Downer EDI Rail Pty Ltd v John Holland Queensland Pty Ltd (No 2) [2025] QSC 347

SUPREME COURT OF QUEENSLAND CITATION: Downer EDI Rail Pty Ltd v John Holland Queensland Pty Ltd (No 2) [2025] QSC 347 PARTIES: File No BS 4350/25 DOWNER EDI RAIL PTY LTD (ACN 000 002 031) (Applicant) v JOHN HOLLAND QUEENSLAND PTY LTD (ACN 133 069 280) (Respondent) File No BS 4615/25 JOHN HOLLAND QUEENSLAND PTY LTD (ACN 133 069 280) (Applicant) v DOWNER EDI RAIL PTY LTD (ACN 000 002 031) (Respondent) FILE NO/S: BS 4350/25 BS 4615/25 DIVISION: Trial division PROCEEDING: Originating application ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 15 December 2025 DELIVERED AT: Brisbane HEARING DATE: Heard on the papers JUDGE: Cooper J ORDER: File No BS 4350/25 The applicant, Downer EDI Rail Pty Ltd, is to pay 80% of the costs of the respondent, John Holland Queensland Pty Ltd, of and incidental to the proceeding (including reserved costs) to be assessed on the standard basis if not agreed. -- 1 of 5 -- 2 File No BS 4615/25 The respondent, Downer EDI Rail Pty Ltd, is to pay 80% of the costs of the applicant, John Holland Queensland Pty Ltd, of and incidental to the proceeding (including reserved costs) to be assessed on the standard basis if not agreed. CATCHWORDS: PROCEDURE – COSTS – GENERAL RULE: COSTS FOLLOW EVENT – INCONCLUSIVE PROCEEDINGS – PARTIAL SUCCESS – where the applicant and respondent each had partial success in two applications previously heard by the Court – what costs order should be made Uniform Civil Procedure Rules 1999 (Qld) r 681 Courtney v Chalfen [2021] QCA 25, applied Downer EDI Rail Pty Ltd v John Holland Queensland Pty Ltd [2025] QSC 310, cited COUNSEL: File No BS 4350/25 D O’Sullivan KC for the applicant TJ Breakspear SC with BJ Kabel for the respondent File No BS 4615/25 TJ Breakspear SC with BJ Kabel for the applicant D O’Sullivan KC for the respondent SOLICITORS: File No BS 4350/25 White & Case for the applicant Corrs Chambers Westgarth for the respondent File No BS 4615/25 Corrs Chambers Westgarth for the applicant White & Case for the respondent [1] On 18 November 2025, I delivered judgment in two related proceedings.1 Defined terms used in that judgment have the same meaning in these reasons. [2] The proceedings arose from a dispute concerning the scope of the decision-making authority of an Independent Expert to be appointed by the parties under cl 62.4 of the D&C Contract. [3] John Holland argued that this authority is limited to the Dispute identified in a Notice of Dispute, and the subject of a mandatory process of executive negotiation before 1 Downer EDI Rail Pty Ltd v John Holland Queensland Pty Ltd [2025] QSC 310. -- 2 of 5 -- 3 referral to Expert Determination; it did not extend to a new cause of action or claim for relief introduced into the Expert Determination by way of a cross-claim. [4] Downer maintained it was not required to concede to John Holland’s position before the Dispute proceeded to Expert Determination, and expressly reserved what it asserted to be its right to bring a cross-claim in the Expert Determination if it considered that the case brought forward by John Holland justified it doing so. [5] Downer’s application sought to compel John Holland to comply with the obligation under the D&C Contract to execute an Expert Determination Agreement in a pre- agreed form. [6] John Holland opposed Downer’s application and filed its own application seeking declaratory relief to identify the scope of the Dispute referred to Expert Determination and the corresponding jurisdiction of the Independent Expert to decide that Dispute. [7] I ordered that John Holland execute the Expert Determination Agreement, but also made declarations of the type sought by John Holland. [8] These reasons deal with the costs of both proceedings after the filing of written submissions on that issue. The parties’ submissions [9] Downer submits that John Holland should pay its costs of both proceedings to be assessed on the standard basis. As to its own application, Downer submits that it was the successful party because the court made the order it sought. Downer could not have obtained that order without bringing the application and pursuing it to a final hearing because John Holland was unwilling to execute the Expert Determination Agreement. As to John Holland’s application, Downer submits that although orders of the type sought by John Holland were made, the precise form of that relief was only advanced at a very late stage of the proceeding. John Holland did not obtain orders in the form originally sought by its proceeding. By the time John Holland revised the form of relief it sought, the parties had already incurred substantial costs in filing submissions concerning a form of relief that was not granted. [10] John Holland submits that Downer should pay its costs of both proceedings on the basis that, despite Downer obtaining the relief it sought, the matters that were the subject of dispute were decided in John Holland’s favour. In that respect, John Holland submits that it succeeded in relation to: (a) the Construction Issue concerning the proper interpretation of the words “cross- claim” in Rule 1.2, that being the substantive controversy which resulted in the parties bringing their respective applications; (b) the question whether the Construction Issue should be determined by the court or the Independent Expert (including whether the issue was hypothetical until such time as Downer purported to bring a cross-claim in the Expert Determination and whether determination of the issue by the court was in the interests of justice and convenience); -- 3 of 5 -- 4 (c) the grant of ancillary declaratory relief reflecting the determination of the Construction Issue in its favour. Consideration [11] Rule 681(1) of the Uniform Civil Procedure Rules 1999 (Qld) provides that the costs of a proceeding are in the discretion of the court but follow the event unless the court orders otherwise. The rationale for the general rule that costs follow the event is that costs are not awarded to punish an unsuccessful party, but as a means of indemnifying the successful party.2 [12] Although two applications were argued and determined there was, in substance, a single dispute as to whether John Holland should be compelled to execute the Expert Determination Agreement before the Construction Issue was resolved. In those circumstances, it would be artificial to view the outcome of each application as a separate event. On that basis, I accept John Holland’s submission that, notwithstanding that it was ordered to execute the Expert Determination Agreement, it enjoyed greater success than Downer. I do not accept, however, that the entirety of the dispute was decided in John Holland’s favour. [13] Having considered the parties’ submissions, I have concluded that Downer should not be ordered to pay all of John Holland’s costs. There are two reasons for this conclusion. [14] First, John Holland’s argument that Downer’s application should be refused on the basis that Downer had, by its position on the Construction Issue, shown itself not to be ready, willing and able to comply with its obligations under cl 62 of the D&C Contract did not succeed. It is true, as John Holland submits, that the position it took at the hearing made it unnecessary to decide that aspect of the dispute.3 Of course, John Holland could have chosen not to raise that issue and instead limited its argument to one seeking ancillary declaratory relief to condition an order that it execute the Expert Determination Agreement. John Holland did not limit its argument in that way. Consequently, costs were incurred in addressing an issue that ultimately did not have to be decided. On that basis, I do not consider it appropriate to require Downer to indemnify John Holland for those costs. [15] Secondly, there is force in Downer’s submission that John Holland’s amendment of the form of the ancillary declaratory relief it was seeking, at a relatively late stage, resulted in costs being incurred in addressing a form of relief that was not granted. That is not a basis to order that John Holland pay Downer’s costs of John Holland’s application. However, it is a reason why I do not consider it appropriate to require Downer to indemnify John Holland for those costs. [16] On the material available to me it is not possible to identify or quantify with any precision the amount by which these matters should reduce a costs order made in John Holland’s favour. I have had to take a broad-brush approach. In doing so, I have concluded that Downer should be ordered to pay 80% of John Holland’s costs of both proceedings on the standard basis. I will make the same order in each proceeding. In 2 Courtney v Chalfen [2021] QCA 25, [4] citing Oshlack v Richmond River Council (1998) 193 CLR 72, 97 [67]. 3 Downer EDI Rail Pty Ltd v John Holland Queensland Pty Ltd [2025] QSC 310, [98]-[100]. -- 4 of 5 -- 5 that way the costs can be assessed globally, without the need to attribute particular costs to one proceeding or the other. -- 5 of 5 --