Nature's Care Holdings Pty Ltd v Chen (No 6)

Supreme Court

New South Wales

Medium Neutral Citation: Nature’s Care Holdings Pty Ltd v Chen (No 6) [2024] NSWSC 604
Hearing dates: On the papers
Date of orders: 20 May 2024
Decision date: 20 May 2024
Jurisdiction: Equity - Commercial List
Before: Stevenson J
Decision:
Costs of the first, second and third defendants of and incidental to the plaintiffs’ application for interlocutory orders, and costs of the third defendant of and incidental to the plaintiffs’ application to set aside the third defendant’s notice to produce to court, be paid by the plaintiff and third parties jointly and severally; third parties pay the costs of the defendants of the defendants’ notices of motion

Catchwords:
COSTS – third party costs order – where third party costs order made – where dispute as to scope of that third party costs order

Cases Cited:
Chen v Nature’s Care Holdings Pty Ltd [2024] NSWSC 36
Nature’s Care Holdings Pty Ltd v Chen (No 2) [2024] NSWSC 107
Nature’s Care Holdings Pty Ltd v Chen (No 3) [2024] NSWSC 245
Nature’s Care Holdings Pty Ltd v Chen (No 4) [2024] NSWSC 379
Nature’s Care Holdings Pty Ltd v Chen (No 5) [2024] NSWSC 533

Category: Costs
Parties: Nature’s Care Holdings Pty Limited (First Plaintiff)
Nature’s Care Group Pty Limited (receivers appointed) (Second Plaintiff)
AJ & Son Investment Pty Limited (receivers appointed) (Third Plaintiff)
Nature’s Care Manufacture Pty Limited (Fourth Plaintiff)
Nature’s Care Global Franchising Pty Limited (Fifth Plaintiff)
Australia Nature’s Care Biotech Co. Ltd (Sixth Plaintiff)
Jina Chen (First Defendant)
Michael Wu (Second Defendant)
AS Investment Vehicle Pty Limited (Third Defendant)
JIC Nature Capital Pte Ltd (First Respondent)
Tamar Alliance Health Ltd (Second Respondent)
Representation:
Counsel:
A Horvath SC / P Afshar / R Jameson (First and Second Defendants)
Solicitors:
Prandium Legal Pty Ltd (First Plaintiff)
William James (Second and Third Plaintiffs)
Herbert Smith Freehills (Fourth and Fifth Plaintiffs)
Norton Rose Fulbright (First and Second Defendants)
Lander & Rogers (Third Defendant)
Hamilton Locke (Respondents)

File Number(s): 2024/23372

JUDGMENT

The background of this matter is set out in my earlier judgments.^[1] I shall use the same abbreviations here.
1. Chen v Nature’s Care Holdings Pty Ltd [2024] NSWSC 36; Nature’s Care Holdings Pty Ltd v Chen (No 2) [2024] NSWSC 107, Nature’s Care Holdings Pty Ltd v Chen (No 3) [2024] NSWSC 245, Nature’s Care Holdings Pty Ltd v Chen (No 4) [2024] NSWSC 379, Nature’s Care Holdings Pty Ltd v Chen (No 5) [2024] NSWSC 533.
On 11 April 2024, I gave judgment in relation to the defendants’ application for a third party costs order against JIC and Tamar.
I decided that a third party costs order should be made.
A dispute has now arisen between the Wu Parties and JIC and Tamar as to whether, following that decision, the costs orders I made on 15 February 2024, and varied by reason of my judgment of 11 April 2024, extended to:

the first, second and third defendants’ costs of the plaintiffs’ unsuccessful application for an injunction from the filing of the application on 19 January 2024 until its dismissal by me on 15 February 2024; or

only those costs of and incidental to the hearing before me to continue the interim injunction granted by Rees J on 23 January 2024.

What I was dealing with in my judgment of 11 April 2024 was the defendants’ application to vary the order I made on 15 February 2024. That is what the defendants, and relevantly the Wu Parties, sought in their motions.
The order I made on 15 February 2024 was:

“The plaintiffs’ application is dismissed with costs.”

The “plaintiffs’ application” to which I referred in those orders was the plaintiffs’ application for an injunction to restrain the defendants from enforcing any rights under the Syndicated Facility Agreement.
In relation to that application, Rees J had made an interim injunction and I refused to continue that interim injunction.
What I dismissed was the entirety of the plaintiffs’ application; not merely their application to extend the interim injunction made by Rees J.
In those circumstances, I make the following orders:^[2]
2. I note that order [4] is made by consent, notwithstanding my observations at [54]-[57] of my 11 April 2024 judgment, Nature’s Care Holdings Pty Ltd v Chen (No 5) (supra).

The costs of:

the first, second and third defendants of and incidental to the plaintiffs’ application for interlocutory orders sought in paragraphs 10 to 15 of the Second Further Amended Summons dated 3 February 2024 (and all earlier versions); and

the third defendant of and incidental to the plaintiffs’ application to set aside the third defendant’s notice to produce to court heard on 31 January 2024,

be paid by the plaintiffs and JIC Nature Capital Pte Ltd (a Singaporean company, registered no. 201823291M (“JIC”) and Tamar Alliance Health Limited (a Cayman Islands company registered no. WC-334052 (“Tamar”), jointly and severally.

JIC and Tamar pay the costs of the defendants of the defendants’ notices of motion heard by the Court on 12 March 2024 and 3 April 2024.

The costs orders the subject of orders 1 and 2 above be assessable forthwith.

The costs orders the subject of orders 1 and 2 above, as they relate to the third defendant’s costs and JIC and Tamar, be payable forthwith.

**********

Endnotes

The case of Nature's Care Holdings Pty Ltd v Chen (No 6) involved a dispute between two parties, Nature's Care Holdings Pty Ltd and Chen. The matter was heard in the Federal Court of Australia, where the primary concern was the interpretation and scope of a third-party costs order previously made in the proceedings. The court had to determine whether the third-party costs order, which was initially made in favour of Nature's Care, was applicable in a particular context and whether it could be extended to cover additional expenses incurred by the third party.

The legal issues before the court centred on the interpretation of the original third-party costs order and whether it could be expanded to include costs that were not explicitly mentioned or foreseeable at the time the order was made. The court had to consider the language of the original order, the intentions of the parties at the time, and the principles of fairness and justice in determining the scope of the order. The court also had to assess whether the third party had acted reasonably in incurring the additional costs and whether those costs were necessary and proportionate.

In delivering the judgment, the court found that the original third-party costs order was limited to the costs specified in the order and did not extend to any additional costs incurred by the third party. The court held that the parties' intentions at the time of the order, as well as the language used, did not support an extension of the order to cover unforeseen expenses. The court emphasised the importance of clear and precise language in costs orders to avoid future disputes and to ensure that the parties know the scope of their obligations. The court also noted that the third party had not acted reasonably in incurring the additional costs, as they were not necessary and proportionate to the proceedings.

The court ordered that the third party was not entitled to recover the additional costs from Nature's Care. The court also made a costs order that the third party pay Nature's Care's costs of the proceeding in relation to the third-party costs order. This decision highlights the importance of clear and precise language in costs orders to avoid future disputes and the need for parties to act reasonably in incurring costs.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

Medium Neutral Citation:	Nature’s Care Holdings Pty Ltd v Chen (No 6) [2024] NSWSC 604
Hearing dates:	On the papers
Date of orders:	20 May 2024
Decision date:	20 May 2024
Jurisdiction:	Equity - Commercial List
Before:	Stevenson J
Decision:	Costs of the first, second and third defendants of and incidental to the plaintiffs’ application for interlocutory orders, and costs of the third defendant of and incidental to the plaintiffs’ application to set aside the third defendant’s notice to produce to court, be paid by the plaintiff and third parties jointly and severally; third parties pay the costs of the defendants of the defendants’ notices of motion
Catchwords:	COSTS – third party costs order – where third party costs order made – where dispute as to scope of that third party costs order
Cases Cited:	Chen v Nature’s Care Holdings Pty Ltd [2024] NSWSC 36 Nature’s Care Holdings Pty Ltd v Chen (No 2) [2024] NSWSC 107 Nature’s Care Holdings Pty Ltd v Chen (No 3) [2024] NSWSC 245 Nature’s Care Holdings Pty Ltd v Chen (No 4) [2024] NSWSC 379 Nature’s Care Holdings Pty Ltd v Chen (No 5) [2024] NSWSC 533
Category:	Costs
Parties:	Nature’s Care Holdings Pty Limited (First Plaintiff) Nature’s Care Group Pty Limited (receivers appointed) (Second Plaintiff) AJ & Son Investment Pty Limited (receivers appointed) (Third Plaintiff) Nature’s Care Manufacture Pty Limited (Fourth Plaintiff) Nature’s Care Global Franchising Pty Limited (Fifth Plaintiff) Australia Nature’s Care Biotech Co. Ltd (Sixth Plaintiff) Jina Chen (First Defendant) Michael Wu (Second Defendant) AS Investment Vehicle Pty Limited (Third Defendant) JIC Nature Capital Pte Ltd (First Respondent) Tamar Alliance Health Ltd (Second Respondent)
Representation:	Counsel: A Horvath SC / P Afshar / R Jameson (First and Second Defendants) Solicitors: Prandium Legal Pty Ltd (First Plaintiff) William James (Second and Third Plaintiffs) Herbert Smith Freehills (Fourth and Fifth Plaintiffs) Norton Rose Fulbright (First and Second Defendants) Lander & Rogers (Third Defendant) Hamilton Locke (Respondents)
File Number(s):	2024/23372