City Garden Australia Pty Ltd (in administration) as trustee for the Ming Tian City Garden Unit Trust v Dai (No 2) [2024] NSWSC 22

Supreme Court New South Wales

Medium Neutral Citation: City Garden Australia Pty Ltd (in administration) as trustee for the Ming Tian City Garden Unit Trust v Dai (No 2) [2024] NSWSC 22 Hearing dates: On the papers, last submissions 22 January 2024 Date of orders: 31 January 2024 Decision date: 31 January 2024 Jurisdiction: Equity - Commercial List Before: Rees J Decision: Compensation and costs orders made. Catchwords: COSTS – indemnity costs – plaintiff sues former director in respect of invalid appointment of his wife as company secretary and entering into series of unauthorised loans to provide working capital for his building company – director maintained the lie to the end – provided a basis for other defendants to strenuously defend all aspects of plaintiff's claim – resulted in longer trial – increased plaintiff's costs significantly – indemnity costs order made. COSTS – plaintiff loses claims against lenders who advanced the unauthorised loans – plaintiff now in liquidation – gross sum costs order made to avoid wasted costs of assessment, to both the lender and liquidator – s98(4)(c) Civil Procedure Act 2005 (NSW) EQUITABLE COMPENSATION – plaintiff's solicitor to provide equitable compensation, being 75% of plaintiff's indebtedness to lenders – whether equitable compensation can include lenders' costs. Legislation Cited: Corporations Act 2001 (Cth), section 1317H Civil Procedure Act 2005 (NSW), section 98(4)(c) Cases Cited: Australian Securities and Investments Commission v Rich (2009) 236 FLR 1 Barrett Property Group Ltd v Metricon Homes Pty Ltd (No 2) [2007] FCA 1823 Baychek v Baychek [2010] NSWSC 987 Beach Petroleum NL & Anor v Johnson (No 2) (1995) 57 FCR 119 Berkeley Administration Inc v McClelland [1990] FSR 565 Berry v British Transport Commission [1962] 1 QB 306 City Garden Australia Pty Ltd (in administration) as trustee for the Ming Tian City Garden Unit Trust v Dai [2023] NSWSC 1498 Dobbs v National Bank of Australasia Ltd (1935) 53 CLR 643 Dustan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916 Gate v Sun Alliance Insurance Ltd (1995) 8 ANZ Ins Case 61-251 Gould v Vaggelas (1985) 157 CLR 215 Gray v Sirtex Medical Ltd (2011) 193 FCR 1 Hadid v Lenfest Communications Inc [2002] FCA 628 Hamod v New South Wales [2011] NSWCA 375 Harrison v Schipp (2002) 54 NSWLR 738 Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 In the matter of Indoor Climate Technologies Pty Ltd [2019] NSWSC 356 Ivory v Telstra Corporation Ltd [2001] QSC 102 Leary v Leary [1987] 1 WLR 72 Leary v NSW Trustee & Guardian (No 2) [2017] NSWSC 1226 Ragata Developments Pty Ltd v Westpac Banking Raulfs v Fishy Bite Pty Ltd [2012] NSWCA 135 Corporation (FCA 5 March 1993, unreported) Sande v Medsara Pty Ltd (No 2) [2004] NSWSC 262 Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788 Sparnon v Apand Pty Ltd [1998] FCA 164 Stemson v AMP General Insurance (NZ) Ltd [2007] 1 NZLR 289 Talacko v Talacko (2021) 389 ALR 178 Vance v Vance (1981) 128 DLR (3d) 109 Texts Cited: Dal Pont, Law of Costs (4th ed, 2018) Ritchie's Uniform Civil Procedure NSW Category: Consequential orders Parties: City Garden Australia Pty Ltd (Plaintiff) Meng Dai (First Defendant) Gerrard Toltz Pty Ltd (Second Defendant) Gemi 130 Pty Ltd (Third Defendant) Bridge Street Capital No 2 Pty Ltd (Fourth Defendant) Wallis Island Pty Ltd (Sixth Defendant) Maxmara Trinity Pty Ltd (Seventh Defendant) Lin Zhu (Eighth Defendant) Gemi Investments Pty Ltd (Ninth Defendant) Weriton Finance No 2 Pty Ltd (Tenth Defendant) Saddleback Mountain Estates No 2 Pty Ltd (Eleventh Defendant) Maxmara and JA International Pty Ltd (Fifteenth Defendant) Representation: Counsel: Ms M Hall (Second Defendant) Mr MW Young SC (Fourth, Tenth, Eleventh Defendants)