Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Total Construction Pty Ltd v Kennedy Civil Contracting Pty Ltd (subject to a Deed of Company Arrangement) (No 2) [2024] NSWCA 22 Hearing dates: On the papers Date of orders: 12 February 2024 Decision date: 12 February 2024 Before: Meagher JA; Mitchelmore JA; Adamson JA Decision: (1) Set aside orders 1, 2 and 4 of the orders of the District Court made on 18 August 2023 and the orders of the District Court made on 3 October 2023. (2) In lieu thereof, order judgment for the defendant. (3) The respondent repay the appellant the amount of $591,308.52 (Amount) held by the respondent upon the terms of the trust specified in the Deed of Company Arrangement dated 17 November 2022. (4) The respondent pay the appellant interest on the Amount from 23 October 2023 to 2 February 2024 in the sum of $16,808.01. (5) The costs of the proceedings at first instance be remitted to the District Court. Catchwords: APPEALS – costs – consequential orders – no question of principle Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW), s 15(2)(a)(i) Uniform Civil Procedure Rules 2005 (NSW), r 42.14 Cases Cited: Total Construction Pty Ltd v Kennedy Civil Contracting Pty Ltd (subject to a Deed of Company Arrangement) [2023] NSWCA 306 Category: Consequential orders Parties: Total Construction Pty Ltd (Appellant) Kennedy Civil Contracting Pty Ltd (subject to a Deed of Company Arrangement) (Respondent) Representation: Counsel: D S Weinberger (Appellant) A Greinke (Respondent) Solicitors: Crisp Law (Appellant) Chamberlains Law Firm (Respondent) File Number(s): 2023/285557 Publication restriction: Nil Decision under appeal Court or tribunal: District Court Jurisdiction: Civil Citation: [2023] NSWDC 325 Date of Decision: 18 August 2023 Before: Abadee DCJ File Number(s): 2022/353359 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] JUDGMENT 1. 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: 1. Appeal allowed with costs. 2. The parties are to file short minutes of order on or before 2 February 2024 for the making of any further orders necessary to give effect to the result on the appeal. 1. 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. 2. The notice of appeal sought the following orders: (1) Appeal allowed. (2) Orders of the Court below set aside. (3) In place of the Orders of the Court below: (a) Amended Statement of Claim be dismissed. (b) The Respondent pay the Appellant's costs. (4) The Respondent pay the Appellant's costs of the Appeal. 1. At the close of argument in this Court, Mr Weinberger for the appellant said: The final point, and it's a point noted in the submissions, in the event the appeal is upheld, my opponent agrees to an order in the nature of restitution. We haven't sought to formally amend the notice of appeal in light of the agreement, but I thought I should just record it… 1. In the concluding paragraph of the judgment of Mitchelmore JA (with whom Meagher and Adamson JJA agreed), her Honour said: The parties informed the Court that in the event that the appeal was allowed, they had reached agreement as to what should occur in so far as Total has paid the money the subject of the claim to Kennedy. Accordingly, I propose the following orders: (1) Appeal allowed with costs. (2) The parties are to file short minutes of order on or before 2 February 2024 for the making of any further orders necessary to give effect to the result on the appeal. 1. 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. 2. The parties are agreed that the following orders should be made: 1. Set aside orders 1, 2 and 4 made by the District Court on 18 August 2023 and the orders made by the District Court on 3 October 2023. 2. In lieu thereof, order judgment for the defendant. 3. The respondent repay the appellant the amount of $591,308.52 (Amount) held by the respondent upon the terms of the trust specified in the Deed of Company Arrangement dated 17 November 2022. 4. The respondent pay the appellant interest on the Amount from 23 October 2023 to 2 February 2024 in the sum of $16,808.01. 1. 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. 2. 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. 3. The defendant/appellant seeks the following orders, which involve a departure from the relief sought in its notice of appeal: 7. By 16 February 2024, the parties file and serve written submissions (limited to three pages) and any supporting evidence as to orders with respect to the costs of the Trial. 8. By 23 February 2024, the Appellant file a Notice of Motion (Notice of Motion) together with any affidavit and submissions (limited to three pages) in support of a personal costs order against the Respondent's Administrator for the Appellant's costs of the Appeal and costs of the Trial. 9. By 8 March 2024, the Respondent file any affidavit and submissions (limited to three pages) in response to the Appellant's Notice of Motion. 10. Unless otherwise directed by the Court, the orders with respect to the costs of the Trial and the Notice of Motion shall be determined on the papers. 1. 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. 2. 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. 3. 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. 4. Accordingly, in addition to order 1 made on 14 December 2023, the Court makes the following orders: 1. Set aside orders 1, 2 and 4 of the orders of the District Court made on 18 August 2023 and the orders of the District Court made on 3 October 2023. 2. In lieu thereof, order judgment for the defendant. 3. The respondent repay the appellant the amount of $591,308.52 (Amount) held by the respondent upon the terms of the trust specified in the Deed of Company Arrangement dated 17 November 2022. 4. The respondent pay the appellant interest on the Amount from 23 October 2023 to 2 February 2024 in the sum of $16,808.01. 5. The costs of the proceedings at first instance be remitted to the District Court. ********** 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: 12 February 2024