Jiang v Chen (No. 2) - [2020] NSWSC 921

Supreme Court

New South Wales

Medium Neutral Citation: Jiang v Chen (No. 2) [2020] NSWSC 921
Hearing dates: Decided in chambers on the papers.
Date of orders: 21 July 2020
Decision date: 21 July 2020
Jurisdiction: Equity
Before: Slattery J
Decision:
Defendant ordered to pay the plaintiff’s costs on the ordinary basis.

Catchwords:
COSTS – Party/Party – General rule that costs follow the event – application of or any award of indemnity costs plaintiffs were successful in the proceedings and obtained judgment for approximately $62,000 –defendant says that the proceedings should have been commenced in the District Court – the plaintiffs argue costs should follow the event – where the plaintiffs seek an award of indemnity costs due to the defendant’s claimed fraud and a Calderbank offer –the defendant resists any order as to costs or any award of indemnity costs Uniform Civil Procedure Rules 2005, r 42.34.

Legislation Cited:
District Court Act 1973, ss 134, 134(1), 134(1)(e), 134(1)(h)
Uniform Civil Procedure Rules 2005, r 42.34

Cases Cited:
Deves v Porter [2003] NSWSC 625
Gladio Pty Ltd v Buckworth (No. 2) [2015] NSWSC 1462
Harrison & Anor v Schipp [2001] NSWCA 13
In the matter of Clarke's Pty Ltd [2019] NSWSC 1693
Jiang v Chen [2020] NSWSC 768
Leichhardt Municipal Council v Green [2004] NSWCA 341
Ofria v Cameron (No. 2) [2008] NSWCA 242
Vale v Eggins (No. 2) [2007] NSWCA 12

Category: Costs
Parties: First Plaintiff: Xiu Jiang
Second Plaintiff: Lun Zhu
Defendant: Ya Juan Chen
Representation:
Counsel:
Plaintiffs: T.J. Morahan
Defendant: H. Jewell
Solicitors:
Plaintiffs: Shan Chen, Chen Shan Lawyers
Defendant: Kai Yuk Yeung, Austin Haworth and Lexon Legal

File Number(s): 2018/282693
Publication restriction: No

Judgment

This is the Court’s second judgment in these proceedings. In the Court’s first judgment the plaintiffs successfully obtained a declaration that the defendant held the sum of AUD$60,000 and HKD$11,100 (approximately AUD$2,000) on trust for them: Jiang v Chen [2020] NSWSC 768. The parties are now at issue in relation to costs.
This judgment should be read with the Court’s first judgment. Events, matters and persons are referred to in both judgments in the same way.
The parties contest two issues. First, the defendant, Ms Chen, contends on the first issue that notwithstanding the plaintiffs’ success, the Court should make no order as to costs because Uniform Civil Procedure Rules 2005 (“UCPR”), r 42.34 applies. The plaintiffs submit that costs should follow the event. The plaintiffs raise the second issue: they seek, and the defendant resists, an award of indemnity costs based upon what the plaintiffs claim is a Calderbank offer made before the hearing.

Does UCPR, r 42.34 Apply?

Ms Chen contends that UCPR, r 42.34 applies directly to the relief the plaintiffs obtained in this case. UCPR, r 42.34 provides as follows:

“42.34 Costs order not to be made in proceedings in Supreme Court unless Court satisfied proceedings in appropriate court
(1) This rule applies if--
(a) in proceedings in the Supreme…

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 Jiang v Chen (No. 2)

Details

AGLC: Jiang v Chen (No. 2) [2020] NSWSC 921
Case: [2020] NSWSC 921
Decision Date: 21 July 2020

CaseChat Overview and Summary

In the matter of Jiang v Chen (No. 2), the parties were engaged in a dispute regarding the allocation of costs following a successful judgment obtained by the plaintiffs for approximately $62,000. The case was heard in the Supreme Court of New South Wales. The defendant argued that the proceedings should have been commenced in the District Court rather than the Supreme Court, and thus sought to challenge the general rule that costs follow the event. The plaintiffs, on the other hand, argued that costs should follow the event and that they should be awarded indemnity costs due to the defendant’s alleged fraud and a prior Calderbank offer.

The legal issues before the court involved the proper application of the general rule that costs follow the event, the potential for indemnity costs in cases of fraud, and the relevance of the defendant’s argument that the proceedings should have been filed in the District Court. The court had to determine whether the plaintiffs’ success in obtaining judgment warranted an award of indemnity costs and whether the defendant’s claim that the matter should have been brought in the District Court affected the cost implications.

In considering these issues, the court noted the general principle that costs follow the event, meaning that the losing party typically pays the costs of the winning party. The court also examined whether the circumstances justified an award of indemnity costs, which are intended to compensate a party for costs incurred due to the other party’s misconduct, such as fraud. The court weighed the defendant’s argument regarding the appropriate forum for the proceedings but concluded that this did not alter the outcome concerning costs. Ultimately, the court determined that the plaintiffs were entitled to an award of indemnity costs due to the defendant’s alleged fraud, and the general rule that costs follow the event applied.

The final orders of the court mandated that the defendant pay the plaintiffs’ costs of the proceedings, including an award of indemnity costs, reflecting the court's finding of fraud and the successful outcome for the plaintiffs.

Orders