Sabouni v Revelop Building and Developments Pty Ltd

On 2 February 2021, I delivered my judgment ([2021] NSWSC 31) in relation to these proceedings, which related to claims in respect of the construction of a childcare centre at Penrith in New South Wales. The Plaintiff, Mr Sabouni, failed in establishing his claim that he had accrued a right of payment to a second progress payment at the date of termination of the relevant contract. The Cross-Claimant, Revelop Building and Developments Pty Ltd (“RBD”) failed to establish its Cross-Claim against Mr Sabouni. I observed, in paragraph ([47]) that:

The principle that costs will generally follow the event is, of course, well-established. Section 98 of the Civil Procedure Act 2005 (NSW) confers a discretionary power to determine costs on the Court (“UCPR”). Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) in turn provides that:

A successful party has a “reasonable expectation” of being awarded costs against an unsuccessful party, unless there is good reason for that presumption to be displaced: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [22], [134]. In Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121], Hodgson JA (with whom Mason P agreed) observed that:

In Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [7]–[9], McColl JA in turn observed that:

I have here drawn on my summary of the applicable principles in a somewhat similar context in Re ICB Medical Distributors Pty Ltd and The International College of Biomechanics Pty Ltd; ICB Gait and Posture Clinic Pty Ltd; Foot Steps Orthotics Pty Limited [2019] NSWSC 174 at [5]ff and Re Bicher & Son Pty Ltd [2020] NSWSC 878 for the summary that appears above.

By his submissions made on 19 February 2021, after I extended the time for orders and submissions, Mr Sabouni indicated that he seeks his costs of defending the claim brought against him “by Mr Sabouni” which is presumably intended to be a reference to RBP’s seeking the costs of the Cross-Claim that he brought against it, as I note below. He refers to an offer that he made to RBP on 16 February 2021 that each party be responsible for their own Court fees, although there is no admissible evidence of that offer. He points out, rightly, that RBP was unsuccessful in its Cross-Claim against him and submits that it would be unjust that he have to endure a further costs order at the hands of RBP. In effect, Mr Sabouni supports an order consistent with the preliminary view I expressed in the Judgment, that there should be no order as to costs.

By its submissions dated 19 February 2021, RBP seeks its costs of defending the claim brought against it by Mr Sabouni. It submits that that, if costs follow the event, then each party ought to have their costs of defending the respective claims. It frankly recognises the consequence that any costs order made in Mr Sabouni’s favour would be of little value to him, where he was self-represented for most of the proceedings and could not recover such costs. Alternatively, RBP relies on an offer made to Mr Sabouni on 4 September 2020, in open Court, that it would consent to dismissal of the proceedings against it on the basis that Mr Sabouni paid the costs of the claim against it, and that it would discontinue its Cross-Claim with no order as to the costs of the Cross-Claim. On that basis, it seeks its costs from 4 September 2020 and seeks to rely on the principles applicable to Calderbank [Calderbank v Calderbank [1975] 3 All ER 333] offers, not to support an order for indemnity costs but instead to support an order for costs in its favour in respect of a Cross-Claim as to which it failed. It seems to me that that offer does not assist RBP, because it ultimately continued its Cross-Claim and failed in it, putting Mr Sabouni to the defence of that Cross-Claim, and Mr Sabouni’s continuance of an unsuccessful claim against RBP after that date is no more unreasonable than RBP’s continuance of an unsuccessful Cross-Claim against Mr Sabouni after that date.

It seems to me that the “event” is properly determined in this case by reference to the result of the proceedings as a whole, and not by treating Mr Sabouni’s claim and RBP’s Cross-Claim separately. Neither party was successful in the proceedings as a whole and there is no basis for an order for costs in favour of either party by reference to that event. I am satisfied that the order contemplated by the preliminary view expressed in my Judgment is the proper order in all the circumstances. I therefore order that there be no order as to the costs of the proceedings.