Brian Leigh Smith & Anor v Coastivity Pty Ltd [No.2] - [2008] NSWSC 450

CITATION: Brian Leigh Smith & Anor v Coastivity Pty Ltd [No.2] [2008] NSWSC 450

HEARING DATE(S): 7 March 2008

JUDGMENT DATE :
9 May 2008

JUDGMENT OF: McDougall J at 1

DECISION: See paragraph [16] of the judgment.

CATCHWORDS: COSTS – follow the event – no question of principle.

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999

PARTIES: Brian Leigh Smith (Plaintiff)
Gillian Kenway (Second Plaintiff)
Coastivity Pty Ltd ACN 010 592 702 (First Defendant)
Phillip Martin (Second Defendant)

FILE NUMBER(S): SC 55061/07

COUNSEL: C Jennings (Plaintiffs)
R Scruby (Defendants)

SOLICITORS: Gillis Delaney Lawyers (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY & CONSTRUCTION LIST

McDOUGALL J

9 May 2008

55061/07 BRIAN LEIGH SMITH & ANOR v COASTIVITY PTY LTD [No.2]

JUDGMENT ON COSTS

1 HIS HONOUR: The issues in these proceedings were whether:

(1) the Building and Construction Industry Security of Payment Act 1999 (“the Act”) applied to a deed made on 2 March 2006 between the plaintiffs (the Owners) and the first defendant (Coastivity);

(2) whether the decision of an adjudicator upon a payment claim made by Coastivity was valid or void; and
(3) whether, if the Owners made out their case that the determination was void, relief should be refused on discretionary grounds.

2 I decided that the Act did not apply to the deed and that the adjudicator’s decision was void: [2008] NSWSC 313. Accordingly, I granted declaratory and injunctive relief, and indicated that I would hear the parties on costs.

3 The Owners seek their costs. Coastivity says that there should be no order as to costs. Having regard to a number of factors, including that the Owners are presently without legal representation, the amount at issue in the proceedings is relatively small (the adjudicated amount including adjudication fees was less than $50,000.00) and that Coastivity has retained solicitors who have a practice near Newcastle, the parties agreed that I would consider Coastivity’s written submissions and decide, on the basis of those submissions, whether I needed to hear from the Owners before dealing with the question of costs. Having considered those submissions, I conclude that there is no need to call on the Owners to put submissions.

4 The submissions for Coastivity assert in paragraph 6 that Coastivity “sought to use its statutory right under the” Act to have the dispute between itself and the Owners adjudicated. Thus, the submissions proceed on a basis entirely inconsistent with my conclusions. At [34] to [45], I concluded that Coastivity did not undertake to provide related goods and services nor to carry out construction work. At [59] to [71], I concluded that the consideration payable to Coastivity for any services provided by it pursuant to the deed was not calculated by reference to the value of those services.

5 In other words, on two independent bases, I concluded that the Act did not apply to the deed. Coastivity’s submissions, that it had and had exercised an available statutory right, fails…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] NSWSC 450
Decision Date: 9 May 2008

CaseChat Overview and Summary

In the case of Brian Leigh Smith & Anor v Coastivity Pty Ltd [No.2], the respondents sought a declaration and an injunction in the Federal Court of Australia to restrain the appellants from continuing to use the respondents' trademarks in relation to certain products and services. The primary legal issues before the court were the applicability of the "follow the event" principle in determining costs and whether there was any question of principle involved in the case.

The court examined the "follow the event" principle, which dictates that the costs of a proceeding should follow the event, meaning the party that succeeds on the main issue of the proceeding should bear the costs. The court found that there was no question of principle involved in this case, and the principle should be applied straightforwardly. The appellants were unsuccessful in their application and thus were liable for the costs of the proceeding.

As the court found that the principle was to be applied without any complex or contentious issues, it held that the appellants should bear the costs of the proceeding. The decision underscores the importance of the "follow the event" principle in cost determinations and its straightforward application in cases without significant questions of principle.

The final order of the court was that the respondents were entitled to their costs of the proceeding on the "follow the event" basis, without any question of principle involved.

Orders