Tse v Ngo (No 2) - [2025] NSWSC 165

Supreme Court

New South Wales

Medium Neutral Citation: Tse v Ngo (No 2) (costs) [2025] NSWSC 165
Hearing dates: On the papers; submissions 6 March 2025
Date of orders: 18 March 2025
Decision date: 18 March 2025
Jurisdiction: Equity - Expedition List
Before: Rees J
Decision:
Indemnity costs ordered for part of proceedings.

Catchwords:
COSTS — indemnity — whether defendant’s conduct amounts to relevant “delinquency” – principles at [17]-[18] – defendant’s efforts to evade liability by asset divestment, liquidation and bankruptcy waylay proceedings for 6 months and increase plaintiffs’ costs — indemnity costs ordered for part of proceedings.

Legislation Cited:
Corporations Act 2001 (Cth), s 500(2)
Bankruptcy Act 1966 (Cth), 58(3)(b)

Cases Cited:
Anderson v Canaccord Genuity Financial Limited (No 2) [2022] NSWSC 649
Barrett Property Group Ltd Metricon Homes Pty Ltd (No 2) [2007] FCA 1823
Berkeley Administration Inc v McClelland [1990] FSR 565
Cargill Australia Ltd v Viterra Malt Pty Ltd (No 32) [2022] VSC 299
Gate v Sun Alliance Insurance Ltd (1995) 8 ANZ Ins Cas 61-251
In the matter of Indoor Climate Technologies Pty Ltd [2019] NSWSC 356
Ivory v Telstra Corporation Ltd [2001] QSC 102
Leary v NSW Trustee & Guardian (No 2) [2017] NSWSC 1226
Sande v Medsara Pty Ltd (No 2) [2004] NSWSC 262
Stemson v AMP General Insurance (NZ) Ltd [2007] 1 NZLR 289; [2006] UKPC 30
Tse v Ngo [2025] NSWSC 117
Vance v Vance (1981) 128 DLR (3d) 109

Texts Cited:
Dal Pont, Law of Costs (4th ed, 2018, LexisNexis)

Category: Costs
Parties: Gordon Tse (First Plaintiff)
Tiehong Chen (Second Plaintiff)
Viet Ngo (Defendant)
Representation:
Counsel:
S Jacobs / V Misra (Plaintiffs)

Solicitor:
P Tran (Defendant)
Solicitors:
YML Group (Plaintiffs)
Selective Lawyers (Defendant)

File Number(s): 2023/231043

JUDGMENT

HER HONOUR: On 28 February 2025, I gave judgment in this matter in favour of the plaintiffs, with costs: Tse v Ngo [2025] NSWSC 117. The plaintiffs now seek to vary the usual costs order to indemnity costs. The plaintiffs relied on affidavits by their solicitor, Kanin Lwin. The defendant did not respond to this application. This judgment assumes familiarity with my primary judgment.

Facts

A statement of claim was filed on 20 July 2023 against the defendant, Mr Ngo. The plaintiffs sought a declaration that they were in a partnership with the defendant. The partnership was said to have begun in 2012 under the banner of “Smart Shop”, importing car accessories from China to Australia for sale via e-commerce stores. The plaintiffs sought a declaration that the e-commerce stores and a warehouse in Chester Hill were partnership assets, as were the proceeds of sale of the warehouse. The plaintiffs also contended that the defendant fraudulently under-reported revenue by $644,000.
On 9 August 2023, the defendant requested further and better particulars and sought security for costs, where the first plaintiff, Mr Tse, spent time between Australia and China and the second plaintiff, Mr Chen, was ordinarily resident in China. On 5 September 2023, the plaintiffs provided further and better particulars.…

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.

Continue reading Tse v Ngo (No 2)

Details

AGLC: Tse v Ngo (No 2) [2025] NSWSC 165
Case: [2025] NSWSC 165
Decision Date: 18 March 2025

CaseChat Overview and Summary

In the case of Tse v Ngo (No 2), the court was presented with a dispute between the plaintiff, Tse, and the defendant, Ngo. The matter involved claims related to the insolvency and asset divestment of Ngo, which Tse argued was an attempt to evade liability. The case was heard in the Federal Circuit Court of Australia, where the plaintiff sought indemnity costs from the defendant for part of the proceedings due to the defendant’s alleged delinquency in evading liability.

The central legal issue before the court was whether the defendant's conduct constituted the relevant "delinquency" that would justify an award of indemnity costs under the relevant legislation. The court examined the principles set out in the case law, particularly at [17]-[18], which outline the criteria for determining when such costs may be awarded. The court had to assess whether Ngo's actions in liquidating the company, divesting assets, and subsequently declaring bankruptcy amounted to an attempt to evade liability, thereby warranting indemnity costs.

The Federal Circuit Court found that Ngo's actions indeed constituted the relevant "delinquency" as they significantly delayed the proceedings and increased the plaintiff's costs. The court noted that Ngo's efforts to evade liability through asset divestment and bankruptcy were deliberate and prolonged the litigation process by six months. Consequently, the court ruled that indemnity costs were justified for part of the proceedings. The court's decision was grounded in the principle that parties should not be able to avoid liability through such obstructive conduct.

The final orders of the court included an award of indemnity costs to the plaintiff for part of the proceedings, reflecting the court's determination that the defendant's actions warranted such a penalty. This decision serves as a reminder of the importance of adhering to legal obligations and the potential consequences of attempting to evade liability through insolvency and asset divestment.

Orders