EA STEEL FIXING PTY LTD v SGP CIVIL PTY LTD [2026] SASC 24

Applicant: EA STEEL FIXING PTY LTD Counsel: MR R FENWICK ELLIOTT - Solicitor: INKBLACK LEGAL First Respondent: SGP CIVIL PTY LTD Counsel: MR A BAILLIE - Solicitor: FENWICK ELLIOTT GRACE Second Respondent: ANDREW VETTE Counsel: MR A BAILLIE - Solicitor: FENWICK ELLIOTT GRACE Hearing Date/s: 13/01/2026, 16/01/2026 File No/s: CIV-26-000386 B SUPREME COURT OF SOUTH AUSTRALIA (Civil: Application) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment 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 in which it was generated. EA STEEL FIXING PTY LTD v SGP CIVIL PTY LTD & ANOR [2026] SASC 24 Judgment of the Honourable Justice McDonald 2 March 2026 PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - AGREEMENTS AS TO COSTS PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - OTHER MATTERS PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - DEPRIVING SUCCESSFUL PARTY OF COSTS - OTHER CASES This is an application for costs by the applicant. The applicant and first respondent were in a sub-contractual relationship which came to an end in November 2025. At that time there remained outstanding payments owed to the applicant by the respondent. The applicant commenced adjudication proceedings. The applicant sought an order from this Court to be allowed the use of a telephone recording between the applicant and the second respondent that was obtained without the respondents’ knowledge in those adjudication proceedings. The matter was listed for a directions hearing to determine whether it was appropriate for the application to be heard ex parte but the first respondent was present for the proceeding. The applicant sought an order for costs to be paid by the respondents on a party/party basis. This was on the basis that they had effectively succeeded in the application and the applicant submitted that the respondents chose to join issue in the application. The respondents submitted that in all of the circumstances each party should bear their own costs. The respondents took issue with any suggestion that they were at fault in the way the proceedings unfolded, which resulted in the incurring of costs. -- 1 of 9 -- Held: 1. There will be no order for costs. 2. It was not necessary for the Court to determine the issue of whether the recording was made to protect the applicant’s lawful interests as the first adjudication proceedings superseded those before the Court. Building and Construction Industry Security of Payment Act 2009 (SA) ss 17(2)(a), 17(3)(c), 17(3)(h), 20(1), 21(3), 21(4)(a), 22(2); Surveillance Devices Act 2016 (SA) ss 4(1)(b), 4(2)(ii), 9(1), 9(1)(g), 19(1)(g); Supreme Court Act 1935 (SA) s 40(1), referred to. -- 2 of 9 -- EA STEEL FIXING PTY LTD v SGP CIVIL PTY LTD & ANOR [2026] SASC 24 Civil: Application McDONALD J. 1 EA Steel Fixing Pty Ltd (‘the applicant’) has made an application for costs. 2 On 9 January 2026, the applicant filed an originating application with a supporting affidavit seeking permission pursuant to s 9(1)(g) of the Surveillance Devices Act 2016 (SA) (‘the SD Act’) to use a recording of a telephone conversation that took place on 17 November 2025. 3 For reasons that remain unclear to me, the application was brought ex parte, although the respondents were given notice of the application and the first respondent (SGP Civil Pty Ltd) was in attendance when the matter was listed for hearing. Background 4 The applicant and the first respondent were previously in a sub-contractual relationship. From about the end of August 2025, the applicant undertook work for the first respondent on the North-South Corridor– River Torrens to Darlington project. 5 The subcontract came to an end on 17 November 2025. At that time there remained outstanding payments owed to the applicant by the first respondent. The applicant made two claims for a total sum of $1,070,496.94. 6 On 18 December 2025 the applicant commenced adjudication proceedings (‘the first adjudication’) under the Building and Construction Industry Security of Payment Act 2009 (SA) (‘the SOP Act’) for $691,536.25. A second payment claim for $397,960.69 was made on 2 December 2025. The SOP Act 7 The SOP Act creates a relatively rigid regime and time frame within which applications for adjudication over contested outstanding payments can be made. It relevantly requires that an application for an adjudication cannot be made unless a claimant has notified the respondent, within a period of 20 business days immediately following the due date for payment, of the claimant’s intention to apply for adjudication of the payment claim.1 The application must be made within 15 business days after the claimant receives a payment schedule from the 1 Building and Construction Industry Security of Payment Act 2009 (SA) s 17 (2)(a). -- 3 of 9 -- [2026] SASC 24 McDonald J 2 respondent2 and “may contain such submissions relevant to the application that the claimant chooses to include”.3 8 A respondent may lodge with the adjudicator a response to the claimant’s adjudication application five business days after receiving the application, or two days after receiving notice of an adjudicator’s acceptance of the application.4 9 In terms of the time frame for the adjudication, the SOP Act requires the adjudicator to determine an adjudication application “as expeditiously as possible” and in any case within 10 business days after the adjudication response is lodged with the adjudicator (or if no response is lodged, on or before the last date on which the response may be lodged) or within any further time that the claimant and the respondent may agree.5 10 Importantly, in determining an adjudication the SOP Act restricts those matters that an adjudicator may have regard to. These include the payment claim and schedule to which the application relates, “together with all submissions (including relevant documentation) that have been duly made in support of the claims schedule”.6 An adjudicator may, however, “request further written submissions from either party and must give the other party an opportunity to comment on those submissions”.7 The telephone conversation 11 The telephone conversation that was the subject of the originating application took place between Alexey Efremov, the sole director and secretary of the applicant and Andrew Vette (the second respondent), a director of the first respondent on 17 September 2025. I have been provided with a copy of the transcript of that telephone call. During the conversation Mr Vette complained about the progress of the project and in particular about the work undertaken by the applicant. In the context of Mr Efremov asking whether there was anything he could do, Mr Vette responded: I don’t know mate, I don’t know obviously what the answer to this is. I don’t know what the rectification work is I don’t know what you want to do mate but yeah, but if I was I’ll leave it in your hands but at this stage we ain’t paying you a fuckin’ cent. Okay? Because the amount of fuckin’ money you’ve cost us its fucking ridiculous. Night shift has cost us a fuckin’ fortune… 12 Mr Vette went on to further state: … its just not fuckin’ working. In fact we gotta get other guys in there to fuckin’ do the work and we trying to get them started as well, I don’t know I don’t know what you wanna 2 Building and Construction Industry Security of Payment Act 2009 (SA) s 17(3)(c). 3 Building and Construction Industry Security of Payment Act 2009 (SA) s 17(3)(h). 4 Building and Construction Industry Security of Payment Act 2009 (SA) s 20(1). 5 Building and Construction Industry Security of Payment Act 2009 (SA) s 21(3). 6 Building and Construction Industry Security of Payment Act 2009 (SA) s 22(2). 7 Building and Construction Industry Security of Payment Act 2009 (SA) s 21(4)(a). -- 4 of 9 -- [2026] SASC 24 McDonald J 3 do but uhm yeah uhm but its not working as it is. I don’t know if you wanna fuck off and go do somethin’ else. There’s no guarantee that as of tomorrow well you know, yeah that we won’t terminate you anyway because of the quality issues and fuckin’ program issues so I’ll leave that with you. 13 The applicant relies upon these statements made by Mr Vette as amounting to a repudiation of the contract. 14 The originating application sought an order from this Court that:8 EA Steel Pty Ltd is permitted to use the electronic recording and/or transcript of a telephone call between Alexey Efremov and Andrew Vette on 17 November 2025 in application 2025SAAT140 and an application yet to be lodged for an Adjudication under the Building and Construction Industry Security of Payment Act 2009. The SD Act 15 The SD Act prohibits the use of such a device “to record a private conversation to which the person is a party”.9 There is an exception to the prohibition if “the use of the device is reasonably necessary for the protection of the lawful interests of that person [the person recording the conversation]”.10 16 The SD Act further prohibits the use, communication or publication of information or material derived from the use of a listening device in circumstances where the device was used to protect the lawful interests of the person, except in certain identified circumstances.11 One of those circumstances is where it is in accordance with an order of a Judge of this court.12 17 There was no dispute between the parties that in recording the conversation, the applicant was using a Listening Device, bringing the recording of the conversation within the terms of the SD Act. The applicant maintained that the recording was made for the protection of his lawful interests. The respondents however disputed that to be so and contended it was not therefore open for the applicant to make an application pursuant to s 19(1)(g) of the SD Act. 18 Ultimately, it was not necessary for me to determine this issue as events in the first adjudication proceedings superseded the proceedings in this Court. Supreme Court Proceedings 19 At 2.15pm on 13 January 2026 the matter was listed for a directions hearing in this Court. The basis for that listing was to determine whether it was appropriate to hear the application ex parte as had been nominated in the initiating application. 8 FDN 1. 9 Surveillance Devices Act 2016 (SA) s 4(1)(b). 10 Surveillance Devices Act 2016 (SA) s 4(2)(ii). 11 Surveillance Devices Act 2016 (SA) s 9(1). 12 Surveillance Devices Act 2016 (SA) s 9(1)(g). -- 5 of 9 -- [2026] SASC 24 McDonald J 4 As I have mentioned, the first respondent had been notified of the proceedings and was present. 20 At that hearing I was advised that at 11.00am that same day the adjudicator had handed down his decision in the first adjudication application in favour of the applicant. The applicant therefore abandoned the first part of the application in this Court, however maintained the second aspect, seeking permission to use the transcript/recording in the second adjudication. I was advised that it was necessary for the applicant to have filed all materials upon which they sought to rely in those proceedings by midnight that evening. 21 Counsel for the respondents13 indicated that whilst he was in a position to make some submissions that day, those submissions would be limited given the lack of notice that he had received of the application. 22 I determined to adjourn the proceedings to enable the respondents to prepare more fulsome submissions, on the basis that in the event that the applicant was successful and an order was made permitting the use of the transcript/recording, the respondents would consent to the adjudicator receiving the material out of time. 23 The matter was listed for further submissions at 2.30pm on 16 January 2026. In advance of that hearing I was advised that the respondents had determined to consent to the use of the transcript/recording in the adjudication proceeding. The only issue that therefore remained outstanding related to an application for costs. It is that issue that is the subject of this decision. Consideration 24 The applicant seeks an order for their costs to be paid by the respondents on a party/party basis. The respondents resist such an order and submit that in all of the circumstances, each party should bear their own costs. 25 Both the parties rely on the history of events in support of their respective positions. The relevant chronology is as follows: • 17 September 2025, the telephone conversation between Mr Efremov and Mr Vette. • 18 December 2025, the applicant commenced the first adjudication proceedings. • 5 January 2026, the first respondent put in their response to the first claim with a supporting affidavit from Mr Vette dated 2 January 2026. 13 Although at this hearing counsel for the respondents indicated that he did not have confirmed instructions to appear for the second respondent, that situation was addressed by 5.59pm, at which time it was confirmed that the solicitors and counsel acted for both the first and second respondents. -- 6 of 9 -- [2026] SASC 24 McDonald J 5 • 5.24pm on 8 January 2026, the applicant wrote to the respondents and advised for the first time of the existence of the recording of the telephone conversation. The relevant portion of the email reads: My client is in possession of a recording of the telephone conversation of around 2.00pm on 17 December 2025 between Andrew Vette and Alexey Efremov which is relevant to the current application and to the second application about to be lodged. The Surveillance Devices Act 2016 at section 9(b) provides for consent of each party to use the material derived from that conversation. If your client were to consent to my client using the transcript of that conversation, it would obviate the need to make an urgent application to the Supreme Court. Does your client consent to my client using the transcript of that conversation? It was by this correspondence that the respondents first became aware of the existence of the recording. • 11.12pm on 8 January 2026, the respondents advised that Mr Vette had not consented to the recording of the conversation and additionally did not consent to the use, communication or publication of information or material derived from such recording. The respondents also requested that the applicant identify the person who had made the recording and put the applicant on notice that any application to the Court to use the material would be opposed. • 9 January 2026, the Originating Application and supporting affidavit were filed by the applicant. The respondents were served at about 5.00pm that same date. • 11.00am on 13 January 2026, the first adjudication was handed down. • 3.18pm on 13 January 2026, the hearing of the originating application was adjourned to enable the respondents to further consider their position and take instruction, particularly given the development that had taken place at 11.00am. • 5.59pm on 13 January 2026, the respondents wrote to the applicant and made an offer to consent to the use of the recording on the basis that applicant “promptly communicate with chambers that agreement has been reached between the parties” and that a notice of discontinuance be filed, and that there be no order made for costs. • At 12.32pm on 15 January 2026, the applicant replied and advised the respondents that there would be no agreement about costs. -- 7 of 9 -- [2026] SASC 24 McDonald J 6 26 It is the applicant’s contention that they should be awarded the costs that they expended in this Court on the basis that they effectively succeeded in their application, in that the recording will now form part of the material in the second adjudication proceedings. It was submitted that the respondents chose to join issue in the application rather than to stand by and abide the outcome. 27 As to the timing of the filing of the originating application, it was submitted that it was only when the applicant received Mr Vette’s statutory declaration that they became aware that he had deposed to a version of the telephone conversation which was inconsistent with the recording. It was in those circumstances that the applicant arrived at the view that it was necessary to rely on the recording. 28 The respondents take issue with any suggestion that they were at fault in the manner in which these proceedings unfolded, resulting in both parties incurring costs. The respondents do not however seek payment of their costs but rather taken the position that no order as to costs should be made. 29 Section 40(1) of the Supreme Court Act 1935 (SA) provides that costs are at the discretion of the Court: 40—Power of court with regard to costs (1) Subject to the express provisions of this Act, and to the rules of court, and to the express provisions of any other Act whenever passed, the costs of and incidental to all proceedings in the court, including the administration of estates and trusts, shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid. 30 The Court may order costs at any stage in proceedings on a standard costs basis, on a solicitor/client basis, indemnity basis or another basis specified by the Court. 31 Ordinarily costs follow the event; the Court generally exercises its discretion as to costs at the hearing of an application on its merits to the successful party. That success may be the consequence of a favourable determination of the issue by the Court or by the capitulation of the other party on the basis that their position is without merit. 32 In this application no ruling was required given the concession made by the respondents. I accept however that the concession should not be characterised as a capitulation given the events preceding and surrounding this change of position. 33 The applicant initially made the decision to not rely upon the transcript/recording in the first adjudication proceedings, consequently failing to put the first respondent on notice of its existence. 34 It was only three days after the first respondent filed their response that the applicant disclosed the existence of the recording, in the context of a request that the first respondent consent to its use in the adjudication. Somewhat surprisingly, -- 8 of 9 -- [2026] SASC 24 McDonald J 7 in making that request not only did the applicant fail to provide a transcript of the recording, but they disclosed nothing about the circumstances in which the recording came to be made. When asked about this during the course of submissions the applicant’s counsel suggested that the reason that a transcript was not provided was that it had not yet been prepared and it was open to the respondents to request a copy. 35 In my view that submission completely misses the point. The applicant had chosen to employ the tactic of not disclosing the existence of the recording and then, at a time that was advantageous to them, they advised of no more than the fact of a record, in an attempt to force the first respondent’s hand in consenting to a transcript that they had not seen, being put before the adjudicator. 36 The first respondent was entitled to decline to consent, particularly in these circumstances. The applicant was prepared to chance their hand, by bringing the application in this Court, in the knowledge that they had no entitlement to put further material before the adjudicator in the first adjudication. 37 It is of significance that by the time the matter came before this Court there had been delivery of the decision in favour of the applicant on the first adjudication. This decision included a finding that the telephone conversation that took place on 17 November 2025 occurred in the terms described by Mr Efremov and not Mr Vette. It follows that by the time the matter came before this Court there was limited utility in the respondents maintaining their position in relation to the use of the recording. There had been a material change in circumstances that warranted the obtaining of further instructions. This was not a case of the respondents capitulating, but rather it involved them making a pragmatic reassessment of the situation. 38 I have arrived at the view that the applicant made a series of calculated forensic decisions about whether to disclose the existence of the recording and when to place reliance upon it. The respondents responded in a timely fashion, in a manner that was not unreasonable as the circumstances unfolded. 39 For the reasons that I have set out, this is an appropriate case in which to make no order for costs. -- 9 of 9 --