Guojin Huang v Jinghong Wei (No 4)

By notice of motion filed on 25 November 2022 the successful plaintiff, Mr Huang, seeks these orders against the defendant, Mr Wei:

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:

Mr ND Riordan of Counsel appeared for Mr Huang. Mr Wei appeared for himself, with the assistance of an interpreter.

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.

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.

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):

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:

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:

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.

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:

On 22 July 2022, Mr Wei’s solicitors filed a notice of ceasing to act.

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:

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:

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.

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.

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.

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)):

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.

On 15 September 2022, Mr Wei emailed the court stating:

Also on 15 September 2022, this reply was sent to Mr Wei on behalf the Court:

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:

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:

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)).

On that occasion the following orders were made in the absence of Mr Wei (28 September orders):

An email noting the orders were sent to all parties, including Mr Wei, later that day.

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".

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:

Screenshots relating to the documents sought in the 28 September orders were attached.

On 25 October 2022, a response was provided to Mr Wei by email on behalf of the Court which stated:

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.

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.

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)):

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):

After making the 28 October orders, I addressed Mr Wei again towards the conclusion of the hearing (Tcpt, 28 October 2022, 7(12-30)):

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.

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)):

After determining a suitable date for hearing as 24 February 2023, I again addressed Mr Wei (Tcpt, 13 December 2022, 3(34)-4(1)):

The following orders were made on that date (13 December orders):

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:

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:

I respectfully adopt and apply this summary by Sackar J in WLD Practice Holdings Pty Limited v Sara Stockham [2020] NSWSC 1354:

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.

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.

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.

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.

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.

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.

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.

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).

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.

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.

The orders of the Court are: