Shun Sheng Pty Ltd v Lei (No 6)

The case of Shun Sheng Pty Ltd v Lei (No 6) involved protracted legal proceedings arising from a terminated partnership. The dispute centred around multiple claims between various parties, including issues of liability and damages. The proceedings took place in the Supreme Court of New South Wales. The primary legal issues the court had to address involved the allocation of costs between the parties, particularly in light of the complex and multifaceted nature of the litigation.

The court had to decide whether the general costs of the proceedings should follow the outcome of the central partnership claim or whether they should be allocated on a claim-by-claim basis. Additionally, the court examined the propriety of purported “Calderbank” offers made by the defendant’s solicitors. These offers, which were intended to be without prejudice, were rejected by the court as both form and substance did not align with the necessary requirements for such offers. The court also considered an application for indemnity costs, which was ultimately refused.

In its reasoning, the court held that general costs of the proceedings should follow the outcome of the partnership claim, reflecting the overarching nature of the litigation. However, it determined that other costs should be allocated on a claim-by-claim basis, given the distinct nature of the individual claims. The court found the “Calderbank” offers to be inadequate and rejected them, underscoring the importance of proper form and substance in such offers. Consequently, the application for indemnity costs was dismissed, as the court found that the proceedings were not exceptional enough to warrant such an award.