defendant. Interlocutory processes filed by the plaintiff on 10 and 11 February 2020 dismissed; plaintiff ordered to file any motion seeking leave to file any Amended Originating Process and Amended Statement...
Key principles
Where a proposed amendment to pleadings effects a substantial change that abandons earlier pleaded causes of action and in substance commences a new case, leave to amend should...
It is appropriate to order that the plaintiff pay the defendant's costs to date where those costs have been 'thrown away' by reason of an amendment that commences an entirely new...
An order that costs be payable forthwith is an unusual step and should not be made unless there is reason to think there will be material delay in the overall determination of...
An order for indemnity costs based on Calderbank offers should not be made if the offers did not provide adequate protection to the recipient against the risk that the offers...
Issues before the court
Whether the plaintiff should be granted leave to file an Amended Originating Process and Amended Statement of Claim that substantially changes the...
Plain English Summary
The Court found the plaintiff's proposed amendments would abandon the earlier case against the second defendant and, in effect, start a new one. Because of that, the Court ordered the plaintiff to pay the second defendant's costs incurred so far (as agreed or assessed). The Court refused to order immediate payment of costs or indemnity costs based on offers, and declined to dismiss the defendant's summary dismissal motion while leave to amend remains available. The plaintiff must apply for leave to amend by set dates, and certain interlocutory processes were dismissed (paras 1-12).
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Deep Dive
1,758 words · generated 06/07/2026
What happened
This is an interlocutory ruling by Black J in proceedings brought by Mr Joseph Sy against multiple defendants including Mr Peter Lin. The plaintiff had originally pleaded a range of claims, including allegations that Mr Lin breached statutory duties under ss 180-184 of the Corporations Act. During the course of the litigation the plaintiff proposed substantial amendments which, as the judge found, abandoned the earlier pleaded relief against Mr Lin and instead, for the first time, sought injunctive relief concerning Mr Lin's involvement in a further share issue (see para 1, where the Earlier Judgment is quoted).
Rafferty v Time 2000 West Pty Ltd [2020] NSWSC 671 | Case summary | Zoe
Whether the plaintiff should be ordered to pay the second defendant's costs of the proceedings to date.
Whether costs should be payable forthwith on an ordinary basis (and in part on an indemnity basis) by the plaintiff.
Whether the second defendant's summary dismissal notice of motion should be dismissed at this stage.
Cited legislation
1 cited instrument linked from this judgment.
The Court had earlier (Re Century Sunshine Investment (Australia) Pty Ltd [2020] NSWSC 548) formed the preliminary view that permitting such an amendment amounted to the commencement in substance of a new case as against Mr Lin, and that any leave to amend should be conditioned on the plaintiff paying Mr Lin's costs of the proceedings to date (para 1). The parties could not agree minutes to give effect to that judgment. The plaintiff proposed an order enabling him to serve an amended originating process and to have Mr Lin indicate consent; the defendants proposed leave on terms and a self-executing dismissal if the plaintiff did not comply. The Court refused both forms of order and instead directed the plaintiff to file any motion seeking leave to file amended pleadings by 8 June 2020, returnable 15 June 2020 (paras 2 and 12(2)).
The Court ordered that the plaintiff pay the second defendant's costs of the proceedings to date, as agreed or as assessed (para 6; order 12(3)), dismissed the interlocutory processes filed by the plaintiff on 10 and 11 February 2020 (order 12(1)), preserved Mr Lin's summary dismissal motion as premature (para 7), and refused to make orders for costs payable forthwith or on an indemnity basis based on Calderbank offers (paras 9–10).
Why the court decided this way
The decision rests on several interlocking considerations.
Substantial change in the case and "wasted" costs. The Court accepted that the proposed amendments would "essentially abandon all previous relief sought against Mr Lin" and for the first time pursue a narrow injunctive claim (para 1). Where an amendment has that effect the costs incurred by the defendant in defending the earlier pleaded case are effectively thrown away. The Court considered it equitable and necessary to require the plaintiff to meet those costs before allowing the plaintiff to commence that new case by amendment (paras 1, 6).
Entitlement of the defendant to defend serious allegations. The Court rejected the plaintiff's argument that the second defendant could have adopted a submitting appearance or moved earlier to dismiss the proceedings. Because serious statutory duty allegations had been advanced, Mr Lin was entitled to defend them; the fact the plaintiff later lacked standing and abandoned those allegations was not a reason to deny costs against the plaintiff (para 4).
Discretion as to timing and basis of costs. The Court declined to order costs to be paid forthwith because it was not satisfied there would be substantial delay in determining the proceedings overall, the new claims were narrow and other parties had not taken active roles, so the matter could be listed soon (para 9). The Court likewise declined to award indemnity costs arising from Calderbank offers because the offers did not protect the plaintiff sufficiently against the specific risk that the plaintiff later attacked (para 10).
Caution about self-executing or draconian forms of order. The Court refused to make orders that would automatically dismiss the plaintiff's claim if the amended pleadings were not framed in a particular way, because such an order invites further dispute about compliance; instead the Court required an application for leave, with annexed drafts, for judicial determination (para 2).
Preservation of the summary dismissal motion. It was premature to dismiss Mr Lin's summary dismissal notice of motion while an amended pleading might, if permitted, plead a tenable case; accordingly, the summary dismissal motion was preserved for future determination (para 7).
These reasons flow from the Court's exercise of its general discretion to manage proceedings and to allocate costs fairly in light of prejudice and wasted litigation expense.
Before and after state of the law
Before this decision, the general principles were well-established: leave to amend is discretionary; costs may be ordered against a party who causes another party to incur wasted expenditure; Calderbank offers can attract adverse costs consequences if rejection was unreasonable; and immediate payment orders or indemnity costs are exceptional and require justification. The decision applies those orthodox principles to the concrete facts.
After this decision, the practical position is clarified in this matter: where an amendment will effectively abandon an earlier case and commence a new one, the Court will treat the earlier costs as wasted and will routinely require the applicant to pay those costs as a condition of leave to amend (para 6). The judgment also reinforces that the Court will be cautious before ordering immediate or indemnity costs: immediate payment requires a risk of delay or other compelling reasons (para 9), and indemnity costs based on offers will be refused if the offers did not adequately protect the offeree against the specific risk (para 10). The decision thus exemplifies a measured application of established principles rather than a change in doctrine.
Key passages with plain-English translation
Para 1 (quoted Earlier Judgment): "It seems to me that the amendments now proposed by Mr Sy involve a substantial change... essentially abandons all previous relief sought against Mr Lin..." Plain English: The plaintiff's new pleading gives up the old case against Mr Lin and starts a different, narrower case. Because of that, the costs Mr Lin spent defending the earlier allegations are wasted.
Para 6: "I will order that Mr Sy pay Mr Lin's costs of the proceedings to date, as agreed or as assessed." Plain English: The plaintiff must reimburse the second defendant for the legal costs he has already incurred, either by agreement or by assessment if they cannot agree.
Para 9: "I will not make such an order [for costs to be paid forthwith], because it is by no means apparent that there will be significant delay..." Plain English: The Court will not force the plaintiff to pay now because there's no strong reason to think these proceedings will drag on and that would otherwise make the delayed payment unjust.
Para 10: "I will not make such an order on that basis, because none of the offers made provided adequate protection to Mr Sy... and it was not unreasonable for him not to accept them." Plain English: The defendant's settlement offers did not fairly guard against the exact risk the plaintiff later complained about, so it was reasonable for the plaintiff to reject them; therefore, the Court will not punish the plaintiff by awarding indemnity costs based on those offers.
Para 12(1)–(3): Orders dismissing the interlocutory processes, setting timetable for any leave motion, and awarding costs. Plain English: The Court dismissed certain interim applications, set a clear timetable for any application to amend, and ordered the plaintiff to pay the defendant's costs to date.
What fact patterns trigger this precedent
This decision is relevant when:
A plaintiff seeks leave to amend pleadings in a way that abandons prior causes of action against a particular defendant and replaces them with materially different claims that comprise, in substance, a separate case (para 1).
The defendant has incurred costs defending the earlier pleaded claims that will be rendered wasted by the amendment (paras 1, 6).
There are Calderbank offers in the record, but they did not expressly and adequately cover the precise risk later complained of so that refusal to accept them is arguably reasonable (para 10).
A defendant has filed a summary dismissal motion but the plaintiff seeks leave to amend, creating a live question whether dismissal should await resolution of leave to amend (para 7).
In such fact patterns the Court is likely to require the applicant for amendment to pay the opposing party's costs to date, to set a timetable for a formal leave application with annexed draft pleadings, and to approach self-executing dismissal orders with caution (paras 2, 6, 7).
How later courts have treated it
This judgment itself cites and applies principles from earlier decisions, notably Re FW Projects Pty Ltd [2019] NSWSC 1019, Rafferty v Time 2000 West Pty Ltd (No 3) [2009] FCA 727, Richmond v Ora Gold Ltd [2020] FCA 70 and Re Hillsea Pty Ltd [2019] NSWSC 1309 (paras 9–10). Those authorities were used to illustrate when immediate costs orders may be granted and how Calderbank offers operate in costs assessments. Black J applied those authorities conservatively: he followed the established tests but declined to exercise extraordinary costs remedies on the facts of this case (paras 9–10). Any subsequent treatment by other courts is not canvassed in this judgment; practitioners should treat this as a clear local example of standard principles being applied rather than a novel rule.
Still-open questions
How readily will courts conclude that an amendment "commences an entirely new case"? The judgment treats such a conclusion as fact-specific. Future cases will need to delineate the threshold between permissible narrowing or clarification and a substantive change amounting to a new cause of action (para 1).
What specifics must Calderbank offers contain to provide "adequate protection"? Black J refused indemnity costs because the offers did not address the particular risk, later courts may further define the particulars required in offers to render them effective for costs consequences (para 10).
When will courts order costs to be paid forthwith? This decision emphasises delay in the overall proceedings as a key factor. But other fact patterns (for example where payment is necessary to prevent injustice or where a party has no realistic capacity to meet future costs) could lead to different outcomes; the precise mix of factors sufficient to justify immediate payment remains case-sensitive (para 9).
The extent to which self-executing orders conditioning leave to amend on automated dismissal should be permitted. Black J rejected an automatic 'self-executing' dismissal because of the risk of further dispute about compliance; future cases may test whether more tightly framed self-executing devices can be permissible (para 2).
Practitioners drafting settlement offers, resisting or seeking leave to amend, and advising clients about costs consequences should take close account of the factual focus of these principles as applied in this judgment.
Judgment (3 paragraphs)
[1]
Solicitors:
Keypoint Law (Plaintiff)
PwC (Second Defendant)
File Number(s): 2019/247634
[2]
Judgment
By my Judgment delivered on 12 May 2020, in Re Century Sunshine Investment (Australia) Pty Ltd [2020] NSWSC 548 ("Earlier Judgment"), I dealt with an application by the Plaintiff, Mr Joseph Sy, for orders in respect of the conduct of the proceedings, and an order sought by the Second Defendant, Mr Peter Lin, that the proceedings be dismissed. I set out the conclusions that I had reached at, relevantly, paragraphs 21 and 32-34 as follows:
"It seems to me that the amendments now proposed by Mr Sy involve a substantial change in his case against Mr Lin, which essentially abandons all previous relief sought against Mr Lin and pursues, for the first time, a claim for injunctive relief against Mr Lin's involvement in a further share issue of a similar character, if Mr Sy is otherwise successful in the proceedings. On that basis, it seems to me that any amendment should only be allowed on terms that Mr Sy pay Mr Lin's costs of the proceedings to date, as agreed or as assessed. That order will have the consequence that allowing or not allowing the amendment has no impact on costs since, if the amendment were not allowed, the existing proceeding would be summarily dismissed on the basis that no tenable claim is pleaded against Mr Lin. I will, however, allow the parties a short opportunity to make further submissions as to that matter, which was not fully addressed in submissions at the hearing. …
For these reasons, I would not grant leave to amend the Statement of Claim in its present form other than by consent, if the parties wish to avoid further delay and further costs in amending the Statement of Claim. If the parties do not reach agreement in that regard, I would grant leave to file an Amended Statement of Claim that pleads the material facts on which Mr Sy relies for the claim to injunctive relief, likely on terms that Mr Sy pays Mr Lin's costs of the proceedings to date, as agreed or as assessed. As I have noted above, it seems to me that those costs are thrown away by reason of the amendment, which commences, in substance, an entirely new, although limited, case against Mr Lin.
I will not order the summary dismissal of the proceedings against Mr Lin since I am unable to find that the proceedings involve an abuse of process, and an Amended Originating Process and an Amended Statement of Claim that pleads the material facts supporting a claim for injunctive relief would plead a proper claim for injunctive relief against Mr Lin.
My preliminary view is that Mr Sy must pay the costs of this application, where he could only succeed in maintaining a limited amendment on terms, and Mr Lin's summary dismissal application would have succeeded but for the changes in Mr Sy's position in the course of the application and the opportunity that he will be given to plead the material facts underling the claim for interlocutory relief."
I directed the parties to bring in agreed short minutes of order to give effect to the judgment within 7 days or, if no agreement was reached, their respective draft short minutes of order and submissions as to the differences between them, subject to a page limit. Perhaps predictably, the parties did not agree short minutes of order.
Mr Sy now proposes that orders be made for him to serve an Amended Originating Process and Mr Lin to indicate his consent or otherwise. I do not propose to make an order in that form, since the history of the proceedings suggests there is little practical likelihood the parties will reach agreement and, if they can do so, that can be done without the need for that order. The Defendants in turn proposed orders that gave leave to Mr Sy to file an Amended Statement of Claim in accordance with the Earlier Judgment, that pleaded the material facts on which he relied for injunctive relief against Mr Lin, and proposed a self-executing order that Mr Sy's claim against Mr Lin be dismissed if he did not do so. I will not make an order in that form, which would risk a further contest as to whether any Amended Statement of Claim did or did not comply with the obligation to plead the material facts on which Mr Sy relied for injunctive relief. I will order that Mr Sy file any motion seeking leave to file any Further Amended Originating Process and Further Amended Statement of Claim by 8 June 2020, returnable in the Corporations Motions List on at 9.15am on 15 June 2020.
I will not now make an order that personal service of the Amended Statement of Claim be dispensed with, since the question whether leave will be granted to file that Amended Statement of Claim is yet to be determined.
Mr Sy sought an order that each of the Plaintiff and the Second Defendant bear their own costs of the proceedings up to 12 May 2020. In support of that proposed order, Ms Peden, who appears for Mr Sy, refers to the fact that Mr Sy sought declarations that Mr Lin was in breach of ss 180-184 of the Corporations Act (which, as I noted in the Earlier Judgment, he did not have standing to seek) and that no other claim for relief was brought against Mr Lin. Ms Peden also refers to the Court's powers to order costs, including under s 98 of the Civil Procedure Act 2005 (NSW) and also refers to ss 58-60 of the Civil Procedure Act. She submits that Mr Lin could have filed a submitting appearance, or brought a notice of motion seeking dismissal of the proceedings more promptly, or not incurred costs in defending proceedings where he did not consider he faced any likely consequence through the proceedings. I am not persuaded that that submission provides any basis for criticism of Mr Lin, where Mr Sy advanced serious allegations of breaches of Mr Lin's statutory duties which he did not have standing to bring, and which he now abandons, or any reason not to order costs against Mr Sy in that regard. Where those allegations were made against Mr Lin, then he was entitled to defend them, and not less so because Mr Sy had no standing to advance them and now abandons them.
Mr Lin submits that any leave to amend Mr Sy's Statement of Claim should be conditioned on the making of an order that Mr Sy pay Mr Lin's costs of the proceedings for the reasons identified at paragraph 21 of the Earlier Judgment, which I have quoted above. Mr Lin submits, and I accept, that that would be the minimum required to address the prejudice suffered by Mr Lin in incurring costs in defending the claims previously brought against him, and now abandoned.
I will order that Mr Sy pay Mr Lin's costs of the proceedings to date, as agreed or as assessed. That order would now be made in any event, whether the pleadings are now amended in a manner that will throw away all costs previously incurred by Mr Lin, when Mr Sy commences an entirely new case against him, or whether Mr Sy does not obtain leave to amend and the proceedings against Mr Lin are likely then dismissed in consequence.
Mr Lin submits, and I accept, that it is premature to dismiss his Notice of Motion, until it is clear that Mr Sy has in fact obtained leave to amend the Statement of Claim, on a basis that properly pleads a case against Mr Lin. I will not dismiss Mr Lin's summary dismissal motion at this point, where that motion will, as I noted above, likely succeed if Mr Sy is unable to sustain the amendments that he proposes to the Statement of Claim, and the proceedings against Mr Lin will then be dismissed.
Mr Lin sought an order for costs payable forthwith on an ordinary basis up to and including a range of alternate dates, then on an indemnity basis from those alternative dates to 23 April 2020, and on an ordinary basis from 24 April 2020.
Mr Peadon, who appears for Mr Lin, submits that costs should be payable forthwith on the basis that Mr Lin has enjoyed complete success on a discrete and substantial part of the proceedings, and the order for costs would otherwise not be payable for a significant period. He refers to my decision in Re FW Projects Pty Ltd [2019] NSWSC 1019 at [20] making such an order. An order that costs be paid forthwith is unusual, but may be made where there is, inter alia, unreasonable conduct that would justify such an order, and there will likely be delay in determining the proceedings as a whole, although the Court will also have regard to the capacity of a costs order to stultify proceedings: Rafferty v Time 2000 West Pty Ltd (No 3) [2009] FCA 727 at [24]; Richmond v Ora Gold Ltd [2020] FCA 70 at [33]. I will not make such an order, because it is by no means apparent that there will be significant delay in determination of the proceedings so that costs will be payable to one or other party for the proceedings as whole. The claims that Mr Sy now seeks to bring against Mr Lin are in narrow scope, and other parties have not to date taken any active role in the proceedings, so there is no reason that the matter could not be listed for a hearing and be determined on its merits in the near future. It is therefore not necessary to deal with any difficulty that would arise with making such an order if Mr Sy did not have notice of the application for it until submissions as to orders were exchanged, and has therefore had limited opportunity to respond to it.
Mr Lin seeks orders on an indemnity basis based on the several offers made by Mr Lin to which I referred on the Earlier Judgment, and submits that each of the offers was in the nature of a Calderbank offer. Mr Peadon refers to my summary of the applicable principles in Re Hillsea Pty Ltd [2019] NSWSC 1309. I will not make such an order on that basis, because none of the offers made provided adequate protection to Mr Sy against the prospect of a further issue of shares of the kind that he now attacks, and it was not unreasonable for him not to accept them. It is again not necessary to deal with any difficulty that would arise with making such an order if Mr Sy did not have notice of the application for it until submissions as to orders were exchanged, and has therefore had limited opportunity to respond to it.
I note, for completeness, that the submissions made by Mr Sy annexed several emails, which, if included in the page count, would have exceeded the page limit on those submissions. It has not been necessary to have regard to those emails to determine the matter.
Accordingly, I make the following orders:
1 The Interlocutory Processes filed by the Plaintiff on 10 and 11 February 2020 be dismissed.
2 The Plaintiff file any motion seeking leave to file any Amended Originating Process and Amended Statement of Claim by 8 June 2020, annexing drafts of the proposed documents, returnable in the Corporations Motions List at 9.15am on 15 June 2020.
3 The Plaintiff pay the Second Defendant's costs of the proceedings to date, including the costs of and incidental to the applications heard by the Court on 23 April 2020, as agreed or as assessed.
[3]
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Decision last updated: 03 June 2020
Interlocutory processes filed by the plaintiff on 10 and 11 February 2020 dismissed; plaintiff ordered to file any motion seeking leave to file any Amended Originating Process and Amended Statement of Claim by 8 June 2020, returnable 15 June 2020; plaintiff to pay the second defendant's costs of the proceedings to date, as agreed or as assessed (para 12).