In the matter of Citigroup Global Markets Australia Pty Limited (No 2)

[2017] NSWSC 1040

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Citigroup Global Markets Australia Pty Limited (No 2) [2017] NSWSC 1040
Hearing dates:	Written submissions, closed 27 July 2017
Date of orders:	09 August 2017
Decision date:	09 August 2017
Jurisdiction:	Equity - Corporations List
Before:	Brereton J
Decision:	Decline to vary order that plaintiff pay defendant’s costs of motion for summary dismissal
Catchwords:	COSTS – interlocutory process for summary dismissal/striking out of plaintiff’s claim – where held that claim as formulated could not succeed but order made for pleadings
Cases Cited:	Citigroup Global Markets Australia Pty Limited, In the matter of [2017] NSWSC 969
Category:	Costs
Parties:	Allan Per Leng Ong (plaintiff) Citigroup Global Markets Australia Pty Limited (defendant)
Representation:	Counsel: A.F. Fernon (plaintiff/respondent) S.H. Hartford Davis (defendant/applicant)   Solicitors: Lex Fori (plaintiff) Henry Davis York (defendant/applicant)
File Number(s):	2016/297894

Judgment

1. In a judgment delivered on 20 July 2017,[1] on the application of the defendant Citigroup for the summary dismissal or striking out of the plaintiff Mr Ong’s claim, I concluded that:

   1. In the matter of Citigroup Global Markets Australia Pty Limited [2017] NSWSC 969

1. insofar as Mr Ong’s case was that the warrants he in fact acquired had a next reset date of 9 May 2014, it could not succeed;

2. insofar as his case was that Citigroup, in breach of ASXOR Sch 10, cl 10.3.4(a), unilaterally purported to vary the maturity date to 24 May 2013 and cancelled the warrants, it could not succeed;

3. No 4040 contract arising from Mr Ong’s on-line acceptance of Citigroup’s offer could have had a term that the NCMIOM warrants to which it related would have a 9 May 2014 reset date;

4. moreover, Mr Ong had no standing to sue on a 4040 contract;

5. however, it was not unarguable that Citigroup warranted or represented that the NCMIOM warrants had or would have a 9 May 2014 reset date (which might involve undertaking to amend the terms of NCMIOM), and that Mr Ong relied on that warranty or representation in (electronically) instructing Ausiex to purchase NCMIOM, so as to found a collateral contract (in respect of which he might well have standing), or a claim for damages for misrepresentation; and

6. I would therefore not summarily dismiss the proceedings, but the application had demonstrated that the plaintiff’s case as then formulated could not succeed, and if it were to proceed, it should be properly pleaded.

2. Accordingly, I made orders that:

1. the proceedings continue on pleadings;

2. the plaintiff file and serve his statement of claim with 14 days and pleading thereafter continue in accordance with the rules;

3. the interlocutory process filed on 16 December 2016 be otherwise dismissed;

4. the plaintiff pay the defendant’s costs of the interlocutory process; and

5. the proceedings be adjourned to 18 September 2017 at 10:00am in the Corporations Judge Directions List.

3. As Mr Ong’s solicitor wished to be heard on the question of costs but was not then in a position to address it, I reserved leave to the plaintiff to apply within seven days, by written submission, for a costs order other than that set out above, at the plaintiff’s own risk as to the costs of that application. Pursuant to that leave, the plaintiff lodged a submission on 26 July 2017, to the effect that each party should bear its own costs, or alternatively that costs of the motion be the defendant’s costs in the proceedings. The defendant lodged a submission on 27 July 2017 which maintained that the order made on 20 July was appropriate.

4. For the plaintiff, it was submitted that the defendant had failed in its application to have the summons and points of claim summarily dismissed or struck out, so that the plaintiff was justified in resisting the application.

5. In my view this does not at all reflect the practical outcome of the interlocutory process. While an order “striking out” the points of claim was not made, that was because they had no status as a pleading and were not amenable to being “struck out”. However, the order for pleadings reflected the position that the points of claim did not disclose an arguable case. The plaintiff’s case as then formulated was held to be incapable of succeeding, and the defendant’s submission that the 4040 contract – which alone was relied upon by the plaintiff – could not have contained the terms asserted by the plaintiff, was upheld. In effect, the plaintiff has been granted an indulgence of reformulating and repleading its case. The defendant should not have to bear the costs of demonstrating that the plaintiff’s case as hitherto formulated could not succeed. No reason has been shown for departing from the costs order previously pronounced.

6. I therefore decline to vary the costs order made on 20 July 2017. The costs referred to in that order include the costs of the application to vary it which is disposed of by this judgment.

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Endnote

Decision last updated: 09 August 2017