Supreme Court New South Wales Medium Neutral Citation: Ye v Chen (No 2) [2022] NSWSC 630 Hearing dates: On the papers Decision date: 20 May 2022 Jurisdiction: Common Law Before: Adamson J Decision: (1) Subject to orders (2) and (3) below, order the plaintiffs to pay the defendant's costs of the proceedings, such costs to be paid on the ordinary basis. (2) Confirm that order (1) above does not affect the orders for costs made by Harrison AsJ on 31 August 2021 and 6 October 2021 in Ye v Chen (No 2) [2021] NSWSC 1265. (3) Each party pay her or its (as the case may be) own costs of this application. Catchwords: COSTS — Party/Party — Exceptions to general rule that costs follow the event — Offers of compromise — whether to follow UCPR r 42.15A to order indemnity costs or order otherwise — where circumstances such that court ought to order otherwise — where costs awarded on an ordinary basis only Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), rr 20.26, 42.15A Cases Cited: Ye v Chen [2022] NSWSC 494 Ye v Chen (No 2) [2021] NSWSC 1265 Category: Costs Parties: Rebecca Haria Ye (First Plaintiff) Ucer Investment and Resources Management Pty Ltd (Second Plaintiff) Yu Chen (Defendant) Representation: Counsel: A Cheema (Plaintiffs) J Harrison (Defendant) Solicitors: Auburn Lawyers (Plaintiffs) Prudentia Legal (Defendant) File Number(s): 2021/6370 Decision under appeal Court or tribunal: Local Court Date of Decision: 11 December 2020 Before: Stapleton LCM File Number(s): 2018/215879 Judgment Introduction 1. On 27 April 2022, I made orders and gave reasons in this matter: Ye v Chen [2022] NSWSC 494. I made a default costs order (that the plaintiffs pay the defendant's costs of the proceedings in this Court) and made provision for any party who sought a different order to make an application within seven days. 2. Within the requisite time, the defendant, Yu Chen, applied for an order that the plaintiffs, Rebecca Ye and Ucer Investment and Resources Management Pty Ltd (Ucer), pay her costs on the ordinary basis up to and including 5 February 2021 and on an indemnity basis thereafter. 3. They relied on an offer of compromise which they served on 5 February 2021, which was expressed to be made pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 20.26 in which they offered to compromise the proceedings on the basis of orders that the proceedings be dismissed and that the plaintiffs pay the defendant's costs of the proceedings assessed on the ordinary basis. The offer was expressed to be open for 28 days. 4. The plaintiffs did not dispute that the offer was made in accordance with UCPR, r 20.26 or that the effect of UCPR r 42.15A(2) was that, unless the Court ordered otherwise, the defendant was entitled to her costs on the ordinary basis until the date of the offer and on the indemnity basis thereafter. However, they submitted that the Court should order otherwise because there was no element of real compromise in the defendant's offer. 5. They submitted that the offer was made on 5 February 2021, a mere four weeks after the summons was filed on 8 January 2021 and barely a week after the defendant had filed a notice of appearance. They contended that the offer, in effect, required the plaintiffs to capitulate completely on their claim and to bear the defendant's costs of the proceedings. 6. In response, the defendant submitted that this Court ought not order otherwise because: 1. Ms Ye's conduct (on her own account and on behalf of Ucer) was dishonest and, as the Court below found, delinquent; 2. there was no reason to depart from the effect of UCPR r 42.15A; and 3. every ground of appeal was rejected by this Court and leave was refused in respect of two issues. 1. While Ms Ye's conduct in the Court below was found to be delinquent and this finding was not disturbed by this Court, I am not persuaded that it would be appropriate to order the plaintiffs to pay the defendant's costs on an indemnity basis on any footing other than on the basis of the offer of compromise. Although the matters raised by Mr Cheema did not result in relief being granted to the plaintiffs, the proceedings in this Court were conducted expeditiously with appropriate focus on the issues raised by the summons. 2. I accept the plaintiffs' contention that the offer of compromise contained no real element of compromise and that, accordingly, I should make an order other than the one provided for under UPCR, r 42.15A(2). In these circumstances, the costs of the proceedings will follow the event but be payable only on the ordinary basis. 3. The plaintiffs have sought an order that the defendant pay their costs of the costs application. Although the plaintiffs have been successful in defeating the defendant's claim for indemnity costs, I consider that there ought be a departure from the general rule in the present case as the costs incurred in the application can be expected to be relatively minor when compared with the costs of the proceedings. I consider it to be appropriate, in all the circumstances, to order that each party pay her or its (as the case may be) own costs of the costs application. 4. For the reasons set out above, I make the following orders: 1. Subject to orders (2) and (3) below, order the plaintiffs to pay the defendant's costs of the proceedings, such costs to be paid on the ordinary basis. 2. Confirm that order (1) above does not affect the orders for costs made by Harrison AsJ on 31 August 2021 and 6 October 2021 in Ye v Chen (No 2) [2021] NSWSC 1265. 3. Each party pay her or its (as the case may be) own costs of this application. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 May 2022