Supreme Court New South Wales Medium Neutral Citation: Guojin Huang v Jinghong Wei (No 4) [2023] NSWSC 164 Hearing dates: 24 February 2023 Date of orders: 24 February 2023 Decision date: 24 February 2023 Jurisdiction: Equity Before: Kunc J Decision: Defendant to pay plaintiff's costs on indemnity basis; Plaintiff's application for gross sum costs order granted Catchwords: COSTS – Party/Party – Gross sum costs – Indemnity basis – No issue of principle Legislation Cited: Civil Procedure Act 2005 (NSW) Cases Cited: Hamod v New South Wales [2011] NSWCA 375 Liverpool City Council v Estephan [2009] NSWCA 161 WLD Practice Holdings Pty Limited v Sara Stockham [2020] NSWSC 1354 Category: Costs Parties: Guojin Huang (Plaintiff) Jinghong Wei (Defendant) Representation: Counsel: ND Riordan (Plaintiff) J Wei (Self represented) Solicitors: Thomson Geer (Plaintiff) File Number(s): 2020/209064 Publication restriction: Nil EX TEMPORE Judgment (REVISED) SUMMARY 1. By notice of motion filed on 25 November 2022 the successful plaintiff, Mr Huang, seeks these orders against the defendant, Mr Wei: "1 An order that the defendant pay the plaintiff's costs of the reference on the indemnity basis, alternatively, on the ordinary basis. 2 An order that the defendant pay the plaintiff's costs of the proceedings from the termination of the reference up to and including the determination of this notice of motion on the indemnity basis, alternatively on the ordinary basis. 3 Pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), the plaintiff's costs the subject of: a. Orders 9 and 10 made on 25 May 2022; b. Any order made in favour of the plaintiff in connection with prayers 1 and 2 of this notice of motion, be fixed as a specified gross sum in the amount as determined by the Court." 1. These reasons assume familiarity and should be read with the Court's earlier judgments which are referred to in [5] and [10] below. By reference to the matters which follow, the Court has concluded that Mr Huang is entitled to the orders he seeks for costs of the balance of the proceedings on the indemnity basis, and for the costs of the proceedings in their entirety to be assessed in the gross sum of $428,500 inclusive of GST. The reasons for those conclusions are: 1. Since the Court delivered its principal judgment in April 2022, Mr Wei has consistently delayed or refused to comply or engage with the orders and processes of the Court, thereby demonstrating a gross procedural delinquency which has led to unreasonable delay and expense for Mr Huang at every turn (see for example Liverpool City Council v Estephan [2009] NSWCA 161 at [91] to [95] per Giles JA (with whom McColl JA and (relevantly) Basten JA agreed). 2. Mr Wei has no real property or other assets of value in Australia. He remains in China. There is no evidence that he is likely to return to Australia. Mr Huang reasonably suggests that it is unlikely that he will ever in fact be able to enforce any judgment for costs against Mr Wei. 3. The litigation between these parties has gone on long enough, having been defended by Mr Wei on a basis which the Court found to be fraudulent. For understandable reasons, Mr Huang no longer wishes to pursue those further remedies to which the Court found Mr Huang was entitled. 4. M Wei's conduct in the last ten months has demonstrated that he is unlikely to participate in any costs assessment, and will only put Mr Huang to further unreasonable delay and expense if an assessment is required. 1. Mr ND Riordan of Counsel appeared for Mr Huang. Mr Wei appeared for himself, with the assistance of an interpreter. PROCEDURAL HISTORY 1. Because it is perhaps the main reason why the Court has acceded to Mr Huang's applications today, it is necessary for me to set out what has occurred over the last ten months in some detail. 2. The Court published its principal reasons on 20 April 2022, finding in favour of Mr Huang (Guojin Huang v Jinghong Wei (No 2) [2022] NSWSC 473 (Principal Judgment)) accompanied by a direction that Mr Huang was to serve on Mr Wei proposed orders giving effect to those reasons and as to costs. Any agreed or competing short minutes were to be provided to the Court by 28 April 2022, and the matter was listed for the making of orders on 29 April 2022. 3. On 29 April 2022 the hearing as to the making of final orders went ahead by Microsoft Teams, at the conclusion of which these orders were made (29 April orders): "Definitions Strathfield Property means Lot XX in Strata Plan XXXXX, being XX/X Hilts Road, Strathfield NSW 1 Declares that the defendant has at all times held his interest in the Strathfield Property on trust for the plaintiff. 2 The defendant is to deliver to the plaintiff's solicitors, Thomson Geer, an executed transfer in registerable form of the defendant's interest in the Strathfield Property for nil consideration on or before 13 May 2022. 3 If the defendant does not comply with Order 2 a transfer to the effect of that referred to in Order 2 is to be executed by a Registrar of the Supreme Court of New South Wales. 4 Subject to any further order of the Court, any fees, duties and other costs which are payable to give effect to order 2 are to be paid by the defendant. 5 The defendant is to execute and provide to the plaintiff by 4 May 2022 a signed direction to Mr Ji Ying Dai of Wisdom Lawyers to deliver up to the plaintiff's solicitors the original Certificate of Title for the Strathfield Property within 5 business days of being served with the direction. 6 The defendant to deliver up the keys to the Strathfield Property to Thomson Geer and cause his belongings in the Strathfield Property to be removed by 5pm, 10 June 2022 or as the parties may otherwise agree. 7 The defendant to serve an affidavit on the plaintiff with details of any tenants currently residing in the Strathfield Property, including the terms of the tenancy by 4pm, 13 May 2022. 8 Subject to any further order made by the Court, the defendant pay the plaintiff's costs of the proceeding on an ordinary basis (as agreed or otherwise assessed). 9 Direct the parties to confer on the following: a) the identity of the Referee to be appointed; b) the regime of the appointment and the terms of the referral and, if agreement can be reached (in part or whole), prepare short minutes of order to give effect to such agreement and email such to the Associate to Kunc J by no later than 5pm on 6 May 2022. 10 Direct that the Plaintiff file and serve by email to the Associate to Kunc J written submissions as to: a) any matter/issue referred to in Order 9 above that has not been resolved between the parties; and b) an application for a costs order different to Order 7 above; by 5pm on 23 May 2022 and indicating whether the parties are content for any remaining disputes to be dealt with on the papers or whether a directions hearing will be required. 11 Direct that the Defendant file and serve by email to the Associate to Kunc J written submissions as to: a) any matter/issue referred to in Order 8 above that has not been resolved between the parties; and b) an application for a costs order different to Order 7 above; by 5pm on 23 May 2022 and indicating whether the parties are content for any remaining disputes to be dealt with on the papers or whether a directions hearing will be required. 12 Liberty to any party to apply as to the working out of these orders on 3 day's written notice to the Associate to Kunc J." 1. On 2 May 2022, the solicitors for Mr Huang emailed draft short minutes of order to my chambers, proposing some minor amendments to orders 10 and 11 made on 29 April 2022. On 16 May 2022, orders were made in accordance with the draft short minutes of order to the effect that orders 10 and 11 of 29 April 2022 were altered to state: "…10 Direct that the Plaintiff file and serve by email to the Associate to Kunc J written submissions as to: a) any matter/issue referred to in Order 9 above that has not been resolved between the parties; and b) an application for a costs order different to Order 7 above; by 5pm on 23 May 2022 and indicating whether the parties are content for any remaining disputes to be dealt with on the papers or whether a directions hearing will be required. 11 Direct that the Defendant file and serve by email to the Associate to Kunc J written submissions as to: a) any matter/issue referred to in Order 8 above that has not been resolved between the parties; and b) an application for a costs order different to Order 7 above; by 5pm on 23 May 2022 and indicating whether the parties are content for any remaining disputes to be dealt with on the papers or whether a directions hearing will be required….". 1. On 16 May 2022, written submissions on behalf of Mr Huang were provided in accordance with the orders made on 29 April and 16 May 2022. The submissions addressed an application by Mr Huang for indemnity costs against Mr Wei and the need to appoint a referee in accordance with order 9 of the 29 April orders. Mr Huang's written submissions included: "… 3. As at the date of these written submissions, the defendant has yet to participate in the conferral as to the identity of the referee and the terms and scope of the reference, despite numerous requests for a response, and has yet to serve the affidavit with details of any tenants currently residing in the Strathfield Property or to provide to the plaintiff's solicitors an executed transfer in registrable form. The defendant is presently in default of these orders. … 25. Regrettably, despite the plaintiff's solicitor having sent three emails to the defendant's solicitor, the plaintiff has not received any input from the defendant into the terms of reference he proposes and has not had the benefit of any comment from the defendant as to the proposed referees. 26. Accordingly, the plaintiff will approach this question on the assumption that everything is in dispute. …" 1. On 23 May 2022, written submissions were provided on behalf of Mr Wei. The submissions noted that Mr Wei did not oppose the appointment of a referee nominated by Mr Huang and was concerned only with the terms of reference and the question of costs. 2. On 25 May 2022, having considered the parties' written submissions and without the need for a further hearing, the Court published its conclusions on the questions of costs and the appointment in terms of the referral in order 9 of the 29 April orders (Guojin Huang v Jinghong Wei (No 3) [2022] NSWSC 662). The gravamen of that judgment was that Mr Huang was entitled to his costs on the ordinary basis up to and including 14 May 2021, and then to indemnity costs on and from 15 May 2021 until 23 May 2022, and that a referee was to be appointed with the parties to be jointly and severally liable for the referee's fees. Orders were made to give effect to the Court's reasons on the same date (25 May orders). Those orders were: "1. Pursuant to Part 20 rule 14 of the Uniform Civil Procedure Rules (the "UCPR"), refer to Meg O'Brien, Barrister, for enquiry and report the matters in the Schedule hereto. 2. With respect to costs, direct that (without affecting the powers of the Court as to costs) the plaintiff and defendant be jointly and severally liable to the referee for the referee's fees. 3. Direct that the parties deliver to the referee a copy of this order together with a copy of Division 3 of Part 20 of the UCPR no later than 31 May 2022. 4. Direct that: 4.1 subject to paras 4.2 and 4.3 hereof, the provisions of Pt 20 r 20 shall apply to the conduct of proceedings under the reference; 4.2 the reference will commence on 4 July 2022 unless otherwise ordered by the referee; 4.3 the referee consider and implement such manner of conducting proceedings under the reference as will, without undue formality or delay, enable a just determination to be made including, if the referee thinks fit: 4.3.1 the exchange of submissions by the parties; and 4.3.2 the issuing of subpoenas for production of documents. 4.4 any evidence in chief before the referee shall, unless the referee otherwise permits, be by way of written statements signed by the maker of the statement; 4.5 the referee submit the report to the Court in accordance with Pt 20 r 23 addressed to the Associate to Kunc J on or before 30 September 2022. 5. Amendments to the Schedule, whether by agreement or on a contested basis, are to be the subject of an order made by the Court. 6. If for any reason the Referee is unable to comply with Order 4.5 for delivery of the report to the Court, the Referee is to provide to Kunc J an Interim Report setting out the reasons for such inability and an application to extend the time within which to deliver the report to the Court to a date when the Referee will be able to provide the Report. 7. Grant liberty to the referee or any party to seek directions in the first instance by email to the Associate to Kunc J with respect to any matter arising in proceedings under the reference upon application made on 24 hours' notice or such less notice ordered by the Court. 8. Vacate Order 8 as to costs made on 29 April 2022. 9. The defendant is to pay the plaintiff's costs of the proceedings on the ordinary basis up to and including 14 May 2021. 10. The defendant is to pay the plaintiff's costs of the proceedings on the indemnity basis on and from 15 May 2021 up to and including 23 May 2022. 11. Stand the proceedings over for further directions before Kunc J on 14 October 2022. 12. Direct these orders be entered forthwith. Schedule 1. The total amount of any rent received by the Defendant in respect of Lot XX in Strata Plan XXXXX, being XX/X Hilts Rd, Strathfield, NSW (the Property) for any time during the period on and from 1 January 2015 and up to and including 31 May 2022 (the Period) (the Rent). 2. The nature and amount of any expenses (including outgoings) incurred and paid by the Defendant in respect of the Property during the Period (Expenses). 3. The amount of Rent for which the Defendant must account to the Plaintiff for the Period, including the extent to which either party is entitled to the benefit of such amounts as are referred to in paragraph 4 of this Schedule. 4. In determining the amount of Rent referred to in paragraph 3: (a) the extent to which, if at all, the Defendant is entitled to the benefit, whether by way of set-off or otherwise, of any of the Expenses; and (b) whether as a matter of fairness and justice any other allowances should be made as between the parties in respect of the Defendant's entitlement to, or occupation of, the Property during the Period. 5. How the costs of the reference should be borne as between the parties." 1. On 22 July 2022, Mr Wei's solicitors filed a notice of ceasing to act. 2. On 8 August 2022, the Court received an email from Ms Meg O'Brien, the barrister appointed as referee pursuant to order 1 of the 25 May orders. That email included: "… Since the May Orders were made, the following steps have occurred: • On 31 May 2022 the solicitors for the plaintiff sent me an email (copying the solicitors for the defendants) informing me that I had been appointed as a referee. • On 2 June 2022 I replied to the solicitors for the parties acknowledging the receipt of the reference and requesting the parties liaise and agree to a timetable for the completion of certain steps in order to progress the reference. • On 7 July 2022 I received an email from the solicitors for the plaintiff which contained the requested timetable, but noting that the plaintiff had been unable to get a response from the defendant. • On 15 July 2022 I received an email from the solicitors for the defendant informing me that they have been unable to obtain instructions. • On 22 July 2022 the solicitors for the defendant advised they had ceased to act for the defendant. • On 27 July 2022 I asked the parties if the defendant had secured alternative representation or was otherwise interested in engaging in the referral process because in the absence of any real involvement from the defendant I considered that a real question arose about the utility of the referral. … In the circumstances, it is my view that the reference cannot proceed as anticipated in the May Orders and given what has transpired, his Honour may wish to relist the matter to obtain a further update on its status from the parties. …" 1. Included with Ms O'Brien's email was a copy of various email correspondence between herself and the parties. The correspondence included an earlier email from solicitors for Mr Wei dated 15 July 2022 which stated: "At this time, we are unable to provide a view on the timetable proposed. This is because we have not been able to obtain instructions from our client." 1. The only other correspondence between Ms O'Brien and solicitors for Mr Wei was an email from the solicitors on 22 July 2022 to the effect that they had ceased to act for Mr Wei. 2. In light of Ms O'Brien's email, the matter was listed for directions on 11 August 2022. On that date, Mr Wei appeared for himself by Microsoft Teams from China. He addressed the court in English and without the benefit of a Mandarin interpreter. Mr Riordan appeared for Mr Huang. During the hearing, Mr Wei requested the matter be stood over for two months, to allow him to make arrangements for new legal representation and a Mandarin interpreter. 3. Mr Riordan submitted that the request for an adjournment should not be granted because it had been at least three weeks since Mr Wei's solicitors had ceased to act, which was sufficient time for him to obtain new representation. In any event, the orders sought by Mr Huang were of a kind which, in the ordinary course, should have been made as part of the reference several months prior. 4. Given Mr Wei's position, being without the benefit of legal representation or an interpreter in his native language, the Court adjourned the proceedings for a period of six weeks. After determining the matter would be adjourned to 22 September 2022, I addressed Mr Wei (Tcpt, 11 August 2022, 2(48-50) – 3(1-21)): "HIS HONOUR: … I want to make it very clear that there will be no excuses at that time. I expect that you will have retained a new solicitor and, whether or not you are in the country, somebody will appear for you so this matter can progress. Do you understand? DEFENDANT: Okay, so the time is – can you repeat the time? HIS HONOUR: Yes, it will be Thursday 22 September 2022. DEFENDANT: 27 September. HIS HONOUR: 22, Thursday 22 September 2022. We will send you a copy of the order today so you can provide that to your new lawyer. Mr Wei, understand this: In my experience six weeks is more than enough, and, frankly four weeks is more than enough, but I'm giving you an indulgence, even if you are overseas, to retain a lawyer in Sydney. This is an age of instantaneous communication, zoom, emails; I will not accept an excuse on the next occasion that you have been unable to have retained a lawyer. Do you understand? You must have a new lawyer by six weeks' time, do you understand. DEFENDANT: Yes. 22 September." 1. An email was circulated to the parties later that morning which stated that the matter was listed for directions on Thursday, 22 September at 9.30am. However, due to the death of Queen Elizabeth II, that date was subsequently declared a holiday in Australia. An email was distributed to all parties on 12 September 2022, informing them the hearing could not proceed on 22 September and would need to be rescheduled for 23 September 2022. 2. On 15 September 2022, Mr Wei emailed the court stating: "… 23 September is unsuitable and I need to rearrange the time with interpreter and lawyer. I will get back to you ASAP." 1. Also on 15 September 2022, this reply was sent to Mr Wei on behalf the Court: "Please rearrange the time with your lawyer and interpreter. The matter remains listed for 23 September 2022." 1. On 20 September 2023, a Microsoft Teams link was distributed to all parties, including Mr Wei, for attendance at the hearing on 23 September 2022 at 9.30am AEST. On 22 September 2022 at 7.03pm Mr Wei emailed the Court: "I am sorry to know this matter remains listed on 23 September 2022 and I can not attend due to I can not get the day-off and also my interpreter is not free on 23. I check with interpreter and she is available on 28 October 2022. Shall we arrange the time on 28 October?" 1. The hearing on 23 September 2022 was vacated because of Mr Wei's email and was relisted for 28 September 2022. The email on behalf of the Court notifying all parties included a direction to Mr Wei: "Mr Wei – if you have retained a solicitor to act for you, the solicitor may appear on your behalf and you will not have to attend personally. However, if you do not attend and there is no solicitor acting on your behalf then orders may be made in your absence." 1. On 28 September 2022, Mr Riordan once more appeared for Mr Huang. There was no appearance on behalf of Mr Wei. Nor did he appear for himself. When asked by the Court whether Mr Wei had any solicitors on the record Mr Riordan said that there were no solicitors on the record, however, Mr Wei "has indicated in correspondence that he has retained lawyers" (Tcpt, 28 September 2022, 1(33-4)). 2. On that occasion the following orders were made in the absence of Mr Wei (28 September orders): "1. The defendant to provide verified discovery of the following categories of documents by 21 October 2022: (a) all documents recording or referring to any advertisement regarding the property located at XX/X Hilts Road, Strathfield during the period 1 January 2015 to 14 June 2022; (b) all bank statements for any bank account in the name of the defendant during the period 1 January 2015 to 14 June 2022; (c) all communications during the period 1 January 2015 to 14 June 2022 between the defendant and any leasing agent, occupant or tenant of the property located at XX/X Hilts Road, Strathfield relating to the payment of rent or the rent payable in consideration of a right of occupation of the premises; (d) all rental ledgers held by the defendant relating to the property located at XX/X Hilts Road, Strathfield maintained during the period 1 January 2015 to 14 June 2022; (e) all records relating to rental bonds or deposits relating to the property located at XX/X Hilts Road, Strathfield maintained during the period 1 January 2015 to 14 June 2022; (f) all lease, sublease or residential tenancy agreements relating to the property located at XX/X Hilts Road, Strathfield covering the period 1 January 2015 to 14 June 2022 (or any part thereof). 2. Stand the proceedings over for further directions on 28 October 2022. 3. Liberty to any party to apply on 2 days' notice by email to the Associate to Kunc J. 4. Direct these orders be entered forthwith." 1. An email noting the orders were sent to all parties, including Mr Wei, later that day. 2. On 24 October 2022, an email containing a Microsoft Teams link was sent to all parties ahead of the directions hearing on 28 October 2022. The email included a note that "Failure by Mr Wei or his representatives to attend on Friday may result in orders again being made in Mr Wei's absence". 3. Also on 24 October 2022, Mr Wei responded to the court's email of 28 September (see [25] above) noting the 28 September orders. Mr Wei's email stated: "Dear Parties, I am sorry to get this order as following. This hearing was scheduled on 22nd of September, however, this date was changed as public holiday to mourn the death of Queen Elizabeth II. The court changed the hearing date to 23rd but I was not free on that date. I was not able to make myself available in such short notice. I think it is unfair for me to receive this order. I want to make an appeal for this order. Would you please inform me the way to appeal. And in my idea, who claims shall bear the proof, the plaintiff should approve these documents instead of me …" 1. Screenshots relating to the documents sought in the 28 September orders were attached. 2. On 25 October 2022, a response was provided to Mr Wei by email on behalf of the Court which stated: "His Honour advises that either you or your legal representative (if you have appointed one) should raise these issues at the directions hearing this Friday 28 October 2022 and he will consider the matter then." 1. At the directions hearing on 28 October 2022, Mr Wei appeared for himself. He was assisted by a Mandarin interpreter. Mr Riordan again appeared for Mr Huang. 2. On that occasion, Mr Riordan handed up short minutes of order providing for an application for a gross sum costs order against Mr Wei. Mr Wei had received the document the day before the hearing. 3. During the course of the hearing, I asked Mr Wei whether he intended to obtain legal assistance, to which he responded that he did require legal assistance. I also had the following exchange with Mr Wei (Tcpt, 28 October 2022, 4(10-31); 4(42)-7(24)): "INTERPRETER: The thing is I think in terms of statute of limitation, this case has gone beyond the time limit specified by law to pursue any charges or bring any requests since the contract was established in 2012 and the plaintiff only brought a suit in 2020 so I think the time limit has passed. HIS HONOUR: Mr Wei, the statute of limitations has got nothing to do with what we are now talking about. We are now talking about a costs order, which I made on 25 May of this year. INTERPRETER: But I still think limited – the statute of limitations is the establishment of this whole case and including the court order given on 25 May. HIS HONOUR: That's not right, Mr Wei. I think what I'm going to do is this. Mr Wei, you are not going to really understand what is happening here unless you get an Australian lawyer to help you. What I'm going to do is only make in effect order 1 of the short minutes today, which is for the motion to come on with all the evidence and the submissions. You really need to find a lawyer to help you look at that so you understand what is happening and then I will bring the matter back for directions but earlier than 13 December, so that you can tell me hopefully through your lawyer, who will appear on that occasion, what you want to do. … HIS HONOUR: Mr Wei, what will happen is you will receive the material upon which the plaintiff is going to rely for the lump sum costs order application by 25 November. You really must do the best for yourself, get yourself an Australian lawyer to help you. I will give you slightly more than a week for that lawyer to have a look at the material. I don't expect it's going to be particularly complicated or extensive and then we will have another hearing like this on the morning of 7 December. Are you available on the morning of 7 December? INTERPRETER: I'm actually not available on 7 December. Could you make it 11 December? HIS HONOUR: That's a Sunday. What about 8 December? INTERPRETER: Is 9th okay? HIS HONOUR: No, I can't do the 9th, unfortunately. RIORDAN: Neither can I, and I can't do the 8th either. Your Honour, it may be that Mr Wei's solicitor may appear. HIS HONOUR: Yes, of course. You don't have to be present if you have a lawyer to represent you, Mr Wei. INTERPRETER: I'm not sure. Currently, I'm not sure if I can find a lawyer, so. HIS HONOUR: Well, Mr Wei, Australia is full of lawyers. How about the 13th, which is the date in these short minutes? INTERPRETER: Yes, the 13th will do. HIS HONOUR: All right. Now, Mr Wei, I just want you to understand that every time the plaintiff has to come back to court and pay for its barrister and its solicitor to be here, that is just money coming out of your pocket at the end of the day, so we really need to bring all this to an end. So I want you to understand that on the 13th, one of two things is going to happen, or may happen. Ideally, you should have a lawyer who can tell me what your attitude is to the application and the material that has been filed. If you will want an opportunity to respond, you will be given it. But, if you don't attend or you don't have a lawyer, then I may proceed to deal with the matter there and then and I will just let you tell me whatever it is you want to tell me on that occasion, or if you're not here, an order may be made in your absence. So it is very important that you attend on the 13th or, even better, that your lawyer attends on the 13th and that your lawyer has looked at the material which have been served by the 25th. Do you understand all that, sir? And if you have any questions, please ask them. INTERPRETER: Yes, I understand." 1. Twice more during the hearing Mr Wei was urged by the Court to seek legal advice (Tcpt, 28 October 2022, 6(38-40, 48-50)) and the following orders were made (28 October orders): "1. Any notice of motion in support of a lump sum costs order in favour of the plaintiffs be filed and served on or before 5:00pm on 25 November 2022, together with any supporting affidavit and submissions; 2. Stand the proceedings over for further directions on 13 December 2022 at 9:30am before Kunc J." 1. After making the 28 October orders, I addressed Mr Wei again towards the conclusion of the hearing (Tcpt, 28 October 2022, 7(12-30)): "HIS HONOUR: So, Mr Wei, you will need to have your lawyer. Or if you haven't got a lawyer, you will need to appear. You'll need to arrange an interpreter unless your lawyer speaks English. And be ready to appear at 9:30am Sydney time on 13 December. We will email you a copy of these orders. Do you understand, sir? INTERPRETER: Yes, I understand. But I still again want to mention statute of limitations. I do think the time limit for this case has passed. So, it cannot be established. HIS HONOUR: Well, sir, I've heard what you said. That is, in my view, not correct. Again, if you get some Australian legal advice, I'm sure they'll be able to explain to you why that is the case … DEFENDANT: Okay. Okay." 1. The parties returned on 13 December 2022. Mr Wei again appeared for himself from China by Microsoft Teams. He was again assisted by a Mandarin interpreter. 2. At the hearing, Mr Wei confirmed that he had received the plaintiff's material on 29 November 2022 in support of the application for additional indemnity costs and a gross sum costs order (being the material that was before the Court today). He requested that the hearing as to a gross sum costs order be delayed, to permit him further time to read the documents and consider his position. Mr Wei was asked whether he had obtained an Australian lawyer, to which he responded (Tcpt, 13 December 2022, 2(3-27)): "INTERPRETER: I'm still – I'm still looking for one, and I am – it's still – I'm still having conversations with them, but I haven't decided. HIS HONOUR: So you haven't shown any of these documents to an Australian lawyer? INTERPRETER: Yes, I'm still trying to decide on a lawyer to assist me, so I wish to have a few more days to prepare for that. HIS HONOUR: Yes. Well, I am going to list this matter for hearing, and you will either have to obtain a lawyer or appear for yourself on the next occasion. But there will be no further adjournments granted, Mr Wei. You have had numerous indulgences. And every time, if I may say respectfully, every time you come along and tell me you are not ready or you haven't got a lawyer you are just increasing the amount of money that you are going to have to pay the plaintiff because this is another occasion which is wasted, and in the ordinary course the plaintiff will have their costs. So all you are doing is putting more money in the plaintiff's pocket by your behaviour. But if that's the way you choose to do it, it's a matter for you. I'm going to list this matter for hearing before me early in the new term. You can either get a lawyer or you can appear for yourself, but I will decide the matter then. Do you understand? INTERPRETER: Yes, I understand. Thank you." 1. After determining a suitable date for hearing as 24 February 2023, I again addressed Mr Wei (Tcpt, 13 December 2022, 3(34)-4(1)): "HIS HONOUR: Now Mr Wei, I again urge you to obtain, if you can, the assistance of an Australian lawyer. There are plenty of them in Sydney, many of whom I am sure would be delighted to act for you. And it will be much easier for you if you have legal representation. INTERPRETER: Okay. HIS HONOUR: And I want to make something very clear, sir, when this matter comes on for hearing on 24 February it will proceed for hearing. I will not, barring some remarkable set of circumstances, entertain any application for any adjournment. So you will either attend on that day and represent yourself or you will have the benefit of legal representation. Or if you do not appear by yourself or by a lawyer then I now put you on notice that the Court will proceed to deal with the application in your absence. So you really need to be in a position to turn up and defend yourself, if you wish to do that. But if you do not appear the matter will proceed in your absence. Do you understand? INTERPRETER: Yes, I understand." 1. The following orders were made on that date (13 December orders): "1. The Defendant is to serve and file by email to the Associate to Kunc J any affidavit evidence upon which he proposes to rely together with an outline of submissions on or before 10 February 2023. 2. The Plaintiff's application for a gross sum costs order is fixed for hearing on 24 February 2023 before Kunc J at 2:00pm." MR WEI'S SUBMISSIONS TODAY 1. As at today's hearing, the Court had not received any affidavit or outline submissions from Mr Wei. However, Mr Wei did appear by Microsoft Teams from China, again with the assistance of an interpreter. It is convenient at this point of my reasons to summarise what occurred in respect of Mr Wei and the submissions he made: 1. Mr Wei informed me that he had read the plaintiff's material. 2. He told me that while some of the terms were "jargon" which he did not understand, he had asked "friends" to help him understand what the material meant, but it appears that they couldn't really enlighten him. He told me that his "friends" were not Australian lawyers but were people who he said knew something about Australian law. He confirmed he had taken no other steps to obtain advice or assistance in relation to today's hearing. 3. The interpreter that he retained today told me - and this was confirmed by Mr Wei - that she had only been retained in the minutes before the hearing. There was a faint attempt by Mr Wei to defer today's hearing while material could be provided to the new interpreter, so that she might be able to assist Mr Wei better in understanding what was going on. However, Mr Wei also told me that the previous interpreter who he said he had arranged, and who had at short notice been unable to assist him, had not been provided by him with any of the material either. I was not prepared to delay the hearing again. 4. Mr Wei had not complied with any of the Court's orders in relation to the preparation for today. I nevertheless asked him if there was any evidence upon which he might wish to rely today. He told me that the only evidence upon which he might wish to rely was evidence of the council rates and other expenses which he had incurred in relation to the property which was the subject of the proceedings. He asked for an adjournment so that he might be able to marshal that material, which he told me was not immediately available to him at the location from which he was addressing the Court. I was not prepared to delay the proceedings to allow that to occur. I explained to Mr Wei that, in my view, the material to which he referred was irrelevant to anything which I had to decide today. This was because if Mr Wei wanted to argue that he had a setoff in relation to costs he had incurred against any costs judgment that might arise from orders which I would make, that was a matter for another time and another place. 5. I gave Mr Wei an opportunity to cross-examine the plaintiff's solicitor, Ms Walkom. However, I curtailed that cross-examination after a few minutes when it became apparent that all Mr Wei was seeking to do was to ask her to translate or summarise material that was in her affidavit. I was not prepared to allow a hearing that had been fixed for two hours to be extended unduly (it in fact took more than three hours), when Mr Wei was asking questions that would not have been necessary if had he taken proper steps to seek to understand the material and prepare properly for today, including with legal assistance if he had chosen to retain someone. 6. Mr Wei's essential submission was that Mr Huang's application should be rejected because the costs of these proceedings should go to independent costs assessment. The reason he gave for this was that he wanted the opportunity to understand what the costs were and how they had been calculated, to question the charges, and to have the benefit of the assurance of an independent person that charges that he was being asked to pay were reasonable. He did not make any submissions in relation to the other matters advanced in the plaintiff's application. 1. There are three immediate answers in relation to Mr Wei's submission that the costs should go to an independent assessment, rather than being the subject of a gross sum costs order: 1. As Mr Riordan put, there is no right in a litigant to have a costs assessment because the Court retains a discretion to make a gross sum costs order in an appropriate case: Hamod v New South Wales [2011] NSWCA 375 at [813]. 2. Had Mr Wei taken steps to prepare for today's application by seeking advice and assistance in relation to the detailed material tendered by Mr Huang, he would in effect have achieved the things which he says he would want to do in a costs assessment. 3. The interlocutory history which I have set out above gives every reason to think that, even if this matter went to an assessment, Mr Wei would not take that opportunity in any event, and that all that would occur would be further unreasonable delay and expense being imposed upon Mr Huang by obfuscation or non-participation from Mr Wei. THE APPLICABLE LEGAL PRINCIPLES 1. I respectfully adopt and apply this summary by Sackar J in WLD Practice Holdings Pty Limited v Sara Stockham [2020] NSWSC 1354: "8. The Court has a discretion to order costs in a lump or gross sum pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW). Beazley P set out the principles relevant to the exercise of that discretion in Hamod v New South Wales [2011] NSWCA 375 at [813]-[820] (and again in Wilkie v Brown [2016] NSWCA 128 at [50]-[51]): I have already set out the relevant provisions of s 98. The discretion thereby conferred upon the court is not confined and may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision: Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]-[22]. In Harrison v Schipp, Giles JA considered that the discretion in s 98(4) may be exercised where the assessment of costs would be protracted and expensive and, in particular, if it appeared that a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment. However, his Honour stated, at [22]: "The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available." See also Wentworth v Wentworth (Court of Appeal, 21 February 1996, unreported). The courts have typically applied a discount in assessing costs on a gross sum basis: Ritchie's Uniform Civil Procedure NSW , LexisNexis, Sydney, 2005 to date, " Civil Procedure Act ", at [s 98.65]; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788; Idoport Pty Ltd v National Australia Bank Ltd; Lorenzato v Lorenzato & Anor (No 2) [2011] NSWSC 790 per Black J. In Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160, von Doussa J noted that the specified gross sum costs procedure was particularly useful in complex cases, that the power must be exercised judicially and only after giving the parties an adequate opportunity to make submissions, and that before exercising the power the court should be confident that the approach taken to estimate costs is fair, logical and reasonable. The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act, ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred (for example, Harrison v Schipp ); the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability: Ritchie's Uniform Civil Procedure NSW at [s 98.45]. The exercise of the power conferred by s 98(4) is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process: Beach Petroleum NL v Johnson (No 2) at 120; Charlick Trading Pty Ltd v Australian National Railways Commission; Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788 at [90], [194]-[195]; Hadid v Lenfest Communications Inc [2000] FCA 628. The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Leary v Leary [1987] 1 WLR 72; [1987] 1 All ER 261; Sony Entertainment (Aust) Ltd v Smith; Microsoft v Jiang (2003) 58 IPR 445; [2003] FCA 101; Ritchie's Uniform Civil Procedure NSW at [s 98.60]). The assessment of any lump sum to be awarded must represent a review of the successful party's costs by reference to the pleadings and complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing: Smoothpool v Pickering [2001] SASC 131. In the exercise of its discretion the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment: Harrison v Schipp at 743; Hadid v Lenfest Communications Inc at [35]; Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5; [1999] FCA 673. The costs ordered should be based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills): Beach Petroleum NL v Johnson (No 2); Leary v Leary; Harrison v Schipp at 743; Sparnon v Apand Pty Ltd (FCA, 4 March 1998, unreported). The approach taken to estimate the costs to be ordered must be logical, fair and reasonable: Beach Petroleum NL v Johnson at 164-165; Hadid v Lenfest Communications Inc at [27]; Harrison v Schipp at 743. This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment: Leary v Leary at WLR 76 per Purchas LJ; Beach Petroleum NL v Johnson (No 2) at 123; Auspine Ltd v Australian Newsprint Mills Ltd at 164-165. 9. I have said previously that finality to litigation is essential in everyone's interest, and that in many cases that factor alone will weigh heavily on whether a Court should exercise discretion to order a lump sum costs order (see Edward Ted Lakis and Anor v Michael Victor Lardis and Anor (No 3) [2018] NSWSC 1296 at [57]; Lawcover Insurance Pty Ltd v Muriniti and Newell [2018] NSWSC 558 at [10]). 10. In cases where a lump sum costs order is appropriate, the Court takes a "broad brush" approach to determining the lump sum (Harrison v Schipp (2002) 54 NSWLR 738 at [22] (Giles JA)). As the Court of Appeal (Beazley P, Meagher and Payne JJA) said in Bechara (T/as Bechara and Co) v Bates [2016] NSWCA 294 at [14], "[t]o require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order." 11. I have commented previously that experience, I think, has shown that a discount of 10-30% is typically appropriate (see Ross v Padget [2016] NSWSC 1851 at [16] and [21]; Fisher-Pollard by her tutor Fisher-Pollard v Fisher-Pollard [2018] NSWSC 807 at [38]). Stevenson J adopted this approach in Berry Rural Co Operative Society Ltd v Sepak Industries Pty Ltd (No 4) [2018] NSWSC 1902 at [6]. However, the appropriate order in each case will turn upon the evidence (Hamod at [819]-[820])." CONSIDERATION 1. Mr Huang relied on a detailed affidavit sworn by his solicitor, Ms JA Walkom, a litigation partner of Thomson Geer, with over sixteen years of experience in commercial litigation. I am satisfied that Ms Walkom is suitably qualified to express the opinions which she does in her affidavit, that those opinions are reasonable and appropriate, as are the costs and expenses which have been charged to Mr Huang. 2. Given the critical role of cross-examination at the hearing of these proceedings, that conclusion extends to my view that this was also clearly a case where the retainer of senior counsel was warranted. 3. Ms Walkom's evidence had been prepared by reference to detailed invoices exhibited to her affidavit. Those invoices had been rendered to Mr Huang by Ms Walkom's firm and he has paid them all. 4. I have also been assisted by Mr Riordan's thorough written submissions, which were efficiently supplemented in the course of oral argument today. Those submissions, so far as they have been dispositive, are reflected in the reasons which I have given in [2] above to explain the orders I will shortly pronounce. It is unnecessary to repeat those reasons here. 5. What I must next do is address the issue of quantum for a gross sum costs order in respect of the four stages of litigation identified in the submissions advanced on behalf of Mr Huang. All the monetary sums which follow are inclusive of GST. 6. The first period is for Mr Huang's costs up to 14 May 2021, which the Court has already ordered should be paid on the ordinary basis. Ms Walkom's evidence was that on a solicitor/client basis the professional fees were $114,275.15, and disbursements of $14,621.19. However, in her opinion, which I accept, the professional fees would likely to have been reduced on assessment by 25%, whereas there would have been no reduction in the disbursements (which included counsels' fees). Making that adjustment gives a figure of $100,327.55, which I will, for simplicity, round to $100,000. 7. In my view, one further adjustment needs to be made to this figure. As often happens in cases of this kind on gross sum costs applications, where costs have been ordered on the ordinary basis, the Court makes a further discount to reflect the advantage which the applicant receives from having an early determination of costs, and to allow for the fact that the Court's exercise today is more broad brush than would occur on any detailed assessment. For those reasons, I reduce the amount of $100,000 by 10% to $90,000. Mr Riordan did not wish to be heard against that further discount. 8. The next component is Mr Huang's costs from 15 May 2021 to 23 May 2022. Those are costs which the Court has earlier ordered should be paid on the indemnity basis. Ms Walkom's evidence is that on a solicitor/client basis those costs were $173,268.70 and disbursements were $157,633.25. I accept Ms Walkom's opinion that, because the costs are to be assessed on the indemnity basis, there should only be a small discount – in this case 5% - in relation to the professional costs to reflect possible disallowances on assessment. This gives a total figure of $322,238.52, which I will round down to $322,000. Because the order is for indemnity costs, I do not consider it appropriate to discount those costs further (unlike the costs dealt with in the previous paragraph). 9. Finally, in relation to the costs of the reference and the costs that were subsequently and most recently incurred, for the reasons set out in [2(1)] above there will be an order that those costs are payable on the indemnity basis. On Ms Walkom's evidence, those costs, applying the same methodology of 5% discount as in the preceding paragraph, are $6,545.64, which I round down to $6,500. 10. Adding the figures set out in the preceding three paragraphs gives Mr Huang a total entitlement to a gross sum costs order in the sum of $428,500. CONCLUSION 1. The orders of the Court are: 1. The defendant is to pay the plaintiff's costs of the balance of the proceedings on and from 24 May 2022 on the indemnity basis. 2. The defendant is to pay the plaintiff's costs of the proceedings assessed on a gross sum basis in the sum of $428,500 inclusive of GST. ********** 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: 28 February 2023