The Owners Strata Plan No 87881 v Frasers Broadway Pty Ltd (No 2) (costs)

Medium Neutral Citation: The Owners Strata Plan No 87881 v Frasers Broadway Pty Ltd (No 2) (costs) [2025] NSWSC 1289

Hearing dates: On the papers; submissions 24 October 2025

Date of orders: 3 November 2025

Decision date: 03 November 2025

Jurisdiction: Equity - Technology and Construction List

Before: Rees J

Decision: Costs order made.

Catchwords: COSTS — r 42.20(1), Uniform Civil Procedure Rules (2005) — owners of high-rise development bring four proceedings against developers, builder and others for building defects — fifth proceeding against developer dismissed as abuse of process — whether defendants entitled to costs of proceedings — whether “the Court orders otherwise” — principles at [2]-[4] — plaintiffs seeks to exclude substantial categories of costs as evidence relevant to remaining four proceedings and given suggested failures by defendants — no reason to make “orders otherwise”.

Legislation Cited: Uniform Civil Procedure Rules (2005), rr 42.1, 42.20(1)

Cases Cited: Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365
Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69
Ibrahim v PERI Australia Pty Limited [2013] NSWCA 328
The Owners Strata Plan No 87881 v Frasers Broadway Pty Ltd [2025] NSWSC 1073

Category: Costs

Parties: The Owners Strata Plan No 87881 (First Plaintiff)
The Owners Strata Plan No 88765 (Second Plaintiff)
The Owners Strata Plan No 89262 (Third Plaintiff)
Fortius Broadway No 1 Pty Ltd (Fourth Plaintiff)
Frasers Broadway Pty Ltd (First Defendant)
Frasers Central Park Land No 1 Pty Ltd (Second Defendant)

Representation: Counsel:
F Hicks SC / SC Ipp (Plaintiffs)
DT Miller SC / M Sheldon (Defendants)
Solicitors:
HWL Ebsworth (Plaintiffs)
Minter Ellison (Defendants)

File Number(s): 2025/48263

JUDGMENT

1. HER HONOUR: On 10 October 2025, I dismissed these proceedings and ordered the plaintiffs to pay the defendants’ costs of the motion for dismissal: The Owners Strata Plan No 87881 v Frasers Broadway Pty Ltd [2025] NSWSC 1073. This judgment concerns the costs of the proceedings.

2. The defendants seek their costs of the proceedings. The plaintiffs proffer an extensive proposed costs order, which runs over two pages, ‘carving out’ various categories of costs.

Principles

3. Rule 42.20(1) of the Uniform Civil Procedure Rules (2005) (UCPR) provides that if the Court makes an order for the dismissal of proceedings then, “unless the Court orders otherwise”, the plaintiff must pay the defendant’s costs of the proceedings. These rules create “a starting point” for the Court’s deliberations as to the appropriate costs order: Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 at [48], [53] (per Bryson JA); followed in Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 at [53]-[54], [69]-[74].

4. In Ibrahim v PERI Australia Pty Limited [2013] NSWCA 328, Beazley P summarised the matters to be considered when “the Court orders otherwise” as including, at [17]:

“whether a party acted reasonably in commencing the proceedings; whether a party had been successful in obtaining interlocutory relief; whether the party sued had acted reasonably; whether the responding party had acted reasonably in defending the proceedings; whether the proceedings terminated after interlocutory relief had been granted; and further, whether the primary judge was satisfied that the party seeking to terminate the proceedings prior to a full hearing had almost a certain chance of success.”

5. While “there is no close control over the discretion of the Court to order otherwise … there must be some sound positive ground or good reason for departing from the ordinary course”: Australiawide Airlines v Aspirion at [54] (Bryson JA).

Procedural history

6. The plaintiffs commenced these proceedings on 6 February 2025 in the Technology and Construction List. The plaintiffs also filed a motion seeking expedition. The same day, the plaintiffs received an expert report from Dominic D’Adam, which was later relied on at the hearing of the dismissal motion. (The plaintiffs now seek to excise any costs incurred by the defendants in relation to this report.)

7. The defendants’ solicitor challenged the plaintiffs’ commencement of the proceedings, where four existing proceedings were already on foot. The plaintiffs were unreceptive. On 13 February 2025, the defendants filed the dismissal motion, supported by affidavits from Peter Welsh, Vanessa English and Claire Tait.

8. On 14 February 2025, the parties appeared before the Expedition Judge, Parker J, who confessed, “I was a bit surprised that you didn’t just apply, or rather, these proceedings weren’t brought in the Technology and Construction List. … I meant, it’s just that in that list, there’s a degree of expedition anyway.” His Honour transferred both motions to the Technology and Construction motions list on 21 February 2025.

9. On 21 February 2025, Stevenson J also observed, “You don’t need expedition here, Mr Hicks. You get expedition. … That is, the matter will be given a hearing date as soon as it is ready and urgent matters are given priority.” Orders were made for the progress of the motions. (The same day, the plaintiffs received an expert report from Steven Halliday, which was later tendered at the hearing of the dismissal motion but which the plaintiffs now seek to excise from the costs order.)

10. On 5 March 2025, the plaintiffs obtained an expert report from Chris Jamieson, which was later tendered on the dismissal motion but which the plaintiffs now seek to excise from the costs order. The plaintiffs also filed an affidavit of Cullen Rutherford. Mr Rutherford uses an abseil to work on the façade of the buildings the subject of these proceedings. The plaintiffs did not ultimately read his affidavit on the dismissal application and seek that there be no order in respect of any costs incurred by the defendants in relation to that affidavit. The plaintiffs also served an expert of Stephen Yeomans dated 28 September 2022 but now seek to excise this from any costs orders made in favour of the defendants. The report was tendered at the hearing of the dismissal motion. The same pertains in relation to an expert report obtained by the plaintiffs from Stephen Yeomans on 24 March 2025, a second report from Mr Jamieson on 30 May 2025, a second report from Jonathan Barnett dated 2 June 2025 and a second report of Mr Halliday of 11 June 2025.

11. Various directions were made to progress both motions towards a hearing. The defendants served an affidavit of Mr Welsh on 25 June 2025, which was read on the dismissal motion and its exhibit tendered. The plaintiffs now seek that there be no order as to costs in respect of this affidavit or its exhibit. The same can be said for a confidential affidavit of Mr Welsh affirmed the same day and read on the dismissal motion. The defendants served further confidential affidavits by Michael Ellis on 8 July 2025, Ian Rea on 10 July 2025, and Isabella Bain on 11 July 2025. These affidavits were not read on the dismissal motion either and the plaintiffs contend that there should be no order as to costs in respect of these affidavits.

“Can I just note with respect to the motion for expedition, in a sense you don’t really need one in this list, because the whole list is effectively in the sense that will give something a hearing as soon as parties are ready, so it might be on the otiose side to seek expedition”.

14. On 25 August 2025, Mr Welsh made a further affidavit which was read on the dismissal motion but which the plaintiffs now seek to excise from the costs order. On 26 August 2025, the proceedings were re-listed at the defendants’ request. Developments between the defendants and Building Commission NSW – being an extension of time to complete rectification works or potential revocation of the works order – were thought to render the hearing otiose. The defendants advised that they wished to press their dismissal motion on the allotted hearing date. I was also informed that the Court Book was nearly 4,000 pages of material.

15. I heard the dismissal motion on 28 August 2025. The plaintiffs’ senior counsel advised that the expedition motion "is not proceeding today*"*. There was no mention of the subpoena. The amount of material relied upon by the plaintiffs was substantial indeed. During the hearing, the defendants were granted leave to file in Court the further affidavit from Mr Welsh of 25 August 2025 and from Ms Tait of 27 August 2025, updating developments with Building Commission NSW and providing expert reports in response to those relied upon by the plaintiffs. The plaintiffs now seek to excise these affidavits and expert reports from the costs order.

Submissions

16. The defendants submitted that the usual costs order should be made as the proceedings were fundamentally flawed, as was pointed out to the plaintiffs early and often, including by Peden J. The plaintiffs relied on extensive evidence on the dismissal motion, serving 12 expert reports and affidavits (and read 11 of them) and 10 lay affidavits (and read 5 of them). These costs have already been awarded to the defendants and the existing costs order is not challenged. The remainder of the proceedings involving interparty correspondence, appearances at directions hearings, and a dispute about a subpoena should naturally follow the dismissal of the matter generally as they all arise from proceedings that have been dismissed. While the plaintiffs can still seek the relief in the four other proceedings already on foot, these proceedings should never have been commenced or maintained. There was no reason why the plaintiffs should not be ordered to compensate the defendants for their costs in having to deal with these proceedings.

17. The plaintiffs submitted that costs on certain matters should be excluded as the Court did not determine the parties’ substantive rights, the expert reports served by the parties are relevant to the four building-defects proceedings and plaintiffs can still pursue the same relief in one of the existing proceedings. The expert evidence served was not wasted and it was said that there was a mixed outcome given that substantive rights were preserved. Further, one of the principal bases for seeking declaratory relief was that the Modified Building Works Rectification Order (MBWRO) required the work to be completed by 31 March 2026. It was said that it was only disclosed by the defendants shortly before the hearing that the date had been extended to November 2026, but they had been aware of this since 4 April 2025. There were unnecessary affidavits served and costs incurred because this was not disclosed.

18. The first excision sought by the plaintiffs is that there be no order as to costs of the plaintiffs' motion for expedition. It was said to have been made clear at an early time that expedition was not required and that the case would be heard when possible as soon as it was ready. The parties proceeded accordingly. The plaintiffs were entitled to prepare the case so that it could be heard. The defendants should not be compensated for the costs of expedition as they knew from 4 April 2025 that time for compliance with the MBWRO had been extended and there was no longer urgency, as was the case when the works were to be completed by 31 March 2026.

19. The defendants submitted that the motion for expedition was unnecessary and abandoned. The motion should have been discontinued in February 2025 but was not. The plaintiffs insisted on an order for expedition until the hearing. Given the dismissal of the proceedings, the motion for expedition was unnecessary and always doomed to fail. The defendants should have their costs of that motion.

Conclusion

32. What is the “sound positive ground or good reason” for departing from the usual costs order: Australiawide Airlines v Aspirion at [54]? So far as the plaintiffs seek to characterise the results of the dismissal motion as giving them a measure of success, the developers did not seek dismissal of the plaintiffs’ claim on the basis that it was hopeless in the General Steel Industries v Commissioner for Railways sense. But the defendants’ arguments were very largely accepted.

33. I concluded that, whilst the plaintiffs’ prayer for declaratory relief was not “so clearly untenable that it cannot possible succeed”, there were a number of reasons why the Court may not exercise its discretion to grant the relief given the circumstances in which the declaration was then sought: at [89]. Further, on its face, it was an abuse of process for the plaintiffs to institute a fifth set of proceedings where the claim for relief could be made in one of the four proceedings already on foot. Nor could the problem be addressed by the plaintiffs’ case management proposals. Further, even if these proceedings were case managed with the existing four proceedings, there was no apparent reason why the plaintiffs should have a third set of legal representatives, in addition to the two firms already engaged. Where I had not determined the substance of the plaintiffs’ claim for relief, the appropriate course was to dismiss the proceedings where the relief sought could be – and should have been – sought in the proceedings already on foot.

34. I do not think it can be said that the plaintiffs acted reasonably in commencing these proceedings, nor have they been successful in the result. The defendants have been put to the cost of defending these proceedings, notwithstanding that the defendants’ solicitors pointed out, at the outset, why these proceedings were a bad idea. Those concerns were repeated by Peden J in the course of the proceedings.

35. Turning to the proposed excisions, if the plaintiffs’ proposed costs order is made, then so extensive are the ‘carve outs’ that the proposed orders will likely deplete the defendants’ existing entitlement to their costs of the dismissal motion. But there is no application to vary that order.

36. The motion for expedition was unnecessary. This was pointed out to the plaintiffs by Parker J, Stevenson J and myself. The plaintiffs did not advise that the motion was not pressed until the hearing of the dismissal motion. The defendants were entitled to proceed on the basis that the motion remained on foot. The affidavit in support of expedition, by the plaintiffs’ solicitor Alexander Ottaway, was also read by the plaintiffs on the dismissal motion; the extensive exhibit to the affidavit was also tendered. I consider it appropriate that the defendants have their costs of dealing with that motion.

37. The proposed second, third and sixth excisions proceed on an incomplete summary of the evidence. Mr Welsh described in detail his dealings with the Building Commission NSW, and updated the position from time to time. It is not the case that an extension of time was granted on 4 April 2025. Whilst Mr Welsh pressed Building Commission NSW for a formal extension, the position changed from time to time. As late as 22 August 2025, Building Commission NSW advised Mr Welsh that a recommendation had been made that the MBWRO be revoked. It was not until immediately before the hearing that the extension was given. These excisions are not appropriate, for the reasons advanced by the defendants.

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