BGM Projects Pty Ltd v Durmaz Corporation Pty Ltd

In the matter of BGM Projects Pty Ltd v Durmaz Corporation Pty Ltd, the dispute involved an injunction granted by the court to prevent Durmaz Corporation from pouring a concrete slab, a matter which was subsequently breached by the latter. The case was heard in the Supreme Court of New South Wales. The primary legal issue before the court was whether the costs incurred by BGM Projects in obtaining the injunction should be awarded on an indemnity basis to Durmaz Corporation. This decision stemmed from Durmaz Corporation's actions in pouring the concrete slab despite being aware of the injunctive order, which was initially granted on 4 June 2019.

The court considered several factors in determining the appropriateness of awarding indemnity costs. Notably, it was established that Durmaz Corporation was bound by Building Covenants and failed to seek the necessary approval from BGM for the construction, thereby breaching the terms of these covenants. The court found that Durmaz Corporation had been duly notified by BGM's solicitors of its obligations under the covenants, including the requirement to obtain approval for the construction plans. Despite this, Durmaz Corporation proceeded with the construction, leading the court to conclude that the company was in wilful breach of the covenants. Given this deliberate disregard for the court's order and the clear undertakings provided by Durmaz Corporation, the court found it appropriate to award indemnity costs to BGM Projects.

Consequently, the court ruled that Durmaz Corporation should bear the costs of the application, including those associated with the hearings on 4 June 2019 and 27 November 2019. Should the parties fail to agree on the quantum of costs, the matter would be assessed on an indemnity basis. The court's decision was grounded in the principles set out in Colgate-Palmolive Co v Cussons Pty Ltd, which provide a framework for awarding indemnity costs in cases of deliberate breach of court orders. The final order required Durmaz Corporation to pay the Applicant's costs of and incidental to the Application, including the aforementioned appearances, as agreed, or to be assessed on an indemnity basis if an agreement could not be reached.