Mashat v Build Property Pty Ltd

(a) damages for the cost to rectify defective work or in the alternative, a work order for the removal of the frames and trusses and their re instillation; and

(b) delay damages for increased construction costs to complete the project and lost rent.

1. BP, as the applicant in matter 2024/00118004 (the BP Proceedings):

(a) claimed that it was owed money by Mr Mashat for work performed either pursuant to the BP Contract or on a quantum meruit basis; and

(b) sought to be indemnified by SPD in respect of any relief ordered against it in the Mashat Proceedings.

1. In my 2 October decision I directed the parties to confer as to the form of a work order and provide either the form of an agreed order or submissions in support of the work order proposed by each party and made directions for the making of any application for costs and the provision of written submissions in respect of costs.
2. In my 11 November decision I made a work order in a form proposed by Mr Mashat and not opposed by BP or SPD and otherwise dismissed applications.
3. I have received submissions in respect of costs from Mr Mashat, BP and SPD and reply submissions from Mr Mashat.
4. Mr Mashat submits that BP and SPD should be ordered to pay his costs of the Mashat proceedings and that BP should be ordered to pay his costs of the BP proceedings.
5. BP submits that either Mr Mashat or SPD on its own or with Mr Mashat should be ordered to pay its costs of the Mashat Proceedings, and that each party should pay its own costs of the BP proceedings.
6. SPD submits that in both the Mashat Proceedings and the BP Proceedings, each party be ordered to pay its own costs.

WHETHER TO DISPENSE WITH A HEARING IN RESPECT OF COSTS

1. Section 50 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) sets out the circumstances in which the Tribunal can dispense with a hearing and proceed to determine a matter, including a costs application, having regard to submissions filed with the Tribunal.
2. In his primary submissions in respect of costs Mr Mashat submitted that because different permutations may arise by the three parties each seeking different costs orders on alternative grounds, it is more appropriate that the question of costs be listed for oral hearing on the basis that an oral hearing is more likely to result in a more efficient, expedient, cost effective and procedurally fair manner of determining the appropriate costs order.
3. Neither BP nor SPD sought that the question of costs be the subject of a further hearing or objected to the question of cost being determined on the papers.
4. Mr Mashat did not maintain his application for a further hearing in respect of costs in his reply submissions.
5. I am satisfied that the parties have been afforded an opportunity to make submissions on whether a hearing on the question of costs should be dispensed with and whether the question of costs can be determined on the papers.
6. Mindful that Mr Mashat was able to make reply submissions, having considered the parties' costs submissions, I am satisfied that the question of costs can be adequately determined in the absence of the parties by considering the written submissions, and pursuant to s 50 of the NCAT Act, I exercise my discretion to determine the question of costs on the papers.

Section 60 NCAT Act and Rule 38 Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules)

1. Section 60 of the NCAT Act provides that each party to proceedings in the Tribunal is to pay its own costs, but that the Tribunal may award costs in relation to proceedings if special circumstances warrant an award of costs, and that if costs are to be awarded, the Tribunal may determine by whom and to what extent costs are to be paid.
2. Rule 38 of the NCAT Rules provides that in respect of proceedings in the Consumer and Commercial Division of the Tribunal, despite s 60 of the NCAT Act, the Tribunal may award costs in the absence of special circumstances, if the amount claimed or in dispute in the proceedings is more than $30,000.00.
3. The effect of the above provisions is that, unless Rule 38 applies or there are special circumstances, each party should pay their own costs, but if Rule 38 applies, the Tribunal can award costs in the absence of special circumstances.
4. There is no dispute that the amount in dispute in the Mashat Proceedings was more than $30,000.00 and therefore that that 38(2)(b) applies and that the Tribunal has a general discretion in respect of the awarding of costs.
5. SPD submitted that it was questionable whether the amount "in dispute" in the BP Proceedings was more than $30,000.00. BP made a submission that the total amount claimed was $29,503.76 but did not submit that special circumstances were required before a costs order could be made. Mr Mashat submitted that the amount claimed by BP was $39,503.76 and that r 38 therefore applies.
6. Mindful that BP's application and Amended Points of Claim both claimed an amount of $39,503.76, I am satisfied that the amount in dispute in the BP Proceedings was more than $30,000.00 and that special circumstances are therefore not required and the Tribunal has a general discretion in respect of the awarding of costs.

1. In Thompson v Chapman [2016] NSWCATAP 6, the Appeal Panel, with regard to what the High Court said in Latoudis v Casey [1990] HCA 59; [1990] 170 CLR 534 and Oshlack v Richmond River Shire Council [1998] HCA 11, 193 CLR 72 said in relation to the exercise of the discretion to award costs where r 38 applied:

67 Rather, in circumstances where there is a general discretion to award costs, the correct statement of principle is that the Tribunal in exercising its discretion is to have regard to the nature of the proceedings before it and all relevant factors arising in connection with those proceedings for the purpose of determining what order for costs, if any, should be made.

68 Each of Regulation 20 of the CTTT Regulation and Rule 38 provide a general discretion in respect to the award of costs.

69 The starting point in exercising such discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour: see Latoudis v Casey [1990] HCA 59; [1990] 170 CLR 534 per Mason CJ at 554 and Oshlack v Richmond River Council per McHugh J at 97.

70 The reason for such an order is that it is appropriate for the party who incurred costs caused by the other party in litigation to be reimbursed. Further, an award of costs is by way of an indemnity to the successful party and not as punishment of the unsuccessful party: see Latoudis v Casey per Mason CJ at 543 and McHugh J at 567 and in Oshlack v Richmond River Council per Brennan CJ at 75.

71 Where there is a general discretion for costs there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party: see Oshlack v Richmond River Council per Gaudron and Gummow JJ at 88 and Kirby J at 121 - 123.

72 The factors to be considered in awarding costs in a particular case are not to be confined as to do so would constrain the general discretion. However, it is clear from the authorities that factors that might influence whether the usual order for costs should apply and, if so, to what extent include:

(1) Whether, by reason of the relative success of the parties on different issues and the time taken to determine those that an order for costs based on issues should be made: see for example Bostick Australia Pty Ltd v Liddiard (No 2) [2009] NSWSCA 304; and

(2) Whether, by reason of the nature of the proceedings the usual rule should otherwise be displaced in whole or in part: see Oshlack v Richmond River Council per Gaudron and Gummow JJ at 41 - 44.

...

76 In short, the proper exercise of the discretion requires the Tribunal to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary or capricious: ...

1. In Vella v Mir (No 3) [2020] NSWCATAP 17 the Appeal Panel said in respect of the principles relating to costs orders:

28. Clause 38 gives the Tribunal a wide discretion to make an order for costs. It does not specify the factors the Tribunal must take into account in exercising the discretion, although the discretion to make such an order must be exercised judicially: ...

29. Where an application has been heard and determined on the merits and Clause 38 applies, the appropriate starting point for the exercise of the discretion is ... that the purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, this means that a party who is successful is entitled to an order for costs in its favour, subject to exceptions generally involving misconduct on the part of that party...

30. In BNT Constructions Pty Ltd v Allen ... the Appeal Panel noted the following principles relevant to the exercise of the discretion:

(1) the starting point is that a successful party should be entitled to an order for costs in his favour;

(2) an award of costs is by way of an indemnity and not as punishment;

(3) there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party;

(4) the factors to be considered are not to be confined as to do so would constrain the general discretion;

(5) the relative success of the parties on different issues and the time taken to determine them may be relevant;

(6) the nature of the proceedings is relevant;

(7) the proper exercise of the discretion requires a decision maker to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary and capricious.

31. Generally, costs are awarded in favour of the successful party based on the outcome of the proceedings as a whole, without differentiating between particular issues on which the party may not have been successful. That said, a different costs order may be made if the losing party succeeds on significant issues: .... The dollar amount of a particular claim does not determine its dominance in the proceedings. Rather, regard must be had to all of the work involved in prosecuting and defending the parties' various claims, including but not limited to the time taken up at the hearing.

32. In Equity Tomanovic v Global Mortgage Corporation Pty Ltd (No 2) [2011] NSWCA 256; (2011) 288 ALR 385, Campbell JA (with Macfarlan JA and Young JA agreeing) held at [107] that an issue or group of issues is "clearly dominant" when it is clearly dominant in the proceedings as a whole. ....

33. In relation to separable issues, a successful party's entitlement to the whole of the costs of the proceedings should not be discounted to allow for another party's success in a separate issue that played a very minor part in the proceedings as a whole... Further, in Hawkesbury District Health Service Ltd v Chaker (No 2) [2011] NSWCA 30 at [14], the Court of Appeal held that the severability of one issue on which the successful party failed is not, without more, sufficient to warrant departure from the general approach. The exercise of discretion will often depend upon matters of impression and evaluation: ....

1. In Dimitropoulos v Capitol Constructions Pty Ltd; Capitol Constructions Pty Ltd v Dimitropoulos (No2) [2018] NSWCATAP 148 (8 June 2018), the Appeal Panel summarised the principles derived from the Court of Appeals consideration of the making of a costs order to reflect time taken in dealing with a particular issue in which an otherwise successful party failed:

24.In Bostick Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 the Court of Appeal noted at [38] that 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 in Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373. We paraphrase the Court of Appeal's summary of the relevant principles as follows.

25.First, where there are multiple issues in a case, the Court (here the Tribunal) 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: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).

26.Secondly, 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: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27].

27.Thirdly, 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: State of New South Wales v Stanley [2007] NSWCA 330 at [18].

28.Fourthly, 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: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34].

29.Fifthly, 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: James v Surf Road Nominees Pty Ltd (No 2) at [38], citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261 at 272.

1. Where there has been a measure of success on both sides it may also be open to the Tribunal to make no order as to costs (with the intent that each party pay its own cost): Johnson t/as One Tree Constructions v Lukeman [2017] NSWCATAP 45 at [25]- [29] which has been cited with approval in several Appeal panel decisions, most recently in Baluri v The Owners Strata Plan No 11258 (No 2) [2025] NSWCATAP 284; (7 November 2025).
2. In Nadilo v Eagleton [2021] NSWCA 232, Brereton JA with whom Meagher JA agreed, said at [6]:

The power to award costs is an important aspect of rendering justice between litigants and underlying the general rule that costs follow the event, and the qualifications to it, is the idea that costs should be borne in a way that is fair, having regard to the responsibility of each party for the incurring by the other of the costs.

1. In Chandrasekaran v Western Sydney Local Health District (t/as Westmead Hospital) (No 2) [2024] NSWCA 21, the Court of Appeal more recently said at [11] - [12] (references to authorities omitted):

Costs are in the broad discretion of the Court with the general rule being that they should follow the "event": .... Generally, the "event" refers to the event of the claim and may be understood as referring to the practical result of a particular claim: ....

Underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of costs: ...

1. Mr Mashat also refers to the approach identified by Ward CJ in Eq (as her Honour then was), in Galati v Deans (No 3) [2018] NSWSC 1861 at [19] to identifying the successful party. That being to ask whether the plaintiff has won anything of value which they could not have won without fighting the action through to a finish.

1. Mr Mashat in summary, submits the following.
2. His claim primarily concerned a claim that BP and SPD breached their contracts (including by breaching the implied warranties) with Mr Mashat, in which, subject to liability being established, he sought damages and / or a work order.
3. SPD denied that the works were defective as claimed by Mr Mashat.
4. BP denied liability primarily because it claimed that it was not a party to the SPD Contract and did not recommend SPD to Mr Mashat.
5. That as against SPD and BP Mr Mashat was successful on the primary issues for determination because the Tribunal:

(a) Found BP and SPD breached the implied warranties, that BP was a party to the SPD Contract, and that BP is liable for SPD's work because that was work contemplated by the BP Contract to which the implied warranties apply;

(b) The Tribunal accepted the evidence of Mr Mashat's expert, Mr Prasad, as to the extent of defective work and therefore the breach of the implied warranties and Mr Prasad's evidence as to the scope of the rectification work and its cost;

(c) Although a work order was not made against BP, that was because of its entitlement to an order that SPD remedy the breaches;

1. Although he was unsuccessful in his delay damages claim, that claim was not a distinct and severable event, and because of the works order, he nevertheless obtained a substantial victory, being the work order, and under the work order, has leave to have the proceedings renewed in the event SPD does not comply with the work order.

1. BP submits that because the Tribunal found that a work order should be made against SPD, the delay damages and damages in lieu of a work order claims were unsuccessful and no order was made against it, that it was successful, and that either Mr Mashat or SPD on its own or with Mr Mahat should be liable for BP's costs.

1. SPD in summary submits the following.
2. It never denied the work was defective, contended that a work order was the only possible outcome and maintained that it was ready, willing, and able to remedy the defective work.
3. Ultimately:

(a) the only order made was a work order for it to remove and replace the building's frames and trusses;

(b) Mr Mashat was unsuccessful in his delay damages or damages for defective work claims; and

(c) Those claims were "distinct and discreet" and took up similar hearing time and in respect of submissions.

1. That the appropriate costs order is that each party pay its own costs in both matters.

1. In reply, Mr Mashat submits the following.
2. SPD had had ample opportunity to remedy the defective work, but had not done so, and to the extent it was prepared to perform rectification work it was not to perform the rectification work ultimately ordered by the Tribunal, and that in circumstances where the Tribunal accepted Mr Mashat's expert as to the scope of the rectification work and its cost, there should be no discount on the basis that SPD was partly successful.
3. The defects claim and the delay damages claims were not separate and distinct, and that the defects claim took up significantly more time at the hearing and in respect of submissions.

1. Mindful that the parties' submissions referred to my findings in respect of the various issues to be considered, the dispute in summary concerned:
   • Contractual issues between Mr Mashat and BP in respect of the BP Contract;
   • Whether BP was a party to the SPD Contract;
   • The extent of the defective frames and trusses and whether they could be repaired in situ, or required removal and re instillation;
   • The extent of the defective work and the scope of rectification work, and then whether a money order or work order ought to be made;
   • Mr Mashat's delay damages claim; and
   • BP's claim against Mr Mashat for payment for work performed and SPD for BP to be indemnified in respect of ay orders made against it.
2. Having regard to the "Joint Summary of Issues for Determination" provided by the parties, I made the following findings or determinations.
3. In respect of issue 2, I found that the implied applied to the BP Contract and therefore to the work contemplated or required by the BP Contract regardless of whether that work was performed by BP or another person engaged by BP to do the work, but was not satisfied that the BP contract otherwise included the terms contended for by Mr Mashat.
4. Because of my findings in respect of issue 2, issue 3 as to whether terms claimed my Mr Mashat to form part of the BP contract had been breached, did not require determination.
5. In respect of Issue 1, I found that BP was a party to the SPD collectively with Mr Mashat as the "Client" or principal and that the work contemplated by the SPD Contract was part of the work contemplated by the BP Contract, being in respect of "the construction of a New Double Storey dwelling with granny flat" including "4. Frame and LVL" and would therefore be covered by the implied warranties that applied to the BP Contract.
6. In respect of Issue 4, I found that rectification required, as contended for by Mr Mashat, was the removal and replacement of the frames and trusses, and that the cost of that work would be $283,708.00.
7. In respect of issues 5 and 6, I found that the SPD Contract remained on foot and that it was not open for Mr Mashat to claim damages for defective work and even if it were, a work order should be made, and that the work order should be made against SPD.
8. In respect of Issue 7, I rejected the delay damages claim for increased costs and lost rent.
9. In respect of issues 8 and 9 that related to BP's cross claim, I found that because I had determined to make a work order against SPD only and the delay damages claim against BP had not been made out, it not fall to be determined, and rejected BP's claim against Mr Mashat for payment for work performed.
10. As between Mr Mashat and SPD, the starting position is that Mr Mashat was successful in obtaining a work order against SPD.
11. I cannot see how the consideration of whether to make a money order or a work order is so separable or dominant that there ought to be any discounting for the fact that a work order may be preferred.
12. Here however there was an issue as to whether Mr Mashat was entitled to damages for defective work at all because as contended for by SPD, the relevant contract was still on foot.
13. Because the issue concerned whether Mr Mashat was entitled to damages for defective work at all, in my view, it was clearly separable and could not be described as minor.
14. Although consideration of the defective work claim and whether Mr Mashat was entitled to damages both required the parties to traverse the contractual history, whether Mr Mashat was entitled to damages at all was nevertheless separate and caused additional costs to be incurred, which in my view justifies making a special costs order discounting the costs to which Mr Mashat is otherwise entitled to.
15. In respect of the delay damages claim, again, although there was some commonality of evidence between the defects claim and the delay damages, in my view, the delay damages claim was separable and in circumstances where it involved a claim of in the order of $280,000.00 and caused additional costs to be incurred, it is appropriate to further discount the costs to which Mr Mashat is entitled to.
16. Considering my impression of those issues in the context of the claim and the proceedings as a whole and adopting an evaluative approach, and also taking into account that for the reasons set out below, as between Mr Mashat and BP I will make no order as to costs, I find that a special cost order ought to be made to discount the costs payable to Mr Mashat by SPD, to sixty percent (60%).
17. In so far as the question of costs between Mr Mashat and SPD is concerned, although it is correct, as submitted by BP, that a work order was made against SPD and not BP and the damages claims (for defective work and delay) were not made out, as submitted by Mr Mashat, I also found that that BP was a party to the SPD Contract, all be it as a "Client" or principle with Mr Mashat, and that, although not satisfied that the express or implied terms contended for by Mr Mashat were terms of the BP Contract, the warranties implied into the BP Contract applied to the work contemplated or required by the BP Contract which included SPD's work, and that BP would be liable for the work performed by SPD as being part of the work contemplated by the BP Contract. That is something of value that Mr Mashat has won which he could not have won without fighting the action through to a finish.
18. In my view, consideration of: the terms of the BP Contract; whether BP was a party to the SPD Contract; whether the warranties implied by the HB Act in respect of the BP Contract would cover the work performed by SPD; whether Mr Mashat was entitled to damages for defective work and delay damages against BP, concerned issues that were each severable and incurred additional time and cost being incurred.
19. Considering that no orders were ultimately made against BP, that Mr Mashat was unsuccessful in obtaining an order for damages for defective work or delay damages claim against BP or that the contended for implied or express terms, save for the implied warranties, formed part of the BP Contract, but achieved success in that a finding was made that warranties implied by the HB Act applied to the BP Contract and include the work performed by SPD and that BP was a party to the SPD Contract, in my view, again taking an impressionistic and evaluative approach, the appropriate order as between BP and Mr Mashat in respect of the costs of the Mashat proceedings, is that there was such a mixed success, that the appropriate course is to make no order as to costs with the intent that as between Mr Mashat and BP, each party is to pay its own costs.
20. BP alternatively submits that its costs ought to be paid by SPD as the person responsible for the defective work and the proceedings being brought, either on its own or with Mr Mashat.
21. Such an order may open under s 60 of the NCAT Act, and subject to my consideration of each parties responsibility for the incurrence of cost, would be available mindful of the statement in Chandrasekaran v Western Sydney Local Health District (t/as Westmead Hospital) (No 2) [2024] NSWCA 21, that "underlying both the general rule that costs follow the event, and qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of costs".
22. BP submits that this order is appropriate because SPD was responsible for the defective work.
23. BP does not however point to any conduct on the part of SPD (save for the fact that it was the person responsible for the defective work) that required that BP be joined or otherwise that would make it appropriate to make the order. In my view the fact alone that SPD was responsible for the defective work is not sufficient to justify an order that it pay BP's costs of the Mashat claim.
24. For that reason and because I have determined not to make any order as to costs between Mr Mashat and BP rather than an order to the effect that BP is entitled to its costs, I am not satisfied that SPD should be ordered to pay BP's costs of the Mashat Proceedings.

1. As between BP and SPD, both BP and SPD submit for an order to the effect that each party pay its own costs.
2. I see no reason to depart from that proposed position.
3. As between Mr Mashat and SPD, Mr Mashat submits that BP has been unsuccessful in respect of its claim against Mr Mashat for $39,503.76 with the entire claim being dismissed, and that costs should follow that event with Mr Mashat being awarded his costs.
4. BP submits that because it only brought its cross claim after being "dragged into the proceedings", that the hearing time taken up by its cross claim against Mr Mashat was "de minimus", and that the evidence although not satisfying the Tribunal as to the value of work clearly established that work was performed, that the appropriate order is that each party to pay its own costs.
5. In circumstances where the cross claim was dismissed and I have not been taken to any disentitling conduct on the part of Mr Mashat or clearly separable issue in respect of which BP was successful in the BP Proceedings, in my view there is no reason that the costs of the cross claim should not follow the event of the cross claim against Mr Mashat being dismissed, and BP ordered to pay Mr Mashat's costs.
6. I will therefore order that in respect of the BP Proceedings, that BP pay Mr Mashat's costs.

1. For the forgoing reasons, the Tribunal make the following orders:

(1) The Tribunal dispenses with a hearing on the question of costs, pursuant to s 50(2) of the NCAT Act.

(2) In matter 2023/00366618, the second respondent is to pay sixty percent (60%) of the applicants costs as agreed or assessed on the ordinary basis.

(3) In matter 2024/00118004, the applicant is to pay the first respondents costs as agreed or assessed on the ordinary basis.

(4) I otherwise make no order as to costs.

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.