Yang v Hypec Electronics Pty Ltd (in Liquidation) & 2 Ors - [2003] NSWCA 181

NEW SOUTH WALES COURT OF APPEAL

CITATION: Yang v Hypec Electronics Pty Ltd (In Liquidation) & 2 Ors [2003] NSWCA 181

FILE NUMBER(S):
40659/02

HEARING DATE(S): 27 August 2003

JUDGMENT DATE: 27/08/2003

PARTIES:
Grace Yang (Appellant)
Hypec Electronics Pty Ltd (In Liquidation) (First Respondent)
Colin Mead (Second Respondent)
BL & GY International Company Ltd (Third Respondent)

JUDGMENT OF: Spigelman CJ Handley JA Santow JA

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC 12674/97

LOWER COURT JUDICIAL OFFICER: Mathews AJ

COUNSEL:
J Kildea (Appellant)
V Bedrossian (Second Respondent)

SOLICITORS:
Ma & Company (Appellant)
Etheringtons (First & Second Respondents)

CATCHWORDS:
COSTS - cross-defendant party to principal proceedings - amenable as such to order for costs of principal proceedings

LEGISLATION CITED:
Supreme Court Act 1970 s 76(1)
Supreme Court Rules 1970 Pt 52A r 4
Supreme Court Rules (Amendment Number 310) 1997

DECISION:
(1) Appeal allowed. (2) Order for costs made by Mathews AJ pursuant to SCR Pt 52A r 4(5)(g) set aside. (3) In lieu thereof substitute an order in the same terms against the appellant as a party to the principal proceedings with effect from 28 June 2002. (4) The appellant to pay the respondent's costs of the appeal.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40659 of 2002
SPIGELMAN CJ
HANDLEY JA
SANTOW JA
27 AUGUST 2003

GRACE YANG v HYPEC ELECTRONICS PTY LTD (IN LIQ) & 2 ORS

Judgment

SPIGELMAN CJ: I will invite Handley JA to deliver the first judgment.
HANDLEY JA: This is an appeal by a cross-defendant, by leave of this court, from an order for costs made by Mathews AJ, at the conclusion of proceedings in the Common Law Division.
The appellant was joined as one of the cross-defendants in a cross-claim by the defendant Hypec Electronics Pty Ltd, which had been sued by a Taiwanese corporation, BL & GY International Company Pty Ltd, for goods sold and delivered.
Her Honour, in a reserved judgment, dismissed the action on 14 February 2002 and expressed highly critical views about the proceedings and the involvement of the plaintiff’s directors, Lucy Mead and Grace Yang, in those proceedings. Her Honour reserved the question of costs which became the subject of a later hearing.
Her Honour dealt with three costs issues in her second judgment of 28 June 2002, but this Court is only concerned with the question whether her Honour had power to order, as she did, that the appellant, as a cross-defendant, pay the successful defendant’s costs of the whole proceedings.

Her Honour considered the power to make such an order on the basis that the cross-defendant was not a party to the proceedings between the plaintiff and the defendant.
Section 76(1) of the Supreme Court Act provides:
“Subject to this Act and the rules …
(a) costs shall be in the discretion of the Court,
(b) the Court shall have full power to determine by whom and to what extent costs are to…

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: [2003] NSWCA 181
Decision Date: 27 August 2003

CaseChat Overview and Summary

The appellant, Yang, sought to appeal an order made by Mathews AJ that required Yang to pay the costs of the principal proceedings. Yang was a cross-defendant in those proceedings, which involved Hypec Electronics Pty Ltd (in Liquidation) and two other respondents. The core of the dispute revolved around Yang's liability for the costs incurred in the principal proceedings, despite not being a party to the initial action.

The central legal issue before the court was whether a cross-defendant, who was not an original party to the principal proceedings, could be made liable for the costs of those proceedings under the relevant court rules. Specifically, the court had to consider the scope of the court's power to make such cost orders against parties who entered the litigation through a cross-claim.

The court allowed the appeal, reasoning that while a cross-defendant is a party to the overall litigation, they are not necessarily a party to the "principal proceedings" in the context of cost orders. The court found that the order made by Mathews AJ was made pursuant to a rule that applied to parties to the principal proceedings, and Yang did not fit this description at the relevant time. Consequently, the court set aside the original cost order and substituted it with an order that Yang pay the respondent's costs of the appeal, and that Yang be liable for the respondent's costs of the principal proceedings from 28 June 2002, as a party to the overall litigation.

Orders

Orders of the court

(1) Appeal allowed. (2) Order for costs made by Mathews AJ pursuant to SCR Pt 52A r 4(5)(g) set aside. (3) In lieu thereof substitute an order in the same terms against the appellant as a party to the principal proceedings with effect from 28 June 2002. (4) The appellant to pay the respondent's costs of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

SPIGELMAN CJ

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Ratio Decidendi

Legal Principle Established

Established by: SPIGELMAN CJ

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