Gordon v We Build Australia Pty Ltd

1. The main issue in these proceedings was whether or not the respondent constructed the work which the applicants stated was defective, or whether the first respondent/developer, who was bankrupt, had carried out the work. This was pointed out at [2] and [3] of the decision.
2. The respondent was in the main, successful in establishing that it did not carry out the work that the applicants claimed to be defective. The respondent did concede that it was responsible for certain items of work the subject of the applicants' claims.

The date proceedings were commenced and the defence

1. The applicants filed these proceedings on 15 December 2023. On 6 August 2024 when it filed its Points of Defence, the respondent put the applicants on notice that the contract with the first respondent was entered into on 19 October 2018 and was terminated on or about 5 November 2020. The respondent also stated that between the contract date and the termination date it completed part of the building works under the contract, but not the whole of the works referred to in the contract. The respondent stated that the first respondent completed the balance of any building works not completed by it after the termination date and provided particulars of the work that the first respondent carried out.
2. The hearing took place on 25 September 2024, some six weeks after the respondent had served its defence.

1. In Bostik Australia Pty Ltd v Liddiard the Court stated at [38] omitting citations:

"The principles governing the making of an order as to costs so as to reflect the time taken in dealing with a particular issue in which the successful party in the proceedings or on the appeal did not succeed were reviewed by this Court in Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373. Those principles may be summarised as follows:

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. 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

In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the 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

If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue

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 powers should be liberally construed

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

Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation."

1. I find that it is not appropriate to base this costs decision on an apportionment of costs because the way in in which the hearing was run was not divided into discrete issues such as whether or not the respondent carried out the work in question and whether or not the work alleged to be defective by the applicants was in fact defective.
2. Ther hearing was run based on the respondent's position stated at the outset that it didn't build the work the subject of the proceedings.
3. The respondent also made concessions as what work it did carry out. The findings made at [229] and [230] of the reasons indicate that the applicants' success over and above what the respondent conceded, was minimal compared to the defective work that the applicants alleged, referred to at [26] and [27] of the reasons.
4. I find that the respondent was in effect the successful party in the proceedings because it was successful in establishing that it did not carry out the majority of the defective items of work alleged by the applicants.
5. I also find that the respondent only made its position clear about this on 6 August 2024 some 6 weeks before the hearing. In addition the evidence of Mr Kizana which was relied upon by the respondent was dated 6 August 2024. Exhibits 2 and 3 were served the night before the hearing. Exhibit 4 was the annexures from an affidavit from the respondent's director. The affidavit was objected to due to its lateness and not read, because of the objection. The annexures were tendered on the morning of the hearing.
6. I find that the material which assisted the respondent's success in the proceedings was filed and served very late.
7. If there is any impression of a failure to afford procedural fairness, the Transcript indicates that the applicants were asked whether they sought an adjournment and indicated that they did not.T.18, T21, and T22.
8. Against this background of how the respondent's evidence was produced is the fact that the applicants from 6 August 2024 were on notice that the respondent's position was that it was not responsible for the defective work. The applicants bore the onus of proving the respondent carried out the work. The decision at [33] - [36] deals with this citing Hiperia Holdings Pty Limited v Sghabi; Sghabi v Hiperia Holdings Pty Limited [2024] NSWCATAP 105 which was a case with a similar factual background.
9. It may have been that had the evidence relied upon by the respondent been tendered earlier, the applicants would have done something different in the proceedings.
10. I find that given the particular facts and circumstances that relate to these proceedings as referred to above, the principle to be applied may be extracted from Bostik Australia Pty Ltd v Liddiard, namely:

"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 powers should be liberally construed."

1. In my opinion the most appropriate order in these proceeding is that each party should bear their own costs. I will make such an order in the separate proceedings.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.