Total Construction Pty Ltd v Kennedy Civil Contracting Pty Ltd (subject to a Deed of Company Arrangement) (No 2)

THE COURT: The Court heard this appeal on 7 December 2023. On the delivery of judgment on 14 December 2023 (Total Construction Pty Ltd v Kennedy Civil Contracting Pty Ltd (subject to a Deed of Company Arrangement) [2023] NSWCA 306), the following orders were made:

The appeal was from a judgment for the respondent for $545,353.18 in proceedings commenced under s 15(2)(a)(i) of the Building and Construction Industry Security of Payment Act 1999 (NSW). That judgment sum has been paid by the appellant and was paid before the appeal was argued in this Court.

The notice of appeal sought the following orders:

At the close of argument in this Court, Mr Weinberger for the appellant said:

In the concluding paragraph of the judgment of Mitchelmore JA (with whom Meagher and Adamson JJA agreed), her Honour said:

The parties have exchanged proposed short minutes of order but cannot agree as to all of the orders to be made, and have requested the Court to determine the competing short minutes on the papers. The matter on which the parties cannot agree is not the subject matter to which Order 2 was directed. Rather, it is the order that should be made for payment of the costs of the proceedings in the District Court.

The parties are agreed that the following orders should be made:

The orders made on 3 October 2023 followed an application by the plaintiff/respondent made by motion dated 1 September 2023 for an order under r 42.14 of the Uniform Civil Procedure Rules 2005 (NSW) that the defendant/appellant pay the costs of the proceedings until 12 December 2022 on the ordinary basis and thereafter on the indemnity basis. That application was upheld, and the trial judge made two orders. The first was that the defendant pay the plaintiff’s costs on the ordinary basis up to 12 December 2022 and on the indemnity basis thereafter, and the second was that each of the parties bears its own costs of that motion.

The difference remaining between the parties is as follows. The respondent seeks an order that “the costs of the proceedings at first instance be remitted to the District Court”. No doubt that is intended to convey that the question as to who should pay those costs in the light of the outcome in the appeal should be remitted to the District Court for determination. That order is to be contrasted with the order sought in the notice of appeal that the plaintiff/respondent pay the defendant/appellant’s costs in the District Court. The respondent contends that notwithstanding the appellant’s success in this Court, the circumstances, including the conduct of the proceedings below, warrant an order other than one which follows the event. It is said that the primary judge remains best placed to consider and rule on that question of costs.

The defendant/appellant seeks the following orders, which involve a departure from the relief sought in its notice of appeal:

These proposed orders expressly accept that there should be further argument as to the order to be made for payment of the parties’ costs in the District Court. They provide for that question to be decided in this Court. They also provide for an application to be made in this Court for personal costs orders against the administrators of the defendant/appellant in respect of the costs of the trial and in this Court. They do not, however, contemplate that the administrators might be separately represented and participate in that application, notwithstanding their likely interest in opposing it.

For that reason alone, this Court should not make orders in the terms proposed by the appellant. Nor is it obvious that this Court would be the appropriate court to hear the proposed further application, at least in respect of the costs at first instance. If any applications are to be made for personal costs orders, separate and formal applications should be made in each of the relevant courts, those applications providing an opportunity for the administrators to participate.

As neither party asks this Court at this stage to award costs in the District Court, and at the same time each accepts that there should be argument as to whether those costs follow the event, an order to the effect of that sought by the plaintiff/respondent should be made. The District Court is in the best position to address an argument which will focus on the way in which the underlying proceedings were conducted.

Accordingly, in addition to order 1 made on 14 December 2023, the Court makes the following orders: