Yang v Yue

[2021] VSC 163

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2020 04101

ZHILONG YANG & ORS (according to the Schedule attached)	Plaintiff
v
JUN YUE & ORS (according to the Schedule attached)	Defendants

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JUDICIAL REGISTRAR:	Irving JR
WHERE HELD:	Melbourne
DATE OF HEARING:	10 March 2021
DATE OF JUDGMENT:	1 April 2021
CASE MAY BE CITED AS:	Yang & Anor v Yue & Ors
MEDIUM NEUTRAL CITATION:	[2021] VSC 163

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COSTS – Application for summary judgment by plaintiff – Where orders made dismissing application – Where no findings of fact or determinations on the merits – Principles as to costs – Scope of discretion – Departure from rule that ‘costs follow the event’.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr L Magowan	Lin Legal & Associates
For the First to Fourth Defendants	Mr M Singh, solicitor	Dhillon Legal
For the Fifth Defendant

JUDICIAL REGISTRAR:

1. On 10 March 2021 I dismissed the plaintiffs’ application for summary judgment brought under s 63 of the Civil Procedure Act 2010 (Vic). At the time I delivered my reasons I indicated an intention to order that the plaintiffs pay the defendants’ costs of the application. Quite correctly, the plaintiff sought an opportunity to consider my reasons for dismissing their application and to then make submissions on the question of costs. Accordingly, I ordered that the parties file written submissions and indicated my intention to decide the costs question ‘on the papers’.

1. Having considered the parties’ submissions, for the reasons set out below, I have decided that the costs of and incidental to the plaintiffs’ amended summons dated 19 November 2020 should be costs in the cause.

Plaintiffs’ submissions

1. The plaintiffs submitted that, “it is the practice of this Honourable Court in relation to a plaintiff who is unsuccessful in relation to a summary judgment application to have costs as costs in the cause unless the plaintiff had no reasonable chance of getting judgment such that the application ought never have been made.” 

1. On the question of whether the application ought to have been made, the plaintiffs submit that:

(a)   the first to fourth defendants do not dispute the debt at the core of the dispute between the parties;

(b)  the first to fourth defendants do not dispute that they provided their properties as security to repay the loan to the plaintiffs; and

(c)   the Court’s reasons reveal that the final determination of the summary judgment application was finely balanced and involved, in the alternative, the exercise of the Court’s discretion to refer the dispute to a full hearing.

1. In addition the plaintiffs submit that in exercising its discretion to award costs, the Court should have regard to the fact that the first to fourth defendants are indebted to the plaintiffs and have chosen not to repay them. 

1. In support of their submissions the plaintiffs drew my attention to Derham AsJ’s useful review of the authorities in Towercom Pty Ltd v Fahour (No 4) (‘Towercom’).[1]

   [1][2013] VSC 585 (‘Towercom’).

First to fourth defendants’ submissions

1. The first to fourth defendants seek an order that the plaintiffs pay their costs of and incidental to the summary judgment application.

1. The first to fourth defendants submit that:

(a)   when a plaintiff’s summary judgment application is dismissed, costs are awarded to the defendant only in circumstances when the plaintiff should not have brought the application;[2] 

[2]Whitehall Holdings Pty Ltd v Custom Credit Corporation Ltd (Supreme Court of Western Australia, Ipp, Pigeon and Owen JJ, 19 June 1992).

(b)  generally the usual costs order would be an order for costs in the cause;[3]

[3]Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21.

(c)   the plaintiffs have been wholly unsuccessful in their application;

(d)  the first to fourth defendants have not engaged in conduct that would weigh against the exercise of the Court’s discretion to award them costs;

(e)   the application for summary judgment was brought and continued in circumstances where there was a real factual dispute as to applicable law and jurisdiction covering the parties’ 2018 agreement; and

(f)    the plaintiffs’ application for summary judgment had no prospect of success especially in light of the ‘high bar imposed for the grant of summary judgment’ and should have been withdrawn after the first to fourth defendants filed their materials opposing the application.

Applicable principles and analysis

1. In Towercom,[4] Derham AsJ, after reviewing the authorities dealing with the question of costs orders following an unsuccessful summary judgment application, concluded that:[5]

The notes to Williams and the cases reveal a tension between the existence of a practice of making a ‘usual order’ that costs be in the cause and there being no such practice.  The principles referred to above … confirm that there is no ‘rule’ of that kind and that, at best, the statements in Dawson v Watson and Harry Smith Car Sales are practices or guidelines.  Those decisions put the decision as turning on whether the applicant for summary judgment should have known there was no reasonable chance of success.  If that is the case, it is clearly right that costs should not be made in the cause but should follow the event. 

It must, however, be steadily borne in mind that the discretion is not confined by any practice and where the circumstances do not neatly fit either ‘pole position’ exemplified in Dawson v Watson, on the one hand, and Harry Smith Car Sales, on the other, the appropriate starting point is to approach the exercise of the discretion in accordance with the settled practice of costs following the event.

For example, in some cases it may not have been so clear to the applicant that there was no real chance of success (although it might ultimately be clear after argument), in which case an order that the costs be in the proceeding (and follow the event at trial) may be appropriate.  In other cases, there may be circumstances that point against making an order that leaves the costs to follow the event at trial.  Whichever is appropriate turns on all the circumstances.  There cannot be any better guide than that.

[4][2013] VSC 585, [6]-[15].

[5]Ibid [16]-[18].

1. In this case, while I have made no findings, it appears that the fact that the plaintiffs paid sums of money to the first and second defendants is not seriously disputed.[6]  Nor is the fact that the first and second defendants offered their real property as security for repayment of part of the money.  What is clearly in dispute however is whether, by the terms of the 2018 agreement, the parties chose the Chinese law and jurisdiction as applicable to any dispute under the agreement. 

   [6]While the first and second defendants have made assertions about whether the money paid to them by the plaintiffs was in fact a loan and about the circumstances in which the first to fourth defendants signed the 2018 agreement, none of these assertions were particularised or seriously argued on the summary judgement application.

1. There is some force in the first to fourth defendants’ submission that once they filed their materials in opposition to the plaintiffs’ amended summons (including the alternative translation of the 2018 agreement terms), it should have been obvious to the plaintiffs that there was a genuine factual dispute concerning the law applicable to the parties’ dispute. Conversely, having read the defendants’ written submissions, the plaintiffs were entitled to be unclear about whether the first to fourth defendants continued to claim that the parties had chosen the Chinese courts as the appropriate jurisdiction.

1. I am not satisfied that the fact that the plaintiffs paid sums to the first and second defendants that have not been repaid is something I should give weight to in deciding the question of the costs of the summary judgment application.

1. If the first to fourth defendants are ultimately successful in defending the plaintiffs’ substantive application, they are likely to have costs, including the costs of the plaintiff’s unsuccessful summary judgment application, awarded in their favour. If the plaintiffs are ultimately successful they will likely receive the benefit of a costs order.

1. Having regard to all the circumstances of this case I will order that the costs of and incidental to the plaintiffs’ summary judgment application be costs in the cause.

SCHEDULE OF PARTIES

S ECI 2020 04101
BETWEEN:
ZHILONG YANG	First Plaintiff
MEILING ZHANG	Second Plaintiff
- v -
JUN YUE	First Defendant
YUN HU	Second Defendant
QIAOXI YU	Third Defendant
JIN XIN AUSTRALIA PTY LTD (ACN 133 695 987)	Fourth Defendant
REGISTRAR OF TITLES	Fifth Defendant