On 6 July 2022, the Court handed down its reasons for decision in relation to a number of applications made for special costs orders: Huang v Muse Beauty Salon Waterloo Pty Ltd (No 5) [2022] NSWDC 248 (Judgment).
The applications for special costs orders were made informally, by agreement, without a Notice of Motion being filed by any party. The Court made the following orders in the Judgment:
1. The Huang interests' applications for special costs orders are dismissed.
2. Order 3 made on 7 April 2022 is varied, such that in matter 2018/00117938, the defendants are to pay the plaintiff's costs of the proceedings as agreed or assessed, reduced by 15%.
3. Order 6 made on 7 April 2022 is varied such that in matter 2018/00364820, the plaintiffs are to pay the defendants' costs of the proceedings as agreed or assessed, reduced by 15%.
4. The Huang interests are to pay 60% of the costs of the Xie interests of the applications as agreed or assessed.
5. In the event a party seeks a different costs order to that in (4) above, written submissions not exceeding three pages are to be filed within three days. The Court will determine the matter on the papers.
It is assumed that a reader of these reasons for decision is familiar with the reasons for decision in the Judgment handed down on 6 July 2022.
Initially, the Xie interests did not seek to take advantage of Order 5 made on 6 July 2022 by filing written submissions seeking a different costs order.
However, the Huang interests did seek to take advantage of the order and filed written submissions dated 8 July 2022 prepared by their counsel. Thereafter, the Xie interests provided written submissions dated 21 July 2022 (following an extension being granted). The Xie interests opposed any variation to the costs orders made by the Court on 6 July 2022.
In their written submissions, counsel for the Huang interests submitted that the orders made on 6 July 2022, being Orders 4 and 5, were ambiguous and sought to re-argue or "seek clarification" in relation to aspects determined in the Judgment handed down on 6 July 2022: see paragraphs 1-7.
In my view, the orders made on 6 July 2022 were clear and the leave granted to the parties in Order 5 was solely to seek a different costs order to that in Order 4 relating to the applications.
Therefore, the submission made in paragraph 1 of the Huang written submissions that Order 5 made on 6 July 2022 "is taken at large" should be rejected.
The Court has a wide discretion as to costs. It is, however, a discretion which must be exercised judicially. See the matters referred to in paragraphs 29-36 of the Judgment and s 98 of the Civil Procedure Act 2005 (NSW).
As to paragraphs 3-4 in the Huang written submissions, this submission is rejected. Whilst it is correct that the Huang interests conceded a higher discount as to their costs if a lump sum order was made as to costs, no such order was made by the Court. The Huang interests did not concede a discount if a lump sum order was not made and the usual order for costs as agreed or assessed was made.
The other matters raised in paragraphs 2-6 of the Huang written submissions are properly matters to be raised in any appeal from the 6 July 2022 orders made in the Judgment. The Court accepts the Xie interests' submission to this effect.
As to paragraph 7 and following in the Huang written submissions, the Court rejects the submissions that the costs order made on 6 July 2022 "is substantially disproportionate to the result" (see paragraph 7, last sentence). There were a number of costs applications before the Court for consideration, but such applications were made, by agreement, informally without Notices of Motion being filed. Arguments as to costs were made by both groups of parties. The Court considered all of the applications together and the costs order made on 6 July 2022 in Order 4 was made after taking into account the degree of success of the parties in relation to the issues argued, having regard to the time consumed including in the written submissions as to the relevant points.
Further, "60% of the costs of the Xie interests of the applications" in Order 4, requires an assessment to be made unless agreement can be reached. An assessor will determine whether the costs claimed are fair and reasonable.
As to paragraph 8 of the written submissions of the Huang interests as to there being multiple applications as to costs, I refer to the matters in paragraph 12 above.
As to paragraph 9 of the written submissions of the Huang interests, the submission that the awarding of costs "at 60% is not at all consistent with the result and as such not at all proportional with the result" is rejected. The Huang interests were substantially unsuccessful in relation to the applications which they made and the order for costs reflected that. The Xie interests were also not entirely successful on the issues they argued. This was taken into account in making Order 4.
In relation to the argument that no allowance should be made for senior counsel (see paragraph 9 of the Huang written submissions), that is a matter for an assessor to determine, particularly in relation to rates and time. Without in any way seeking to determine that issue, having regard to the quantum of costs in issue in the proceedings as claimed by the Huang interests, the Court is not of the view that the retaining of senior counsel was unreasonable in all the circumstances. The amount for costs claimed by the Huang interests was expressly referred to in the affidavit evidence.
In the Court's opinion, the parties which were primarily unsuccessful on the applications were the Huang interests. The reduction in the percentage of costs awarded in Order 4 reflects the fact that the Xie interests did not achieve their aim of a very substantial reduction in the assessed costs. Paragraphs 10-18 of the Huang interests' submissions are rejected or raise matters properly the subject of any appeal.
As to paragraph 23 of the Huang interests' submissions, there were disputed factual issues which led to cross-examination. Accordingly, an oral hearing was required. See paragraph 8b of the Xie interests' submissions. An oral hearing also allowed issues to be considered in further detail with counsel.
The Court rejects the submission "that both parties equally failed" (Huang interests' written submissions paragraph 24): see also the matters in paragraph 15 above. It also rejects the submission that, in the circumstances, the appropriate order should be that each pay their own costs of the applications. The alternative submission of an order of only 30% limited to solicitors' costs and junior counsel's costs as agreed or assessed is similarly rejected. The Court also rejects the submission that the Xie interests "equally failed". The claims for indemnity costs orders made by the Huang interests required a close examination of the procedural history, the conduct of the matter prior to trial and the Calderbank offer. They were dealt with in detail in written submissions. All these claims failed.
As to paragraph 27 of the written submissions, the reasons in the Judgment should not be regarded as suggesting any inappropriate conduct by the solicitor or counsel for the Huang interests. As retainer letters or agreements were not in evidence, no suggestion could be made (and none was intended) that costs claimed did not comply with the terms of any agreements or retainers.
As to paragraph 28 of the Huang written submissions, the matters raised are properly matters to be determined by a costs assessor. I accept the Xie interests' written submissions on this point: see paragraph 24.
Accordingly, the application to vary the costs order made on 6 July 2022 by the Huang interests is rejected. The usual order for costs of the application should be made.
[2]
Determination
For the above reasons, the following orders are made:
1. The application by the Huang interests to vary Order 4 made on 6 July 2022 is rejected.
2. The Huang interests are to pay the costs of the Xie interests of the application to vary Order 4 as agreed or assessed.
3. Order 4 made on 6 July 2022 is confirmed.
[3]
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Decision last updated: 16 August 2022