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Texts Cited: Nil

Category: Principal judgment

Parties: Costi Cohen Pty Ltd (Plaintiff)
Yin Bo (Defendant)

Representation: Counsel:
Mr P Folino-Gallo (Plaintiff)
Mr P Reynolds (Defendant)
Solicitors:
Hitch Advisory (Plaintiff)
MLH Lawyers (Defendant)

File Number(s): 2024/356522

Publication restriction: Nil

JUDGMENT

1. On 12 September 2025, the Court delivered judgment (“Principal Judgment”) in these proceedings finding that Mr Bo was liable to Costi Cohen in the amount of $166,100 and ordered that the parties provide to the Court:

(a) orders giving effect to the judgment; and (b) any submissions on costs.

2. The parties provided competing orders and provided submissions on costs. Notwithstanding the form of the orders made on 12 September 2025, the parties agreed that the Court could resolve the question of the final orders to be made, including in relation to costs, on the papers.

3. Terms used in this judgment carry the same meaning as they did in the Principal Judgment.

Orders giving effect to the judgment

4. Each party agreed that to give effect to the judgment, at least, the following orders should be made:

(a) Judgment for the plaintiff against the defendant in the amount of $166,100; (b) Order that the defendant pay the plaintiff the amount of $17,137.94 on account of interest calculated in accordance with s. 100 of the Civil Procedure Act 2005 (NSW) for the period 14 June 2024 to 12 September 2025.

5. Mr Bo seeks a further order, namely a declaration pursuant to s.250 of the Australian Consumer Law (“ACL”) that clause 4.2(a) of the Agency Agreement is an unfair term. The plaintiff opposes the making of such an order. The plaintiff seeks an order dismissing Mr Bo’s cross claim.

6. As reflected in the Principal Judgment, Mr Bo ‘s positive defences, including his ‘unfair terms’ defence were repeated in a cross-claim. Mr Bo did not seek a declaration pursuant to s. 250 of the ACL as part of the relief claimed in his cross-claim.

7. The Agency Agreement is no longer on foot. The finding that clause 4.2(a) of the Agency Agreement was an unfair term binds only the parties to these proceedings. In those circumstances, I do not consider that there is utility in making the declaration sought by Mr Bo. Accordingly, the only orders I propose to make to reflect the Principal Judgment are those set out in paragraph 4 above together with an order dismissing the cross-claim.

Costs

8. The parties’ submissions raise three issues on the question of costs:

(a) Costi Cohen seeks an order that the costs of 8 October 2024 and 4 April 2025 be costs in the cause. Mr Bo has made no separate submissions in relation to these costs; (b) Costi Cohen seeks its costs of the proceedings on an ordinary basis up to 27 March 2025 and on an indemnity basis from 28 March 2025; (c) Mr Bo submits that costs of the proceedings should be apportioned such that Costi Cohen should only obtain its costs on an ordinary basis in relation to the quantum meruit issue, or alternatively, should only receive 30% of its costs of the proceedings (at most).

9. I will deal with Mr Bo’s ‘apportionment’ submissions first, then deal with Costi Cohen’s indemnity costs application. I will then deal with the costs of 8 October 2024 and 4 April 2025.

Apportionment

10. In summary, Mr Bo submits that the parties had mixed success in the proceedings and in particular submits that:

(a) The plaintiff failed in its principal contract claim because the defendant was successful in establishing that clause 4.2(a) of the Agency Agreement was an unfair term; (b) The defences which failed were alternative to the unfair terms defence and all directed towards the breach of contract claim and were not discrete and severable from the contract claim; (c) The plaintiff was unsuccessful on its conventional estoppel claim; (d) The plaintiff was successful on a discrete cause of action for quantum meruit; (e) Costs were incurred unnecessarily because of the plaintiff’s insistence that the defendant plead his statutory defences by way of cross claim.

11. Costi Cohen submits that it would not be appropriate to apportion costs in the manner advocated by Mr Bo or at all. In summary, it submits:

(a) That ordinarily costs follow the event and that is the starting position in the exercise of the Court’s discretion; (b) That the contract and conventional estoppel claims were not clearly dominant and separable such that an issue by issue costs order would be appropriate; (c) That it could not be said that the issues on which it was unsuccessful took up a significant part of the trial either by way of evidence or argument; (d) That the contract claim and the quantum meruit claim were not ‘severable’ in the sense required for costs apportionment but were alternative legal characterisations of the same factual matrix; (e) That Mr Bo’s submissions concerning the pleading of statutory defences in a cross claim is a collateral attack on the judgment of Newlinds SC DCJ on 5 May 2025 and the costs orders made on that occasion.

Consideration - Principles

12. The Court of Appeal in a number of decisions has addressed the circumstances in which it may be appropriate for the Court to apportion the costs of a successful party [1] . Recently, the Court of Appeal, in Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd (No 2) [2] , said the following (citations removed):

[18] The applicable principles were stated by this Court in Elite Protective Personnel Pty Ltd v Salmon (No 2) in the following terms:

6 Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which the appellant was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd.

7 As the appellants submit, the commencing position is that costs follow the event so that a successful party is entitled to costs. In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Ltd (No 2) . A similar approach is adopted in the Court of Appeal. If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick (No 2).

8 Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: New South Wales v Stanley per Hislop J (with whom Beazley JA and Tobias JJA agreed).

[19] These principles have subsequently been applied in many cases and were restated in Bostik Australia Pty Ltd v Liddiard (No 2).

[20] The phrase “dominant or separable” should not be applied as if it were a statutory test. It involves two concepts, each of which should be treated flexibly. Most cases will involve multiple issues and one expects a judgment to be structured accordingly. A number of issues may arise from a common factual basis, so that it is difficult to disentangle them. Further, disentanglement may work at different levels. One issue may be entirely separate from others, and thus truly separable. On the other hand, it may not be possible to state a fraction of the time taken in preparation, or presentation at trial, of that issue. For that purpose, it may not be sufficiently dominant to warrant separate treatment in relation to costs.

[21] The term “separate treatment” is itself imprecise. Such treatment may involve a separate costs order. For example, in a civil claim for damages, where liability is established but the claimed loss is not, separate orders may be made as to liability and damages. On the other hand, the distinction may not be so clear, but the court may be able to satisfy itself that the length of a trial would have been reduced by a significant proportion of the time and resources devoted to it had a particular matter not been raised. Again, a 10% reduction might suggest that the issue was not sufficiently dominant to warrant a variation of the usual order. In the case of an appeal which has been completed within a single day, some adjustment to the usual costs order would, in many cases, not be appropriate unless the issue were so clearly separable that the resources devoted to its preparation could readily be identified and allowed for. Often the exercise will require a degree of speculation, or explanation based on a reassessment of the parties’ preparation, which is either not warranted or is inappropriate. While accepting the importance of costs for the parties, the Court should be wary of encouraging satellite litigation with respect to the precise nature of a costs order. In Oikos Constructions Pty Ltd (t/as Lars Fischer Construction) v Ostin (No 2) a case discussed in relation to the costs of the trial, an issue which was treated as clearly separable, but involved a low proportion of the outcome on the appeal, did not lead to a reduction of the costs of the appeal, but, conversely, did affect the order for the costs of the trial.

[22] Furthermore, while a successful party may be deprived of costs, either in part or in whole for misconducting litigation, generally it would not be appropriate to deprive a successful party of costs of claims or defences which were not unreasonably maintained, even if not made good. Nor should the parties be discouraged from seeking settlement on the basis that adverse costs orders may be limited by the unsuccessful party winning some points but losing the game. Indeed, there is also a risk that there will be demands on the Court to resolve all issues, where that is not necessary to dispose of the proceedings, so that the unsuccessful party can seek to reduce the expected adverse costs order. Nor is it insignificant that the parties exchanged offers of compromise intended to dispose of the proceedings on a global basis.”

Application of principles to the proceedings.

13. Fundamentally, Costi Cohen’s claim was for recovery of $166,100 for services it provided to Mr Bo. It framed its claim as a claim in contract and in the alternative, quantum meruit. It’s reliance on conventional estoppel was defensive, in the sense that it was raised in reply in response to the various affirmative defences advanced by Mr Bo.

14. Mr Bo’s raised numerous defences:

(a) Uncertainty such that the Agency Agreement was void – this defence failed; (b) A failure by Costi Cohen to perform the Agency Agreement – this defence failed; (c) Unfair terms – this defence to the contract claim succeeded in relation to the contract claim; (d) Misleading and deceptive conduct – this defence failed; (e) Unconscionability – this defence failed; (f) A claim for relief under the Contracts Review Act 1980 (NSW) – this defence failed.

15. Contrary to Mr Bo’s submissions, the defences referred to in paragraph 14(d), (e), and (f) were not expressed as mere alternatives to his unfair terms defence. In his Amended Defence, each of those defences is pleaded as being “Further, or in the alternative...**”. That is, they were principally cumulative defences. Perhaps more significantly, contrary to Mr Bo’s submissions, the defences referred to in paragraph 14(d) and (e) above, were not only advanced as defences to Costi Cohen’s claim in contract. Rather, they were advanced as defences to Costi Cohen’s claims for relief in their entirety. [3]

16. Although Costi Cohen failed in its contract claim, it did so on a single issue, namely the finding that clause 4.2(a) of the Agency Agreement was an unfair term. I do not consider that it could properly be said that Costi Cohen unreasonably maintained its contract claim.

17. Further, the factual matrix relied upon by Costi Cohen for its quantum meruit claim, which succeeded, was largely co-extensive with that which formed the factual matrix relevant to its contract claim. In particular, that factual matrix included:

(a) The fact of the Agency Agreement, particularly the agreed fees; (b) The services performed pursuant to that agreement.

18. The factual matrix relied upon by Mr Bo for his unconscionability defence traversed much of the same material as that relied upon for each of the defences referred to in paragraph 14(c) and (d) above.

19. In these circumstances, I do not consider that the quantum meruit claim and contract claims brought by Costi Cohen are, on a factual basis, materially distinct or separable, including with respect to those defences which addressed both the contract and quantum meruit claims.

20. It is true that some of the positive defences raised by Mr Bo addressed only the contract claim, for example, his claim for relief under the Contracts Review Act. However, even then, factually, Mr Bo accepted in final submissions that he relied on much the same facts and arguments for his Contracts Review Act claim as he did for his unconscionability claim which (as noted above) in turn traversed matters relied on for other defences.

21. Adopting and adapting the Court of Appeal’s words in Michael Hill Jeweller, I do not consider it “appropriate to deprive [the] successful party [Costi Cohen] of costs of claims [the contract claim]..that were not unreasonably maintained, even if not made good”. The practical assessment of the proceedings is that Costi Cohen sought $166,100 from the defendant for services it rendered and it succeeded in its claim. Mr Bo raised numerous defences, some solely related to the contract claim, others to all of Costi Cohen’s claims and the factual matrix relevant to those defences largely overlapped. In those circumstances, for the Court to approach costs on an issue by issue basis would not be a fair exercise of discretion. It would require a degree of nit-picking of the various successes and failures of the parties in a way I consider would be inappropriate.

22. There is not a sufficient basis, in my view, to depart from the ‘commencing position’, namely that costs follow the event. In this regard, the ‘event’ referred to in UCPR r42.1 generally refers to the ‘practical result’ of the proceedings as a whole: Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2). [4]

23. Finally, in so far as Mr Bo relies on Costi Cohen’s ‘insistence’ that he file a cross-claim, his Honour Newlinds SC DCJ dealt with that issue on 5 May 2025 when dealing with Mr Bo’s application to file an amended defence. His Honour made costs orders based on the issues raised, including the need for a cross-claim. I see no reason to revisit that issue in the context of determining the appropriate costs orders.

Costi Cohen’s claim for indemnity costs

24. Costi Cohen seeks an order that Mr Bo pay its costs on an indemnity basis on and from 28 March 2025 and otherwise on an ordinary basis. It relies on an offer it made on 28 March 2025 to settle the proceedings which was not accepted. It relies on that offer in the context of earlier offers exchanged by the parties prior to the filing of the Statement of Claim and later offers post the filing of the claim.

25. Costi Cohen relies on the affidavit of Mr Timothy McGrath. That affidavit annexed correspondence containing the various offers made by the parties before and after commencement of the proceedings. The correspondence reveals the following:

(a) On 12 August 2024, Costi Cohen by its solicitor made an offer of $120,000 (plus GST) for payment of services rendered. The offer was open for three days. The letter contained no further details though it did identify that it would be relied upon for a claim for indemnity costs; (b) Mr Bo responded to that offer within one day, on 13 August 2024 with a counter-offer of $75,500 plus GST; (c) Costi Cohen’s solicitors responded on 14 August 2024 urging Mr Bo to offer $100,000 plus GST; (d) On 15 August 2024, Mr Bo indicated that the most he would offer was $75,500. (e) On 28 March 2025, Costi Cohen’s solicitors wrote to Mr Bo’s solicitors setting out the basis for a further offer. At that point, Mr Bo had served his evidence. Costi Cohen offered to settle the matter for $201,000 being an aggregate of $161,000 on account of unpaid commission, and $40,000 on account of costs pursuant to clause 13 of the Agency Agreement. The terms of the offer also required mutual releases, including in relation to the freezing order that had been previously made. The offer expressly referred to Calderbank principles. The offer was open for 14 days; (f) On 30 July 2025, Mr Bo, by his solicitor, made an offer to settle the proceedings for an inclusive amount of $120,000, and an agreement that each party pay their own legal costs and that Costi Cohen pay the costs ordered on 5 May 2025; (g) On 1 August 2025, Costi Cohen, by its solicitor, offered to resolve the proceedings for $215,000 comprising of $166,100 on account of commission and $48,900 said to be a portion of its costs. Payment of the settlement amount was to be made within 14 days.

26. In Michael Hill Jeweller, the Court of Appeal identified (in a non-exhaustive way) matters that are relevant to the Court’s exercise of discretion when addressing an application for indemnity costs. In the case before it, as in this case, the relevant offers were made by way of Calderbank letters. The Court said the following:

The offer did not comply with (and did not seek to invoke) the scheme for offers of compromise under the UCPR, r 20.26. Accordingly, under conventional principles, the appellant must satisfy the Court that it was unreasonable for the respondent to reject the offer, in order to justify a claim for costs on the indemnity basis from the day after the offer was made: see Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2). That principle flows from the fact that an application for indemnity costs involves a departure from the general rule that costs are to be assessed on the ordinary basis under UCPR, r 42.2.

[6] The Court in Miwa accepted six factors to be considered in determining whether the rejection of an offer was unreasonable:

12 In Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; 13 VR 435 the Court of Appeal (Warren CJ, Maxwell P and Harper AJA) identified the factors relevant to determining whether the rejection of an offer was unreasonable as including the following:

(a) the stage of the proceeding at which the offer was received;

(b) the time allowed to the offeree to consider the offer;

(c) the extent of the compromise offered;

(d) the offeree’s prospects of success, assessed as at the date of the offer;

(e) the clarity with which the terms of the offer were expressed;

(f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree’s rejecting it.”

27. Applying these matters to the present application for indemnity costs and to the offer relied upon by Costi Cohen, namely the offer of 28 March 2025 :

(a) As at 28 March 2025, Costi Cohen’s evidence in chief and Mr Bo’s evidence had been filed and served. An amended defence and a cross claim were served after the offer on 19 May 2025, and reply evidence was served by Costi Cohen on 10 July 2025; (b) The offer was open for 14 days which is half the amount of time provided for under r 20.26(5)(a) of the Uniform Civil Procedure Rules 2005 (NSW). Whilst prior to this time, Mr Bo showed an ability to respond to offers quickly, those offers were made before proceedings commenced and were made to Mr Bo personally (that is, not conveyed to a solicitor acting for him); (c) The offer was for $201,000 and was said to comprise:

(i) a principal sum of $161,000 on account of commission. At that point, the Statement of Claim sought an order in the amount of $161,100 for the claimed commission. I do not consider that the offer represented any material compromise to the amount claimed in the Statement of Claim at that point (even though it was later said, during the hearing of the proceedings, that the Statement of Claim included the wrong amount actually claimed); (ii) an amount of $40,000 on account of costs said to be “under clause 13 of the Agreement”. However, the letter did not identify what Costi Cohen’s costs were, nor is there any evidence in the affidavit of Mr McGrath identifying Costi Cohen’s costs at that point, or at any point;

(d) at the date of the offer, Mr Bo had not advanced his statutory defences. There is no evidence as to whether those defences were in the minds of Mr Bo or his legal advisors at that time. Having regard only to the matters raised on his defence as at the date of the offer, I do not consider his prospects were strong; (e) In my opinion the offer was expressed with reasonable clarity; (f) the offer did highlight that it would be relied upon for an application for indemnity costs.

28. Considering these matters overall, in my opinion, Costi Cohen has not established that it was unreasonable for Mr Bo not to accept the offer made in the letter of 28 March 2025. This is because, on the evidence, the offer required virtual capitulation. There was a de minimis compromise on the commission claimed by Costi Cohen in its Statement of Claim at that point ($100), and there was no indication of the extent (if beyond de minimis) of the compromise on account of costs. This is particularly relevant given the letter asserted an entitlement to the payment of costs on an indemnity basis pursuant to clause 13 of the Agency Agreement – in this regard, the Court rejected that clause 13 entitled Costi Cohen to recover costs on that basis. There is no basis for the Court to infer that any material compromise was being offered on costs. Accordingly, the Court cannot conclude that the offer represented a genuine compromise, or to put it another way, that it was unreasonable for Mr Bo to reject an offer that amounted, on the evidence, to require virtually full payment of his potential exposure at that time.

29. For these reasons, I am not prepared to exercise the Court’s discretion to award Costi Cohen indemnity costs from 28 March 2025.

Costs of 8 October 2024 and 4 April 2025

30. Costi Cohen seeks an order that the costs reserved on 8 October 2024 and 4 April 2025 be costs in the cause. Mr Bo has not indicated opposition to that course (as opposed to his general apportionment submissions).

31. On 8 October 2024 the Court made orders in relation to a Notice of Motion relating to a freezing order. On 4 April 2025, the Court made orders setting a timetable in relation to a proposed notice of motion to file an amended defence. I do not see any basis on the material advanced by the parties to make any special order for costs in relation to the appearances on those two days and accordingly, I consider it appropriate to order that the costs of those days be costs in the cause.

Freezing Order

32. Mr Bo consents to the existing freezing order made on 3 October 2024 as amended by order 1-2 of 8 October 2024 continuing until further order on the basis that Costi Cohen continues to give the usual undertaking as to damages. The solicitor for Costi Cohen has confirmed that Costi Cohen does continue to give the usual undertaking.

33. Accordingly, I will order that the freezing order continues until further order on the usual undertaking as to damages given by Costi Cohen.

Orders

34. The Court makes the following orders:

(a) Judgment for the plaintiff against the defendant in the amount of $166,100; (b) Order that the defendant pay the plaintiff the amount of $17,137.94 on account of interest calculated in accordance with section 100 of the Civil Procedure Act 2005 (NSW) for the period 14 June 2024 to 12 September 2025. (c) The defendant's cross-claim filed 19 May 2024 be dismissed. (d) The costs of 8 October 2024 and 4 April 2025 be costs in the cause. (e) The defendant to pay the plaintiff's costs of the proceedings, including the costs of the cross-claim as agreed or assessed.

Freezing Order

(a) On the plaintiff, by its solicitor, continuing to give the usual undertaking as to damages set out in Schedule A to the Penal Order, Order 5 of the Orders of the Court on 3 October 2024 (as varied by Orders 1-2 of the Orders of the Court of 8 October 2024) making orders 1 to 17 (noting there are no orders 8 or 9) of the Penal order set out in attachment A to the Orders of 3 October 2024, is extended until further order.

**********

Endnotes

For example: Elite Protective Personnel Pty Ltd & Anor v Salmon (No2) [2007] NSWCA 373 at [6]; Sabah Yazgi v Permanent Custodian Limited (No2) [2007] NSWCA 306; Bostik Australia Pty ltd v Liddiard (No2) [2009] NSWCA 304 at [38].

[2024] NSWCA 274

See Amended Defence, paragraphs 45, 60(a); 69(a); see paragraphs 1 and 3 of the Relief claimed in the First Cross Claim

[2014] NSWCA 219 at 15 (Ward, Emmett and Gleeson JJA).