Sader v Renbar Constructions Pty Ltd [No 2] [2025] NSWCATCD 197;

Croghan v Blacktown CC [2019] NSWCA 248

Elite Protective Personnel PL v Salmon [2007] NSWCA 322

Hanave PL v Wine Nomad PL [2022] NSWCATAP 361, [2023] NSWSC 265

Hazeldene's Chicken Farm PL v Victorian Workcover Authority (No 2) (2005) 13 VR 435, [2005] VSCA 298

Jayasooriah v Wisdom Properties Group PL [2020] NSWCATAP 81

Johnson t/as One Tree Constructions v Lukeman [2017] NSWCATAP 45

Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534

Minifie v Maxwell [2020] NSWCATAP 175

Miwa PL v Siantan Properties PL [No 2] [2011] NSWCA 344

Oppidan Homes PL v Yang [2017] NSWCATAP 67

Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72

Owners SP 63341 v Malachite Holdings PL [2018] NSWCATAP 256

Redmyre Group PL v Stockman [No 2] [2023] NSWCATAP 342

Shoal Bay Developments Pty Ltd v Community Association DP 270468 [2020] NSWCATAP 115

Thompson v Chapman [2016] NSWCATAP 6

Vella v Mir [No 3] [2020] NSWCATAP 17

Whitehouse v Paradise Pools & Solar Pty Ltd [2022] NSWCATCD 161

Wilkinson Building and Construction Lawyers (applicants)

1. The applicants, Dr and Mrs Sader, own land in Connells Point, a suburb in southern Sydney, NSW. By written cost-plus contract dated 1 July 2014 (with an initial contract sum of $1.65million) signed by Dr Sader as the named owner party they engaged the respondent builder to demolish the existing dwelling and construct a new house. A final occupation certificate was issued on 23 January 2018, with handover on 14 April 2018.
2. In these proceedings filed 18 January 2024 the owners claimed against the builder a money order for $222,315.46 for alleged breach of statutory warranties under s 18B of the Home Building Act 1989 (NSW) (HBA) and alleged breaches of the builder's duty of care under s 37 of the Design and Building Practitioners Act 2020 (NSW) (DBPA).
3. On 19 February 2024 leave for legal representation was granted to both parties and procedural directions were made to prepare the matter for final hearing.
4. The primary issue between the parties was whether the owners were precluded from bringing the present proceedings. In that respect, there had been previous proceedings, in the Supreme Court Technology and Construction List between the same parties, with the builder's claim (for alleged unpaid works invoices) filed on 22 November 2019 and the owners' claim (for alleged defective work) filed on 20 December 2019. A final hearing took place between 14 and 18 February 2022 which resulted in written reasons delivered on 25 February 2022 and orders finalised on 27 March 2022 after further argument on 25 March 2022: Renbar Constructions PL v/ats Sader [2022] NSWSC 172 (the earlier proceedings). The owners' expert had provided reports in those proceedings dated 9 December 2019, with an inspection on 14 October 2019, and 21 January 2022. The builder's expert provided a report dated 7 December 2020, with an inspection on 23 November 2020.
5. I found that the owners were so precluded. In the event that I was later found to be wrong on my conclusions concerning the owners' preclusion from litigating all or some of the matters the subject of the current proceedings, I made findings on the merits of the owners' claims in the current proceedings. I found that the owners would succeed on the merits only in respect of the first of the three claims in the current proceedings, being in respect of the roof membrane, and that the builder had not established a failure to mitigate by the owners in not inviting the builder to return to remediate the further items and in engaging other contractors.
6. I understand that my substantive decision is the subject of an appeal to be heard on 8 December 2025.
7. On 10 June 2025 I made the following orders with delivery of my substantive reasons:

1. Application dismissed.

2. Order as follows in respect of costs:

2.1 Any application in respect of costs with supporting evidence (beyond existing evidence) and written submissions to be filed and served on or before 24 June 2025.

2.2 Any evidence and written submissions in response to be filed and served on or before 8 July 2025.

1. On 14 October 2025 the Tribunal's Sydney Registry issued the following communication under my name:

On 10 June 2025 I made provision for a costs application by any party, with a timetable. That timetable was extended at the builder's request. There was no stay on such orders by the Appeal Panel, where I understand that an appeal against my orders of 10 June 2025 will be heard later this year.

I am informed by the Registry that no costs application has been made by either party. On 8 July 2025 in the absence of such an application by the builder the owners have sought that each party pay its or their own costs of the proceedings.

In the circumstances, what the owners seek is effectively the current position because there is no order as to the costs of the primary proceedings, the timetable for any costs application has expired and (apart from that timetable) the primary proceedings had ended with the making of final orders on 10 June 2025.

Accordingly, no further order is necessary to finalise the primary proceedings.

1. On 5 November 2025, after a slight delay in the Registry before it was issued, the Sydney Registry issued a further communication under my name which explains the background to the present issue and decision:

SM Burton SC was not supplied, apparently through Registry error, the builder's costs application and submissions that were filed on 17 July 2025 within the extended time. The content of the costs communication issued on 14 October 2025 (dated properly at the end but erroneously by Registry at the start of the communication 12 June 2025) bears that out.

The parties are invited on or before 13 November 2025 to email to Sydney Registry a short note as to whether the Tribunal as part of primary jurisdiction can consider the question of the costs of the primary proceedings: see, eg, Jayasooriah v Wisdom Properties Group PL [2020] NSWCATAP 81 at [36]- [40] and authority there cited. Any note from the owners should also include submissions and any further documents relevant to costs in response to the builder's costs submission filed 17 July 2025 (attached) for potential consideration.

1. The owners' note emailed by their solicitors on 13 November 2025 read as follows:

"Dear Registrar,

We act for the Applicants in the abovementioned proceedings.

We refer to the Tribunals purported Orders of 5 November 2025, concerning the Tribunals jurisdiction to reopen the matter after it's final orders concerning the substantive proceedings, dated 16 August 2024, and costs dated 14 October 2025 have been made and published.

It is the Applicants submission that the Tribunal, is Functus Officio, and it does not have jurisdiction after 14 October 2025, to re-open the proceedings and or make a further decision in relation to its own decision, after the decision has been published.

The substantive orders and costs order made by the Tribunal are final and binding and the Respondent's have had other options available to them, if they were not satisfied with the orders made by the Tribunal.

Further, the costs application is not ancillary to any remaining issue before the Tribunal and therefore falls outside the scope of the Tribunal's continuing jurisdiction.

Further and alternatively, to re-open the matter would go against section 36 of the Civil and Administrative Tribunal Act 2013 (NSW), which is the guiding principle to facilitate the quick, just and cheap resolution of the real issues in the proceedings, which have been concluded.

We further note that the matter is before the NCAT Appeal Panel, and that appeal is listed for a hearing on 8 December 2025.

Should you have any further queries, please do not hesitate to contact me by reply email.

This email has been copied to the solicitors for the Respondents."

1. I granted the builder's application for a short extension for its note to 18 November 2025 and extended time for the owners to file and serve any submission on costs in the event that I found that I had jurisdiction to determine costs. The owners have not taken up that extended invitation.
2. After setting out the chronology, the relevant nub of the builder's note was as follows (footnote authority references omitted):

(a) First, the only substantive Order made in the proceedings was an Order dismissing the Owners' claim on 12 June 2025;

(b) Second, a dismissal alone does not prevent the Tribunal from making a decision in respect to costs;

(c) Third, no costs order of any kind has been made by the Tribunal. The Tribunal can only be functus officio as regards the subject matter of an Order (in this case a costs order) that has been made; and

(d) Fourth, as Orders have not been made that completely determine all issues

(including the question of costs), the Tribunal is not functus officio.

1. The builder's contention addressed that nothing in ss 55, 60 and 61 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) ended the Tribunal's jurisdiction in respect of costs when the decision, being the substantive order to dismiss the application, was made, and that those provisions were consistent with such continuance of costs jurisdiction being empowered by s 60. I accept that contention which was supported by cited authority: Shoal Bay Developments Pty Ltd v Community Association DP 270468 [2020] NSWCATAP 115 at [55], [57], [61]; Whitehouse v Paradise Pools & Solar Pty Ltd [2022] NSWCATCD 161 at [53(2)]. Indeed, I did not understand the owners to contend otherwise.
2. The builder's note emphasised that "No costs order was made on 12 June 2025 or at any time thereafter", which was the essence of the difference between the parties' contentions. The builder contended that the difference from Jayasooriah v Wisdom Properties Group PL [2020] NSWCATAP 81 at [37], [38] and Minifie v Maxwell [2020] NSWCATAP 175 at [26] was that those cases found that the Tribunal had no jurisdiction to re-visit an existing order except under s 63 of the NCAT Act and other powers that operated on orders (such as the set-aside power in Sch 4 para 8 to the NCAT Act), including a power of application to vary within an existing order. Here no costs order had at any point been made.
3. I accept the builder's contention as a correct analysis. I accordingly proceed to exercise jurisdiction to determine costs.
4. In the event that I am wrong on jurisdiction, it would appear that any costs order and the reasons for it that is to be found in my communication of 14 October 2025 could be the subject of an appeal on the basis, among others, of an (inadvertent) absence of consideration of relevant matters or inadequate reasons (not addressing the builder's costs submission dated 17 July 2025 and not addressing that content) or, possibly but more controversially, an application of s 63 of the NCAT Act (although there could be argued to be no "obvious" error in the text of the 14 October communication given what was known to me when it was written). This prospect reinforces the utility of addressing on the merits the costs application of the builder.

Builder's costs application - governing principles

1. Section 60 of the NCAT Act provides as follows:

Costs

(1) Each party to proceedings in the Tribunal is to pay the party's own costs.

(2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.

(3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following -

(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,

(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,

(d) the nature and complexity of the proceedings,

(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,

(f) whether a party has refused or failed to comply with the duty imposed by section 36(3),

(g) any other matter that the Tribunal considers relevant.

(4) If costs are to be awarded by the Tribunal, the Tribunal may -

(a) determine by whom and to what extent costs are to be paid, and

(b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis.

(5) In this section -

costs includes -

(a) the costs of, or incidental to, proceedings in the Tribunal, and

(b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.

1. In Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [37]- [38], the Appeal Panel found that "'[P]roceedings'" refers to the process set in motion, or commenced, by lodging an application or notice of appeal. That process includes the steps taken by the Tribunal to hear and determine whether to grant the relief sought in the application or notice of appeal, as well as any interlocutory or ancillary steps. Proceedings are defined by the subject matter raised in the application or notice of appeal. The participants in proceedings are limited to the parties determined in accordance with [s 44 of the NCAT Act and the Rules]".
2. In Owners SP 63341 v Malachite Holdings PL [2018] NSWCATAP 256 at [3]- [5] the Appeal Panel summarised the operation of r 38 as follows, from the detailed discussion at [86]-[111]:

"[3] Rule 38(2)(b) applies to the following proceedings:

(1) Where the relief claimed in the proceedings is for an order to pay a specific amount of money, or an order to be relieved from an obligation to pay a specific amount of money, and that amount is more than $30,000;

(2) Where an order is sought in the proceedings for the performance of an obligation (such as to do work), and the Tribunal has power make an order to pay a specific amount of money, even if not asked for by the claimant, provided that

(a) there is credible evidence relating to the amount the Tribunal could award; and

(b) that evidence, if accepted, would establish an entitlement to an order for an amount more than $30,000.

[4] Rule 38(2)(b) may also apply to proceedings where the orders sought in the proceedings depend upon the claimant proving there is a debt owed in order to establish an entitlement to the relief sought, and that amount is in dispute and is more than $30,000.

[5] Rule 38(2)(b) does not apply to proceedings:

(1) Where a claim for relief in the proceedings (not being a claim for an order to be paid or be relieved from paying a specific sum) may, as a consequence of that relief being granted, result in the loss of any property or other civil right to a value of more than $30,000; or

(2) Where there is a matter at issue amounting to or of a value of more than $30,000 but:

(a) no direct relief is sought and no order could be made in the proceedings requiring payment or relief from payment of an amount more than $30,000; or

(b) the relief sought does not depend on there being a finding that a specific amount of money is owed."

1. In Hanave PL v Wine Nomad PL [2022] NSWCATAP 361 at [40]- [42] the Appeal Panel expounded aspects of the above summary which were not the subject of findings in the partly-successful appeal to the Supreme Court on aspects of the substantive decision [2023] NSWSC 265:

"[40] As made clear in Malachite at [75] and following, r 38 is not concerned with the value of rights that might be in issue or any change in wealth. Unlike s 101(2)(r) of the Supreme Court Act 1970 (NSW), r 38 does not require consideration of whether the proceedings:

(1) involve a matter at issue amounting to or of a value of $30,000 or more, or

(2) involve (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $30,000 or more.

[41] Rather, r 38(2)(b) applies where "the amount claimed or in dispute in the proceedings is more than $30,000".

[42] The questions to be determined are what is the amount "claimed", what is the amount "in dispute" and what are "the proceedings" in circumstances where there are two applications, the second in the nature of a cross-application ("cross application").".

1. Here it is clear that the threshold amount was exceeded on the test as explained in Allen, Malachite and Hanave. The cost or value of the works the subject of the owners' claims clearly exceeded $30,000: Kaye v Owners SP 4350 [2022] NSWSC 1386 at [79]; Redmyre Group PL v Stockman [No 2] [2023] NSWCATAP 342 at [25].
2. Relevant principles governing costs are authoritatively explored in Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 and Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 which have been followed and applied in the Tribunal, among many instances, in Thompson v Chapman [2016] NSWCATAP 6, Bonita v Shen [2016] NSWCATAP 159, citing earlier consistent authority, and in Vella v Mir [No 3] [2020] NSWCATAP 17 at [28]- [31].
3. In summary:

(1) The exercise of the discretion is principled but involves impression and evaluation.

(2) The starting point for the exercise of costs discretion on the usual principles is that costs are compensatory for having to contest the proceedings to achieve the outcome, and normally follow the event.

(3) "The event" is usually the overall outcome of the proceedings - did the successful party have to go to the court or tribunal to get what it achieved, rather than being offered at least that relief prior to commencement of the proceedings.

(4) If there are distinct, separate or dominant issues on which the party seeking relief did not succeed, that may be taken into account in the exercise of costs discretion, either as an award of costs of those issues to the party who had success on them or as a discount of the costs of the overall successful party, or some other appropriate exercise of principled discretion.

(5) There may be no order as to costs made (to the intent that each party pays its or their own costs) where there has been a measure of success on both sides_: Johnson t/as One Tree Constructions v Lukeman_ [2017] NSWCATAP 45 at [25]- [29]; applied in Oppidan Homes PL v Yang [2017] NSWCATAP 67.

(6) Costs are usually ordered on the ordinary basis as agreed or assessed, unless the parties tender material and/or make submissions that justify an award of costs on the indemnity basis as agreed or assessed, in whole or part.

(7) For an award of costs on other than the ordinary basis, a party's conduct of the proceedings themselves, or the nature of the proceedings themselves (for instance, misconceived), or unreasonable refusal of an offer (often when an outcome less favourable than an offer is achieved in the litigation), are considered.

1. The principles governing Calderbank offers, as with formal processes in court rules for offers of compromise such as those found in Uniform Civil Procedure Rules NSW (UCPR) 23.26 and Pt 42 Div 3, operate generally in relation to disputes, including those ultimately determined by consent (where departure from the usual outcome of each party paying its own costs is justified on this or other bases) as well as those determined after contest.
2. The principles governing Calderbank offers were set out in the reasons of the Appeal Panel in Thompson v Chapman [2016] NSWCATAP 6 at [91] in reliance upon authority in the NSWCA and Supreme Court there cited including Miwa PL v Siantan Properties PL [No 2] [2011] NSWCA 344, to which can be added (among other authority) Hazeldene's Chicken Farm PL v Victorian Workcover Authority (No 2) (2005) 13 VR 435, [2005] VSCA 298, El-Wasfi v NSW; Kassas v NSW (No 2) [2018] NSWCA 27 and Croghan v Blacktown CC [2019] NSWCA 248 and authority there discussed. The effect of legal representation was discussed in Bajic v Paraskevopoulos [2018] NSWCATAP 205 at [27].
3. In summary: the offer must constitute a real and genuine compromise; rejection must be unreasonable in the circumstances; reasonableness of rejection is to be assessed at the time the offer is made, not with the armchair of hindsight; relevant factors in assessing unreasonableness include the stage of the proceedings when the offer was made, time allowed to consider the offer, extent of compromise in the offer, the offeree's prospects in the litigation at the time the offer was made, clarity of terms of the offer, whether an application for indemnity costs was foreshadowed in the event of rejection, and whether there was legal representation for the party considering the offer.
4. What triggers the assessment of the offer is what one actually achieves in the litigation outcome (by consent or contest) compared with the terms of the offer. However, the reasonableness of conduct in rejecting the offer is assessed at the point in time the offer is made, on the knowledge the offeree then has about litigious documentation and prospects. Circumstances can arise where "it may not be unreasonable to reject an offer, notwithstanding that the amount of the offer is reasonable and, in particular, notwithstanding that the offer (in the case of an offer made by a defendant) is greater than the damages that are awarded": Commonwealth of Australia v Gretton [2008] NSWCA 117 at [81].
5. Absent submissions showing authority compelling the contrary, and consistent with the requirement of adequate time to consider the offer, any special costs orders made when an offer in a Calderbank letter is taken into account ought logically to date from the expiry of the offer period, or from the date of the offer being rejected if that occurs within the offer period, rather than from the date of the offer itself; nevertheless, the date of the offer itself seems often to be used. In this case it seems apposite to use the date of the relevant offers discussed below for reasons there specified.
6. The formal offer of compromise process within some Court rules expressly provides the costs consequences of accepting or rejecting the substantive relief amount offered.
7. Unlike the general position in the formal offer of compromise rules, the Calderbank offer process does permit consideration of the reasonableness of costs-inclusive offers and offers which specify an amount for the substantive relief and an amount for costs. The inclusion of costs within the amount offered will be an element in the overall assessment, for the purposes of a special costs order, of whether it was unreasonable or otherwise to reject the offer: Elite Protective Personnel PL v Salmon [2007] NSWCA 322 at [136]- [150].
8. The offeree will need to calculate or at least estimate (with the assistance of its legal representatives) its costs incurred at time of offer. This is to know the net amount of substantive relief out of the global amount offered that the offeree will effectively receive where it is being offered a payment (or activity that can be valued monetarily). If the offer is that the offeree pay money (or provide activity that can be valued monetarily) then the offeree needs to know the costs that it has incurred to that point, so that it knows what accepting the offer will cost it. It should also estimate (with the assistance of its legal representatives) what amount of its costs it is likely to recoup under a costs order if it succeeds in the litigation. These matters are in order to decide whether or not to accept the offer, taking also into account the other factors already mentioned such as prospects. The information to make that calculation or estimation will be within the offeree's knowledge or control (usually via the offeree's legal representatives): Elite at [143] and [144]:

"[143] If a party in receipt of an offer wishes to know how far the sum offered will go in meeting its costs up to that time, all it has to do is ask its lawyers. In an age where lawyers are required to provide advance estimates of their fees and in circumstances where commercial services are billed on a monthly basis, it is unrealistic to suggest that the recipient of an inclusive offer will be confused or otherwise unable to assess the financial risk of proceeding with litigation. In any event, the offeree is likely to be liable for legal fees exceeding the costs recoverable from the other party. Most litigants, in considering offers, will want to know from their own lawyers, how much they will receive in the hand.

[144] ... Such an inclusive offer will not cause the plaintiff embarrassment: its value will be that amount remaining to him or her after deducting costs already incurred, which the plaintiff's lawyer should be readily able to quantify."

1. Information about an offeree's costs, able to be ascertained from the offeree's lawyers (including likely outcome on a costs assessment if successful in the proceedings), is centrally relevant to what is the focus of a later costs ruling in respect of the effect of the Calderbank offer, namely, the assessment whether the rejection of the offer was unreasonable at the time of offer. A determination whether rejection was unreasonable does not require resolution of the amount of costs at time of offer by a formal process (such as having costs as at that point assessed): Elite at [142]-[145], [148], [150].
2. While it is sometimes suggested that a plaintiff can act reasonably in refusing an offer at an early stage in proceedings, before evidence (especially expert evidence) and interlocutory preparation processes have given the basis for a real appreciation of prospects on liability and amount, as said in Elite at [146] and [147]:

"[146] ... it does not follow that where the plaintiff is uncertain as to the likely outcome, he or she can reject an offer without being at risk as to costs if the offer proves fair and reasonable. ... Accordingly, the fact that a defendant's offer is made early in the proceedings should not by itself be given significant weight in assessing the reasonableness of the plaintiff in rejecting it. Nor should significant weight usually be given to what the plaintiff did or did not know at that stage. Were it otherwise, the more complex the litigation the less likely that the rejection of an early offer which proves to have been fair and reasonable, will have costs consequences. That tendency would diminish rather than enhance the purpose to be discerned from the Calderbank offers and court rules.

[147] Greater sympathy may be accorded to a defendant who receives an offer early in proceedings where there has been no reasonable opportunity for it to assess its questions of liability or its likely exposure in damages. Such matters must be assessed on a case by case basis. Usually litigation will not be the first that the defendant hears of the claim. However, a defendant which receives an offer of settlement in circumstances where it reasonably requires more time to consider its position would no doubt be advised to respond to that effect and, if necessary, make a counter-offer in due course."

1. The builder sought indemnity costs for the entirety of the proceedings, alternatively from 9.30am on 16 August 2024, or costs of the entire proceedings on the ordinary basis.
2. There is no question that the builder is entitled to its costs of the entire proceedings, at least on the ordinary basis. It was entirely successful on "the event", being whether the claims were precluded. There was no basis for departing from the usual rule that costs follow the event.
3. The builder relied upon three letters in its claim for indemnity costs.
4. The first was dated 20 October 2023. It responded to a letter dated 8 September 2023 which conveyed the owners' offer to settle for $41,668.57 the three named defects (which became the subject of the current proceedings) and a limited release in respect of those defects. The amount reflected the current total for those defects either assessed or, in the case of the alleged bedroom 1 ensuite water leak, already expended. The letter stated that, if the offer was not accepted on or before 22 September 2023, an amount of $170,011.23 would be claimed in fresh proceedings which would include an amount of $134,998.86 for further rectification of the ensuite leak if the existing repair was inadequate. The letter was expressed to be "without prejudice save as to costs" but enclosed a further report dated 11 August 2023 of the owners' expert in the current and earlier proceedings that was relied upon in the current proceedings.
5. The builder's solicitors' letter of 20 October 2023 was an open letter and was referred to in my substantive reasons. It contained a careful and detailed analysis of the similarities in respect of two of the three defects (roof membrane and ensuite leak) with the opinions and photographs in the owners' expert's existing reports of October 2019 and January 2022 and the award of money in respect of the roof membrane in the judgment in the earlier proceedings. It also pointed to the reference to the effects of what were alleged to be inadequate falls in drainage lines in the expert's January 2022 report that inferred the owners knew or ought to have known of the alleged defect at time of the previous proceedings.
6. The analysis was substantially similar to the evidence and submissions in the present proceedings which formed the basis of my substantive findings and decision on the preclusion issue.
7. Although an open letter, the builder's solicitors' letter gave the usual warning about use on costs - such use in any event could have been made of the letter since it was in the evidence:

"In the event that your client commences proceedings against [the builder] for the alleged defects contained in [the 11 August 2023 report], we place your client on notice of [the builder's] intention to rely on this letter as to the question of costs, particularly in seeking costs from your client on an indemnity basis."

1. On principles on which a Calderbank offer is assessed, I consider that it was unreasonable for the owners not to accept the position in the builder's solicitors' letter of 20 October 2023. The letter contained a compromise in that did not seek to claim costs of what was a careful analysis. That careful exercise set out strong reasons for avoiding the costs of further litigation on the basis of analysing what would clearly be in the evidence and submissions in that litigation. It sought to deter further costs and, in the event of success on the strong argument, the likelihood of an adverse costs order on either an ordinary or indemnity basis against the owners. There was substantial continuity of legal representation from the previous proceedings on both sides. The owners and their advisers had access to the existing evidence and submissions and to their new expert report. They were clearly in a position to make an informed assessment of prospects and risks in beginning the threatened proceedings compared with not doing so and avoiding those risks which were clearly stated. There was no time limit specified; it was constrained only by the owners not commencing proceedings. There was no lack of clarity.
2. In any event, if one considers the open letter as an integer in assessing the owners' conduct in respect of the present proceedings and the claims they made, in my view it is a strong support for award of indemnity costs. For the reasons given in the preceding paragraph, the owners knew or ought to have known of the tenuous basis in fact and law for bringing these three claims before one even reached the merits of two of them. It was clear that by January 2022 the owners knew or ought to have known of the alleged defects.
3. In the alternative, the builder sought its costs on the indemnity basis on and from 9.30am on 16 August 2024 being the day of final hearing, followed by extensive written submissions. It accepted that the owners' solicitor had not received a Calderbank offer email dated 14 August 2024 owing to recipient email issues but did receive at 12.58pm on 15 August 2024 a substantively identical offer email dated 15 August 2024. Both emailed letters cross-referred to the letter of 20 October 2023 and the detailed analysis therein and added further analysis based on the claim as presented for hearing. Both offered $15,000 to be paid to the owners for a dismissal of the relief sought and no fresh proceedings for that relief, with no order as to costs in favour of either party (including vacating existing costs orders). Both foreshadowed an application for indemnity costs "from the date of this letter".
4. In my view it was unreasonable for the owners not to have accepted that offer. It was clearly better than the outcome they have incurred including in terms of a costs order even on the ordinary basis. By this point the long-term legal representatives ought to have been fully prepared to make an informed assessment of prospects and risks in advising the owners, with the actualisation in the evidence of the matters foreshadowed in the 20 October 2023 letter. The builder was offering to pay over one-third of what the owners had offered and were claiming as "hard" costs (that is, costs expended or assessed by their retained expert excluding the large contingency of an existing remediation failing), and to forego claiming costs to prepare for a hearing despite strong prospects of success. That was a genuine compromise. At a time of such advanced preparation and an imminent hearing the time for acceptance was not unreasonable. There was no lack of clarity in the offer.

(1) Order that the applicants pay the respondent's costs of the proceedings on the indemnity basis as agreed or assessed.

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.