The Craftsmen Restoration and Renovations Pty Ltd v Boland (No 2)

This case concerned appeals and cross-appeals regarding costs orders made by the primary judge, following earlier proceedings in the Consumer, Trader and Tenancy Tribunal and the Common Law Division. The dispute originated from building works carried out by the appellant builder for the respondent owners, leading to claims for progress payments and rectification of defective work. The Tribunal had found in favour of the builder for some payments but also found the builder liable for rectification costs, resulting in a net balance payable by the builder. Both parties appealed to the Common Law Division, where the primary judge identified legal error but attempted to resolve the issues, leading to a revised financial outcome for the owners. The builder then appealed to the Court of Appeal, achieving significant success.

The Court of Appeal was required to determine the appropriate costs orders for both the proceedings before the primary judge and the appeal to the Court of Appeal itself. Specifically, the court had to consider whether to vary the primary judge's costs orders, which had directed each party to bear their own costs in the Common Law Division. The court also had to decide on the basis of costs for the appeal, including whether the builder was entitled to indemnity costs from specific dates due to unaccepted offers of compromise. Furthermore, the court considered an application for a certificate under the Suitors' Fund Act 1951 (NSW).

The Court of Appeal reasoned that the primary judge's decision to order each party to bear their own costs in the Common Law Division was justified by the parties' conduct. Both sides had failed to appreciate the limited nature of an appeal from the Tribunal and had effectively acquiesced in the primary judge's attempts to resolve what was a relatively small financial claim. Regarding the appeal costs, the court varied the orders to reflect the builder's substantial success. The court ordered the owners to pay 25% of the builder's costs in the Common Law Division and the builder's costs of the appeal on the usual basis up to a certain date, and thereafter on an indemnity basis, acknowledging the unaccepted offers of compromise.

The Court of Appeal ultimately varied the orders made on 8 June 2011. The owners were ordered to pay 25% of the builder's costs in the Common Law Division and the builder's costs of the appeal to the Court of Appeal, with costs of the appeal to be on an indemnity basis from 11 May 2011. The owners were also granted a certificate under the Suitors' Fund Act 1951 (NSW) in respect of the costs payable by them to the builder in the Common Law Division and in respect of the builder's appeal to the Court of Appeal.