Schmuelly v Elrob Construction Group Pty Ltd (No 4) - [2025] NSWSC 212

Supreme Court

New South Wales

Medium Neutral Citation: Schmuelly v Elrob Construction Group Pty Ltd (No 4) (costs) [2025] NSWSC 212
Hearing dates: On the papers; submissions 13 March 2025
Date of orders: 17 March 2025
Decision date: 17 March 2025
Jurisdiction: Equity - Technology and Construction List
Before: Rees J
Decision:
Costs order made.

Catchwords:
COSTS – owner sues builder and director – seeks damages of $3.66 million – judgment against builder for $1.13 million – whether entitled to usual costs order – builder makes no submission to the contrary – costs order made.

Legislation Cited:
Civil Procedure Act2005 (NSW), s 98
Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law
Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:
Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2) [2014] NSWCA 219
Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52; [2007] HCA 56
Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59
Ryde Developments Pty Ltd v Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40
Schmuelly v Elrob Construction Group Pty Ltd (No 2) [2025] NSWSC 26
Schmuelly v Elrob Construction Group Pty Ltd [2025] NSWSC 118
Verde Terra Pty Ltd v Central Coast Council [2023] NSWLEC 110
Waters v PC Henderson (Aust) Pty Ltd (1994) 254 ALR 28; [1994] NSWCA 338

Category: Costs
Parties: Dror Schmuelly (Plaintiff)
Elrob Construction Group Pty Ltd (First Defendant)
Elia Boujaoude (Second Defendant)
Representation:
Counsel:
M Pesman SC (Plaintiff)

Solicitors:
Colin Biggers & Paisley (Plaintiff)
Elia Boujaoude (Second Defendant in Person)

File Number(s): 2022/254588

JUDGMENT

HER HONOUR: This judgment is about costs. I gave judgment in this matter on 6 March 2025: Schmuelly v Elrob Construction Group Pty Ltd [2025] NSWSC 118. I made directions for the parties to confer in respect of costs and, in the event that no orders were agreed, to file any affidavits and submissions in support of the costs orders sought, such application to be determined on the papers.
I have received submissions from the plaintiff. I did not have the benefit of submissions from the defendants to assist in the exercise of my discretion as to costs. The judgment assumes familiarity with my primary judgment.

Submissions

The plaintiff sought his costs of the claim and cross-claim from the first defendant, as the final orders made by the Court represented a substantial success for him. The plaintiff submitted that there was no reason to depart from the usual rule that costs follow the event under r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW). The Court accepted the expert opinions of Mr Matley and Mr Dyson in relation to the building defects and defective swimming pool. The Court accepted the expert opinion of Mr Arden in relation to the costs of remedying the defects and overpayment for the second and third milestones. (In part, this followed from the fact that I refused leave to the defendants…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] NSWSC 212
Decision Date: 17 March 2025

CaseChat Overview and Summary

The plaintiff, Schmuelly, commenced an action against the defendant, Elrob Construction Group Pty Ltd, and its director, seeking damages for alleged breaches of contract and negligence in the construction of a residential property. The case was heard in the Supreme Court of New South Wales. Schmuelly claimed damages in the amount of $3.66 million, following a judgment in his favour against Elrob Construction Group Pty Ltd for $1.13 million. The central legal issue before the court was whether Schmuelly was entitled to the usual costs order given that Elrob Construction Group Pty Ltd had made no submission to the contrary.

The court examined the principle that a party is generally entitled to recover costs as of course unless the contract or statute otherwise provides. In this case, there was no contract or statutory provision that would prevent the plaintiff from recovering his costs. Moreover, the defendant had not raised any objections or submissions that would counter the plaintiff's entitlement to the usual costs order. The court noted that the absence of any submissions from the defendant in this respect was significant, as it indicated a tacit acceptance of the plaintiff's entitlement to such costs. Therefore, the court found that the plaintiff was entitled to the usual costs order against the defendant.

The court made a costs order in favour of the plaintiff, Schmuelly, against the defendant, Elrob Construction Group Pty Ltd. This order was made in accordance with the principle that a party is generally entitled to recover costs unless there is a specific provision to the contrary. The absence of any submissions from the defendant regarding the costs further supported the plaintiff's entitlement to the usual costs order. Consequently, the court ruled that Schmuelly was entitled to recover his costs from Elrob Construction Group Pty Ltd.

Orders