Atlanta Building Pty Ltd v Abela (No 4)

[2025] NSWSC 1277

Supreme Court

New South Wales

Medium Neutral Citation:

Atlanta Building Pty Ltd v Abela (No 4) [2025] NSWSC 1277

Hearing dates:

16 October 2025

Date of orders:

29 October 2025

Decision date:

29 October 2025

Jurisdiction:

Equity - Technology and Construction List

Before:

Peden J

Decision:

At [40]

Catchwords:

COSTS – where award of damages below jurisdictional limit of District Court – whether costs charged by practitioners are reasonable and proportionate – whether practitioners should be referred to OLSC

CIVIL PROCEDURE – application to amend judgment under UCPR r 36.16 – where Court misapprehended plaintiff’s case – where plaintiff’s pleading did not include deposit – where leave to amend pleading was refused – where judgment mistakenly awarded damages for deposit

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Legal Profession Law 2014 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Adelaide Concrete Cutting & Drilling Pty Ltd v Marino (No 2) [2024] NSWSC 499

Atlanta Building Pty Ltd v Abela (No 3) [2025] NSWSC 730

Autodesk Inc v Dyson (No 2) (1993) 176 CLR 300

CJD Equipment v A&C Constructions [2010] NSWSC 502

D’Alessandro v Legal Practitioners Complaint Committee (1995) 15 WAR 198

Johnston v Greens NSW (No 2) [2021] NSWCA 291

Law Society of New South Wales v Foreman (1994) 34 NSWLR 408

Majak v Rose (No 5) [2017] NSWCA 238

NSW Bar Association v Meakes [2006] NSWCA 340

O’Halloran v Legal Profession Complaints Committee [2013] WASCA 59

Poulos v Commonwealth Bank of Australia Ltd (No 3) [2020] NSWCA 72

Re application by the Chief Commissioner of Police (Vic) (2005) 79 ALJR 881

Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd (No 2) [2008] NSWCA 205

Veghelyi v Law Society of New South Wales [1995] NSWCA 483

Category:

Costs

Parties:

Atlanta Building Pty Ltd (Plaintiff)
David Abela (First Defendant)
Rebecca Amos (Second Defendant)

Representation:

Counsel:
M Klooster (Plaintiff)
G Donnellan (Second Defendant)

Solicitors:
Yates Beaggi Lawyers (Plaintiff)
Mark O’Brien Legal (Second Defendant)

File Number(s):

2023/111376

Publication restriction:

Nil

JUDGMENT

1. This judgment follows Atlanta Building Pty Ltd v Abela (No 3) [2025] NSWSC 730 (Judgment) and assumes familiarity with the reasons.

2. The issues here are:

1. What costs order is appropriate, including any gross sum costs order;

2. Whether Ms Amos ought to be permitted to reopen her case and the judgment sum payable by her ought be varied down from $196,577.23 to $73,252.05;

3. Whether the matter ought to be referred to the Office of the Legal Services Commissioner because of the conduct of any legal practitioners in relation to:

1. the seeming disproportion between the amount in dispute and want of complexity of the issues;

2. the failure to transfer the proceedings to a more appropriate court;

3. the number of counsel briefed; and

4. the size of the court book, when so few pages were relevant.

Costs

3. I have decided there will be no order as to costs, primarily because Atlanta ought to have transferred the case to the District Court, as it was seeking damages for breach of contract of less than $500,000: see Uniform Civil Procedure Rules 2005 (NSW) r 42.34 (UCPR).

4. The matter came to this Court as follows. Atlanta had commenced the proceedings in the District Court seeking $212,411.72 plus interest. Then the proceedings were transferred to NCAT. When Mr Abela filed his cross-claim seeking more than $1,000,000 in damages against Atlanta the whole proceedings were transferred to this Court. That cross-claim was dismissed in February 2025. Atlanta’s counsel, Mr Klooster, accepted that from that time it was “open to … seek to have the matter transferred back to the District Court.” It is the case that, at all times, Atlanta’s claim ought to have been, and was, commenced in the District Court and there was no reason for its claim to be heard in this Court.

5. Mr Klooster raised two reasons he considered it appropriate for Atlanta to continue the matter in this Court and this List, both of which I reject.

6. His first submission was that the list judge, Stevenson J, condoned the matter remaining in the Technology & Construction List because his Honour was “well appraised of the issues raised by the parties”, because Mr Abela had the default judgment against him set aside. However, Mr Klooster did not suggest that at any time Atlanta informed any judge of the quantum of its claim. Ms Amos was unrepresented at the directions hearing when the matter was allocated hearing dates and opposed such an order. I consider it was incumbent on Atlanta’s legal representatives to assist the Court in allocating the matter to an appropriate forum; it is not for busy list judges to interrogate whether a transfer is necessary because of the low quantum of the claim. Atlanta’s case ought to have been heard in the District Court.

7. I also reject Mr Klooster’s submission that it was “just, quick and cheap” for Atlanta to take advantage of what he said was the efficiency of the List, because the District Court could not provide a hearing date as quickly. No evidence was provided for that submission, and I reject it.

8. I consider that UCPR 42.34 applies here, and Atlanta is not entitled to its costs. Atlanta obtained a judgment well below the $500,000 threshold identified in that rule, apparently knowing it remained in the inappropriate forum, contrary to the rule.

9. In the alternative, I consider there ought to be no order as to costs because Atlanta failed on most of its claim, and Atlanta’s choice to spend a large sum on legal costs does not mean those costs must be funded by Ms Amos: see eg CJD Equipment v A&C Constructions [2010] NSWSC 502 at [10] (McDougall J). It would be unjust to Ms Amos to award Atlanta any costs where it ran its case with no clarity as to the amount it claimed.

10. Had I considered Atlanta was entitled to its costs, I would not have awarded those costs on an indemnity basis. I do not accept Atlanta could rely upon a 14 July 2022 Calderbank offer made to Ms Amos to settle its then claim of just over $200,000 with a 12.5% discount. At that time, Atlanta’s pleading was very different, no evidence had been served, and the offer was only open for a week. In those circumstances, I do not accept that Ms Amos could be found to have unreasonably refused the offer. In any event, the final outcome is more favourable to Ms Amos.

11. It follows that I will not award Atlanta its costs on a gross sum basis as it sought.

Ms Amos’ application to reopen and vary judgment

12. Ms Amos brought an application to vary the Judgment pursuant to UCPR r 36.16(1) or r 36.16(3A), or the Court’s inherent jurisdiction.

13. She claims Atlanta was awarded too large a sum in the Judgment, and in effect, Atlanta was awarded its “unpaid deposit”, when Atlanta’s application to amend its pleadings to raise an unpaid deposit was refused: Judgment at [75]-[82].

14. UCPR r 36.16(1) relevantly provides that the Court may vary a judgment or order if a notice of motion for the variation is filed before entry of the judgment or order. UCPR r 36.16(3A) extends this provision; if a notice of motion is filed within 14 days of the entry of judgment, the Court may vary the judgment or order as if the judgment or order had not been entered: see eg Johnston v Greens NSW (No 2) [2021] NSWCA 291 at [7] (Meagher and Brereton JJA).

15. The power conferred under this rule is to be exercised sparingly and with caution, having regard to the finality of judgments: Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd (No 2) [2008] NSWCA 205 (Rockcote) at [9] (Simpson JA, McColl JA and Handley AJA agreeing).

16. Further, the power conferred by UCPR 36.16(3A):

1. is subject to the limitations the general law imposed on the power to set aside or vary a judgment or order prior to that judgment or order being entered: Rockcote at [10] (Simpson JA, McColl JA and Handley AJA agreeing);

2. may be exercised by the Court where the Court has “apparently proceeded according to some misapprehension of the facts of the relevant law…” which cannot be attributed solely to the neglect of the party seeking the rehearing: Autodesk Inc v Dyson (No 2) (1993) 176 CLR 300 at 303 (Mason CJ);

3. has a limited purpose to enable easily identifiable and rectifiable inadvertent errors to be corrected without the need for an appeal: Majak v Rose (No 5) [2017] NSWCA 238 at [12] (Leeming and Simpson JJA, Emmett AJA). The Court’s misapprehension of counsel’s submissions is a valid basis to exercise the power under UCPR r 36.16: Poulos v Commonwealth Bank of Australia Ltd (No 3) [2020] NSWCA 72 at [7] (Payne and Brereton JJA).

17. Ms Amos’ application turns on a consideration of Atlanta’s Amended Commercial List Statement paragraph 7.2, which relevantly provides:

In performance of the Agreement: …

7.2 [Atlanta] issued seven Payment Claims for the Works and received payment from the Defendants as indicated in the table below:

Stage	Certified	Amount paid	Claim date	Paid Date
1	$269,925.81	$140,000	25/11/2019	10/12/19
2	….

18. Then, at paragraph 10.6 Atlanta pleaded that in breach of the Agreement the defendants failed to pay the “Progress Claims for the Works … referred to in paragraph 7”. In paragraph 15, Atlanta pleaded that it suffered loss and damage by reason of various breaches of the Agreement by Ms Amos. However, nowhere was there any particular of loss caused by the failure to pay the Payment Claims identified at paragraph 7.2, or a failure to pay the whole deposit: see Judgment at [75]-[77]; [87].

19. Ms Amos’ List Response admitted:

… subparagraph 7.2 in relation to Stages 2 to 7, but denies the allegations in respect to Stage 1 and refers to and repeats paragraph [4c] above.

20. Paragraph [4c] provided:

…it was agreed between all parties that the deposit payable under the Agreement up front was reduced to $134,962 and in exchange that the Defendants would not withhold any retention monies from progress payments under the Agreement.

21. Ms Amos also denied paragraph 10.6 on the basis that all “Progress Claims” were paid while she was “involved in the project” and further pleaded an agreement about Mr Abela taking over the project and payment responsibilities. Ms Amos accepted that she had paid the amount pleaded as part-payment of what Atlanta called the “Stage 1 payment”, however, denied she was in breach by failing to pay the remainder.

22. In her application to have the Judgment varied, Ms Amos submitted that the Court misapprehended the nature of Atlanta’s claim awarding it the pleaded shortfall at paragraph 7.2, when that amount was not referrable to an underpayment of any staged works but was in fact the underpaid deposit.

23. I accept that there was an error in including in the Judgment for Atlanta the amount of the paragraph 7.2 shortfall, which was not claimed at the hearing. A claim for the unpaid deposit was only raised during closing submissions and leave to bring that claim late was refused.

24. The finding in the Judgment at [95] makes it plain that, had Atlanta pleaded and agitated for the unpaid amounts and unpaid deposit, then without more it would have been entitled to judgment for those sums.

25. While Atlanta’s attempt to amend its pleading after the conclusion of the hearing was rejected, that left the existing pleading to be determined. Paragraph 10.6 particularised Atlanta’s loss and damage but did not include any underpaid invoices or deposit. No damages schedule provided during the hearing referenced that underpayment either. In paragraph 10.6, interest was sought on “late payments”, but that did not specify what was “late”, and did not entitle Atlanta to interest: see Judgment [108].

26. I accept that the intention of the Judgment, including refusal to allow a late amendment to add a claim for the unpaid deposit, was that Atlanta was held to its pleadings and was not entitled to any sum for an unpaid deposit. That error was not caused by Ms Amos, who was entitled to rely upon her denial of the “Stage 1 Payment Claim” and the Court’s refusal to allow Atlanta to bring any claim concerning the underpayment of the deposit, without taking any further step. I accept that the particular invoice in question never amounted to a “stage” of the building works.

27. Therefore, I misapprehended Atlanta’s claim for the repayment of debt as including the sum of $123.325.18, when that sum related to a deposit invoice and not an invoice for works completed. This misapprehension meant that the orders did not accord with the intention of the Judgment.

28. The Judgment will be varied to:

1. Amend paragraph [96] deleting “is” to “would have been”.

2. Amend paragraph [110] to read $73,252.05 instead of $196,577.23.

3. Delete subparagraph [110](1)].

Legal practitioners’ conduct

29. As noted in the Judgment, the obligations in ss 56-60 Civil Procedure Act2005 (NSW) (CPA) cannot simply be ignored by lawyers or parties. I sought submissions and evidence showing cause as to why I ought not refer the matter to the Office of the Legal Services Commissioner in relation to fees and breaches of Court orders.

Disparity of legal fees

30. Section 172(1) of the Legal Profession Law 2014 (NSW) (LPUL) provides that costs must be both proportionately and reasonably incurred and proportionate and reasonable in amount. Section 173 of the LPUL provides that a law practice must not act in a manner which unnecessarily increases the legal costs payable by a client. Breach of those provisions can sound in disciplinary sanction: see s 298(a) LPUL. The charging of grossly excessive costs may amount to unsatisfactory professional conduct or professional misconduct: see eg NSW Bar Association v Meakes [2006] NSWCA 340; Veghelyi v Law Society of New South Wales [1995] NSWCA 483.

31. A disparity between the amount of a claim and costs charged does not necessarily mean that those costs are excessive or unreasonable: see O’Halloran v Legal Profession Complaints Committee [2013] WASCA 59 at [86]-[89] (Pullin JA, Martin CJ and Newnes JA agreeing). Resolution of that question first requires a determination of what, in the circumstances, would be a reasonable sum to charge: D’Alessandro v Legal Practitioners Complaint Committee (1995) 15 WAR 198 at 214 (Ipp J, Pidgeon and Franklyn JJ agreeing).

Ms Amos’ lawyers

32. I make no criticism of Mr Lewis, who became Ms Amos’ lawyer only shortly before the hearing. He and both counsel carried out significant work within a short timeframe in order to be ready for the hearing. Atlanta’s court book was voluminous. I also accept that the bulk of costs invoiced to Ms Amos were from her previous lawyers.

Atlanta’s lawyers

33. Atlanta’s legal costs from commencement to the costs hearing are close to $1,300,000; yet Atlanta succeeded in its claim as to about $73,000. Included in Atlanta’s costs are almost $80,000 for its gross sum costs motion that could not succeed, because of the late service of evidence.

34. Atlanta does not complain about its legal fees of more than 10 times the amount it has recovered on its claim. Atlanta’s director states he was always told that the legal fees could well exceed the amount in dispute and continued giving instructions to agitate the claim. However, the obligations in ss 56-60 CPA, including proportionality, apply to legal practitioners and parties alike: see also the observations of Kirby P (as his Honour then was) in Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 422-433.

35. In his affidavit dated 13 October 2025, Mr Amirbeaggi deposed that his decision to brief two counsel for the matter was for “efficiency of work” as junior counsel’s hourly rates were significantly cheaper than his own. However, that did not explain what volume of work was necessary, considering Atlanta’s continuous representation by the same practitioners, the simple nature of the case and the small quantum involved.

36. Related to fees is the fact that a court book of over 1500 pages was produced, when only a few hundred pages were relevant and referred to during the hearing. This is “unacceptable”, and a reason for an adverse costs order: see paragraph 58 of Practice Note SC Eq 3. Such conduct is also inimical to the duty imposed on practitioners and parties by s 56 CPA: see eg Adelaide Concrete Cutting & Drilling Pty Ltd v Marino (No 2) [2024] NSWSC 499 at [783]-[788] (Meek J). Atlanta’s provision of a further volume of “key” documents at the hearing demonstrated that most of the court book was unnecessary.

37. The proceedings were not difficult, did not involve novel or complex legal issues, and there is a notable difference between the true value of the claim and the legal fees incurred. However, because I am not able to assess the detail of why all those costs were incurred and whether they were appropriate, as might be done on a costs assessment, I do not consider it appropriate to refer the matter to the Office of the Legal Services Commissioner.

Unsolicited further submissions and breaches of orders

38. After the hearing, counsel for Atlanta sent further submissions by email to my Chambers. I did not invite further submissions, and Ms Amos did not consent to any being sent. Counsel ought not have sent that email: see Re application by the Chief Commissioner of Police (Vic) (2005) 79 ALJR 881 at [54] (Kirby J); see also Practice Note SC Eq 3, at paragraph 67.

39. Further, Atlanta’s explanation for breaches of orders for evidence and submissions on the motions was essentially that Mr Amirbeaggi was too busy. Mr Klooster accepted that where there were breaches of court orders the appropriate course would have been for the matter to be relisted to seek an extension of time, rather than continuing to fail to comply with the orders. It is not clear why that was not done.

Orders

40. For these reasons, I made the following orders:

1. Each party to bear their own costs of the proceedings.

2. Amend paragraph [96] of the Judgment, deleting “is” to “would have been”.

3. Amend paragraph [110] of the Judgment to read $73,252.05 instead of $196,577.23.

4. Delete subparagraph [110(1)] of the Judgment.

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Decision last updated: 29 October 2025