Jiang v Chen (No. 2)

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.