Calibre Construction Group Pty Ltd v Kaloriziko Pty Ltd atf Ryde Combined Unit Trust; Kaloriziko Pty Ltd atf Ryde Combined Unit Trust v Calibre Construction Group Pty Ltd (No 4)

Legislation Cited: Civil Procedure Act 2005 (NSW)

Cases Cited: Calibre Construction Group Pty Ltd v Kaloriziko Pty Ltd atf Ryde Combined Unit Trust; Kaloriziko Pty Ltd atf Ryde Combined Unit Trust v Calibre Construction Group Pty Ltd (No 2) [2025] NSWSC 593
Calibre Construction Group Pty Ltd v Kaloriziko Pty Ltd atf Ryde Combined Unit Trust; Kaloriziko Pty Ltd atf Ryde Combined Unit Trust v Calibre Construction Group Pty Ltd (No 3) [2025] NSWSC 646
Currabubula v State Bank of New South Wales [2000] NSWSC 232
Howards Storage World Pty Ltd v Haviv Holdings Pty Ltd [2010] FCAFC 5
Rogers v Kabriel (No 2) [1999] NSWSC 474

Category: Costs

Parties: Calibre Construction Group Pty Ltd (Plaintiff/Cross-Defendant)
Kaloriziko Pty Ltd as trustee for Ryde Combined Unit Trust (First Defendant/Cross-Claimant)
Camile Chanine (Second Defendant)
Eddie Tran (Third Defendant)
Ninth Campsie Pty Ltd (Fourth Defendant)

Representation: Counsel:
M Sheldon / Y Truong (Plaintiff/Cross-Defendant)
M Ashhurst SC / S Scott (First and Second Defendants/Cross-Claimant)
Solicitors:
One Group Legal (Plaintiff/Cross-Defendant)
Fortis Law (First and Second Defendants/Cross-Claimant)

File Number(s): 2022/00195843

Publication restriction: Nil

JUDGMENT

1. On 11 June 2025, Stevenson J delivered judgment in these proceedings: Calibre Construction Group Pty Ltd v Kaloriziko Pty Ltd atf Ryde Combined Unit Trust; Kaloriziko Pty Ltd atf Ryde Combined Unit Trust v Calibre Construction Group Pty Ltd (No 2) [2025] NSWSC 593 (Judgment). These reasons assume familiarity with the Judgment.

2. His Honour made orders disposing of the proceedings on 19 June 2025: Calibre Construction Group Pty Ltd v Kaloriziko Pty Ltd atf Ryde Combined Unit Trust; Kaloriziko Pty Ltd atf Ryde Combined Unit Trust v Calibre Construction Group Pty Ltd (No 3) [2025] NSWSC 646. His Honour gave judgment for the plaintiff against the first defendant for $2,137,430.86 with interest of $568,829.14 under s 101 of the Civil Procedure Act 2005 (NSW) (CP Act) and gave judgment for the first defendant on its cross claim against the plaintiff for $6,513.64 with interest. The balance of the summons, including the plaintiff’s claim against the second defendant, and the balance of the cross claim, were dismissed.

3. His Honour’s orders did not deal with costs and were without prejudice to the plaintiff’s entitlement to apply for contractual interest, which it now seeks.

4. The parties are in dispute as to whether any costs order should be made in the second defendant’s favour and the nature of the costs order to be made against the first defendant.

5. It is necessary to draw attention to some aspects of his Honour’s reasoning which bear on the exercise of the Court’s costs discretion here.

6. The plaintiff’s case primarily concerned retention monies of some $1.6 million which, under the terms of the contract between the plaintiff and the first defendant, the first defendant was required to retain on trust for the plaintiff. The plaintiff pursued the retention monies through a breach of trust claim against the first defendant and a knowing assistance claim against its director, the second defendant. It sought an order that the first defendant pay the plaintiff the amount of the retention plus interest and alternatively claimed damages for breach of contract. The plaintiff otherwise claimed from the first defendant $270,000 for unpaid variations and $250,000 for the balance of the contract sum. The first defendant contended that a settlement between the plaintiff and the third and fourth defendants — parties said to have co-ordinate liability to the plaintiff in relation to the plaintiff’s claims for the retention monies and variations — had discharged its liability to the plaintiff. It disputed its obligation to pay variations in the sum of $689,922 and sought to recover that sum from the plaintiff in its cross claim, along with liquidated damages for delay and damages for defects.

7. Stevenson J found that the first defendant had not actually set aside a retention fund and as such no trust had been constituted: at [23]. This was consistent with the way the plaintiff pleaded its case, which was that the first defendant was obliged, but failed, to hold a cash retention on trust: at [22]-[23]. As the first defendant accepted, the result of this conclusion was that it was liable in contract to repay the retention to the plaintiff: at [31]. The plaintiff’s knowing assistance claim against the second defendant therefore failed: at [32].

8. For reasons which are not presently relevant, the first defendant’s defence of discharge of an alleged co-ordinate liability was not established: see [59]-[67]. His Honour found that the plaintiff was entitled to payment for the variations and the first defendant was not entitled to recover any amount from the plaintiff: at [114]. His Honour dismissed the first defendant’s claim for liquidated damages: at [161]. The parties agreed that the first defendant was entitled to $6,513.64 for defects; a claim by the first defendant for an additional amount for defects was not pressed: at [165]-[166].

Appropriate costs orders

9. On 30 September 2024 the plaintiff sent an offer of compromise to both defendants, in which it offered to settle the proceedings for $2,100,000.00 including interest. It was not accepted. Relying on that offer, the plaintiff seeks an order that the first defendant pay its costs of the proceedings on the ordinary basis until the date of the offer of compromise and on an indemnity basis thereafter.

10. The defendants submit that the first defendant should pay half of the plaintiff’s costs, and the plaintiff should pay half of the second defendant’s costs. This is said to follow from the application of a “rule of thumb” approach to the apportionment of costs where a plaintiff succeeds against one jointly represented defendant but not another: see Rogers v Kabriel (No 2) [1999] NSWSC 474 at [14] (Young J, as his Honour then was); Currabubula v State Bank of New South Wales [2000] NSWSC 232 at [89]ff (Einstein J).

11. The plaintiff seeks that there be no order for costs as between it and the second defendant, on the basis that, although its claim against the second defendant failed, it only sued the second defendant because the first defendant’s assets had been dissipated. Counsel for the plaintiff submitted that the plaintiff will be unlikely to recover any costs from the first defendant, and so if it is ordered to pay any of the second defendant’s costs, the plaintiff will be the only party actually paying any costs.

12. While the plaintiff is entitled to a costs order against the first defendant, I do not accept that the costs order should be on a special basis. As the defendants submit, the plaintiff’s offer was made to both defendants and was only capable acceptance by both parties. Having regard to the other claims against the first defendant, non-acceptance of the offer does not entitle the plaintiff to a special costs order against the first defendant.

13. The form of the appropriate costs order against the first defendant (and in relation to the second defendant) is not dictated by a particular “rule of thumb” relied on by senior counsel for the defendants. That “rule” may be a “convenient guide” to the exercise of the Court’s discretion in “ordinary and straightforward cases”, but this is not such a case: see Howards Storage World Pty Ltd v Haviv Holdings Pty Ltd [2010] FCAFC 5 at [70] (Edmonds J, with whom Lindgren J agreed). The “rule” takes as its premise that the defendants are proportionately responsible and liable for the joint costs involved in defending the proceedings. That is not self-evident here and is contraindicated by the contractual claims and defences raised between the plaintiff and first defendant only, in relation to which the plaintiff was largely successful.

14. Further, the second defendant’s involvement in the proceeding could have been curtailed earlier, had the defendants admitted, before the first day of trial, that no cash retention had been held.

15. Therefore, it is appropriate for the first defendant to pay the plaintiff’s costs of the proceedings on the ordinary basis and for there to be no order for costs as between the plaintiff and the second defendant.

Plaintiff’s claim for contractual pre-judgment interest

16. The plaintiff seeks to apply the “interest rate on overdue payments” of 7% specified in clause 37.5 of its contract with the first defendant, rather than the rate of pre-judgment interest applicable under s 100 CP Act, which is said to result in additional interest of $43,987.92.

17. The fundamental impediment to the plaintiff’s claim for contractual interest is that it was not properly pleaded. The further amended summons sought pre-judgment interest pursuant to s 100 CP Act. The plaintiff’s further amended list statement pleaded an entitlement to contractual interest, in general terms, in relation to the variations and the balance of the contract sum, but there was no pleaded claim for contractual interest in relation to the retention, the matter of most significance in terms of the value of the plaintiff’s claim for contractual interest. There was no pleading which referred to the terms of clause 37.5 and set out the basis on which the entitlement to interest under that clause was said to be engaged and how that interest was to be calculated.

18. In those circumstances, the plaintiff is not entitled to contractual interest. The order for interest on the plaintiff’s judgment made by Stevenson J on 19 June 2025 should stand.

Orders

19. For the reasons identified above, the appropriate orders are:

20. First defendant to pay the plaintiff’s costs of the proceedings as agreed or assessed; and

21. No order as to costs as between the plaintiff and the second defendant.

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