Cappello v Hammond & Simonds NSW Pty Ltd (No 2) - [2020] NSWSC 1199

Supreme Court

New South Wales

Medium Neutral Citation: Cappello v Hammond & Simonds NSW Pty Ltd (No 2) [2020] NSWSC 1199
Hearing dates: On the papers
Decision date: 04 September 2020
Jurisdiction: Equity - Technology and Construction List
Before: Ball J
Decision:
The plaintiffs pay the defendants’ costs on an indemnity basis

Catchwords:
COSTS – Indemnity costs – Where proceedings should have been commenced in the New South Wales Civil and Administrative Tribunal – Where plaintiffs should have appreciated part of the claim was doomed to fail – Indemnity costs awarded to successful defendant

Legislation Cited:
Civil and Administrative Tribunal Act 2013 (NSW)
Civil Procedure Act 2005 (NSW)
Home Building Act 1989 (NSW)

Cases Cited:
Cappello v Hammond & Simonds NSW Pty Ltd [2020] NSWSC 1021
Harrison v Schipp [2001] NSWCA 13

Category: Costs
Parties: Rosario Cappello (First Plaintiff)
Maria Cappello (Second Plaintiff)
Hammond & Simonds NSW Pty Limited (First Defendant)
John Re (Second Defendant)
Representation:
Counsel:
Self Represented (First Plaintiff)
DP O’Connor (Defendants)
Solicitors:
Self Represented (Plaintiffs)
Adam & Partners (Defendants)

File Number(s): 2019/8265
Publication restriction: None

Judgment

On 7 August 2020, I delivered judgment in this matter (Cappello v Hammond & Simonds NSW Pty Ltd [2020] NSWSC 1021). The only outstanding question is costs.
The case concerned renovations to the plaintiffs’ home undertaken by the first defendant. The plaintiffs made a claim for breach of the warranties implied by s 18B of the Home Building Act 1989 (NSW) (HBA) in respect of certain defects said to have existed in the building work undertaken by the first defendant and a claim to recover certain amounts said to have been overcharged by the first defendant. They also made a claim for general damages said to have arisen from a delay of seven months in completing the work. Originally, that claim had three components. First, the plaintiffs claimed an amount of $160,000 said to represent a decrease in the market value during the period of the delay. Second, they claimed an amount of $500,000 said to represent a diminution in the value of their property resulting from the compulsory acquisition of the substratum of their property for stage 3A of the WestConnex road project that was foreshadowed shortly before the building work was complete. It was the plaintiffs’ contention that, if the work had been completed on time, they could have sold the property before notice of the acquisition was given and avoided that loss. Third, they claimed an amount of $30,000 for the physical inconvenience they suffered as a consequence of the delay. The claim for $160,000 was abandoned before the commencement of the hearing. The claim for $500,000 was reduced to $370,000.
The plaintiffs also made a claim against the second defendant, the director of the first defendant. The basis of that claim was never made clear. The plaintiffs’ case seemed to be that because the second defendant held a licence under the HBA and undertook the relevant building work, he was liable for breaches…

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: [2020] NSWSC 1199
Decision Date: 04 September 2020

CaseChat Overview and Summary

The case of Cappello v Hammond & Simonds NSW Pty Ltd (No 2) involved the plaintiffs, Cappello, who were pursuing legal action against Hammond & Simonds NSW Pty Ltd, a legal firm. The dispute centred around alleged professional negligence and misleading conduct by the legal firm. The matter was initially heard in the Supreme Court of New South Wales, which subsequently referred the issue of indemnity costs to the Court of Appeal.

The legal issues before the court primarily revolved around the appropriateness of awarding indemnity costs in circumstances where the plaintiffs' decision to commence proceedings in the Supreme Court, rather than the New South Wales Civil and Administrative Tribunal (NCAT), was deemed ill-advised. The court was required to determine whether the plaintiffs should have been aware that a portion of their claims was likely to fail, and if so, whether this warranted an indemnity costs order against them. Additionally, the court needed to consider the broader implications of such an order on the legal landscape and the conduct of parties in similar future cases.

The Court of Appeal held that the plaintiffs should have appreciated that their claim was partially doomed to fail, given that part of their action should have been commenced in the NCAT. The court reasoned that the plaintiffs' failure to recognise this led to unnecessary legal costs and proceedings. Consequently, the court awarded indemnity costs to the successful defendant, Hammond & Simonds NSW Pty Ltd. The decision underscored the importance of parties conducting due diligence and understanding the appropriate forums for their claims, and the potential consequences of bypassing designated tribunals or courts.

No additional orders were made beyond the indemnity costs awarded to the defendant. The court's decision provided clarity on the implications of initiating proceedings in the wrong forum, emphasising the need for careful consideration of jurisdictional issues before commencing legal action.

Orders