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Category: Costs

Parties: Claim:
Alta Vale Residential Pty Ltd (In Liq) (Rec Apptd) (First Plaintiff)
TC Build Group Pty Ltd (In Liq) (Second Plaintiff)
STM123 Pty Ltd (First Defendant)
Hoz Construction Pty Ltd (Second Defendant)
Ian Drummond Hossack (Third Defendant)
Vaughan Rudd Blank (Fourth Defendant)
STM123 No. 4 Pty Limited (Fifth Defendant)
STM123 No. 6 Pty Limited (Sixth Defendant)
STM123 No. 7 Pty Limited (Seventh Defendant)
STM123 No. 9 Pty Limited (Eighth Defendant)
STM123 No. 16 Pty Limited (Ninth Defendant)
STM123 No. 17 Pty Limited (Tenth Defendant)
STM123 No. 20 Pty Limited (Eleventh Defendant)
STM123 No. 21 Pty Limited (Twelfth Defendant)
Blank Super Pty Ltd (Thirteenth Defendant)
Cross-Claim:
STM123 Pty Ltd (First Cross-Claimant)
STM123 No. 17 Pty Limited (Second Cross-Claimant)
Blank Super Pty Ltd (Third Cross-Claimant)
STM123 No. 20 Pty Limited (Fourth Cross-Claimant)
STM123 No. 16 Pty Limited (Fifth Cross-Claimant)
STM123 No. 21 Pty Limited (Sixth Cross-Claimant)
STM123 No. 9 Pty Limited (Seventh Cross-Claimant)
STM123 No. 7 Pty Limited (Eighth Cross-Claimant)
STM123 No. 6 Pty Limited (Ninth Cross-Claimant)
Alta Vale Residential Pty Ltd (In Liq) (Rec Apptd) (First Cross-Defendant)
Thomas Cull (Second Cross-Defendant)
Moitly Boss Pty Ltd (Third Cross-Defendant)
TC Build Group Pty Ltd (Fourth Cross-Defendant)

Representation: Counsel:
D S Weinberger SC w A Jordan (Plaintiffs/Cross-Defendants)
N Simpson SC w S Steinhoff (Defendants/Cross-Claimants)
Solicitors:
Chedid Storey Legal (Plaintiffs/Cross-Defendants)
Bradbury Legal (Defendants/Cross-Claimants)

File Number(s): 2022/00229562

Publication restriction: Nil

JUDGMENT

1. On 24 July 2026, I delivered reasons for judgment in these proceedings: Alta Vale Residential Pty Ltd (In Liq) (Rec Apptd*)* v STM123 Pty Ltd [2026] NSWSC 882 (Primary Judgment).

2. At that time, I directed the parties to confer regarding a form of orders to give effect to the Primary Judgment, including dealing with interest and costs, and in the event that they were unable to reach agreement, to propose competing forms of orders and provide written submissions on the issues in dispute.

3. In their written submissions regarding interest and costs, the Defendants/Cross-Claimants requested an oral hearing on these issues, which subsequently occurred on 26 August 2026.

4. The hearing on 26 August 2026 helpfully narrowed a number of the issues, as the parties appeared to reach a common position that an order should be made, by consent, for any costs in favour of the Defendants to be set off against any costs in favour of the Plaintiffs. This reflected the fact that the corporate Defendants are all members of the same group of companies, which is associated with the Fourth Defendant (Mr Blank). The parties recognised that, if such an order were made by consent, it would be unnecessary for the Court to determine, at this stage, the Defendants’ application for a third-party costs order against the Receiver of the First Plaintiff and his appointor.

5. However, despite the parties having indicated to the Court on 26 August 2026 that they would provide the Court with an agreed form of set-off order, the parties were unable to come to any such agreement, leading to the need for a further short hearing on 9 September 2026. At this hearing, consensus emerged on the appropriate form of set-off order, as set out below.

6. The principal issues that remain in dispute are:

7. whether pre-judgment interest should be calculated from the date when the cause of action arose, or from the date when the claim was first pleaded (either at the commencement of the proceedings or by subsequent amendment, as the case may be); and

8. the extent to which the costs of any successful parties should be reduced to reflect their lack of success on any clearly dominant or separable issues.

Interest

Relevant Principles

7. Pre-judgment interest awarded pursuant to s 100 of the Civil Procedure Act 2005 (NSW) (CPA) and similar statutory provisions is compensatory in character: Miller Heiman Pty Ltd v Sales Principles Pty Ltd (2017) 94 NSWLR 500; [2017] NSWCA 106 at [84] per Macfarlan JA (with whom McColl JA and Sackville AJA agreed), citing Haines v Bendall (1991) 172 CLR 60 at 66-67; [1991] HCA 15.

8. Although such provisions confer a discretion to award interest, it is “almost invariably to be allowed when claimed”: Miller Heiman at [84], citing Falkner v Bourke (1990) 19 NSWLR 574 at 576.

9. Interest should generally be awarded on the “neutral” basis that the defendant “ought to have paid” the plaintiff money at a particular time, but did not, and since that time the plaintiff has been out-of-pocket in respect of that money and the defendant has had the benefit of it: Spotlight Pty Ltd v Fatseas Investments Pty Ltd [2020] NSWCA 132 at [103] per Gleeson JA (with whom White JA agreed).

10. Accordingly, the usual practice is to award interest not simply from the date of the commencement of proceedings, but from the date identified in s 100 of the CPA (and its statutory predecessors), being the date on which the relevant cause of action arose: Miller Heiman at [84].

11. In the absence of some contrary agreement, a cause of action concerning payment for services accrues when the services are performed: LCM Operations Pty Ltd v Rabah Enterprises Pty Ltd (No 2) [2023] NSWSC 722 at [10] (Rees J).

12. Because interest is compensatory, it should ordinarily not be withheld to punish a plaintiff’s delay in commencing proceedings or a party’s delay in filing a cross-claim: Spotlight at [103], citing Bennett v Jones [1977] 2 NSWLR 355 at 367.

13. Whilst there may be some cases in which it is appropriate to deny interest to a plaintiff by reason of its conduct, whether that be delay or otherwise, they are exceptional cases: Miller Heiman at [86].

14. Generally, where delay is treated as relevant it is used to reduce the period over which interest is awarded: Spotlight at [104]. In considering whether to exercise this discretion, the Court will consider whether the defendant has suffered any detriment by reason of the plaintiff’s delay in bringing the claim: Spotlight at [105]-[107], [110].

Determination - Interest

15. The Plaintiffs submitted that there was, in the present case, no evidence of any agreement as to when fees would be paid in respect of each project and that, in those circumstances, the cause of action for unpaid fees for each project arose – and interest should run – from the date when the Occupation Certificate for that project was issued (or, in respect of the Lamrock Ave Project and the Jacques Ave Project, from the date when those projects were taken over by the Second Defendant (Hoz Construction Pty Ltd)).

16. Further, the Plaintiffs submitted that, in respect of the claim by the Third Cross-Claimant (Blank Super Pty Ltd) against Mr Cull in relation to the Curlewis St Project, that the cause of action arose – and interest should run – from the date that the Stop Work Order was lifted (being 26 July 2021).

17. The Defendants/Cross-Claimants accepted the Plaintiffs’ position in respect of Blank Super’s claim (despite this claim having not been pleaded until 22 April 2026, almost five-and-a-half years after the collapse at the Curlewis St Project which gave rise to the claim).

18. However, the Defendants/Cross-Claimants submitted that, in respect of the Plaintiffs’ claims for unpaid fees, interest should run not from the date when the respective causes of action arose, but only from the date when those claims were first pleaded.

19. Two main reasons were advanced.

20. First, the Defendants/Cross-Claimants submitted that some of the fees in respect of various projects were not invoiced at the relevant time. However, as outlined above, in the absence of an agreement to the contrary, a cause of action for unpaid services does not arise from the date that an invoice for those services is issued. Instead, it arises from the date that the services were supplied.

21. Secondly, the Defendants/Cross-Claimants submitted that, in respect of a number of projects, the Court found that the fees were owing to the Second Plaintiff (TCBG) rather than the First Plaintiff (TC Build) and, although TC Build had claimed those fees from the start of the proceeding, the pleading was only amended in May 2026 to add a claim, in the alternative, that those fees were due to TCBG.

22. However, the Defendants/Cross-Claimants did not suggest that they had suffered any detriment by reason of the delay in raising this alternative claim. Nor did they establish any other reason why this was an exceptional case warranting the Court denying or reducing interest.

23. For those reasons, I have determined that pre-judgment interest should be calculated and awarded on the basis for which the Plaintiffs/Cross-Defendants contended.

Costs

Relevant Principles

24. There was no dispute regarding the relevant principles. The following summary is drawn from my decision in Firmtech Aluminium Pty Ltd v Xie; Zhang v Xu; Xie v Auschn Conveyancing & Associates Pty Ltd (No 4) [2026] NSWSC 263.

25. Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) provides that if the Court makes any order as to costs, the Court is to order that costs follow the event, unless it appears to the Court that some other order should be made as to the whole or any part of the costs.

26. The “event” typically refers to the event of the claim or counter-claim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] (Ward, Emmett and Gleeson JJA).

27. Generally, a successful party should be entitled to the whole of its costs of the proceeding, including costs on an issue on which it has failed. However, in an appropriate case, a costs order may be formulated to reflect the degree of success on distinct issues. Relevant circumstances in which apportionment across different issues has been said to be appropriate include where a successful party has, in respect of one or more issues, unfairly, improperly or unnecessarily increased costs; where the bulk of the time has been taken on an issue on which the unsuccessful party has succeeded; or where a particular issue or group of issues is clearly dominant or separable: see Access Training Group Ltd v Jane [2024] NSWCA 204 at [190]-[191] per Ward P (with whom Payne JA agreed).

28. A separable issue can relate to any disputed question of fact or law before a Court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] (Beazley, Ipp and Basten JJA), referring to James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34].

29. It may be appropriate to deprive a successful party of its costs or a portion of its costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Bostik Australia at [38], referring to Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24].

30. However, in Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 90 ALJR 270; [2015] HCA 53 at [6], the High Court observed that there are “good reasons not to encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like”.

31. Accordingly, where there are multiple issues in a case, the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed; and, unless a particular issue or group of issues is clearly dominant or separable, it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Bostik Australia at [38].

32. Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the Court, which should be liberally construed: Bostik Australia at [38], referring to State of New South Wales v Stanley [2007] NSWCA 330 at [18].

33. In Access Training Group at [192], Ward P observed that:

“The purpose of costs orders is, compensation not punishment (Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59) and ultimately, as Finkelstein and Gordon JJ observed in Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 at [5], fairness should dictate how the costs discretion is to be exercised.”

34. In Sze Tu v Lowe (No 2) [2015] NSWCA 91 at [41], Gleeson JA (with whom Meagher and Barrett JJA agreed) observed that, in approaching the question of apportionment where there are multiple issues, it has been recognised that there is a basis for distinguishing between the position of successful defendants and successful plaintiffs. In this regard, his Honour referred, with approval, to the following observations of Hodgson JA in Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145 at [19] regarding this distinction:

“In the former case, the defendant has been caused to incur costs in defending a claim which the decision in the case has wholly rejected, and has thus determined should not have brought about the incurring of any costs at all. In those circumstances, it may be considered appropriate that the defendant have costs associated with reasonable defences, even if they ultimately proved to be unsuccessful and severable. In the latter case, the plaintiff has chosen to bring the whole proceedings and thereby to incur costs and cause costs to be incurred which otherwise would not have been incurred; and in those circumstances, it may be seen more readily as appropriate that the plaintiff be liable for the costs of unsuccessful severable claims or issues, even if it was reasonable to include those claims or issues.”

35. Where there is a mixed outcome in a proceeding, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends on matters of impression and evaluation: Bostik Australia at [38], referring to James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36]. In general, such an exercise will be carried out on a relatively broad-brush basis: Doppstadt at [19].

Determination – Costs

Plaintiffs’ Claims

36. The Plaintiffs were unsuccessful in their claims against the Second Defendant (Hoz Construction), the Fourth Defendant (Mr Blank), the Fifth Defendant (STM 123 No. 4 Pty Ltd), the Ninth Defendant (STM123 No. 16 Pty Ltd), the Twelfth Defendant (STM123 No. 21 Pty Ltd) and the Thirteenth Defendant (Blank Super).

37. It was common ground that the Plaintiffs should pay the costs referrable to the claims against those Defendants.

38. The Plaintiffs were successful in their claims for unpaid fees against the remaining Defendants. In particular:

39. the First Plaintiff succeeded in its claims against the Sixth Defendant (STM123 No. 6 Pty Ltd), the Tenth Defendant (STM123 No. 17 Pty Ltd) and the Eleventh Defendant (STM123 No. 20 Pty Ltd); and

40. the Second Plaintiff succeeded in its claims against the First Defendant (STM12****3 Pty Ltd), Seventh Defendant (STM123 No. 7 Pty Ltd) and Eighth Defendant.

41. The Defendants contended that any costs order against these particular Defendants should be reduced to reflect the fact that the Plaintiffs were unsuccessful in respect of their contentions regarding the terms of the 18 August 2020 agreement between Mr Blank and Mr Cull, and regarding the identity of the counterparty to a number of the relevant construction contracts.

42. The latter issue was a minor issue which involved minimal evidence and submissions (see Primary Judgment at [262]-[293]). The outcome of deciding this issue in favour of the Defendants was that certain Defendants were found to owe fees to the Second Plaintiff, rather than the First Plaintiff – which was, in any case, a position that the Plaintiffs pleaded in the alternative. The resolution of this issue did not alter the quantum of the fees owed. I therefore would not make any reduction for this issue, or any specific costs award in respect of this issue.

43. I accept that the issue regarding the terms of the 18 August 2020 agreement was a significant focus of the evidence and submissions at the hearing, including a central issue in the cross-examination of each of Mr Cull and Mr Blank. That is unsurprising given that this issue went to the question of whether the Defendants agreed to pay a 3% or an 8% margin on direct costs, which self-evidently had a significant impact on the quantum of the unpaid fees. However, ultimately, I rejected the positions pleaded by both the Plaintiffs (that the margin remained at 8% on all direct costs, past and future) and by the Defendants (that the margin was reduced to 3% on all direct costs, past and future) and determined that the margin was 8% for direct costs up to 18 August 2020, reducing to 3% for direct costs from that date. In those circumstances, I will not make any reduction in the costs award in respect of this issue.

44. The Plaintiffs accepted that there should be a reduction in the costs awarded as against each of the First and Tenth Defendants to reflect the fact that the Plaintiffs had only partial success against each of those Defendants. The Plaintiffs proposed that they be awarded only 80% of their costs against each of those entities.

45. It should be noted that the Defendants did not, in their proposed orders provided to the Court on 9 September 2026, seek any such reduction in respect of the costs award against the Tenth Defendant. Nonetheless, in circumstances where the First Plaintiff only had partial success against this entity, I am satisfied that – as the Plaintiffs conceded – a reduction in the costs award should be made to the extent proposed by the Plaintiffs.

46. As regards the First Defendant (STM123), the Defendants did not propose a percentage reduction in the costs award against STM123, but instead proposed that the costs orders be framed to recognise that STM123 was sued in a number of capacities, with some claims succeeding and others not. In particular, the orders which the Defendants proposed at the 9 September 2026 hearing included that:

47. the First Plaintiff is to the pay the costs of its claims against STM123 in its capacity as the trustee for the STM123 No. 2 Trust;

48. STM123 in its capacity as the trustee of the STM123 No. 2 Trust is to pay the costs of Second Plaintiff’s claims against STM123 in that capacity;

49. the Plaintiffs are to pay the costs of their claims against STM123 in its own right; and

50. the Plaintiffs are to pay the costs of their claims against STM123 in its capacity as trustee for the STM Investment Trust.

51. These proposed orders – which would require an identification, for each cost incurred by or in relation to STM123, the relevant “capacity” of STM123 to which the cost related – would be apt to cause confusion on an assessment process, and would likely result in a significant increase in the costs and time required for assessment.

52. I consider that the appropriate course – which achieves fairness to both parties and will cause less complication in the assessment process – is to order, as proposed by the Plaintiffs, that STM123 pay 80% of the costs of the Plaintiffs’ claims against STM123. This reduction reflects the lack of success by the Plaintiffs on the clearly separable claims against STM123 relating to the termination of the business relationship (see Primary Judgment at [338]-[486]). I am satisfied that the extent of the proposed reduction is appropriate having regard to the extent of the evidence and submissions in respect of those claims.

53. Finally, the Defendants sought an order discharging order 3 of the orders made by Peden J on 22 April 2026. On that date, her Honour heard and rejected the Defendants’ motion to set aside a subpoena issued by the First Plaintiff, and ordered that the Defendants pay the costs of that motion. The Defendants’ submission on the present costs dispute was that, in circumstances where the documents sought by the subpoena were relevant to an issue on which the Plaintiffs were unsuccessful, the Court should set aside the costs order made by her Honour, with the Plaintiffs instead being ordered to bear the costs of that motion. I do not accept this submission. The Defendants are, in effect, seeking that the costs of the motion be costs in the cause. However, Peden J determined not to make such an order, but to make a different order, namely, that costs follow the event in respect of the motion. The appropriate form of costs order was a matter for her Honour, having reviewed the evidence and heard the arguments on the motion. There is no reason now to disturb that order.

54. At the hearing on 9 September 2026, the parties agreed that there should be an order to the effect that any costs orders made in favour of the Plaintiffs should be set off against any costs orders made against any of the Defendants. I will make an order, by consent, to this effect.

55. The parties also agreed that, in circumstances where the Plaintiffs are insolvent, there should be liberty reserved to those Defendants in whose favour a costs award has been made to bring an application for a third-party costs order (against the Receiver of TC Build and his appointor) in the event that the total amount of the assessed costs in their favour exceeds the total amount of the assessed costs payable to the Plaintiffs, such that there remains a balance payable by the Plaintiffs (who are in liquidation). I will also make an order to this effect.

56. In circumstances where the set off order is being made, and this liberty is being reserved, I do not consider that there is any necessity for the amount of $350,000 paid by TC Build into Court as security for costs to remain held in Court pending the outcome of the assessment process, which may take some considerable time. Accordingly, I will make an order that the security be released.

Cross-Claimants’ Claims

51. The Second Cross-Claimant (STM123 No. 17) was successful in establishing its cross-claim against the First Cross-Defendant (TC Build) regarding defects in the Bellevue Rd Project. Accordingly, TC Build should pay STM123 No. 17’s costs of this claim.

52. The Third Cross-Claimant (Blank Super) established its claim for damages against the Second Cross-Defendant (Mr Cull) in respect of the Curlewis St Project. It was common ground that Mr Cull should pay Blank Super’s costs of that cross-claim.

53. The remaining Cross-Claimants were unsuccessful in their claims, which included claims for defects in respect of various other projects, claims for oppression, and claims regarding the assignment of certain debts. In addition, they abandoned, late in the hearing, their claims in respect of “back charges” and various costs said to be not “properly payable” (Primary Judgment at [509]).

54. Costs should follow the event. Accordingly, the appropriate order is that, with the exception of the cross-claim in respect of the defects in the Bellevue Rd Project (which is addressed above), the Cross-Claimants pay the costs of the First Cross-Defendant (TC Build), the Third Cross-Defendant (Moitly Boss Pty Ltd) and the Fourth Cross-Defendant (TCBG), which are referrable to the claims against them.

ORDERS

55. For the reasons given above, I make the following orders:

Orders for Judgment – Third Further Amended Commercial List Summons

1. Judgment for the First Plaintiff against the Tenth Defendant in the sum of $13,010.02 plus interest of $5,223.28 pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
2. Judgment for the First Plaintiff against the Eleventh Defendant in the sum of $94,577.92 plus interest of $45,569.59 pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
3. Judgment for the First Plaintiff against the Sixth Defendant in the sum of $354,736.34 plus interest of $135,623.39 pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
4. Judgment for the Second Plaintiff against the First Defendant in the sum of $416,274.06 plus interest of $133,731.75 pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
5. Judgment for the Second Plaintiff against the Eighth Defendant in the sum of $436,390.62 plus interest of $138,759.07 pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
6. Judgment for the Second Plaintiff against the Sixth Defendant in the sum of $43,535.92 plus interest of $13,843.11 pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
7. The Third Further Amended Commercial List Summons filed 1 June 2026 otherwise be dismissed.

Orders for Judgment – Second Further Amended Cross-Claim Cross-Summons

8. Judgment for the Third Cross-Claimant against the Second Cross-Defendant in the sum of $137,256.00 plus interest of $49,012.99.
9. The Second Further Amended Cross-Claim Cross-Summons filed 12 May 2026 otherwise be dismissed.

Costs – Third Further Amended Commercial List Summons

10. The Plaintiffs pay the costs of the Second, Fourth, Fifth, Ninth, Twelfth and Thirteenth Defendants which are referrable to the claims against those Defendants.
11. The Sixth, Seventh, Eighth and Eleventh Defendants pay the costs of the Plaintiffs which are referrable to the claims against those Defendants.
12. The First Defendant pay 80% of the costs of the Plaintiffs which are referrable to the claims against the First Defendant.
13. The Tenth Defendant pay 80% of the costs of the Plaintiffs which are referrable to the claims against the Tenth Defendant.
14. The amount of costs payable by the Plaintiffs pursuant to Order 10 is to be set off against the amount of costs payable by the First, Sixth, Seventh, Eighth, Tenth and Eleventh Defendants pursuant to Orders 11 to 13.
15. Reserve liberty to the Second, Fourth, Fifth, Ninth, Twelfth and Thirteenth Defendants to bring, in the event that the costs payable pursuant to Order 10 exceed the costs payable pursuant to Orders 11 to 13, an application that Mr Benjamin Chedid (in his own capacity and/or trading as Chedid Storey Legal) and Mr Dominic Calabretta, be liable to pay the costs payable in accordance with Order 10.
16. Security for costs in the sum of $350,000 paid into Court by the First Plaintiff be paid to the First Plaintiff forthwith.

Costs - Second Further Amended Cross-Claim Cross-Summons

17. The Second Cross-Defendant pay the costs of the Third Cross-Claimant which are referrable to the Third Cross-Claimant’s claim against the Second Cross-Defendant.
18. The First Cross-Defendant pay the costs of the Second Cross-Claimant which are referrable to the Second Cross-Claimant’s claim against the First Cross-Defendant.
19. The Cross-Claimants pay the costs of the First, Third and Fourth Cross-Defendants, which are referrable to the claims against those Cross-Defendants (with the exception of the costs that are the subject of Order 18 above).

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