John Beever v Roads Corporation (Costs)
[2018] VSC 779
•14 December 2018
| IN THE SUPREME COURT OF VICTORIA AT MELBOURNE COMMERCIAL COURT TECHNOLOGY ENGINEERING AND CONSTRUCTION LIST | Not Restricted |
S ECI 2018 0078
| JOHN BEEVER (AUST) PTY LTD | Plaintiff |
| v | |
| ROADS CORPORATION | Defendant |
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JUDGE: | Digby J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF RULING: | 14 December 2018 |
CASE MAY BE CITED AS: | John Beever v Roads Corporation (Costs) |
MEDIUM NEUTRAL CITATION: | [2018] VSC 779 |
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COSTS – Costs of summary judgment application – Costs of strike out application – Where applications were heard together – Where both applications failed – Default position that costs are ‘costs of the proceeding’ – Whether court should depart from default position – Costs reserved – Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.20.
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The Papers: |
| 1. Plaintiff’s Submissions on Costs (19 November 2018) 2. Defendant’s Submissions on Costs (19 November 2018) 3. Plaintiff’s Reply Submissions on Costs (23 November 2018) 4. Defendant’s Reply Submissions on Costs (23 November 2018) |
HIS HONOUR:
Introduction
On 28 January 2016, John Beever (Aust) Pty Ltd (plaintiff) and Roads Corporation (defendant) entered into a construction contract (the construction contract) in respect of strengthening works to the Wallen Road Bridge in Hawthorn, in the State of Victoria.[1]
[1]CB068.
On 11 April 2017, the defendant certified that practical completion of the works was achieved on 22 March 2017.[2] At the earliest, the Defects Liability Period (DLP) under the construction contract expired in March 2018.
[2]CB646 and 647. While the parties contest whether the defects liability period commenced on 22 March 2017 (being the date specified in the certificate), or 11 April 2017 (being the date the certificate was received), the question does not require resolution on return of the current applications (T9.23–10.2).
On 26 October 2018, in John Beever v Roads Corporation[3] (the judgment), I dismissed:
(a) the plaintiff’s application for summary judgment by Summons dated 16 May 2018; and
(b) the defendant’s application to strike out by Summons dated 29 May 2018, based substantially on a lack of proper particularisation and also failure to plead a relevant ‘reference date’ in relation to the plaintiff’s Statement of Claim.
[3][2018] VSC 635.
Following judgment I directed the parties to provide submissions as to the final form of orders sought, including as to costs.
Costs Dispute
Plaintiff’s Submissions
With respect to its summary judgment application, the plaintiff contends the most appropriate order is for the costs to be reserved.[4] It refers to a number of Victorian authorities including those referred to below dealing with the costs of an unsuccessful summary judgment application.[5]
[4]Plaintiff’s Submissions on Costs, 19 November 2018 (Plaintiff’s Submissions), [2].
[5]Ibid [3]–[4].
(a) In Cullia v Gook,[6] Hargrave J ordered costs in the cause after an unsuccessful summary judgment application by the defendant.[7]
(b) In Webb v Ryan,[8] Zammit AsJ (as her Honour then was) ordered costs in the cause after an unsuccessful application for summary judgment by the defendant.[9]
(c) In Aquatec-Maxcon Pty Ltd v Minson Nacap Pty Ltd,[10] Winneke P, Buchanan and Eames JJA found that the costs of an unsuccessful application for summary judgment could be either reserved for the trial judgment or be costs in the cause.[11] Their Honours decided to order the latter.[12]
[6][2011] VSC 412.
[7]Ibid [28].
[8][2011] VSC 461.
[9]Ibid [49].
[10][2005] VSCA 167.
[11]Ibid [17].
[12]Ibid.
With respect to the defendant’s strike out application, the plaintiff contends that because it provided further particulars sought by the defendant, and did so in advance of the hearing date, and because such particulars largely satisfied the defendant, the defendant ought to pay the costs of pressing the balance of its application in relation to the asserted lack of a pleaded reference date because this latter part of the defendant’s application was unsuccessful.[13]
[13]Ibid [7].
In the alternative, the plaintiff argues that if the Court were minded to order that ‘costs follow the event,’ then the costs of the defendant’s unsuccessful strike out application and the plaintiff’s unsuccessful summary judgment application ‘effectively cancel each other’, such that there should be no order as to costs in these circumstances.[14]
[14]Ibid [8].
Defendant’s Submissions
With respect to the plaintiff’s summary judgment application, the defendant submits that the ‘usual’ course for security of payment applications is for costs to follow the event. The defendant observes that the ‘entire hearing’ of 25 June 2018 was occupied with the summary judgment application. It submits that the plaintiff should pay the costs of and associated with this unsuccessful application.[15]
[15]Defendant’s Submissions on Costs, 19 November 2018, [2].
I note that in response, the plaintiff points out that its claim under the Building and Construction Industry Security of Payment Act 2002 (Vic) was not dismissed per se, but rather summary judgment was declined, that is the plaintiff brought and was unsuccessful on its discrete application for summary judgment on its claim.[16]
[16]Plaintiff’s Reply Submissions on Costs, 23 November 2018, [1].
With respect to its strike out application, the defendant submits that:
(a) the extent to which the strike out application was pressed at the hearing of 25 June 2018 was limited to the ‘reference date’ issue, which the High Court of Australia has identified as a necessary integer of a payment claim;[17]
[17]Ibid [7].
(b) the plaintiff was given ample opportunities to redress the deficiencies in its pleadings, to which it only responded with Further and Better Particulars on 25 June 2018, after the defendant had already incurred costs of and associated with the strike out application;[18]
(c) the plaintiff’s provision of further particulars in the lead-up to the hearing of 28 June 2018 demonstrates that the underlying basis for the strike out application was sound;[19] and
(d) the plaintiff was required under the Civil Procedure Act 2010 to provide particulars promptly in response to the defendant’s correspondence, and to engage with the identified defects in its pleadings, before the defendant was put to the trouble and expense of making its strike out application.[20]
[18]Ibid [4].
[19]Ibid [5].
[20]Ibid [6].
Considerations
In essence there are two issues which arise, the costs of the plaintiff’s unsuccessful summary judgment application and the costs of the defendant’s partially successful strike out application.
Rule 63.20 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules) provides:
Where an interlocutory or other application is made in a proceeding and—
(a) no order is made on the application; or
(b) the order made is silent as to costs—the costs are the parties' costs in the proceeding, unless the Court otherwise orders.
The above Rule appears to reflect a default position that the costs will be ‘costs in the proceeding’ in the circumstances to which the Rule refers, unless a different order is made by the Court.[21]
[21]Plaintiff’s Submissions, 19 November 2018, [6].
The result of an order, that certain interlocutory costs will be ‘costs in the proceeding’ means that at the end of the day those costs will abide the overall outcome of the proceedings and be recoverable by whichever party wins. As a result costs so ordered will not necessarily be paid and received with any reference to the merits of the parties positions /merits on the relevant earlier application. Because this will be the likely outcome of an order that costs associated with either of the subject applications be ‘costs in the cause’, I do not consider such an order is the most appropriate order in the circumstances.
In my view, the appropriate course is to award the defendant the costs of the plaintiff’s summary judgment application in respect of which the defendant was successful on the issues prepared and argued on that application. On that aspect I consider costs should follow the event.
As to the defendant’s strike out application, in my view, there should be no order as to costs. What the plaintiff characterises as a partial success as to the ‘reference date’ related pleading issue said to render the payment claim as pleaded vulnerable was, in my view, in substance counter-balanced by the defendant’s success in obtaining the particulars of claim of its Summons of 29 May 2018 sought before the hearing on 28 June 2018.
Accordingly, it is clear that the defendant made justifiable complaints that the plaintiff’s pleadings were insufficiently particularised. Further particulars were not provided by the plaintiff until after the defendant was forced to issue its Summons of 29 May 2018. It is likely that the defendant’s costs in successfully pursuing these particulars would cancel out the plaintiff’s costs associated with the relatively minor aspect to the hearing on 28 June 2018 that was devoted to the plaintiff’s defensive arguments on the reference date pleading issue. Therefore setting these considerations off against each other is I consider just and appropriate in this instance. The resulting position is that there will be no order as to costs on the defendant’s Summons dated 29 May 2018.
Conclusion
For the reasons outlined above, there will be an order that the plaintiff pay the defendant’s costs of and associated with the hearing of the plaintiff’s Summons dated 16 May 2018.
For the reasons outlined above, there will be no order for the costs of and associated with the hearing of the defendant’s Summons dated 29 May 2018.
Orders
I shall order:
1.The plaintiff pay the defendant’s costs of and associated with the hearing of the plaintiff’s Summons dated 16 May 2018 on a standard basis.
2.There be no costs of and associated with the hearing of the defendant’s summons dated 29 May 2018.
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