Federal Court of Australia

Shearman v Techin MBS Pty Ltd (No 2) [2025] FCA 1446

ORDERS

THE COURT ORDERS THAT:

1.    There be judgment for the applicant against the respondent in the sum of $650,000 together with interest under s 51A of the Federal Court of Australia Act 1976 (Cth) in the amount of $194,177.26.

2.    The respondent shall forthwith cause Maddocks Lawyers to return to the applicant the deposit of $650,000 paid under the contract of sale between the applicant as purchaser and the respondent as vendor dated 22 May 2018 for the land known as Apartment 301 at 14 Lascelles Avenue, Toorak, in the State of Victoria, together with any interest that has accrued thereon, on account of the sum for which judgment is given under order 1 of these orders.

3.    The respondent’s cross-claim is dismissed.

4.    The respondent pay 75% of the applicant’s costs of the proceeding, including reserved costs, on a party and party basis.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

HORAN J:

1    I delivered reasons for judgment in this matter on 14 October 2025: Shearman v Techin MBS Pty Ltd [2025] FCA 1243 (J). In the absence of agreement on the orders to give effect to those reasons for judgment, the parties were asked to file their proposed orders together with submissions in support.

2    The central outcome in the proceeding is that the applicant, Mr Scott Shearman, was held to have lawfully terminated the Contract of Sale based on the repudiatory breach of that Contract by the respondent, Techin MBS Pty Ltd. This stemmed from Techin’s failure to prove any variation agreement or estoppel by which the penthouse apartment would be settled as a “cold shell”. In such circumstances, Techin’s refusal or failure to settle in accordance with the terms of the Contract of Sale evinced an intention not to be bound by the Contract.

3    On the other hand, Mr Shearman failed to establish his claim that Techin engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL). Further, I did not accept Mr Shearman’s contention that Techin’s purported termination of the Contract of Sale itself amounted to a repudiation of the Contract, although that contention was to some extent overtaken by the finding that Techin ultimately repudiated the Contract by its refusal or failure to settle the penthouse apartment.

4    It is common ground that Mr Shearman is entitled to the return of the deposit of $650,000 that he paid under the Contract of Sale, together with any interest that has accrued on that amount.

5    Mr Shearman no longer presses any claim to damages in contract in respect of his expenditure on the redesign of the interior fit-out of the penthouse apartment: cf. J [524].

6    There are two contested issues in relation to the final orders:

(a)    first, whether any pre-judgment interest is payable under s 51A of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and, if so, in what amount;

(b)    second, whether Techin should pay Mr Shearman’s costs of the proceeding.

Interest

7    Where judgment is given in proceedings for the recovery of any money, including any debt or damages, s 51A of the FCA Act provides for interest to be awarded on the judgment sum at such rate as the Court thinks fit for the whole or any part of the period between the date when the cause of action arose and the date on which judgment is entered. On an application under s 51A, the Court must include such interest in the sum for which judgment is given, unless good cause is shown to the contrary. The Court has a discretion under s 51A(1)(b) to order that interest be included as a lump sum in lieu of any interest calculated in accordance with s 51A(1)(a).

8    An important purpose of pre-judgment interest is to compensate the successful party for having been kept out of his or her money during the relevant period: Grincelis v House (2000) 201 CLR 321 at [16] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ), referring to MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657 at 663. As such, the award of interest is “in the nature of damages” and is compensatory in character, restoring the party to the situation in which he or she otherwise would have been: Haines v Bendall (1991) 172 CLR 60 at 66 (Mason CJ, Dawson, Toohey and Gaudron JJ). However, while its object is not punitive, the power to award interest may also serve the purpose of encouraging early resolution of litigation: Grincelis at [16]; cf. Batchelor v Burke (1981) 148 CLR 448 at 455 (Gibbs CJ).

9    In the light of its compensatory purpose, “good cause” not to award pre-judgment interest on money claims will be shown “rarely” and “only in exceptional circumstances”: Kazar v Kargarian (2011) 197 FCR 113 at [97(a)] (Foster J). However, as Foster J stated in Kazar (at [97(b)]):

Once the Court has decided that pre-judgment interest should be payable, it has a discretion to award interest at such rate or rates as it thinks fit for such period or periods as it thinks fit on the whole or on part of the monetary award. The only constraint imposed upon the exercise of that discretion by the language of s 51A(1)(a) itself is that the period in respect of which interest may be awarded must begin no earlier than the date when the relevant cause of action arose and must end no later than the date of judgment.

10    The Interest on judgments (GPN-INT) practice note provides guidance in respect of the award of pre-judgment interest under s 51A of the FCA Act. While the Court has a discretion as to the rate at which any interest is awarded, the general expectation is that the Court will have regard to the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before the commencement of each six-monthly period from 1 January to 30 June or from 1 July to 1 December in any year: GPN-INT at [2.2].

11    In the present case, the deposit of $650,000 was paid by Mr Shearman on 14 May 2018, in advance of his execution of the Contract of Sale: J [78]. The amount was paid into the trust account of Maddocks Lawyers, who were acting as Techin’s solicitors at that time. In an email to Mr Brendan Allen of Marshall White (Techin’s real estate agent), Mr Shearman said that he was transferring the deposit prior to signing the contract “[a]s a measure of good faith” on the basis that “any contractual issues would be minor … as it all looked to me what we had discussed and agreed on”.

12    The Contract of Sale was subsequently executed on 22 May 2018. The terms of the Contract of Sale relevantly provided as follows in relation to the deposit.

(a)    Special Condition (SC) 3.2 provided for the deposit to be paid to Techin’s solicitor to be held on trust for Mr Shearman in the solicitor’s trust account until the registration of the plan of subdivision (see s 9AA(1)(a) of Sale of Land Act 1962 (Vic)).

(b)    Under SC 3.3, the parties authorised Techin’s solicitor to invest the deposit and agreed that “any Interest must be paid to the party entitled to the Deposit on the date on which the Deposit is released to that party”. For such purposes, “Interest” was defined in SC 1.1 to mean “the interest, if any, that accrues on the Deposit less the taxes, charges and fees charged on, or attracted by, the Deposit or by the interest earned on it”.

(c)    SC 3.4 provided that, upon registration of the plan of subdivision, the deposit “must be held or invested by [Techin’s] solicitor upon the terms set out in this special condition as stakeholder for the parties”.

(d)    SC 3.7 precluded the parties from making make any claim on Techin’s solicitor for any matter arising out of SC 3.

(e)    General Condition (GC) 12.2 provided that “[t]he stakeholder must pay the deposit and any interest to the party entitled when the deposit is released, the contract is settled, or the contract is ended”. GC 12.3 provided that “[t]he stakeholder may pay the deposit and any interest into court if it is reasonable to do so”.

See also ss 24 and 25 of the Sale of Land Act, which relevantly provide that deposit moneys are to be held by a legal practitioner, conveyancer or estate agent as a stakeholder, or are to be paid by the vendor into a special purpose account in the joint names of the purchaser and vendor. Section 26(1) of the Sale of Land Act further provides that, where the purchaser rescinds a contract of sale as the result of a default by the vendor, the purchaser shall be entitled to the immediate return of the deposit moneys.

13    The plan of subdivision in relation to the Lascelles Toorak development was registered on or about 22 June 2020: J [463].

14    In a letter dated 15 October 2020, in response to Techin’s purported termination of the Contract of Sale, Mr Shearman’s solicitors requested that Techin agree to hold the deposit “in escrow in an interest bearing bank account pending the outcome of the court proceeding (or as otherwise agreed in writing by our respective clients) or, alternatively, the deposit monies be paid into court pending the outcome of the court proceeding”. Failing such an agreement, Mr Shearman reserved the right to apply to the Court “for an order for an order to affect [sic] the preservation of the deposit monies as proposed above”.

15    On 21 October 2020, Maddocks replied to Mr Shearman’s solicitors, confirming that it “currently holds the deposit monies and those funds are invested in an account accruing interest”. The letter stated:

Whilst our client contends that it is entitled to the deposit monies given the Contract has been terminated, we have been instructed to continue to hold the deposit monies pending an Order of the Court or the joint written direction of the parties.

16    Mr Shearman ultimately terminated the Contract of Sale on 31 May 2021: see J [174], [437], [520].

17    In these circumstances, Mr Shearman submitted that the deposit (together with accrued interest) should have been released to him within 14 days after the Contract of Sale was terminated (i.e. by 14 June 2021). Having been deprived of those moneys since that date, Mr Shearman seeks an order for interest pursuant to s 51A of the FCA Act to be calculated in accordance with the relevant practice note (GPN-INT).

18    Techin submits that Mr Shearman is entitled only to the release of the deposit currently held in the interest-bearing account, including any accrued interest in that account. Techin argues that the deposit was held by Maddocks as a stakeholder under the special conditions of the Contract of Sale, and continued to be held in that capacity throughout the duration of the dispute, subject to “contractual duties to the parties to retain that money, and disburse it to a party only where that party was entitled to it under law”. In this regard, Techin relies on the principle that a stakeholder “is entitled to await the outcome of the dispute between the parties, and until the dispute is resolved, it cannot safely pay either party”: see Tambakis v Ferluga (2010) 107 SASR 246 at [20], [29] (Gray J).

19    Maddocks initially received the deposit of $650,000 as trustee for Mr Shearman pursuant to SC 3.2 of the Contract of Sale, to be invested on the basis that net interest accruing on the deposit would be payable to the party to whom the deposit was released. Upon the registration of the plan of subdivision on 22 June 2020, Maddocks held the deposit “as stakeholder for the parties” until such time as the deposit was released, the contract was settled, or the contract was ended: SC 3.4, GC 12.2.

20    The role of a stakeholder was considered by the Supreme Court of South Australia in Tambakis. In that case, the purchaser of an apartment off-the-plan brought proceedings to challenge the enforceability of the contract of sale, alleging that the vendors had engaged in misleading or deceptive conduct and seeking an order that the contract be rescinded or set aside. The purchaser applied for an interlocutory injunction to restrain the vendors from drawing upon a bank guarantee that the purchaser had provided by way of a deposit. The terms of the contract specified that the deposit was held by a third-party deposit holder “as stakeholder”.

21    Justice Gray observed in Tambakis (at [18]) that “[t]he legal capacity in which a stakeholder holds a deposit is vexed”, referring to differing views as to whether the stakeholder holds the deposit as a trustee or agent who is subject to fiduciary obligations, or instead holds as a principal on a “contractual or quasi-contractual basis”. Ultimately, this question may turn on the intention of the parties and the construction of the applicable contractual provisions. In either case, it appears that the stakeholder generally holds the money for both parties and is under a duty “to keep it in his own hands” until the occurrence of a specified event: Tambakis at [20], quoting Harington v Hoggart (1830) 109 ER 902 at 905; see also ibid. at [21]–[28] and the cases there discussed. This has the consequence that a claim by the purchaser for the return of the deposit would usually lie against the stakeholder, as opposed to an action against the vendor.

22    Techin contends that it “does not itself owe a debt to [Mr Shearman] which it should be ordered to repay in the ordinary sense”. Presumably, this is based on the premise that the deposit was not paid to or held by Techin under the Contract of Sale, but rather has been held throughout by the stakeholder as a principal, albeit subject to contractual or quasi-contractual (if not fiduciary) obligations owed to Techin and Mr Shearman. Techin relied on the summary of the principles governing the position of a stakeholder set out by Lord Millet in Manzanilla Ltd v Corton Property & Investments Ltd (Court of Appeal Civil Division, Butler-Sloss, Millett and Waller LJJ, 13 November 1996) which was reproduced by Gray J in Tambakis at [29]. In particular, counsel for Techin submitted that the stakeholder was bound to await the happening of the specified event upon which the money is payable to the parties, and that:

If the occurrence of the event is disputed, the stakeholder cannot safely pay either party, for if he mistakenly pays the party not entitled the payment will not discharge his liability to the other. In these circumstances he may (i) interplead and pay the money into Court; (ii) retain the money pending the resolution of the dispute; or (iii) take the risk of paying one party. The choice is entirely his.

23    Accordingly, Gray J stated in Tambakis at [33]:

Whether the conveyancer in the within proceeding holds the deposit as a trustee or on a contractual or quasi-contractual basis, it appears settled that inherent in the role of a stakeholder is the duty to hold the deposit until the occurrence of the specified event, and further, in the event of a dispute, to continue to hold that deposit until the dispute is settled.

(Emphasis added.)

24    It may be observed that the issue in Tambakis arose in the context of an application for interlocutory relief against the vendor, which was ultimately granted by the Court, so as to prevent the vendor from drawing upon the bank guarantee that had been provided by way of deposit.

25    It is clear that, at least until 21 October 2020, Maddocks held the deposit as a stakeholder under the Contract of Sale. It is less clear whether Maddocks continued to hold the deposit in that capacity after that date, or after the Contract of Sale was terminated by Mr Shearman on 31 May 2021.

26    When Techin purported to terminate the Contract of Sale on 12 October 2020, its solicitors foreshadowed that Techin would claim that the deposit had been forfeited (i.e. reserving the right to seek “declaratory relief in relation to its entitlement to the deposit and loss and damages suffered as a result of termination of the contract”). In order to avert an application by Mr Shearman for interlocutory injunctive relief to preserve the deposit monies, as had occurred in Tambakis, Maddocks obtained instructions from Techin “to continue to hold the deposit monies pending an Order of the Court or the joint written direction of the parties”. In this correspondence, Maddocks did not purport to be acting as a principal in its own right, nor as a trustee or agent for both parties, but rather proceeded on the basis of instructions obtained from Techin.

27    It is now clear that the Contract of Sale was no longer on foot from 31 May 2021, when it was terminated by Mr Shearman based on repudiation by Techin. Except in so far as any obligations survived the termination of the contract, Maddocks was no longer strictly acting as a stakeholder under SC 3.4 of the Contract of Sale. As the Contract had ended as a result of default by Techin, the deposit was immediately payable to Mr Shearman. It may be that Maddocks was entitled to continue to hold the deposit in its capacity as stakeholder until the settlement of the dispute between Techin and Mr Shearman. It was also open to Maddocks to pay the money into Court. Alternatively, it might be possible to characterise the situation as one in which Maddocks was purporting to hold the deposit monies on behalf of Techin and subject to its instructions, which were to the effect that Techin agreed not to disburse those monies other than in accordance with an order of the Court or a joint written direction of both parties.

28    Ultimately, in my view, the application for interest under s 51A of the FCA Act does not turn on the resolution of these questions. Mr Shearman seeks relief against Techin for breach of the Contract of Sale. Mr Shearman is not claiming damages against Maddocks in respect of the performance of its obligations as the stakeholder of the deposit monies. Accordingly, it does not advance matters to say, as Techin submitted, that “it was appropriate for the stakeholder to adopt a cautious approach and retain the money given the complicated cross-demands made on the stakeholder by the parties”, nor is it relevant whether Maddocks was entitled to adopt that course. Whatever the nature and extent of Maddocks’ obligations in holding the deposit monies, this does not directly affect the measure of damages payable by Techin in respect of its repudiatory breach of the Contract of Sale.

29    It is not in dispute that Mr Shearman was entitled to the return of the deposit when the Contract of Sale was brought to an end on 31 May 2021. At any time since that date, Techin could have given instructions for the deposit to be released to Mr Shearman. Instead, Mr Shearman has been kept out of his money during the period between 31 May 2021 (or a reasonable time thereafter) and the date on which judgment is entered. In such circumstances, an award of pre-judgment interest can be regarded in substance as interest on the damages for which Techin is liable in respect of its breach of the Contract of Sale.

30    Accordingly, Techin has not shown any good cause not to award interest under s 51A of the FCA Act.

31    In the alternative, Techin submitted that the Court should exercise its discretion to fix the rate of interest no higher than the interest that has accrued on the deposit in the interest-bearing account. Among other things, Techin has not itself had the use of that money during the relevant period: cf. TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 4) [2007] FCA 635 at [7] (Finkelstein J). Having regard to all of the circumstances, I do not consider that it is appropriate to limit the interest payable by reference to the accrued interest. Mr Shearman succeeded in establishing that he terminated the Contract of Sale on 31 May 2021. It has remained open to Techin at any time since then to give instructions for the deposit with accrued interest to be released or returned to Mr Shearman. Accordingly, in order properly to compensate Mr Shearman and to advance the object of encouraging the settlement of disputes, it is appropriate that interest be awarded at the rates set out in the practice note GPN-INT.

32    The total amount of interest claimed by Mr Shearman from 15 June 2021 to 19 November 2025 is $194,177.26, as outlined in para 10 of the affidavit of Thomas Maximilian Hoerner sworn 19 November 2025 (Hoerner affidavit). Techin did not take any issue with the accuracy of that calculation. It appears that such interest has been calculated from 15 June 2021 on the amount of $650,000, rather than on the amount that was then standing to the credit of the interest-bearing account (which included accrued interest of $7,411.88 to that date). However, as the difference is likely to be relatively insignificant, I will adopt the amount as set out in the Hoerner affidavit.

33    Mr Shearman acknowledges that is necessary to account for the interest that has accrued on the deposit in the interest-bearing account since 15 June 2021 (which amounts to $36,615.31), either by deduction from the interest awarded under s 51A of the FCA Act or by crediting the accrued interest towards meeting the judgment sum. Accordingly, there will not be any “double recovery” of statutory interest and accrued interest.

34    It would be possible to make orders for the release to Mr Shearman of the deposit monies and interest standing to the credit of the interest-bearing account, and for the payment by Techin of an amount by way of interest under s 51A of the FCA Act less the accrued interest since 15 June 2021. However, it is more straightforward to give judgment for Mr Shearman for the amount of the deposit, together with statutory interest under s 51A of the FCA Act from the date on which the relevant cause of action arose in or about June 2021, and to order Techin to cause or facilitate the payment of the deposit and accrued interest from Maddocks to Mr Shearman on account of the judgment sum.

Costs

35    Mr Shearman submits that costs should follow the event; namely, that he was successful in establishing that he lawfully terminated the Contract of Sale and thereby made good his claim to the repayment of the deposit. Accordingly, Mr Shearman argues that Techin should pay his costs of the proceeding on a party and party basis.

36    Techin submits that Mr Shearman was unsuccessful on his misleading or deceptive conduct claim, which occupied a substantial proportion of the time and resources throughout the proceeding and in the trial. Techin argues that this is an appropriate case in which to exercise the discretion to make orders as to costs which reflect the parties’ respective success or failure on the distinct issues in the proceeding.

37    It is well established that the Court has a broad discretion to award costs. The discretion must be exercised judicially having regard to relevant facts and circumstances connected with the litigation. The purpose of the power is to compensate the successful party for the expense of litigation. The general principle is that costs follow the event, and are awarded in favour of the successful party in the litigation, unless such an outcome is displaced by the conduct of that party or some other relevant factor: see generally Northern Territory v Sangare (2019) 265 CLR 164 at [24]–[25] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ). However, as the exercise of direction is guided and not controlled by such principles, there is no automatic or absolute rule that costs will always follow the event nor that, in the absence of disentitling conduct, a successful party is to be compensated by an unsuccessful party: Kazar at [5] (Greenwood and Rares JJ), cf. at [46]–[47] (Foster J); see also Oshlack v Richmond River Council (1998) 193 CLR 72 at [40] (Guadron and Gummow JJ).

38    In appropriate circumstances, a successful party who has failed on particular issues may face adverse costs consequences, including an order depriving that party of the costs of those issues or requiring that party to pay costs incurred by another party in respect of those issues: see PKT Technologies Pty Ltd v Peter Vogel Instruments Pty Ltd (No 2) [2020] FCAFC 46 at [14]–[15] (Besanko, Banks-Smith and Stewart JJ). As noted by Katzmann, Wheelahan and Hespe JJ in Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd [2025] FCAFC 29 at [16], s 43(3) of the FCA Act expressly contemplates that the discretion in relation to costs can be exercised by ordering costs against a successful party or by ordering that the parties bear costs in specified proportions: see s 43(3)(c), (e).

39    The mere fact that a party is not successful on every argument or issue raised in the proceeding does not necessarily mean that it is appropriate to make an issues-based costs order or to adopt an issues-based analysis to the disposition of costs. This is particularly so where the allocation of costs between different issues is likely to be difficult, such as where there is a degree of overlap in the facts and evidence giving rise to separate claims or defences. As Riordan J stated in Saafin Constructions Pty Ltd (in liq) v MAG Financial and Investment Ventures Pty Ltd [2021] VSC 702 at [31(b)], “[w]here the issues involve a degree of overlap or common facts, which go in separate directions in relation to different issues, it will usually be undesirable to engage in an issue by issue analysis”. Further, parties are generally entitled to pursue alternative claims or arguments without the spectre of an adverse costs order in the event that not all such claims or arguments are ultimately accepted.

40    In Cretazzo v Lombardi (1975) 13 SASR 4, Jacobs J (at 16) “sound[ed] a note of cautious disapproval of applications, which are being made with increasing frequency, to apportion costs according only to the success or failure of one party or the other on the various issues of fact or law, which arise in the course of a trial”. His Honour continued (at 16):

But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.

41    The High Court made observations to similar effect in Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53; 90 ALJR 270 at [6] (French CJ, Kiefel, Nettle and Gordon JJ):

[T]he preferable approach in this case is the one usually taken, that costs should follow the outcome of the appeal. This is not a case where it may be said that the event of success is contestable, by reference to how separate issues have been determined [cf. Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322 at 393 [241] (Kiefel and Keane JJ)]. There are no special circumstances to warrant a departure from the general rule, and good reasons not to encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like.

42    In considering whether to make an issues-based costs order, it is relevant to have regard to whether and to what extent the issues were discrete, and whether or not it was reasonable for the issues to be raised. As Goldberg J observed in Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [54]:

[A] court should be reluctant to embrace the proposition that, as a general rule, it is appropriate to undertake an enquiry as to who was successful in relation to particular issues in a case to determine whether there should be an apportionment of costs against a successful party. A court should not be too ready to disallow costs simply because a party has failed upon an issue, unless it be quite a separate and distinct issue from the issues in respect of which it succeeded or unless there be some element of unreasonableness or inappropriate conduct in relation to that issue”.

See, to similar effect, Saafin Constructions at [30] (Riordan J), referring to Mickelberg v State of Western Australia [2007] WASC 140 (S), [43] (Newnes J).

43    Where an issues-based approach to costs is warranted, the costs awarded to the successful party can be proportionately reduced to reflect the Court’s rejection of particular claims or defences, in order to avoid “the complexities associated in allocating costs to particular issues”: Clough Ltd v Federal Commissioner of Taxation (No 2) [2021] FCA 267 at [6] (Colvin J), citing Phonographic Performance Co of Australia Ltd v Copyright Tribunal of Australia [2019] FCAFC 192 at [6]–[7] (Besanko, Middleton and Burley JJ). Any such apportionment does not aim for “mathematical precision” but rather seeks to achieve “a result that best reflects the interests of justice in the overall circumstances of the case”: PKT Technologies at [14] (Besanko, Banks-Smith and Stewart JJ).

44    In the present case, Mr Shearman succeeded in establishing that he had lawfully terminated the Contract of Sale and was entitled to an order that the deposit be repaid to him. In so far as costs ought to follow the event, in the sense of the “overall outcome” (see Queensland North Australia Pty Ltd v Takeovers Panel (No 2) (2015) 236 FCR 370 at [16] (Dowsett, Middleton and Gilmour JJ)), Mr Shearman was successful in obtaining the primary relief sought in his amended originating application. It nevertheless remains open to take into account the extent of each party’s success or failure on individual issues and their conduct of the proceedings: ibid. at [18]. The categories of case in which a successful party may be deprived of their costs or ordered to pay the other side’s costs include the situation “where a party has succeeded in obtaining the relief sought, but has not succeeded on all bases (factual or legal) upon which it sought such relief”: ibid. at [11].

45    In support of its submission that there should be no orders as to costs (so that each party would bear its own costs), Techin relied on spreadsheet analyses which purported to demonstrate that a significant proportion of the affidavit evidence in the proceeding was addressed to the ACL claim and that a substantial part of the trial was spent on the ACL claim. Techin submitted that this claim (which was characterised in Techin’s submissions as the “primary case” of Mr Shearman) was unsuccessful, and that the issue on which Mr Shearman succeeded (namely, that there was no binding contract or estoppel for the apartment to be delivered as a cold shell) could have been dealt with by more limited evidence and without the need for any expert evidence. Techin contended that this would have led to a shorter trial, arguing (somewhat ambitiously) that “[t]he matter would have been dealt with in the space of 2 days or thereabouts”. In my view, that contention is considerably overstated.

46    Counsel for Mr Shearman argued that Techin was seeking to deprive Mr Shearman of all of his costs, rather than proposing an issues-based costs order or an apportionment or reduction of costs by reference to success and failure on discrete issues. However, I understood Techin’s position to be, in effect, that Mr Shearman’s entitlement to costs in respect of the issues on which he succeeded should be offset by an adverse costs disposition in respect of the issues on which he was unsuccessful (primarily, the ACL claim), resulting in an outcome that neither party should recover their costs. In oral submissions, senior counsel for Techin floated a fallback argument that there should be a proportionate reduction of the costs awarded to Mr Shearman, albeit without nominating the specific percentage by which he contended the costs should be reduced.

47    I accept that the ACL claim for misleading or deceptive conduct absorbed a significant part of the evidence and submissions at the trial, and consumed time and resources in the conduct of the proceeding more generally. The ACL claim was the principal claim advanced by Mr Shearman when the proceeding was commenced in August 2021, although it must be recognised that this was at a time that the Contract of Sale was still on foot. At the outset, it was clear that Mr Shearman’s main objective was to rescind the Contract of Sale and avoid any obligation to settle, and to recover the deposit. By the time of trial, in circumstances where both parties had purported to terminate the Contract of Sale, the ACL claim was given somewhat lesser prominence in Mr Shearman’s submissions, being pursued primarily as an alternative basis on which he could avoid the Contract or (perhaps) recover some additional damages. While Mr Shearman did not ultimately succeed in his ACL claim, it was not suggested that the claim was unreasonably raised nor that it had no real prospect of success.

48    Nevertheless, it remains the case that the ACL claim involved a substantial body of evidence, which Techin was required to meet and respond to at the trial. Among other things, each of the parties engaged an expert architect to prepare a report in respect of the claimed shortcomings in the presentation of the completed Lascelles Toorak development, and the experts together prepared a joint report on those issues. Mr Shearman gave extensive evidence about the importance that he placed on the reputation of Mr Christopher Doyle as the architect of the Lascelles Toorak development, and called evidence from a real estate agent in relation to the reputation in the market of buildings designed by Mr Doyle. Detailed evidence and submissions were directed to the marketing of the development and the history of Mr Doyle’s involvement.

49    There was some degree of overlap in the facts giving rise to the respective claims and issues raised in the proceeding. However, the case in relation to the alleged “cold shell” variation and the repudiation of the Contract of Sale was primarily focused on a chronology of events to which the dealings prior to entry into the contract were less central, and which did not turn on evidence about the marketing of the development or the appearance and presentation of the completed development.

50    Having regard to all of these circumstances, I consider that it is appropriate to reduce the costs awarded to Mr Shearman to reflect his lack of success on the ACL claim. I do not attempt to do so with mathematical precision. The underlying rationale for the reduction in the present case is not that Mr Shearman should pay any of Techin’s costs in respect of the ACL claim, but rather that Techin should not be required to pay all of Mr Shearman’s costs of conducting and preparing evidence in support of that particular claim. On balance, I consider that a reduction of 25% is appropriate, so that Techin should be ordered to pay 75% of Mr Shearman’s costs of the proceeding.

Orders

51    For the reasons set out above, the final orders in the proceeding will be as follows:

(1)    There be judgment for the applicant against the respondent in the sum of $650,000 together with interest under s 51A of the Federal Court of Australia Act 1976 (Cth) in the amount of $194,177.26.

(2)    The respondent shall forthwith cause Maddocks Lawyers to return to the applicant the deposit of $650,000 paid under the contract of sale between the applicant as purchaser and the respondent as vendor dated 22 May 2018 for the land known as Apartment 301 at 14 Lascelles Avenue, Toorak, in the State of Victoria, together with any interest that has accrued thereon, on account of the sum for which judgment is given under order 1 of these orders.

(3)    The respondent’s cross-claim is dismissed.

(4)    The respondent pay 75% of the applicant's costs of the proceeding, including reserved costs, on a party and party basis.

Associate:

Dated:    21 November 2025