Ceerose Pty Limited v A-Civil Aust Pty Ltd (No 6)

[2023] NSWSC 1460

Supreme Court

New South Wales

Medium Neutral Citation:

Ceerose Pty Limited v A-Civil Aust Pty Ltd (No 6) [2023] NSWSC 1460

Hearing dates:

27 November 2023

Decision date:

27 November 2023

Jurisdiction:

Equity - Technology and Construction List

Before:

Ball J

Decision:

Plaintiff pay 90 percent of the defendant's costs of both proceedings

Catchwords:

COSTS — Party/Party — General rule that costs follow the event — Security of Payment Act proceedings — Where defendant ultimately entitled to recover majority of adjudication determinations — Where costs reserved on a number of interlocutory applications

Legislation Cited:

Building and Construction Industry Security of Payment Act 1999 (NSW)

Civil Procedure Act2005 (NSW)

Uniform Civil Procedure Rule 2005 (NSW)

Category:

Costs

Parties:

Ceerose Pty Limited (Plaintiff | First Cross-Defendant)
A-Civil Aust Pty Ltd (First Defendant | Cross-Claimant)
John Tuhtan (Second Defendant | Second Cross Defendant)
ABC Dispute Resolution Service (Third Defendant)

Representation:

Counsel:
S Robertson SC (Plaintiff)
FP Hicks SC with L Gor (Defendant)

Solicitors:
Salim Rutherford Lawyers (Plaintiff | First Cross-Defendant)
M&A Lawyers (First Defendant | Cross-Claimant)
Submitting Appearances (Second Defendant | Second Cross Defendant and Third Defendant)

File Number(s):

2022/217806; 2022/236818

Publication restriction:

None

Ex tempore JUDGMENT

1. In these proceedings the plaintiff sought to set aside two adjudication determinations under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the SOP Act). One determination in respect of construction work carried out a development in York Street, Sydney, was for $2,045,453.97 including GST. The other related to construction work carried out at a development in Elizabeth Bay and was for $349,324.36 including GST.

2. Ultimately, although the Court held that some aspects of each determination were affected by jurisdictional error, the Court, relying on s 32A of the SOP Act, concluded that the defendant was entitled to recover $1,757,863.46 in respect of the York Street determination, and $345,210.36 in respect of the Elizabeth Bay determination.

3. The only outstanding question is costs. The defendant submits that it was substantially successful and, therefore, should recover all of its costs of the two proceedings. The plaintiff submits that each party achieved a degree of success and that the most appropriate order is that each party should bear its own costs. In making that submission the plaintiff makes two broad points. First, it submits that it was successful in establishing jurisdictional error which was the subject of Darke J's first judgment. Second, it submits that it was successful in relation to a number of interlocutory applications where the Court reserved costs. In the normal course of events it should have its costs of that success. The applications on which the plaintiff says it was successful are set out in paragraph 6 of the plaintiff's submissions dated 9 November 2023. It is not necessary for the purposes of this judgment to set out each of those applications in this judgment.

4. I do not accept the plaintiff's submissions. In substance there were two principal issues before the Court. The first was whether the defendant was entitled to recover the amounts of the adjudication determinations. As matters transpired, that issue was determined at two hearings. The first concerned the extent to which the determinations were affected by jurisdictional error. The second concerned the consequences of those findings. However, the practical result was that the defendant was substantially successful.

5. The second issue was whether the judgment should be stayed pending the determination of substantive proceedings recently commenced by the plaintiff seeking to recover the amount that it was liable to pay as a consequence of the determinations in the exercise of its contractual rights. The plaintiff was wholly unsuccessful on that issue.

6. As to the plaintiff's second point, it seemed to me there are three difficulties with it. First, it overlooks Uniform Civil Procedure Rule 2005 (NSW) r 42.7(1). It is for the plaintiff to establish that the Court should depart from the rule that reserved costs follow the event. It has not sought to do so in any substantive way.

7. Second, a number of the motions might be characterised as raising case management issues where it is reasonable for the costs of the motion to follow the ultimate event. The motion dated 25 November 2022 to set aside a notice to produce is an example. The application for a release of the portions of the determination affected by jurisdictional error which was made in the context of another motion on which the defendant was ultimately successful in the Court of Appeal is another. A number of applications were heard by me on 19 May 2023, including an application to vacate the hearing date for the stay application. That application was made necessary by the decision of Stevenson J in relation to the production of financial documents by the defendant which was ultimately reversed by the Court of Appeal. Again, that seems to me to be in the nature of a case management issue where, in the normal course of events, it might be expected that the costs of the application would follow the costs of the case as a whole.

8. Third, in the case of a number of motions, it is more accurate to say that the parties enjoyed mixed success. The motion dated 25 November 2022 heard by Richmond J to set aside a notice to produce, and the hearing by Stevenson J on 5 May 2023 of the notice of motion dated 1 May 2023, are examples.

9. It seems to me that one other point is also relevant. This was a case in which the plaintiff took every possible point to avoid having to pay the amount of the adjudication determinations in the defendant's favour. Although its approach fell well short of an abuse of process, and although it might be said that the plaintiff complied with its obligations under s 56 of the Civil Procedure Act2005 (NSW) in relation to each application, the overall result was a serious departure from the policy underlying the SOP Act. The plaintiff may have been entitled to do what it did, but ultimately it largely failed. It should have to bear the costs of doing so.

10. Taking all those matters into account, in my opinion, the appropriate order is that the plaintiff pay 90 percent of the defendant's costs of both proceedings.

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Decision last updated: 28 November 2023