Yu v Yu (No 2)

[2021] NSWSC 26

Supreme Court

New South Wales

Medium Neutral Citation:

Yu v Yu (No 2) [2021] NSWSC 26

Hearing dates:

On the papers

Date of orders:

29 January 2021

Decision date:

29 January 2021

Jurisdiction:

Equity - Family Provision List

Before:

Williams J

Decision:

No variation to the costs order contained in order 4 of the orders made on 22 December 2020.

Catchwords:

COSTS – application for indemnity costs – whether respondent’s opposition to motion had no reasonable prospects of success – where grounds of arguments rejected at hearing were not clearly articulated prior to hearing – application dismissed

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98

Uniform Civil Procedure Rules 2005 (NSW), r 42.5

Cases Cited:

Colgate-Palmolive Pty Ltd v Cussons (1993) 46 FCR 225

Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34

Yu v Yu [2020] NSWSC 1904

Category:

Costs

Parties:

Kai Yu (Plaintiff/Cross-Defendant/Respondent)
Ying-Hsun Yu (First Defendant/First Cross-Claimant/First Applicant)
Attorney General of New South Wales (Second Defendant)
Jau-Shinne Loue (Second Cross-Claimant/Second Applicant)

Representation:

Counsel:
Mr R Stoyef, solicitor (Plaintiff/Cross-Defendant/Respondent)
Ms N Obrart (First Defendant/First Cross-Claimant/First Applicant and Second Cross-Claimant/Second Applicant)
Dr C Mantziaris (Second Defendant)

Solicitors:
Robert Stoyef (Plaintiff/Cross-Defendant/Respondent)
David Kam & Co Solicitors (First Defendant/First Cross-Claimant/First Applicant and Second Cross-Claimant/Second Applicant)
NSW Crown Solicitor’s Office (Second Defendant)

File Number(s):

2015/190851

Publication restriction:

N/A

Judgment

1. On 22 December 2020, on the application of the first defendant/first cross-claimant and second cross-claimant (the Applicants), the Court made declarations and orders giving effect to a settlement agreement between the parties: Yu v Yu [2020] NSWSC 1904. The plaintiff (the Respondent) was wholly unsuccessful in opposing the motion for those declarations and orders. I indicated that I was not aware of any reason why he should not be ordered to pay the Applicants’ costs of the motion and the costs of the Attorney-General, who appeared at the hearing of the motion and made submissions to assist the Court. I made directions granting liberty to any party who contended for a different costs order to file and serve written submissions in support of the order for which he or she contended.

2. The Respondent did not serve submissions contending for any different costs order or opposing an order that he pay the costs of the Applicants and the Attorney-General.

3. The Attorney-General did not serve submissions contending for any different costs order.

4. The Applicants served written submissions contending for an order under s 98(1)(c) of the Civil Procedure Act 2005 (NSW) and r 42.5 of the Uniform Civil Procedure Rules 2005 (NSW) that the Respondent pay their costs of the motion on an indemnity basis or, alternatively, on an indemnity basis after 20 February 2020.

5. The Applicants submitted that an order for indemnity costs should be made because, from 20 February 2020, the Respondent should have known that his opposition to the motion had “no real prospects of success” and that he persisted in opposing the motion “without proper evidence to support [his] factual contentions or reasonably arguable law to support [his] legal contentions”.

6. The Applicants rely on a letter dated 20 February 2020 from their solicitor to the Respondent’s solicitor in relation to two matters that were in issue on the hearing of the motion. The letter set out the Applicants’ position in relation to those two issues, and stated that the Applicants considered it futile to engage with the Respondent about those issues because “the issues have been raised as devices to seek to depart from the Settlement Agreement rather than as genuine impediments to the operation of the Settlement Agreement”.

7. The letter of 20 February 2020 did not address other issues that were ultimately relevant to the determination of the motion.

8. The Applicants also refer to a further letter dated 13 November 2020 in which their solicitors questioned the relevance and admissibility of certain affidavits that the Respondent had indicated he would read at the hearing of the motion.

9. The Applicants also rely on several passages from the reasons for judgment published on 22 December 2020 disposing of the Respondent’s contentions raised at the hearing of the motion.

10. Acting unreasonably by prolonging litigation with no reasonable prospects of success is one circumstance that may warrant an order for indemnity costs: Colgate-Palmolive Pty Ltd v Cussons (1993) 46 FCR 225 at 233–234; Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34 at [89].

11. In my opinion, it cannot be said in this case that the Respondent knew from 20 February 2020, or prior to the hearing of the motion, that he had no reasonable prospects of successfully opposing the motion. Nor can it be said that he should have known this, except with the benefit of pure hindsight. The Respondent’s arguments in opposition to the Applicants’ motion failed. However, the grounds on which most of his arguments were rejected were not articulated by the Applicants clearly or, in some instances, at all, prior to the hearing of the motion. In those circumstances, it is not appropriate in my opinion to order the Respondent to pay the Applicants’ costs of the motion on an indemnity basis rather than on the usual, ordinary basis.

12. For those reasons I make the following order and notation:

1. Order that the first defendant/cross-claimant and second cross-claimant pay their own costs of the application for indemnity costs made by written submissions dated 28 January 2021.

2. Note that order 4 made on 22 December 2020 otherwise operates unconditionally from 29 January 2021.

**********

Decision last updated: 29 January 2021