Derek Larsen as Trustee for the Larsen Superannuation Fund v Tastec Pty Ltd ACN 051516682 (No 2)

[2025] NSWDC 16

District Court

New South Wales

Medium Neutral Citation:

Derek Larsen as Trustee for the Larsen Superannuation Fund & Anor v Tastec Pty Ltd ACN 051516682 (No 2) [2025] NSWDC 16

Hearing dates:

On the papers

Date of orders:

19 February 2025

Decision date:

19 February 2025

Jurisdiction:

Civil

Before:

Cole DCJ

Decision:

(1) The plaintiffs are to pay the defendants’ costs of the remitter on the ordinary basis.

(2) The plaintiffs are to pay the costs of the District Court proceedings before Gibb DCJ on the ordinary basis up until 7:10pm on 22 July 2021 and on the indemnity basis as and from 7:10pm on that date (save for the costs of the defendants’ motion of 30 December 2021 which the plaintiffs are to pay on the ordinary basis).

Catchwords:

COSTS – where part of the plaintiffs’ claim is remitted to the District Court together with the costs of the proceedings in the District Court and the plaintiffs are unsuccessful in their claim for damages on the remitter

Legislation Cited:

Australian Consumer Law

Cases Cited:

Derek Larsen as trustee for the Larsen Superannuation Fund ABN 95 894 143 943 and Floyd Larsen v Tastec Pty Limited (formerly Wonders Building Company Pty Ltd ACN 051 516 682 and Stephen Sainsbury (unreported)

Larsen v Tastec Pty Ltd [2023] NSWCA 39

Northern Territory v Sangare [2019] HCA 19; 265 CLR 164

Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72

Category:

Costs

Parties:

Derek Larsen as Trustee for the Larsen Superannuation Fund (ABN 95 894 143 943) (First Plaintiff)
Floyd Larsen as Trustee for the Larsen Superannuation Fund (ABN 95 894 143 943) (Second Plaintiff)
Tastec Pty Ltd (formerly Wonders Building Company Pty Limited) (ACN 051 516 682) (First Defendant)
Stephen Sainsbury (Second Defendant)

Representation:

Counsel:
Mr I Roberts SC (Plaintiff)
Mr M Gracie (Defendant)

Solicitors:
Mills Oakley (Plaintiff)
Ad Valorem Law (Defendant)

File Number(s):

2020/00083478

Publication restriction:

Nil

JUDGMENT

1. The plaintiffs’ claim in this matter was first determined on 17 December 2021 by the delivery of a judgment and the making of orders in Derek Larsen as trustee for the Larsen Superannuation Fund ABN 95 894 143 943 and Floyd Larsen v Tastec Pty Limited (formerly Wonders Building Company Pty Ltd ACN 051 516 682 and Stephen Sainsbury (unreported) by SJ Gibb DCJ (‘the First DC judgment’).

2. The plaintiffs appealed from the First DC judgment to the Court of Appeal.

3. The Court of Appeal handed down its judgment on the appeal (‘the Court of Appeal judgment’) and made orders disposing of the appeal on 9 March 2023 (see Larsen v Tastec Pty Ltd [2023] NSWCA 39). The orders are as follows:

(1) Appeal allowed.

(2) Set aside Order 1 of the orders of the District Court on 17 December 2021, and Order 4 of the orders of the District Court on 4 March 2022.

(3) In lieu thereof, order that:

(a) The Plaintiffs’ claim for damages for breach of contract against the First Defendant is dismissed.

(b) The Plaintiffs’ claim against the First and Second Defendants for relief under the Australian Consumer Law (ACL) be remitted to the District Court, to a judge other than the primary judge, for determination of:

(i) what relief (if any) should be granted pursuant to s 236 and/or s 237 of the ACL, and

(ii) the costs of the proceedings.

(4) The respondents are to pay the appellants’ costs of the appeal.

4. Following a trial on 8-9 May 2024 and written submissions, the remitter was determined on 7 November 2024 (‘the Second DC judgment’) and the following orders and directions were made:

(1) The plaintiffs’ claim against the first and second defendants for relief under the Australian Consumer Law is dismissed.

(2)   The defendants are to file and serve written submissions on costs on or before 21 November 2024.

(3)   The plaintiffs are to file and serve written submissions on costs on or before 5 December 2024.

(4)   The defendants are to file and serve written submissions in reply on or before 12 December 2024.

5. The defendants filed 3 pages of written submissions on costs on 26 November 2024.

6. On 6 December 2024, by email to my associate from their solicitors, the plaintiffs sought an extension of time, to 31 January 2025, to file their written submissions on costs. The application for an extension of time was opposed by the defendants and was refused.

7. On 17 December 2024, the plaintiffs’ solicitors sent an email to my associate in the following terms:

Dear Associate,

As you are aware we act for the Plaintiffs in these proceedings.

We are writing to inform the Court and the Defendants, as a matter of courtesy, that the Plaintiffs will not be filing written submissions in response on the question of costs.

The solicitor for the Defendants is copied to this email.

Kind Regards,

Luke

Luke Stirton

Senior Associate/Projects and Construction

Mills Oakley

8. The defendants responded to the plaintiffs’ email by letter dated 19 December 2024.

9. The plaintiffs have had an opportunity to make submissions with respect to costs but have chosen not to avail themselves of that opportunity. The plaintiffs have been accorded procedural fairness but have declined the opportunity to be heard in relation to the question of the costs of the proceedings in the District Court.

The Defendants’ submissions on costs

Costs of the proceedings on remitter

10. The defendants submitted that the plaintiffs’ claim was wholly unsuccessful and that the correct exercise of the costs discretion in those circumstances is to order the plaintiffs to pay the defendants’ costs of the remitter. The defendants cited McHugh J in Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [66]:

By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. 

That principle was reaffirmed in Northern Territory v Sangare [2019] HCA 19; 265 CLR 164 (per Kiefel CJ, Bell, Gageler, Keane and Nettle JJ) at [24] – [25].

11. The defendants submitted that there were no disentitling factors to be considered.

12. I agree with the defendants’ submissions. The plaintiff was wholly unsuccessful on the remitter and the defendants are entitled to an award of costs in their favour on the ordinary basis.

Costs of the proceedings before SJ Gibb DCJ

13. The Court of Appeal set out the history of the costs orders made by the District Court at first instance in the Court of Appeal decision at [161] – [164]:

161.   The Larsens also sought to set aside the primary judge’s order as to costs and in lieu thereof an order that the respondents pay the costs below. The orders of the primary judge dismissing the proceedings, dated 17 December 2021, included an order that the Larsens jointly and severally pay the respondents’ joint and several costs in respect of the whole proceedings (Order 6), and a further order granting leave to the parties to apply within 14 days for a variation of the costs order (Order 7). Although it was not included with the appeal books, at the conclusion of the appeal hearing it emerged that her Honour made further orders as to costs on 4 March 2022, following an application that the respondents made for indemnity costs. A copy of her Honour’s further orders, together with her Honour’s reasons on the application, were provided to the Court after the hearing.

162.   On 4 March 2022, her Honour revoked Order 6 of the orders made on 17 December 2021 and substituted an order that the Larsens jointly and severally pay the respondents’ joint and several costs in respect of the whole of the proceedings:

(1)   on the ordinary basis up until 7.10pm on 22 July 2021; and

(2)   on the indemnity basis as and from 7.10pm on that date (save for the costs of the respondents’ motion of 30 December 2021, which the Larsens were to pay on the ordinary basis).

163.   In making those orders, her Honour concluded that by a Calderbank letter the respondents had made a genuine offer of compromise which sought to bring a commercial solution to a building dispute where the responsible builder was not joined to the proceedings; and were thwarted when they pressed for a settlement conference. Her Honour also found that the offer was a sensible and a reasonable proposal to bring the proceedings to an end, and that the Larsens’ joint and several rejection of it was not reasonable.

164.   In circumstances where the question of relief under the ACL remains outstanding, I consider it necessary to set aside the order that her Honour made as to costs below, and for that issue to be considered afresh following resolution of the outstanding issue, including as to indemnity costs.

14. The defendants argued that there is no practical difference in the outcome of these proceedings between the First DCJ judgment and the Second DCJ judgment. In neither case was any award of damages given (or any relief), as sought by the plaintiffs.

15. The defendants submitted, to summarise and paraphrase, that, even if the plaintiffs’ damages claim had been determined at first instance in accordance with the Court of Appeal Judgment, there would have been no award of damages or any other relief and the circumstances of the offer of settlement, and the rejection of a settlement conference, would still have supported the decision by Gibb DCJ to order costs on the indemnity basis from 7:10pm on 22 July 2021 (except for the cost of a motion of 30 December 2021).

16. I accept the defendants’ arguments.

17. No basis has been advanced on behalf of the plaintiffs for any different outcome and I am not aware of the existence of any such basis.

18. The appropriate order in respect of the costs of the proceedings at first instance are the orders made by Gibb DCJ. The Court of Appeal set those orders aside so that the costs in the District Court could be considered afresh on the remitter because, if relief had been granted on the remitter, the costs orders at first instance may no longer have been appropriate. As the plaintiffs have been unsuccessful in obtaining an award of damages or any other relief under the ACL on the remitter, the orders on costs made at first instance remain the appropriate orders.

Orders

19. The following orders will issue:

1. The plaintiffs are to pay the defendants’ costs of the remitter on the ordinary basis.

2. The plaintiffs are to pay the costs of the District Court proceedings before Gibb DCJ on the ordinary basis up until 7:10pm on 22 July 2021 and on the indemnity basis as and from 7:10pm on that date (save for the costs of the defendants’ motion of 30 December 2021 which the plaintiffs are to pay on the ordinary basis).

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Decision last updated: 19 February 2025