Hestbay Pty Ltd v One Sector Pty Ltd

Hestbay Pty Ltd, the owner of an industrial property, sued One Sector Pty Ltd, alleging that the concrete laid by One Sector did not meet the requisite strength. One Sector, in turn, issued a third party notice to the concrete supplier. One Sector was later given leave to discontinue proceedings against the third party after expert evidence was obtained, prompting the third party and Hestbay to seek an order for One Sector to pay the third party’s costs. One Sector argued that they had not surrendered their position against the third party and were not required to pay their costs. They also contended that they acted reasonably in joining the third party and that the third party would not suffer prejudice if a costs order was not awarded before trial.

The court had to decide whether One Sector had surrendered their position against the third party, making them liable for the third party’s costs. The court also had to consider whether One Sector acted reasonably in joining the third party and whether the third party would suffer prejudice if a costs order was not awarded before the trial. The court concluded that One Sector had not surrendered their position against the third party, and it was reasonable for them to join the third party. However, the court was concerned about the potential prejudice to the third party if a costs order was not awarded before trial.

Accordingly, the court ordered that the costs of the third party proceedings be reserved and that the parties be heard on the costs of the application. This decision ensures that the third party’s potential financial burden is considered and that the parties have an opportunity to argue their positions on the costs of the application. The court's decision also maintains the integrity of the legal process by ensuring that parties who are joined to proceedings are not unfairly disadvantaged.