Creative Building Services Pty Ltd v TIO Air Conditioning Pty Ltd (No 2)

[2016] ACTSC 374

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Creative Building Services Pty Ltd v TIO Air Conditioning Pty Ltd (No 2)

Citation:

[2016] ACTSC 374

Hearing Date:

Determined on written submissions

Date last submissions received:

14 December 2016

DecisionDate:

16 December 2016

Before:

Mossop AsJ

Decision:

See [8]

Catchwords:

COSTS – Costs follow event – Departure from default rule under r 1729 of Court Procedures Rules 2006 (ACT) – Turns on own facts

Legislation Cited:

Building and Construction Industry (Security of Payment) Act 2009 (ACT)

Court Procedures Rules 2006 (ACT), r 1729

Parties:

Creative Building Services Pty Ltd (ACN 070 303 892) (Plaintiff)

TIO Air Conditioning Pty Ltd (ACN 165 149 486) (First Defendant)

Scott Pettersson (Second Defendant)

Representation:

Counsel

A J Greinke (Plaintiff)

W D B Buckland (First Defendant)

Solicitors

Meyer Vandenberg Lawyers (Plaintiff)

Chamberlains (First Defendant)

File Number:

SC 507 of 2016

MOSSOP AsJ:

1. I published my decision in these proceedings on 13 December 2016: Creative Building Services Pty Ltd v TIO Air Conditioning Pty Ltd [2016] ACTSC 367. I made directions requiring the exchange of written submissions and any evidence in relation to costs. Those submissions have now been filed.

1. The plaintiff has sought costs of the whole of the proceedings including the costs of the application to extend time and of the defendant’s application for security for costs assessed on a party and party basis.  The first defendant contended that the appropriate order was that there be no order as to costs of the proceedings or, alternatively, that if costs were to follow the event they should be awarded on no better than a party and party basis.

1. In my view it is appropriate that costs follow the event.  It is appropriate that those costs be assessed on a party and party basis and that they include the costs of the application to extend time and the application for security for costs.  That is for the reasons which follow.

1. I do not accept the first defendant’s contention that there should be no order as to costs.  That was based upon the submissions that:

(a)the first defendant submitted a legitimate payment claim under the Building and Construction Industry (Security of Payment) Act 2009 (ACT) (SOP Act);

(b)the plaintiff did not provide a payment schedule or otherwise address the matters it was required to in the pre-adjudication process;

(c)the error found by the Court was not made by the first defendant which only sought to enforce the decision of the second defendant in good faith; and

(d)as a result of the Court’s decision, the first defendant is deprived of the process under the SOP Act.

1. I do not accept those circumstances are sufficient to warrant adopting an approach other than that costs follow the event. The availability of judicial review proceedings clearly creates risks for parties who have invoked and relied upon the adjudication process under the SOP Act. The costs consequences of legal proceedings may be significant and defendants may be placed in the invidious position of having to choose between abandoning their entitlement under an adjudication decision or risking significant costs consequences. However, given the essentially compensatory nature of a costs order made in adversarial proceedings it is appropriate that the unsuccessful defendant pay the plaintiff’s costs. As I pointed out in my decision, it was not a case where the plaintiff had run one contention before the adjudicator and sought to run a different argument before the Court. Nor did the plaintiff engage in other conduct warranting a departure from the usual rule. Rather, for reasons which were unexplored in the evidence, the plaintiff did not serve a payment schedule and, again for reasons which were unexplored in the evidence, the defendant chose to claim $175,362.31 in its adjudication application rather than the amount which, on a proper construction, payment claim 13 was limited to. If the exercise was one of attributing blame, it could not be said that all the blame for the unsatisfactory outcome which results from quashing the adjudicator’s decision falls on one party. In those circumstances I do not consider that there is a sufficient basis for departing from the approach that costs follow the event.

1. Rule 1729 of the Court Procedures Rules 2006 (ACT) (CPR) provides that a party applying for the extension or shortening of a time set under the CPR must pay the cost of the application or any order made on or because of the application unless the Court otherwise orders. Notwithstanding r 1729, I do not consider that the plaintiff should pay the costs of the application for an extension of time. The circumstances related to the extension of time are set out in my earlier reasons at [5]. Those circumstances do not involve any fault or lack of diligence on the part of the plaintiff and, in those circumstances, I consider that it is appropriate that the cost of the extension of time application are dealt with in the same manner as the cost of the proceedings as a whole.

1. So far as the security for costs application is concerned, it was not necessary to deal with that application because of the fortunate situation that the Court was able to give the matter a final hearing within a month of the proceedings having been commenced.  I consider that the bringing of the application was reasonable in circumstances where there may have been, for a variety of reasons, greater delay in having the matter heard and determined.  In circumstances where it was ultimately unnecessary for the application to be dealt with I consider that the costs of that application should follow the outcome of the proceedings.

1. For these reasons the orders of the Court are:

1.    The first defendant is to pay the plaintiff’s costs of the proceedings.

2.    The costs required to be paid by order 1 include the costs of the application for an extension of time in which to commence proceedings.

3.    There is otherwise no order as to costs of the proceedings.

I certify that the preceding eight [8] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Associate Justice Mossop.

Associate:

Date: 16 December 2016