[2024] NSWSC 392

Nano Logistics Pty Ltd v Rabi Omran (No 2)

Plaintiff to pay defendant’s costs on the indemnity basis; security for costs to be paid out of court to the plaintiff

Catchwords

COSTS — Party/Party — Bases of quantification — Indemnity basis — Where plaintiff’s director must have been aware that basis of claim was false

Cases cited

Guojin Huang v Jinghong Wei (No 3)[2022] NSWSC 662
Nano Logistics Pty Ltd v Rabi Omran[2024] NSWSC 236
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd(1988) 81 ALR 397

Judgment

Summary

[1]
The Court delivered its principal Judgment dismissing Nano’s claim on 7 March 2024: Nano Logistics Pty Ltd v Rabi Omran [2024] NSWSC 236. The Court dismissed the proceedings and ordered Nano to pay Mr Omran’s costs. These reasons assume familiarity, and should be read with, the Judgment. Defined terms in the Judgment have the same meaning in these reasons.
[2]
Mr Omran now applies for an order that Nano pay his costs on the indemnity basis and for the immediate payment out of court of $50,000 paid into court by Nano as security for Mr Omran’s costs. For the reasons which follow, both those applications will be granted.

Procedural history

[3]
At the time the Judgment was delivered, the Court made these orders concerning submissions as to costs and the payment of the security amount:
[4]
On 15 March 2024, the Court received, on behalf of Mr Omran, written submissions prepared by Mr P D Reynolds of Counsel, supported by an affidavit sworn by Mr N Hallasso, solicitor.
[5]
No submissions or evidence were filed by Nano. On 9 April 2024, my associate emailed the parties, including after reciting the orders set out in [3] above:
[6]
No response or submission was received from Nano by the time specified in my associate’s email or up to the date of these reasons. I therefore propose to treat Mr Omran’s applications as unopposed. Nevertheless, given the nature of the applications, the Court must be satisfied that Mr Omran has made out a proper basis for the orders he now seeks.

Indemnity costs

[7]
The Court accepts Mr Reynolds’ submissions that an indemnity costs order should be made in favour of Mr Omran for these reasons:
1. (1)
  Nano persisted in a completely unsubstantiated case of fraud against Mr Omran (Judgment [45]).
2. (2)
  Nano, properly advised, should have known that it had no chance of success: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401. In particular, Mr Kei, the controlling mind of Nano, given his concession in cross- examination (Judgment [6]), must have known that the proceedings were based on a falsehood. That may generally in and of itself be sufficient for indemnity costs to be ordered: Guojin Huang v Jinghong Wei (No 3) [2022] NSWSC 662 at [17]. Furthermore, no proper basis was pleaded or particularised from which the knowledge or intent for accessorial liability could reasonably have been inferred, nor was Nano’s affidavit evidence reasonably capable of sustaining such an allegation. There was also no basis disclosed in Nano’s pleading or evidence that alleged or could support a finding of the relevant moral obloquy that would be recognised as unconscionable under the ACL.
3. (3)
  By his own admission, Mr Kei withheld evidence because it was inconvenient to Nano’s case (see Judgment [27]). This conscious attempt to mislead the Court was only compounded by the evidence which Mr Kei gave about the airport meeting, which evidence the Court found to be a deliberate fabrication (see Judgment [30]).

Payment out

[8]
The Court accepts Mr Hallasso’s evidence that Mr Omran’s costs of the proceedings are, on a party and party basis, approximately $90,000, and in excess of $120,000 on a solicitor and client basis. In those circumstances, the Court finds that Mr Omran’s recoverable costs (whether on the ordinary or, as the Court will order, indemnity basis) exceed the $50,000 paid into Court by Nano as security for Mr Omran’s costs. Nano has advanced no reason why Mr Omran should be kept out of those funds pending agreement or assessment of his costs.
[9]
By reason of the matters referred to in the preceding paragraph, the Court will order that the security amount should now be paid out to Mr Omran in partial satisfaction of his entitlement to his costs from Nano.

Conclusion

[10]
The Court orders:
1. (1)
  The plaintiff is to pay the defendant’s costs of the proceedings on the indemnity basis.
2. (2)
  The sum of $50,000 paid into court by the plaintiff as security for the defendant’s costs, together with any interest accrued thereon, be paid out to the defendant or at his direction.