Federal Court of Australia

Sydney Subdivision Pty Ltd (in liq) v Chow (No 2) [2023] FCA 54

ORDERS

THE COURT ORDERS THAT:

1.    The applicants pay the costs of the interlocutory application determined on 13 January 2023.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

COLVIN J:

1    On 13 January 2023, an application by Sydney Subdivision Pty Ltd (in liq) (SSPL) and the liquidator of SSPL for leave to amend the statement of claim in these proceedings was dismissed. In my reasons for dismissing the application, I indicated that I would be inclined to order SSPL and the liquidator to pay the costs of the application to amend: Sydney Subdivision Pty Ltd (in liq) v Chow [2023] FCA 8 at [77]. However, I afforded an opportunity for submissions and indicated that the question of costs should be determined on the papers.

2    Mr and Ms Chow seek an order that the applicants pay the costs of the interlocutory application to amend. SSPL and the liquidator submit that any order as to costs should exclude the costs of certain of the proposed amendments to the statement of claim that were not opposed. They further submit that the orders dismissing the application should be recalled and that they should make provision allowing the application to the extent that the amendments were not opposed. The submissions from SSPL and the liquidator as to these matters were filed well out of time. Nevertheless, they have been considered in the course of preparing these reasons.

3    As explained in my reasons for dismissing the application to amend, an application was only opposed to the extent that the amendments sought to introduce reliance upon an alleged scheme in respect of what was described in my reasons as the Normandy loan: at [23]. The application was dismissed on the basis that there may be a further application to amend. Therefore, the applicants may present a further application. They have indicated that they are considering whether they will do so. Whether it is confined to the paragraphs that are consented to is a matter for the applicants. If it is, then leave can be given. If it is not, then it will be a matter for the respondents as to whether the application is opposed.

4    Further, I am not satisfied that the costs incurred by Mr and Ms Chow in respect of that part of the application to amend that was not opposed (in respect of which there was an early indication by Mr and Ms Chow that they would consent to such amendments) are sufficiently material that they might be the subject of some form of separate provision by way of qualification to any cost orders.

5    As to the costs order sought by Mr and Ms Chow, the award of costs is discretionary: s 43 of the Federal Court of Australia Act 1976 (Cth). Settled principle guides the exercise of the discretion: Oshlack v Richmond River Council (1998) 193 CLR 72 at [38]. Generally, the discretion is exercised in favour of the successful party: Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 at [25].

6    In the case of interlocutory applications where the ultimate merits of the claim may be a significant factor affecting how the discretion may be exercised, the Court may reserve costs or order that the costs of the application should be costs in the cause. However where, as here, discrete issues were raised for determination and those issues were determined adversely to the applicants, it is generally appropriate for an order to be made in favour of the successful party. Orders of that kind also encourage due deliberation as to the appropriate form of interlocutory applications.

7    In addition, in the present case, the application to amend, in effect, was for an indulgence in circumstances where the conduct of the lawyers for the applicants was advanced as a significant reason why the application should be allowed.

8    In all the circumstances, there should be a costs order in favour of Mr and Ms Chow.

9    SSPL and the liquidator also seek to advance submissions as to why costs of and incidental to an earlier application for discovery should be awarded in favour of the applicants and that orders should be made in favour of the applicants as to costs of certain case management hearings. The provision for submissions to be made as to costs of the interlocutory application and for those costs to be dealt with on the papers did not relate to these other costs. Any application for costs in respect of these other aspects of the proceedings should be raised at a case management hearing or by separate application so that there is an opportunity for the respondents to advance submissions in response. In that regard, I note that orders had been made for certain of those costs to be determined at the hearing of the interlocutory application to amend but that no submissions were advanced at that hearing seeking those costs.

Associate:

Dated:    3 February 2023