H & M Constructions (NSW) Pty Ltd v Golden Rain Development Pty Ltd (No 3)

[2023] NSWSC 58

Supreme Court

New South Wales

Medium Neutral Citation:

H & M Constructions (NSW) Pty Ltd v Golden Rain Development Pty Ltd (No 3) [2023] NSWSC 58

Hearing dates:

03 February 2023

Date of orders:

03 February 2023

Decision date:

03 February 2023

Jurisdiction:

Equity - Technology and Construction List

Before:

Stevenson J

Decision:

No further security for past costs; allow future costs

Catchwords:

COSTS – Security for costs – quantum of further security to be granted – whether additional amount for past costs should be granted where party obtained security on specified basis – where discovery costs were higher than expected

Legislation Cited:

Evidence Act 1995 (NSW)

Cases Cited:

H & M Constructions (NSW) Pty Ltd v Golden Rain Development Pty Ltd [2021] NSWSC 708

H & M Constructions (NSW) Pty Ltd v Golden Rain Development Pty Ltd (No 2) [2021] NSWSC 1475

Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328; [1994] NSWCA 338

Category:

Procedural rulings

Parties:

H & M Constructions (NSW) Pty Ltd (Plaintiff/Respondent)
Golden Rain Development Pty Ltd (Defendant/Applicant)

Representation:

Counsel:
N Simpson (Plaintiff/Respondent)
J Dooley (Defendant/Applicant)

Solicitors:
Pinsent Masons (Plaintiff/Respondent)
Allens (Defendant/Applicant)

File Number(s):

2021/115569

EX TEMPORE Judgment (REVISED)

1. The background to this matter is set out in my two earlier judgments in this matter. ^[1]

   1. H & M Constructions (NSW) Pty Ltd v Golden Rain Development Pty Ltd [2021] NSWSC 708; H & M Constructions (NSW) Pty Ltd v Golden Rain Development Pty Ltd (No 2) [2021] NSWSC 1475.

2. The defendant seeks further security for costs. As I recorded in my earlier judgments, there was no dispute that the Court's jurisdiction to order security has been enlivened. The question here is the quantum of the further security that should be granted.

3. I have already ordered that a total of $500,000 security for costs be ordered, being $350,000 to the point of mediation in 2021 and then a further $150,000 to the date upon which the matter was set down for hearing, including for discovery.

4. The matter was set down for hearing on 4 November 2022 for eight days commencing 24 July 2023.

5. The defendant seeks further security in an amount in the order of $682,000, being a sum in the order of $147,000 for past costs, that is costs to 4 November 2022, and a further figure in the order of $534,000 for costs from 4 November to the hearing.

6. The additional amount for past costs sought in relation to discovery is said to be because the costs of discovery were higher than expected. The figure sought is said to be the difference between the opinion of the defendant's costs expert, Mr Nicholas, as to the reasonable amount that the defendant has incurred in relation to discovery and the amount that the defendant attributes to the amount that I allowed for discovery within the figure of $150,000 to which I have referred.

7. Both parties have provided detailed and careful submissions as to the circumstances in which the discovery given by the plaintiff was managed by the defendant.

8. It is true, as Mr Dooley for the defendant has pointed out, that additional security can be given where the Court is satisfied that circumstances have changed in a way that warrants additional security being provided. ^[2]

   2. Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328 at 330-331 (Mahoney JA); [1994] NSWCA 338.

9. However, a party that has obtained security on a specified basis, here the anticipated costs of discovery, should not, in my opinion, be encouraged to have a "second bite at the cherry" because their earlier estimate on the basis on which it obtained security in a contested application turns out not to be adequate.

10. Further, neither the Court nor the party giving security should, in the normal course, be burdened with detailed evidence and arguments at a granular level of the detail of the process the subject of the earlier security amount.

11. In all the circumstances, I am not persuaded I should give the defendant any further security for past costs.

12. As to future costs, the uncontested evidence from the defendant's costs expert, Mr Nicholas, is that a reasonable amount for the defendant's future costs is in the order of $535,000.

13. There are a number of matters raised by the plaintiff in relation to that figure.

14. The first is that security in that order would result in the defendant having security of around $1 million for a claim that is said to involve "only" $2.2 million. I do not see that as a factor weighing heavily in the balance. In this list parties often argue about matters in the order of $1 to $2 million and sometimes, as in this case, that dispute, although involving a relatively "small" amount of money, requires the allocation of a large number of days of hearing.

15. There was also a dispute as to whether, as currently the defendant apprehends, up to a day of the hearing will need to be devoted to the question of whether the evidence of the important witness for the plaintiff, Mr O'Callaghan, is admissible. The dispute will apparently be as to whether Mr O'Callaghan, who was the superintendent of the relevant building project, was acting as the independent superintendent in the usual way or was acting as the defendant's agent. If the latter is the case, the argument will be that a number of evidently important things he is supposed to have said will be the subject of legal privilege.

16. There has been discussion of the possibility of the question of Mr O'Callaghan's evidence being dealt with in advance of the hearing under s 192 of the Evidence Act 1995 (NSW). At one point the defendant raised the possibility it would seek to follow that course. Ms Simpson for the plaintiff has informed me that the plaintiff is contemplating itself making such an application. I would encourage the parties to seek to reach an agreement as to whether it is a sensible course to have that question dealt with before the hearing under s 192 of the Evidence Act. However, the current position is that it is an issue which will have to be dealt with at the trial and therefore it appears that the eight day trial estimate is appropriate.

17. There was also a dispute as to whether what Mr Nicholas has assumed to be the work required to review discovered documents and to deal with the production of documents will be less than he has been mooted.

18. As is well known, a broad-brush approach is required in cases like this. Overall, the opinion I have come to is that I should allow future costs in the sum of $450,000.

19. The parties should bring in short minutes to give effect to these reasons.

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Endnotes