On Forbes Developments Pty Ltd v Chase Building Group (Canberra) Pty Ltd (No 2)

[2020] ACTSC 199

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

On Forbes Developments Pty Ltd v Chase Building Group (Canberra) Pty Ltd (No 2)

Citation:

[2020] ACTSC 199

Hearing Date:

Submissions last received 07 July 2020.

DecisionDate:

29 July 2020

Before:

Crowe AJ

Decision:

See [15]

Catchwords:

Costs – Neither party clearly more successful than the other – No order as to costs

Legislation Cited:

Court Procedures Act 2004 (ACT) – s 5A

Cases Cited:

Calderbank v Calderbank [1975] 3 WLR 586

Parties:

On Forbes Developments Pty Ltd (Plaintiff)

Chase Building Group (Canberra) Pty Ltd (First Defendant)

Representation:

HFW Australia (Plaintiff)

Bradley Allen Love Lawyers (First Defendant)

File Number:

SC 658 of 2019

Crowe AJ

1. On 23 June 2020, I handed down my decision on the residual substantive issue between the parties in this matter. I reserved the question of costs and gave the parties leave to file and serve submissions and evidence on that issue.

1. Both parties have exercised that leave. The plaintiff submits that the appropriate orders are:

(1)Subject to order (2), the plaintiff pay the first defendant’s costs thrown away by reason of the amendment of the Originating Application pursuant to the order made on 1 April 2020;

(2)Each party bear its own costs of the hearings on 30 March 2020 and 1 April 2020 and the related written submissions; and

(3)The first defendant otherwise pay the plaintiff’s costs of the proceedings.

1. The first defendant, unsurprisingly, takes issue with the orders proposed by the plaintiff. It seeks orders as follows:

(1)The plaintiff pay the first defendant’s costs up to 1 April 2020 on a solicitor and client basis;

(2)Thereafter, the plaintiff pay the first defendant’s costs up to 24 April 2020 on a party and party basis; and

(3)Thereafter, the plaintiff pay the first defendant’s costs on a solicitor and client basis.

1. The plaintiff argues that the first defendant behaved unreasonably and, on proper analysis, was unsuccessful in relation to the issues in question. This argument is made by reference to the correspondence between the parties and the position adopted by the first defendant at the hearing of the amendment application and before me on 12 May 2020. Moreover, reference is made to the opportunity for the first defendant to have settled the matter for a lesser sum than it ultimately had to pay, which it failed to take up. On the other hand, the first defendant submits that the plaintiff’s initial challenge to the adjudication decision was made for the improper purpose of avoiding the statutory obligation of the plaintiff to pay the first defendant the amount due under the judgment entered in this court on 24 December 2019.  That assertion provided the basis for order (1) as sought by the first defendant. 

1. In relation to orders (2) and (3), the first defendant submits that those should be made due to the unreasonableness of the plaintiff in the way in which it approached the litigation between the parties, including the failure to accept the offer made by the first defendant by letter dated 24 April 2020 pursuant to the principles in Calderbank v Calderbank [1975] 3 WLR 586.

1. In reply the plaintiff submitted that in commencing proceedings it sought to mount a genuine challenge to the adjudicator’s decision based on his asserted failure to have decided liquidated damages. The plaintiff also pointed to the attempt by the first defendant to contest the expert determination, a position which it was said to have maintained until the lead up to the final hearing before me.

1. Finally, in its reply submissions the plaintiff argued that the first defendant's Calderbank offer (made by letter dated 24 April 2020) was not effective in that the first defendant's offer did not contain the necessary element of compromise. Moreover, having regard to the timing and circumstances in which the offer was made it was not unreasonable for the plaintiff to have not accepted it.

Consideration

1. I do not propose to recite the complex, and at times somewhat confusing, exchange of communications between the solicitors for the parties in relation to the many issues in dispute arising from the building contract made between the parties on 17 August 2017. There seems little doubt that the parties engaged in a vigorous forensic arm-wrestle from the latter part of 2019 in relation to questions of variations, delay in completion and the related matters submitted for expert determination.

1. These formed the background to the litigation in this Court, which I summarised in my 23 June 2020 reasons for decision, and the litigation in the Federal Court of Australia over the statutory demand issued by the plaintiff which commenced on 18 March 2020.

1. I am not persuaded that the plaintiff was, in commencing the proceedings in this Court, seeking to achieve a purpose which was “ulterior”. However, I see some attraction in the proposition that the party abandoning its initial cause of action by the wholesale amendment of the originating process should bear the costs of the matter up to the amendment.

1. I am also not persuaded by the argument that the first defendant could have resolved the matter as early as September 2019 on favourable terms. The circumstances in which that offer was made have not been shown to have been such as to engage the costs discretion for the proceedings in this Court, in my view.

1. The reality is, it seems to me, that the circumstances were such that by early March 2020 both parties should have been able to analyse the matters in issue between them, so as to reach in substantive terms the resolution which has ultimately been reached having regard to the orders I made by consent on 12 May 2020, and order (1) which I made on 23 June 2020. Both parties sought to argue issues on which, in practical terms, they have been unsuccessful. The litigation has been carried on in such an aggressive fashion that it seems to me that the parties have on occasions missed opportunities to reach agreements which would have brought the dispute to an end and saved costs.

1. I do not see the Calderbank offer made by the first defendant on 24 April 2020 as sufficiently clear. In particular, although reference is made to consenting to a declaration under paragraph 1C of the Further Amended Originating Application, the letter does not identify the date at which the suspension entitlement should come to an end.

1. In my view, each of the parties has provided grounds for differing orders to be made one way or the other, both as to separable segments of the proceedings and as to particular issues within the proceedings. However, it seems to me that these largely counter-balance each other. Having regard to s 5A of the Court Procedures Act 2004 (ACT) and the circumstances of this case, I have concluded that the fair and just outcome in relation to costs is that there should be no order as to costs. That outcome extends to the costs of the amendment application reserved by Elkaim J on 1 April 2020.

Order

1. The order of the Court is:

(1)That there be no order as to costs, including any reserved costs.

I certify that the preceding fifteen [15] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Crowe.

Associate:

Date: 29 July 2020