed) v Redelman (Supreme Court of New South Wales, Giles CJ, 13 December 1995).
Referring to Bruce Pie, Giles CJ observed that it was unclear whether it was thought that there was no power to include costs referable to the defendants’ third party proceedings, noting that the costs in question seem to have been the defendants’ costs of prosecuting the third party proceedings rather than the costs which might be payable by the defendant to third parties.[20]
[20]Ibid.
Giles CJ considered that the Court had inherent jurisdiction to order security for costs including the costs which a defendant might be ordered to pay another defendant or cross-defendant:
The inherent jurisdiction, or s 76 of the Supreme Court Act, empower an order that a party pay or provide for costs of another party at an interlocutory stage … and I see no sufficient reason why either should not extend to ordering a plaintiff to provide for costs which a defendant might be ordered to pay to another defendant or a cross-defendant. I stress that I am referring to power: exercise of the power, particularly where there are express powers in s1335 and [the rule] which (if my view be correct) do not go so far is another matter. … it would be strange if a plaintiff would not be required to provide security for the defendant’s costs of prosecuting a cross-claim reasonably brought …but would be required to provide for the costs of a cross-claim reasonably brought which a defendant might be ordered to pay to a cross defendant. It should be noted that I have brought into this the element of reasonableness in bringing the cross-claim …[21]
[21]Ibid.
His Honour observed:
While a cross-claiming defendant is in the position of a plaintiff on the cross-claim, and historically there is joinder of all claims for reasons of convenience, in my view there is more to it than the “but for” position that without the plaintiff’s claim there would be no cross-claim. Even if the cross-claim proves to be redundant upon failure of the plaintiff’s claim, I can conceive that in some circumstances a defendant who reasonably cross-claims, when the plaintiff has so conducted himself as to make it fair to impose some liability on the plaintiff for the costs falling upon the defendant as cross-claimant, may justifiably ask to be protected against the latter costs. The additional element of reasonableness in bringing the cross-claim, understood as including regard to the plaintiff’s conduct, may be important. Notwithstanding the unwillingness evidenced in the three cases to include in a defendant’s security for costs the costs of a cross-claim, which must extend in principle to costs ordered against a defendant as cross-claimant as well as to the defendant’s own costs as cross-claimant, in my opinion there may be cases where that is appropriate. But while it always remains an exercise of discretion in the particular circumstances, such cases would be few.[22]
[22]Ibid.
In Pegasus Gold, Mathews J considered whether a respondent was entitled to security for costs under s 56 of the Federal Court of Australia Act 1976 (Cth), ord 28 r 3 of the Federal Court Rules, or s 1335 of the Corporations Law in relation to any costs it may be ordered to pay a cross-respondent.[23]
[23]Pegasus Gold (n 4).
Mathews J adopted the reasons of Drummond J in Southern Cross Airlines Holdings Ltd (in liq) v Arthur Andersen & Co, where his Honour said:
It cannot be within the power of a respondent, by taking action against third parties in order to advance its own interests, to create a situation in which the Court’s jurisdiction under s1335 the Corporations Law to order security is enlivened, when that would not be the case if the respondent claiming security for its defence costs had not chosen to take such third-party action.[24]
[24]Southern Cross Airlines Holdings Ltd (in liq) v Arthur Andersen & Co (Federal Court of Australia, Drummond J, 6 August 1997) (‘Southern Cross Airlines’).
Referring to Southern Cross Airlines and Bruce Pie, Mathews J said:
I can only echo the views expressed by both Drummond and McPherson JJ. BKK’s cross-claim … is a separate action which, as a matter of convenience, BKK has chosen to join with the proceedings commenced by the applicants. That is indisputably the most efficient way of conducting the litigation. But it does not affect the essential nature of the cross-claim, which is a separate claim pursued by BKK against a party independent of the applicants.
It is possible in exceptional circumstances that an order such as that which is sought here might be justified. But in my view special considerations would need to be shown. No such circumstances have been demonstrated here. In my view the security for costs which BKK is entitled to obtain from the applicants should not include security for any costs that BKK might be liable to pay ...[25]
[25]Pegasus Gold (n 4), [29]–[30].
Professor Dal Pont in his seminal work on the law of costs summarises the Australian authorities in these terms:
The costs of a proposed third party proceeding are not normally properly the subject of an order for security because such a proceeding is in substance a separate action brought by a defendant that, for reasons of procedural convenience, are combined with the trial of the principal proceedings. The defendant who brings third party proceedings is, in respect of those proceedings, really a plaintiff, and so is not entitled to security for costs. That apart from the plaintiff in the principal proceedings instituting those proceedings, there would be no third party proceedings, is beside the point.[26]
[26]G E Dal Pont, Law of Costs (LexisNexis Butterworths, 4th ed, 2018) 1017 [28.60].
The summons seeks security for costs under r 62.02 of the Rules and s 1335 of the Act. It is unnecessary for me to consider whether security for costs should be ordered in the inherent jurisdiction of the Court, as no application was made in that jurisdiction, or considered at the hearing or in submissions made by the parties.
English authorities
The English authorities have departed significantly from the established position in Australia. Before turning to the Sarpd decision, it is convenient to refer to the English Court of Appeal decision in Taly NDC International NV v Terra Nova Insurance Co Ltd.[27]
[27][1986] 1 All ER 69 (‘Taly’).
The defendants in an insurance claim joined a third party who sought security for costs against the plaintiffs. At that time, the relevant rule relating to security for costs provided:
(1) Where, on the application of a defendant to an action or other proceeding in the High Court, it appears to the Court … then if, having regard to all the circumstances of the case, the Court thinks it is just to do so, it may order the plaintiff to give such security for the defendant’s costs of the action or other proceeding as it thinks just …
(3) The references in the foregoing paragraphs to a plaintiff and a defendant shall be construed as references to the person (howsoever described on the record) who is in the position of plaintiff or defendant, as the case may be, in the proceeding in question, including a proceeding on a counterclaim.[28]
[28]Rules of the Supreme Court 1965 (UK) ord 23 r 1, quoted in Taly (n 27), 71.
Parker LJ held that the rule specifically provided that the references in the rule were to the person who is in the position of plaintiff or defendant. The third party was not in the position of a defendant to any action or other proceeding brought by the plaintiff. If the third party were made a defendant, it would be open to apply for security for costs, but no such order had been made. The terms of the rule should not be given a strained meaning which they were incapable of bearing.[29]
[29]Taly (n 27), 71.
Croom-Johnson LJ agreed. The right to ask for security for costs under the rule was purely devoted to people who were plaintiff and defendant in the proceeding as a whole. There was no remedy sought by the plaintiffs directly against the third party.[30]
[30]Ibid 72.
In Noterise Ltd v Haseltine Lake & Co,[31] a dissatisfied intellectual property litigant sued his patent agent and his solicitor. The solicitor brought contribution proceedings against the patent agent. The plaintiff discontinued against the patent agent, but resisted an application for security for the costs which the patent agent would be able to recover from the solicitor. Mummery J described the plaintiff’s submission in these terms:
[31][1992] BCC 497 (‘Noterise’).
As to the various orders claimed by the defendants, the crux of the plaintiff’s response is that those motions are an attempt to obtain indirectly what cannot be ordered directly, namely security for the costs of a person who is not or is no longer being sued as a defendant by the plaintiff. This contention rests on the construction of sec. 726(1) of the Companies Act 1985. That section provides:
“Where in England and Wales a limited company is plaintiff in an action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the defendant’s costs if successful in his defence, require sufficient security to be given for those costs, and may stay all proceedings until the security is given.”
The plaintiff’s submission comes to this: security may only be ordered to be given “for those costs”, i.e. “the defendant’s costs”, which the company will be unable to pay if the defendant is successful in his defence. … The first defendant only remains in the action in a third party position, defending the contribution and indemnity proceedings brought against him by his co-defendant, the second defendant. In that position the first defendant may be entitled under the RSC to apply for security to be given by the second defendant, but is not entitled to make an application … as against the plaintiff … the court has no jurisdiction to order a plaintiff to give security for costs of a third party who is not being sued by the plaintiff and is therefore not in the position of a defendant to the plaintiff’s proceedings.
Further, so far as the second defendant is concerned, the court only has jurisdiction … to order security to be given for “the defendant’s costs”, that is costs incurred by him in his defence and not in respect of additional costs which he may be ordered to pay to a third party or to a co-defendant, if unsuccessful in his contribution and indemnity proceedings. Thus, whether considered from the point of view of the first defendant or the second defendant, it is submitted … that there are no grounds for enforcing the order for security made in favour of the first defendant. That order has gone and it cannot be resurrected in a different guise or transferred to or enforced for the benefit of a different party, namely the second defendant.[32]
[32]Ibid 500–1 (citations omitted).
Mummery J held:
If the second defendant is successful in its defence, the first defendant will be successful in the contribution and indemnity proceedings. The failure of the second defendant in the contribution and indemnity proceedings would probably lead to an order being made by the court that the second defendant should pay the first defendant’s costs of those proceedings. The court would apply the normal rule in such proceedings that costs should follow the event … rather than make an order that the plaintiff should be ordered to pay the costs of the first defendant direct.
The court would also probably follow the normal rule in the exercise of its very wide discretion that the costs of the action which the plaintiff should pay to the successful second defendant should include the additional costs which the second defendant has been ordered to pay the first defendant on the contribution and indemnity proceedings ... In my view, those added costs which the second defendant, though successful in its defence, would be ordered to pay the first defendant, and which the successful second defendant is entitled to recover from the plaintiff, can properly be described as “defendant’s costs” within the meaning of sec. 726(1) of the Companies Act. They are costs that the second defendant is liable to pay if successful “in his defence” and the plaintiff can therefore be made liable to give security for those sums. This seems to be sensible because it is the claims of the plaintiff against the second defendant which have made the contribution and indemnity proceedings against the first defendant inevitable.[33]
[33]Ibid 501–2 (citations omitted).
In Sarpd, Addax defended a claim for defective gas oil but sued its supplier Glencore from which it had bought the gas oil on back-to-back terms.[34]
[34]Sarpd (n 2).
The relevant rule provided that a defendant may apply for security for his costs and set out conditions to be satisfied on such an application:
(1) the court may make an order for security for costs … if –
(a)it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order, and
(b)
i) One or more of the conditions in paragraph (2) applies, …
(2) The conditions are –
…
c)the claimant is a company or other body (whether incorporated inside or outside Great Britain) and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so;[35]
[35]Civil Procedure Rules (UK), pts 25.12, 25.13(1)–(2).
The Court of Appeal held that security for costs should be given, and determined that the security should address:
(a) the costs incurred by Glencore which, if Sarpd were to lose, Addax would very probably be ordered to pay since Addax would have lost against Glencore; and
(b) the costs incurred by Addax in suing Glencore.
The Court analysed relevant issues regarding security for costs in the following passage:
Both Mr Lewis and Mr Nolan dealt first with the costs incurred by Glencore which, if Sarpd were to lose, Addax would very probably be ordered to pay since Addax would itself have lost against Glencore. …
Mr Lewis submitted that although these costs are currently Glencore’s costs and not Addax’s costs, once Addax are ordered to pay them they become Addax’s costs and are therefore within CPR Part 25.12 which entitled a defendant to apply “for security for his costs” (underlining supplied). An order for security for costs looks inevitably forward to the time when, at the end of the trial, a party is ordered to pay costs. If Sarpd loses, it is unlikely that Glencore would get an order for costs directly against Sarpd who had not sued it; it was much more likely that Addax would be held liable to pay Glencore’s costs. Addax’s costs would then include not merely its own costs of defending Sarpd’s claim but also its own costs in the Part 20 proceedings and the costs for which it was held liable in those proceedings against Glencore.
We consider this approach to be correct inasmuch as by the time the court makes its final order as to costs it will have determined (if Sarpd loses) that Glencore has won as against Addax. It would inevitably award costs to Glencore to be paid by Addax; it is highly likely that Addax will be entitled to recover those costs from Sarpd (as well as its own costs of defending itself against Sarpd and of suing Glencore). Those costs then become Addax’s own costs and thus costs for which, pursuant to CPR Part 25.12, it ought to obtain security if it can come within CPR Part 25.13.[36]
[36]Sarpd (n 2), [23]–[25].
After considering a number of authorities, the Court referred favourably to the judgment of Mummery J in Noterise which I have quoted above,[37] and concluded as follows:
If moreover there were any doubt about the matter CPR Part 1.2 requires the doubt to be resolved in favour of doing justice in the particular case and in our view, justice does require that security be given in the absence of any evidence that the claim would be stifled.
We would accordingly reverse the judge’s decision about the costs for which Addax will be liable to Glencore but uphold his decision about Addax’s own costs of suing Glencore … On any principled view the result should, in any event, be the same for both sets of costs.[38]
[37]Noterise (n 31), 501–2.
[38]Sarpd (n 2), [29]–[30].
In Maroil Trading, Inc v Cally Shipholdings, Inc, Cockerill J noted that it was not in dispute that in certain cases it was appropriate for a claimant to provide security for the costs of a third party claim, including the defendant’s potential cost exposure to a third party. This acknowledged that if the defendant succeeds in defending the primary claim but loses the third party claim, the court may order the claimant to pay the defendant’s costs which it has incurred in the third party claim.[39]
[39][2020] EWHC 3041, [14].
Cockerill J observed that it was far from unusual for third party costs to be ordered against claimants, and might even be said to be more usual than not. Overall, there must be a sliding scale between cases where a claim is purely and simply passed down the line on the same basis, and cases where, for example, a small simple claim is passed down and a separate and entirely distinct claim is then also pursued for a much greater amount and involving much greater dispute.[40]
[40]Ibid [21]–[23].
Discretion
The Australian authorities which I have set out above uniformly stand for the proposition that the costs of a third party proceeding are not normally properly the subject of a security order because a third party proceeding is a separate proceeding by the defendant as plaintiff against the third party as defendant. It is not sufficient that the third party proceeding would not have been commenced were it not for the principal proceeding.
The Australian authorities have been followed in the federal jurisdiction and in at least four State jurisdictions.
Rule 62.02 speaks of the costs of the defendant of the proceeding in circumstances where each of the words ‘plaintiff’, ‘defendant’ and ‘proceeding’ are defined terms. The expression ‘costs of the defendant of the proceeding’ has been construed as the costs relating to the principal proceeding alone, and excluding the costs of the defendant and the third party in the third party proceeding.
Likewise, where s 1335(1) speaks of the costs of the defendant in his, her or its defence, this is taken to be the costs of the defendant in the action or other legal proceeding, and not the third party proceeding.
Rules 25.12 and 25.13 of the Civil Procedure Rules (UK), considered in Sarpd, are in a significantly wider form than either r 62.02 of the Rules or s 1335(1) of the Act. The wider form of the rule has facilitated a construction which permits security for costs to be ordered against a plaintiff in relation to the costs which a defendant may pay or be ordered to pay on a third party claim.
The Sarpd interpretation of the security for costs rule brings with it a requirement to evaluate the third party claim in the context of the principal claim to determine the extent to which it is back-to-back with the principal claim, and the extent to which it involves other issues and matters. This would not always be a simple task, but one which must be undertaken before the discretion of the court can be exercised under the Sarpd approach.
In my view, I should follow the Australian authorities which are founded on the language and definitional structure of r 62.02 and s 1335(1), and decline to award security for costs in relation to the third party claim against AJC. Insofar as the Court may have a discretion in exceptional circumstances, I am of the view that there is nothing exceptional about this proceeding. The dispute concerns whether loan money was disbursed in accordance with the written instruction of the borrower, and if that were not the case, whether the solicitors handling the loan failed to exercise reasonable skill and care.
Amount of security
Ms Goddard and Ms Sango are experienced legal practitioners who have assessed Ms Weisler’s future costs of Minh’s claim at the standard rate to include all costs reasonably incurred and of reasonable amount. Ms Goddard calculated Ms Weisler’s solicitors fees and disbursements at $212,130.79 (inclusive of GST), whereas Ms Sango arrived at $153,528.29 (exclusive of GST) which she reduced to $56,285.44 to allow for Ms Weisler’s common costs of the counterclaim and third party notice. Each considered the costs of the security for costs application, the costs of trial preparation including the first day of the trial, and the costs of the second day of the trial up to the making of final orders.
The main points made by Ms Sango about Ms Goddard’s costings were:
(a) various items were excessive, unreasonable, or duplicated;
(b) an allowance of twelve hours for solicitors’ general trial preparation was unreasonable, as the tasks to be performed were included under other items;
(c) the loading for skill, care and responsibility having regard to the complexity of the matter was unreasonable, and duplicated other cost items. Details of the actual rates charged by Ms Weisler’s solicitors had not been given;
(d) instructing solicitors’ fees at trial should be calculated on the basis of the Court sitting up to six hours per day;
(e) fees to counsel for trial preparation should be allowed at four days;
(f) counsel’s appearance fee to receive final judgment should be reduced; and
(g) GST was not recoverable between parties to litigation.
Security for costs application
I accept Ms Sango’s estimate of Ms Weisler’s costs in relation to the application for security for costs, being $7,663.84, for the reasons set out in her report.
Trial preparation including first day of trial
I generally accept Ms Sango’s estimate of trial preparation costs of $51,223.79 for the reasons given in her report, but will allow an additional ten hours of general solicitors’ trial preparation totalling $4,250, and an additional day of preparation by counsel of $4,363.60 (excluding GST). I will also allow transcript fees on the basis of a one-third share (additional $166.67) as there are three major parties likely to order transcript over the duration of the trial. Trial preparation costs will therefore amount to $60,004.06.
Second day of trial up to making of final orders
I generally accept Ms Sango’s estimate of the costs of the second day of trial up to the making of final orders of $94,640.96 for the reasons that she gives, but I will allow an additional fee of $2,181.82 to counsel for attending to receive final judgment and for the hearing as to costs. I will also allow additional transcript fees of $1,833.33 on the basis of a one-third share of transcript fees, being an additional amount of $166.67 per day for the remaining eleven days of a twelve day trial period. This gives a total estimate of the costs from the second day onwards of $98,656.11.
Total reasonable costs
Taken together, the three sums total $166,324.01, being the estimated reasonable costs likely to be incurred by Ms Weisler until the end of the trial, excluding GST.
Ms Sango reduced her total estimated amount by two thirds, reflecting Ms Weisler’s common costs of the counterclaim and third party claim. Ms Goddard did not make a common cost reduction.
Ms Weisler has undertaken that in the event that a security for costs order is made, she will not proceed with the counterclaim. I will make no common cost reduction for the future costs of the counterclaim. AJC observed, but did not play an active role in, the hearing of the application for security for costs. I will not make a common cost reduction for the security for costs application. It would be unfair to do so.
Throughout the conduct of this proceeding, Minh’s claim has been heavily disputed by both Ms Weisler and AJC. In contrast, the third party claim against AJC has attracted far less attention. I am satisfied that this will be the case at trial. Having regard to the overall circumstances of the case, I will allow a 20% reduction of Ms Weisler’s costs subsequent to the application for security for costs, having regard to the third party claim which will be tried at the same time as Minh’s claim.
As a result, the amount of security for costs to be provided after rounding is $134,600.
Conclusion
It is fair and just that security for Ms Weisler’s costs in the amount of $134,600 be provided by Minh. The Court will order that the amount of $134,600, or security in the amount of $134,600 in a form acceptable to the Senior Master, be paid or provided to the Senior Master within 45 days, in default of which the proceeding will be stayed.
SCHEDULE OF PARTIES
| I MINH HOLDINGS PTY LTD (ACN 601 650 293) | First Plaintiff (Defendant by counterclaim) |
| QUANQING LIU | Second Plaintiff |
| LIQIN LIANG | Third Plaintiff |
| LIU LIANG INVESTMENTS PTY LTD (ACN 165 211 192) | Fourth Plaintiff |
| - and - | |
| IVAN LI CHUANG | First Defendant |
| KIG HOLDINGS PTY LTD (ACN 607 330 021) | Second Defendant |
| SHELLEY NICOLE WEISLER | Fourth Defendant (Plaintiff by counterclaim) |
| I N HOLDINGS PTY LTD (ACN 166 957 660) (under external administration) | Fifth Defendant |
| EXPRESS MONEY SERVICE PTY LTD (ACN 110 272 574) | Sixth Defendant |
| - and - | |
| AJZENSZTAT JERUZALKSI & CO | First Third Party |
| EXPRESS MONEY SERVICE PTY LTD (ACN 110 272 574) | Second Third Party |
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