Sharetea Australia Pty Ltd v Lephan Trading Pty Ltd - [2025] NSWDC 405

District Court

New South Wales

Medium Neutral Citation: Sharetea Australia Pty Ltd v Lephan Trading Pty Ltd [2025] NSWDC 405
Hearing dates: 25 September 2025
Date of orders: 25 September 2025
Decision date: 25 September 2025
Jurisdiction: Civil
Before: Newlinds SC DCJ
Decision:
(1) The Notice of Motion filed by the Cross Defendants on 29 August 2025 is dismissed.
(2) The first and second Cross Defendants are to pay the first and second Cross Claimants’ costs of and incidental to the Motion filed 29 August 2025.

Catchwords:
COSTS — Security for costs — Jurisdiction against natural person — Proper construction of UCPR rules 42.21 (e) and (f) — “Suing not for his or her own benefit but for the benefit of another person” — In context of solicitor agreeing to accept outstanding fees by instalment — Laith & Fadi Investments v Fogo Brazilia Holdings Pty Ltd [2024] NSWSC 1508; Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2013] NSWCA 404; and Longjing Pty Ltd v Perpetual Nominees Ltd [2017] NSWSC 1690 explained and distinguished — No jurisdiction engaged — In any event application dismissed on discretionary grounds — Claim defensive in nature — Delay — Quantification — As to corporation — Application dismissed on discretionary grounds

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW) r 42.21

Cases Cited:
Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148
Hung v Aquamore Credit Equity Pty Ltd [2022] NSWCA 123
Laith & Fadi Investments v Fogo Brazilia Holdings Pty Ltd [2024] NSWSC 1508
Longjing Pty Ltd v Perpetual Nominees Ltd [2017] NSWSC 1690
Madgwick v Kelly [2013] FCAFC 61
Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2013] NSWCA 404

Category: Procedural rulings
Parties: Sharetea Australia Pty Ltd (Plaintiff/Applicant)
Lephan Trading Pty Ltd (First Defendant/Respondent)
Jonathan Nhan Le (Second Defendant/Respondent)
Representation:
Counsel:
N Lennings (Plaintiff/Applicant)
A Rizk (Defendants/Respondents)
Solicitors:
Somerset Ryckmans (Plaintiff/Applicant)
Levitt Robinson (Defendants/Respondents)

File Number(s): 2022/218841
Publication restriction: Nil

JUDGMENT; ex tempore (revised)

This is an application for security for costs brought by Cross Defendants to a cross-claim which, in its amended form, was filed in February of this year.
The Cross Claimants are the Defendants to a claim brought by the Plaintiff/Cross Defendant which arises out of a franchise agreement entered into by one of the plaintiffs, and the first Defendant/Cross Claimant which his obligations were guaranteed by the second Defendant/Cross Claimant.
The claim by the Plaintiff is for moneys said to have become payable under that franchise agreement.
The matter has a long and tortured history which is not a credit to anyone who has been involved in it. There have been a multitude of directions hearings, notices of motions and the like, none of which seem to have produced the desired result which is that the case which is now set down for a hearing to commence on 1 December 2025 should be well and truly ready to go by now, but it is not.
I…

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: [2025] NSWDC 405
Decision Date: 25 September 2025

CaseChat Overview and Summary

The case of Sharetea Australia Pty Ltd v Lephan Trading Pty Ltd involved an application by the Cross Defendants seeking security for costs against the Cross Claimants. The dispute arose in the Supreme Court of New South Wales, where the Cross Defendants sought to enforce a costs order against the Cross Claimants, who were natural persons. The primary legal issue before the Court was whether it had jurisdiction to grant security for costs against the Cross Claimants under the Uniform Civil Procedure Rules 2005 (NSW), specifically rules 42.21(e) and (f), given that the Cross Claimants were not suing for their own benefit but for the benefit of another person. The Court had to interpret these rules in the context of a solicitor agreeing to accept outstanding fees by instalment. The Court considered precedents such as Laith & Fadi Investments v Fogo Brazilia Holdings Pty Ltd, Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd, and Longjing Pty Ltd v Perpetual Nominees Ltd to determine the proper construction of the rules.

The Court concluded that the rules did not confer jurisdiction against natural persons in such circumstances. Even if the rules could be interpreted to grant jurisdiction, the Court exercised its discretion to dismiss the application due to the defensive nature of the claim and the delay in making the application. The Court also found issues with the quantification of the costs. Regarding the corporation, the application was dismissed on discretionary grounds. The Court found that the Cross Claimants were not suing for their own benefit but for the benefit of another person, and therefore, the application was not well-founded.

In summary, the Court dismissed the Notice of Motion filed by the Cross Defendants on 29 August 2025 and ordered that the first and second Cross Defendants pay the first and second Cross Claimants’ costs of and incidental to the Motion filed on that date. The Court's decision hinged on its interpretation of the relevant UCPR rules and the discretionary factors it considered in light of the case's specifics.

Orders

Orders of the court

(1) The Notice of Motion filed by the Cross Defendants on 29 August 2025 is dismissed.

(2) The first and second Cross Defendants are to pay the first and second Cross Claimants’ costs of and incidental to the Motion filed 29 August 2025.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Sharetea Australia Pty Ltd v Lephan Trading Pty Ltd [2025] NSWDC 405
Hearing dates:	25 September 2025
Date of orders:	25 September 2025
Decision date:	25 September 2025
Jurisdiction:	Civil
Before:	Newlinds SC DCJ
Decision:	(1) The Notice of Motion filed by the Cross Defendants on 29 August 2025 is dismissed. (2) The first and second Cross Defendants are to pay the first and second Cross Claimants’ costs of and incidental to the Motion filed 29 August 2025.
Catchwords:	COSTS — Security for costs — Jurisdiction against natural person — Proper construction of UCPR rules 42.21 (e) and (f) — “Suing not for his or her own benefit but for the benefit of another person” — In context of solicitor agreeing to accept outstanding fees by instalment — Laith & Fadi Investments v Fogo Brazilia Holdings Pty Ltd [2024] NSWSC 1508; Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2013] NSWCA 404; and Longjing Pty Ltd v Perpetual Nominees Ltd [2017] NSWSC 1690 explained and distinguished — No jurisdiction engaged — In any event application dismissed on discretionary grounds — Claim defensive in nature — Delay — Quantification — As to corporation — Application dismissed on discretionary grounds
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW) r 42.21
Cases Cited:	Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148 Hung v Aquamore Credit Equity Pty Ltd [2022] NSWCA 123 Laith & Fadi Investments v Fogo Brazilia Holdings Pty Ltd [2024] NSWSC 1508 Longjing Pty Ltd v Perpetual Nominees Ltd [2017] NSWSC 1690 Madgwick v Kelly [2013] FCAFC 61 Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2013] NSWCA 404
Category:	Procedural rulings
Parties:	Sharetea Australia Pty Ltd (Plaintiff/Applicant) Lephan Trading Pty Ltd (First Defendant/Respondent) Jonathan Nhan Le (Second Defendant/Respondent)
Representation:	Counsel: N Lennings (Plaintiff/Applicant) A Rizk (Defendants/Respondents) Solicitors: Somerset Ryckmans (Plaintiff/Applicant) Levitt Robinson (Defendants/Respondents)
File Number(s):	2022/218841
Publication restriction:	Nil