The Owners - Strata Plan No 97315 v Icon Co (NSW) Pty Ltd (No 2)

The plaintiff is the Owners Corporation in relation to a residential strata scheme in Olympic Park known as “Opal Tower”. The defendant, Icon Co (NSW) Pty Ltd, built the building under a design and construct contract.

The Owners Corporation commenced these proceedings against Icon in July 2020 alleging the existence of various structural and non-structural defects in Opal Tower.

On 14 July 2022, the Court ordered that a number of issues be referred to Mr Steven Goldstein for determination.

During the course of the reference, the parties reached agreement in respect of all defects save for the sunshades on the façade of the building.

The hearing proceeded before the referee in relation to that issue for four days from 5 December 2022.

The referee filed his report on 3 February 2023.

The referee concluded, in summary, that:

On 13 April 2023, Darke J ordered that the referee’s report be adopted. [1] On 27 November 2023, the Court of Appeal refused to grant leave to the Owners Corporation to appeal that decision. [2]

I am now dealing with the costs of the reference.

The Owners Corporation seeks an order that Icon pay its costs of the reference in respect of the sunshade issue. Icon seeks an order that the Owners Corporation pay 85% of its costs of the reference in respect of the sunshade issue.

At the time of the reference, Icon’s pleaded position was that it denied liability for any breach of warranty under the Home Building Act in respect of the sunshades.

The parties’ façade experts produced joint reports on 18 August 2022 and 28 September 2022.

In their report of 18 August 2022, the experts agreed that:

Thus, early in the reference, there was no dispute that the sunshades were defective.

What continued to divide the parties was the repair work needed to address the structural issues identified by the experts, particularly in relation to the 300mm and 450mm deep sunshades.

As I have set out, the referee concluded that the “C-Bracket Solution” should be adopted. Icon first advanced that repair methodology on 7 November 2022, four months into the reference, and after the parties’ façade experts had issued two further reports.

On 21 November 2022, Icon made a settlement offer concerning the “Alleged Façade Defects”, advocating either the “C-Bracket Solution” or, alternatively, another method referred to by its expert. Icon rejected the Owners Corporation’s proposed “Stiffener Plate Method” of repairing the defective sunshades.

By the time that submissions to the referee were prepared, Icon’s position was that the “focus on this part of the reference” was on the repair scope although, until the last day of the reference, Icon advocated other repair scopes.

During his opening address to the referee, counsel for Icon said:

The referee concluded: [3]

In these circumstances, the question is who, “as a matter of substance and reality”, has “won” in relation to the sunshade issue. [6]

Each party has achieved some measure of success. But neither party established the case for which it primarily contended.

Icon put in issue its liability in relation to the sunshades. The Owners Corporation has obtained a finding that the sunshades were defective and must be replaced.

Ultimately, Icon succeeded in relation to the question of rectification methodology but only on a basis it embraced without qualification at the last moment.

In those circumstances, “as a matter of substance and reality”, neither party has “won”.

The appropriate order is that there be no order as to the costs of the reference, with the intent that each party bear its own costs of the reference.

I so order.