Wells Group Pty Ltd v Betts (No 2)

1. On 15 April 2025, Ms Betts lodged an Application for miscellaneous matters in which she seeks the following order (the Betts costs application):

"The Appellant pay the Respondent's costs of the Appeal.

(Or in the alternative) the Appellant pay three quarters of the Respondent's costs of the Appeal."

1. We have decided that the Betts costs application should be dismissed and Ms Betts should pay Wells Group's costs of the Betts costs application.

1. The history of the appeal up to 8 April 2025 is set out in the appeal decision at [30]-[36].
2. On 15 April 2025, Ms Betts lodged her submissions on the costs of the appeal as part of the Betts costs application (the Betts appeal costs submissions).
3. On 7 May 2025, Wells Group lodged its submissions on the costs of the appeal in response to the Betts appeal costs submissions (the Wells Group appeal costs submissions).
4. On 8 May 2025, Ms Betts lodged her submissions in reply to the Wells Group appeal costs submissions (the Betts costs submissions in reply).

(1) whether a hearing of the Betts costs application should be dispensed with;

(2) whether the appeal costs order should be varied.

Whether a hearing of the Betts costs application should be dispensed with

1. Each of Ms Betts and Wells Group consents to an order dispensing with an oral hearing of the Betts costs application.
2. We are satisfied that that the issues for determination in relation to the Betts costs application can be adequately determined in the absence of the parties by considering their submissions. Accordingly, we have decided pursuant to s 50(2) of the NCAT Act to make an order dispensing with a hearing in relation to the Betts costs application.

Whether the appeal costs order should be varied

1. Before considering this issue, we have summarised the submissions of the parties.

1. Ms Betts in the Betts appeal costs submissions has made the following submissions:

(1) Wells Group succeeded on ground of appeal 5 out of grounds of appeal 1 to 8 in the amended notice of appeal;

(2) overwhelmingly, the main issue in the appeal in terms of time, quantum and complexity was Wells Group's challenge on ground of appeal 1 on which she succeeded;

(3) she referred to Oikos Constructions Pty Limited t/as Lars Fischer Construction v Ostin & Anor (No 2) [2021] NSWCA 98 (Oikos Constructions) at [14] where the New South Wales Court of Appeal referred to and approved its earlier decision in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 (Bostik) as to the principles to be applied where there may have been mixed outcomes in a case;

(4) her costs in defending the appeal far exceeded the money order in her favour;

(5) the appeal costs order should be varied as a consequence of her being substantially successful in resisting the appeal.

1. Wells Group in the Wells Group appeal costs submissions has made the following submissions:

(1) the basis for apportionment is if there are dominant or separable issues;

(2) there is a difficulty with apportionment for various reasons including:

(a) there were multiple issues on appeal. Ground of appeal 1 was separable but not dominant. Whilst Mr Betts contends practical completion was the main issue on appeal it was not; rather it was a contentious issue in fact and law;

(b) ground of appeal 5, which was opposed by Ms Betts, did not occupy as much time hearing as the appeal ground was clear. The principles set out in Bostik against apportionment where there is a mixed outcome as not being capable of mathematical precision are applicable;

(c) Ms Betts' submission that her costs in defending the appeal far exceeded the money order in her favour is not supported by evidence and is not a relevant consideration;

(3) given the mixed success, the Appeal Panel appropriately exercised its discretion to order each party pay its own costs as they each enjoyed a measure of success;

(4) the alternate position would be for each party to receive 50% of their costs on the ordinary basis.

1. Ms Betts in the Betts appeal costs submissions in reply has made the following submissions:

(1) in substance, there were two grounds of appeal dealt with at the hearing;

(2) ground of appeal 1 occupied the majority of the time at the hearing and the appeal decision. This issue is dominant and separable in accordance with the principles in Bostik;

(3) Wells Group has not made an application for the appeal costs order to be varied in accordance with order (5) of the appeal decision.

1. We accept that it is appropriate to exercise the discretion afresh under r 38A(2) of the NCAT Rules in determining the costs of the appeal after taking into account the submissions of the parties.
2. We accept that an apportionment of the costs as between various issues may be made under r 38A(2) of the NCAT Rules. The relevant principles have been set out in many authorities including Vella (No 3) at [33] (which is quoted in the appeal decision at [83]).
3. In Bostik at [38], the New South Wales Court of Appeal (Beazley, Ipp and Basten JJA) summarised 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:

"[38] 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: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).

• 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: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal.

• 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].

• 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] per Hislop J (with whom Beazley and Tobias JJA agreed).

• 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].

• 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), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261 at 272.

These principles were applied in City of Canada Bay Council v Bonaccorso Pty Ltd (No 3) [2008] NSWCA 57 at [22] and most recently in Turkmani v Visvalingham (No 2) [2009] NSWCA 279."

1. In Oikos Constructions, the New South Wales Court of Appeal after quoting at [14] the summary of principles in Bostik at [38] made the following observations at [15]-[16] (White JA with Basten JA at [1] and Macfarlan JA at [2] agreeing):

[15] A successful party may be denied the whole of its costs or may be required to pay costs in respect of its failure on particular issues, even though that party did not act unreasonably in raising or defending the issues on which it failed (Permanent Trustee Australia v FAI General Insurance Co (Supreme Court of NSW, Hodgson CJ in Eq 3 June 1998 unrep at 10-11); Short v Crawley (No 40) [2008] NSWSC 1302 at [32]; Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd [2008] NSWSC 1423 at [31]).

[16] In Bowen Investments v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107, Finkelstein and Gordon JJ said (at [5]) that if an issue by issue approach produces a result that is fairer than giving the successful party all of his or her costs, notwithstanding his or her failure on particular issues, then the issue by issue approach should be adopted."

1. Recently, these principles were summarised by Nixon J in In the matter of Keybridge Capital Limited (No 3) [2025] NSWSC 423 (Keybridge Capital) at [11]:

"[11] Generally, a successful party should have the whole of its costs of the proceedings, including costs on an issue on which it has failed. However, in an appropriate case, a costs order may be formulated to reflect the degree of success on distinct issues. Relevant circumstances in which apportionment across different issues has been said to be appropriate include where a successful party has, in respect of one or more issues, unfairly, improperly or unnecessarily increased costs; where the bulk of the time has been taken on an issue on which the unsuccessful party has succeeded; or where a particular issue or group of issues is clearly dominant or separable: see Access Training Group Ltd v Jane [2024] NSWCA 204 at [190]- [191] (Ward P, Payne JA agreeing)."

1. In exercising discretion afresh under r 38A(2) of the NCAT Rules we see no reason to vary the appeal costs order for the following reasons:

(1) grounds of appeal 1 and 5, which were the two substantive issues in the appeal, were separable. Grounds of appeal 1 raised the issue of whether Wells Group was entitled to the monies owing under the building contract by reason of practical completion within clause 21 of the building contract having been reached, whereas ground of appeal 5 raised the issue of defective work under building contract;

(2) having regard to the principles in Bostik at [38], Oikos Constructions at [15]-[16] and Keybridge Capital at [11], in circumstances where each party was successful on one of the two substantive issues in the appeal, we are satisfied that that there should be no order as to the costs of the appeal.

1. It follows that the Betts costs application should be dismissed and Ms Betts should pay Wells Group's costs of the Betts costs application.

(1) A hearing of the application of the respondent to vary order (4) made on 8 April 2025 is dispensed with.

(2) The application of the respondent to vary order (4) made on 8 April 2025 is dismissed and the respondent is to pay the appellant's costs of the application.

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.