Roseville Bridge Marina Pty Ltd v Bellingham Marine Australia Pty Ltd [2009] NSWSC 376

New South Wales Supreme Court

CITATION : Roseville Bridge Marina Pty Ltd v Bellingham Marine Australia Pty Ltd [2009] NSWSC 376

HEARING DATE(S) : Written submissions

JUDGMENT DATE : 12 May 2009

JURISDICTION : Equity Division

JUDGMENT OF : Brereton J

DECISION : Defendant to pay 80 percent of plaintiff's costs.

CATCHWORDS : PROCEDURE - Costs - Indemnity costs – where defendant succeeded in part and where its unsuccessful contentions were not unarguable – whether defendant persisted in an unreasonable defence – Held: defendant's conduct not unreasonable, plaintiff not entitled to indemnity costs – where costs increased by issues on which plaintiff failed – whether plaintiff should not recover all of its costs - Held: defendant should not be liable for costs to the extent they were increased by issues on which plaintiff failed.

CATEGORY : Consequential orders

PARTIES : Roseville Bridge Marina Pty Ltd (plaintiff) Bellingham Marine Australia Pty Ltd (defendant)

FILE NUMBER(S) : SC 1783/09

COUNSEL : R T McKeand SC (plaintiff) M J Slattery QC w D T Miller (defendant)

SOLICITORS : Herbert Geer (plaintiff) DLA Phillips Fox (defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BRERETON J

Tuesday 12 May 2009

1783/09 Roseville Bridge Marina Pty Ltd v Bellingham Marine Australia Pty Ltd JUDGMENT 1 HIS HONOUR: On 27 April 2009, for reasons then published, I declared that the defendant Bellingham Marine Australia Pty Ltd was not entitled to recover payment for work completed under the construction contract dated 31 July 2007, or additional work or variations in connection therewith (other than demolition works) completed prior to 14 July 2008, including the work described as "variations" (other than demolition works) in its payment claim and the adjudication, over and above the agreed sum of $441,424.50. I ordered that Bellingham be permanently restrained from issuing execution or a creditor's statutory demand or otherwise enforcing any judgment it might obtain upon registration of the adjudicator's determination, to the extent that such judgment exceeds principal of $57,611.40 and interest thereon. I ordered that the defendant pay the plaintiff's costs, but directed that that order not be entered for seven days and provided for any party seeking a different costs order to lodge and serve on the other a document setting out the order it sought and an outline of its submissions and attaching any supplementary evidence, and providing also for submissions in response. 2 By submission dated 4 May 2009, the plaintiff Roseville Bridge Marina Pty Ltd seeks an order that the defendant pay its costs of the proceedings on an indemnity basis, on the ground that Bellingham unreasonably defended the proceedings. By submission dated 5 May 2009, Bellingham contends that it should be responsible only for a proportion of Roseville's costs, and that Roseville should be responsible for a proportion of its costs, having regard to the relative success of the parties in the proceedings. Roseville's application for indemnity costs 3 Roseville submits that Bellingham's conduct in pursuing its defence was unreasonable having regard to its knowledge of all relevant facts at the time of the adjudication application, the issues raised in the adjudication response, and Roseville's solicitors' letter of 23 January 2009 whereby it invited a withdrawal of the claim. 4 I am quite unpersuaded that Bellingham's conduct was unreasonable in the relevant sense. To the contrary, its defence succeeded in part, in that it succeeded in preserving the entitlement to register as a judgment and enforce the adjudication insofar as it related to the demolition works, and the final payment. In this respect, I do not accept that the demolition works were never in issue: Roseville's adjudication response asserted that the amount to which Bellingham was entitled was $NIL; Roseville's solicitors' letter of 23 January 2009 sought withdrawal of the adjudication application in its entirety; and while it is true that Roseville never expressly argued that Bellingham was not entitled to a progress payment in respect of the demolition works, its summons and amended summons sought declaratory and injunctive relief to the effect that Bellingham was not entitled to act on the adjudication simpliciter, not that it was only entitled to act on it to a limited extent. It was in the light of those matters that, in the substantive judgment, I recorded (at [16]) that "Roseville does not now dispute that Bellingham is entitled to enforce the adjudication in respect of the amount allowed for demolition works". In my view, it was not clear until the hearing that Roseville did not contend that Bellingham should be wholly restrained from enforcing the adjudication. 5 Insofar as Bellingham failed in respect of the email agreement of 14 July 2008 and the "variations", its claim was not unarguable. 6 Roseville is not entitled to have its costs assessed on the indemnity basis. Bellingham's submission that costs should be apportioned 7 Roseville's success was, as already mentioned, far from complete. Of the total adjudicated amount of $146,717.95, Roseville failed to restrain the enforcement of $36,315 attributable to the final payment, and $21,296 attributable to the demolition work; it succeeded only in respect of $89,106 attributable to other "variations". It monetary terms, that approximates 60 percent of the sum in issue. In terms of time and effort expended in the litigation, it is fair to say that the issue on which Roseville succeeded was by far the predominant issue litigated, and occupied a more prominent role than a mere apportionment according to financial significance would indicate. Put another way, the issues on which Bellingham succeeded were responsible for far less than 40 percent of the costs in the litigation. 8 I do not see why justice requires that Bellingham should pay Roseville's costs insofar as they were increased by the agitation of issues on which Roseville failed. Moreover, in this case Bellingham succeeded in vindicating its entitlement to proceed to register the adjudication and enforce it as a judgment, albeit to a limited extent. 9 Adopting the "broad axe" approach which is appropriate on this type of application, having regard to the relative measures of success enjoyed by each party, the circumstance that Roseville had to come to court to obtain any relief, and the extent to which the costs in the proceedings can be attributable to the various issues, justice will be done if Bellingham pays 80 percent of Roseville's costs. Conclusion 10 I vary order 3 made on 27 April 2009 by inserting after the word "pay" the words "80 percent of". **********