Tipto Pty Ltd v Yuen (No 2) - [2016] NSWSC 611

Supreme Court

New South Wales

Medium Neutral Citation: Tipto Pty Ltd v Yuen (No 2) [2016] NSWSC 611
Hearing dates: On the papers
Date of orders: 12 May 2016
Decision date: 12 May 2016
Jurisdiction: Equity
Before: Robb J
Decision:
See par 60

Catchwords: COST ORDERS – court considered the manner in which proceedings were conducted – whether defendants were entitled to indemnity costs sought – plaintiffs initially made baseless demands and threats against the defendants in which they ultimately sought no such relief – HELD plaintiffs’ conduct was unreasonable but it was not sufficiently connected with the litigation itself to justify indemnity costs – whether plaintiffs’ rejection of various attempts to settle the matter was unreasonable – in particular, court considered the Calderbank offer by the defendants – court found that the offer did not relate closely enough to the relief sought by the plaintiffs – HELD it was not unreasonable for the plaintiffs to reject the offer as it did not deal with the principal relief sought by the plaintiffs – whether there was misconduct involved on the part of the plaintiffs that justify a more onerous costs orders against them – court considered that plaintiffs’ misconduct in pressing baseless claims unnecessarily prolonged the hearing and increased costs – HELD plaintiffs to pay 85% of the defendants’ reasonable solicitor/client costs
Legislation Cited: Corporations Act 2001 (Cth)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Mead v Watson [2005] NSWCA 133; 23 ACLC 718
Nu Line Construction Group Pty Ltd v Fowler (aka Grippaudo) [2012] NSWSC 816
Nu Line Construction Group Pty Ltd v Fowler (No 2) [2014] NSWCA 188
Tipto Pty Ltd v Yuen [2015] NSWSC 1086
Category: Costs
Parties: Tipto Pty Ltd (first plaintiff)
SWU Financial Planning Pty Ltd (second plaintiff)
Premium China Funds Management Pty Ltd (third plaintiff)
Kam Cheun Yuen (first defendant)
CoWealth Partners Pty Ltd (second defendant)
Representation:
Counsel: R Gration (plaintiffs)
J Fernon SC/D Scully (defendants
Solicitors: WMD Law (plaintiffs)
Harmer Workplace Lawyers (defendants)

File Number(s): 2014/223988
Publication restriction: None

Judgment

I gave judgment in this matter on 7 August 2015: see Tipto Pty Ltd v Yuen [2015] NSWSC 1086.
I dismissed the plaintiffs’ claim and ordered the plaintiffs to pay the costs of the defendants, Mr Yuen and his company, which I called CoWealth Partners in the judgment.
Because of particular features of the proceedings, I made directions that allowed the parties to make submissions concerning the basis upon which the costs payable by the plaintiffs should be assessed.
The defendants delivered written submissions dated 21 August 2015, and the plaintiffs responded on 4 September 2015.
This judgment deals with the basis upon which the plaintiffs should be ordered to pay the defendants’ costs.

Legal principles

The defendants invited me to accept the following statement of the legal principles applicable to the determination of the costs of proceedings given by Ward J (as her Honour then was) in Nu Line Construction Group Pty Ltd v Fowler (aka Grippaudo) [2012] NSWSC…

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: [2016] NSWSC 611
Decision Date: 12 May 2016

CaseChat Overview and Summary

In the case of Tipto Pty Ltd v Yuen (No 2), the plaintiffs sought to recover costs from the defendants. The plaintiffs had made baseless demands and threats against the defendants, but ultimately did not seek such relief. The court was required to decide whether the defendants were entitled to indemnity costs given the plaintiffs' unreasonable conduct. The court also considered whether it was unreasonable for the plaintiffs to reject the defendants' settlement attempts, particularly their Calderbank offer. The court found that the plaintiffs' rejection of the offer was not unreasonable as it did not deal with the principal relief sought by the plaintiffs. The court further considered whether the plaintiffs' misconduct justified more onerous costs orders against them. The court held that the plaintiffs' conduct unnecessarily prolonged the hearing and increased costs, and therefore ordered the plaintiffs to pay 85% of the defendants' reasonable solicitor/client costs.

The court held that while the plaintiffs' conduct was unreasonable, it was not sufficiently connected with the litigation itself to justify indemnity costs. The court found that the plaintiffs' rejection of the defendants' settlement attempts was not unreasonable, particularly in light of the fact that the Calderbank offer did not relate closely enough to the relief sought by the plaintiffs. The court considered that the plaintiffs' misconduct in pressing baseless claims unnecessarily prolonged the hearing and increased costs. The court held that the plaintiffs should pay 85% of the defendants' reasonable solicitor/client costs, but did not deem it appropriate to impose more onerous costs orders against them.

Orders