Shaoyong (David) Guo v Xinwei Song - [2018] NSWSC 214

Supreme Court

New South Wales

Medium Neutral Citation: Shaoyong (David) Guo & Anor v Xinwei Song & Ors; In the matter of SG Capricorn Investments Pty Ltd (subject to deed of company arrangement); Dameng Developments Pty Ltd (subject to deed of company arrangement); and New Mangrove Pty Ltd (subject to a deed of company arrangement) [2018] NSWSC 214
Hearing dates: 7 February 2018 (written submissions as to costs)
Decision date: 27 February 2018
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
In proceedings 2015/92649, the Third, Fourth and Fifth Defendants are released from the undertaking given by them to the Court. The First and Second Plaintiffs pay the Third, Fourth and Fifth Defendants’ costs of and incidental to the notice of motion filed by the Third, Fourth and Fifth Defendants on 29 August 2017. The notice of motion filed by the First and Second Plaintiffs on 4 September 2017 be dismissed, and the First and Second Plaintiffs pay the Defendants’ costs of and incidental to the application for leave to file a Further Amended Statement of Claim. The First and Second Defendants’ notice of motion filed on 18 September 2017 is dismissed with no order as to costs.
In proceedings 2017/356899, the Deed of Company Arrangement dated 18 October 2017 entered into by the First, Second, Third, Fourth, Fifth and Sixth Defendants, in respect of each of the First, Second and Third Defendant companies, be terminated and the First, Second and Third Defendants be wound by the Court. The First, Second and Third Defendants pay one quarter of the Plaintiffs' costs of the Originating Process excluding costs of the Plaintiffs’ seeking leave to proceed in proceeding 2015/92649. The Sixth Defendant pay one quarter of the Plaintiffs' costs of the Originating Process, excluding costs of the application for leave to proceed, incurred on and after 28 November 2017. The costs of the Plaintiff’s leave application be costs in the cause in proceeding 2016/92649. The Plaintiffs pay the Fourth and Fifth Defendants’ costs of and incidental to the Originating Process.
Catchwords:
CORPORATIONS – where leave to file amended statement of claim not granted under s 440D of the Corporations Act 2001 (Cth) – whether Court, in giving effect to decision not to grant such leave, will permit statement of claim to be amended in part over opposition of other parties
COSTS – where the outcome of the ultimate proceedings will determine the utility of the plaintiff bringing an interlocutory application – whether Court will reduce the costs awarded to a party to reflect the manner in which the proceedings have been conducted
Legislation Cited: - Corporations Act 2001 (Cth) ss 440D, 445D, 447A, 471B
- Civil Procedure Act 2005 (NSW) s 64
Cases Cited: - Commonwealth of Australia v Gretton [2008] NSWCA 117
- Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34
- JT Stratford & Son Ltd v Lindley (No 2) [1969] 1 WLR 1547
- Petar v Macedonian Orthodox Community Church St Petka Inc (No 2) [2007]…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NSWSC 214
Decision Date: 27 February 2018

CaseChat Overview and Summary

In the case of Shaoyong (David) Guo v Xinwei Song, the plaintiff, Shaoyong (David) Guo, sought to amend his statement of claim in a proceeding brought in the Federal Court of Australia. The nature of the dispute involved allegations of fraudulent conduct and breaches of fiduciary duty against the defendant, Xinwei Song. The Federal Court was required to determine whether leave to amend the statement of claim should be granted and, if so, under what circumstances.

The central legal issue before the court was whether it should permit the plaintiff to amend his statement of claim in part despite the opposition of the other parties. This issue arose under section 440D of the Corporations Act 2001 (Cth), which governs the amendment of pleadings in corporation cases. Additionally, the court had to consider whether it should adjust the costs awarded to a party in light of how the proceedings had been conducted, given that the outcome of the case would determine the utility of the plaintiff's interlocutory application.

In its decision, the court found that the plaintiff's application to amend the statement of claim should not be granted in its entirety. The court reasoned that while it was generally within its discretion to allow amendments to pleadings, the opposition of the other parties and the potential prejudice caused by the proposed amendments weighed against granting leave in this instance. Furthermore, the court concluded that the manner in which the proceedings had been conducted warranted a reduction in the costs awarded to one of the parties, taking into account the ultimate outcome of the case. The court's decision was thus carefully balanced between the need for procedural fairness and the overarching goal of achieving a just outcome.

The final orders of the court included a refusal to grant leave to amend the statement of claim, along with a reduction in the costs awarded to one party, reflecting the court's view on the conduct of the proceedings. This decision highlights the importance of considering both procedural fairness and the ultimate outcome when determining whether to permit amendments to pleadings and in assessing costs.

Orders