Shinetec (Australia) Pty Ltd v The Gosford Pty Ltd; The Gosford Pty Ltd v Bank of China Ltd (No 4)

[2024] NSWSC 115

Supreme Court

New South Wales

Medium Neutral Citation:

Shinetec (Australia) Pty Ltd v The Gosford Pty Ltd; The Gosford Pty Ltd v Bank of China Ltd (No 4) [2024] NSWSC 115

Hearing dates:

On the papers

Decision date:

15 February 2024

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

The cross-defendant pay two thirds of the cross-claimant’s costs of the Amended Cross-Summons

Catchwords:

COSTS – cross-claimant successful on claim advanced at trial – two other claims not pressed at last moment – length of trial reduced – cross-defendant incurred costs relating to claims not pressed – what costs order should be made to reflect these matters

Cases Cited:

Kanjian Holdings No 1 Pty Ltd v Kanjian; Kanjian v Kanjian (No 4) [2021] NSWSC 1390

Shinetec (Australia) Pty Ltd v The Gosford Pty Ltd; The Gosford Pty Ltd v Bank of China Ltd [2022] NSWSC 59

Shinetec (Australia) Pty Ltd v The Gosford Pty Ltd; The Gosford Pty Ltd v Bank of China Ltd (No 2) [2023] NSWSC 1405

Taylor v Stav Investments Pty Ltd as trustee for the Stav Investments Family Trust (No 2); Taylor v LK Group Investments Pty Ltd (No 2) [2023] NSWCA 322

Category:

Costs

Parties:

Shinetec (Australia) Pty Ltd (Plaintiff)
The Gosford Pty Ltd (First Defendant/Cross-Claimant)
David Anthony Hurst (Second Defendant)
David Anthony Sampson (Third Defendant)
Bank of China Limited (Fourth Defendant/Cross-Defendant)
Macquarie Bank Limited (Fifth Defendant)

Representation:

Counsel:
R G McHugh SC / R J May (First Defendant/Cross-Claimant, Second and Third Defendants)
J B Kay Hoyle SC (Fourth Defendant/Cross-Defendant)

Solicitors:
Johnson Winter Slattery (First Defendant/Cross-Claimant, Second and Third Defendants)
King & Wood Mallesons (Fourth Defendant/Cross-Defendant)

File Number(s):

2021/220732

JUDGMENT

1. I published my principal judgment in this matter on 20 November 2023. ^[1] I shall use the same abbreviations here.

   1. Shinetec (Australia) Pty Ltd v The Gosford Pty Ltd; The Gosford Pty Ltd v Bank of China Ltd (No 2) [2023] NSWSC 1405.

2. I have now received written submissions from Gosford and the Bank concerning the costs of Gosford’s cross-claim against the Bank.

3. Gosford was successful in relation to the claim that it pressed at trial, being its claim under the Letter of Credit.

4. Gosford had also made a claim for misleading or deceptive conduct and a claim for consequential loss.

5. It abandoned the consequential loss claim on 20 October 2023, shortly before the commencement of the hearing before me on 25 October 2023. It abandoned the misleading or deceptive conduct claim during argument on the first day of the hearing and only after an enquiry from me.

6. The Bank submits that I should infer that the claims for misleading or deceptive conduct and consequential loss were only added by Gosford to its case “tactically and solely for the purpose of anchoring the proceedings in the jurisdiction” and in anticipation of the forum non conviens application from the Bank that I dealt with in my first judgment in these proceedings. ^[2]

   2. Shinetec (Australia) Pty Ltd v The Gosford Pty Ltd; The Gosford Pty Ltd v Bank of China Ltd [2022] NSWSC 59 at [100]-[101].

7. I see no basis upon which I could come to that conclusion. It involves a veiled suggestion that Gosford, the Receivers and the legal representatives, at the time engaged in what might well amount to an abuse of process; including claims solely to defeat an anticipated stay application rather than for the purpose of pursuing and vindicating legal rights.

8. As Gosford has submitted, the more likely inference to draw arises from the fact that, shortly before the hearing, the parties’ joint accounting experts produced a joint report in which Gosford’s expert, Mr O’Keeffe, revised his earlier opinion and concluded that Gosford’s loss was $37.78 million, an amount only marginally greater than the amount Gosford contended was due to it from the Bank under the Letter of Credit. Earlier, Mr O’Keeffe had opined that Gosford’s loss was some $47 million and some $40 million.

9. In those circumstances, I am not able to conclude that Gosford’s abandonment of the claims for misleading or deceptive conduct and consequential loss should be seen as an “effective surrender or capitulation” such as would necessarily result in costs following the event of their abandonment. ^[3]

   3. Cf Kanjian Holdings No 1 Pty Ltd v Kanjian; Kanjian v Kanjian (No 4) [2021] NSWSC 1390 at [63] (Henry J).

10. In those circumstances, while Gosford should have its costs of the claim on which it succeeded, being the claim under the Letter of Credit, it should not have its costs on the misleading or deceptive conduct and the consequential loss claims.

11. However, the Bank invites me to go further and to order that Gosford, and also the Receivers, pay the 65% - 70% of the Bank’s costs of the cross-claim, on the basis that its solicitor, Ms Kwan, estimates that approximately 65% - 70% of the costs incurred by the Bank related to the abandoned claims.

12. Ms Kwan’s estimate is expressed at a very high level and I think should be treated with some caution. I accept, however, that the Bank has incurred significant costs in meeting the abandoned claims. However, Gosford’s abandonment of these claims meant that the hearing was completed in three days, rather than the eight days originally allocated.

13. Overall, accepting that apportionment of costs is very much a matter of discretion, and that mathematical precision is illusory,^[4] the appropriate order for costs is that the Bank pay two thirds of Gosford’s costs of its cross-claim.

    4. For example, Taylor v Stav Investments Pty Ltd as trustee for the Stav Investments Family Trust (No 2); Taylor v LK Group Investments Pty Ltd (No 2) [2023] NSWCA 322 at [7] (Mitchelmore JA, Simpson AJA agreeing).

14. My order is that the cross-defendant pay two thirds of the cross-claimant’s costs of the Amended Cross-Summons.

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Endnotes