Zhang & Liu Investment Pty Ltd v Nando's Australia Pty Ltd
[2023] VSC 214
•27 April 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2021 03517
BETWEEN:
| ZHANG & LIU INVESTMENT PTY LTD (ACN 149 856 799) | Plaintiff/Defendant by Counterclaim |
| v | |
| NANDO’S AUSTRALIA PTY LTD (ACN 079 066 407) | Defendant/Plaintiff by Counterclaim |
| JIANG ZHANG | Second Defendant by Counterclaim |
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JUDICIAL REGISTRAR: | Englefield JR |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 27 April 2023 |
CASE MAY BE CITED AS: | Zhang & Liu Investment Pty Ltd v Nando’s Australia Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2023] VSC 214 |
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COSTS – Ords 63, 67 of the Supreme Court (General Civil Procedure Rules) 2015 (Vic) – The costs of an oral examination of a judgment debtor for the purposes of enforcing judgment – Where gross sum or fixed costs orders made - Whether costs of the oral examination reasonable – Costs of the costs dispute - s 24(1) of the Supreme Court Act 1986 (Vic) – ss 3, 9, 11, 16, 24 of the Civil Procedure Act 2010 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff/Defendant by Counterclaim | Access Law | |
| For the Defendant/Plaintiff by Counterclaim | Norton Rose Fulbright Australia |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Order 67 Examinations Generally................................................................................................... 3
Orders for Fixed Costs Principles................................................................................................... 5
Quantum of Costs.............................................................................................................................. 6
A:..... Preparation of Court Documentation............................................................................... 6
Counsel fees to draft/settle documents and to advise in conference................................... 7
B...... Review of the documents produced by the judgment debtors..................................... 8
C...... Letters & Attendances to/from the Supreme Court...................................................... 8
D...... Briefs, conferences & miscellaneous correspondence to counsel................................. 9
E...... Letters and attendances to/ from Nandos Australia Pty Ltd (judgment creditor). 10
F...... Appearance before Judicial Registrar Englefield on 9 August 2022.......................... 11
Loading of 10%............................................................................................................................ 11
Civil Procedure Act.......................................................................................................................... 12
Costs of this Costs Determination................................................................................................ 13
Conclusion......................................................................................................................................... 14
JUDICIAL REGISTRAR:
Introduction
This ruling deals with a small aspect of a larger proceeding that was commenced by a franchisee against the franchisor for various relief connected to the franchise agreement and surrounding transactions. The franchisor counterclaimed.
By Orders made on 21 March 2022, the franchisee, who is the plaintiff/first defendant by counterclaim and the second defendant by counterclaim (collectively, ‘judgment debtors’) were ordered to pay the franchisor, who is the defendant/plaintiff by counterclaim (‘judgment creditor’) a total of $280,052.57, pursuant to certain paragraphs of the counterclaim (‘judgment’). The remaining proceeding continues.[1]
[1]After various interlocutory disputes, on 19 April 2023, after hearing an appeal against the summary dismissal of various parts of the judgment debtors pleading, a process for an application by the first judgment debtor to amend its pleadings was set out by the Court: Zhang & Liu Investment Pty Ltd v Nando’s Australia Pty Ltd [2023] VSC 199.
Ordinarily, enforcement of a judgment occurs after a proceeding is ended. However, in this case, as set-off is unavailable to the judgment debtors under the franchise agreement, the judgment is enforceable even while the remaining proceeding continues.
Pursuant to Orders made on 22 June 2022 (‘order for examination’), the judgment debtors provided production of documents and submitted to oral examination under Order 67 of the Supreme Court (General Civil Procedure Rules) 2015 (Vic) (‘Rules’) on 9 August 2022.[2] Some further documents were provided after the oral examination by consent. The Order 67 process was complete prior to 26 August 2022.
[2]The first judgment debtor is a corporation, its sole director is the second judgment debtor, who was examined in that capacity for the first judgment debtor and personally as the second judgment debtor pursuant to Rule 67.03 of the Rules.
The parties were unable to reach agreement as to the costs of the Order 67 process and sought to be heard after exchange of material.
Due to the concern of the Court that the costs of the dispute over costs could exceed the amount in issue, orders were made on 6 September 2022 (‘Liability Order’), for the filing of submissions, restricted solely to the question of what orders for payment of costs ought be made in the Order 67 process, not as to the quantum of costs and that, unless necessary, the judgment creditor will not be required to make responding submissions. These orders provided that the determination of the costs liability be determined ‘on the papers’. The ‘Other Matters’ section of these orders noted that thereafter, the costs will be fixed, after production of further and distinct material.
Orders were made on 19 October 2022 (‘Quantum Order’), after submissions from the parties, for the judgment debtors to pay the judgment creditor’s reasonable and proportionate costs of the Order 67 process, except for the costs of a particular affidavit. The Quantum Order, after determining liability, set out a process of exchange of material and a determination on the papers of the quantum of the judgment creditor’s costs. Pursuant to the Quantum Order, the judgment creditor filed an itemised list of costs that seeks a total of $50,793.32 for the costs of the Order 67 examination. Pursuant to the Quantum Order, the judgment debtors filed an objection. This ruling is the determination provided for by the Quantum Orders.
The Order 67 examination itself was a straightforward process. The order for examination, which sets out the documents sought and questions to be asked, was essentially drafted by my chambers. Documents were produced. The examination took around two hours, extended due to a genuine struggle with language and technology. The patience and clarity of the barrister who appeared for the judgment creditor, enabled a fair and modestly fruitful examination. Further documents were required, due to misunderstanding rather than resistance. By consent, an informal process of further disclosure of documents followed the hearing, which was adhere to by the parties. Such a process could not produce party/party legal costs of over $50,000.00.
After considering the cost quantum material submitted by the parties, for the following reasons, I consider that the reasonable and proportionate party/party costs of this examination ought be fixed at $13,976.08. Subject to objection by any party, I deal also the costs of determining these costs, to avoid further disputation over ever decreasing sums, by ordering each side bear their own costs of this costs dispute, for reasons explained below.
Order 67 Examinations Generally
An Order 67 examination has a confined purpose. By this process, the Court exercises its substantial powers over persons and property to bring a judgment debtor into Court to be examined where such examination is necessary for the enforcement of a judgment. For example, an examination may be required to establish things useful to enforcement such as location of chattels, whether share transfers have occurred or the identity of a suitable garnishee. It is not an automatic step in enforcement. It is not acceptable to seek an examination under Order 67 for reasons other than a genuine need to identify financial means for the purposes of enforcing judgment.[3] Even then, it is a last resort.[4]
[3]McCormack v National Australia Bank Ltd (1992) 35 FCR 303 per Davies, Neaves and Miles JJ, jointly (‘McCormack’).
[4]Martinek v Evans (2004) 211 ALR 651 at [18] per Gray J.
The Order 67 process incurs costs and may have limited utility, yet it imposes serious sanction for non-attendance. If attendance occurs, then the judgment debtor undergoes ‘an extraordinary power of inquisitorial nature’.[5] These are further reasons why such a process ought only be invoked in appropriate cases, where the examination has some prospect of identifying means of satisfying judgment and all alternatives have been exhausted.
[5]McCormack (n 3) at [19] citing with approval Lockhart J. in Re Abrahams; ex parte Thomas (1985) 9 FCR 232 at 238-9.
Order 67 examinations may be becoming rarer. Judgment creditors now have extensive publicly searchable databases at their disposal. Alternatively, full financial disclosure may have been made at the outset of a commercial relationship, by way of credit checking, direct security over assets or secured personal guarantees. In these ways, the modern judgment creditor has better, quicker, cheaper options to identify financial means, some of which were unknown to the law prior to the invention of the internet. As stated, it is not acceptable to apply for an Order 67 examination until all other means of finding income or assets have been utilised.[6]
[6]Ibid.
Further, where the judgment debtor is an individual, a judgment creditor has the option, in appropriate circumstances, to issue a bankruptcy notice under s 40 of the Bankruptcy Act 1966 (Cth). A bankruptcy notice puts the onus on the judgment debtor to pay, negotiate or become a bankrupt. If the bankruptcy notice is unsatisfied, there is a process to identify and seize assets and income, as well as an examination process under the Bankruptcy Act1966 (Cth). By contrast, the Order 67 process merely enquires as to the judgment debtor’s financial means.
Alternatively, where the judgment debtor is a corporation, a judgment creditor has the option, in appropriate circumstances, to serve a statutory demand under s 495E of the Corporations Act 2001 (Cth). This requires the company to pay the amount of the debt, or to secure or compound to that amount to the judgment creditor’s reasonable satisfaction, within 21 days of service.[7]
[7]As to the difficulties in setting aside a statutory demand regarding a judgment debt see Chapel of Angels Pty Ltd v Hennessy [2021] FCA 875, and surrounding litigation.
It may be difficult to quantify, but another limiting factor on the frequency of applications for oral examination under Order 67, is the encapsulated by the expression ‘don’t throw good money after bad.’ This expression is said to be derived from a 19th century caution against spending money in an attempt to recover money from someone who has already defaulted on a loan.[8] That is, unless an oral examination identifies previously unknown means of satisfying a judgment debt, a judgment creditor may simply be further out of pocket by the end of the examination process. This is common sense. It also links to the obligation imposed by the Civil Procedure Act 2010 (Vic) (‘CPA’), not to make any claim in a civil proceeding that does not have a proper basis, among other obligations.[9]
[8] accessed 31 March 2023.
[9]Civil Procedure Act (2010) (Vic) (‘CPA’) ss 3, 11, 16 and 18.
Orders for Fixed Costs Principles
Having determined the judgment debtors’ liability for costs of the examination, I then ordered an exchange of material on quantum as a preliminary step to making a fixed (gross) sum costs order,[10] to avoid the delay, costs and ‘aggravation’ of the taxation process in the Costs Court.[11] This was also intended to avoid the risk that a dispute over the quantum of the costs of the oral examination in the Costs Court could become ‘satellite’ litigation around what is already ‘satellite’ litigation to the remaining proceeding.[12] Further, it seemed at the time that there was a risk that costs of a dispute in the Costs Court might match or exceed the costs of the examination.
[10]Rule 63.07 of the rules.
[11]LexisNexis, Civil Procedure Victoria, vol 1 (online at 30 March 2023) [63.07.15]; Ireland v Retallack (No 2) [2011] NSWSC 1096 per Pembroke J.
[12]Expense Reduction Analysts Group Pty Ltd & Ors v Armstrong Strategies Management and Marketing Pty Ltd & Ors (2013) 250 CLR 303 at [59] per French CJ, Kiefel, Bell, Gageler and Keane JJ.
The power to award a fixed sum costs amount is both expressly included in the Rules of Court and falls within the general discretion to order costs in s 24(1) of the Supreme Court Act 1986 (Vic) .[13] No party appealed the Quantum Orders, which provided for the making of orders ‘on the papers’ fixing costs of the examination. This process was also foreshadowed in the Liability Orders.
[13]Rule 63.07(2)(c) of the Rules.
Fixing costs involves a ‘broad brush’ approach, rather than the item by item scrutiny required in a taxation of costs. However, it ought be ‘logical, fair and reasonable.’[14] The Quantum Orders set out a process of exchanging material prior to this determination on the papers.
[14]Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123 per Von Doussa J.
Often a fixed costs order involves a substantial discount, commonly in the range of 25 to 40 per cent.[15] This is intended to take into account the ‘inevitable’ reduction incurred in taxation and be fair to the payer. Further, the costs must be kept proportionate to the nature, complexity and importance of the case. Where necessary, judges take what might be described as control of excessive costs by way of orders fixing costs.[16] The need for such control only became apparent after the judgment creditor’s itemised list of costs was filed and served, however the quantum of the judgment creditor’s claim retrospectively justifies the decision to fix its costs of this procedure.
[15]Gino Dal Pont, Law of Costs (LexisNexis Butterworths, 4th ed, 2018) [15.21].
[16]Ibid at [15.21] Canvas Graphics Pty Ltd v Kodak (Australasia) Pty Ltd (FCA, O'Loughlin J, 23 January 1998, unreported) at 24-5 where O’Loughlin J remarked that as the case involved a relatively basic cause of action, it was 'necessary to keep a firm control' on costs, which should not be 'permitted to explode as they obviously have done in this case': at 25), as well as Bitek Pty Ltd v IConnect Pty Ltd (2012) 290 ALR 288 at [18] per Kenny J.
Quantum of Costs
The judgment creditor’s itemised list of costs contains a number of headings, which I will adopt for clarity and consistency. The quantum of the judgment creditor’s costs of the oral examination under Order 67 is considered as party/party costs on a standard basis.
A: Preparation of Court Documentation
The first affidavit in support affirmed 18 May 2022 was insufficient to establish the factual basis for making an order under Order 67 and will be disallowed. The judgment debtors object to this cost as they say this affidavit was not in support of the summons, however the unissued summons was before the Court. The application for orders under Order 67 was considered ‘on the papers’ and ex parte, and once granted, the summons was filed.
The second affidavit in support affirmed 9 June 2022 was prepared after specific questions were raised by the Court regarding the exercise of the Court’s discretion to order an examination under Order 67. The total costs of this affidavit of $1,786.10 (Items 2-6) is excessive. The judgment debtors object on the basis that this cost is not reasonable. They say that this affidavit reproduces significant text from the judgment and correspondence contributing to over 14 folios of text. Further, they question the need to prepare such a detailed affidavit when the order made by Associate Justice Efthim would have been sufficient and when the transcript and correspondence referred to are annexed to the affidavit. I agree. I add that the issues raised by the Court were not fully addressed by this affidavit. I will allow only two hours at the solicitor’s rate of $430.00 per hour, plus 30 minutes of clerical time at $164.50 per hour, for the preparation of this affidavit. This amounts to $942.25.
I will allow one hour for engrossing the order will, that is $430.00. The form of order originally provided by the judgement creditor had a number of deficiencies. It had insufficient clarity as to the questions to be asked or the documents to be produced, the penal notice was incorrect and documents were to be produced on the day of examination rather than in advance. The Court sent a draft order to the judgment creditor, with blanks for completion, so that the process could be conducted in a prompt, cost effective manner.
Engrossing the index of documents at $63.50 will be allowed, as will the fee on the summons of $1,866.70 and the engrossing of the appearance form at $12.70.
Counsel fees to draft/settle documents and to advise in conference
The first two items dated 18 and 19 April 2022 relates to costs submissions, but there was no costs issue in this application at that time. Indeed, the first approach for an ex parte hearing of an application for an order for examination under Order 67 was made by email on 29 April 2022 to a judge’s associate and only subsequently referred to me. These two items are disallowed.
I will allow only one hour of counsel’s time giving advice on an email sent to the judgment debtors’ solicitors and settling the second affidavit in support. The solicitors were given direction by the Court as to the form of the summons, when to file it and the form of the order. The criticism of the second affidavit above applies equally to counsel’s time spent on settling it.
Counsel’s submissions as to the necessity of the order were not provided to the Court, although an opportunity for submissions was offered and accepted by the judgment creditor. This item is disallowed. In addition, this item includes for a second time the costs of advice on amending the summons and settling the second affidavit in support. The judgment debtors observe that no double counting ought occur and propose that 1.3 hours be allowed for the submissions. I accept that objection, but as the submissions were not filed, no allowance will be made.
B. Review of the documents produced by the judgment debtors
A total of 641 pages of documents were produced by the judgment debtors prior to the examination. For example, some bank account statements occupied more than 30 pages and one annual tax return is 16 pages. The further disclosure of documents after the examination resulted in a further 190 pages. The judgment creditor seeks $19,085.30 in costs for considering these documents at the following rates, assuming two folios per page for the first two rates:
(a) peruse one third of the documents ($21.40 per folio or a total of $11,855.60);
(b) scan one third of the documents ($8.70 per folio or a total of $4,819.80); and
(c) exam one third of the documents ($8.70 per page or a total of $2,409.90).
The judgment debtors say this is exorbitant in amount, disproportionate, not reasonably claimed, overstated and observe that some documents would be known to the judgment creditors. They say a reasonable time basis should be applied and suggest a one and a half to two days of solicitor’s time. These documents were relatively self-explanatory and not particularly central to the question of identifying financial means unknown to the judgment creditor against which to execute judgment. I accept the objections and will allow one and half days of solicitor’s time to consider these documents, or $5,160.00.
Engrossing the list of documents produced by the judgment debtor on 19 August 2022 (informal production) – 3 folios or a total of $38.10, is allowed.
C. Letters & Attendances to/from the Supreme Court
The judgment creditors seek an award of costs under this heading of $2,031.60 from the judgment debtors. Yet, as can be seen from the itemised list of costs, they exchanged ten letters and received 12 emails, as well as spending an hour of solicitor’s time and two hours of clerical time on the summons. Most of this is work of their own making. Their initial application was in the wrong form and had insufficient material to warrant making the order. As noted above, my chambers essentially drafted the order. These attendances and communications with the Court arose in the main as a response to general procedural guidance or calls for further material via email from the Court. The alternative to such correspondence was for the Court to conduct an ex parte hearing on the initiating documents, at greater expense to all. I will allow half an hour of solicitor’s time for corresponding with the Court, or $215.00.
It is noted that the judgment debtors object to these claims as excessive, some clerical attendances are charged at a higher rate, some are duplications and some are not recoverable on a party/party basis, all under the cover of a general objection that in the absence of the file it is difficult to object other than in general. The judgment debtors make a valid point about the absence of the file, however providing access to the file is not warranted. Such a step is inimical to a gross sum costs determination.
D. Briefs, conferences & miscellaneous correspondence to counsel.
An undated brief to a first counsel to draft and settle documents and to advise in conference at $381.50 is halved to $190.75. The work done pursuant to this brief is criticised above. A competent solicitor can draft a summons for oral examination and a proposed order. The Court called for material in support with specific reference to the relevant principles regarding when such examinations will be ordered and the Court provided a further draft order.
An undated brief to a second counsel to appear at the examination will be allowed at $381.50. The judgment debtors object to the duplication, question the need for two counsel and call for the production of the briefs. As the solicitor’s costs of preparing the first brief is reduced, the brief need not be produced. Such a step is inimical to a gross sum costs determination.
The next item seeks the costs of three hours of solicitor attendances on two counsel between 19 May and 19 October 2022, being $1,320.00. The judgment debtors call for the file notes. The costs element of the Order 67 examination is already overburdened, I will not order production of the solicitors’ file or any part of it. I am satisfied that there is simply no need for such conferences for this application. As stated, an examination under Order 67 is a straightforward process. The sole issue is whether there is financial means to satisfy judgment. The questions are set out in the order and the documents were available in advance of the hearing. I will allow half an hour for conferring with a single counsel who holds the brief to appear at the oral examination, that is $215.00.
On the same basis, three hours of clerical attendances on the two barristers and ten short letters to two barristers cannot be sustained as reasonable or necessary. However, some arrangements for appearances, instructions, provision of the documents and other clerical arrangements for the single barrister who appeared may be allowed. I will allow half an hour or $164.50 and five short letters at $43.00 per letter.
E. Letters and attendances to/ from Nandos Australia Pty Ltd (judgment creditor)
Under this heading, the judgment creditor’s solicitors claim the costs of five letters of advice on the Order 67 examination, then 12 letters seeking instructions, five hours of conferences, as well as eight hours of clerical time to schedule conferences and do ASIC searches. This cannot be realistic. Order 67 occupies only two pages in the authorised version of the Rules. It is impossible to imagine how such a quantity of advice could be given on such a simple, short, straightforward process.
The sole reason for the examination was to aid in the enforcement of the judgment. This process was not part of the on-going or remaining proceeding. The time spent on the remaining proceeding is not recoverable in this application.[17]
[17]Rule 63.04 Rules.
The judgment debtors describe this aspect of the claim as excessive. I agree. I will allow one hour for obtaining instructions to apply for an order for examination under Order 67 and, if granted, to act in the examination. That is, $430.00.
F. Appearance before Judicial Registrar Englefield on 9 August 2022
The attendance of the solicitor at the examination to instruct was unnecessary and will be disallowed, as well reviewing the transcript. The solicitors cannot rely heavily on counsel in such a straightforward matter, then seek to charge professional fees for observing the oral examination. However, the transcript is necessary[18] and the transcript costs is allowed in full.
[18]Rule 67.06 of the Rules.
Counsel spent seven hours preparing, reviewing, making telephone calls to his instructor up to the day before the hearing, I will allow 3 hours preparation for the examination, particularly as there were documents to consider, that is $1,320.00.
Counsel charged three hours for preparing, appearing at the examination and a teleconference on 9 August 2022. This will be allowed in full. This allowance adds $1,320.00.
Thereafter, counsel spent another seven hours in conference, preparing notes and reviewing a draft letter. The judgment debtors object to these costs as solicitor/client costs not party/party costs. I agree. These costs are disallowed.
In their objection to this aspect of the claim, the judgment debtors noted the absence of counsel’s fee slips. By email dated 3 February 2023, the judgment creditor supplied four fee slips. Counsel who appeared at the hearing submitted one fee slip, which is replicated section F of the itemised list of costs, and dealt with in this section of this ruling. The other three fee slips, issued by another barrister, included the items set out in section A above and which are dealt with there.
Loading of 10%
The judgment debtors’ objection says:
“The maximum loading allowable is 15%. This applies to complex commercial matters, appeals and indemnity cost orders and where proceedings reach a trial stage of multiple hearing days.
The loading of 10% claimed is excessive and not reasonable, given the time period and work involved. Question whether any loading is reasonable. To otherwise allow minimal loading.”
The question of whether to allow any loading on an enforcement procedure is an interesting one. The costs of an enforcement proceeding are different to ordinarily litigation. In ordinarily litigation, one party or other succeeds[19] and ordinarily ‘costs follow the event,’ although, as always, costs are in the discretion of the Court. The Court’s enforcement role is more of an quasi-administrative function. Warrants are issued by this Court pursuant to the Rules of Court, but by the registry without judicial input or oversight. Pursuant to such warrants, property is seized, sold and judgments satisfied. Significant amounts are gathered for judgment creditors each year arising under this Court’s judgments and judgments of inferior Victorian Courts and Tribunals, other Australian Courts, certain arbitration awards and certain International Courts, where assets or income are located in Victoria. Costs are fixed amounts set out in the relevant regulations and added to the warrants. In this way, the process of enforcement is paid for in the first instance by judgment creditors, but they recover those costs if the warrant is satisfied. The administration of justice is advanced by this clear, simple process of accessing the assets or income of judgment debtors in satisfaction of judgments.
[19]Singular includes the plural.
In my view, it is not appropriate that a loading be allowed for acting in an enforcement process in this Court. It is not litigation that requires a high level of legal expertise, objectivity and specialised assistance to the client. In particular, an examination in aid of enforcement, which is confined only to identifying financial means to satisfy the judgment, either income or assets, is not litigation leading to a judgment, but a process in enforcement of judgments. I will not apply a loading.
Civil Procedure Act
As noted above, although an examination in aid of enforcement is self-evidently a step in enforcement, not in litigation leading to a judgment, the CPA applies. The obligation to keep the costs reasonable and proportionate to the complexity or importance of the issues in dispute under s 24 of the CPA applies on the judgment creditor and its solicitors. The solicitors’ obligation to keep costs reasonable and proportionate overrides their duty to their client, to the extent there is an inconsistency.[20] However, in light of the disallowances above, I will not reduce the costs payable to the judgment creditor further based on the manifest excessiveness of their claim.
[20]Yara Australia Pty Ltd v Oswal (2013) 41 VR 302; Bolitho v Banksia Securities Ltd (No 18) (remitter) [2021] VSC 666 at [1339].
Costs of this Costs Determination
The Court itself is required to further the overarching purpose of the CPA.[21] Leaving the costs of this cost determination silent will not aid the just, efficient, timely and cost-effective resolution of the real issues in dispute in this oral examination for the purposes of the enforcement of the judgment. Otherwise, once this ruling is handed down, if the parties are unable to reach a conclusion as to such costs, a further application regarding costs of this oral examination may ensue. Therefore, although I have no application for costs of this process before me, I will deal with these now, while affording an opportunity for hearing, if a party elects.
[21]Section 9 CPA.
Subject to any application by any party within 21 business days of the handing down of this ruling, I will order that each party bear their own costs of the application for costs of the oral examination. This conclusion may be explained by making two observations.
First, I observe that if the judgment debtors were to pay the judgment creditor’s costs of and an incidental to the Liability Order, these could not exceed $2,245.00.[22] The submissions were just six pages, including significant amounts of introductory and factual background material. The question was dealt with on the papers. The Court drafted the Quantum Order.
[22]That is, generously, one hour for the solicitor to brief counsel and file costs liability submissions and five hours for counsel to draft costs liability submissions.
Second, I observe that if, on the other hand, the judgment creditor was ordered to pay the judgment debtors’ costs of the objections to the judgment creditor’s itemised list of costs, these may be in the order of $2,285.00, or more.[23] The judgment creditor’s claim of over $50,000.00 was so excessive that it warranted the judgment debtors’ response of engaging a cost consultant to prepare and file objections. By this ruling the judgment creditor’s claim has been reduced by around 72% or $36,817.24. The judgment creditors are arguably the unsuccessful party on quantum and therefore, the costs of the determination of this aspect of this dispute perhaps should ‘follow the event.’ I have a discretion as to the costs, which must be exercised judicially. In my view, justice demands that the parties bear their own costs of this costs dispute.
[23]That is, 5 hours for preparing objections at $457.00 per hour.
Conclusion
Ordinarily, an Order 67 examination arises well after the heat of battle has receded. Here, the parties remain deep in the trenches. The interlocutory skirmishes in this proceeding have been protracted, numerous and costly. This proceeding, commenced 27 September 2021, is still in its preliminary stages. The parties are on a long and winding road. The issue of the costs of the Order 67 examination is a blind alley off that circuitous path. It is hoped that the parties’ focus will now return to issues of substance in the remaining proceeding.
SCHEDULE OF PARTIES
| S ECI 2021 03517 | |
| BETWEEN: | |
| ZHANG & LIU INVESTMENT PTY LTD (ACN 149 856 799) | Plaintiff/Defendant by Counterclaim |
| - v - | |
| NANDO’S AUSTRALIA PTY LTD (ACN 079 066 407) | First Defendant/Plaintiff by Counterclaim |
| JIANG ZHANG | Second Defendant by Counterclaim |
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