The Owners - Strata Plan 82089 v Omaya Holdings Pty Ltd (No 4)

1. [1]

   I published my principal judgment in this matter on 3 December 2024. [1]

2. [2]

   The background is set out in that judgment. I shall use the same abbreviations here.

3. [3]

   Four issues were agitated before me:

4. [4]

   I determined each of issues in [3(a)], [3(b)], and [3(c)].

5. [5]

   The parties agreed that the General Building Defects issue be referred out. Indeed, that issue had earlier been referred out but the relevant referee proved no longer to be available. That current referee is due to report by 13 June 2025.

6. [6]

   The Owners Corporation’s primary submission was that I should make no decision, now, as to costs and to defer consideration of costs until the referee delivers his report concerning the General Building Defects.

7. [7]

   I am not persuaded to take this course. The four issues I have set out at [3] above are quite distinct and costs are apt to be determined separately in relation to each issue. The costs of the reference can follow the event of the reference.

The Effective Height Issue

1. [8]

   The Effective Height issue was the main focus of the hearing before me.

2. [9]

   The Builder and the Developer were successful on this issue. I see no reason why they should not have their costs.

The claim against Omaya Investments and BSM Holdings

1. [10]

   The Owners Corporation’s claim against Omaya Investments and BSM Holdings was predicated on the Owners Corporation achieving success in relation to the Effective Height issue. As it failed on that issue, its claims against Omaya Investments and BSM Holdings necessarily failed.

2. [11]

   For the reasons set out in detail in respect of the primary judgment, [2] the Owners Corporation against Omaya Investments would have failed in any event.

3. [12]

   The Owners Corporation accepted that, as it had failed against Omaya Investments and BSM Holdings, the prima facie position was that it should pay the costs of those parties.

4. [13]

   The Owners Corporation submitted that that prima facie position should not be adopted because:

5. [14]

   None of these reasons provides a basis to not order that the Owners Corporation pay the costs of Omaya Investments and BSM Holdings. If the costs incurred by those parties is “zero or negligible”, that will no doubt be reflected when those cost are assessed. The settlements with the Architect and the Certifier are irrelevant, as is the asserted fact that the Effective Height claim was “reasonably brought”.

6. [15]

   Alternatively, the Owners Corporation sought this costs order against Omaya Investments and BSM Holdings:

7. [16]

   The rationale behind that proposal was said to be:

8. [17]

   I see no reason to make such a complicated order.

9. [18]

   The quantum of the costs incurred by Omaya Investments and BSM Holdings, as opposed to those incurred by the Builder and the Developer, are matters that can be dealt with within the assessment process.

10. [19]

    Omaya Investments and BSM Holdings sought an order that the Owners Corporation pay their costs on an indemnity basis from 25 September 2024, based upon an offer of compromise expressed to be made pursuant to Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), r 20.26. The offer was that the proceedings be dismissed as against Omaya Investments and BSM Holdings on the basis of each party paying their own costs.

11. [20]

    The Owners Corporation submitted that this was in effect an offer that the Owners Corporation capitulate.

12. [21]

    But the Owners Corporation did not submit that the offer was not properly made under UCPR r 20.26. It follows that, as Omaya Investments and BSM Holdings have obtained a result “no less favourable” than the offer, [3] they are entitled to indemnity costs thereafter. [4]

The Fire Safety Defects Claim

1. [22]

   As I recorded in the primary judgment, [5] there was no dispute before me that the Builder and the Developer were liable to rectify those defects by reason of the warranties under the Home Building Act 1989 (NSW), and that the cost of rectification was $298,462.39.

2. [23]

   The Builder and the Developer led no evidence in respect of these defects.

3. [24]

   It may be that, were those defects the only claim made by the Owners Corporation, the claim could have been brought in the District Court of New South Wales or at the New South Wales Civil and Administrative Tribunal.

4. [25]

   But the claim has been brought together with the other claim to which I have referred. Being, at the end of the day, uncontested, I see no reason why the Builder and the Developer should not pay the Owners Corporation’s costs in relation to this aspect of the matter.

Conclusion

1. [26]

   The parties should now bring in short minutes to give effect to these reasons.