Rhodium Trading Australia Pty Ltd (in liquidation) (receivers and managers appointed) v Leading Edge Commercial FZE

Category: Procedural rulings

Parties: Rhodium Trading Australia Pty Ltd (in liquidation) (receivers and managers appointed) (Plaintiff)
Leading Edge Commercial FZE (Defendant)

Representation: Counsel:
J Jaffray (Plaintiff)
Solicitors:
Ashurst (Plaintiff)

File Number(s): 2024/00314276

Publication restriction: Nil

EX TEMPORE JUDGMENT (REVISED)

1. Rhodium Trading Australia Pty Ltd, to which receivers and managers have been appointed and which is in liquidation, claims that the defendant, Leading Edge Commercial FZE, is liable to pay for goods to the value of USD7,964,840, together with contractual interest and costs.

2. Leading Edge is an entity based in the United Arab Emirates. Under three sales contracts, Rhodium Trading supplied Leading Edge with large quantities of Brazilian cane sugar, Argentine soya bean, and Ukrainian corn. Rhodium Trading alleges that it has received no payment for those goods.

3. In March 2025, Richmond J made orders for substituted service of the originating documents on Leading Edge. I am satisfied from the evidence before me that Leading Edge has been served in accordance with those orders.

4. Rhodium Trading now seeks, as its primary relief, default judgment against Leading Edge on its Summons and Commercial List Statement, pursuant to r 16.6(1) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), by applying Pt 16 thereof by analogy through orders made under s 61(3)(g) of the Civil Procedure Act 2005 (NSW). It relies upon the judgment of Brereton J in Toyota Finance Australia Ltd v Suntsova [2025] NSWSC 94 at [7], where such an approach was taken in circumstances where, instead of a Statement of Claim having been served and forming the basis of an order under Pt 16, a Summons and Commercial List Statement had been served: see also The Property Investors Alliance Pty Ltd v C88 Project Pty Ltd [2021] NSWSC 1175 at [12] (Hammerschlag J); Cashflow Finance Australia Pty Ltd v Bennett [2024] NSWSC 632 at [46] (McGrath J).

5. Rule 16.6(1) empowers, but does not require, the Court to order judgment in default in cases within the rule: Wily v King [2010] NSWSC 352 at [17] (Barrett J). Relevant to the exercise of the Court’s discretion is the existence of an affidavit in support of the plaintiff’s application that complies with rule 16.6(2) and sets out the necessary information.

6. Rhodium Trading’s motion was supported by affidavits from Mr Joseph Hansell, one of the joint and several receivers and managers appointed to its property, and Lucinda Blue, one of its solicitors. The supporting affidavits complied with r 16.6(2)(a)-(d) and (f) insofar as they addressed the existence and amount of the debt and interest claimed, and service of the originating process.

7. However, despite Rhodium Trading seeking its costs, the supporting affidavits did not comply with r 16.6(2)(e) UCPR in that they did not set out the amount claimed for professional costs, filing fees, and costs of serving the originating process. I raised that noncompliance with counsel for Rhodium Trading, Ms Jaffray, at the hearing of the motion on 18 July 2025, and adjourned the motion to allow the filing of further evidence to support the claim for costs.

8. At the adjourned hearing on 25 July 2025, Rhodium Trading sought a gross sum costs order pursuant to s 98 Civil Procedure Act 2005 (NSW) in the sum of $95,235.28. It relied on a further affidavit from Ms Blue, who deposed that Rhodium’s costs are $109,830.70, comprising solicitors’ fees of $90,200.92 and disbursements of $19,629.78.

9. Despite having time to put on additional submissions and evidence, the application remains deficient. It does not address r 16.6(2)(e)(i), which provides that the amount claimed on account of professional costs is not to exceed the amount fixed by regulation. By dint of reg 24(1) of the Legal Profession Uniform Law Application Regulation 2015 (NSW), the costs payable in respect of the enforcement of a liquidated sum are fixed at the amounts specified in Sch 1 to that Regulation. On its face, that provision would entitle Rhodium Trading to professional costs of some $4,060.00 for preparing the originating process, substituted service, service outside Australia in a country where English is not the official language, and applying for default judgment.

10. However, Rhodium Trading claims professional costs beyond that amount, referencing:

11. Counsel’s fees of $6,448.75; and

12. Additional solicitor’s professional costs of $86,140.92.

13. In those sums sought for professional costs, it appears Rhodium Trading is seeking the additional costs incurred by reason of the failure to comply with r 16.6(2)(e)(i)-(iii) the first time.

14. There is no entitlement to those additional sums. Rhodium Trading is entitled to $4,060.00 for professional costs.

15. For completeness, I note that Rhodium Trading made reference in its submissions to my decision in S&A Law Pty Ltd v Pasquini [2025] NSWSC 728, in which I determined costs on a gross sum basis beyond the amount in the Regulation. That was in circumstances where an earlier judgment of Stevenson J had determined that costs were payable “as agreed or assessed”; in S&A Law the costs were, therefore, assessed by way of a gross sum. Rhodium Trading did not refer to any other authority where the relevant judge was taken to the regulations fixing professional costs and nevertheless ordered a larger amount (unless there was a contractual entitlement pleaded).

16. Rhodium Trading is entitled to additional amounts under r 16.6, for filing fees and the costs of service. Those amounts are respectively $6,877.00 and $6,242.82. A “miscellaneous sum” of $56.21 was also sought for searches, which I consider part of the service costs. Therefore, those additional amounts total $13,176.03.

17. I note that Rhodium Trading sued Leading Edge on sales contracts. In those contracts, Leading Edge agreed to indemnify Rhodium Trading “for all out-of-pocket costs, charges and expenses, including but not limited to legal costs incurred by [Rhodium Trading] as a result of [Leading Edge’s] failure to … honour payment when due”. Leading Edge has failed to indemnify Rhodium Trading, which prima facie would entitle Rhodium Trading to damages for that breach. However, that claim was not pleaded. After I raised that with Rhodium Trading’s representatives, Rhodium Trading proposed relying on an amended notice of motion seeking professional costs relying on the contractual term. However, it did not seek time to amend its pleadings to claim the costs of enforcement as damages for breach of the indemnity. Any such amended pleading would have needed to have been served on Leading Edge. Leading Edge might have defended the matter and challenged the quantum of those costs. Therefore, Rhodium Trading must be limited to the scheduled professional costs.

18. Rhodium Trading also seeks interest on the unpaid sum at the contract rate, as pleaded in its Commercial List Statement, in the sum of USD6,292,955.43. It is appropriate to award that amount as a debt due.

19. It is well established that the Court may order default judgment but will not if there is any perceived injustice in doing so: see eg Wily v King at [17], quoting Charles v Shepherd [1892] 2 QB 622 at 624 (Lord Esher MR). I am unaware of any injustice here and consider that default judgment is appropriate.

20. Because I have acceded to the primary relief sought by Rhodium Trading, it is unnecessary for me to consider the alternative claim for summary judgment.

Orders

19. For the reasons above, I make the following orders:

20. Judgment for the plaintiff against the defendant for USD7,964,840 in respect of the plaintiff’s claim.

21. Judgment for the plaintiff against the defendant for USD6,292,955.43 in respect of interest.

22. Judgment for the plaintiff against the defendant in the sum of $17,236.03 in respect of the plaintiff’s costs.

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