New South Wales Court of Appeal CITATION : Yavuz v Noaman [2001] NSWCA 449 FILE NUMBER(S) : CA 40229/01 HEARING DATE(S) : 27/11/01 JUDGMENT DATE : 27 November 2001 PARTIES : Salim Uyan Yavuz and Hatem Yavuz (Appellants) Mohanad Noaman (Respondent) JUDGMENT OF : Young CJ in Eq at 1-15, 18; Brownie AJA at 16; Rolfe AJA at 17 LOWER COURT JURISDICTION : District Court LOWER COURT 5054/98 FILE NUMBER(S) : LOWER COURT Knight DCJ JUDICIAL OFFICER : COUNSEL : R G Forster SC (A) D P F Officer QC and M V Sahade (R) SOLICITORS : Dickson Fisher Macansh (A) Comino Prassas (R) CATCHWORDS : Building case- Sent out to referee- 12 day hearing- Builder mainly successful but proprietors' cross-claim partly successful- District Court judge upholds report and orders proprietors to pay all the costs- No error of principle- Costs order within discretion- Appeal dismissed. (ND) CASES CITED: Super Pty Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549 DECISION : Appeal dismissed with costs. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40229/01 DC 5054/98 YOUNG CJ in EQ BROWNIE AJA ROLFE AJA Tuesday 27 November 2001 SALIM UYAN YAVUZ & ANOR v MOHANAD NOAMAN Judgment 1 YOUNG CJ In EQ: This is a building case. The appellants are the proprietors, the respondent, the builder. The builder sued the proprietors in respect of three jobs. The principal job was at Matraville and this was the subject of District Court proceedings 5054/98. There were other disputes between the parties or related parties in District Court proceedings 5916/98. These other disputes were tried more or less simultaneously with 5054/98. 2 The proceedings were remitted to a referee, Mr Peter Callaghan SC. After what appears to be a 12 day hearing including a view which, with a couple of exceptions, followed usual court procedure, Mr Callaghan SC made a report for the District Court. The exceptions were that Mr Callaghan SC had that view which he treated as evidence and at one stage held a conclave of experts. The report was to the effect that the builder was entitled to a verdict on his claim for $251,843 exclusive of interest and that the proprietors were entitled to $116,174 on their cross-claim. The builder moved the District Court for adoption of the report. This application came before Knight DCJ. The report of the referee was accepted in 5916/98 so there is no need to mention that action further. 3 In the present proceedings, the proprietors raised ten matters of complaint. His Honour was also asked to consider the questions of interest and costs. His Honour gave reasons on 14 and 19 March 2001 in which he: a. subject to adjusting a mathematical error, adopted the report; b. awarded interest; c. made an order for costs. 4 The short minutes of order note judgment for the builder for $279,136.49 on the claim and judgment for the proprietors on the cross-claim for $116,174 with an order that the proprietors pay the builder's costs for both the claim and the cross-claim. For some reason or other there is in the red appeal book a certificate of judgment issued by the District Court certifying that there is a judgment debt against the proprietors in favour of the builder for $162,962.49. Although this is mathematically correct it is hard to see how that certificate issued. 5 Both parties submitted that, in considering the application, his Honour should be guided by the decision of this Court in Super Pty Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549. His Honour did just that. 6 In the notice of appeal to this Court, most of the same matters were raised however some grounds were abandoned so that before this Court, there were four issues raised, namely: 1. What was the contract price? 2. How was the contract terminated? 3. What were the damages on the cross-claim in respect of aggregate concrete panels? 4. Costs. 7 The arguments for the proprietors have been vigorously advanced by Mr Forster SC but despite saying everything that could be said to challenge the first three matters, my view is that there is no appealable error in the judgment of the learned District Court Judge. He followed the approach in Super Pty Limited. He carefully considered the material before the referee on the contract point and the termination point and he was justified in coming to the conclusion that the learned referee had properly determined those matters and his report should be adopted. 8 So far as the damage on the panels was concerned, the principal argument before us was that the referee misconstrued the specification. The specification if it could be called that, in the builder's quotation, said: "The concrete system to be used for the above development is exposed aggregate pre-cast concrete vertical panels, other than internal faces and hidden concrete areas." 9 The argument was that "hidden" meant completely hidden and was not covered by the situation where the builder assumed that the panels would be hidden when other adjacent properties were developed in the future. 10 I do not consider there is any force in that point. The word "hidden" is usually a relative term. The Court often comes across it in expressions such as "hidden defects" and "hidden danger" and it is a question of fact as to what is meant by "hidden" because what may be apparent in daytime may become a pitfall in darkness, et cetera. Here, the word had to be construed in the context of a builder's misspelt quotation. The parties were approaching the matter as practical men and so was the referee. I would not find that his Honour made any mistake on that. 11 The matter that did concern the Court particularly, was the matter of costs. As I have said, his Honour made an award to the builder of the whole of the costs of the proceedings. It is quite clear that costs are a very important aspect of this matter because after 12 days plus submissions, plus the hearing before Knight DCJ and the hearing before us, the relatively small verdicts pale into insignificance compared with the costs. The usual rule in both the District Court and this Court is that, prima facie, costs follow the event and so Mr Forster SC for the proprietors argues that when one sees such a departure from the normal rule without, he submits, adequate explanation, his Honour must have made an error. 12 The matters that seem to have particularly appealed to his Honour were that the cross-claim or the part of the cross-claim on which the proprietors succeeded, were for $51,936 with respect to defective work and $64,238 with respect to the encroachment claim. The encroachment claim was raised, it would seem, on the fifth day of the hearing and the referee took the view that because of the lateness of those amendments, the defendants should pay the costs of that issue. Knight DCJ thought that that was the approach that he should follow. It would have been open, of course, to the Judge to decide that the costs thrown away by the lateness of the amendment should be paid by the proprietors in any event, but otherwise he who won should get costs and he who lost should pay costs. But the referee had been involved in a complicated and long hearing and was probably in the best position to make the assessment. We do not know one way or the other whether the relevant pages of the transcript were before the trial judge. 13 So far as the defective work was concerned, the proprietors sought $270,000 and got $51,936. That of course in itself is not the be all and end all of the matter, but it is significant. 14 There was also the matter that the learned Judge decided that as there had been no pleading of a set off, he could not set off from the verdict obtained by the builder, the verdict obtained by the proprietors. However, had that pleading "error" not been made, it is probable (though it is not necessary to go into this) that there would have been some sort of set off. Mr Forster SC valiantly put that this was not just a pleading error on his clients' part, but also on the part of the builder but I was not convinced that that was so and it is not necessary to go into the details. 15 So far as costs are concerned, there is a prima facie rule, but the matter of costs is always in the discretion of the Judge. In my view, although the order that was made in the instant case may have some unusual features about it, it was within the discretion of the learned Judge and the appeal fails on that ground too. Accordingly in my view the appeal should be dismissed with costs. 16 BROWNIE AJA: I agree. 17 ROLFE AJA: I also agree. 18 YOUNG CJ in EQ: That is the order of the 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.