Supreme Court New South Wales Medium Neutral Citation: Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 123 Hearing dates: 26, 27 November 2020 and 20 January 2021 Decision date: 22 February 2021 Jurisdiction: Equity - Corporations List Before: Black J Decision: No order as to costs made. Catchwords: COSTS — Party/Party — Exceptions to general rule that costs follow the event Legislation Cited: - Civil Procedure Act 2005 (NSW) s 98 Cases Cited: - Calderbank v Calderbank [1975] 3 All ER 333 - Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 - Commonwealth of Australia v Gretton [2008] NSWCA 117 - Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34 - Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 - Re Bicher & Son Pty Ltd [2020] NSWSC 878 - 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 Category: Costs Parties: Omar Sabouni (Second Plaintiff) Revelop Building and Developments Pty Ltd (Defendant) Representation: Counsel: Mr A R Vincent (Defendant) Solicitors: O Sabouni (Plaintiff) (self-represented) HWL Ebsworth (Defendant) File Number(s): 2018/393550 Judgment Background 1. 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: "My preliminary view is that, where each party has failed in establishing its claim for damages against the other, there should be no order as to costs, but I will allow the parties an opportunity to make written submissions as to that question. I direct the parties to bring in agreed short minutes of order to give effect to this judgment, including as to costs, within 14 days or, if there is no agreement between them, their respective draft orders and submissions, not exceeding 8 pages in one and a half spacing, as to the differences between them." Applicable principles 1. 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: "Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs." 1. 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: "… underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs." That observation was cited, with apparent approval, by the Court of Appeal in Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34 at [98]. 1. In Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [7]–[9], McColl JA in turn observed that: "Section 98 of the Civil Procedure Act 2005 (NSW) confers a wide discretion on the court with respect to costs. The "general rule" is that court costs follow the event unless the court makes "some other order" pursuant to the discretion conferred by Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 42.1. As Beazley JA explained in Baker v Towle [[2008] NSWCA 73; (2008) 39 Fam LR 323 at [11] (Mathews AJA agreeing)], in most litigation, UCPR r 42.1 "operates in a straightforward way, 'the event' being readily identifiable as a judgment for the plaintiff or the defendant on the claim. In that sense, 'the event' to which the rule refers is the result of the proceedings, so that the party who succeeds on the claim before the court is awarded costs, unless the court, pursuant to the discretion conferred by r 42.1, makes 'some other order'". Underlying both the general rule that costs follow the event, and qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs." [footnotes omitted] 1. 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. The parties' submissions and determination 1. 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. 2. 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. 3. 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. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 March 2021