Hestbay Pty Ltd v One Sector Pty Ltd

Link copied
Case Copied 79 min read

SUPREME COURT OF QUEENSLAND

CITATION:

Hestbay Pty Ltd v One Sector Pty Ltd and another [2025] QSC 4

PARTIES:

Hestbay Pty Ltd (CAN 010 851 073) as trustee for the J & F Property Trust

(Plaintiff)

v
One Sector Pty Ltd (CAN 139 990 891)

(Defendant)
and
Excel Concrete Pty Ltd (CAN 010 981 773)
(Third Party)

FILE NO/S:

Brisbane 9563/21

DIVISION:

Trial

PROCEEDING:

Costs hearing after trial

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

17 January 2025

DELIVERED AT:

Brisbane

HEARING DATE:

26 November 2024

JUDGE:

Ryan J

ORDERS:

The plaintiff is to pay the defendant’s costs of the claim and counter-claim on the standard basis, up to and including 20 September 2023 and on the indemnity basis thereafter.

The defendant’s costs, in so far as counsels’ costs are concerned, are limited to the costs of two counsel.

The defendant is to pay the third party’s costs, including reserved costs.

The defendant is to pay the plaintiff’s costs of the hearing of 14 June 2023.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – OFFERS OF COMPROMISE, PAYMENTS INTO COURT AND SETTLEMENTS – INFORMAL OFFERS AND CALDERBANK LETTERS – GENERALLY – where defendant made a Calderbank offer to settle which was rejected by the plaintiff – where defendant bettered its offer at trial – where parties agree that costs post the offer ought to be paid on an indemnity basis

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW THE EVENT – OTHER PARTICULAR CASES AND MATTERS – whether it is appropriate to make an order for the plaintiff to pay the defendant’s costs incurred prior to the Calderbank offer on an indemnity basis

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW THE EVENT – PARTIAL SUCCESS – where the plaintiff submitted that the defendant had only been successful in part in its claim and counterclaim – whether the costs payable to the defendant ought to be reduced to reflect its lack of success in relation to certain issues

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW THE EVENT – OTHER PARTICULAR CASES AND MATTERS – where the defendant was represented by a silk and two juniors at trial and at this costs hearing – whether costs recoverable by the defendant ought to be limited to the costs of two counsel – whether matter sufficiently complex as to warrant three counsel

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PARTIES AND NON-PARTIES – COSTS IN PROCEEDINGS WHERE MULTIPLE PARTIES – GENERALLY – where defendant joined the third party early in the piece – whether the defendant ought to pay the third party’s costs – where defendant said plaintiff’s claim was the catalyst for joining third party – where defendant said it discontinued against the third party after the plaintiff amended its statement of claim and obtained different…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Hestbay Pty Ltd v One Sector Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2025] QSC 4
Decision Date

CaseChat Overview and Summary

Hestbay Pty Ltd v One Sector Pty Ltd involved a dispute between two companies, Hestbay and One Sector, concerning a contract for the sale of a property. The case was heard in a state court, where the primary issue was the allocation of costs incurred during the proceedings. The court was required to decide whether Hestbay should bear the costs on an indemnity basis post the defendant's Calderbank offer, whether the costs should be apportioned on an issues basis, and whether the defendant should be limited to the costs of two counsel given the complexity of the matter. Additionally, the court needed to determine whether Hestbay should pay the third party's costs and whether the defendant's conduct in joining the third party was reasonable.

The court examined the nature of Hestbay's conduct, finding it inadequate but not unreasonable enough to warrant an order for indemnity costs. It was noted that Hestbay misunderstood critical evidence and failed to prove certain claims, but these shortcomings did not rise to the level of unreasonableness. The court also considered the fairness principle in allocating costs, referencing James & Ors v Surf Road Nominees Pt Limited & Ors (No 2) [2005] NSWCA 296, but found that Hestbay's conduct did not justify costs on an issues basis. The court held that the defendant's costs should be limited to the costs of two counsel as the matter was not sufficiently complex to warrant three counsel. Regarding the third party's costs, the court ruled that the defendant should bear them, and the plaintiff should pay the defendant's costs of a specific hearing.

The final orders of the court required Hestbay to pay One Sector's costs of the claim and counterclaim on the standard basis up to a certain date and on an indemnity basis thereafter. The defendant's costs, concerning counsel, were to be limited to two counsel. The defendant was also ordered to pay the third party's costs, including reserved costs, and to cover the plaintiff's costs of a particular hearing.

Orders

Orders of the court

The plaintiff is to pay the defendant’s costs of the claim and counter-claim on the standard basis, up to and including 20 September 2023 and on the indemnity basis thereafter.

The defendant’s costs, in so far as counsels’ costs are concerned, are limited to the costs of two counsel.

The defendant is to pay the third party’s costs, including reserved costs.

The defendant is to pay the plaintiff’s costs of the hearing of 14 June 2023.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Its refusing site access was irrelevant to this issue. And in any event, Hestbay had not been unreasonable given that it had to consider its tenants, who had rights under their leases. Conclusion: The costs pre-offer relating to the claim are to be paid by Hestbay on the standard basis. In my view, Hestbay conducted its case inadequately but not to the standard of unreasonableness required for an order that it pay One Sector’s costs of the whole proceeding on an indemnity basis. Criticisms may certainly be made of the evidential inadequacies of Hestbay’s case, and it might even be said that it “lost badly”. However, I do not find that Hestbay commenced or maintained the proceedings for any purpose unrelated to its prospects of success. Indeed, it seemed to me that Hestbay was very confident of its position, but did not have a solid grasp of the evidence or a well thought through case theory, as my judgment reveals. Among other things, it misunderstood what it had to prove to render Dr Woolcock’s opinion about the cause of the slab’s alleged deficiency of any persuasive weight. And it failed to prove that any alleged deficiency in the slab led to the loss and damage it claimed. But in my view, Hestbay’s evidential and factual errors and misunderstandings reflected inadequacy rather than unreasonableness. Further, it could not fairly be said that Hestbay ought to have anticipated, prior to trial, that I would prefer Dr Khan (for the defendant) over Dr Woolcock on other critical issues, such as whether it was permissible to count-back from the slab’s current compressive strength to estimate its compressive strength at an earlier time. As to the other matters relied upon by One Sector – (a)on the evidence before me at this costs’ hearing, no firm offer was put by Mr Ray to Hestbay to resolve things prior to the commencement of proceedings (see, e.g. footnote 6 above);(b)One Sector’s application for strike out did not succeed;(c)Hestbay’s initial reliance on its 2020 experts was reasonable and its change to its pleadings in the light of Dr Woolcock’s report was understandable;(d)I have considered the voluminous correspondence about One Sector’s access to the site to conduct its own testing. While it is regrettable that the issue took up so much time, I do not consider anything in Hestbay’s conduct in that regard – taken alone, or in combination with anything else – to warrant an order for indemnity costs. I will allow rule 361A to take effect in accordance with its terms. Costs on an issues basis? In arguing for costs on an issues basis, Hestbay submitted inter alia (and uncontroversially) that the touchstone of the general rule, that costs follow the event, is “fairness”. It referred to James & Ors v Surf Road Nominees Pt Limited & Ors (No 2) [2005] NSWCA 296 for its statements of principle, and discussion of the relevant authorities, about the circumstances in which a court might order costs on an issues basis. This decision assisted me by setting out the relevant considerations but, as will emerge, its application did not help Hestbay. Omitting citations, the Court of Appeal of New South Wales said (my emphasis):[32][In accordance with the rules concerning costs] … an unsuccessful party may be ordered to pay the entirety of the costs of the successful party, even though the successful party did not succeed on all issues. However, as is specified by the rule itself, the Court is entitled to make a different order. That may occur where there are multiple issues involved. This was the subject of comment in Waters v P C Henderson (Aust) Pty Limited … where Mahoney JA said:“Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues and fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken by the proceedings. Nevertheless, unless a particular issue or groups of issues is clearly dominant or separable, it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.”[33]Similarly, Toohey J made the following observations in Hughes v Western Australian Cricket Association …“1 Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order.2 Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed.3 A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the party’s costs of them. In this sense, “issue” does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law.”[34]Where a matter involves multiple issues and the question before the court is whether it should make some other order as to costs other than the order that costs follow the event, a distinction is commonly drawn between cases which involve clearly discrete issues for determination, and those in which all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of a particular matter … [35]In Madden v Connell … Hamilton J referred to there being a “rule” that where there are “discrete issues and the time taken on each issue at the hearing can be identified or realistically estimated”, an order for costs may be made against the party which fails on such issues, or alternatively, that party may be deprived of its costs for that portion of the matter. In the Court’s opinion it is preferable not to speak in terms of “rules”. However, the underlying approach to the “rule” stated by his Honour may be an available approach to the exercise of the court’s discretion as to costs in a particular case, depending upon all of the circumstances.[36]Where the court does exercise its discretion to apportion costs, the apportionment itself involves the exercise of discretion. As Gummow, French and Hill JJ recognised in Dodds Family Investments v Lane Industries Pty Ltd …:“Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation.”

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.