Supreme Court New South Wales Medium Neutral Citation: Auscity Enterprises Pty Ltd v Kismet Ventures Pty Ltd (No 2); Feng Feng An v Shujauddin Mohammad; Autian Taxi Service Pty Ltd v Ali Wais; Top Taxi Management Pty Ltd v Jian Ma; Top Taxi Management Pty Ltd v Boateng [2013] NSWSC 605 Hearing dates: 15 May 2013 Decision date: 15 May 2013 Jurisdiction: Common Law Before: Beech-Jones J Decision: Cross claimant to pay cross defendant's costs of the motion up to and including 24 April 2013. Catchwords: COSTS - No question of principle. Cases Cited: - Auscity Enterprises Pty Ltd v Kismet Ventures Pty Ltd, NSW Supreme Court, 10 April 2012, unrep - Minister for Immigration and Ethnic Affairs, Re; Ex Parte Lai Qin (1997) 186 CLR 622 - Mohammed v An [2013] NSWSC 80 Category: Interlocutory applications Parties: 2011/402268: Auscity Enterprises Pty Ltd - Plaintiff Kismet Ventures Pty Ltd - First Defendant Mhedi Salehi - Second Defendant 2012/281677: Feng Feng An - Plaintiff Shujauddin Ismail Mohammed - Defendant 2012/294422: Autian Taxi Service Pty Ltd - Plaintiff Ali Ahmed Ogk Wais - First Defendant George Youssef - Second Defendant 2012/294684: Top Taxi Management Pty Ltd - Plaintiff Jian Ma - First Defendant Jack Yeung - Second Defendant 2012/294693: Top Taxi Management Pty Ltd - Plaintiff Anthony Agyenim Boateng - First Defendant Daniel Mansour - Second Defendant Representation: Counsel: G. Minas (Plaintiffs and Second Proposed Cross Defendant) D.A. Lloyd (Defendants and Proposed Cross Defendants) M.K. Condon SC, P. Reynolds (Q. Feng) Solicitors: Minas & Associates (Plaintiff and Second Proposed Cross Defendant) Riley Grey-Spencer Lawyers (Defendants and Proposed Cross Defendants) Rockwell Olivier (Q. Feng) File Number(s): 2011/402268 2012/281677 2012/294422 2012/294684 2012/294693 Ex Tempore Judgment 1Senior Counsel for Mr Quiang Feng, one of the cross defendants to each of the proceedings, seeks an order for the payment of his client's costs of a motion that sought the joinder of his client and leave to issue a cross claim. The notice of motion has now been mostly resolved. 2On 10 April 2012 and 6 February 2013 I gave reasons for ordering the transfer of five proceedings from the Small Claims Division of the Local Court into this Court (Auscity Enterprises Pty Ltd v Kismet Ventures Pty Ltd, NSW Supreme Court, 10 April 2012, unrep; Mohammed v An [2013] NSWSC 80). The basis upon which I did so was that the defendant sought to bring a cross claim against Mr Feng and others alleging that they pursued a fraudulent scheme for the inflation of the cost of repairing damaged taxies. In the judgment of 6 February 2013 I noted that: "The law attaches great importance to allegations and findings of fraud. In particular, it imposes great burdens on those who make the allegations and attaches serious consequences to those who are found to have engaged in it." 3Having made the orders for transfer, I then made directions for the filing of a motion by the defendant seeking leave to join Mr Feng and leave to issue a cross claim in a particular form. Ultimately Mr Feng indicated that he did not consent to the form of cross claim, and I made directions designed to facilitate the resolution of that dispute between him and the defendant(s). As part of those directions I made orders requiring that Mr Feng notify the defendant(s) of the bases of his objection to the cross claim. Although in principle Mr Feng, faced with an allegation of fraud, would be entitled to hold his position until the last minute, I made those directions in order to avoid the wastage of Court time that can occur in pleading disputes. For example, often in response to a particular form of objection, the party seeking leave to issue the pleading produces an amended version. 4The result of that process was that a number of iterations of the proposed cross claim were prepared. The defendant/cross claimant(s) do not concede that there was any particular deficiency in any of their cross claims, and state that they took a pragmatic course of heading off costly and lengthy submissions before the Court on pleading issues by bringing in further versions designed to address Mr Feng's objections. 5Ultimately leave to file the fourth draft of the proposed cross claim which was prepared on 24 April 2013 was not opposed. I have made appropriate directions facilitating the filing of further pleadings and the preparation of evidence. 6Where a matter has resolved in such circumstances, it is not appropriate that I conduct an in-depth analysis of the likelihood of whether one party or another would have succeeded for the purpose of determining whether to award costs (see Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622 at 624.) In my view that principle does have application at an interlocutory phase, with appropriate modification. Similarly, an exception to that principle which involves an assessment of whether the parties have acted reasonably or, if they did, whether one party would have been certain to have succeeded if the matter had been fully tried (see Lai Qin at 625) can apply at an interlocutory stage as well. 7The second iteration of the draft of the proposed cross claim bore the date 15 February 2013. A number of objections were notified on behalf of Mr Feng to that form of draft. The critical problem as I see it with that iteration was that it did not properly allege a state of mind on the part of Mr Feng that would amount to fraud. Leaving aside all other complaints, I consider that, had the motion proceeded in respect of that iteration, leave to file it would have been refused. 8The third iteration of the draft of the proposed cross claim bore the date 2 April 2013. Again, various objections were raised in relation to that iteration. The only objections that I propose to consider are a series of amendments that alleged a duty of care on the part of Mr Feng not to make false representations. As formulated, the pleading appeared to mix the concepts of negligence and fraud. Bearing in mind the statement that I made in the judgment ordering the transfer of the proceedings, I would not have allowed a cross claim in that form to have proceeded either. 9In relation to the other objections raised in respect of the form of the cross claim, including contentions that the version in respect of which leave has been granted needs further particulars, I am simply not in a position on an application for costs to determine whether they were so well founded that I could conclude that the motion for leave would have been unsuccessful. 10The conclusions that I have reached seem to me to result in an entitlement on the part of Mr Feng to be awarded his costs of the motion up to the date of the fourth iteration, being 24 April 2013. Accordingly, I order the cross claimants to pay Mr Feng's costs of the notice of motion for joinder and seeking leave to file a cross claim up to and including 24 April 2013. Given the nature of the serious allegations made against Mr Feng, I will also order that those costs be paid forthwith. However, I do not consider that there is any matter that warrants they be paid on an indemnity basis. The balance of the costs of the notice of motion will be each party's costs in the cause. ********** 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: 21 May 2013