On 30 June 2015, I delivered a judgment that very substantially resolved the dispute between the plaintiff, Mr Ling, the defendant, Ms Wu, and a company associated with her: see Ling v Pan Pac Investment Pty Limited; Ling v Wu [2015] NSWSC 850. I shall not now repeat the contents of that judgment except to the extent necessary.
As can be seen from my judgment at [121], I did not seek to calculate the mathematics of a monetary order that would give effect to my determination; rather, I hoped that the parties would be able to come to an agreed position about that.
Separately, as can be seen from my judgment at [127], I provided a very concise analysis as to why I foreshadowed that, unless I received submissions to the contrary, I proposed to order that Mr Ling pay 75% of the costs of Ms Wu.
It took quite some time for the parties to find a date that was mutually convenient, and work was also being done on the requested calculations. In due course, the matter came back before me on 14 August 2015.
On that occasion, counsel for Mr Ling did indeed make submissions contrary to my foreshadowed position about costs. Separately, senior counsel for Ms Wu raised another issue; namely, what should be the date upon which the modified rates of interest that I had ordered should come to an end, and the date upon which the lesser rate of interest after judgment, pursuant to r 36.7 of the Uniform Civil Procedure Rules 2005 (NSW) (the Rules), should commence.
The matter was stood over again to give counsel for Mr Ling a chance to respond to the submissions about interest, and to permit the question of costs to be explored more deeply. A timetable was set for the exchange of submissions, and the matter came before me on 8 October 2015. On that occasion, I received further evidence by way of affidavits, along with very helpful written and oral submissions from each counsel. I indicated that I would provide a judgment that sets out my determinations about the two remaining controversies, but would thereafter ask the parties again to seek to agree in calculations that give effect to this judgment.
Interest
The submission of senior counsel for Ms Wu in a nutshell was that, on the first loan, she is to pay an unaltered annual rate of interest of 9%. On the second, third, fourth and fifth loans, pursuant to my substantive judgment, she is to pay an altered rate of interest of 20%. In contrast, from the date of the formal entry of judgment, and pursuant to r 36.7 of the Rules, she will only be called upon to pay an annual rate of interest of 8%.
Proceedings were commenced as long ago as 19 September 2012. The submission is that the time taken for the matter to be resolved by way of litigation financially disadvantages Ms Wu (by way of the "late" commencement of the rate of interest of 8%, as opposed to 20% or 9%) to a marked degree: on the calculation of senior counsel, perhaps in the order of $150,000.00.
In short, in accordance with what was said by Kirby P in GIO of NSW v Healey (No 2) [1991] NSWCA 103; (1991) 22 NSWLR 380, senior counsel submitted that I could "backdate" the commencement of the interest after judgment to a date substantially before this year, perhaps as early as 19 September 2012.
When the matter was before me on 14 August 2015, it was accepted by counsel for Mr Ling that, in light of the logistical delay in resolving the matter, judgment interest should commence on 14 August 2015, even though it will be the case that formal judgment will not be entered until some months after that time.
Turning to my determination, I accept that, pursuant to s 101 of the Civil Procedure Act 2005 (NSW) and r 36.4(3) of the Rules, I have discretion to vary the date upon which interest after commences. But I am not persuaded that I should vary it in the circumstances of this case. That is so for the following reasons.
First, the last loan expired in early 2010. And yet Ms Wu did not come to Court seeking (for example) a declaration about the unconscionability of the interest rates to which she had agreed. Indeed, she did not seek to have the matter resolved in Court on that basis before she filed a cross-claim alleging unconscionability on 13 November 2012, in response to the statement of claim that had been filed by Mr Ling. Whilst it is true that efforts were being made by both parties during the intervening months to resolve the matter, and that Ms Wu was unrepresented at some stages of the litigation, that forensic history means that some of the responsibility for the delay in the resolution of the dispute must be laid at the feet of Ms Wu.
Secondly, it is noteworthy that, in her amended cross-claim of 14 December 2012, Ms Wu pleaded that she owed Mr Ling neither interest nor indeed principal with regard to any of the loans. Her counsel did not demur from the submission of counsel for Mr Ling that that denial of liability for principal was not eschewed on behalf of Ms Wu until the first day of the hearing before me.
Thirdly, Ms Wu maintained on oath, and senior counsel submitted on her behalf at the end of the substantive hearing as a primary position, that she owed no interest at all to Mr Ling. As can be seen from [52]-[56] of my substantive judgment, I firmly rejected that proposition.
In my opinion, those second and third factors further contributed to the responsibility of Ms Wu for the delay in the resolution of this matter.
Fourthly, I do not accept that anything particularly unusual has occurred in the history of this matter that would leave me to deviate from what is by far the more usual approach.
In short, it is true that this matter took quite some time to resolve after the last of the loans fell due in early 2010. There was indeed delay, both before and after proceedings were commenced by Mr Ling. But a substantial proportion of responsibility for that state of affairs must fall at the feet of Ms Wu. In those circumstances, I do not propose to "backdate" the commencement of interest after judgment to a point before the agreed date of 14 August 2015.
Costs
At the most recent hearing, senior counsel for Ms Wu expressed himself content with my foreshadowed order about apportionment of costs. On behalf of Mr Ling, the following submissions were made to the contrary.
First, for many months, Mr Ling was seeking to resolve the matter by way of letters sent on his behalf by his solicitor, both to Ms Wu personally and, when she was represented, to her firm of solicitors. Those efforts included offers of compromise in June 2012 and March 2013. It was said that that general context, and that those particular offers, could feed into the broad discretion reposed in me with regard to costs.
Secondly, it was said that Mr Ling was the real victor at the substantive hearing. That was because: on the first day of the hearing, Ms Wu accepted liability for repayment of the principal; Ms Wu never disavowed the proposition that she need repay no interest, but that position was firmly rejected by me; the first loan was not the subject of interference by me; and, in truth, the only issue upon which Mr Ling failed was the issue of the quantum of interest. And it was said that, even in resolving that controversy with regard to four of the five loans, I imposed upon Ms Wu a rate of interest that remained substantial. In short, it was said that, far from Mr Ling paying any of the costs of Ms Wu, she should pay his costs, because he succeeded in the litigation.
Those submissions have force. Nevertheless, I do not propose to deviate from my foreshadowed course. That is so for the following reasons.
First, the particular offers to which I was invited were made in the context of longstanding efforts to settle the matter by negotiation on both sides. I consider that it would be artificial to pluck particular letters from the bulk of correspondence, and to give them determinative weight.
Furthermore, at the end of the recent hearing, counsel for Mr Ling did not gainsay the submission of senior counsel for Ms Wu that those offers complied neither with the requirements of r 20.26 of the Rules about offers of compromise, nor with the requirements of Calderbank v Calderbank [1975] 3 All ER 333. As I have said, his ultimate position was merely that those offers could feed into my discretion.
Nor did counsel gainsay the submission on behalf of Ms Wu that, in any event, as a matter of mathematics (and irrespective of the approach taken to the commencement date of interest after judgment) Ms Wu "did better" than those offers, by way of my substantive judgment.
Thirdly, it is true that Ms Wu did not maintain her stance about the repayment of principal. It is also true that I rejected the proposition that she should be required to repay no interest at all.
Nevertheless, to my mind, the central issue litigated between the parties at the substantive hearing was really the rate of interest that Ms Wu should pay on each of the five loans.
The position of Mr Ling through his counsel at the end of the hearing was that those interest rates should not be the subject of any interference by me. My judgment firmly rejected that proposition, and effected a very substantial reduction in the interest rates of four of the five loans.
In short, it is true that each party found success and failure on different issues litigated at the hearing. But I maintain the opinion that, although each had success to a degree, Ms Wu was the more successful of the two. Whilst I do not consider that Mr Ling should pay her costs in their entirety, I maintain the opinion that payment by him of 75% of the costs of Ms Wu appropriately reflects the measure of success enjoyed by the parties, and can be understood as costs following the event. That assessment should also be understood as being the result of my application of the principles in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] to the evidence placed before me about costs, when seen in light of my substantive judgment.
Conclusion
As for the conclusion of the matter, in terms of formal orders giving effect to the above determinations, on 8 October 2015 the parties expressed a guarded confidence that they could agree in the mathematics that would give effect to my findings. Even if that be the case, nevertheless I would prefer to have one final hearing, rather than make dispositive orders in Chambers.
For the time being, I shall simply make orders directed towards my continued assistance by the parties, and the expeditious conclusion of the matter.
Orders
I make the following orders:
1. The parties are to prepare and file draft formal orders to give effect to this judgment, such orders to be agreed if possible.
2. The parties are to approach my Associate jointly and promptly in order to set a mutually convenient date, within three weeks of today, for the making of formal dispositive orders in the matter.
[3]
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Decision last updated: 20 April 2016