Zheng v Australian International Aviation College Pty Ltd [2023] NSWSC 1165

Zheng v Australian International Aviation College Pty Ltd [2023] NSWSC 1165

AIAC knew the Training Agreement contained a broad arbitration clause and, at least by 13 June 2023, knew Hainan disputed liability under the indemnity and wished to exercise its contractual right to arbitration. In those circumstances it was plain that the Court was required to refer the matter to arbitration, and the meaning and effect of the indemnity clause was for the arbitration. AIAC's continued resistance was unreasonable, most costs were incurred after that date, Hainan's costs were reasonable, and a 10 percent discount to solicitor costs supported fixing costs on an indemnity basis in a gross sum of $38,480.

Jurisdiction
Australia
Judgment Date
28 September 2023
Procedural Posture
Costs Application in Equity Commercial Arbitration List Following Stay Under S 7(2) of the International Arbitration Act 1974 (cth) / Determination of Costs of Amended Notice of Motion Filed on 14 July 2023
Outcome
Hainan obtained a gross sum costs order on an indemnity basis.
Legal Topics
['indemnity Costs' 'gross Sum Costs Order' 'stay of Proceedings in Favour of Arbitration' 'arbitration Clause']
['costs' 'arbitration' 'civil Procedure'] ['indemnity Costs' 'gross Sum Costs Order' 'stay of Proceedings in Favour of Arbitration' 'arbitration Clause']

Case Brief

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Procedural Posture

Costs Application in Equity Commercial Arbitration List Following Stay Under S 7(2) of the International Arbitration Act 1974 (cth) / Determination of Costs of Amended Notice of Motion Filed on 14 July 2023

Legal Issues

  1. 1 ['Whether AIAC acted unreasonably in opposing a stay in favour of arbitration.' "Whether Hainan's costs of the stay motion should be awarded on an indemnity basis." 'Whether costs should be fixed by a gross sum costs order.']

Ratio Decidendi

AIAC knew the Training Agreement contained a broad arbitration clause and, at least by 13 June 2023, knew Hainan disputed liability under the indemnity and wished to exercise its contractual right to arbitration. In those circumstances it was plain that the Court was required to refer the matter to arbitration, and the meaning and effect of the indemnity clause was for the arbitration. AIAC's continued resistance was unreasonable, most costs were incurred after that date, Hainan's costs were reasonable, and a 10 percent discount to solicitor costs supported fixing costs on an indemnity basis in a gross sum of $38,480.

Court Disposition

Hainan obtained a gross sum costs order on an indemnity basis.

Orders

  • ["The cross-claimant pay the cross-defendant's costs of the amended notice of motion filed on 14 July 2023 fixed in a gross sum of $38,480."]