Donau Pty Limited v ASC AWD Shipbuilder Pty Limited (No 2) [2018] NSWSC 1589

Supreme Court New South Wales

Medium Neutral Citation: Donau Pty Limited v ASC AWD Shipbuilder Pty Limited (No 2) [2018] NSWSC 1589 Hearing dates: 4 October 2018 Decision date: 23 October 2018 Jurisdiction: Equity - Technology and Construction List Before: Ball J Decision: (1) Vacate all previous costs orders made in the proceedings; and

(2) Order that each party bear its own costs of the proceedings Catchwords: COSTS – Party/Party – Exceptions to general rule that costs follow the event – Offers of compromise/Calderbank offers – Where a costs order reflecting the ultimate outcome of the case would not be more desirable than a fair apportionment of costs in light of the success and failure of particular issues Legislation Cited: Australian Consumer Law Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Donau Pty Limited v ASC AWD Shipbuilder Pty Limited [2018] NSWSC 1273 Category: Costs Parties: Donau Pty Limited ABN 17 000 019 616 (Plaintiff) ASC AWD Shipbuilder Pty Limited ABN 15 112 123 181 (Defendant) Representation: Counsel: K Stern SC and E Bathurst (Plaintiff) E Holmes with R Mansted (Defendant)

Solicitors: McCabe Curwood (Plaintiff) Johnson Winter & Slattery (Defendant) File Number(s): 2016/163292 Publication restriction: None

Judgment

Background 1. These proceedings concern a contract (the 2HA) entered into on 26 October 2012 between the plaintiff, Donau Pty Limited, formerly known as Forgacs Engineering Pty Ltd (Forgacs), and the defendant, ASC AWD Shipbuilders Pty Limited (ASC), which varied the terms of an earlier contract (the Original Contract) between Forgacs and ASC by which Forgacs agreed to construct for ASC certain parts of the hulls of three air warfare destroyer ships that ASC, with others, had contracted to build for the Commonwealth of Australia. 2. During the course of the proceedings, a large number of issues were raised by the parties in connection with their dispute. Some of those issues, such as a claim by ASC that the 2HA should be rectified and claims by Forgacs that various estoppels operated in its favour, raised substantial factual issues. 3. Many of those issues were abandoned before trial with the result that the trial itself concerned two principal issues. One was the correct construction of the 2HA and whether on its correct construction it had come into effect and, if so, whether ASC had validly terminated it and the consequences of termination if it had. The second issue was whether ASC had been induced to enter into the 2HA by the misleading and deceptive conduct of Forgacs in contravention of s 18 of the Australian Consumer Law. 4. In a judgment I delivered on 20 August 2018 (see Donau Pty Limited v ASC AWD Shipbuilder Pty Limited [2018] NSWSC 1273), I concluded: 1. Contrary to ASC's submissions, the 2HA had come into effect; 2. Contrary to Forgacs' submissions, ASC had validly terminated the 2HA; 3. Contrary to Forgacs' submissions, the effect of termination was that ASC was largely entitled to the rights it had under the Original Contract and in particular the right to adjust the Payable Fee payable by it under that contract by reference to the mechanism set out in the contract; 4. Contrary to ASC's submissions, the 2HA did have the effect of releasing any right that ASC may otherwise have had to liquidated damages; and 5. Had it been necessary to decide, contrary to ASC's submissions, its case based on misleading and deceptive conduct failed. 1. The practical result of those conclusions was that I entered a substantial judgment in ASC's favour. The only outstanding question concerns costs. It is with that question that this judgment is concerned.