An architectural firm has been ordered to pay indemnity costs to a contractor, which the Supreme Court found was underpaid by a little more than $85,000.

BS&R Group, a carpentry firm, launched legal action against Westport Architecture in 2015 after it claimed that it was owed $87,760 for work carried out at three different homes in 2014.

Westport admitted that it had not fully compensated for one of the contracts, but argued in court that BS&R had breached a deal and inflated costs.

In 2021, Puisne Judge Larry Mussenden — now the Chief Justice — found that Westport had broken the contract and held back payments on jobs as BS&R general manager Anthony Madeiros worked to finish the customer’s home in time for Christmas.

However, a fresh dispute arose after BS&R sought compensation for more than $250,000 in legal costs in the matter, which Westport argued were excessive for the comparatively small claim.

While an initial application was refused in 2022, a renewed application was filed after a Court of Appeal ruling that clarified the test that should be applied.

In a decision published this week, Mr Justice Mussenden granted the application for indemnity costs, citing “exceptional circumstances” in Westport’s handling of the case.

He said that Westport had made claims that BS&R had padded their bills without supporting evidence, had sought adjournments for purposes that had no impact on the case, and had launched “hopeless” counterclaims.

Mr Justice Mussenden wrote: “In my view, I have had regard to all the circumstances of the case, and I regard the conduct of the defendants as set out above, which takes the case out of the norm.

“I have come to the conclusion that the conduct amounts to unreasonableness, on the part of the defendants, due to their conduct before and during the trial.

“I have also concluded that the defence and counterclaim were weak, and the unreasonable conduct of playing off BS&R in respect of one job against another job, which was opportunistic.”

The Supreme Court previously heard that Westport — a partnership of F. Stephen West and his son, Tripp West — had subcontracted BS&R to carry out work at three homes.

However, BS&R complained that Westport had underpaid and withheld payments for one project until work on another was completed.

Mr Justice Mussenden awarded BS&R $2,417 for one job, $31,802 for a second and $53,124 for the third.

However, he also awarded Westport $1,500 for an appliance removed from the property Vista Verde, and $65 for a painting “touch-up” job at the house.

The reductions resulted in a final award of $85,780 to BS&R, but the company subsequently applied for an award for costs on an indemnity basis.

At a hearing earlier this year, Allan Doughty, counsel for BS&R, said his client had won every point of its claim and the conduct of Westport before and during the trial amounted to unreasonable behaviour.

Mr Doughty said that during the trial Tripp West admitted speaking to his father outside court hours while he was still sworn, preparing questions for his father to answer and interfering in the cross-examination to “correct” an answer.

He said that BS&R was required to get an expert witness to counter a claim by Westport that it had padded its bills, only for the firm not to present any evidence to support the allegation or cross-examine the witness.

Mr Doughty added that BS&R also had to prepare a legal response to a witness statement included in a counterclaim launched by Westport, only for the witness to never be called.

He submitted that the defendant’s case was speculative, weak, opportunistic and thin.

Scott Pearman, for Westport, argued that indemnity costs were the exception rather than the rule and BS&R’s costs were “exceptionally high” for a case in which only about $50,000 was in dispute.

He added that Westport had represented itself during the trial and should be excused for mistakes that stemmed from its inexperience.

Mr Justice Mussenden responded: “I do not accept those arguments, in particular that since this was a small claim the costs should not be so considerable and awarding indemnity costs reduces the judicial scrutiny of the Registrar on taxation.

“In doing so, I am guided by the principle that a more fair result should be achieved for the successful party, BS&R.

“The essence of the reasoning is that the defendants, as litigants in person, embarked on a course of conduct before and during trial that took it out of the norm.

“There are consequences for such conduct.”

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