Downer EDI Rail Pty Ltd v John Holland Pty Ltd; John Holland Pty Ltd v QBE Insurance (Australia) Ltd (No 6); Kellogg Brown & Root Pty Ltd v John Holland Pty Ltd (No 5); John Holland Pty Limited v Kellogg Brown & Root Pty Ltd; Kellogg Brown & Root Pty Ltd v QBE Insurance (Australia) Ltd [2018] NSWSC 581

Downer EDI Rail Pty Ltd v John Holland Pty Ltd; John Holland Pty Ltd v QBE Insurance (Australia) Ltd (No 6); Kellogg Brown & Root Pty Ltd v John Holland Pty Ltd (No 5); John Holland Pty Limited v Kellogg Brown & Root Pty Ltd; Kellogg Brown & Root Pty Ltd v QBE Insurance (Australia) Ltd [2018] NSWSC 581

Special costs orders were warranted because KBR and QBE incurred costs preparing substantial evidence from witnesses they elected not to call, requiring Downer to respond. Downer should not pay those costs, and should recover costs of responding. Proceedings related to arbitration were transferred to court, and Downer is required to pay costs for arbitration and related proceedings as per statutory discretion.

Parties
First Plaintiff: Downer EDI Rail Pty Ltd; Second Plaintiff: EDI Rail PPP Maintenance Pty Ltd; First Defendant/cross Claimant; Defendant; Plaintiff: John Holland Pty Ltd; Second Defendant; Plaintiff; Defendant/cross Claimant: Kellogg Brown & Root Pty Ltd; Third Defendant: Atlantis Corporation Pty Ltd; Fourth Defendant/cross Defendant; Cross Defendant: QBE Insurance (Australia) Limited
Jurisdiction
Australia
Judgment Date
02 May 2018
Procedural Posture
Equity Technology and Construction List / Final Orders and Costs Determination
Outcome
Proceedings dismissed; costs orders as specified; special costs orders granted regarding certain affidavits; no order as to costs in Separate Question Proceedings.
Legal Topics
Costs Follow the Event, Arbitration Transferred to Court, Special Costs Orders
Civil Procedure Costs Arbitration Costs Follow the Event Arbitration Transferred to Court Special Costs Orders

Case Brief

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Parties

Downer EDI Rail Pty Ltd

First Plaintiff

EDI Rail PPP Maintenance Pty Ltd

Second Plaintiff

John Holland Pty Ltd

First Defendant/cross Claimant; Defendant; Plaintiff

Kellogg Brown & Root Pty Ltd

Second Defendant; Plaintiff; Defendant/cross Claimant

Atlantis Corporation Pty Ltd

Third Defendant

QBE Insurance (Australia) Limited

Fourth Defendant/cross Defendant; Cross Defendant

Procedural Posture

Equity Technology and Construction List / Final Orders and Costs Determination

Legal Issues

  1. 1 Entitlement to costs after dismissal of proceedings
  2. 2 Whether costs incurred in preparing affidavits for witnesses not called should be recoverable
  3. 3 Effect of transfer of arbitration to court on costs

Ratio Decidendi

Special costs orders were warranted because KBR and QBE incurred costs preparing substantial evidence from witnesses they elected not to call, requiring Downer to respond. Downer should not pay those costs, and should recover costs of responding. Proceedings related to arbitration were transferred to court, and Downer is required to pay costs for arbitration and related proceedings as per statutory discretion.

Court Disposition

Proceedings dismissed; costs orders as specified; special costs orders granted regarding certain affidavits; no order as to costs in Separate Question Proceedings.

Orders

  • 2015/120806: Proceedings dismissed. Plaintiffs pay defendants' costs including cross-claims, interest on costs, and hearing fees. Costs exclude those for preparation of Gaffney and Urriola affidavits. KBR and QBE to pay plaintiffs' costs for responding to those affidavits. Set-off of costs between parties.
  • 2017/288097: Proceedings dismissed. Downer to pay costs of John Holland and KBR including the arbitration costs and hearing fees. Interest to be paid on costs.