Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Dial D Pty Ltd as trustee for the Smith Street Unit Trust v Kingston Building (Australia) Pty Ltd (No 2) [2013] NSWCA 295 Hearing dates: On the papers Decision date: 04 September 2013 Before: Ward JA at [1]; Leeming JA at [15]; Tobias AJA at [16] Decision: 1. Subject to order 2, there be no order as to the costs of the appeal. 2. The appellant pay the respondent's costs of the Notice of Motion filed 27 March 2013. [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.] Catchwords: COSTS - both parties enjoyed measure of success on appeal - no order as to costs - no occasion to alter costs order at first instance Legislation Cited: Uniform Civil Procedure Rules 2005 Category: Costs Parties: Dial D Pty Ltd as trustee for the Smith Street Unit Trust (Appellant) Kingston Building (Australia) Pty Ltd (Respondent) Representation: Counsel: F Corsaro SC with F G Kalyk (Appellant) F P Hicks (Respondent) Solicitors: Keystone Lawyers (Appellant) Moray & Agnew Lawyers (Respondent) File Number(s): CA 13/077168 Decision under appeal Citation: Kingston Building (Australia) Pty Ltd v Dial D Pty Ltd as trustee for the Smith Street Unit Trust [2013] NSWSC 173 Date of Decision: 2013-03-05 00:00:00 Before: Stevenson J File Number(s): SC 13/027998 Judgment 1WARD JA: In this matter, on 28 August 2013, this Court handed down reasons on an appeal by Dial D from part of a decision of Stevenson J ([2013] NSWSC 173) relating to his Honour's finding in relation to the validity of a progress certificate issued by the Superintendent under a construction contract between Dial D (the principal) and Kingston (the builder): [2013] NSWCA 277. 2The dispute between the two related to the proper construction of provisions in the contract dealing with the making of progressive payment claims and the issue of progress or other certificates during the course of the contract. This Court set aside his Honour's finding that the relevant progress certificate was void and of no effect but did not disturb the entry by his Honour of judgment in favour of Kingston on a deemed progress certificate from December, the month before the Superintendent's certificate. This Court rejected Dial D's contention that the Superintendent's certificate had superseded the December deemed progress certificate in the sense that there was no accrued liability thereunder. 3At the time judgment was published, this Court expressed a tentative view as to costs of the appeal, namely that there be no order as to those costs, but made directions for the service of brief submissions in the event that one or both parties wished to contend otherwise and indicated that in that event the question of costs would be dealt with on the papers. Both parties took up that invitation. Each contended that a costs order should be made in its favour. Dial D's submissions on costs 4Dial D submits that, for the purpose of costs orders, it should be regarded as the successful party on the appeal since it achieved the "practical result" of obtaining a contractual right to payment from Kingston for the amount certified in the January certificate. 5No cross-claim or set-off based on the January certificate had, however, been brought in the proceedings before his Honour. Dial D contends, nevertheless, that it was successful in the event because Kingston was unsuccessful in its contention that the January certificate was invalid. It submits that, on the result below, there was a "standalone" contractual event (namely, the deemed progress certificate), with an obligation for the payment of the default amount albeit without any contractual entitlement on the part of the Dial D to payment for the amount the subject of the January certificate. It is said that this Court's decision modifies the result of the primary judge's determination by providing Dial D with a contractual entitlement to payment of an amount that can be offset or claimed against the amount due to Kingston under the deemed progress certificate. 6Dial D further submits, in a submission going beyond the scope of the Court's direction, that there should also be an order in its favour as to the costs of the proceedings below, since it succeeded in its contention that the January certificate was valid, and that, at the very least, there should be an order that each party pay its own costs of the proceedings below since each has now been partially successful as to the matters in issue in those proceedings. Kingston's submissions on costs 7Kingston also submits that, on the application of the general rule that costs follow the event (see rule 42.1 of the Uniform Civil Procedure Rules 2005), it should have its costs of the appeal proceedings. 8It makes that submission on the basis that for Dial D to be truly successful on its appeal, it needed to succeed not only on the question as to the validity of the January certificate but also on the question as to whether the January certificate had superseded the deemed progress certificate, thus extinguishing Dial D's obligation to pay Kingston the amount due under that deemed certificate. 9In that regard, it is relevant to note that the proceedings before Stevenson J were instituted by Kingston seeking relief in circumstances where Dial D had asserted an entitlement (and intention) to have recourse to a security sum for payment of the amount due under the January certificate and Dial D had contended that no amount was payable under the deemed progress certificate. 10Kingston also notes that Dial D, on 27 March 2013, filed a notice of motion seeking a stay of the judgment and orders 3, 4 and 5 made by Stevenson J on 5 March 2013 until determination of the appeal, and an order that the costs of the application for a stay be the costs of the parties in the appeal. It refers to an agreement reached on 15 July 2013 by the parties as to a regime preserving the position so that his Honour's judgment remained, in effect, stayed pending the hearing of the appeal. 11Kingston submits that, even if this Court is minded to determine the costs of the appeal in accordance with the preliminary view expressed in the reasons handed down on 28 August 2013, it should have its costs of the stay application in circumstances where the appeal with respect to the judgment and orders in question was unsuccessful. Conclusion 12True it is that Dial D was successful in its appeal from the decision that the January certificate was void and of no effect. However, the nub of the proceedings before Stevenson J related to Dial D's contention (that was unsuccessful before his Honour and unsuccessful on appeal) that the deemed progress certificate was superseded by the January certificate and therefore no amount was owing (except perhaps interest for a short period) on the amount deemed to have been certified in relation to the December payment claim. There was no claim for a set-off in relation to that amount, perhaps because if the January certificate amount were set off against the December progress certificate amount there would remain an amount payable to Kingston whereas Dial D was contending an entitlement to the whole of the January certified amount without taking into account the amount certified by the deemed progress certificate. 13Seen in that light, in the context of the proceedings below Kingston was ultimately successful "in the event" even though his Honour's finding as to the January certificate was set aside. Further, the appeal did not extend to all aspects of Stevenson J's decision. There is, therefore, no warrant to revisit the primary judge's costs orders. As to the costs of the appeal, I remain of the view that it is appropriate that each party bear its own, each having had a measure of success on the appeal. However, in circumstances where the stay application had the effect that Kingston was held out of the moneys owing to it for a further period from the time of his Honour's judgment, I consider that it is appropriate to order that Dial D pay Kingston's costs of its motion for a stay. 14Therefore, the orders that I propose are as follows: 1. Subject to order 2, there be no order as to the costs of the appeal. 2. The appellant pay the respondent's costs of the Notice of Motion filed 27 March 2013. 15LEEMING JA: I agree with Ward JA. 16TOBIAS AJA: I agree with Ward JA ********** 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: 04 September 2013