The Owners Strata Plan No 87881 v Frasers Broadway Pty Ltd (No 2)

[2025] NSWSC 1289

Supreme Court

New South Wales

Medium Neutral Citation:

The Owners Strata Plan No 87881 v Frasers Broadway Pty Ltd (No 2) (costs) [2025] NSWSC 1289

Hearing dates:

On the papers; submissions 24 October 2025

Date of orders:

3 November 2025

Decision date:

03 November 2025

Jurisdiction:

Equity - Technology and Construction List

Before:

Rees J

Decision:

Costs order made.

Catchwords:

COSTS — r 42.20(1), Uniform Civil Procedure Rules (2005) — owners of high-rise development bring four proceedings against developers, builder and others for building defects — fifth proceeding against developer dismissed as abuse of process — whether defendants entitled to costs of proceedings — whether “the Court orders otherwise” — principles at [2]-[4] — plaintiffs seeks to exclude substantial categories of costs as evidence relevant to remaining four proceedings and given suggested failures by defendants — no reason to make “orders otherwise”.

Legislation Cited:

Uniform Civil Procedure Rules (2005), rr 42.1, 42.20(1)

Cases Cited:

Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365

Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69

Ibrahim v PERI Australia Pty Limited [2013] NSWCA 328

The Owners Strata Plan No 87881 v Frasers Broadway Pty Ltd [2025] NSWSC 1073

Category:

Costs

Parties:

The Owners Strata Plan No 87881 (First Plaintiff)
The Owners Strata Plan No 88765 (Second Plaintiff)
The Owners Strata Plan No 89262 (Third Plaintiff)
Fortius Broadway No 1 Pty Ltd (Fourth Plaintiff)
Frasers Broadway Pty Ltd (First Defendant)
Frasers Central Park Land No 1 Pty Ltd (Second Defendant)

Representation:

Counsel:
F Hicks SC / SC Ipp (Plaintiffs)
DT Miller SC / M Sheldon (Defendants)

Solicitors:
HWL Ebsworth (Plaintiffs)
Minter Ellison (Defendants)

File Number(s):

2025/48263

JUDGMENT

1. HER HONOUR: On 10 October 2025, I dismissed these proceedings and ordered the plaintiffs to pay the defendants’ costs of the motion for dismissal: The Owners Strata Plan No 87881 v Frasers Broadway Pty Ltd [2025] NSWSC 1073. This judgment concerns the costs of the proceedings.

2. The defendants seek their costs of the proceedings. The plaintiffs proffer an extensive proposed costs order, which runs over two pages, ‘carving out’ various categories of costs.

Principles

3. Rule 42.20(1) of the Uniform Civil Procedure Rules (2005) (UCPR) provides that if the Court makes an order for the dismissal of proceedings then, “unless the Court orders otherwise”, the plaintiff must pay the defendant’s costs of the proceedings. These rules create “a starting point” for the Court’s deliberations as to the appropriate costs order: Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 at [48], [53] (per Bryson JA); followed in Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 at [53]-[54], [69]-[74].

4. In Ibrahim v PERI Australia Pty Limited [2013] NSWCA 328, Beazley P summarised the matters to be considered when “the Court orders otherwise” as including, at [17]:

“whether a party acted reasonably in commencing the proceedings; whether a party had been successful in obtaining interlocutory relief; whether the party sued had acted reasonably; whether the responding party had acted reasonably in defending the proceedings; whether the proceedings terminated after interlocutory relief had been granted; and further, whether the primary judge was satisfied that the party seeking to terminate the proceedings prior to a full hearing had almost a certain chance of success.”

5. While “there is no close control over the discretion of the Court to order otherwise … there must be some sound positive ground or good reason for departing from the ordinary course”: Australiawide Airlines v Aspirion at [54] (Bryson JA).

Procedural history

6. The plaintiffs commenced these proceedings on 6 February 2025 in the Technology and Construction List. The plaintiffs also filed a motion seeking expedition. The same day, the plaintiffs received an expert report from Dominic D’Adam, which was later relied on at the hearing of the dismissal motion. (The plaintiffs now seek to excise any costs incurred by the defendants in relation to this report.)

7. The defendants’ solicitor challenged the plaintiffs’ commencement of the proceedings, where four existing proceedings were already on foot. The plaintiffs were unreceptive. On 13 February 2025, the defendants filed the dismissal motion, supported by affidavits from Peter Welsh, Vanessa English and Claire Tait.

8. On 14 February 2025, the parties appeared before the Expedition Judge, Parker J, who confessed, “I was a bit surprised that you didn’t just apply, or rather, these proceedings weren’t brought in the Technology and Construction List. … I meant, it’s just that in that list, there’s a degree of expedition anyway.” His Honour transferred both motions to the Technology and Construction motions list on 21 February 2025.

9. On 21 February 2025, Stevenson J also observed, “You don’t need expedition here, Mr Hicks. You get expedition. … That is, the matter will be given a hearing date as soon as it is ready and urgent matters are given priority.” Orders were made for the progress of the motions. (The same day, the plaintiffs received an expert report from Steven Halliday, which was later tendered at the hearing of the dismissal motion but which the plaintiffs now seek to excise from the costs order.)

10. On 5 March 2025, the plaintiffs obtained an expert report from Chris Jamieson, which was later tendered on the dismissal motion but which the plaintiffs now seek to excise from the costs order. The plaintiffs also filed an affidavit of Cullen Rutherford. Mr Rutherford uses an abseil to work on the façade of the buildings the subject of these proceedings. The plaintiffs did not ultimately read his affidavit on the dismissal application and seek that there be no order in respect of any costs incurred by the defendants in relation to that affidavit. The plaintiffs also served an expert of Stephen Yeomans dated 28 September 2022 but now seek to excise this from any costs orders made in favour of the defendants. The report was tendered at the hearing of the dismissal motion. The same pertains in relation to an expert report obtained by the plaintiffs from Stephen Yeomans on 24 March 2025, a second report from Mr Jamieson on 30 May 2025, a second report from Jonathan Barnett dated 2 June 2025 and a second report of Mr Halliday of 11 June 2025.

11. Various directions were made to progress both motions towards a hearing. The defendants served an affidavit of Mr Welsh on 25 June 2025, which was read on the dismissal motion and its exhibit tendered. The plaintiffs now seek that there be no order as to costs in respect of this affidavit or its exhibit. The same can be said for a confidential affidavit of Mr Welsh affirmed the same day and not read on the dismissal motion. The defendants served further confidential affidavits by Michael Ellis on 8 July 2025, Ian Rea on 10 July 2025, and Isabella Bain on 11 July 2025. These affidavits were not read on the dismissal motion either and the plaintiffs contend that there should be no order as to costs in respect of these affidavits.

12. On 1 August 2025, the parties appeared in the Technology and Construction List. Peden J spent some time with the parties, enquiring how these proceedings worked given the existing proceeding on foot. In particular, her Honour observed “If any declaration or finding is made in these proceedings, do any of those possibly affect some of the other parties in the other proceedings such that they wouldn’t be bound by these proceedings, and then you’d have a mess?”. After further discussion, her Honour noted “It just seems that doing it this way makes it quite convoluted … I just come back to what is being determined on a motion is going to be not who’s right and who’s wrong, but just, is there a risk?” In short, Peden J pointed out many of the problems with the plaintiffs’ claim, which were later referred to in my judgment dismissing the proceedings.

13. On 13 August 2025, the plaintiffs issued a subpoena to the independent expert retained by Building Commission NSW. On 21 August 2025, the plaintiffs relisted the matter, as an issue had arisen between the parties concerning the subpoena and production of documents. On 22 August 2025, I made directions for the progress of the motion to set aside the subpoena on the grounds of relevance. I also observed:

“Can I just note with respect to the motion for expedition, in a sense you don’t really need one in this list, because the whole list is effectively in the sense that will give something a hearing as soon as parties are ready, so it might be on the otiose side to seek expedition”.

14. On 25 August 2025, Mr Welsh made a further affidavit which was read on the dismissal motion but which the plaintiffs now seek to excise from the costs order. On 26 August 2025, the proceedings were re-listed at the defendants’ request. Developments between the defendants and Building Commission NSW – being an extension of time to complete rectification works or potential revocation of the works order – were thought to render the hearing otiose. The defendants advised that they wished to press their dismissal motion on the allotted hearing date. I was also informed that the Court Book was nearly 4,000 pages of material.

15. I heard the dismissal motion on 28 August 2025. The plaintiffs’ senior counsel advised that the expedition motion "is not proceeding today". There was no mention of the subpoena. The amount of material relied upon by the plaintiffs was substantial indeed. During the hearing, the defendants were granted leave to file in Court the further affidavit from Mr Welsh of 25 August 2025 and from Ms Tait of 27 August 2025, updating developments with Building Commission NSW and providing expert reports in response to those relied upon by the plaintiffs. The plaintiffs now seek to excise these affidavits and expert reports from the costs order.

Submissions

16. The defendants submitted that the usual costs order should be made as the proceedings were fundamentally flawed, as was pointed out to the plaintiffs early and often, including by Peden J. The plaintiffs relied on extensive evidence on the dismissal motion, serving 12 expert reports and affidavits (and read 11 of them) and 10 lay affidavits (and read 5 of them). These costs have already been awarded to the defendants and the existing costs order is not challenged. The remainder of the proceedings involving interparty correspondence, appearances at directions hearings, and a dispute about a subpoena should naturally follow the dismissal of the matter generally as they all arise from proceedings that have been dismissed. While the plaintiffs can still seek the relief in the four other proceedings already on foot, these proceedings should never have been commenced or maintained. There was no reason why the plaintiffs should not be ordered to compensate the defendants for their costs in having to deal with these proceedings.

17. The plaintiffs submitted that costs on certain matters should be excluded as the Court did not determine the parties’ substantive rights, the expert reports served by the parties are relevant to the four building-defects proceedings and plaintiffs can still pursue the same relief in one of the existing proceedings. The expert evidence served was not wasted and it was said that there was a mixed outcome given that substantive rights were preserved. Further, one of the principal bases for seeking declaratory relief was that the Modified Building Works Rectification Order (MBWRO) required the work to be completed by 31 March 2026. It was said that it was only disclosed by the defendants shortly before the hearing that the date had been extended to November 2026, but they had been aware of this since 4 April 2025. There were unnecessary affidavits served and costs incurred because this was not disclosed.

18. The first excision sought by the plaintiffs is that there be no order as to costs of the plaintiffs' motion for expedition. It was said to have been made clear at an early time that expedition was not required and that the case would be heard when possible as soon as it was ready. The parties proceeded accordingly. The plaintiffs were entitled to prepare the case so that it could be heard. The defendants should not be compensated for the costs of expedition as they knew from 4 April 2025 that time for compliance with the MBWRO had been extended and there was no longer urgency, as was the case when the works were to be completed by 31 March 2026.

19. The defendants submitted that the motion for expedition was unnecessary and abandoned. The motion should have been discontinued in February 2025 but was not. The plaintiffs insisted on an order for expedition until the hearing. Given the dismissal of the proceedings, the motion for expedition was unnecessary and always doomed to fail. The defendants should have their costs of that motion.

20. The second excision proposed by the plaintiffs is that there be no order as to costs with respect to the following affidavits and exhibits: affidavit of Peter Welsh affirmed 25 June 2025 and Exhibit PW-02; affidavit of Peter Welsh affirmed 25 August 2025 and Exhibit PW-03; confidential affidavit of Peter Welsh affirmed 25 June 2025; confidential affidavit of Michael Ellies affirmed 8 July 2025; confidential affidavit of Ian Rea affirmed 10 July 2025; and confidential affidavit of Isabella Bain affirmed 11 July 2025.

21. The plaintiffs submitted that this evidence related to dealings with the Building Commissioner and the prospect of an extension of time for compliance with the MBWRO. This was unnecessary as it post-dated the grant of an extension of time. It also included ‘confidential’ affidavits that purported to depose to the substance of without prejudice communications and meetings between representatives of the parties and the Building Commissioner. The plaintiffs were required to respond to this material, unaware of the extension of time already granted months earlier.

22. The defendants submitted that these affidavits related to issues determined on the dismissal motion, namely, whether the MBWRO date was likely to be extended once the final scope was determined, such that the plaintiffs’ relief was hypothetical and there was no pressing urgency. Costs of that motion have already been determined. While the confidential affidavits were not read, they concerned an alleged without prejudice conversation that became irrelevant once the Building Commissioner stated the time for compliance with the MBWRO is likely to be extended once the final scope was known on the eve of the hearing. Having alleged urgency in relation to those works, the plaintiffs should pay the defendants’ costs of that failed contention.

23. The plaintiffs’ third excision was that there be no order as to costs with respect to any costs incurred by the defendants from 4 April 2025 in relation to the issue of any grant of an extension of time by Building Commission NSW for the performance of works under a MBWRO issued in February 2024. The plaintiffs submitted that extensive evidence as to the defendants’ dealings with Building Commission NSW was irrelevant and unnecessary as and from 4 April 2025. The failure to disclose that an extension of time for compliance with the MBWRO had been granted on 4 April 2025 led to unnecessary affidavit evidence, the issue of a subpoena and additional costs in respect of an application to have the subpoena set aside.

24. The defendants submitted that this proposed excision appeared to rely on an email from the Building Commissioner dated 4 April 2025, stating that the MBWRO date was likely to be extended once the final scope was known. The defendants were not required to volunteer their internal correspondence with the Building Commissioner. Their position was always that the scope was not finalised and there was no urgency until it was. The 4 April 2025 email supported, rather than contradicted, that position. There is no basis to alter the usual position as to costs.

25. The plaintiffs’ fourth excision was that there be no order as to costs with respect to any costs incurred by the defendants in relation to the following evidence:

1. expert report of Stephen Yeomans dated 28 September 2022;

2. expert report of Peter Karsai dated 11 December 2024;

3. expert report of Jonathan Barnett dated 5 February 2025;

4. expert report of Dominic D'Adam dated 6 February 2025;

5. expert report of Steven Halliday dated 21 February 2025;

6. expert report of Chris Jamieson dated 5 March 2025;

7. expert report of Stephen Yeomans dated 24 March 2025;

8. expert report of Chris Jamieson dated 30 May 2025;

9. expert report of Jonathan Barnett dated 2 June 2025;

10. affidavit of Anya Serpanchy affirmed 11 June 2025;

11. affidavit of Steven Halliday affirmed 11 June 2025 and Exhibit SH-1;

12. affidavit of Cullen William Rutherford affirmed 7 February 2025;

13. affidavit of Danny Michael McKinney affirmed 11 June 2025;

14. expert report of Tim Hoare dated 25 August 2025; and

15. expert report of Per Olsson dated 25 August 2025.

26. The plaintiffs submitted that this expert evidence (and related lay evidence) was relevant to the remaining four proceedings. The Court was justified in exercising its broad discretion as to costs by making an order “otherwise” than costs be paid by the plaintiffs. The application was not granted on the basis that the proceedings had no substance, that there was no arguable case, that the claim for declaratory relief should be refused as “hypothetical”, or that it was futile. The right to seek declaratory relief in the damages proceedings has been expressly preserved and the expert evidence prepared has not been wasted.

27. The defendants submitted that it was not open to the plaintiffs to seek such an order, where the reports referred to were either read by the plaintiffs in opposition to the defendants’ motion or read by the defendants in response to the plaintiffs’ experts. Costs had already been ordered. The defendants were put to considerable expense to respond to expert evidence deployed by the plaintiffs to demonstrate that the plaintiffs’ position was disputed. They now face further significant expense in preparing final reports for the substantive defects proceedings.

28. The fifth excision was that there be no order as to costs with respect to two affidavits of Ms Tait affirmed 27 August 2025 and exhibit CT-3. The plaintiffs submitted that these affidavits were served to explain the defendants’ default in not serving evidence in accordance with procedural directions and to support an application to be allowed to rely on expert reports served shortly before the hearing when no expert evidence had been previously served. The plaintiffs should not have to bear the costs of this material.

29. The defendants submitted that the affidavits were read on the dismissal motions. Costs orders have already been made in respect of that motion.

30. Finally, the plaintiffs submitted that there should be no order as to costs with respect to the defendants’ notice of motion to set aside the subpoena, including the affidavit of Maciej Getta and Exhibit MG-01. The plaintiffs submitted that the subpoena seeking production of the report of Diagnostech was issued on 13 August 2025 in circumstances where the plaintiffs understood the MBWRO (which encompasses hydraulic defects the subject of the Diagnostech report) required works to be completed by March 2026. Had the true position been disclosed, there would have been no subpoena issued.

31. The defendants submitted that, absent a specific costs orders, usually the costs of a subpoena should be costs in the cause. The Court should not be burdened with minute disputes over matters like this.

Conclusion

32. What is the “sound positive ground or good reason” for departing from the usual costs order: Australiawide Airlines v Aspirion at [54]? So far as the plaintiffs seek to characterise the results of the dismissal motion as giving them a measure of success, the developers did not seek dismissal of the plaintiffs’ claim on the basis that it was hopeless in the General Steel Industries v Commissioner for Railways sense. But the defendants’ arguments were very largely accepted.

32. I concluded that, whilst the plaintiffs’ prayer for declaratory relief was not “so clearly untenable that it cannot possible succeed”, there were a number of reasons why the Court may not exercise its discretion to grant the relief given the circumstances in which the declaration was then sought: at [89]. Further, on its face, it was an abuse of process for the plaintiffs to institute a fifth set of proceedings where the claim for relief could be made in one of the four proceedings already on foot. Nor could the problem be addressed by the plaintiffs’ case management proposals. Further, even if these proceedings were case managed with the existing four proceedings, there was no apparent reason why the plaintiffs should have a third set of legal representatives, in addition to the two firms already engaged. Where I had not determined the substance of the plaintiffs’ claim for relief, the appropriate course was to dismiss the proceedings where the relief sought could be – and should have been – sought in the proceedings already on foot.

33. I do not think it can be said that the plaintiffs acted reasonably in commencing these proceedings, nor have they been successful in the result. The defendants have been put to the cost of defending these proceedings, notwithstanding that the defendants’ solicitors pointed out, at the outset, why these proceedings were a bad idea. Those concerns were repeated by Peden J in the course of the proceedings.

34. Turning to the proposed excisions, if the plaintiffs’ proposed costs order is made, then so extensive are the ‘carve outs’ that the proposed orders will likely deplete the defendants’ existing entitlement to their costs of the dismissal motion. But there is no application to vary that order.

35. The motion for expedition was unnecessary. This was pointed out to the plaintiffs by Parker J, Stevenson J and myself. The plaintiffs did not advise that the motion was not pressed until the hearing of the dismissal motion. The defendants were entitled to proceed on the basis that the motion remained on foot. The affidavit in support of expedition, by the plaintiffs’ solicitor Alexander Ottaway, was also read by the plaintiffs on the dismissal motion; the extensive exhibit to the affidavit was also tendered. I consider it appropriate that the defendants have their costs of dealing with that motion.

36. The proposed second, third and sixth excisions proceed on an incomplete summary of the evidence. Mr Welsh described in detail his dealings with the Building Commission NSW, and updated the position from time to time. It is not the case that an extension of time was granted on 4 April 2025. Whilst Mr Welsh pressed Building Commission NSW for a formal extension, the position changed from time to time. As late as 22 August 2025, Building Commission NSW advised Mr Welsh that a recommendation had been made that the MBWRO be revoked. It was not until immediately before the hearing that the extension was given. These excisions are not appropriate, for the reasons advanced by the defendants.

37. The proposed fourth excision is inappropriate in circumstances where the plaintiffs relied on a swathe of expert and lay evidence on the dismissal motion. The defendants presumably incurred costs in considering and addressing that material. Whilst some of the material in the Court Book was not ultimately tendered at the hearing of the dismissal motion, most of it was. No advance notice was given of which reports and affidavits were no longer relied upon. The defendants presumably prepared on the basis that the plaintiffs would rely on everything that they had included in Court Book for the hearing.

38. Nor is it clear why the defendants should not have their costs of preparing expert reports in response to the expert evidence relied upon by the plaintiffs. Ms Tait made clear that the reports of Tim Hoare and Per Olsson were prepared specifically for the purpose of the dismissal motion and were not relied on in the four existing proceedings, where more expansive reports will need to be obtained. Nor do I accept the fifth excision in respect of Ms Tait’s final affidavits, serving the expert reports which the defendants had managed to procure in short order, in an effort to address the substantial amount of material put against them.

39. The plaintiffs may well seek to re-agitate the issue raised in these proceedings in the four existing proceedings. Where the plaintiffs will no longer be represented by the same solicitors on any such application, the timing and form of any application, and the evidence relied upon in support of it, may bear no resemblance to these proceedings. The defendants should not be obliged to bear the costs of dealing with these proceedings on the off-chance that it proves to be time well spent in dealing with a similar application in the future. In sum, I am not satisfied that there is “some sound positive ground or good reason” from departing from the usual costs order. For these reasons, I order the plaintiffs to pay the defendants’ costs of the proceedings.

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