Duplex Australia Pty Limited v Hathaway

[2025] NSWSC 383

Supreme Court

New South Wales

Medium Neutral Citation:

Duplex Australia Pty Limited v Hathaway [2025] NSWSC 383

Hearing dates:

10 April 2025

Date of orders:

10 April 2025

Decision date:

10 April 2025

Jurisdiction:

Common Law

Before:

Hamill J (as Duty Judge)

Decision:

See orders at [15]

Catchwords:

CIVIL LAW – appeal from decision of NCAT – building dispute – where builder fails to pay award – where plaintiff seeks security for costs – where builder seeks stay of NCAT orders – both motions granted but stay conditional on payment of security for costs

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 172

Uniform Civil Procedure Rules 2005 (NSW), rr 42.21(1)(c), 42.21(1A), 42.21(1A)(a), 42.21(1A)(b), 42.21(1A)(c), 42.21(2)

Cases Cited:

Duplex Australia Pty Limited v Hathaway [2024] NSWCATAP 228

Wollongong Coal Limited v Gujarat NRE Properties Pty Ltd [2019] NSWSC 187

Texts Cited:

N/A

Category:

Procedural rulings

Parties:

Duplex Australia Pty Limited (Plaintiff)
Jade Hathaway (First Defendant)
Jacinta Harrison (Second Defendant)

Representation:

Counsel:
I Chatterjee (Defendant)

Solicitors:
L Baker (Plaintiff)
Chapman Solicitors (Defendant)

File Number(s):

2024/00458866

Publication restriction:

N/A

EX TEMPORE JUDGMENT

1. The plaintiff in this Court, Duplex Australia Pty Limited (“Duplex”), was the respondent to proceedings brought in the Consumer and Commercial Division of the Civil and Administrative Tribunal (“NCAT”). The defendants in this Court, Mr Hathaway and Ms Harrison, were the applicants in those proceedings. They commenced the proceedings in around July 2023. Mr Hathaway and Ms Harrison asserted in the NCAT proceedings that Duplex did defective home building works on their property in Little Bay.

2. On 18 June 2024, Senior Member McDonald made orders that Duplex pay the sum of $92,301 plus costs to Mr Hathaway and Ms Harrison.

3. On 13 November 2024, an Appeal Panel of NCAT refused leave to appeal except in relation to the costs order: Duplex Australia Pty Limited v Hathaway [2024] NSWCATAP 228. The Appeal Panel substituted a different costs order.

4. On 10 December 2024, Duplex commenced proceedings by summons in this Court. Those proceedings are, in essence, an appeal against the decision made at NCAT. The substantive proceedings in this Court are listed before the Registrar on 17 April 2025 and 29 April 2025 to set a hearing date and a timetable for filing in preparation for that hearing.

5. Before the Court today are notices of motion by both parties. Mr Hathaway and Ms Harrison filed their notice of motion on 27 February 2025 and seek orders, in short form, for security of costs and, if such security is not provided, a stay of the proceedings until further order or until security is provided. Duplex filed its motion on 1 April 2025 and seeks an order staying enforcement of the order for payment. They rely on s 172 of the Civil Procedure Act 2005 (NSW).

6. A working folder of 176 pages included an affidavit of the defendants’ solicitor and an affidavit of the Director of Duplex. Each annexes several documents, some more relevant than others. Mr Chatterjee of counsel, who appears for Mr Hathaway and Ms Harrison, filed written submissions on both motions. They were dated 4 and 9 April 2025. Mr Vavrica, the Director of Duplex, filed submissions and I have also read a number of letters and emails he has addressed both to the defendants’ solicitor and to the President, I think, of NCAT.

7. Based on that material, I have come to the following findings relevant to the disposition of the two notices of motion:

1. Duplex has paid neither the judgment sum nor any costs as ordered by NCAT or the Appeal Panel of NCAT to this point.

2. Mr Hathaway and Ms Harrison have expended considerable amounts of money bringing the action to NCAT, defending the appeal to the Appeal Panel and now to resist Duplex’s proceedings in this Court and the appeal that lies underneath those proceedings.

3. There is some evidence, although it is denied, to suggest Duplex may not be in a position to pay, or simply will refuse to pay, any costs orders made in the current proceedings. I refer to, without being too detailed about it:

1. The fact that, to this point, Duplex has not made any payment or attempted to make any payment of the sums ordered to be paid for the deficient work, as alleged, or the costs orders made in NCAT.

2. Some of Duplex’s explanations for not paying any of those amounts to this point are, frankly, silly. I include the assertion in [10] of Mr Vavrica’s affidavit stating, “I need the bank account details of the applicants in the originating NCAT application.”

3. Similarly, his assertion at [21] that “the plaintiff has not been served a judgment order”. The reality is that Duplex, through Mr Vavrica, is entirely aware of the orders made by NCAT and no doubt that is what motivated the company and Mr Vavrica to prosecute the present appeal to this Court.

4. Mr Vavrica’s affidavit says at [20] that the plaintiff no longer trades as a licensed building contractor. I understand from the material and what has been said this morning that this is a result of the non-payment and consequent suspension of his building licence.

5. As put by Mr Chatterjee, no real evidence, apart from assertions, has been provided to resist the suggestion that there may be an issue of impecuniosity on the part of the plaintiff.

4. It is very difficult to assess the prospects of the appeal to this Court on the limited material available, but I have read both of the decisions of NCAT, that is the decision by the Senior Member at first instance and the decision of the Appeal Panel. My assessment, based on what I have seen to this point, is that some of the arguments to be brought to this Court have very little merit. I could not come to the conclusion, on the other hand, that the appeal is untenable or that it has no prospects of success.

5. The amount of security for costs sought by the defendants is set out and particularised in some detail by the defendants’ solicitor. They appear to be reasonable. It is certainly an amount substantially less than the judgment sum and costs ordered by NCAT.

8. In the circumstances, my view is that it would be quite unfair to put Mr Hathaway and Ms Harrison through the expense of defending this appeal in circumstances where there is a real risk that if they are successful and get the benefit of a costs order, Duplex will fail to satisfy that costs order, let alone the orders made by NCAT approaching a year ago.

9. I have considered the well-established principles as discussed in cases like Wollongong Coal Limited v Gujarat NRE Properties Pty Ltd [2019] NSWSC 187, a decision by the now President, then Ward CJ in Eq. I have also considered r 42.21(1)(c) of the Uniform Civil Procedure Rules 2005 (NSW). I am satisfied there is credible evidence that the plaintiff either cannot or will not be in a position to pay a costs order. I have considered the criteria in r 42.21(1A). I note:

1. There are significant question marks over the merit and the genuineness of the proceedings brought in this Court: r 42.21(1A)(a) and (b).

2. There are issues over the ability of the plaintiff company to pay a costs order, if one is made: r 42.21(1A)(c).

3. The plaintiff, to this point, is capable of and has represented itself competently through its Director, Mr Vavrica, and today has been represented by Mr Baker. An order for security of costs will not, in any sense on the material before me, stifle the proceedings: r 42.21(1A).

4. The application for security of costs was made in a timely manner: r 42.21(2).

10. As to r 42.21(1A)(b), I have a strong suspicion the appeal to this Court is an attempt to avoid the judgment of the NCAT Appeal Panel and/or to delay payment of the money ordered by NCAT to be paid to the defendants in this Court.

11. The amount, as I said, sought by way of security of costs does appear on its face to be reasonable and has been itemised carefully by the defendants’ solicitor. The amount of $59,000 seems realistic, or as I described it in argument, perhaps a little generous. I propose to order security for costs in a slightly lesser sum. However, the sum will be sufficient to ensure the good faith of the plaintiff in pursuing his appeal.

12. I have to say that initially I could see no basis to order a stay of the enforcement of the order in NCAT. However, in the course of discussions with the lawyers in Court this morning and, in essence, taking a pragmatic and realistic view which is that they are not going to pay it anyway, I can see there is some merit in a sort of trade off whereby security of costs is ordered but in the meantime the plaintiff not pursue enforcement of the orders made at NCAT. There will be in terms of a failure to provide the security of costs, which will be ordered, a stay of the proceedings in this Court.

13. What I would propose then, and I have canvassed this with the lawyers in Court this morning and there was no great dispute about it, is to make the orders sought by each party in their respective notices of motion but noting that the stay on the enforcement of the NCAT orders will be lifted if the security of costs is not paid. That will be, if you like, a two-fold consequence with the proceedings in this Court then being stayed and the stay on the enforcement of the NCAT orders being lifted.

14. I also formed the view, in reading the material this morning and given that the defendants in this Court commenced their proceedings in NCAT nearly two years ago, that the case should get an expedited hearing date or as expedited as the Court can provide. The parties tell me they are available in the week of 10 and 11 June 2025 and the Listing Clerk and Registrar advised my Associate those dates were available. I propose to list the matter on 11 June 2025, vacate the hearings before the Registrar and make the orders sought by the parties in their respective notices of motion.

15. Accordingly, I make the following orders:

1. Vacate the directions hearing and mention scheduled before the Registrar on 17 April 2025 and 29 April 2025.

2. List the matter for hearing on 11 June 2025 in this Court.

3. The following case management directions will apply:

1. The plaintiff is to file and serve written submissions of no more than 15 pages on or before 9 May 2025.

2. The defendants are to file and serve written submissions of no more than 15 pages on or before 23 May 2025.

3. The plaintiff to file and serve written submissions in reply of no more than 5 pages on or before 30 May 2025.

4. The parties are to file a joint court book on or before 6 June 2025.

4. Pursuant to part 42.21 of the Uniform Civil Procedure Rules 2005 (NSW), the plaintiff is to provide security for costs for the first and second defendants in the (total) sum of $50,000 on or before 9 May 2025, such security to be provided by payment into court or the provision of an unconditional bank guarantee in a form acceptable to the first and second defendants.

5. A stay on the enforcement of the orders for payment made by NCAT.

6. In the event that the security for costs ordered in order 4 is not provided by 9 May 2025, the proceedings in this Court are stayed until further order of the Court and the stay on the enforcement of NCAT orders will be lifted immediately.

7. The matter will be listed before the Registrar on 14 May 2025 to update the Court on the readiness of the matter to proceed and the situation in relation to the security for costs order.

8. The costs of both notices of motion today and incidental to those will be costs in the cause.

9. The plaintiff has leave to amend his points of appeal on or before 9 May 2025.

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