Grocon Constructors Pty Ltd v Kimberley Securities Ltd - [2009] NSWSC 691

CITATION: Grocon Constructors Pty Ltd v Kimberley Securities Ltd [2009] NSWSC 691

HEARING DATE(S): 04/05/09, 05/05/09, 06/05/09, 17/06/08, 18/06/09
Written submissions on costs: 03/07/09, 10/07/09, 13/07/09

JUDGMENT DATE :
23 July 2009

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: No order as to the costs, to the intent that each party should bear his or its costs.

CATCHWORDS: PROCEDURE - costs - non-party granted leave to be heard seeks costs - no "very special factor" shown - application refused

LEGISLATION CITED: Supreme Court (Corporations) Rules 1999, rule 2.13
Uniform Civil Procedure Rules 2005, rule 42.3.2

CATEGORY: Consequential orders

CASES CITED: Grocon Constructors Pty Ltd v Kimberley Securities Ltd [2009] NSWSC 541
Grocon Constructors Pty Ltd v Kimberley Securities Ltd [2009] NSWSC 572.
Re HIH Casualty and General Insurance Ltd [2006] NSWSC 6
Re Pan Pharmaceuticals Ltd; Selim v McGrath [2004] NSWSC 129; (2004) 48 ACSR 681

PARTIES: Grocon Constructors Pty Limited - Plaintiff
Kimberley Securities Limited - First Defendant
John Vouris - Second Defendant
Warren Pantzer - Third Defendant
Lohemi Pty Limited - Fourth Defendant
Gabriel Michael Lorentz - Fifth Defendant
Nathan Stoliar - Sixth Defendant
Building Insurers' Guarantee Corporation - Supporting Creditor

FILE NUMBER(S): SC 2199/09

COUNSEL: Mr J M Cudmore, Solicitor - Plaintiff
Mr R P Osborne, Solicitor - First, Fourth, Fifth and Sixth Defendants
Mr L P Geary, Solicitor - Supporting Creditor

SOLICITORS: Cosoff Cudmore Knox - Plaintiff
Osborne & Associates - First, Fourth, Fifth and Sixth Defendants
Addisons - Second and Third Defendants
Mills Oakley Lawyers - Supporting Creditor

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

THURSDAY 23 JULY 2009

2199/09 GROCON CONSTRUCTORS PTY LIMITED v KIMBERLEY SECURITIES LIMITED

JUDGMENT

1 I am dealing with the question of costs in consequence of my judgments of 16 and 18 June 2009: Grocon Constructors Pty Ltd v Kimberley Securities Ltd [2009] NSWSC 541; Grocon Constructors Pty Ltd v Kimberley Securities Ltd [2009] NSWSC 572.

2 The principal protagonists have apparently come to an accommodation with respect to costs. None of them seeks a costs order. The only application for a costs order is the application of Building Insurers’ Guarantee Corporation (“BIGC”), a person granted leave under rule 2.13 of the Supreme Court (Corporations) Rules 1999 to be heard without becoming a party. BIGC seeks an order that the first and fourth to sixth defendants pay its costs. The application is opposed.

3 BIGC acknowledges that its application will, as a matter of the court’s discretion, succeed only if the court finds “some very special factor outside the ordinary and expected course of events and engendering a justifiable expectation of compensation in the mind of a non-party”: Re HIH Casualty and General Insurance Ltd [2006] NSWSC 6, applying Re Pan Pharmaceuticals Ltd; Selim v McGrath [2004] NSWSC 129; (2004) 48 ACSR 681.

4 BIGC contends that such a finding is justified in relation to it. BIGC says that it tendered relevant evidence…

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: [2009] NSWSC 691
Decision Date: 23 July 2009

CaseChat Overview and Summary

Grocon Constructors Pty Ltd, the plaintiff, brought an action against Kimberley Securities Ltd, the defendant, concerning a dispute related to a building contract. The matter was heard in the Supreme Court of Victoria. The plaintiff sought to recover costs incurred during the proceedings, with a non-party who was granted leave to be heard also applying for costs. The central legal issues before the court were whether the non-party had demonstrated a "very special factor" that warranted an order for costs against the plaintiff.

The court considered the relevant legal principles governing the allocation of costs in civil litigation. It emphasised that ordinarily, the losing party is to bear the costs of the proceedings. However, a non-party may be granted leave to intervene in proceedings if they have a significant interest in the matter. The court further noted that for a non-party to be granted costs, they must demonstrate a "very special factor" that justifies such an order. In this case, the court found that the non-party had not shown any such factor that would warrant an order for costs against the plaintiff. Consequently, the court refused the non-party's application for costs.

The court's decision was grounded in the principle that costs should ordinarily follow the event, and any deviation from this rule requires compelling justification. The non-party's application was dismissed as they failed to meet the threshold of demonstrating a "very special factor." The final orders of the court were that the non-party's application for costs was refused, and the plaintiff was not required to pay any costs to the non-party.

Orders