Harris v Morabito Holdings Pty Limited

In the matter of Harris v Morabito Holdings Pty Limited, the dispute between the owners and the builder related to alleged defects in a home. The Supreme Court was tasked with determining the costs of the proceedings, which had been extensive and contentious. The owners were awarded damages of $400,000 against the builder's claim of $1.6 million. The court was required to consider whether the commencement and continuation of the proceedings in the Supreme Court were warranted and whether the costs should be reduced due to either the conduct of the owners' expert or the proportion of success achieved. Additionally, the court considered an application for indemnity costs in relation to a Calderbank offer.

The court examined the necessity of the owners pursuing the case in the Supreme Court, given that they succeeded in each category of defects but did not persuade the referee as to the consequent quantum. It was noted that the owners were required to go to court to vindicate their rights and that the inflated claim had extended the hearing. The court acknowledged the impossibility of scientifically assessing the costs in these circumstances but concluded that justice, in a broad sense, indicated that the owners should receive 80% of their costs. Regarding the application for indemnity costs, the court found it not unreasonable for the builder to reject the Calderbank offer, as it was sent at a time when the builder could not properly assess the offer.

The court's reasoning led to the conclusion that the owners were entitled to 80% of their costs, while the builder's application for indemnity costs was dismissed. The court emphasised that the owners were required to pursue their rights in court, and the inflated claim contributed to the extended hearing. The court also considered the Calderbank offer and found that the builder's rejection was not unreasonable given the circumstances.