Zhou v Xie
[2020] NSWSC 1367
•07 October 2020
Supreme Court
New South Wales
Medium Neutral Citation: Zhou v Xie [2020] NSWSC 1367 Hearing dates: 07 October 2020 Date of orders: 07 October 2020 Decision date: 07 October 2020 Jurisdiction: Equity - Commercial List Before: Stevenson J Decision: Proceedings dismissed; freezing order dissolved; indemnity costs order refused; gross sum costs order refused
Catchwords: CIVIL PRACTICE – no appearance by plaintiff at final hearing – proceedings dismissed – freezing order dissolved
COSTS – offer of compromise – whether defendant should have indemnity costs from date of that offer
COSTS – whether gross sum costs order should be made
Legislation Cited: Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rule 2005 (NSW)
Cases Cited: Barakat Bazdarova [2012] NSWCA 140
Fabre v Lui (No 2) [2015] NSWCA 312
Fyna Foods Australia Pty Ltd v Cobannah Holdings Pty Ltd (No 2) [2004] FCA 1212
Hancock v Arnold (No 2) [2009] NSWCA 19
Shorten v David Hurst Constructions Pty Ltd [2008] NSWSC 609
Category: Principal judgment Parties: Qiyun Zhou (Plaintiff)
Xiongming Xie (Defendant)Representation: Counsel:
Solicitors:
M Pringle (Defendant)
McAneny Lawyers (Defendant)
File Number(s): 2018/366801
EX TEMPORE JUDGMENT (REVISED)
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The plaintiff, Mr Qiyun Zhou, was part of a "casino junket group" that organised trips to Australian casinos, including The Star Casino in Sydney, for wealthy Chinese nationals. The defendant, Mr Xiongming Xie, assisted Mr Zhou in making those arrangements.
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Both Mr Zhou and Mr Xie operated gambling accounts at The Star Casino and both appear to have been active in gambling in their own right.
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Mr Zhou claims that on 6 March 2016, he loaned Mr Xie $3.1 million by transferring to Mr Xie's casino account gaming chips with the face value of $3.1 million.
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Mr Xie accepts on 6 March 2016 he executed a "loan agreement" recording two proposed loans to him totalling $3.1 million from an entity described, according to its English translation, as "Chinatown Zhou Qiyun".
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Mr Xie also accepts that he received $1.5 million from one Juiming "Tom" Zhou, a person who was evidently known as "Mr Chinatown". A newspaper report suggests Mr Juiming Zhou has since been deported to China.
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An entity known as Chinatown Entertainment Group Pty Ltd obtained a judgment against Mr Xie for some $4.2 million on 16 August 2016. Mr Xie says that that amount has been repaid.
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Mr Xie denies that he borrowed any money from Mr Qiyun Zhou.
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On 26 November 2019 Mr Zhou obtained a freezing order preventing Mr Xie from dealing with some shares and the proceeds of sale of a property at Hunters Hill. On 11 December 2019 that freezing order was extended until further order.
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Until May of this year, Mr Zhou appeared actively to be involved in these proceedings. His most recent affidavits were affirmed in May 2020, evidently in Port Vila in Vanuatu.
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On 22 July 2020, Mr Zhou's solicitor, Mr Qi Sun served on Mr Zhou a Notice of Intention to File a Notice of Ceasing to Act. On 29 July 2020 Mr Sun filed a Notice of Ceasing to Act. In that notice he names the last residential address known to him for Mr Zhou as a nominated address in Wuhan, China.
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On 7 August 2020, Hammerschlag J set the matter down for a two day hearing commencing today. His Honour made the usual order for hearing and directed the defendant to notify the plaintiff's previous solicitor of the hearing that was in three days. That has been done.
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On 25 September 2020, Mr Zhou’s former solicitor, Mr Sun, provided to my tipstaff the last email address of Mr Zhou known to him. The solicitor told my tipstaff that he had not been able to contact Mr Zhou "for a long time".
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On 2 October 2020, and again yesterday, my tipstaff sent an email to Mr Zhou at that email address notifying him of the hearing date and inquiring as to whether he proposed to participate in the hearing. My tipstaff received no response to either of those emails.
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Mr Zhou has not served any submissions or taken any other step in compliance with the usual order for hearing or the practice note.
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I have been provided with a court book which was prepared by Mr Xie's legal advisors and I am grateful to them for doing that.
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Ms Pringle of counsel appears for Mr Xie and has provided written submissions, for which I am also grateful.
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Mr Zhou was called outside the Court a few moments ago. There has been no appearance.
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In those circumstances I order that the proceedings be dismissed with costs.
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I order that the freezing order made on 26 November 2019 and extended on 11 December 2019 be set aside.
Addendum
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Ms Pringle, on behalf of Mr Xie, sought an order for indemnity costs based upon an offer of compromise sent by her instructor to Mr Zhou's solicitor on 23 March 2020 pursuant to Uniform Civil Procedure Rule 2005 (NSW) r 20.26.
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Mr Pringle caused her instructing solicitor to send to my Associate a copy of the offer of compromise after I gave the above reasons.
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In that offer of compromise, Mr Xie offered to settle the proceedings on the basis that Mr Zhou discontinue the proceedings, the freezing order be withdrawn, Mr Zhou pay his own costs and that Mr Zhou pay Mr Xie’s costs.
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As Mr Xie has achieved a result “no less favourable” than the offer, he is entitled to indemnity costs from the day after the offer, “unless the court orders otherwise”: UCPR r 42.14.
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It is not necessary that there be “exceptional circumstances” before the court “orders otherwise”. [1]
1. Eg Barakat Bazdarova [2012] NSWCA 140 at [42]-[49] (Tobias AJA, Bathurst CJ and Whealy JA agreeing).
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One reason to “order otherwise” is that the unaccepted offer does not represent a genuine compromise. [2] That is the case here. The terms of the offer included Mr Zhou filing a notice of discontinuance, paying his own costs and paying Mr Xie’s costs. Mr Xie’s offer in effect invited Mr Zhou to capitulate. [3] An offer such as this involves no compromise at all. [4] I see it as a case where I should “order otherwise” and refuse to order indemnity costs.
2. Hancock v Arnold (No 2) [2009] NSWCA 19 at [23]; Fabre v Lui (No 2) [2015] NSWCA 312 at [6].
3. Fyna Foods Australia Pty Ltd v Cobannah Holdings Pty Ltd (No 2) [2004] FCA 1212.
4. Shorten v David Hurst Constructions Pty Ltd [2008] NSWSC 609 at [6].
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Ms Pringle also sought an order that I make a gross sum costs order under s 98(4) of the Civil Procedure Act2005 (NSW). The evidence relied by Ms Pringle compromised a brief affidavit from her instructor setting out, at a very high level, and without revelation of the underlying documents (for example tax invoices and the like), the actual costs to be charged to Mr Xie. That evidence does not provide a satisfactory basis on which to make a gross sum costs order, assuming this to be a case where such an order would in any event be made.
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Endnotes
Decision last updated: 07 October 2020
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