Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 15)

[2023] FedCFamC2G 1085

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 15) [2023] FedCFamC2G 1085

File number(s):

SYG 2771 of 2019

Judgment of:

JUDGE BAIRD

Date of judgment:

21 November 2023

Catchwords:

PRACTICE AND PROCEDURE – COSTS – costs of successful interlocutory application to reopen applicants’ case after judgment reserved to tender and admit documents not available to applicants at hearing – whether costs should follow the event where applicants sought indulgence of the Court – costs apportioned among participating respondents – actions of solicitor unnecessarily extended hearing – personal costs order against solicitor  

Legislation:

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss190, 191, 214, Schedule 2

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 1.05, 1.06, 1.07, 22.02, 22.06, 22.09

Federal Court Rules 2011(Cth) Part 40, Schedule 1

Cases cited:

Australian Competition and Consumer Commission v Colgate‑Palmolive Pty Ltd (No 5) (2021) 151 ACSR 26; [2021] FCA 246

Bagshaw v Scott [2005] FCA 104

Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd (No 4) [2017] FCA 436

GAIN Capital UK Ltd v Citigroup Inc (No 3) [2016] FCA 582

Gersten v Minister for Immigration and Multicultural Affairs [2009] FCA 922

Hakea Holdings Pty Ltd v McGrath [2021] FCA 660

Henley Arch Pty Ltd v Del Monaco (No 2) [2020] FCCA 1911

LFDB v SM (No 2) [2017] FCAFC 207

Mann Travel Pty Ltd v Skyscanner Ltd (No 2) [2022] FedCFamC2G 33

Mann Travel Pty Ltd v Skyscanner Ltd [2021] FedCFamC2G 263

Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (No 2) [2017] FCAFC 116

Mitry Lawyers v Barnden [2014] FCA 918

Paciocco v Australia and New Zealand Banking Group (No 2) [2017] FCAFC 146; (2017) 253 FCR 403

Patrick v Capital Finance (No 2) [2003] FCA 263

Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 14) [2023] FedCFamC2G 868

TSG Franchise Management Pty Ltd v Cigarette & Gift Warehouse (Franchising) Pty Ltd (No 3) [2016] FCA 828

White Industries (Qld) Pty Ltd v Flower & Hart [1998] 156 ALR 169

Z (A Solicitor) v Limousin [2010] FamCAFC 59

Division:

Division 2 General Federal Law

Number of paragraphs:

125

Date of hearing:

21 November 2023

Place:

Sydney

Counsel for the Applicants:

Mr J Hennessy SC

Solicitor for the Applicants:

Gilbert + Tobin

Solicitor for the First, Second and Fifteenth Respondents:

H+ H Lawyers

Solicitor for the Sixth Respondent:

Gear and Co Lawyers

Solicitor for the Ninth and Fourteenth Respondents:

Mr S Li, Viska Lawyers and Advisors

ORDERS

SYG 2771 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

SELF CARE CORPORATION PTY LTD (ACN 132 213 113)

First Applicant

SELF CARE IP HOLDINGS PTY LTD (ACN 134 308151)

Second Applicant

AND:

GREEN FOREST INTERNATIONAL PTY LTD (ACN 607 602 988)

First Respondent

YAOAN (ERIC) CHEN

Second Respondent

YILIN TRADING PTY LTD (ACN 626 244 479) (and others named in the Schedule)

Third Respondent

ORDER MADE BY:	JUDGE BAIRD
DATE OF ORDER:	21 NOVEMBER 2023

THE COURT ORDERS THAT:

1.Save as provided for under Orders 2 to 5, the Fifth Respondent (Emilio Wang), the Sixth Respondent (Pascal Skelin) and the Ninth and Fourteenth Respondents (the Yang/Wang parties) be jointly and severally liable to pay the Applicants’ costs of their Application in a Case dated 14 June 2023 on a party / party basis.

2.Emilio Wang and the Yang/Wang parties be jointly and severally liable to pay 75% of the Applicants’ costs of and incidental to the hearing of the Application on 5, 6, 11 and 13 September 2023 (the Hearing) on an indemnity basis.

3.The legal representative for the Yang/Wang parties, Mr Shuyang Li, be jointly and severally liable for the costs payable under Order 2.

4.The costs under Order 2 be determined on a lump sum basis by a Registrar of this Court, and be payable forthwith upon such determination. 

5.Emilio Wang, Yang/Wang parties, and Pascal Skelin be jointly and severally liable to pay 12½ % of the Applicants’ costs of the Hearing, on a party / party basis.

6.There be no order as to costs in respect of the Application or the Hearing as between the Applicants and the Sixteenth Respondent (AVP), or as between the Applicants and the Thirteenth Respondent, Ms Siqi Huo.

7.Save as provided above, the costs of the Application and the Hearing be costs in the cause.

THE COURT NOTES THAT:

A.Each of the Green Forest parties (First, Second, Fifteenth and Seventeenth Respondents), Pascal Skelin, Ms Huo and AVP were excused from appearing at the hearing on 21 November 2023.

B.Mr G Grunert by MS Teams observed the hearing on 21 November 2023 on behalf of the Sixth Respondent.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT

(Ex tempore, revised from transcript)

JUDGE BAIRD

1. These reasons deal with the issue of costs following my reasons for judgment given in Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 14) [2023] FedCFamC2G 868 (Self Care (No 14)) handed down on 10 October 2023.

2. In Self Care (No 14) I allowed the Applicants’, Self Care Corporation Pty Ltd and Self Care IP Holdings Pty Ltd (together, Self Care), Application in a Proceeding dated 14 June 2023 to reopen their case following the matter being reserved for judgment to tender some eight documents and to admit those documents (the Documents). 

3. On 10 October 2023 I made orders admitting the Documents into evidence, and directing that the parties then file and serve any submissions in relation to the Documents, supplementing their closing submissions in the proceeding, and provided a timetable.  I stood over the Application to reopen for any arguments as to costs on a date to be fixed after consultation with the participating parties.

4. As identified in Self Care (No 14) at [3], there were three groups of participating respondents on the Application, namely, the first, second, fifteenth and seventeenth respondents (the Green Forest parties), the sixth respondent (Mr Pascal Skelin), and the ninth and fourteenth respondents (the Yang/Wang parties).  Whilst the thirteenth respondent, Ms Siqi Huo, and the sixteenth respondent, Australian Vitamin Plus Pty Ltd (AVP), participated in the final hearing they did not participate in the Hearing of the Application. 

5. The participating parties’ positions on the Application are summarised in Self Care (No 14) at [144]‑[147].  I adopt and rely on the terms and definitions that I used in Self Care (No 14).

6. By orders made 6 November 2023, inter alia, I directed Self Care to advise the legally represented parties and my Chambers of the costs orders they intended to seek in respect of the Application, and I set down a timetable for the provision of submissions on costs for those parties that wished to make submissions.  I listed the Application for any argument as to costs today, 21 November 2023.

7. On 8 November 2023, Self Care served the orders they sought in respect of costs. 

8. Self Care submits that they succeeded on their Application, they did so in the face of opposition from certain of the participating respondents, and that costs should follow the event.  Specifically, they seek costs as follows:

   1.Save as provided for under Orders 2 to 3, the Fifth Respondent (Emilio Wang), the Sixth Respondent (Skelin) and the Ninth and Fourteenth Respondents (the Yang/Wang parties) be jointly and severally liable to pay the Applicants’ costs of their Application in a Case dated 14 June 2023.

   2.The Applicants’ costs of and incidental to the hearing of the Application on 5, 6, 11 and 13 September 2023 be payable as follows:

   a)the First, Second, Fifteenth and Seventeenth Respondents (the Green Forest parties), Skelin, Emilio Wang and the Yang/Wang parties are jointly and severally liable to pay ¼ of the costs on a party/party basis; and

   b)Emilio Wang and the Yang/Wang parties are jointly and severally liable to pay ¾ of the costs on an indemnity basis.

   3.The legal representative for the Yang/Wang parties be jointly and severally liable for the costs payable under Order (2.b).

   4.The costs under Order (2.b) to be determined on a lump sum basis by a Registrar of this Court.

   5.There be no order as to costs in respect of the Application as between the Applicants and AVP.

   6.Costs otherwise reserved.

   (Self Care’s proposed orders)

9. It is appropriate to note here, and as I will return to, it is implicit in Self Care's proposed orders that they seek their costs on an ‘otherwise orders’ basis, that is, not limited to the Schedule costs, which is the default position in this Court.  For reasons I will briefly state later in these reasons, I consider this approach is appropriate and should be followed.

10. On 15 November 2023 Self Care filed and served their submissions in support of the costs orders they sought. 

11. In overview, the participating respondents’ positions are as follows. 

12. First, in relation to AVP, as I noted in Self Care (No 14) at [4], AVP did not participate in the Application.  It is appropriate that there be no order as to costs as between Self Care and AVP on the Application.

13. Secondly, in relation to Ms Huo, whilst Ms Huo as a courtesy communicated with the Court at one point in the Hearing of the Application, she has not participated in the Application and has sought to be excused from this hearing on costs on account of the orders being irrelevant to her.  As confirmed by Mr Hennessy SC, counsel for Self Care, this morning it is appropriate that as between Self Care and Ms Huo there be no order as to costs of the Application.

14. Each of the Green Forest parties, Mr Skelin, and the Yang/Wang parties made written submissions in answer to Self Care's submissions on costs. 

15. On 17 November 2023, the Green Forest parties provided brief written submissions.  They have been excused from appearing today, being content to rely on their written submissions. 

16. In short, the Green Forest parties submit that the orders as against them ought to be costs in the cause.  If the Court disagrees, and is minded to make a costs order in favour of Self Care, then the Green Forest parties oppose a lump sum costs order payable forthwith being made, commenting that if that is truly what is being sought by Self Care.  It is appropriate to note here, as confirmed by Mr Hennessy SC this morning, that Self Care does not seek as against the Green Forest parties any order for costs be payable forthwith nor that it be in a lump sum amount.

17. Mr Skelin's solicitors by email dated 20 November 2023 referred to Self Care's solicitors communication dated 8 November 2023, which attached Self Care’s proposed orders (set out above at [8]), and conveyed their instructions that Mr Skelin neither consents nor opposes the orders sought by the Applicants (namely, Self Care).  Mr Skelin’s solicitors inquired, given his position, whether the sixth respondent could be excused from appearing today.  My Chambers communicated with Mr Skelin's solicitors informing them that I excused him and them from appearing.  I note the courtesy of Mr Grunert on behalf of the sixth respondent's solicitors observing online today.

18. As to the Yang/Wang parties, on Saturday, 18 November 2023, Mr Li, solicitor for those parties, filed and, I presume, served an outline of written submissions.  This morning variously at 2.15am and at 3.06am and again at 10.58am Mr Li provided, first, case law and the Court rules that Mr Li proposed to refer to in his oral submissions today, and proposed costs orders, followed with a further email bringing Chambers up-to-date with some inter partes communications, and then provided two further authorities which were also referred to in Self Care's submissions. 

19. Mr Li has appeared for the Yang/Wang parties and, as will be apparent in the course of these reasons, also for himself today.

20. Mr Li's proposed orders communicated at 2.15am this morning were a variation of the second order sought by Self Care.  In short, the Yang/Wang parties proposed that the Green Forest parties and Mr Skelin jointly and severally pay half of the costs of the Hearing of the Application on a party-party basis and the Yang/Wang parties, be jointly and severally liable to pay half of the costs, also on a party-party basis, and otherwise there be no orders as to costs.

21. Thus at the hearing today Mr Hennessy appeared for Self Care and Mr Li appeared by AVL, and the remaining participating parties variously were content to abide by the Court’s orders, or to rely on their written submissions. 

22. Self Care referred in their submissions to two offers made respectively to the Green Forest parties and to Mr Skelin in the evening before the first day of Hearing of the Application, and subsequently to a separate hearing day for determining objections.  In those orders Self Care made an offer that the costs of the Application be costs in the cause.  However, neither the Green Forest parties nor Mr Skelin accepted those proposals.  Self Care also tendered an email from Mr Li on 10 October 2023 in which Mr Li invited the Self Care's solicitors to ‘…indicate [Self Care's] position on costs as against ‘the ninth and fourteenth respondents and against me (maybe).’

23. From the Bar table today, Mr Li informs me that he did follow up on that email, but he had no response.  That observation should be qualified by the response which was given by Self Care's solicitors on 8 November 2023 by communicating the orders they sought on costs. 

    Relevant principles

24. It is appropriate, first, to set out some of the relevant established principles on costs. 

25. Pursuant to s 214(2) and (3) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOA Act), the Court has a broad discretion to order costs.  In sum, the Court’s costs discretion is broad, but is to be exercised judicially, and in the context of the relevant Court rules.  See in respect of intellectual property cases in this Court, inter alia, Henley Arch Pty Ltd v Del Monaco (No 2) [2020] FCCA 1911 at [7]‑[11]; Mann Travel Pty Ltd v Skyscanner Ltd [2021] FedCFamC2G 263 at [45]‑[47]; and Mann Travel Pty Ltd v Skyscanner Ltd (No 2) [2022] FedCFamC2G 33 (Mann Travel (No 2)) at [5]‑[11].  It suffices to refer to what I have said in those judgments.

26. The fundamental purpose of a costs order is to compensate a successful party, rather than punish an unsuccessful party.  In the absence of good reason to the contrary, generally, a successful litigant should receive their costs.  This is reflected, it is fair to say, in the general rule that costs follow the event.

27. The default position in this Court, as I have briefly adverted to above, is set out in rule 22.09 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules): unless the Court otherwise orders, a party entitled to costs in a general federal law proceeding … is entitled to: (a) costs in accordance with schedule 2; and (b) disbursements properly incurred.

28. Costs may be awarded according to the Court event‑based scale set out in Schedule 2, GFL Rules as provided by r 22.09, as I have just said, or otherwise, inter alia, on a party‑party basis (including, but not limited to, under the Federal Court scale), or on an indemnity basis. I consider it is appropriate in my discretion to ‘otherwise order’ costs, rather than order costs according to the event-based scale in schedule 2 of the GFL Rules.

29. As I have noted above (at [9]), it is implicit in Self Care's submissions that they seek an order for costs otherwise than according to the event-based scale.  No party has made any submissions to the contrary.  I consider that my reasons in Self Care (No 14) sufficiently demonstrate that it is reasonable in the circumstances of this interlocutory application, and indeed in this proceeding more generally, to order that costs be payable other than as specified in Schedule 2 to the GFL Rules.  These circumstances include, as is apparent from Self Care (No 14), the complexities of the facts and legal issues that arose on the present Application and the circumstances pertaining to the application of Chinese law, foreign witnesses, the types of documents sought to be tendered, and the circumstances of a reopening where it was submitted documents were not reasonably available to Self Care at an earlier time. 

30. Pursuant to r 22.02(2) of the GFL Rules, in making an order for costs in a proceeding, which I consider includes on an interlocutory application, the Court may: (a) set the amount of the costs; or (b) set the method by which costs are to be calculated; or (c) refer the costs for taxation under Part 40 of the Federal Court Rules 2011(Cth) (FCRules); or (d) set a time for payment of the costs, which may be before the proceeding is concluded.

31. In the present case, Self Care seeks both costs payable on a party-party basis as against some respondents, and on an indemnity costs basis as against the other respondents, namely, Mr Emilio Wang and the Yang/Wang parties. 

32. Where the circumstances of the case warrant, the Court may order indemnity costs.  The Dictionary, Schedule 1 to FCRules (to which recourse may be had by this Court when the circumstances require, see r 1.06(2), GFL Rules) refers to indemnity costs as meaning a complete indemnity against the costs incurred by the party in the proceeding, provided that they do not include any amount shown by the party liable to pay them to have been incurred unreasonably by the party incurring them.  Indemnity costs may be distinguished from costs as between party and party.  The Dictionary refers to party and party costs as ‘only the costs that have been fairly and reasonably incurred by the party in the conduct of the proceeding’.

33. In broad terms, an order for indemnity costs requires that some special or unusual feature arises.  There can be no exhaustive list of the circumstances that may warrant the exercise of the discretion to award indemnity costs: as I noted in Mann Travel (No 2) citing Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (No 2) [2017] FCAFC 116 at [4]‑[5].

34. In Melbourne City Investments, a Full Court of the Federal Court of Australia reiterated that indemnity costs are not punitive, but are designed to compensate a party fully for costs incurred as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs: at [5], citing Hamod v New South Wales (2002) 188 ALR 659; [2002] FCA 424 at 665 (per Gray J, Carr and Goldberg JJ agreeing).

35. As Davies J earlier explained in TSG Franchise Management Pty Ltd v Cigarette & Gift Warehouse (Franchising) Pty Ltd (No 3) [2016] FCA 828 at [7]‑[8], referring to Hamod: 

    [7]Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail.  They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty.  Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs.

    [8]The cases illustrate the appropriateness of awarding costs on an indemnity basis where there has been particular misconduct that caused a loss of time to the Court and to other parties, where proceedings were commenced or continued in wilful disregard of known facts or clearly established law, where allegations were made which ought never to have been made, or where the proceeding was unduly prolonged by groundless contentions …

1. The above authorities illustrate the appropriateness of awarding costs on an indemnity basis where there has been particular misconduct that caused a loss of time to the Court and other parties, and where proceedings are commenced or continued in wilful disregard of known facts or clearly established law, where allegations were made which ought never to have been made, or where the proceeding was unduly prolonged by groundless contentions.

2. As further summarised by the Full Court in Melbourne City Investments at [5] circumstances warranting indemnity costs orders may also include where ‘the applicant [or in this case, a particular party], properly advised, should have known that he [sic] had no chance of success’ or ‘persists in what should on proper consideration be seen to be a hopeless case’.

3. Of course, it is important to bear in mind that it is necessary to be wary of reasoning with the benefit of hindsight: Mann Travel (No 2) at [11] citing Australian Competition and Consumer Commission v Colgate‑Palmolive Pty Ltd (No 5) (2021) 151 ACSR 26; [2021] FCA 246 at [12].

4. Increasingly, both in the Federal Court of Australia and in this Court, courts order costs on a lump sum basis ‘wherever it is practicable and appropriate to do so’.  The FCRules invite such an approach, and in earlier judgments in other proceedings in this Court I have considered the relevance and appropriateness of ordering lump sum costs, including, inter alia, in Henley Arch. 

5. As I set out in Henley Arch at [18], the purpose of the lump sum costs order has been described as to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: see LFDB v SM (No 2) [2017] FCAFC 207 at [14]. In Paciocco v Australia and New Zealand Banking Group (No 2) [2017] FCAFC 146; (2017) 253 FCR 403, the Full Court said at [17]-[20]:

   [17]The Costs Practice Note provides for the Court to make use of sophisticated costs orders and procedures, and to take such steps as it considers necessary to ensure that it has the requisite level of detail to make a costs determination that is fair, logical and reasonable and to avoid orders that lead to potentially expensive and lengthy taxation hearings: Costs Practice Note at [3.3].

   [18]We emphasise that in making a lump sum award of costs, the Court in undertaking the task of assessing costs is not precluded from undertaking a close inquiry of costs relating to a particular issue or category of costs, should the Court consider it appropriate to do so: see e.g. Hudson v Sigalla (No 2) at [30] (‘Sigalla’). The Court is able to adopt its own procedures in inquiring into costs, is able to be flexible in how it conducts that inquiry, including by the obtaining of suitable assistance whether by referee’s report or other reporting, and is able to acquire the level of detail needed to make a determination that is fair, logical and reasonable.

   [19]Whilst the Costs Practice Note now suggests that most cases should have a lump sum costs order approach applied unless there is some characteristic that would make it unsuitable, a lump sum costs order is not mandated in all instances. In all cases it is a matter for the Court to exercise the discretion given to the Court by the Federal Court Act and the Rules as appropriate: see Sigalla at [18]-[19].

   [20]There is no particular characteristic that a case must possess for it to be suitable for the making of a lump sum costs order. Particular circumstances that may make a lump sum order especially appropriate include where in a large and complex commercial matter it would save the time, trouble, expense and aggravation of a taxation; where a taxation would require the parties to consume additional time and incur additional expenditure prolonging already protracted litigation; and generally to avoid an ongoing, counter‑productive dispute as to costs, in the interests of achieving finality.

6. In Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd (No 4) [2017] FCA 436 at [15], Perram J observed ‘that the modern process of taxation is very onerous and few have the fortitude to see a taxation through to its conclusion’ as a rationale for the more practical course of ordering a lump sum determination.  Wherever it is logical, fair and reasonable to do so, and to do justice as between the parties, a lump sum approach can be more efficient and less costly than a full taxation. 

7. Particular circumstances may apply on an interlocutory application in circumstances of amendment or reopening, as was discussed by Markovic J in GAIN Capital UK Ltd v Citigroup Inc (No 3) [2016] FCA 582 at [5]‑[9]. At [8]‑[9] her Honour noted a line of authority to the effect that where a party seeks an indulgence from the Court, which is granted, it should pay the costs of the application:

   [8]In contrast to the approach reflected in Oztech and Gee v Burger [which her Honour first discussed] there is a line of authority to the effect that where a party seeks an indulgence from the court, which is granted, it should pay the costs of the application.  In Golski v Kirk (1987) 14 FCR 143, a Full Court of this Court (Kelly, Beaumont and Ryan JJ) considered an appeal from an order allowing amendments to a statement of claim. The respondent to the appeal, who was the successful party before the primary judge, sought leave to cross-appeal against the order for costs made by the primary judge. In relation to that aspect of the matter at 157 Beaumont J, having observed that the primary judge had ordered that the respondent pay the costs of the application, continued:

   … Costs are, of course, discretionary, and it will only be in rare cases that leave to appeal from a decision to award costs will be granted.  There is nothing extraordinary about the order for costs made by Miles CJ. On the contrary, it is usual for a party seeking an indulgence to pay the costs of the application, especially where, as here, the application throws up a difficult legal question.  Since I propose to allow the appeal with costs, the question is now academic.  I would refuse leave to cross appeal.

   [9]In Bowen Energy Limited v 2KD Drilling Pty Ltd [2012] FCA 275 Katzmann J considered an application by the applicant for leave to amend its application, statement of claim and a defence to the respondent’s cross-claim. Her Honour categorised some of the proposed amendments as uncontroversial and others as controversial. In the result, Katzmann J granted leave to the applicant to amend. At [22] her Honour noted that, as the applicant was seeking an indulgence, it should pay the respondent’s costs of the interlocutory application insofar as it concerned the application for leave to amend including the costs, if any, thrown away by reason of the amendments. In Finch v The Heat Group Pty Ltd (No 3) [2015] FCA 1084 Jessup J, in the context of an application for reinstatement of a proceeding, applied the same principle. That is, that a party required to respond to an application by another party for an indulgence should generally have his or her costs and made a costs order in favour of the respondents on that basis.

8. In the Green Forest parties' written submissions they note that ‘it is not unusual for a party seeking an indulgence [from the Court] to pay the opposing parties’ costs even if they get the leave they seek’, citing GAIN, and that ‘applications to reopen have been considered an indulgence and provided opposition was advanced on reasonable grounds, costs of the application have been awarded in favour of the resisting party’, notwithstanding that the indulgence was granted.  They refer to two decisions, Hakea Holdings Pty Ltd v McGrath [2021] FCA 660 at [47]‑[48] and Patrick v Capital Finance (No 2) [2003] FCA 263 at [16] (Tamberlin J), to similar effect. The exercises of discretion in these circumstances are instances of the Court doing justice as between the parties in circumstances of indulgence and reasonable opposition.

   Orders sought by Self Care against Mr Li

9. Self Care seeks a particular order against Mr Li, which Mr Li resists. 

10. Self Care seeks an order (see [8] above) that there be an order for costs against the lawyer for the Yang/Wang parties pursuant to r 22.06 (3), (5) of the GFL Rules.  Those provisions, relevantly, are as follows:

    (3)An order for costs against a lawyer may be made:

    (a)on the initiative of the Court or Registrar; or

    (b)on application by a party to the proceeding; or

    (c)by another person who has incurred the costs or costs thrown away. 

    …

    (5)Before making an order for costs, the Court or Registrar:

    (a)must give the lawyer, and any other person who may be affected by the decision, a reasonable opportunity to be heard; and

    (b)may order that notice of the order, or of any proceeding against the lawyer, be given to a party for whom the lawyer may be acting or any other person. 

11. The circumstances in which such an order against a lawyer may be made have been summarised in a number of cases, which have been referred to me today.  Wigney J in Mitry Lawyers v Barnden [2014] FCA 918 at [39]‑[42], by reference to earlier superior court authority, and Full Court decisions, summarised the relevant principles. The following should be noted:

    [39]The power to order costs against a lawyer is a power that must be exercised with care and discretion and only in clear cases: Ridehalgh v Horsefield [1994] Ch 205 (Ridehalgh) at 229; Re Bendeich (1994) 53 FCR 422; Deputy Commissioner of Taxation v Levick (1999) 168 ALR 383 per Hill J at [11]; Levick v Deputy Commissioner of Taxation [2000] FCA 674; (2000) 102 FCR 155 (Levick) at [44]; Gitsham v Suncorp Metway Insurance Ltd [2002] QCA 416 at [8] per White J (with whom Davies and Williams JJA agreed); De Sousa v Minister for Immigration, Local Government and Ethnic Affairs (1993) 41 FCR 544; Money Tree Management Service Pty Ltd v Deputy Commissioner of Taxation (No 3) [2000] SASC 286.

12. The FCRules to which Wigney J referred in Mitry are, in substance, those applicable in this Court, as I have said, when GFL Rules do not provide an equivalent rule.

13. In Mitry at [42], Wigney J summarised the principles emerging from, inter alia, a decision of Goldberg J in White Industries (Qld) Pty Ltd v Flower & Hart [1998] 156 ALR 169 (White Industries), the version of which decision was also provided to the Court by Mr Li,  as follows:

    1.Instituting or maintaining a proceeding on behalf of a client which has no, or substantially no, prospect of success will not, without more, invoke the jurisdiction to make a costs order against a lawyer.

    2.Something which involves “unreasonable conduct” is required.

    3.What constitutes unreasonable conduct will depend on the circumstances of the particular case.

    4.The element of acting unreasonably involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success, with either a recognition that there is no chance of success, or an intention to use the proceeding for an ulterior purpose, or to abuse the processes of the court, or with a disregard of any proper consideration of the prospects of success.

    5.The circumstances must involve or result in a serious dereliction of duty owed to the court, or serious misconduct in promoting the course of, and the proper administration of, justice.

    6.An ulterior purpose or an abuse of process cannot be assumed simply because the case is hopeless.

    7.The reason that the mere pursuit of an unmeritorious case is not so sufficient to invoke the jurisdiction to make a costs order against a lawyer is that a party is entitled to have a practitioner act for him or her in an unmeritorious case.  The court is concerned to avoid the risks of a practice developing whereby lawyers endeavour to browbeat their opponents into abandoning clients, or particular issues or arguments, for fear of personal costs orders being made against them.  

14. As Wigney J noted at [43] (citations omitted):

    An additional procedural consideration … is that a lawyer against whom a claim for costs is made must have full and sufficient notice of the complaint and full and sufficient opportunity of answering it. 

    That obligation and procedural consideration is made express in r 22.06(5) of the GFL Rules.

15. In Z (A Solicitor) v Limousin [2010] FamCAFC 59, a decision of the Full Court of the Family Court of Australia, at [47]‑[62], the Full Court considered the relevant principles and reviewed decisions since White Industries.  I note the useful observations of the Full Court in Limousin at [61], adopting the observations of French J, as his Honour then was, in Ex Christmas Islander Association Inc & Ors v Attorney-General Commonwealth (No 2) [2006] 233 ALR 97; FCA 671:

    [61]We also with respect adopt the observation of French CJ at paragraph 30 of his reasons.  There his Honour said:

    A solicitor or counsel may conceive of himself or herself as advancing the public interest or some moral cause in pursuing particular proceedings.  Whether acting in the public interest or to advance a moral purpose, whether charging the highest fees or acting pro bono and whether counsel or solicitor, legal practitioners have a duty to the client and to the court to be competent in their conduct of legal business.

16. I adopt his Honour's observations, as the Full Court of Family Court did. I do not consider that in the present Application Mr Li's conduct has been of the standard of competence expected of legal practitioners in the conduct of legal business, and consistent with the overarching purpose as expressed in ss 190 and 191 of the FCFCOA Act in his use of the Court's time and the time of the parties in this Application.

17. In the decision of Bagshaw v Scott [2005] FCA 104, Bennett J reviewed authorities and set out a summary at [45], which finds its reflection in Wigney J’s summary in Mitry.  Her Honour at [47] cited Whitlam J’s decision in Gersten v Minister for Immigration and Multicultural Affairs [2009] FCA 922 in which his Honour found (at [29]) ‘that a solicitor ‘appear[ed] to have been content to act as a mere cipher and not to exercise his own professional judgment’ in the conduct of the litigation.  On the basis of this ‘serious dereliction of his duty to the Court’ Whitlam J ordered the applicant [in that case] and his solicitor to pay costs on an indemnity basis.’  That is, the costs were jointly payable by the solicitor and client. 

18. In paragraphs from Bagshaw v Scott referred to by Mr Li and by Mr Hennessy SC this morning, Bennett J noted at [97] and [100] respectively, that the solicitor in the matter before her ‘had a responsibility to make his own inquiries independently of his client and he simply did not make them’, and that ‘there was a serious dereliction of duty’ by the solicitor.  

19. Bennett J further observed at [101]:

    There [was] no suggestion that [the solicitor] advised [his clients] on the adequacy of the instructions necessary to support the allegations [that the solicitor propounded for his client].  There is no suggestion that he applied his mind at all to the evidence necessary to support the allegations made, including the allegation of fraud.  [The solicitor] abandoned his obligation to exercise professional judgment.

    Submissions and consideration

20. With these principles in mind, I turn to the submissions of the parties, and my consideration of their submissions. 

    The Green Forest parties

21. In relation to the Green Forest parties, Self Care submits, in short, that the Green Forest parties opposed the Application, rather than adopt the position of AVP, a respondent in a similar position. 

22. Self Care submits that the Documents (the subject of the re‑opening) did not relate to the Green Forest parties’ case and that bit by bit, the Green Forest parties abandoned most of their points.  First, at the first return directions they withdrew their opposition to the admission of the appeal judgment.  Secondly, in their submissions on 4 August 2023 they ‘gave away’ the two Yangfeng agreements, but maintained an opposition on the authorisation letter and then, lastly, they abandoned their solicitor's affidavit on prejudice once notified that the deponent was required for cross‑examination.

23. Self Care submits that the Green Forest parties, rather than them accepting the without prejudice offer put by Self Care, relied on the discredited expert evidence led by the Yang/Wang parties, cross examined Mr Plane (a witness for Self Care), and ran a number of arguments beyond those raised by others, including in relation to the implication of Chinese law, and that in these circumstances, being happy to rely on Mr Jize Yang’s report (tendered by the Yang/Wang parties) they should bear the costs as sought in paragraph 2(a) of Self Care’s proposed orders.

24. As to questions of uncertainty, time, cost and delay of reopening, Mr Hennessy SC reminds me that on 22 June 2023, I informed the parties that the substantive judgment in this proceeding was still “in the queue”, and that I speculated later on that occasion that it may be my judgment could possibly be quicker or simpler if re‑opening was successful. 

25. As to the Green Forest parties’ further submission that, hypothetically put, the Documents may have no material bearing on the outcome of the proceeding and, therefore, costs orders should be in the cause, Self Care submits that it is not appropriate to say that the costs should be costs in the cause as Green Forest submits, because Self Care ought to have had these documents earlier and before closing and, whilst not Green Forests parties' doing, this is a reason why the orders should be made now. 

26. Self Care say that Green Forest parties should be liable for a portion of Self Care’s costs in relation to the Hearing of the Application which hearing should have taken only one day and, therefore, it is appropriate that the Green Forests parties with the participating parties in the Hearing should be liable for at least a quarter of those costs of and incidental to the Hearing of the Application. 

27. The Green Forests parties’ submissions on costs in response focus on the following points: 

    (a)the ‘bit by bit abandoning’ of opposition to re‑opening and tender were appropriately made concessions that did nothing to extend the Hearing.  To the contrary, it [was] conduct expected of parties pursuant to the overarching principles;

    (b)the conduct of Green Forest [parties] at the Hearing drew the Court's attention to binding High Court authority in respect of expert evidence on foreign law that no other party had referred to; and it elicited from Mr Plane [Self Care's witness] precisely when he informed Ms Amoroso [Self Care's CEO] of his possession of the Chinese Documents – shortly after 19 November 2022 – (Self Care (No 14) at [32(j)]) which was something that ought to have been led in chief by Self Care to give a full and frank chronology of when it knew of its agents’ possession of the documents.

28. As to these two points, I am satisfied that the Green Forests parties’ concessions were appropriately made and did nothing to extend the Hearing.  Any delay in obtaining the Documents allowed under the Application was not a delay responsibility for which should be placed at the feet of the Green Forest parties.  As to not relying on Mr Tin‑Lok Shea's affidavit, that was an appropriate call by counsel in his preparation for the Hearing and was given in sufficient time so that it, at least as far as the Court is concerned, did not waste Court time.

29. As to relying on the evidence of Mr Jize Yang on Chinese law, the submissions made by Mr Parish, counsel for the Green Forest parties, were appropriately limited to the High Court authority as to the consequences of what appeared on the affidavit and report.  The defects in Mr Jize Yang's evidence were defects for which neither Self Care nor the Green Forest parties bear responsibility.  I was assisted by Mr Parish’s submissions.

1. The Green Forest parties limit their submissions to the costs sought against them.  The Green Forest parties’ principal submission focuses on the balancing of the interests of justice as between the parties.  They submit that the costs should be costs in the cause. 

2. Whilst noting that applications to reopen have been considered an indulgence and, as I have said, where opposition is advanced on reasonable grounds, costs of the application have been awarded in favour of a resisting party, the Green Forest parties accept that it would not be in the interests of justice that the costs as relates to the Green Forest parties should be their costs as at today because if the Documents could have been produced earlier in this proceeding, it was neither Self Care's nor the Green Forest parties' failure which led to that non-production.

3. What the Green Forest parties do submit is that whether the time, cost and delay to the finality of this proceeding justified the Application will not be known until the Court gives final judgment, and hypothetically, the Documents may have no material bearing on the findings of the Court.  It would be unjust in the extreme if a costs order was made now against the Green Forests parties in respect of Documents that may not have any bearing on the final result.  The Green Forest parties submit that the most just outcome as between Self Care and Green Forest parties, at least, would be that the party who succeeds in the proceeding gets their costs of the Application. 

4. Whilst I am persuaded, as evident by my decision in Self Care (No 14), that the Documents should be admitted and may facilitate the determination of arguments put by the parties, including clarifying the evidence and putting relevant documents before the Court, I am not in a position as at today to accept or not accept Self Care's submission that the Documents are of such an order that the outcome of the proceeding is clear. 

5. I consider that as between Self Care and the Green Forest parties for the reasons submitted by the Green Forest parties summarised above, the appropriate order in lieu of paragraph 2 of Self Care’s proposed orders is that the costs of the Hearing of the Application as between Self Care and the Green Forest parties be costs in the cause.  The percentage of those costs is a matter that I will decide in the context of my determination below of Self Care's costs as sought against the other parties.

   Mr Skelin

6. It is appropriate that I next turn to the orders that Self Care seeks on this Application as to the different position viz Mr Skelin from the Green Forest parties and from the Yang/Wang parties.

7. First, in relation to the appeal judgment (one of the Documents the subject of the Application), whilst the appeal judgment could not have been tendered prior to this proceeding being reserved, the Application to reopen in relation to that judgment should have been a matter of minimal or no opposition.  The matter of a foreign judgment – the first instance judgment – had already been the subject of an application and judgment by me in this proceeding.  It should have been a matter of formality for the case to be reopened to allow the appeal judgment to be tendered. 

8. The Application (that is, the application in a proceeding), whilst formally necessary, as I have said in relation to the appeal judgment, in other respects in large part (as it appears from the Documents that have been admitted) relates to documents that an EPAQ party, including Mr Emilio Wang, had available to be produced at an earlier point in time. 

9. From their face, it appears, and I also accept on Self Care's submission, that Mr Emilio Wang should have produced the Chinese Documents, and he failed to do so.  Whether Mr Skelin had available to him and could have produced those Documents has been a matter of argument on previous occasions, which I am not going to resolve today.  Mr Skelin neither consents nor opposes the orders sought against him, however.  In these circumstances, I am satisfied that paragraph 1 of Self Care’s proposed orders is an order that should be made.  In this order, Self Care seeks the costs of the Application, excepting the costs of and incidental to the four days of the Hearing be ordered to be payable jointly and severally by Mr Emilio Wang, Mr Skelin and the Yang/Wang parties.

10. In relation to Mr Skelin, there are additional matters that Self Care has submitted before me.  On two occasions during the procedural steps in the hearing and determination of this Application, Mr Skelin's legal representatives said to the Court that they needed time to put on evidence of Chinese law and evidence that Mr Skelin might suffer prejudice.  In neither case did that evidence transpire.  In relation to the issue of Chinese law, notwithstanding that I allowed further time, no evidence was forthcoming.  Mr Skelin then sought to rely on and make submissions on Chinese law based on Mr Jize Yang's evidence, which material had been served.

11. In relation to Mr Plane and applicable Chinese law, Mr Skelin's legal representatives opposed the Application, indicated that counsel proposed to cross examine Mr Plane, and formulated submissions that Mr Skelin was prejudiced because he could not put certain questions directly to Ms Chen, Self Care’s solicitor in China.  In response Ms Chen travelled to Hong Kong to give evidence on Chinese law and Self Care arranged that she was available for cross‑examination.  Further to these steps being taken, Mr Skelin then did not put on any evidence in response, did not cross-examine either Mr Plane or Ms Chen, and, ultimately, narrowed the submissions he made.

12. In this context, I accept Self Care's submission that their offer (identified above at [22]) that costs be costs in the cause, was an offer that should have been considered.  That offer was made at a point where Mr Skelin had done little to advance his opposition to the Application.  In these circumstances I consider it is appropriate that Mr Skelin bear costs of the Application, and costs of and incidental to the Hearing of the Application as to a percentage, that I will decide later in these reasons. 

    Mr Emilio Wang

13. I turn briefly to the position of Mr Emilio Wang.  Mr Emilio Wang has not participated in the proceeding since early 2020 when he appeared on an examination further to inadequacies in his Norwich Pharmacal affidavits and his failure to produce devices pursuant to orders made against him in late 2019.

14. On my recollection, Mr Emilio Wang then conveyed an assurance to the Court that he would facilitate the provision of his devices to his solicitors and through them to Self Care's solicitors, notwithstanding that immediately thereafter he was intending to travel to China.

15. I am satisfied on the evidence that at least some, if not a majority, of the Documents that have been admitted further to the Application to reopen were documents that Mr Emilio Wang either had available to him or were within his direction, custody or control, insofar as they then existed.  In these circumstances, where Mr Emilio Wang has not complied with orders for production I consider it appropriate, notwithstanding his non‑participation in this Application to reopen, that he be subject to orders for costs as proposed in Self Care’s proposed orders.

16. In so accepting Self Care's submissions, I do not accept any submission, if it is made, and I did not understand it to be made, that Mr Li acted on instructions from Mr Emilio Wang. 

    Yang/Wang parties and Mr Li

17. I turn now to the position of the Yang/Wang parties and Mr Li. 

18. First, in the case of the Yang/Wang parties I consider the following are relevant.  No other party than the Yang/Wang parties opposed in a blanket fashion the Application to reopen, including the Application even on a limited basis to tender the appeal judgment.  The Yang/Wang parties maintained their opposition to the reopening in its entirety, even though, as Mr Li for the Yang/Wang parties acknowledged in his submissions filed 4 August 2023 at [22]:

    If the files are not fabricated documents, I further submit that from the entire package of documents produced by the Applicants [Self Care], there is not a single document that is related to the ninth and fourteenth respondents [Yang/Wang parties].  The Chinese police and prosecutor seized all the electronic devices of Mr Emilio Wang when he was arrested in China, so they have access to all the correspondence and business records of Emilio Wang.  The lack of evidence about the ninth and fourteenth respondents [Yang/Wang parties] implies that they are not involved in the Emilio's [sic] Self Care business at all.

19. In addition, the Yang/Wang parties led expert evidence contesting Self Care's evidence of the application of Chinese law at that stage in hearsay form on Mr Plane's evidence.  It became apparent, as I discuss in Self Care (No 14), that the basis of their opposition was misconceived and relied on a mistaken application of Chinese law.  Mr Li cross‑examined Mr Plane and he cross‑examined Ms Chen.  Mr Li put arguments that had been rejected on previous occasions in respect of Mr Plane's expertise and as to the admissibility of hearsay on interlocutory applications.

20. Without reiterating what was put and which I have determined in Self Care (No 14), Mr Li's submissions on behalf of the Yang/Wang parties in opposing the reopening involved the following:

    (a)the source of the China indictment documents ‘are highly doubtful’, are questionable and, in effect, are forgeries;

    (b)Mr Plane is not appropriately qualified and cannot give any expert opinion about Chinese law and is not admitted appropriately; 

    (c)Mr Plane cannot give hearsay evidence notwithstanding that the Application was an interlocutory application (notwithstanding the Evidence Act1995 (Cth) permits such evidence); 

    (d)the original documents from the Shanghai Court should be produced; and

    (e)Mr Yang's evidence is the proper evidence appropriate as to Chinese law.

21. As I have said, the Yang/Wang parties obtained the evidence of Mr Jize Yang as to Chinese law.  In Self Care (No 14) I have set out my findings in relation to Mr Jize Yang's evidence. 

22. Mr Jize Yang first gave a report which was deficient in a number of respects, including for non‑compliance with the expert evidence practice note GPNEXPT applicable in this Court under the FCRules as applicable pursuant to the GFL Rules. 

23. Self Care, whilst raising objections to Mr Jize Yang and to another expert as witnesses in this Application, did not press those objections in respect of Mr Jize Yang upon an affidavit by Mr Jize Yang being made to the effect that he had read and would comply with the harmonised expert evidence requirements and as to the extent of his instructions in giving his report, namely, that they were oral instructions from Mr Li and that he did not have any written instructions.  As I set out in Self Care (No 14), in cross examination it became apparent that Mr Jize Yang did receive written instructions and had been proffered as an expert by Mr Shuhai Bai, Emilio Wang's solicitor in his criminal proceedings in China.

24. None of the Documents the subject of the Application to reopen and which I allowed on reopening concerned the Yang/Wang parties' defence. Mr Li acknowledged that this was the case in his written submissions, as I have identified above at [82]. Self Care submits that this being the case, the opposition maintained by the Yang/Wang parties to the Application to reopen must have been for an ulterior purpose and that that purpose was to advance Mr Emilio Wang's position in the proceeding.

25. In written submissions at [7]‑[9], Self Care put their submission thus:

    [7]…Because the documents did not concern the Yang/Wang parties’ defence (Mr Li even made a submission to this effect), the opposition to the Application must have been for an ulterior purpose.  The Court will be fortified in reaching that conclusion by the events that transpired during the hearing.  The real purpose was revealed during the cross‑examination of Mr Jize Yang, when it became apparent that Mr Li was not only acting for the Yang/Wang Parties, but was also taking instructions from Emilio Wang’s Chinese criminal lawyer, Shuhai Bai.  Mr Bai instructed Jize Yang in preparation of his report and documents produced by Mr Li under compulsion indicated that Mr Bai authored drafts of Jize Yang’s “report”.  None of this was disclosed to the Court by Jize Yang or Mr Li; it was only uncovered by the Applicants [Self Care] when calling for production of documents in the course of cross‑examining Jize Yang (the call was unsuccessfully opposed by Mr Li), after which Mr Li claimed to have deleted some of the WeChat records (but then produced them the next day), and then gave inadequate production which obliged the Court to compel him to produce further documents.  Almost all of the extra time of the hearing (beyond the original estimate of one day plus) can be attributed to the misconduct of the Yang/Wang Parties in opposing the Application apparently for their son Emilio, and Mr Li who facilitated this process (justifying proposing order 2(b)). 

    [8]Because of Emilio Wang’s indirect role in this Application, and because so much of the costs incurred by the Applicants during the hearing related to uncovering Emilio Wang’s role in theYang/Wang Parties’ opposition to the Application, he should, along with the Yang/Wang Parties, be liable for the costs incurred by the Applicants in relation to their conduct.  Given the conduct referred to above, the costs payable (under order 2(b)) by the Yang/Wang Parties and Emilio Wang should be paid on an indemnity basis.

    [9]The Yang/Wang Parties’ misconduct was facilitated by Mr Li. An order for costs against a lawyer may be made if the lawyer has caused costs to be incurred by a party because of undue delay, negligence, improper conduct or other misconduct or default.  Clearly, the misconduct outlined above would constitute circumstances in which such a costs order should be made.  Failing to disclose, and attempting to cover up, the fact that he was not truly acting on behalf of his own clients, but instead acting in the interests of Emilio Wang, involved Mr Li misleading the Court.  Mr Li should also be liable to pay costs on an indemnity basis (proposed order 3).

26. It is clear from the above written submission, and earlier from Self Care’s form of orders circulated on 8 November 2023, that Self Care's proposition is not that Mr Li was secretly retained by Mr Emilio Wang, nor that Mr Li was retained to represent Mr Emilio Wang, but rather that the Yang/Wang parties, and thus Mr Li as their lawyer, sought to ‘protect’ Mr Emilio Wang by seeking to exclude evidence that on one possible view, as Self Care submits, put beyond doubt Mr Emilio Wang's participation as a counterfeiter in the subject matter of this proceeding.  Thus, in circumstances where the Documents do not relate to the case that Self Care brings against the Yang/Wang parties, the Yang/Wang parties’ prosecuted an opposition not for a purpose relating to their defence.

27. The consequence of the Yang/Wang parties’ opposition, and in addition Mr Li's conduct in the Hearing, was what should have been, and had been agreed by all participating parties when I set the matter down for hearing to be at most a one-day plus hearing, has ended up being a hearing that involved:

    (a)an extended directions hearing of approximately a day dealing with objections, including objections made by Mr Li which reiterated objections that had been made and ruled upon in relation to Mr Plane's evidence in the substantive hearing; and

    (b)four days of evidence, argument and submission, which time included considerable time in dealing with matters that arose only in the course of Mr Jize Yang's cross‑examination, but which, in my view, should have been earlier disclosed by Mr Li or, at least, by Mr Jize Yang retained by Mr Li’s clients, before Mr Jize Yang was cross‑examined. 

28. The inescapable inference is that the Yang/Wang parties’ position and their opposition to the Application to reopen was for no reason other than to keep out Documents that may adversely affect the case of their son, Mr Emilio Wang.

29. In Self Care's written submissions dated 15 November 2023, and earlier further to the orders circulated on 8 November 2023 (that is, Self Care’s proposed orders), Self Care articulated their position as to why, first, Self Care seeks orders against the Yang/Wang parties, including on an indemnity basis, as I have identified above and, secondly, that Mr Li be subject to those orders, that is, that there be an order against Mr Li as solicitor for the Yang/Wang parties to pay costs.

30. Self Care's intention to seek orders as against Mr Li was first ventilated in the Hearing on day 2, 6 September 2023, when Mr Hennessy SC first raised the prospects of costs against Mr Li as follows (transcript page 147, line 1):

    Given that almost the entirety of this application seems to be occupied with a position that Mr Li's clients have taken in relation to the law of China and that Mr Li seems to be deeply embedded in it.  And that may well have costs consequences in terms of the order we seek against his client and/or Mr Li.

31. At that time, in the afternoon of the second day of the Hearing, I urged Mr Li to comply with his obligations to the Court under ss 190 and 191 of the FCFCOA Act, and reminded Mr Li to do his utmost as a solicitor on the record to procure a NAATI qualified translation of the documents which he produced in answer to the call for documents made by Self Care during the Hearing so that the Court could review them, and that he “do that as soon as possible”.

32. It is also apparent that Mr Li was aware as at 10 October 2023, that is the date that I delivered judgment in Self Care (No 14) and made orders, that Self Care was considering seeking costs orders against him. 

33. Now, Mr Li submits that no order can sought against him that he pays costs in the absence of a formal application being filed and served.  He draws my attention to the wording in rule 22.06(3)(b) of the GFL Rules, which I have noted above, ‘on application by a party to the proceeding’, and submits that a separate, formal application supported by an affidavit is the only way that an application for costs in the circumstances can be made.  I do not accept that submission.

34. First, the GFL Rules in r 1.05 specifically defines ‘application in a proceeding’. That term is not used in r 22.06 of the GFL Rules. 

35. Secondly, an application for costs can be made whether it be orally, further to an application in a proceeding, such as the Application to reopen, or indeed, by the circulation of proposed orders accompanied by submissions.  In addition, there is also the facility for the Court to make costs orders against lawyers on its own initiative. 

36. Lastly, of course, the GFL Rules permit the Court to dispense with the need for any compliance or formal compliance with the rules under r 1.07 of the GFL Rules. In addition, I note the obligation of the parties in the Rules to apply the overarching purpose and that parties must assist the Court by avoiding undue delay, expense and technicality.

37. I consider that by the notification during the Hearing on 6 September 2023, as I have indicated, and by Self Care's submissions on costs at [7]‑[9], and as I have already set out above, that Mr Li has been fully informed of the complaint and given full and sufficient notice of the complaint, and, as I have said, had the opportunity to fully and sufficiently respond to it.

38. I am satisfied from the above that Mr Li has been placed clearly on notice of the orders sought by Self Care that there be an order for costs against Mr Li, and of the type and extent of that order, and that the requirements of rule 22.06(5) of the GFL Rules have been met, including by Mr Li's opportunity to make written submissions and the opportunity to appear and make oral submissions, and by the Court's indulgence in allowing Mr Li's submissions from the Bar table on matters which properly were matters of evidence.

1. In short, in the present instance, I consider that Self Care by its Application to reopen, by the orders for costs it has circulated, and by its submissions, has complied with r 22.06(3) of the GFL Rules.  To the extent that there may be any lack of formality, which I do not accept, in addition, and, in any event, the Court hereby dispenses with any requirement for the filing and service of a formal application for costs against Mr Li. 

2. Mr Li then makes these points.  First, as to ulterior motive, Mr Li submits that there is no evidence to indicate that he has ever acted for Mr Emilio Wang in this proceeding and took instructions from Mr Emilio Wang or Mr Bai.  Secondly, he asks rhetorically, "What could the Yang/Wang parties and/or Emilio Wang possibly gain in this proceeding to ask me to represent in Emilio Wang in secret?"

3. As I have adverted to above, I do not understand Self Care to say that Mr Li ever acted for Mr Emilio Wang.  I do understand Self Care to say that by the use of Mr Emilio Wang's lawyer, Mr Bai, and by the facilitation through Mr Bai of the evidence of the purported expert, Mr Jize Yang, Mr Li has participated in Mr Bai's involvement in this proceeding. 

4. It appears that Mr Li in his submissions sought leave to file new affidavits on behalf of Ms Yang and Mr Wang to explain that there is no indirect role of Mr Emilio Wang in the Application and that there are no instructions from Ms Yang and Mr Wang to represent Mr Emilio Wang.  As I have said, no such submission was made by Self Care.

5. The ‘indirect role’ of Emilio Wang is answered as I have said by reference to the Yang/Wang parties’ position in ‘protecting’ Mr Emilio Wang.  I do not consider that any evidence from Ms Yang and Mr Wang would be relevant or that it would do anything more than expend more costs and be a further opportunity for more Court time to be taken.

6. I accept Mr Li's submissions that Ms Yang and Mr Wang sought Mr Bai's assistance and that Mr Bai located the proposed experts, noting that there were two experts proffered.  However, in this case, I consider that there is a significant difference between an inference of involvement that the Yang/Wang opposition advances Mr Emilio Wang's position, and the extent of Mr Bai's participation in the opposition to reopening in respect, at least, of the prosecution of the evidence of Chinese law.  In the case of Mr Jize Yang, the evidence is that Mr Bai brought his own computer to Mr Jize Yang's office.  He engaged with Mr Li and Mr Jize Yang in three‑way WeChats in which Mr Bai had a direct involvement in what questions should and should not be asked of Mr Jize Yang.

7. Mr Jize Yang's evidence is that Mr Bai typed up Mr Jize Yang's report and sent the report to Mr Li.  In addition, Mr Bai created draft versions of the report and, at least, also provided template versions of the expert report.  In short, the WeChat records and Mr Jize Yang's evidence under cross-examination makes very clear that Mr Bai's involvement was much more than simply recommending that Mr Jize Yang be approached to give expert evidence as to the position on Chinese law.

8. I am also concerned as to the non‑compliance with the expert practice note on matters which were within Mr Li's direct knowledge, namely, the extent of instructions that Mr Jize Yang received in the course of the preparation of his expert report. 

9. I am not satisfied – indeed, there was no real explanation given – why the instructions that Mr Jize Yang did receive, which Mr Jize Yang conceded he received, which Mr Jize Yang said because they were WeChat were not in writing, were not matters that Mr Li in accordance with his duty to the Court should have brought to the Court's attention or seen fit to disclose to Self Care's solicitors, but rather were matters about which Mr Li stayed silent.  It was only further to matters disclosed by Mr Jize Yang in cross-examination that Self Care's counsel, and thus the Court, became aware that Mr Jize Yang had received instructions, that there were documents that Mr Li had either previously or currently in his possession, and which, I consider, were relevant to Mr Jize Yang’s independence and the basis on which he put forward his opinion on Chinese law.

10. Significant time during the Hearing was taken addressing Mr Li’s response to Self Care’s call to Mr Li and the Yang/Wang parties for documents passing between Mr Li, the person who was subsequently identified as Mr Bai, and Mr Jize Yang, Mr Li's explanation for the extended time, the intermittent production, the claims of overarching privilege, and the failure to produce documents in a coherent and complete way, first in answer to the call for documents and, secondly, further to orders that I made extending further allowance to Mr Li to produce documents in response to the call.  The arguments put by Mr Li that he was doing no more than exercising his client's claim to privilege do not withstand examination.

11. I do not propose to recite the full history of the course of three days of the Hearing which were taken up with addressing Mr Li's response to Self Care’s call.  It suffices to note that on day 1 of the Hearing, 5 September 2023, in response to a question from Mr Hennessy SC, Mr Jize Yang disclosed that he had engaged in WeChat communications with Mr Li and that these were his instructions, and that Mr Hennessy SC then called for ‘All WeChat records of correspondence between Mr Li and Mr Yang’.  Mr Li was aware that Mr Jize Yang had said that he had deleted those WeChat records.  Later that same day, Mr Hennessy SC made a more formal call in four paragraphs, set out in transcript at page 77 from line 30:

    … I call for all records of communications between Mr Li and Mr Yang in relation to these proceedings, including but not limited to four categories: (1) communications containing the six documents listed in paragraph 1 of Mr Yang’s report, (2) any documents MrLi sent to Mr Yang saying that criminal materials cannot be used in civil cases, (3) any drafts of Mr Yang’s report, and (4) documents recording any instructions provide[d] by Mr Li to Mr Yang. 

12. Following the Court hearing day, Self Care's solicitors sent an email reiterating the call.  On day 2, 6 September 2023, Mr Hennessy SC noted there had been "radio silence" from Mr Li in relation to the call.  In other words, Mr Li had not communicated that he had even received and was trying to make any inquiries.  Shortly there afterwards Mr Li said he had not had the chance to look at the details and nature of the documents requested, because he had other commitments.  Mr Li then said he had had a preliminary review of the documents and objected to the request because of privilege.  I said (transcript at page 85, lines 10 to 12) I did not find Mr Li's points particularly persuasive in the context of the Hearing and noting that the claims for privilege encompassed Mr Yang's report itself and the expert evidence practice note.

13. I then ordered Mr Li to respond to the call, and stated that any questions of privilege may be articulated and addressed after the call was answered, and that the call did not prevent production of documents in the first instance to the Court.  I excused Mr Li to properly respond to the call.  The transcript records that at approximately midday some documents were sent to the Court.  They were largely in Chinese.  I requested a transcript of those documents.  The Court received the first translated screenshot at 2:03pm.  Mr Li followed with a second response to the call at 2:46pm.  I then directed Mr Li to obtain a NAATI translation of the 44 screenshots that had been sent to the Court and reminded Mr Li of his obligations under the overarching purpose set out in the FCFCOA Act.  I later extended more time to Mr Li. 

14. I note Mr Li informed the Court, first of all, that he had deleted any WeChats between him and Mr Yang, and secondly, it was only in the course of some of the response to the call that Mr Bai's existence and his participation was disclosed to the Court.

15. I do not find Mr Li's reliance on claims of privilege sufficient in circumstances where the expert report of Mr Jize Yang had been prepared by Mr Bai sitting in Mr Yang's office typing up the report on his computer and dealing with Mr Li.  Mr Li in his submissions states that he also separately sought expert opinion from Mr Bai on the legality of the new evidence in confidence. There is no evidence to support that submission.  Whether or not that advice was or was not sought is a separate matter from Mr Bai's involvement in Mr Jize Yang's evidence, which involvement on the evidence, was known to Mr Li at the time (viz three‑way WeChats). 

16. Having observed Mr Jize Yang under cross-examination, and with the benefit of the subset of Mr Li's production of documents to the Court which the Court has released to Self Care, I do not consider that Mr Bai was a mere introducer of and liaison with Mr Jize Yang.  I have formed the considered view that Mr Li's involvement in the Application and in the Hearing was intimate and such that it satisfies the identification in Mitry of a lawyer engaged in unreasonable conduct and of acting in a deliberate and conscious way by reference to circumstances not directed to his clients' (the Yang/Wang parties’) defence.

17. I accept Self Care's submission that Mr Li's behaviour is properly characterised as a serious dereliction of his duty to the Court, and that Mr Li acted as a mere cipher and did not exercise his own professional judgment as a solicitor of this Court in the opposition by the Yang/Wang parties to the reopening and in the obtaining and presentation of Mr Jize Yang's report on Chinese law.

18. For the above reasons and further below, I am satisfied, first, that the conduct of the Yang/Wang parties is such that it is appropriate in the exercise of my discretion to order they pay Self Care’s costs on an indemnity basis, and as a separate matter, secondly, that the involvement of Mr Li and Mr Li’s conduct in this proceeding is such that Mr Li be jointly and severally liable for the costs of his clients and of Mr Emilio Wang.

19. I am satisfied on the evidence that that was before me on the Application to reopen, and including the evidence to which I have been directed on the transcript, and on the Documents that have been tendered in the Hearing of the Application, that the opposition and maintenance of the opposition by the Yang/Wang parties at all times to the Application in respect of any of the Documents, including the appeal judgment, was an opposition which, should it have succeeded, would have excluded from the evidence in the proceeding documents which on their face go to Mr Emilio Wang's conduct as a counterfeiter of Self Care products and is evidence relevant to the claims Self Care prosecutes in this proceeding against Mr Emilio Wang. 

20. I accept that the Documents tendered in reopening are not documents that Self Care relies on in Self Care's case against the Yang/Wang parties, and, as I have said, Mr Li has also made express submissions that the Documents do not relate or are not relevant to the Yang/Wang parties' defence.  Mr Li's clients’ opposition to the Application, together with Mr Li's conduct in the proceeding, especially given the disclosures by Mr Jize Yang of Mr Bai's involvement in the direction and preparation of his expert report and in communication with Mr Li, are matters that did extend the Hearing, and have been directly relevant to time, effort and cost that should not have been necessary to expend to achieve the outcome effected by the orders that I made in Self Care (No 14).

21. Self Care proposes that the orders for payment by Mr Li jointly and severally with the Yang/Wang parties and Mr Emilio Wang of the costs be determined by a Registrar of this Court and be payable forthwith on a lump sum basis.  I briefly adverted to the practicalities and efficiencies of such an order earlier in these reasons.  I am satisfied it is appropriate to make such an order in the present case, including, because it seems to me that these costs have been incurred as a separate matter from the ultimate bearing that the Documents may have on my reasons for final judgment. 

    Disposition

22. For the above reasons, I am satisfied it is appropriate to make costs orders as follows:

    (1)Save as provided for under Orders 2 to 5, the Fifth Respondent (Emilio Wang), the Sixth Respondent (Pascal Skelin) and the Ninth and Fourteenth Respondents (the Yang/Wang parties) be jointly and severally liable to pay the Applicants' costs of their Application in a Case dated 14 June 2023 on a party / party basis.

    (2)Emilio Wang and the Yang/Wang parties be jointly and severally liable to pay 75% of the Applicants' costs of and incidental to the hearing of the Application on 5, 6, 11 and 13 September 2023 (the Hearing) on an indemnity basis.

    (3)The legal representative for the Yang/Wang parties, Mr Shuyang Li, be jointly and severally liable for the costs payable under Order 2.

    (4)The costs under Order 2 be determined on a lump sum basis by a Registrar of this Court, and be payable forthwith upon such determination. 

    (5)Emilio Wang, Yang/Wang parties, and Pascal Skelin be jointly and severally liable to pay 12½ % of the Applicants' costs of the Hearing, on a party / party basis.

    (6)There be no order as to costs in respect of the Application or the Hearing as between the Applicants and the Sixteenth Respondent (AVP), or as between the Applicants and the Thirteenth Respondent, Ms Siqi Huo.

    (7)Save as provided above, the costs of the Application and the Hearing be costs in the cause.

23. I so order. 

I certify that the preceding one hundred and twenty-five (125) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Baird.

Associate:

Dated:       21 December 2023

SCHEDULE OF PARTIES

SYG 2771 of 2019
Respondents
Fourth Respondent:	FREEZEFRAME CHINA CO PTY LTD (ACN 621 016 975)
Fifth Respondent:	KEFEI (EMILIO) WANG
Sixth Respondent:	PASCAL SKELIN
Seventh Respondent:	EPAQ INTERNATIONAL PTY LTD (ACN 608 870 588)
Eighth Respondent:	QUANJIAN PTY LTD
Ninth Respondent:	YIPING YANG
Tenth Respondent:	TAOYU PAN
Eleventh Respondent:	KEFEI (IVAN) WANG
Twelfth Respondent:	ZUREN INTERNATIONAL PTY LTD
Thirteenth Respondent:	SIQI HUO
Fourteenth Respondent:	YULIN WANG
Fifteenth Respondent:	E-GO CHANNEL PTY LTD
Sixteenth Respondent:	AUSTRALIAN VITAMIN PLUS PTY LTD
Seventeenth Respondent:	YAN (CYNTHIA) LI