Tse v Ngo (No 2)

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.