In the matters of Shaolin Temple Foundation (Australia) Ltd (No 2) [2016] NSWSC 1766

Solicitors: Logie-Smith Lanyon Lawyers (Plaintiffs) Chamberlains Law Firm (Defendants) File Number(s): 2016/378022016/37815

Judgment

1. BARRETT AJA: I am dealing with the question of costs in each of two proceedings following my judgment of 6 September 2016 (In the matter of Shaolin Temple Foundation (Australia) Ltd [2016] NSWSC 1232). Written submissions on costs were filed as directed.
2. Each proceeding was an application by Shaolin Temple Foundation (Australia) Ltd ("Shaolin") under s 459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand served on Shaolin. One demand was served by Street Quinn Pty Ltd ("SQPL"). The other was served by Kwok Leong Pang. In each case, it was ordered that the statutory demand be set aside.
3. The natural consequence, in terms of r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW), would be that SQPL and Kwok Leong Pang each be ordered to pay Shaolin's costs. Shaolin therefore submits that the following order should be made in each proceeding: "The defendant pay the plaintiff's costs of the proceeding, including all reserved costs, on the ordinary basis."
4. There are, however, circumstances which, according to SQPL and Kwok Leong Pang, warrant departure from the general rule. They say that it would be unfair and unreasonable to require them to bear the whole of Shaolin's costs. Reference is made, in that connection, to the following features of the litigation: 1. In the SQPL matter, Shaolin filed a motion seeking enforcement of a notice to produce and discovery orders, which application was withdrawn in the course of hearing on 11 May 2016 on the preliminary issue of whether the s 459G application by SQPL had been made within the period of 21 days specified in that section. On 11 May 2016, it was ordered that Shaolin pay SQPL's costs of the withdrawn motion. Shaolin's costs of that motion should therefore be excluded from costs of the proceedings awarded to it. 2. The question of the date of service of the SQPL statutory demand was determined in favour of Shaolin on 1 June 2016 and costs of that aspect were reserved. SQPL contends that the appropriate order in respect of that determination is that each party bear its own costs. The basis for that contention is that crucial evidence as to the question of the time of service of the demand was not served by Shaolin until about a week before the hearing on 1 June 2016, which evidence could have been produced much earlier, thereby resolving the matter more expeditiously. 3. In both matters, Shaolin made unsuccessful attempts to have substantial quantities of new evidence admitted at the final hearing - to the extent that the first of two hearing days (4 August 2016) was taken up by very substantial argument about evidence. Much of the argument was determined adversely to Shaolin at the hearing. The balance was determined adversely to it in the reserved judgment. Shaolin's attempts, it might be noted, were made after 20 June 2016, the day on which Brereton J had made certain directions limiting further evidence without special reasons being shown. 4. When the matter was adjourned part heard on 4 August 2016, it was made clear by the court that no further evidence was to be relied on by either party, except as to certain narrowly defined matters. Despite this, Shaolin served, on the afternoon of Sunday 14 August (the day immediately before the resumed hearing), a number of documents relating to the Kwok Leong Pang case which the court ultimately declined to admit into evidence.