Nova Builders Pty Ltd v Beno Excavations Pty Ltd (No 6)

[2023] ACTSC 392

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Nova Builders Pty Ltd v Beno Excavations Pty Ltd (No 6)

Citation: 

[2023] ACTSC 392

Hearing Date: 

14 December 2023

Decision Date: 

14 December 2023

Before:

Mossop J

Decision: 

See [24].

Catchwords: 

PRACTICE AND PROCEDURE – FINAL ORDERS – Successful claim for restitution for the value of work and labour assessed by way of a quantum meruit – entitlement to payment for work precluded by estoppel arising from ostensible authority – first defendant entitled to payment for work less plaintiff’s costs of conducting the proceedings not able to be recovered from the second defendant or any third party – outstanding questions of costs reserved for hearing of costs applications against third parties – liberty to apply within 12 months in relation to application for interest

Cases Cited: 

Nova Builders Pty Ltd v Beno Excavations Pty Ltd (No 4) [2023] ACTSC 369

Nova Builders Pty Ltd v Beno Excavations Pty Ltd(No 5) [2023] ACTSC 370

Parties: 

Nova Builders Pty Ltd ( Plaintiff)

Beno Excavations Pty Ltd ( First Defendant)

Civil and Civic Corporation Pty Ltd (Second Defendant)

Representation: 

Counsel

R Arthur ( Plaintiff)

C McKeown ( First Defendant)

Solicitors

Lexicon Lawyers ( Plaintiff)

Joseph Tallarita ( First Defendant)

File Number:

SC 276 of 2020

MOSSOP J:  

Introduction

1․In Nova Builders Pty Ltd v Beno Excavations Pty Ltd (No 4) [2023] ACTSC 369 (Nova (No 4)), I gave my reasons for allowing Benex’s claim for reasonable remuneration subject to accounting for the detriment suffered by Nova as a result of the representations made by Mr Moseley who was, at the relevant time, an employee of Benex. I allowed the parties to be heard on the form of orders to be made.

2․Amongst the orders that I contemplated in Nova (No 4), at [108] was a declaration to the following effect:

(a)  Declare that Benex is entitled to be paid by Nova $456,258 less:

(i)    any amount of the $87,996.07 the subject of its counterclaim against Civil not reasonably able to be recovered from Civil; and

(ii)   the costs actually incurred by Nova in conducting these proceedings which are not reasonably able to be recovered by Nova from another party to the proceedings or a third party.

3․I indicated that it would also be necessary to address the question of interest and costs and potentially grant liberty to apply for any further order required to give effect to the declaration.

4․In these reasons I use the same naming convention as in my earlier reasons.

Orders proposed by the parties

5․Nova has proposed orders largely consistent with those suggested in my earlier reasons. It has proposed the following:

1.     Declare that Benex is entitled to be paid by Nova $456,258 less:

a.any amount of the $87,996.07 the subject of Nova’s counterclaim against Civil not reasonably able to be recovered from Civil; and

b.the costs actually incurred by Nova in conducting these proceedings, including costs and expenses reasonably incurred in recovering those costs, which are not reasonably able to be recovered by Nova from another party to the proceedings or a third party; and

c.such proportion, as is agreed by the parties, of the amount of any interest payable by Civil to Nova able to be recovered by Nova from Civil.

2.     There be no order as to costs.

3.     The parties have liberty to apply for any further order required to give effect to the declaration.

6․The underlined portions indicate additions to the orders that I contemplated in my earlier reasons.

7․As will be seen from the terms of proposed order 1(b), this contains language making it clear that the costs incurred by Nova in conducting these proceedings include the costs reasonably incurred in recovering those costs. The reference to “expenses” is simply included out of abundant caution in order to ensure that enforcement expenses are covered.

8․Further, Nova proposes that, having regard to the fact that interest has now been awarded in favour of Nova against Civil in relation to the amount of $550,000: see Nova Builders Pty Ltd v Beno Excavations Pty Ltd(No 5) [2023] ACTSC 370 (Nova (No 5)), the orders in these proceedings should provide for a proportion of the interest actually recovered from Civil to be paid to Benex.

9․Nova also proposes that there be no order as to costs. That is on the basis that any order made in favour of Benex against Nova would be part of the detriment suffered by Nova as a result of the representations made by Mr Moseley and hence required to be discharged by Benex before it had any entitlement to recover from Nova: see Nova (No 4) at [88]-[89].

10․Benex proposes orders in the following terms:

1.     On the claim made by Beno Excavations Pty Ltd (Benex) against Nova Builders Pty Ltd (Nova) it is declared;

a.Benex is entitled to be paid by Nova $456,258.00 (the monies recoverable).

b.Nova is entitled to setoff (the setoffs) against the monies recoverable;

i.any amount of the $87,995.07 [sic] (Nova’s counter claim) which Nova is not reasonably able to recover from Civil & Civic.

ii.The costs of Nova as between Nova and Civil & Civic in proceedings 276 of 2020 which are not reasonably recovered from Civil & Civic and or other third party and for this provision, being $180,000.00.

2.     Nova shall forthwith pay and deal with the monies recoverable as follows:

a.pay $188,262.93 to Benex directly within 7 days, and

b.invest the balance in an interest-bearing account (the investment account) which account will note Benex as a joint owner.

c.on the receipt of the setoffs or part, Nova shall pay Benex from the investment account an amount equal to that collected with such payment being made within 7 days of receipt.

3.     Nova shall pay Benex’s costs as between Benex and Nova in proceedings 276 or [sic] 2020 in the sum agreed or taxed.

4.     Nova shall pay pre judgment interest in the sum of $87,366.61 to 14 December 2023 and post judgment continuing.

5.     Nova is released from its undertaking noted in Order 3 of 8 November 2023.

6.     Benex and Nova have liberty to apply on 7 days notice in respect of these orders.

11․These orders are designed to achieve an immediate payment to Benex. Benex is obviously anxious to achieve some immediate recovery and not have any potential recovery deferred for an indefinite time.

12․The amount in proposed order 1(b)(ii) of $180,000 is proposed to be set by the court, although there is no evidence on which that figure for the costs of the proceedings as between Nova and Civil could be determined.

13․The amount in proposed order 2 is arrived at by deducting the amounts in proposed orders 1(b)(i) and (ii) from the amount in 1(a) ($456,258 – ($87,995.07 + $180,000)).

14․Proposed order 2(c) is intended only to require immediate payment of any net amount collected from Civil or a third party and, upon that hypothesis, takes account of the costs of recovery.

15․Proposed order 3 would require Nova to pay Benex’s costs. Counsel for Benex submitted that this issue of costs should be determined even though Benex wished to reserve an entitlement to seek some form of costs order from Civil and/or third parties.

16․Proposed order 4 would require Nova to pay interest on the $456,258 calculated from 30 March 2020.

Decision

17․While it is understandable that Benex would wish to recover some amounts from Nova immediately, the submissions made on its behalf did not appear to fully give effect to the earlier reasons which found that, except to the extent that the detriment suffered by Nova had subsequently been removed, Benex was estopped from denying that the relevant payment direction was made by it. Any decision as to final orders must take place in that context. It also takes place in a context in which Benex has chosen to sue only Nova and has not, to date, brought any proceedings against Mr Moseley or Civil.

18․In my view, the orders proposed by Nova provide a more appropriate basis for the orders of the court. That is for the following reasons:

(a)There is no evidentiary basis for the fixing of Nova’s costs of the proceedings between it and Civil for the purposes of the present orders.

(b)There is therefore no basis for determining a sum to be paid immediately.

(c)The issue of interest would be more appropriately dealt with in a manner consistent with that apparently intended by Nova.

19․I do not consider that it is necessary to include a reference to “expenses” in the orders. The reference to costs in the order is a reference to legal costs. The reference to “actually incurred” indicates that they must have been paid and that they cover all costs, not simply party and party costs. Legal costs necessarily include disbursements. It is therefore not necessary, and possibly would introduce an element of uncertainty, to make further reference to expenses in the order.

20․There is difficulty in formulating an appropriate order in relation to interest. The intention behind the order proposed by Nova is that, having regard to the fact that the court has, in Nova (No 5), awarded interest in the sum of $103,509.67, that interest should be passed on to Benex in proportion to the amount it is entitled and in proportion to the amount recovered from Civil. That, in my view, would need to be done by way of a separate order rather than attempting to include it as a deduction from the $456,258. That is because any amount of interest passed on pursuant to the order is intended to be an amount in addition to whatever proportion of the $456,258 becomes payable. It would also, in my view, be inappropriate to include in a final declaration a reference to an amount yet to be agreed by the parties.

21․If I were to make an order at this stage, it would be a declaration to the following effect:

In addition to the amount payable pursuant to order [number], Benex is entitled to be paid $85,867 (that is $456,258 / 550,000 x $103,509.67) multiplied by the following factors:

a. the amount payable pursuant to order [number] / $456,258; and

b. the amount recovered from Civil for interest / $103,509.67.

22․However, there are too many contingencies surrounding the recovery and payment of interest to make a declaration of this specificity appropriate at this stage. Further, any additional amount payable pursuant to such a declaration would only have any practical effect if the other amounts payable by Civil (or third parties), namely the $87,996.07 and Civil’s liability for costs, had been paid in full. Because of these difficulties and the need to ensure that any order made is actually final, I will simply reserve liberty to apply in relation to any obligation to pay interest or money attributable to Benex’s claim for interest. If the parties are unable to resolve this aspect of the claim in some pragmatic way, then a formal order can be sought when the position in relation to recovery from Civil or third parties is clearer and hence it is possible to identify with some certainty the terms of an appropriate declaration or other order. In order to provide some finality to the proceedings I will order that, subject to further order, if no application is made pursuant to the grant of liberty in relation to interest within 12 months, then the claim for interest is dismissed.

23․In relation to costs, it is more appropriate to address the question of costs as between Nova and Benex in the context of the balance of the costs issues yet to be determined. Directions have been made and a hearing date set in relation to Nova’s claim for a third‑party costs order against Mr Moseley and the lawyers that represented Civil. Benex foreshadowed the possibility of it making claims for third-party costs orders or an order that Civil be directly or indirectly responsible for its costs. I will make directions which require Benex to make any application that it wishes in relation to costs involving Civil or any third party, so as to allow the remaining issues as to costs to be determined at the same time.

Orders

24․The orders of the Court are:

1.Declare that Beno Excavations Pty Ltd (Benex) is entitled to be paid by Nova Builders Pty Ltd (Nova) $456,258 less:

(a)any amount of the $87,996.07 the subject of Nova’s counterclaim against Civil and Civic Corporation Pty Ltd (Civil) not reasonably able to be recovered from Civil; and

(b)the costs actually incurred by Nova in conducting these proceedings (including costs reasonably incurred in recovering those costs) which are not reasonably able to be recovered by Nova from another party to the proceedings or a third party.

2.Nova and Benex have liberty to apply on seven days’ notice for any further order required to give effect to order 1.

3.Nova and Benex have liberty to apply on seven days’ notice in relation to any final order relating to the claim by Benex against Nova for interest or money attributable to Benex’s claim for interest but, subject to further order, if no application is made pursuant to the grant of liberty within 12 months of this order, then the application for interest is dismissed.

4.Any outstanding question of costs of the proceedings is reserved to the hearing set for the determination of Nova’s claim for costs against third parties, 1 March 2024 at 9.30am.

5.Benex is to give notice to Civil of any application for costs to be made by Benex in relation to Civil and is to file and serve any application for a third-party costs order on the parties and the third parties against whom any such order is sought by 8 January 2024.

6.Any application filed and served pursuant to order 5 shall be listed for hearing on the date referred to in order 4.

7.In the event that the parties do not provide by 15 January 2024 proposed consent directions to the associate to Mossop J to allow the applications referred to in order 5 to be determined on the date referred to in order 4, the proceedings are listed before the registrar for directions on 29 January 2024 at a time fixed by the registrar.

I certify that the preceding twenty-four [24] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.

Associate:

Date: 24 January 2024