Liu v Lam (No 2)

[2025] NSWSC 264

Supreme Court

New South Wales

Medium Neutral Citation:

Liu v Lam (No 2) [2025] NSWSC 264

Hearing dates:

On the papers (written submissions received on 6 and 13 December 2024 and 6 February 2025)

Date of orders:

27 March 2025

Decision date:

27 March 2025

Jurisdiction:

Common Law

Before:

Walton J

Decision:

The Court orders and directs that the plaintiff shall file and serve Short Minutes of Order reflecting the primary judgment and this judgment within 7 days of the publishing of this judgment.

Catchwords:

COSTS – Whether ordinary costs should be apportioned – Whether indemnity costs to be awarded for whole of proceedings – Where offer of compromise – Whether offer warrants indemnity costs order from the time of the offer – Where notice to admit – Deliberately and knowingly giving false evidence – Indemnity costs order

COSTS – Security for costs – Application to release security monies paid into court by plaintiff – Where plaintiff successful at trial and awarded costs – Where defendant intends to submit notice of appeal – Whether prospects of appeal relevant issue – Whether arguable case – Security returned

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Evidence Act 1995 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

A & R Constructions Pte Ltd v Lees (1982) 7 ACLR 900

Barbieri v Pirovic [2022] NSWCA 76

Boris v Pages Property Investments Pty Ltd (No 2) [2022] NSWCA 43

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304

Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd (No 2) [2010] NSWSC 490

Cappello v HomeBuilding Pty Ltd [2023] NSWCA 109

Carter v Mehmet (No 2) [2021] NSWCA 333

Challenger Group Holdings Ltd v Concept Equity Pty Ltd (No. 2) [2008] NSWSC 1002

Chen v Chan [2009] VSCA 233

Degmam Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 354

Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373

Gayle v Fairfax Media Publications Pte Ltd (No 2) [2018] NSWSC 1932

Gispac Pty Ltd v Michael Hill Jeweller (Australia) Pty Ltd (No 2) [2024] NSWSC 356

Hamod v State of NSW (2002) 188 ALR 659; [2002] FCA 424

Huon Shipping Logging Co Ltd v South British Insurance Co Ltd [1923] 23 VLR 206

James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296

Kiri Te Kanawa v Leading Edge Events Australia Pty Ltd [2007] NSWCA 187

Larsen v Tastec Pty Ltd (No 2) [2023] NSWCA 141

Leach v Nominal Defendant (QBE Insurance (Aust) Ltd) (No 2) [2014] NSWCA 391

Liu v Lam [2024] NSWSC 1306

Lym International Pty Ltd v Chen; Marcolongo v Lym International Pty Ltd [2009] NSWSC 167

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

Penrith Whitewater Stadium Ltd v Lesvos Pty Ltd [2007] NSWCA 103

Pirrottina v Pirrottina(No 2) [2024] NSWSC 1053

Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368

Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40

Sims v The Commonwealth (No 2) [2023] NSWCA 30

Taylor v Stav Investments Pty Ltd (No 2) [2023] NSWCA 322

Texxcon Pte Ltd v Austexx Corporation Pty Ltd (No 2) (2013) 276 FLR 401; [2013] VSC 343

Wentworth v Rogers (No 5) (1986) 6 NSWLR 534

Texts Cited:

Gino Dal Pont, The Law of Costs (5th ed, 2021, Lexis Nexis)

Category:

Costs

Parties:

Tuo Liu (Plaintiff)
Kin Lam (Defendant)

Representation:

Counsel:
J R Willis (Plaintiff)
D Robinson SC (Defendant)

Solicitors:
Piper Alderman (Plaintiff)
Baker McKenzie (Defendant)

File Number(s):

2020/00117870

Publication restriction:

Nil

JUDGMENT

1. By a Statement of Claim filed on 20 April 2020 (“SOC”), Tuo Lio (the “plaintiff”) brought proceedings against Kin Lam (the “defendant”) for breach of an agreement which the plaintiff alleged had been entered into between the plaintiff and the defendant on 14 May 2018 (“the Agreement”).

2. In substance, the plaintiff was a guarantor under a loan agreement which was entered into on or around 3 June 2014 between the defendant and Hong Kong Jiayi International Trade Co Ltd (“Jiayi”) (“Jiayi Loan Agreement”). Under the Jiayi Loan Agreement the defendant borrowed RMB 5 million. The defendant defaulted under the Jiayi Loan Agreement, and, as a result, Jiayi commenced proceedings against the plaintiff, as guarantor, in the People’s Republic of China. Ultimately, an appellate court found in favour of Jiayi and the plaintiff was ordered to pay Jiayi a total of RMB 9,469,485.52 (“Judgment Debt”). The plaintiff paid back the Judgment Debt by 23 January 2019.

3. The plaintiff claimed that, under the Agreement, the defendant had agreed to indemnify the plaintiff for his loss occasioned by the Judgment Debt in consideration for the plaintiff proffering a period of forbearance. The plaintiff claimed that the defendant had wrongfully failed and refused to pay the plaintiff any amount in relation to the amount owing or interest thereon which remained due and owing to the plaintiff under the Agreement.

4. This Court delivered judgment with respect to those claims on 18 October 2024 in Liu v Lam ^[1] (“the primary judgment”), in which the Court found that there should be judgment for the plaintiff.

   1. [2024] NSWSC 1306.

5. The following Directions were made on 18 October 2024:

“(1) The plaintiff shall file and serve Short Minutes of Order reflecting this judgment within 28 days of the publishing of the judgment.

(2) If there is any dispute as to the form of the Short Minutes of Order filed and served by the plaintiff in accordance with Order (1), then the defendant shall file and serve an alternative form of Short Minutes of Order within 35 days of the publishing of this judgment.

(3) The Short Minutes of Order shall make provision for the receipt by the Court of submissions as to any adjustment to the judgment sum for any monies paid into a Chinese Court by the defendant, interest and costs (not exceeding five pages) in the event of any dispute as to those matters. The Short Minutes of Order shall also make provision for the filing and service of evidence in the case of a dispute as to costs.

(4) In the event any one or more of the issues concerning monies paid into a Chinese Court by the defendant, interest and costs are resolved, the parties shall provide a note accompanying the Short Minutes of Order to that effect in which case the Court may deal with the consent orders administratively in Chambers.”

6. By Short Minutes of Order filed and served by the plaintiff and defendant in accordance with those Directions, the parties agreed on the judgment sum and interest payable to the plaintiff, namely, judgment for the plaintiff in the amount of $2,548,079.87. This sum was inclusive of interest up to 18 October 2024. My final orders shall, subject to what next follows, reflect that sum.

7. I note the subsequent submission made by the defendant, that “[t]he defendant does consent to interest continuing at the same rate, 7.3% per annum, on [and] from 18 October 2024 to the date that the Court makes its Orders”.

8. This submission was not addressed by the plaintiff. Nonetheless, as the defendant has agreed to the payment of interest on and from 18 October 2024 to the date of the Orders made in consequence of this judgment, that position should be reflected in the Short Minutes of Order that the Court will direct to be filed.

9. Two issues emerged from the Short Minutes of Order filed and served by the plaintiff and the defendant in accordance with the Directions of 18 October 2024, namely:

1. the form of costs order to be made in favour of the plaintiff; and

2. whether the security sum of $310,000 paid by the plaintiff into Court as security for the defendant’s costs pursuant to Orders made on 2 February 2021, 21 November 2022 and 9 October 2023 be returned to the plaintiff prior to any appeal period having expired or any appeal having been dismissed or discontinued.

(“the issues”)

10. In accordance with further Directions of the Court made on 27 November 2024, the plaintiff and the defendant filed and served submissions and affidavits in support of their position on the issues on 6 and 13 December 2024 respectively. The plaintiff also filed submissions in reply on 6 February 2025 on the question of whether the security sum should be returned.

11. This judgment concerns the Court’s determination of the issues.

Costs

Submissions of the parties

12. The plaintiff submitted that the defendant should pay the plaintiff’s costs of and incidental to the proceedings on an indemnity basis, as agreed or assessed. The plaintiff’s submissions were, in summary, as follows:

1. A departure from the standard costs order is appropriate in circumstances where various adverse credit findings were made in relation to the defendant, including a finding that the defendant knowingly gave false evidence in the proceedings. The necessary corollary of these findings is that the defendant must have known at all times during the course of the proceedings that the Agreement created enforceable obligations on his part and that he was liable to the plaintiff.

2. Each of the facts disputed by the defendant in the ‘notice disputing facts’, served on the plaintiff on 15 October 2020, were subsequently proven by the plaintiff at trial. The defendant is liable to pay the plaintiff’s costs of proving those facts on an indemnity basis pursuant to r 42.8 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”).

3. The defendant failed to accept the plaintiff’s Offer of Compromise dated 1 August 2023, being judgment for the sum of $2,164,310 with no order as to costs (“the offer of compromise”). In circumstances where judgment obtained by the plaintiff is no less favourable than the terms of the offer of compromise, the defendant is liable to pay the plaintiff’s costs on an ordinary basis for the period up to and including 1 August 2023 and an indemnity basis thereafter, pursuant to r 42.14 of the UCPR. There are no exceptional circumstances which would justify a departure from the ordinary consequence of r 42.14 of the UCPR.

4. There should be no apportionment of costs for the two issues found in the defendant’s favour at trial, as the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Additionally, the amount of time spent on those two discrete issues was insignificant, and the argument advanced in relation to whether the statement of agreed facts constituted an “agreement” for the purposes of s 191 of the Evidence Act 1995 (NSW) was moot and ultimately of no assistance to the defendant.

13. The defendant accepted that the plaintiff may have costs on other than an ordinary basis but submitted that the Court should exercise its discretion to award indemnity costs with respect to ‘a qualified order’. The defendant submitted that he should pay 75% of the plaintiff’s costs of and incidental to the proceedings on an indemnity basis, as agreed or assessed. The defendant’s submissions were, in summary, as follows:

1. The defendant accepted that indemnity costs may be warranted where a party has given false evidence. However, the object of an award of costs is compensatory rather than punitive and the focus of the Court’s consideration is the impact that the delinquency or falsehood has on the time required in the proceeding. The time and costs incurred by the parties was not wholly attributable to the Court’s determination of the defendant’s conduct. Given the adverse credit findings which were also made against the plaintiff, a proportion of 75% is reasonable and appropriate.

2. Rule 42.8 of the UCPR provides an entitlement for indemnity costs for the costs incurred in proving each disputed fact on which the applicant on the ‘notice to admit’ was ultimately successful. This does not support a claim for indemnity costs in respect of the entirety of the proceedings. There were only eight disputed facts and the defendant’s response to those facts was more complex and nuanced than a simple rejection of each of those facts.

3. The defendant accepted that the Offer of Compromise would justify the court exercising its discretion to order indemnity costs in favour of the plaintiff in respect of the costs incurred after 29 August 2023. However, the Offer of Compromise cannot fortify indemnity costs in respect of the whole of the proceedings.

4. There were two discrete issues in the proceedings on which the defendant succeeded at hearing. These issues were not insignificant and therefore, an indemnity costs order of 75% is more than reasonable.

The costs issue

14. In that light, the issues between the parties can be distilled to the following:

1. subject to the question on indemnity costs, whether ordinary costs should be apportioned; and

2. whether there should be an order for indemnity costs for the whole of the proceedings or for a qualified period.

Issue 1: Subject to the question on indemnity costs, whether ordinary costs should be apportioned

15. Whilst the issues in substance revolved around the question of the appropriate order for indemnity costs, I propose to address the last mentioned summarised submission for the defendant as a precursor to considering that central issue.

16. The Court has full power and a general discretion to determine how costs are awarded. ^[2] This discretion is, however, subject to the rules of the Court including the UCPR. The general rule is that ‘costs follow the event’, ^[3] meaning that an unsuccessful party will normally be required to pay a successful party’s costs, unless it appears that some other order should be made as to the whole or any part of the costs.

    2. Section 98 of the Civil Procedure Act 2005 (NSW) (“CPA”).

    3. Rule 42.1 UCPR.

17. As mentioned, the defendant submitted that the Court should take account of the two discrete matters on which the defendant was successful at hearing, being:

1. whether the Statement of Agreed Facts and Issues (“SOAF”) was an ‘agreement’ for the purposes of the Evidence Act; and

2. whether the plaintiff’s claim for interest at 18.25% per annum was penal and unenforceable.

18. In Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2), ^[4] the New South Wales Court of Appeal described the general position on apportioning costs in cases of mixed success as follows:

“Under rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) the general rule is that the Court is to order that costs follow the event. The “event” may be characterised in more than one way. Generally the "event" refers to the result of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] per Ward, Emmett and Gleeson JJA. Where there has been a mixed outcome in the proceedings, and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings, in general such an exercise will be carried out on a relatively broad brush basis, and largely as a matter of impression and evaluation by the Court: Doppstadt at [19]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36]; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22.”

4. [2018] NSWCA 40 (“Ryde”) at [6].

19. The principles applicable to determining when and how costs should be apportioned between issues in proceedings were stated by the Court of Appeal in Bostik Australia Pty Ltd v Liddiard (No 2): ^[5]

“• Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).

• In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal.

• If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27].

• Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed).

• A separable issue can relate to “any disputed question of fact or law” before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34].

• Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272.”

5. [2009] NSWCA 304 at [38]. These principles were recently applied in Larsen v Tastec Pty Ltd (No 2) [2023] NSWCA 141 at [20]; Sims v The Commonwealth (No 2) [2023] NSWCA 30 at [6]-[9]; Taylor v Stav Investments Pty Ltd (No 2) [2023] NSWCA 322 at [6]-[12] per Mitchelmore JA (Simpson AJA agreeing). See also Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [6]-[12]; Barbieri v Pirovic [2022] NSWCA 76 at [36] per Gleeson and Mitchelmore JJA.

20. Hence, the starting point when examining costs is the general rule that costs follow the event. Where there has been a mixed outcome in the proceedings, the Court will determine if it is appropriate to engage in the process of apportioning costs as between different issues. Importantly, the process of apportioning costs does not automatically follow where there is mixed success on multiple discrete issues as the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed.

21. Where the Court determines that it is appropriate to apportion costs, the relevant question is then how to apportion costs. This question necessarily requires an impressionistic and discretionary evaluation. ^[6] The exercise should be carried out on a broad-brush basis, taking account of the degree of success and the likely extent of costs associated with different aspects of the case. The Court is entitled to take into account the importance of matters upon which the parties have been successful or unsuccessful, the time occupied, and the ambit of the submissions made, as well as any other relevant matter. ^[7]

    6. Chen v Chan [2009] VSCA 233 (“Chen”) at [10]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36], citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261.

    7. Chen citing Major Engineering Pty Ltd v Helios Electroheat Pty Ltd (No 2) [2006] VSCA 114 at [5].

22. In my view, a proper evaluation of the primary judgment must result in the conclusion that costs should follow the event; being the determination of the plaintiff’s claim. Further, the plaintiff is correct to submit that the defendant’s success on two discrete issues at final hearing does not warrant the Court embarking upon an apportionment of costs.

23. While it is unhelpful to undertake a detailed quantification of the issues which the defendant succeeded and failed, in the context of the significant number of factual and legal issues in dispute, in my view, the two discrete issues on which the defendant succeeded were relatively insignificant.

20. Not only did the two issues occupy a minimal amount of time in a 8-day final hearing, but I also consider that the two issues on which the defendant succeeded were ancillary to the more dominant issues in dispute.

21. The plaintiff was correct to submit that the argument which was had (and on which the defendant succeeded) in relation to whether the SOAF was an “agreement” for the purposes of the Evidence Act, was “moot and ultimately of no assistance to the defendant”. As correctly submitted by the plaintiff, that argument “did not alter any findings of fact made by the Court and did not result in any success for the defendant on any of the issues in dispute”.

22. As to the question of interest, the defendant submitted that:

“The difference between the parties on this aspect in the ultimate outcome between the two contended interest rates (18.25% per annum v the 7.3% p.a.) over more than four years represents a disputed liability of many hundreds of thousands of dollars”

27. However, this submission is misguided as the proper consideration is the actual impact on the cost of the proceedings, which are to be approached not upon punitive considerations but on a compensatory basis. In that regard, the plaintiff correctly submitted that:

“In relation to the ‘penalty interest issue’, this was largely a matter for submissions and took up less than an hour (on any generous view) of oral argument and submissions at the 7-day final hearing”.

28. This proposition, that the ‘penalty interest issue’ was a minor issue in the scheme of the proceedings as a whole, is also reflected in the primary judgment and in the time spent deliberating that issue.

29. Accordingly, notwithstanding the defendant’s success on the two discrete issues, it is not appropriate to seek to apportion costs. If the Court were assessing ordinary costs, then it would have made an order for costs in favour of the plaintiff for the whole of the proceedings. However, I now need to turn, at that juncture, to the indemnity issue.

Issue 2: Whether there should be an order for indemnity costs for the whole of the proceedings or for a qualified period

30. The Court also has the power and discretion to award costs on an indemnity basis pursuant to s 98 of the CPA.

31. A summary of the relevant principles relating to the discretion to award costs on an indemnity basis based on the conduct of a party can be found in Cappello v HomeBuilding Pty Ltd: ^[8]

“[46] The Court has a discretion to award costs on an ordinary or indemnity basis. Usually costs will follow the event, unless the Court considers that some other order ought to be made: Civil Procedure Act 2005 (NSW), s 98; Uniform Civil Procedure Rules 2005 (NSW), r 42.1; Collier v Country Women’s Association of New South Wales [2018] NSWCA 36 at [116] (“Collier”).

[47] For an order of indemnity costs to be made, the conduct of the party against whom such costs are sought must usually exhibit some special or unusual feature: Collier at [117]. The focus is on the way the litigation was conducted: Mead v Watson [2005] NSWCA 133 at [8]-[9]. For example, the discretion may be enlivened where a party persists in what should have been seen to be a hopeless case, such as where the case was unduly prolonged by groundless contentions: Ferella at [36]; Liverpool City Council v Estephan (Executor and Administrator of the Estate of the late Jocelyn Estephan and Ors) [2009] NSWCA 161 at [93] (“Liverpool City Council”). It has also been said that indemnity costs may be awarded where the unsuccessful party’s conduct was unreasonable or delinquent: Amirbeaggi v Matrix Group Co Pty Ltd [2021] NSWCA 21 at [18].

[48] The categories of circumstances in which the discretion may be exercised are not closed: Liverpool City Council at [93]. Ultimately, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on the ordinary basis: Liverpool City Council at [93].”

8. [2023] NSWCA 109 (Mitchelmore JA (with whom Simpson AJA and Meagher JA agreed)).

32. Relevantly, the overarching principle in relation to the question of costs, is that an award of indemnity costs should be, as I have mentioned, compensatory and not punitive. ^[9] In Oshlack v Richmond River Council, ^[10] the Court noted:

“It may be true in a general sense that costs orders are not made to punish an unsuccessful party. However, in the particular circumstance of a case involving some relevant delinquency on the part of the unsuccessful party, an order is made not for party and party costs but for costs on a “solicitor and client” basis or on an indemnity basis. The result is more fully or adequately to compensate the successful party to the disadvantage of what otherwise would have been the position of the unsuccessful party in the absence of such delinquency on its part.”

9. Hamod v State of NSW (2002) 188 ALR 659; [2002] FCA 424.

10. (1998) 193 CLR 72; [1998] HCA 11, at [44].

33. Therefore, the relevant issue is whether this matter exhibits some special feature that would warrant the Court awarding costs other than on an ordinary basis, and if so, whether costs on an indemnity basis should be awarded for the whole of the proceedings or a qualified period of time.

34. There were three bases advanced by the plaintiff in this respect:

1. Pursuant to r 42.14 of the UCPR, costs should be awarded to the plaintiff on an indemnity basis from 2 August 2023 onwards, on the basis that the defendant failed to obtain a judgment no less favourable than the terms of the Offer of Compromise.

2. Pursuant to r 42.8 of the UCPR, costs should be awarded to the plaintiff on an indemnity basis from 2 October 2020 onwards, on the basis that each of the facts disputed by the defendant in the notice disputing facts were subsequently proven by the plaintiff at trial.

3. Costs should be awarded to the plaintiff on an indemnity basis for the whole of the proceedings, on the basis that the defendant was found to have given false evidence in the proceedings and was not an honest or and reliable witness.

Offer of Compromise

35. There was an Offer of Compromise made by the plaintiff on 1 August 2023, which was prior to the commencement of the trial on 14 February 2024. The relevant parts of the Offer of Compromise were as follows:

1. The plaintiff offered to compromise the whole of his claim against the defendant in the proceedings on the following terms:

1. judgment in favour of the plaintiff as against the defendant for the sum of $2,164,310; and

2. that the proceedings be dismissed with no order as to costs with the intention that each party is to bear their own costs of the proceedings.

2. The Offer of Compromise was expressed to be made in accordance with r 20.26 of the UCPR.

3. The Offer of Compromise required the defendant to accept its terms by 29 August 2023, being within 28 days from the date of the issuing of the offer.

36. The defendant did not accept the Offer of Compromise within the time required, or at all.

37. For a valid offer of compromise to be made, it must accord with the provisions of r 20.26 of the UCPR, which, relevantly, provides as follows:

“20.26 Making of offer (cf SCR Part 22, rules 1A, 2, 3 and 4; DCR Part 19A, rules 1, 2, 2A, 3 and 4; LCR Part 17A, rules 2 and 5)

(1) In any proceedings, any party may, by notice in writing, make an offer to any other party to compromise any claim in the proceedings, either in whole or in part, on specified terms.

(2) An offer under this rule--

(a) must identify--

(i) the claim or part of the claim to which it relates, and

(ii) the proposed orders for disposal of the claim or part of the claim, including, if a monetary judgment is proposed, the amount of that monetary judgment, and

(b) if the offer relates only to part of a claim in the proceedings, must include a statement--

(i) in the case of an offer by the plaintiff, as to whether the balance of the proceedings is to be abandoned or pursued, or

(ii) in the case of an offer by a defendant, as to whether the balance of the proceedings will be defended or conceded, and

(c) must not include an amount for costs and must not be expressed to be inclusive of costs, and

(d) must bear a statement to the effect that the offer is made in accordance with these rules, and

(e) if the offeror has made or been ordered to make an interim payment to the offeree, must state whether or not the offer is in addition to that interim payment, and

(f) must specify the period of time within which the offer is open for acceptance.

(3) An offer under this rule may propose--

(a) a judgment in favour of the defendant--

(i) with no order as to costs, or

(ii) despite subrule (2)(c), with a term of the offer that the defendant will pay to the plaintiff a specified sum in respect of the plaintiff's costs, or

(b) that the costs as agreed or assessed up to the time the offer was made will be paid by the offeror, or

(c) that the costs as agreed or assessed on the ordinary basis or on the indemnity basis will be met out of a specified estate, notional estate or fund identified in the offer.

(4) If the offeror makes an offer before the offeree has been given such particulars of the offeror's claim, and copies or originals of such documents available to the offeror, as are necessary to enable the offeree to fully consider the offer, the offeree may, within 14 days of receiving the offer, give notice to the offeror that--

(a) the offeree is unable to assess the reasonableness of the offer because of the lack of particulars or documents, and

(b) in the event that rule 42.14 applies to the proceedings, the offeree will seek an order of the court under rule 42.14(2).

(5) The closing date for acceptance of an offer--

(a) in the case of an offer made two months or more before the date set down for commencement of the trial--is to be no less than 28 days after the date on which the offer is made, and

(b) in any other case--is to be such date as is reasonable in the circumstances.

(8) Unless the notice of offer otherwise provides, an offer providing for the payment of money, or the doing of any other act, is taken to provide for the payment of that money, or the doing of that act, within 28 days after acceptance of the offer.

(9) An offer is taken to have been made without prejudice, unless the notice of offer otherwise provides.

(10) A party may make more than one offer in relation to the same claim.

(11) Unless the court orders otherwise, an offer may not be withdrawn during the period of acceptance for the offer.

(12) A notice of offer that purports to exclude, modify or restrict the operation of rule 42.14 or 42.15 is of no effect for the purposes of this Division.”

38. There was no dispute in these proceedings that the Offer of Compromise did comply with r 20.26 of the UCPR. Nor is there anything on the face of the Offer of Compromise which would suggest otherwise.

39. The plaintiff’s application for indemnity costs based upon the Offer of Compromise, is also to be assessed in the light of r 42.14 of the UCPR, which provides as follows:

“42.14 Where offer not accepted and judgment no less favourable to plaintiff (cf SCR Part 52A, rule 22; DCR Part 39A, rule 25)

(1) This rule applies if the offer is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer.

(2) Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim--

(a) assessed on the ordinary basis up to the time from which those costs are to be assessed on an indemnity basis under paragraph (b), and

(b) assessed on an indemnity basis--

(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and

(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.”

40. The requirements of r 42.14(1) are satisfied in the present matter. A valid offer was made by the plaintiff and was not accepted by the defendant. The plaintiff obtained a judgment on his claim no less favourable to the plaintiff than the terms of the Offer of Compromise.

41. Accordingly, unless the Court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff’s costs assessed on an indemnity basis from 2 August 2023. ^[11]

    11. The defendant suggested that the relevant date from which indemnity costs should be incurred was 29 August 2023. This does not conform with r 42.14 of the UCPR and the defendant made no submission as to the relevance of this date.

42. The plaintiff submitted that “[e]xceptional circumstances are required to justify a departure from the strong presumption in favour of the ordinary consequence of rule 42.14 of the UCPR”. However, there are differing authorities on whether exceptional circumstances must be established. ^[12]

    12. see Leach v Nominal Defendant (QBE Insurance (Aust) Ltd) (No 2) [2014] NSWCA 391 at [46]–[48] (McColl JA); Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [15] (Spigelman CJ, Beazley and McColl JJA).

43. Nonetheless, the defendant has not demonstrated any circumstances, exceptional or otherwise, that would, in my view, justify a departure from the ordinary consequence of r 42.14 of the UCPR. The defendant has, in fact, accepted that the Offer of Compromise does justify the exercise of the Court’s discretion to order indemnity costs in favour of the plaintiff in consequence of the Offer of Compromise.

44. In all the circumstances, it is appropriate to award indemnity costs to the plaintiff against the defendant from at least 2 August 2023.

Notice to admit facts

45. On 2 October 2020, the plaintiff served on the defendant a notice to admit facts (“notice to admit”). The notice to admit required the defendant to admit the following facts:

1. The advance made by the lender pursuant to the Loan Agreement was made to Mr Lam personally.

2. The advance made by the lender pursuant to the Loan Agreement was not made to a partnership comprising of the plaintiff and the defendant.

3. The plaintiff was required to be included as a guarantor under the Loan Agreement because of the lender’s requirements.

4. The defendant requested that the plaintiff pay to the lender the sum of RMB 1,000,000 as repayment of the principal owing under the Loan Agreement.

5. The defendant's signature appears on the document which is annexed and marked "A".

6. The defendant signed the document which is annexed and marked "A" (or a version of it).

7. The defendant agreed to pay to the plaintiff the amount that the plaintiff was required to pay under the Judgment Debt.

8. The defendant agreed to pay to the plaintiff the amount owing.

46. On 15 October 2020, the defendant served on the plaintiff a notice disputing facts in which the defendant disputed each of the above-mentioned matters referred to in the notice to admit.

47. Ultimately, each of the facts contained within the notice to admit, and disputed by the defendant, were proven by the plaintiff at trial.

48. Pursuant to r 17.3 of the UCPR, a requesting party (in this case, the plaintiff) may, by notice served on another (in this case, the defendant), require them to admit for the purpose of the proceedings the facts specified in the notice to admit. Rule 42.8(2) of the UCPR provides:

“42.8 Dispute of fact subsequently proved or admitted

…

(2) Unless the court orders otherwise, the disputing party must, after the conclusion of proceedings in which a fact in dispute is subsequently proved or is subsequently admitted by the disputing party, pay the requesting party's costs, assessed on an indemnity basis, being costs incurred by the requesting party--

(a) in proving the fact, or

(b) if the fact has not been proved--in preparation for the purpose of proving the fact.”

49. In r 42.8(1) of the UCPR, ‘disputing party’ means the party who serves a notice disputing a fact, while the ‘requesting party’ means the party who is served with a notice disputing a fact. As mentioned, the disputing party was the defendant and the requesting party was the plaintiff.

50. Therefore, as each of the facts disputed by the defendant were subsequently proved, the defendant must pay the costs of proof on an indemnity basis unless the court orders otherwise (r 42.8(2), UCPR).

51. In the recent case of Pirrottina v Pirrottina (No 2), ^[13] Justice Rees set out the following observations in relation to the purpose and consequences of r 42.8 of the UCPR:

“[35] Obviously enough, the purpose of the Notice to Admit regime is to identify the facts which are seriously in dispute, rather than those which are not, such that the Court’s time can be devoted to resolving the real issues between the parties. To improve the efficacy of this regime, and to focus the mind of the party asked to admit facts, r 42.8 adds a costs incentive. Rule 42.8 provides the ‘default position’, casting the onus onto the party seeking an “otherwise order” to show why some different order should be made: Re Heavy Plant Leasing Pty Ltd [2017] NSWSC 1835 at [24] (per Brereton J). The rule is intended to encourage parties to consider realistically whether they will put the other party to the cost of proving each and every fact; the risk of a cost burden if the fact is proved provides an incentive to narrow the issues, shorten trials and save costs: Meadow Gem Pty Ltd v ANZ Executors and Trustees (Supreme Court (Vic), Byrne J, 11 June 1996, unrep) at 5. The purpose of the rule is to provide a sanction in situations where a fact which should be admitted is not admitted such that proceedings are needlessly prolonged: Millane v Nationwide News Pty Ltd [2004] NSWSC 1023 at [20] (Hoeben J).

[36] It is not necessary for a party to serve all their evidence in respect of a particular fact before serving a Notice to Admit, as this would undermine the rationale of the rule: Heavy Plant Leasing at [24]. As such, the party who has received a Notice to Admit must decide whether to admit those facts based on their assessment as to whether that fact is true, either from their own knowledge or from the evidence served in the proceedings in respect of that fact as at the date of the notice. The party receiving the notice may already know that the fact is true. The party may assess that that fact is likely to be established at trial, whether they know that fact to be true or not, and that in those circumstances it would be sensible to admit that fact rather than for the parties to continue to incur costs in seeking to establish, or to contest, that fact. The party may also admit a fact where they consider that the fact does not matter.

[37] It is not necessary for the party receiving the Notice to Admit to admit those facts if they are not in a position to assess the truth of the facts in the 14 day period; the Court may “otherwise order” where the receiving party acted reasonably in disputing those facts, or frame an order such that any costs consequences only ‘run’ from when they ought to have made the admission: Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd (No 2) [2010] NSWSC 490 at [16] (White J).”

13. [2024] NSWSC 1053 (Rees J) at [35] – [37].

52. The onus is therefore on the defendant to demonstrate why the Court should order otherwise than in accordance with r 42.8 of the UCPR. The focus will be on the reasonableness of the defendant in disputing each of the facts which were subsequently proved at trial.

53. Justice White in Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd (No 2) ^[14] described the approach to r 42.8 of the UCPR and the circumstances where the Court might be persuaded to “order otherwise”, as follows:

“[11] I have been taken to little authority on how the court should approach a decision as to whether to make a contrary order under r 42.8(2). As a matter of principle the discretion to make a contrary order is to be exercised having regard to s 56 of the Civil Procedure Act 2005 (NSW) and, in particular, in this case, what order is required to facilitate the just resolution of the real issues in the proceedings. In my view it would be a proper exercise of discretion under r 42.8 to make a contrary order if the facts sought to be admitted were significant to the outcome of the proceedings and if the party asked to make the admission was not, at the time the notice was served, in a position to assess whether the fact was or was not true.

…

[16] If the defendants were not in a position to assess the truth of the facts sought to be admitted in the 14 days after the notice was served and they acted reasonably in disputing the facts, then it would be appropriate to make a contrary order. It does not follow that the order cannot be so framed that the party receiving the notice might be required to pay costs of proving the fact, either on the ordinary or the indemnity basis, from the time the party ought to have made the admission.”

14. [2010] NSWSC 490 (White J) at [11] and [16].

54. The defendant submitted that the plaintiff erroneously treated certain “propositions” contained in the notice to admit, namely paragraphs 2, 7 and 8, as facts in dispute. The defendant submitted that:

“They are overall conclusions which involve mixed questions of the conclusion to be drawn from many facts, and of law, as to the proper construction, and use of the Agreement [s]ued [u]pon. The non admission of the "facts" was justified in answering that notice instead of setting aside the notice at additional cost.”

55. As to the remaining paragraphs in the notice to admit, namely paragraphs 1, 3, 4, 5 and 6, the defendant submitted that their response:

“…was more complex and nuanced than a simple rejection of each of those facts, but rather to place in a different context and to explain and qualify the circumstances of those allegations. To this extent the defence conducted in these proceedings different from an outright rejection of those facts.”

56. In my view, the defendant correctly submitted that paragraphs 2, 7 and 8 contained in the notice to admit, which were purported to be ‘facts’ by the plaintiff, in fact contained mixed questions of fact and law, or were conclusions. In some cases, the conclusions for which agreement was sought went to the ultimate conclusion in the proceedings.

57. I also agree with the thrust of the defendant’s submissions with respect to paragraphs 1, 3, 4, 5 and 6.

58. I have determined to exercise my discretion to order otherwise than in accordance with r 42.8 of the UCPR and will not award indemnity costs to the plaintiff against the defendant on the basis of the disputed facts which were subsequently proved at trial.

False evidence

59. The parties correctly submitted that indemnity costs may be awarded where the unsuccessful party falsely and deliberately concocted evidence, or unnecessarily prolonged a hearing with deliberately false defences or allegations of fact. ^[15]

    15. Foundas v Arambatzis (No 4) [2023] NSWSC 1648 at [18], citing Degmam Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 354 at 358; Chaina v Alvaro Homes Pty Ltd [2008] NSWCA 353 at [106]-[113] (per Basten JA, with whom Giles JA and Young CJ in Eq agreed); Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd (2006) 196 FLR 419; [2006] QSC 7 at [13]-[16]; Thors v Weekes (1989) 92 ALR 131 at 151-152; Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 230-234; Huang v Wei (No 3) [2022] NSWSC 662 at [17]; Fang v Sun (No 2) [2014] NSWSC 1194 at [17]-[23]; RinRim Pty Ltd v Deutsche Bank AG (Costs) [2016] NSWSC 1510 at [3]-[17] (upheld in RinRim Pty Ltd v Deutsche Bank AG [2017] NSWCA 169); Roberts-Smith v Fairfax Media Publications Pty Limited (No 45) [2023] FCA 1474 at [10], citing Degmam Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 354 at 358.

60. In Degmam Pty Ltd (in liq) v Wright (No 2), ^[16] an unsuccessful party prolonged a trial by making deliberately false allegations of fact and Justice Holland ordered costs on an indemnity basis. His Honour found that the allegations, made as the basis of the defendant’s defences and causes of action, had been deliberately concocted in an attempt to deny the plaintiff its rights and to shift legal liability to the plaintiff. The defendant’s conduct, in multiplying allegation upon allegation and prevaricating in the witness box, grossly prolonged the litigation, which caused other parties to incur costs beyond what the plaintiff could have reasonably expected to incur in litigating genuine issues.

    16. [1983] 2 NSWLR 354 at 358.

61. However, not every allegation that proves unsustainable or without merit justifies indemnity costs. In Wentworth v Rogers (No 5),^[17] the New South Wales Court of Appeal found that, while the appellant’s case lacked merit, the appellant had not made allegations which she believed or knew to be false, and as a result the Court ordered party party costs.

    17. (1986) 6 NSWLR 534 at 542.

62. The focus is therefore on the culpability of the unsuccessful party in knowingly and deliberately presenting false evidence which prolonged the proceedings through litigation of false claims (rather than merely unmeritorious claims).

63. While findings of credit in relation to the defendant were made throughout the primary judgment, the overall conclusions reached by the Court were as follows: ^[18]

“[84] Based upon my overall assessment of the defendant's evidence, which derived, in part, from my close observations of him as a witness, when combined with the further adverse credit findings regarding the defendant's evidence in the fact finding section of this judgment, I have such concerns about both the honesty and reliability of the defendant's evidence that, mindful of the aforementioned principles, his entire evidence must nonetheless be approached with great caution.

[85] Overall, I have found that he is not a truthful and reliable witness and that his evidence should only be accepted to the extent that it is against his interests, is consistent with the plaintiff's evidence (which for the most part was honest and reliable) or is corroborated by contemporaneous documentary evidence.”

18. The primary judgment at [84] – [85].

64. On one view, this overall conclusion regarding the defendant could sustain the plaintiff’s contention that the defendant knowingly and deliberately presented false evidence. However, a wider review of the primary judgment makes that position abundantly clear.

65. A pivotal consideration in the Court’s determination of the claim was the defendant’s assertion, made throughout the proceedings, that he had lied in his evidence in the Chinese court proceedings but told the truth in his evidence as to the same subject matter in these proceedings. The relevant passages of the primary judgment dealing with that argument are as follows: ^[19]

“[71] The gravamen of the defendant’s case in these proceedings including his affidavit evidence was that he was willing to tell lies to a Chinese Court to assist his friend, yet he asks this Court to accept he is a witness of truth in these proceedings when he gives evidence to assist himself.

[72] These considerations must result in an acceptance of the plaintiff’s submission that the inevitable consequence of the defendant's evidence is that either the defendant's evidence is accepted, wholly or in part, with the necessary corollary that he knowingly gave false evidence in China, or his evidence is not accepted, wholly or in part with the necessary corollary that he is knowingly giving false evidence in these proceedings. I have reached the latter conclusion.

[73] Ultimately, I will find that the defendant’s evidence in these proceedings was false and that he did not give false evidence in the Chinese courts as reflected above.

[74] This conclusion is predicated upon the evidence in these proceedings supporting that conclusion including admissions made by the defendant together with my overall conclusions as to the defendant’s credibility (which I will partly find in this section of my judgment and further during the course of my findings of fact).

[75] The particular factual considerations bearing upon my conclusion as to the true nature of the plaintiff’s obligations under the Jiayi Loan Agreement (when viewed in the light of my findings as to those matters) and the truth of his evidence in the Chinese Court Proceedings include: the email sent by the defendant to the plaintiff on 29 November 2016; the email sent by the defendant to the plaintiff dated 6 December 2016; the affidavit executed by the defendant on 6 April 2017 to be used in the Lower Court Proceedings; the viva voce evidence given by the defendant in the Appeal Proceedings and his evidence in these proceedings as to the correctness or otherwise of his evidence, in that respect and the Agreement itself being signed by the defendant with his English and Chinese signature knowing that it would be provided by the plaintiff and his lawyers to a Chinese Court or Official to demonstrate that the plaintiff would imminently receive funds sufficient to discharge the Judgment Debt and to obviate the need for enforcement of the judgment pending the receipt of those funds. I do not find that either party intended to defraud the Chinese Courts.”

19. The primary judgment at [71] – [75].

66. Further, in discussing the defendant’s primary contention that the Agreement was not intended to create enforceable legal obligations and was executed solely for the purpose of delaying or preventing enforcement of the Judgment Debt by the Chinese courts, the primary judgment states: ^[20]

“Lying at the heart of the contentions advanced by the defendant in this respect was, in essence, that the plaintiff and the defendant conspired to give false evidence in the Chinese Court Proceedings. I have ultimately found, to the contrary, namely, that the truth lay in the evidence given by the defendant in the Chinese Court Proceedings. This is so much so that the defendant in these proceedings, when pressed in cross-examination, ultimately confirmed much of the evidence that he gave in the Chinese Court Proceedings as well as the Chinese Court Proceedings Affidavit (and related documents in preparation for the making of that affidavit and the giving of the defendant’s evidence).”

20. The primary judgment at [723].

67. It must follow, at least implicitly, from the above passages from the primary judgment that the Court concluded that the defendant knowingly and deliberately gave false evidence when advancing the argument that his evidence in the Chinese courts was, in all material respects, a lie and that his counterpart evidence in this Court should be believed.

68. I acknowledge that the subject matter of the above findings does not necessarily encase the entirety of the findings of the Court leading to its final conclusion. However, it was a foundational component of the defendant’s case and significantly contributed to the length of the proceedings.

69. While this is no doubt sufficient to resolve the issue of indemnity costs in favour of the plaintiff (whether taken with the findings as to the Offer of Compromise or separately), a further factor supporting an award of indemnity costs in favour of the plaintiff is that the Court’s adverse credit finding also materially contributed to the resolution of other key issues, including the issue as to whether ‘the 26 September 2015 email’ had been sent and whether the Agreement had been executed by the defendant.

70. For example, in relation to the question of whether the defendant affixed his signature to the Agreement at a meeting with the plaintiff at the Grand Hyatt in Shenzhen on 14 May 2018, the Court noted: ^[21]

“Apart from the general view that I have formed about the defendant’s credit, this evidence cannot be accepted in the light of the context in which the meeting occurred, and as I have found, the plaintiff’s desire to obtain, for whatever reason, the defendant’s Chinese signature on the document.”

21. The primary judgment at [612].

71. Ultimately, the adverse credit findings materially impacted the Court’s final determination that the Agreement created enforceable legal obligations on the defendant’s part, and that there was no partnership between the plaintiff and defendant. Again, by way of example, in its determination of the issue as to whether the plaintiff and the defendant were in a partnership, the Court concluded: ^[22]

“Contrary to the defendant's case I have not accepted that the defendant gave false evidence in the Chinese Court Proceedings but rather that his evidence in these proceedings as to the circumstances of the Jiayi Loan Agreement were, in substance, false. As was his evidence in relation to the Agreement.”

22. The primary judgment at [681].

72. This Court’s conclusion that the defendant knowingly and deliberately gave false evidence is further buttressed by two ancillary findings of the primary judgment.

73. First, the Court found that the defendant had given a false declaration in a passport application and was willing to lie in documents such as a declaration if it would assist him. ^[23] The defendant ultimately conceded that he was willing to lie in affidavits it if would assist him. ^[24]

    23. The primary judgment at [77].

    24. The primary judgment at [77].

74. Secondly, the evidence given by the defendant in relation to how his signature came to be applied to the transcript of the Chinese Court appeal proceedings, was to suggest that anyone in the court room that day could have applied his signature that day. The Court found that this evidence was ‘evasive’ and ‘manufactured’. ^[25]

    25. The primary judgment at [80]-[82].

75. I have determined to award indemnity costs to the plaintiff against the defendant for the whole of the proceedings.

Release of security

76. On 2 February 2021, Registrar Jones made the following Consent Orders relating to the security to be paid into the Court by the plaintiff:

“1. The Plaintiff provide security for the Defendant's costs as follows:

1.1 $67,500,00 shall be paid into court or in a manner to be agreed by the parties within 21 days of the date of entry of these orders; and

1.2 $67,500.00 shall be paid into court or in a manner to be agreed by the parties on or before the day which is 42 days before the date fixed for the hearing of the proceedings.

2. In the event that either of the amounts referred to in [1.1] and [1.2] are not paid by the time specified, the proceedings be stayed subject to further order.

3. Grant liberty to the parties to apply on 7 days' notice to vary these orders or seek further security.”

77. On 21 November 2022, Registrar Jones made the following further Orders sought by the defendant pursuant to a Notice of Motion filed on 26 September 2022, with reasons delivered orally by Registrar Jones in relation to the quantum of security:

“1. The Plaintiff provide further security for the Defendant's costs as follows:

(a) $75,000 to be paid into court or in a manner to be agreed by the parties within 21 days of entry of these orders; and

(b) $167,500 to be paid into court or in a manner to be agreed by the parties on or before the day which is 42 days before the date fixed for the hearing of the proceedings.

2. Order 1.2 of the orders of Registrar K Jones dated 2 February 2021 is vacated.

3. In the event that either of the amounts referred to in [1(a)] and [1(b)] are not paid by the time specified, the proceedings be stayed subject to further order.

4. Grant liberty to the parties to apply on 7 days' notice to vary these orders or seek further security.

5. The Plaintiff to pay the Defendant's costs of this Notice of Motion.”

78. Registrar Jones gave the following reasons for increasing the quantum of security: ^[26]

“Taking a broad brush approach to the consideration of the appropriate quantum of security, which is permitted under the case law in cases of this nature, I am persuaded from a review of all of the evidence that it is appropriate to make orders in accordance with the prayers for relief in the motion.

I am satisfied that the proceedings are sufficiently complex and may well require an eight day hearing and that the amount sought reflects a reasonable estimate of the costs and disbursements which, being appropriately discounted, may well be required to appropriately cover an order for security.”

26. Tcpt, 21 November 2022, p 5.

79. On 9 October 2023, Justice Chen made the following orders:

“Order 1(b) of the orders made 21 November 2022 in respect of the Plaintiffs Notice of Motion filed 26 September 2022 (Order) is varied to require the Plaintiff to provide security for the Defendant's costs in the amount and manner referred to in the Order on or before 24 November 2023.”

80. Accordingly, the sum of $310,000 was paid by the plaintiff into the Court as security for the defendant’s costs (the “security sum”)pursuant to orders made on 2 February 2021, 21 November 2022 and 9 October 2023.

81. As previously mentioned, the primary judgment was delivered on 18 October 2024, with judgment for the plaintiff.

82. By a proposed Short Minutes of Order filed and served by the plaintiff on 13 November 2024, the plaintiff sought orders regarding the release of the security sum.

83. The defendant did not consent to such orders, and by an alternative proposed Short Minutes of Order filed and served by the defendant on 22 November 2022, the defendant sought that the security sum be retained by the Court until:

1. the time for filing and service of a notice to appeal has expired and no appeal had been filed and served; or

2. any appeal which is made by the defendant is discontinued or dismissed.

84. As at the date of this judgment, no notice of appeal has been lodged by the defendant and the defendant has not sought a stay of the primary judgment.

85. The defendant provided a draft notice of appeal in the affidavit of Andrew Salgo filed on 13 December 2024 (“draft NOA”). The draft NOA sets out the following grounds of appeal:

“1. The trial judge erred in finding that the Appellant signed the Agreement with his simplified Chinese signature on 14 May 2018 at the Grand Hyatt Hotel in Shenzhen in front of the Respondent.

2. The trial judge was in error in finding, as an alternative finding to the above, that the Agreement came into being as a result of the Respondent asking the Appellant to sign the Agreement via our WeChat on 8 May 2018 and the Appellant signing the Agreement with his English signature and returning it to the Respondent via WeChat on 9 May 2018.

3. The trial judge erred in finding that the Agreement was intended by the parties to create legal relations.”

86. I acknowledge that there is a dispute between the parties as to what the “material date” is for the purpose of r 50.12(1)(a) of the UCPR. The plaintiff submitted that the material date is the date the primary judgment was delivered, being 18 October 2024, and as a result, the time for filing of any appeal has expired. The defendant submitted that the material date is the date on which an order is made, as it is not possible to appeal against reasons.

87. It is for this reason that the defendant has likely not filed any notice of appeal or sought a stay of the primary judgment, as on their argument, there are no orders to appeal or stay at this time. Given the orders I propose to make and the reasons for the same, it is unnecessary to resolve that issue.

88. The defendant did not expand on any of the above grounds of appeal in the draft NOA and advanced an entirely separate argument regarding ‘the 26 September 2015 email’ (that was not addressed within the draft NOA) in his submissions filed 13 December 2024. Hence, there is no correlation between the grounds of appeal and the arguments developed in the defendant’s written submissions.

Submissions of the parties

89. The plaintiff submitted that:

1. in circumstances where the plaintiff has been successful at trial, he is entitled to the release of security that has been paid into Court for the defendant’s costs of the proceedings;

2. it would be unjust to stay the release of security until such time as any appeal period has expired or appeal has been dismissed; and

3. in any event, the time period for any appeal has already expired as the “material date” for the purpose of r 50.12(1)(a) of the UCPR is 18 October 2024, being the date that judgment was delivered.

90. The defendant submitted that:

1. if there were to be an order of costs in the defendant’s favour following an appeal, the prospect of enforcement of costs (in the absence of security) would be small. The facts the defendant points to in support of this submission are that as at 19 October 2020, the plaintiff had no assets in Australia and had not filed or lodged Australian tax returns or assessments for the years ending 30 June 2019 and 30 June 2020;

1. the Court fell into error in finding that ‘the 26 September 2015 email’ was a screenshot taken on the phone of the defendant, and absent this finding, the plaintiff would not have succeeded in the proceedings;

2. the following factors would be relied upon by the defendant on appeal, in relation to the ‘balance of likelihood’ as to the source of ‘the 26 September 2015 email’:

“45. As recorded at [428] fourth; there was no evidence to show the defendant had transferred RMB 1 million to the plaintiff prior to the plaintiff transferring RMB 1 million in partial satisfaction to the Jiayi debt. There was no later transfer or repayment of the amount, or any follow up on request from the plaintiff in respect of it. That is put for the defendant as a powerful reason to accept that the RMB 1 million paid to Jiayi by the plaintiff was in fact not paid on the defendant's behalf.

46. What is said in the Judgment contrary to that submission is that the parties had cooperative relationships. In the defendant's submission this is a somewhat cursory dismissal of a significant circumstance. Certainly, by the time the Agreement Sued Upon came to be entered on the plaintiffs case, there was no reason to hold back from inclusion in the monies to be recovered from the defendant that RMB 1 million; let alone when these proceedings were later contemplated; and even later when instituted.

47. As to the circumstance that the 26 September 2015 email was written in simplified Chinese, the defendant's evidence was that he cannot write in those characters. That was rejected by the Court as implausible:

48. The only evidence given for the plaintiff of the defendant's ability to write in Simplified Chinese was that he went to primary school in Hainan province. The defendant submits that there was no foundation for the extrapolation of his ability to write in simplified Chinese characters from that fact. But even if this were otherwise, if the 26 September 2015 email was written by the defendant on that date - and not for the purpose of being used in evidence one day-there is no explanation for the Defendant's use of this unfamiliar or lesser familiar script.” (footnotes omitted)

4. the material date in relation to the appeal period should be the date on which an order is made, rather than the date that reasons for judgment are delivered.

91. The plaintiff was invited by the Court to file and serve submissions in reply on the question of whether the security sum should be returned. In reply, the plaintiff submitted that:

1. the Court cannot be satisfied that the averred grounds of appeal are arguable, as the draft NOA and submissions do not provide particulars or further elucidation as to the impugned findings; and

2. in regard to the defendant’s submission regarding ‘the 26 September 2015 email’, no other person could have taken the screenshot other than the defendant because:

1. there is a reference to “sjt_liutuo” (being a reference to the plaintiff) and “me”, which makes it apparent that “me” is the other party to the email communication, being the defendant (there being only two parties to the communication); and

2. the defendant admitted that the references to “SJT” and “sent to me” indicated that he took the screenshot on his phone.

Legal principles

92. The plaintiff relied on the authority in Huon Shipping Logging Co Ltd v South British Insurance Co Ltd, ^[27] as well as a number of cases that have followed this decision. ^[28]

    27. [1923] 23 VLR 206 (“Huon Shipping”).

    28. See A & R Constructions Pte Ltd v Lees (1982) 7 ACLR 900; Lym International Pty Ltd v Chen; Marcolongo v Lym International Pty Ltd [2009] NSWSC 167 (“Lym”) at [18]; Texxcon Pte Ltd v Austexx Corporation Pty Ltd (No 2) [2013] VSC 343; Gayle v Fairfax Media Publications Pte Ltd (No 2) [2018] NSWSC 1932.

93. As observed by Professor Dal Pont, the authority in Huon Shipping dictates that: ^[29]

“a plaintiff who pays money into court as security for the defendant’s costs of the action, and succeeds in the action and secures a costs order in his or her favour, is entitled to have that money paid out of court as soon as judgment is entered, notwithstanding that the defendant has secured a stay of execution pending an appeal.” (footnotes omitted)

29. Gino Dal Pont, The Law of Costs (5th ed, 2021, Lexis Nexis) at [28.66].

94. The defendant relied on the recent case of Gispac Pty Ltd v Michael Hill Jeweller (Australia) Pty Ltd (No 2),^[30] where the Court refused the plaintiff’s application for release of security, as well as a number of further cases where the Court has refused to release security pending (i) an appeal, (ii) an application for leave to appeal, or (iii) further order, if an appeal is filed within a specified period. ^[31]

    30. [2024] NSWSC 356 (“Gispac”).

    31. See Penrith Whitewater Stadium Ltd v Lesvos Pty Ltd [2017] NSWSC 103 (“Penrith”); Kiri Te Kanawa v Leading Edge Events Australia Pty Ltd [2007] NSWCA 187 (“Kiri”); Challenger Group Holdings Ltd v Concept Equity Pty Ltd (No. 2) [2008] NSWSC 1002 (“Challenger”).

95. It is necessary to first examine the authorities relied on by the parties.

96. There is a long list of authorities which all follow the decision of Huon Shipping. As Justice Hamilton in Lym ^[32] explains, the principle enunciated in these cases is:

“to the effect that, once the purpose of the security has been exhausted, the moneys should be paid out at once, even where an appeal is contemplated, leaving the questions of security for costs of the appeal and any possible re trial for later consideration.”

32. Lym at [18].

97. The authorities relied on by the plaintiff favour the return of any sum paid into court as security for a defendant’s costs, regardless of whether an appeal has been filed or there were valid concerns that led to the granting of the security in the first place.

98. Given the authorities relied on by the defendant, it is first useful to set out two recent Court of Appeal authorities in relation to the release of security for costs.

99. In Carter v Mehmet (No 2), ^[33] the appellants provided security for the respondents’ costs of an appeal. The Court allowed the appeal brought by the appellants, set aside the orders of the primary judge, and ordered that the respondents pay the appellants’ costs of the appeal. The appellants sought the release of the security they had paid into court for the respondents’ costs of the appeal on the basis that, since the Court allowed the appeal and did not make any order for costs in the respondents’ favour, the entitlement to costs that the security for costs order was designed to protect, does not arise. The respondents did not make any submissions opposing the release of funds. The Court held:

“[11] In GE Dal Pont, Law of Costs (5th ed, 2021, LexisNexis) at [28.66]:

“Case authority dictates that a plaintiff who pays money into court as security for the defendant's costs of the action, and succeeds in the action and secures a costs order in his or her favour, is entitled to have that money paid out of the court as soon as judgment is entered …”

[12] While it remains open to the respondents to seek special leave to appeal to the High Court of Australia, the prospects of any prospective application are, for present purposes, irrelevant. The judgment of this Court stands unless and until it is overturned by the High Court. The respondents are not entitled to any order for costs from the appellants. Even if the respondents are successful in obtaining special leave to appeal, they would not in those circumstances be entitled to security for costs from the appellants.

[13] The appellants are plainly impecunious. No reason has been shown why the funds they paid into Court should not be returned to them forthwith.”

33. [2021] NSWCA 333 (“Carter”).

100. In Boris v Pages Property Investments Pty Ltd (No 2), ^[34] the appellant provided security for the respondent’s costs of an appeal. Following the upholding of the appellant’s appeal and an order that the respondent pay the appellant’s costs of the appeal and costs at trial, the parties were notified that the Court intended to pay out the monies held by the Court as security for the costs of the appeal. The respondent opposed the release of the monies, notwithstanding that it was not successful in its appeal, on the basis that there were two interlocutory costs orders made in the respondent’s favour over the course of the appeal. The Court held:

“[11] Contrary to PPI’s submissions, the order for security for costs made by Meagher JA was against the contingency that Mr Boros failed in his appeal and was designed to provide a fund from which at least some of PPI’s costs could be paid. The premise upon which the order for security for costs was made, namely PPI’s success on the appeal, has not come to pass. The orders of Meagher JA were not intended to provide security in respect of the costs order made on the security for costs application itself nor in relation to any interlocutory application made prior to the hearing of the appeal. As to the former, the costs incurred in the application were incurred before the security order was made. Meagher JA’s decision to order security was not stated to be in respect of past costs incurred but, rather, was forward-looking.

[12] Moreover, the order was made in respect of particular costs, viz. “for the preparation and hearing of the appeal”: Boros v Pages Property Investments Pty Ltd [2021] NSWCA 50 at [39]. That description does not characterise either of the applications in respect of which PPI achieved costs orders in its favour.

[13] In these circumstances, we accede to Mr Boros’ submission that the costs paid into court should be released to him.”

34. [2022] NSWCA 43 (“Boris”).

101. The main authority relied on by the defendant is Gispac. In Gispac, the Court approached the question as to release of the security for costs as follows: ^[35]

“It is common ground that the Court’s decision to release the security involves an exercise of discretion. The debate in the present case focused on whether (i) the appeal grounds are reasonably arguable, and (ii) there is a reason to doubt that Gispac would be able to satisfy any order to pay Michael Hill’s costs of the trial, if the appeal succeeds.”

35. Gispac at [33].

102. The Court in Gispac found that the appeal grounds advanced were arguable, and there were good discretionary reasons to refuse the plaintiff’s application for release of security. As a result, the plaintiff’s application for release of security was refused.

103. A determinative feature in distinguishing the facts of Gispac from Carter and Boris was the fact that the Court had available to it evidence that the defendant had filed a notice of appeal: ^[36]

“Gispac did not dispute Michael Hill’s submission that Carter v Mehmet (No 2) and Boris are distinguishable. In Carter v Mehmet (No 2), there was no evidence of any intended appeal, nor were submissions filed opposing the release of security: at [8], [12]. In Boris, no application for special leave to appeal to the High Court had been filed and the security was sought to be retained by the respondent as security for two separate interlocutory costs orders, not referrable to the costs in respect of which the order for security was made. By contrast, here there is evidence of an appeal by Michael Hill.”

36. Gispac at [27].

104. While I note that no notice of appeal has been filed by the defendant, the draft NOA has been provided as evidence of the impending appeal and provides the grounds of appeal to be argued. I have mentioned the limitations of the draft NOA above and will further develop that consideration below.

105. The Court in Gispac refers to three authorities where the court has refused to release a security pending the filing of an appeal or the determination of an appeal. ^[37] The courts in these matters have approached the question by reference to whether there is an arguable case on appeal. ^[38]

     37. Penrith; Kiri; Challenger.

     38. Penrith at [31]; Kiri at [22].

106. Ultimately, given the discretion of the Court, each case will turn on its own facts.

Consideration

107. There are two different lines of authority regarding how to approach the return of a security sum which has been paid into the Court by a plaintiff as security for a defendant’s costs.

108. On the authority in Huon Shipping and following, a plaintiff who has paid money into Court as security for the defendant’s costs and has secured a judgment and costs order in their favour, is entitled to have that money paid out as soon as judgment is entered, even if a defendant has secured a stay of execution with a view to an appeal. ^[39]

     39. Gino Dal Pont, The Law of Costs (5th ed, 2021, Lexis Nexis) at [28.66].

109. In my view, I should follow this line of authority in this matter, although as I will later discuss, in the event that it was appropriate to consider the prospects of success of the appeal, no different result would follow.

110. In circumstances where the plaintiff has succeeded at trial, and the significance of that success is demonstrated through an order for indemnity costs to be made in favour of the plaintiff, there is no sufficient reason for the Court to withhold the security sum. The apparent entitlement to costs in favour of the respondent which the security sum was designed to protect has not come to pass.

111. I am not persuaded that the facts outlined by the defendant, being that as at 19 October 2020 the plaintiff had no assets in Australia and had not filed or lodged Australian tax returns or assessments for the years ending 30 June 2019 and 30 June 2020, is, without more (such as current financial information), enough to sustain the defendant’s submission that the prospect of enforcement of costs against the plaintiff (in the absence of security) would be low.

112. Despite having approached the consideration of the issue in this way, and with a real reluctance to enter into a full discussion of the merits of any intended appeal, I intend to turn briefly to the question of whether the arguments advanced by the defendant demonstrate an arguable case on appeal.

113. On the evidence that is before this Court, there are real doubts as to whether the appeal grounds advanced by the defendant are arguable for two reasons.

114. First, the grounds of appeal in the draft NOA do not advance any substantive argument as to how the Court erred. The draft NOA merely lists three findings of the trial judge which, in the defendant’s opinion, were in error. As the plaintiff rightly submits, “no particulars of the impugned findings are given”. Nor is there any elaboration upon them in the written submissions for the defendant.

115. Secondly, the only arguments advanced by the defendant in submissions were regarding the balance of likelihood as to the source of ‘the 26 September 2015 email’.

116. Notwithstanding that the aspects of the primary judgment regarding ‘the 26 September 2015 email’ are not addressed as grounds in the draft NOA, and the defendant has not pointed to any nexus between the grounds of appeal averred in the draft NOA and ‘the 26 September 2015 email’, I propose, for completeness, to turn briefly to a number of difficulties with the defendant’s submissions as to the Court’s conclusions as to ‘the 26 September 2015 email’. Those issues, which are threefold, raise real doubts as to whether an appeal based on ‘the 26 September 2015 email’ would be arguable.

117. First, the defendant’s submissions erroneously contended that ‘the 26 September 2015 email’ was determinative of the primary judgment in producing orders in favour of the plaintiff. The defendant submitted:

“…it is the defendant's contention that the judgement was in error in dealing with that email and the result of that error was that the plaintiff succeeded in these proceedings where, absent error, he would not.”

118. I do not accept that proposition that, absent the Court’s finding in favour of the plaintiff regarding ‘the 26 September 2015 email’, the plaintiff would not have necessarily succeeded. The 26 September 2015 email was but one of several issues which were determined in favour of the plaintiff, giving rise to the ultimate determination in the primary judgment.

119. The defendant correctly submitted that the primary judgment recognised the importance of ‘the 26 September 2015 email’ as follows: ^[40]

“[395] If the email was sent by the defendant to the plaintiff then it is an admission by him as to those matters, inconsistent with the notion of a partnership between the plaintiff and the defendant and, because the communication predates the commencement of the Lower Court Proceedings, cannot be said to be a document prepared to assist the plaintiff with his defence of those proceedings (as the defendant advanced with respect to later documents, earlier discussed in this judgment). The question is, however, should the Court find the email was one produced by the defendant.”

40. The primary judgment at [395].

120. However, if attention is directed to the core issues dividing the parties in the proceedings, it is evident that ‘the 26 September 2015 email’ is but one factor in the determination or has no significance at all.

121. A useful starting point, in that respect, is to examine the issue as to whether there was a partnership between the plaintiff and defendant.

122. In relation to the question as to whether the Jiayi Loan Agreement and the ‘CAN deal’ were entered into by a partnership, the Court concluded: ^[41]

“In addition to the conclusions above, I accept the plaintiff’s submissions that the evidence does not support existence of a partnership according to New South Wales law (having found it unnecessary to decide the question of whether the laws of China are the same as the laws of New South Wales) because:

(1) there is no documentary record whatsoever recording the terms of the partnership agreement;

(2) I have not accepted the defendant’s evidence as to the alleged conversations concerning the terms;

(3) The defendant gave evidence in China which is fundamentally inconsistent with the existence of a partnership, being evidence which the defendant accepted was largely true in these proceedings (as I have described above); and

(4) the alleged partnership as to the Jiayi deal was to be conducted through Millennium and the defendant never fulfilled his obligation under that supposed agreement to transfer 50% of the shares in Millennium to the plaintiff.”

41. The primary judgment at [697].

123. The section of the primary judgment dealing with the question of whether the Jiayi Loan Agreement was entered into by any partnership (see pars [656] – [703] of the primary judgment) does not include any discussion of ‘the 26 September 2015 email’. Rather, the Court relies on a number of other reasons as to why the notion of a partnership between the plaintiff and defendant was not upheld by the evidence.

124. A further illustration is the determination of the Court with respect to the issue as to whether there was an intention to create legal relations with respect to the Agreement.

125. The Court found that there was an intention to create legal relations with respect to the Agreement which was signed by the parties on 14 May 2018 in the defendant’s hotel room in Shenzhen, which as described in the primary judgment is:

“a conclusion that sits ill with any proposition that there was a partnership arrangement with respect to the Jiayi Loan Agreement.”

126. In relation to whether the Agreement was intended to create enforceable legal relations, the Court found: ^[42]

     42. The primary judgment at [723], [742] – [743].

“[723] Lying at the heart of the contentions advanced by the defendant in this respect was, in essence, that the plaintiff and the defendant conspired to give false evidence in the Chinese Court Proceedings. I have ultimately found, to the contrary, namely, that the truth lay in the evidence given by the defendant in the Chinese Court Proceedings. This is so much so that the defendant in these proceedings, when pressed in cross-examination, ultimately confirmed much of the evidence that he gave in the Chinese Court Proceedings as well as the Chinese Court Proceedings Affidavit (and related documents in preparation for the making of that affidavit and the giving of the defendant’s evidence).

…

[742] Secondly, the plaintiff sent a WeChat message to the defendant on 23 August 2018 asking him to “return some money to me” as he was in “urgent need” after having to mortgage his house to the bank and sell his car to pay the judgment sum. In relation to that document, the following important exchange occurred in cross-examination:

“Q. The reason he's asking you to return money to him is he's talking about paying him under the agreement that we sue on, isn't he?

A. Yes.”

[743] This is a frank concession by the defendant that the plaintiff was asking for payment to be made under the Agreement, with the necessary corollary that the Agreement had operative effect.”

127. These further findings are not addressed by the argument sought to be advanced by the defendant, that absent any error in relation to ‘the 26 September 2015 email’, the plaintiff would not have succeeded. As is evident from the Court’s reasoning in the primary judgment as a whole, the finding in relation to ‘the 26 September 2015 email’ was but one factor bearing upon the conclusions in this matter.

128. Secondly, the defendant failed to address in the primary proceedings that his contention that ‘the 26 September 2015 email’ was fabricated, required him to meet the rigorous standard of proof required to demonstrate the equivalent of fraud. That omission remains evident in the supplementary submissions.

129. As noted in the primary judgment, to prove that the plaintiff effectively engaged in fraud is a significant hurdle given the Briginshaw principle: ^[43]

“[396] The defendant’s case in that respect is that the 26 September 2015 email was fabricated by the plaintiff and reflects adversely on his credit. I agree with the counsel for the plaintiff that, having regard to the way in which the defendant constructed his argument in this respect the allegation made is serious and is tantamount to an allegation of fraud. It should be assessed having regard to the standard in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (No 2) [2011] FCA 1123; (2011) 297 ALR 56 at [48].

…

[398] Ultimately, I do not accept that the defendant has established the 26 September 2015 email is a fabrication at the hands of the plaintiff.”

43. The primary judgment at [396] and [398].

130. Lastly, the defendant submitted that there was nothing in the screenshot of ‘the 26 September 2015 email’ that on its face suggested (let alone made apparent) that the screenshot was taken on the phone of the defendant, as there was no identifying feature which suggested that the recipient “me” was any known or identifiable individual, let alone the defendant.

131. The Court’s findings on this issue were as follows: ^[44]

     44. The primary judgment at [415] – [419].

“[415] Thirdly, and most significantly, the document in evidence before the Court referencing the 26 September 2016 email, which was signed by the defendant, was a screenshot taken on the phone of the defendant. This is apparent on the face of the email and was accepted as fact by the defendant. I agree with the submission by the plaintiff that the necessary corollary of the acceptance of this fact, again as accepted by the defendant in cross-examination, was that the defendant must have had a copy of the 26 September 2015 email on his phone in order to be able to take a screenshot of it. Further, as the defendant accepted that must mean he took the screenshot on his phone. I further agree that the only real reason that the defendant would have a copy of the 26 September 2015 email on his phone, as displayed in this exhibit before this Court (Exhibit 5 p 200), is because he had previously sent it. If the plaintiff had fabricated the email and asked the defendant to sign it, the email would have never made its way onto the defendant’s phone in this fashion.

[416] On this basis, the defendant’s evidence that he was handed a copy of the screenshot of the email on 7 April 2017 at the meeting with the plaintiff and his lawyers cannot be accepted.

[417] It was also submitted by the defendant that no explanation had been given as to why the defendant would have taken a screenshot of the email or provided it to the plaintiff’s lawyers, but that submission again stands contrary to the defendant’s concession in cross-examination regarding the source of the copy exhibited before the Court as the 26 September 2015 email.

[418] Nor is the defendant’s evidence in this respect overcome by the hypothesis developed in the defendant’s submissions as to why the defendant had not taken a screenshot as follows:

(1) if in 2017 the plaintiff had remembered his long deleted email and asked the defendant for it for use in the Chinese Proceedings;

(2) for some (unexplained) reason the defendant, or the plaintiff and the defendant, decided that the best way of using that email was not for the defendant to forward it to the plaintiff or his lawyers, but for the defendant to screenshot the email and print a hard copy for physical delivery to the plaintiff’s lawyer; and

(3) in circumstances where the defendant’s request for the plaintiff to repay the specified sum of RMB 1 million had been referred to as early as in an email from the plaintiff to the defendant of 30 November 2016 (but with no mention of the 26 September 2015 email at all).

[419] It is not implausible that the plaintiff had sought to employ the 26 September 2015 email in the Chinese Court Proceedings or that, if he did not have a copy of the email himself, that he would ask the defendant to produce it for that purpose.”

132. There is real strength to the submission of the plaintiff that, on the evidence reflected in the findings made in the primary judgment, no other person could have taken the screenshot other than the defendant because, as mentioned earlier:

1. there is a reference to "sjt_liutuo" (being a reference to the plaintiff) and "me", which makes it apparent that "me" is the other party to the email communication, being the defendant (there being only two parties to the communication); and

2. the defendant admitted that the references to "SJT" and "sent to me" indicated that he took the screenshot on his phone.

133. In cross-examination, the defendant made the following admission: ^[45]

“Q. I suggest to you that the reference I've just read out to you: "SJT" and "Sent to me" indicates that it was you who took the screenshot on your phone. Do you accept that?

A: yes.”

45. Tcpt, 20 February 2024, p 226(5).

134. In relation to this admission, the defendant submitted that:

“Taken literally the defendant is accepting the non-sequitur referenced at [38] above. There was no logical or factual foundation for the question. That the defendant answered as he did cannot be used to make a finding which (it is submitted) is otherwise unavailable on the evidence”

135. This appears to be a new argument advanced for any appeal, but in any event, it faces significant difficulties. In answer to a question, which was not the subject of an objection, the defendant gave a straightforward answer to the question as to whether he took the screenshot on his phone. Whatever other forensic processes that might be applied to the expression “sent to me” or “SJT”, they are matters about which the defendant may be expected to be able to ascribe meaning in order to answer the question as to whether he took the screenshot. His answer represents an admission of fact.

136. For the reasons I have given above, in my view, there must be real doubts as to whether the appeal grounds advanced by the defendant are arguable.

137. It follows that it is appropriate to return the security sum to the plaintiff.

Conclusion

138. For the above reasons, the Court has concluded:

1. there shall be judgment for the plaintiff;

1. in the amount of $2,548,079.87 which sum is inclusive of interest up to 18 October 2024; and

2. a further sum equivalent to interest up to the date of this judgment;

2. the defendant shall pay the plaintiff’s costs on an indemnity basis for the whole of the proceedings; and

3. there shall be a return of the security sum to the plaintiff.

Orders

139. The Court orders and directs that:

1. the plaintiff shall file and serve Short Minutes of Order reflecting the primary judgment and this judgment within 7 days of the publishing of this judgment.

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Endnotes

Decision last updated: 27 March 2025