Li v Yang (No 2)

1. [1]

   On 12 May 2025 I heard three motions in these proceedings, being the plaintiff’s notices of motion dated 11 September 2024 (11 September 2024 motion) and 25 March 2025 (25 March 2025 motion) as well as the defendant’s notice of motion dated 3 March 2025 (3 March 2025 motion). In summary:

   1. (1)

      By the 11 September 2024 motion, the plaintiff sought orders dismissing, permanently staying, or otherwise striking out two cross-claims brought by the defendant pursuant to rr 13.4 and 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and s 57 of the Civil Procedure Act 2005 (NSW) (CPA). The plaintiff had previously filed a motion on 19 August 2024 seeking those orders in respect of the first cross-claim and the 11 September 2024 motion was described as an ‘amended motion’ which amended that earlier motion to seek the same relief in respect of the second cross-claim.

   2. (2)

      By the 25 March 2025 motion, the plaintiff sought an order restraining the defendant from ‘selling, providing security on, further encumbering or any way dealing, selling or otherwise dealing with her 60% share of the Haymarket property’.

   3. (3)

      By the 3 March 2025 motion, the defendant sought leave to file nunc pro tunc an amended defence originally filed without leave on 12 February 2025 (Amended Defence) and to withdraw several admissions as set out in the Amended Defence.

2. [2]

   In Li v Yang [2025] NSWSC 904 (primary judgment), I dismissed the two motions brought by the plaintiff, being the 11 September 2024 motion and the 25 March 2025 motion, and granted the defendant’s motion, being the 3 March 2025 motion. The orders made on 12 August 2025 were:

3. [3]

   The parties took up the invitation in order 5. The defendant did so by filing another notice of motion dated 26 August 2025 (26 August 2025 motion). That motion seeks the following orders (together defendant’s proposed orders):

4. [4]

   In support of the motion, the defendant provided written submissions on 12 September 2025 and relied on an affidavit in support by her solicitor, Ms Jessica Prats, sworn on 26 August 2025 as well as two affidavits of service dated 19 and 22 September 2025. The plaintiff, who is now self-represented, filed (with leave) written submissions dated 26 September 2025 opposing the proposed orders and, relevantly, sought orders (1) that the determination of costs of the motions heard on 12 May 2025 be reserved until final hearing (plaintiff’s proposed costs order); and (2) that a ‘freezing order’ in respect of rental income from the Haymarket property which the plaintiff says has been in place since July 2023, be varied to permit the income to be released to the defendant as to 60% and the plaintiff as to 40%, and that this distribution continue monthly until final determination of the proceedings.

5. [5]

   I propose to deal only with the plaintiff’s proposed costs orders and submissions related thereto, as only these issues relate to the motion presently under consideration. The matter regarding the variation to the so-called ‘freezing order’ will need to be brought by way of a notice of motion to allow the defendant a proper opportunity to respond, if agreement cannot be reached, particularly as it is not clear to me what ‘freezing order’ is being referred to.

6. [6]

   Both parties were content for me to deal with the costs issues on the papers. For the reasons that follow, the defendant is entitled to her proposed orders 1, 4 and 5, subject to a discount in relation to proposed order 5 to reflect her failure in relation to proposed orders 2 and 3.

Consideration

1. [7]

   I will consider the defendant’s proposed orders first and then address the plaintiff’s proposed costs order. These reasons assume familiarity with and maintain the same abbreviations used in the primary judgment.

2. [8]

   Defendant’s proposed order 1 refers to the ‘Plaintiff’s motion filed on 19 August 2024’ (19 August 2024 motion). That motion was amended (and subsumed) by the 11 September 2024 motion rather than being a different notice of motion altogether. Reflecting this, at the hearing the plaintiff moved on the 11 September 2024 motion and not the 19 August 2024 motion. Order 1 made on 12 August 2025 provides that the 11 September 2024 motion is dismissed with costs. While the defendant accepts that proposed order 1 is strictly unnecessary it is sought to put beyond doubt that the costs ordered include the costs of the motion filed 19 August 2024.

3. [9]

   Since the 11 September 2024 motion was dismissed with costs, the defendant will be entitled to recover costs which have reasonably been incurred in the conduct of the litigation in relation to the motion (see eg Oshlack v Richmond River Council (1998) 193 CLR 72 at 97; [1998] HCA 11) which in my view includes the earlier motion which was subsumed into that motion. That was my intention when the order was made. Nevertheless, given the degree of disputation between the parties, it is desirable to avoid any doubt as to the scope of Order 1 made on 12 August 2025. Accordingly, I will make an order amending Order 1 made on 12 August 2025 so that it reads: ‘The plaintiff’s notices of motion dated 11 September 2024 (including the motion filed on 19 August 2024 which it amends) and 25 March 2025 are dismissed with costs’.

4. [10]

   By proposed orders 2 and 3 the defendant seeks to replace Order 4 made on 12 August 2025 (that the parties’ costs of the 3 March 2025 motion will be costs in the cause) with an order that the plaintiff pays the defendant’s costs of that motion.

5. [11]

   The effect of Order 4 made on 12 August 2025 for an award of ‘costs in the cause’ in respect of the 3 March 2025 motion, is that the costs of that motion will be only payable to whichever party is ultimately successful in the proceedings. An order for costs in the cause is essentially the default rule for interlocutory applications pursuant to r 42.7 of the UCPR. I note that such orders have been made in applications for leave to amend pleadings: see eg Joudo v Joudo [2024] NSWSC 232 at [244] and Shelteo Pty Ltd v Australia and New Zealand Banking Group Ltd [2021] NSWSC 224 at [7].

6. [12]

   In support of proposed orders 2 and 3, the defendant relied on Public Trustee v Nash (1921) 38 WN (NSW) 142 where a party held to have unreasonably opposed an application for leave to amend was ordered to pay the costs of the application and the costs of the amendment were made the costs in the cause. The defendant submitted that the plaintiff has been unreasonable in her opposition by not giving the requested consent, not providing any reasons for refusing to do so, and when finally doing so the reasons were difficult to understand and lacking in substance.

7. [13]

   In particular, the defendant submits that the plaintiff’s opposition to the 3 March 2025 motion was unreasonable given the following:

   1. (1)

      there were previous court directions made by Kunc J on 14 February 2025 which ordered the plaintiff to consider the proposed amendments in the Amended Defence and signify any consent or opposition and that the motion was to be filed if consent was not forthcoming within the agreed period. However, no response to these proposed amendments were made in time, which necessitated the need for the motion to be filed even when the Amended Defence itself was already filed on 12 February 2025 (albeit without leave) and the trial affidavit as well as all supporting exhibits were served even earlier on 8 February 2025;

   2. (2)

      further, when a response was finally made on 27 March 2025 refusing consent to the amendments, that response supplied no reasons for that refusal. This was said to have caused the defendant substantial prejudice as she had to prepare submissions in chief dealing with all of the amendments without any notice of the grounds upon which the plaintiff objected to them; and

   3. (3)

      lastly, when the basis of these objections later came to light in subsequent written submissions by the plaintiff to the Court and during oral argument on 12 May 2025, they were said to be 'difficult to understand and lacking substance' and therefore the amendments should not have been opposed in the first place.

8. [14]

   I am not persuaded that these matters justify a change to Order 4 made on 12 August 2025.

9. [15]

   The defendant required leave to amend her defence under s 64 of the Civil Procedure Act 2005 (NSW). She also required leave under r 12.6 of the UCPR to withdraw the admissions previously made in her original defence, as the plaintiff did not give consent. Given the nature of the admissions which were sought to be withdrawn, it is not surprising that the plaintiff did not give her consent. In my view the plaintiff was entitled to require the defendant to satisfy the court that in all the circumstances the grant of leave to withdraw the admissions previously made was appropriate because, irrespective of whether the plaintiff opposed the application, the defendant had an independent obligation to satisfy the court that the withdrawal of the admissions should be permitted: Media Ocean Ltd v Optus Mobile Pty Ltd (No 6) [2009] FCA 1319 at [34].

10. [16]

    The defendant also needed to explain to the court how it came about that the Amended Defence came to be filed, in error, without leave. She did so by an affidavit from her solicitor, Ms Prats, explaining how the error within her office came about.

11. [17]

    In light of these matters, I consider that it was not unreasonable for the plaintiff to require the defendant to satisfy the court that the relief sought in the 3 March 2025 motion be granted, irrespective of whether the plaintiff could establish good reasons to oppose it.

12. [18]

    Finally, the main reason put forward by the defendant as to why she should have her costs of the 3 March 2025 motion is because she had to ‘prepare submissions in chief dealing with the whole motion and each of the amendments without notice of [the] grounds of the Plaintiff’s objection to any part of it’. However, in reality, the defendant’s written submissions in support of the 3 March 2025 motion did not refer to the motion in any detail, and very little time was actually spent on it at the hearing. I am therefore not satisfied that the plaintiff’s conduct caused the defendant to incur significant further costs than she otherwise would have done.

13. [19]

    For these reasons, I consider on balance that fairness dictates that the responsibility for the costs of the 3 March 2025 motion be determined by the ultimate outcome of the proceedings. Thus, I consider that it is appropriate to leave Order 4 of the primary judgment undisturbed.

14. [20]

    Defendant’s proposed order 4 seeks the costs under proposed orders 1 and 2, as well as those under Order 1 of the primary judgment, to be ‘payable forthwith’. In light of what I have already said, the only remaining issue is whether costs under Order 1 made on 12 August 2025 be payable forthwith.

15. [21]

    Rule 42.7 of the UCPR provides relevantly:

16. [22]

    In the present case, what the defendant seeks is for the court to exercise its discretion under r 42.7(2) to make an order that the costs under Order 1 made on 12 August 2025 be paid forthwith rather than at the conclusion of the proceedings which is the usual position for costs of interlocutory proceedings in accordance with rr 42.7(1) and (2).

17. [23]

    The guiding principle in exercising that discretion is whether, in all the circumstances of the case, the demands of justice require it: Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31 at [16]-[18]; Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 at [7]-[8]. Relevant factors in this regard include whether: (1) the proceedings giving rise to the order are sufficiently self-contained and discrete from the main proceeding yet to be heard to make it just for an actual payment to be made in the meantime; (2) there has been some unreasonable conduct by the party against whom the costs were ordered (with ‘unreasonable’ conduct not necessarily requiring there to be an abuse of process or misconduct: Ashwood v Ashwood [2023] NSWSC 208 at [95]); and (3) there is still likely to be a considerable time before the conclusion of the proceedings: Pavlovic at [15]; Morningstar Research at [11]-[13].

18. [24]

    Another potentially relevant matter to the exercise of the discretion is the financial position of the parties, which goes to the degree of financial hardship which such an order may cause the party bound to comply with it, balanced against the prejudice which may be suffered by the party entitled to the costs due to delay in their payment: Madsen v Darmali (No 2) [2024] NSWSC 268 at [5]; Hamod v New South Wales [2007] NSWSC 707 at [12]; G E Dal Pont, Law of Costs (5th ed, LexisNexis, 2021), [14.51].

19. [25]

    It is not necessary for all of the factors mentioned above to be present before an order that costs be payable forthwith could be made: Pavlovic at [24].

20. [26]

    I accept the defendant’s submission that the three factors referred to at [23] above are present here. As to the first factor, the motions to which Order 1 on 12 August 2025 relates, being the strike out/stay application and the freezing order application, are of a discrete nature. Orders for costs to be payable forthwith have been made against applicants in unsuccessful strike out applications (eg Watson v Kriticos (Cost of Summary Judgment Application) [2021] FCA 917) and unsuccessful stay applications (eg WLD Practice Holdings Pty Ltd, in respect of WLD Practice Holdings Trust v Sara Stockham [2020] NSWSC 576), as well as unsuccessful applications for freezing orders (eg Zhao v Bonheur Holdings Pty Ltd atf Bonheur Holdings Trust (No 2) [2020] NSWSC 648).

21. [27]

    As to the second factor, I accept there was some unreasonable conduct part of the plaintiff in the prosecution of those motions. As I noted in the primary judgment, the plaintiff advanced many grounds for relief in respect of the 11 September 2024 motion but provided very little or no support for most of those grounds, either by way of submissions or evidence and many of the grounds were needlessly repetitive.

22. [28]

    As to the third factor, this is a protracted piece of litigation which is likely to remain on foot for a considerable period of time. As foreshadowed in her submissions, the plaintiff has now filed another notice of motion dated 23 October 2025 seeking leave to amend her statement of claim, plus a further six weeks to serve evidence and submissions in support. No date has been set down for the hearing of that notice of motion, but if such relief is granted the defendant will need further time to file further evidence in response to the extra claims. There is a history of delay on the part of both parties in bringing the matter to a stage where it can be listed for final hearing and the latest motion of the plaintiff will have the effect of pushing the trial date even further into the indeterminate future.

23. [29]

    In relation to the financial position of the defendant, the affidavit of Ms Prats in support of the 26 August 2025 motion, together with the evidence of the defendant in her affidavit dated 8 February 2025, establishes that the defendant is a junior medical officer with a current annual income of $68,000 per year, is not in receipt of rental income from either the Haymarket property or the Chinese properties, has no other significant assets or income, and is not presently able to pay her legal costs of the proceedings. She will suffer significant hardship if the costs are not paid forthwith.

24. [30]

    The plaintiff raised a number of matters against an order making costs payable forthwith.

25. [31]

    First, she submits that the making of orders requiring costs to be paid at this stage would stifle her ability to continue these proceedings, as she is currently in ‘precarious financial circumstances’ and would be unable to meet any substantial costs order without jeopardising her ability to prosecute her statement of claim (including her proposed amendment to the statement of claim) and to defend the cross-claims.

26. [32]

    The plaintiff also submitted that making a costs order at this stage would effectively deny the ‘second plaintiff’ (her son, Harold, who is a minor without any independent financial capacity) access to justice. However, this latter submission is misplaced as Harold is not a party to the proceedings.

27. [33]

    I accept that the potential stultification of a party’s ability to pursue proceedings to finality is a factor going against the discretion to make an order for costs to be payable forthwith (see eg Re Elsmore Resources Ltd [2014] NSWSC 1390 at [4]). However, the plaintiff has not adduced any evidence to establish this. Although she claims to be in a ‘precarious financial situation’, the only matters put forward in support of that claim are that she has paid the deceased’s funeral expenses totalling $58,787.50 without reimbursement from his estate, tuition fees and living expenses for her son, Harold, in unspecified amounts and the tuition expenses she provided to the defendant (which are subject to the dispute in the present proceedings). However, she has not put evidence before the court as to her overall financial situation (including her assets and income, and those from whom she is entitled to financial support). Nor has she established that her financial position is ‘precarious’ or threatens her ability to effectively pursue her claims for the remainder of these proceedings.

28. [34]

    Further, the plaintiff has not explained how her financial circumstances will improve in a way which will allow her to fund the proceedings going forward. Her unexplained financial difficulty is no justification for the court to refuse to make an order that costs be paid forthwith if the proceedings are going to collapse for lack of funding in any event: Ashwood at [107]-[109].

29. [35]

    Secondly, the plaintiff asks that her current poor health issues in relation to her pregnancy should be taken into account. However, it has not been shown how this is relevant to the question whether costs should be paid forthwith in circumstances where there is no evidence of her financial position as noted above.

30. [36]

    Thirdly, the plaintiff submits that the defendant’s conduct has substantially protracted this litigation and increased the costs for both parties. As noted above, there are aspects in which both parties have delayed the conduct of the litigation but ultimately I do not see that as being relevant to the present question.

31. [37]

    For the above reasons, I consider that in all the circumstances of the case, it is in the interests of justice that the costs payable under Order 1 made on 12 August 2025 should be payable forthwith.

32. [38]

    The defendant seeks her costs of the 26 August 2025 motion, such costs to be payable forthwith. The defendant has succeeded in respect of substantially all the relief sought in the motion except for proposed orders 2 and 3. I see no reason why costs of the motion should not follow the event, so that the defendant is entitled to her costs of the motion, subject to a discount of 15% to reflect her failure relation to proposed orders 2 and 3.

33. [39]

    It is recognised that in circumstances where there has been a mixed outcome in proceedings an apportionment of costs may be appropriate and one way of achieving this is to have the successful party’s costs reduced by the application of a discount if it would be unfair to allow the person to get the whole of his or her costs: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 24.

34. [40]

    In light of the defendant’s failure in relation to proposed orders 2 and 3, it would in my view be unfair to allow her to get the whole of her costs of the motion and it is appropriate to apply a discount to reflect this. Bearing in mind that the question of apportionment is a matter of discretion and that a relatively broad-brush approach may be taken, I consider that a discount of 15% is appropriate, being my assessment of the relative time spent on that issue in the defendant’s submissions and evidence on the motion and its relative significance in the conduct of the motion.

35. [41]

    For the same reasons already given in respect of the defendant’s proposed order 4, it is in the interests of justice that those costs also be paid forthwith.

36. [42]

    In relation to costs, the plaintiff proposed that costs in relation to all orders made in the primary judgment be reserved until final hearing. In support of this, she advanced several very brief global submissions, with the only salient submission being on the matter of hardship which I have considered above. In light of my previous reasons as to why the original orders should stand, it follows that I reject her proposed orders in relation to costs. It remains the case that the plaintiff was substantially unsuccessful in relation to the three motions in the primary proceedings and that as a matter of principle the defendant should be entitled to her costs of those motions, subject to what has been said above.

Conclusion

1. [43]

   The Court orders as follows:

   1. (1)

      Order 1 of the Orders made on 12 August 2025 is amended by inserting after “11 September 2024” the words “(including the motion filed on 19 August 2024 which it amends)”.

   2. (2)

      Order that the costs ordered by Order 1 of the Orders made on 12 August 2025 be payable forthwith.

   3. (3)

      The plaintiff to pay 85% of the defendant’s costs of the defendant’s motion filed 26 August 2025 on the ordinary basis, as agreed or assessed, such costs to be payable forthwith.

   4. (4)

      Otherwise dismiss the defendant’s motion filed 26 August 2025.