Xijie Cao v Shumiao Zhu (No 2) [2020] NSWSC 647

Supreme Court New South Wales

Medium Neutral Citation: Xijie Cao v Shumiao Zhu (No 2) [2020] NSWSC 647 Hearing dates: On the papers: written submissions 5, 9 and 26 May 2020 Decision date: 28 May 2020 Jurisdiction: Equity Before: Kunc J Decision: Defendant to pay the plaintiff's costs on the ordinary basis up to and including 18 October 2019 and thereafter on the indemnity basis Catchwords: COSTS — Party/party — Bases of quantification — Whether defendant's case so hopeless or other relevant delinquency warranting order for indemnity costs — No issue of principle Cases Cited: Cao v Zhu [2020] NSWSC 321 Category: Costs Parties: Ziejie Cao (Plaintiff)

Shumiao Zhu (Defendant) Representation: Counsel:

F Santisi (Plaintiff)

P Bolster (Defendant)

Solicitors:

GOH Lawyers (Plaintiff)

CS Lawyers (Defendant) File Number(s): 2017/109702 Publication restriction: No

Judgment

Summary 1. The Court delivered its primary judgment in these proceedings on 30 March 2020: Cao v Zhu [2020] NSWSC 321 (the "Principal Judgment"). This judgment deals with the question of costs. It assumes familiarity, and should be read with, the Principal Judgment. Defined terms in the Principal Judgment have the same meaning in these reasons. 2. Mr Cao enjoyed complete success, obtaining a judgment for $500,000 with interest and costs against Mr Zhu. The parties are agreed that Mr Zhu should pay Mr Cao's costs of the proceedings on the indemnity basis from the day after a Calderbank offer was made on 18 October 2019 (the "Offer"). Mr Zhu also accepted that he was liable for Mr Cao's costs prior to that date on the ordinary basis. The only issue for the Court to determine was Mr Cao's submissions that there were circumstances warranting an order that Mr Zhu should pay Mr Cao's costs of the proceedings on the indemnity basis up to and including the date of the Offer. 3. While Mr Zhu clearly failed in his defence of the proceedings, the Court does not accept the submissions put on behalf of Mr Cao that Mr Zhu knew, or ought to have known, that the various defences which he raised were hopeless or that he otherwise engaged in conduct intended to delay and frustrate Mr Cao ultimately obtaining the judgment which he did. An order for indemnity costs is not made to punish an unsuccessful party for defending a case unsuccessfully for what appears, with the benefit of hindsight, to have been untenable reasons. 4. The result is that Mr Zhu should pay Mr Cao's costs of the proceedings up to and including the date of the Offer on the ordinary basis and thereafter on the indemnity basis. 5. The parties agreed that the costs argument should be dealt with on the papers. Mr F Santisi of Counsel prepared the submissions in chief and in reply for Mr Cao. Mr P Bolster of Counsel prepared Mr Zhu's submissions.