Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Ye v Chen (No 2) [2023] NSWCA 9 Hearing dates: On the papers Date of orders: 14 February 2023 Decision date: 14 February 2023 Before: Macfarlan JA: Meagher JA; Mitchelmore JA Decision: (1) Ms Chen's solicitors forthwith pay $93,746.31 to Ms Yu Chen, or at her direction, from the monies held in their trust account pursuant to the orders made by Beech-Jones J on 22 March 2021 in full satisfaction of the judgment given by Stapleton LCM on 11 December 2022 in the amount of $83,215.85 for Ms Chen against Ms Rebecca Haria Ye and Ucer Investment and Resources Management Pty Limited and interest after judgment on that judgment sum pursuant to s 101 of the Civil Procedure Act 2005 (NSW). (2) The Court notes that the sum of $93,746.31 does not include any amount in satisfaction of the costs orders made by Stapleton LCM, the costs orders form part of the judgment and the costs orders are not satisfied. (3) Otherwise dismiss Ms Chen's notice of motion. (4) Make no orders as to the costs of Ms Chen's notice of motion. Catchwords: COSTS — Court of Appeal — variation of costs order — whether non-acceptance of offer of compromise warranted departure from ordinary cost consequences — offer held not to be a genuine offer of compromise as no evidence to suggest successful party incurred significant appeal costs prior to making offer Legislation Cited: Civil Procedure Act 2005 (NSW), s 101 Supreme Court Act 1970 (NSW), s 75A Uniform Civil Procedure Rules 2005 (NSW), Pt 42, Div 3, r 51.51 Cases Cited: Leach v Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 Category: Costs Parties: Yu Chen (Applicant on motion) Rebecca Haria Ye (Respondent on motion) Representation: Counsel: J L Harrison (Applicant) A Ogborne (Respondent) Solicitors: Prudentia Legal (Applicant) Auburn Lawyers (Respondent) File Number(s): 2022/151232 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Common Law Citation: [2022] NSWSC 494 Date of Decision: 27 April 2022 Before: Adamson J File Number(s): 2021/6370 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. THE COURT: On 3 November 2022 this Court dismissed an application by Ms Ye for leave to appeal against a decision of Adamson J of 27 April 2022 ([2022] NSWCA 219; [2022] NSWSC 494). Her Honour had dismissed an appeal by Ms Ye against a judgment of Magistrate Stapleton dated 11 December 2020 ordering Ms Ye to pay the sum of $ 72,350.66 plus interest and costs to Ms Chen. 2. This Court ordered Ms Ye to pay Ms Chen's costs of the application to it, calculated on the ordinary basis. 3. Within 14 days of this Court's decision, Ms Chen filed a notice of motion seeking, principally, variation of its costs order to provide that Ms Chen's costs be assessed on the ordinary basis up to 6 July 2022 and thereafter on an indemnity basis. This application is founded on Ms Ye's non-acceptance of an offer of compromise dated 6 July 2022. 4. It is an essential element of an offer of compromise to which Pt 42 Div 3 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") applies that the offer be a genuine offer to compromise and "not be made merely to trigger the costs consequences under the rules" (Brighten v Traino (No 2) [2019] NSWCA 203 at [13]; see also Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [16] and Leach v Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 at [41]). It is therefore insufficient for one party to make an "offer" that involves the other party capitulating where no significant inducement is offered to procure that result. Where however a respondent to an appeal has already incurred substantial costs, its offer to forego any right to claim them may well give an offer the character of a genuine offer of compromise. 5. Ms Chen however has not established that this is the case here. 6. The Court file indicates that: 1. Ms Ye filed her summons seeking leave to appeal on 25 May 2022. 2. Ms Chen filed a notice of appearance in response on 22 June 2022. 3. At the first directions hearing on 4 July 2022, the registrar noted that Ms Ye would not be filing any supplementary submissions and directed that Ms Chen's submissions and a supplementary folder be filed by 1 August 2022. 4. On 6 July 2022 Ms Chen made her offer of compromise. 5. On 29 July 2022 Ms Chen lodged her written submissions. 1. On its face, this chronology does not suggest that Ms Chen would have been likely to have incurred any significant appeal costs before she made the offer of compromise and she did not call any evidence to suggest that she had. 2. In these circumstances, we conclude that she has not demonstrated that her offer was a genuine offer of compromise. As a result, the provisions of UCPR Pt 42 Div 3 dealing with offers of compromise, are inapplicable. There is no basis therefore to vary the order this Court made on 3 November 2022 that Ms Ye pay Ms Chen's costs of the application for leave to appeal on the ordinary basis. 3. A second order sought by Ms Chen's notice of motion concerns the application of funds originally paid by Ms Ye to Ms Chen's solicitors and held in a trust account as a condition of a stay of the judgment of Magistrate Stapleton pending determination of the appeal. 4. In relation to this the parties agree that the following order should be made: "Ms Chen's solicitors forthwith pay $93,746.31 to Yu Chen (Ms Chen), or at her direction, from the monies held in their trust account pursuant to the orders made by Beech-Jones J on 22 March 2021 in full satisfaction of the judgment given by Stapleton LCM on 11 December 2022 in the amount of $83,215.85 for Ms Chen against Rebecca Haria Ye (Ms Ye) and Ucer Investment and Resources Management Pty Limited and interest after judgment on that judgment sum pursuant to s 101 of the Civil Procedure Act 2005 (NSW)." 1. Ms Chen's agreement to the making of this order was subject to the Court making the following note: "The sum of $93,746.31 does not include any amount in satisfaction of the costs orders made by Stapleton LCM, the costs orders form part of the judgment and the costs order[s] are not satisfied." 1. That note appears consistent with Ms Ye's position and should accordingly be made. 2. Further orders sought by Ms Chen's notice of motion comprise notes to the effect that asset preservation orders made by Beech-Jones J on 22 March 2021 and varied by Brereton JA on 9 June 2022 remain in force. That is clearly the case as both sets of orders are expressed to operate until "further order" and none has been made. In her written submissions to the Court, Ms Ye effectively seeks abrogation or variation of those orders by the making of a "further order". In reply, Ms Chen objects to this Court addressing such an application in the absence of Ms Ye filing a notice of motion, supported by evidence. 3. There is force in Ms Chen's position. As a result, Ms Ye should be left to make such applications by way of notice of motion as she may be advised. Such an application can, and should, be made in the Common Law Division. 4. As each party has had a measure of success in relation to Ms Chen's notice of motion, there should be no order as to the costs of that motion. 5. For these reasons, the Court makes the following orders: 1. Ms Chen's solicitors forthwith pay $93,746.31 to Ms Yu Chen, or at her direction, from the monies held in their trust account pursuant to the orders made by Beech-Jones J on 22 March 2021 in full satisfaction of the judgment given by Stapleton LCM on 11 December 2022 in the amount of $83,215.85 for Ms Chen against Ms Rebecca Haria Ye and Ucer Investment and Resources Management Pty Limited and interest after judgment on that judgment sum pursuant to s 101 of the Civil Procedure Act 2005 (NSW). 2. The Court notes that the sum of $93,746.31 does not include any amount in satisfaction of the costs orders made by Stapleton LCM, the costs orders form part of the judgment and the costs orders are not satisfied. 3. Otherwise dismiss Ms Chen's notice of motion. 4. Make no orders as to the costs of Ms Chen's notice of motion. ********** 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: 14 February 2023