When getting judgment doesn’t mean you won the case
The Star Entertainment Sydney Properties Pty Ltd v Buildcorp Group Pty Ltd trading as Buildcorp Interiors (No 2) (Costs) [2026] NSWSC 190
In what Justice Rees described as “fairly disastrous proceedings”, The Star Casino learned an expensive lesson about litigation strategy, the importance of suing the right defendant, and what it actually means to “win” a case.
The Star sued its builder, Buildcorp, and sought $4 million in damages for aluminium composite panels. The panels were removed from three refurbishment projects after the 2017 Grenfell Tower fire in London. After nearly six years of litigation and a hard-fought trial, the court awarded The Star $285,662. That’s about 7% of what they claimed.
But here’s where it gets truly ugly. The Star’s legal costs came in at $2,470,424. Buildcorp’s costs were $1,963,814. The parties did not disclose the architect’s costs, but Justice Rees noted a “microscopic focus” on the architect at trial. As Her Honour observed with admirable understatement, “Clearly enough, the parties’ total legal costs exceed the amount in issue.”
So Who Actually Won?
This was the central question Justice Rees had to grapple with when determining who should pay whose costs. The Star argued it had succeeded and should get its costs. Buildcorp argued it was the true victor, having successfully defended a substantial claim.
Her Honour’s answer was unequivocal and deserves to be quoted in full (at paragraph [48] of her judgment):
“When the award of damages made in Star Casino’s favour is viewed in the context of its claims as a whole, I do not think it can be said that Star Casino has succeeded in this litigation. I think it unlikely that Star Casino would have commenced proceedings in respect of the third project in isolation. On the other hand, the builder has successfully defended a substantial claim on the causes of action which mattered and uttered no protest in respect of the third project. Costs should follow the event, but I consider that the event is the builder’s successful defence of the claim made against it.”
Translation: getting some damages doesn’t mean you won. Context matters. The Star sought $4 million, overwhelmingly tied to the first project. It lost on that project and on the second project. It only succeeded on the third and smallest project, which represented about 7.5% of its total claim.
The result? The Star was ordered to pay Buildcorp’s costs.
The Strategic Blunder
The case reveals what appears to have been a significant strategic misstep by The Star. The work in question was done under a “Construct Only” contract that expressly provided Buildcorp had no “Design Responsibility”. Design responsibility rested with The Star’s architect, The Buchan Group.
But The Star didn’t sue its architect. It sued the builder.
This put Buildcorp in what Justice Rees described as an “invidious position”. Facing a $4 million claim for design failures when it had no design responsibility, Buildcorp had little choice but to cross-claim against the architect. This meant Buildcorp was effectively prosecuting claims that The Star could and arguably should have brought itself.
The consequences were significant. When The Star’s claims failed, Buildcorp’s cross-claim against the architect became unnecessary to determine. The litigation dragged the architect through nearly six years of proceedings. The architect occupied 43% of the trial transcript with extensive expert evidence. The architect also produced 129 pages of closing submissions, which Justice Rees described as “excessive and, indeed, oppressive”.
Spreading the Hardship
Justice Rees made what’s known as a Sanderson order, requiring The Star to pay the architect’s costs directly. Her Honour also ordered The Star to pay Buildcorp’s costs of the cross-claim against the architect. The reasoning was straightforward: it was reasonable for Buildcorp to sue the architect, and The Star’s decision not to do so itself was “conduct such as to make it fair to impose liability on Star Casino for the costs of the architect”.
Justice Rees considered whether to make a Sanderson order or a Bullock order and took into account The Star’s financial position. The Star was not insolvent, but its parent company faced financial difficulties and liquidity pressures. These issues created uncertainty about its ability to continue as a going concern. Her Honour decided any hardship should fall on the architect rather than the builder, to “spread the hardship”.
The Gross Sum Orders
Rather than sending the parties off to costs assessment, which Buildcorp’s solicitor feared would lead to “very hard fought” satellite litigation, Justice Rees made gross sum costs orders. The Star was ordered to pay Buildcorp $800,000 for defending the main claim and $275,000 for the costs of the cross-claim against the architect.
The court calculated these figures by taking Buildcorp’s actual costs, apportioning them across different parts of the litigation, and applying standard discount rates. The result is immediate certainty without the expense and delay of formal assessment.
Key Takeaways for Practitioners
1. Sue the right defendant. The Star’s decision not to sue the party with design responsibility proved extremely costly. While we can’t know all the reasons behind that decision, the case shows the consequences of getting it wrong.
2. Winning damages doesn’t mean you won the case. Success is measured in context. A small award against a large claim can be a loss, particularly when costs are taken into account.
3. Costs can dwarf the amount in dispute. This case is an extreme example, but it’s a useful reminder to clients about the economics of litigation. Sometimes the battle isn’t worth fighting.
4. Strategic decisions have downstream consequences. The Star’s decision not to sue the architect meant Buildcorp had to, creating a cross-claim that The Star ultimately had to pay for.
5. Calderbank offers require serious consideration. Neither Calderbank offer in this case led to indemnity costs orders, but the case shows how parties assess offers with hindsight. The builder made an early offer to carry out rectification work on the second project, but delayed providing draft agreements for months, which complicated the offer. The architect made a late offer of $1 million, and the court found it was not unreasonable to reject that offer, given the builder faced significant exposure and had a strong cross-claim.
6. Financial stability matters in costs orders. The Star’s financial difficulties influenced the form of costs order made, with Justice Rees opting to “spread the hardship” through a Sanderson order.
A Cautionary Tale
Justice Rees opened her judgment and noted that lead counsel for The Star was briefed only one month before trial. She also said she could not “begin to know the multitude of reasons why one party is sued and not another”. There’s no criticism of counsel in the judgment, nor should there be.
The case stands as a cautionary tale about litigation strategy and identifying responsible parties. It also highlights the risks of pursuing claims where costs exceed the value of the prize. The Star obtained judgment but lost the case on costs. After nearly six years and more than $2.4 million in legal fees, The Star now faces costs orders exceeding $1 million. It recovered less than $300,000 in damages.
As Her Honour put it in her opening paragraph, the proceedings were “fairly disastrous in two senses. First, the plaintiffs (Star Casino) may have sued the wrong defendant (being the builder as opposed to the architect). Second and relatedly, Star Casino sought some $4 million in damages but was awarded only $285,662.”
For a company that makes its money on calculated risk, The Star would have done well to heed Kenny Rogers’ advice: “You got to know when to hold ’em, know when to fold ’em, know when to walk away”. The Star’s litigation strategy proved to be a losing bet.
Jake McKinley notes that this article is written for the purpose of providing generalised information and not to provide specialised legal advice. If you require qualified legal advice on anything mentioned in this article, our experienced team of solicitors at Jake McKinley are here to help. Please get in touch with us on 02 9232 8033 today to make an enquiry.
Article Written by Hayden Nelson, Solicitor
