A L Builders Pty Ltd v. Fatseas (No. 2)

[2014] QCATA 319

CITATION: A L Builders Pty Ltd v Fatseas (No 2) [2014] QCATA 319

PARTIES:	A L Builders Pty Ltd (Applicant/Appellant)
v
Nicholas Fatseas Tricia Fatseas (Respondents)

APPLICATION NUMBER: APL156-14

MATTER TYPE: Appeals

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Senior Member Oliver
Member Howe

DELIVERED ON: 29 October 2014

DELIVERED AT: Brisbane

ORDERS MADE: The applicant/appellant pay the respondents costs of the appeal and further application for miscellaneous matters filed 28 August 2014 as agreed or failing agreement as assessed by Hickey and Garrett, costs assessors, on a standard basis by reference to the Supreme Court of Queensland Scale of Costs, and the assessment be paid within 28 days of delivery of the assessment of costs to the applicant/appellant.

CATCHWORDS: Costs – building dispute – award of costs outside the usual rule of the Tribunal that each party bear their own costs – the general rule that costs follow the event applied – the Member’s decision on reserved costs left undisturbed – appropriate scale of costs

APPEARANCES:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REASONS FOR DECISION

1. This application involves an application for costs by the respondent consequent on the failure of an appeal brought by the applicant against the decision of a Member refusing to order a trial of preliminary issues prior to the determination of the substantive proceeding at final hearing.

2. The appeal was determined on the papers and the decision dismissing the appeal was delivered on 9 July 2014.

3. The successful respondents now seek their costs of the initial application before the Member, the appeal and this application for an order for costs on a standard basis by reference to the Supreme Court of Queensland Scale of Costs.  Both parties have made submissions.

4. This matter involves a complex building dispute. Section 77 of the Queensland Building and Construction Commission Act 1991 (QBCC Act) displaces the usual order in Tribunal proceedings that each party bear their own costs.[1]  Subject to exercise of discretion, the general rule about costs is thereby incorporated into building disputes before the Tribunal.  The general rule is that a successful party is entitled to recoup its costs against the other party.  That is, the costs should follow the event.  That might not be appropriate in some circumstances, such as the delinquent behaviour of a winning party, or the pyrrhic nature of the win.[2] 

   [1]Lyons v Dreamstarter Pty Ltd [2012] QCATA 71.

   [2]The general principle finds expression in section 689(1) of the Uniform Civil Procedure Rules 1999 (UCPR) as those rules apply to the Supreme, District and Magistrates Courts. The QCAT Act does not incorporate the UCPR but the law associated with Chapter 17A of the UCPR is of assistance in determining when and what awards of costs should be made in the interests of justice: QCAT Act s 102(1).

5. The applicant submits that no cost order should be made.  The submission is that the appeal was advanced because the applicant genuinely believed that the time taken at trial and the legal costs to be incurred by both sides could be substantially reduced if there was a preliminary adjudication on the central point whether the construction was carried out under a fixed price or cost plus contract.  The applicant contended for a fixed price contract and the respondents for a costs plus.  It was entirely reasonable, says the applicant, for the applicant to test the efficacy of its view by taking the point on appeal.

6. According to the respondents, the decision of the learned Member below was merely the application of well-established principles to the unique facts of the litigation in question.  The Member found that there was no suggestion in the application before him that the determination of the suggested preliminary issue would dispose of the litigation altogether.  Nor would it shorten the litigation.  It did not involve an issue of statutory construction.  It would probably require a determination of credibility of some witnesses.

7. The potential problems of a preliminary determination of a separate issue before the determination of all issues together was discussed by Kirby and Heydon JJ in Waterways Authority v Fitzgibbon[3] where their Honours said at [37]: ‘It is notorious that the course of ordering that a preliminary separate question be tried, and deciding the case on that question, rather than deciding the case on all issues, is a course which can create graver difficulties than those which it is intended to solve’.  As this statement makes clear, this type of application is a challenging one from outset.

   [3](2005) HCA 57.

8. As stated in our decision of 9 July 2014, the critical issue on appeal was the exercise of discretion by the learned Member below.  We also explained in our earlier decision that there is a presumption that a discretion has been exercised correctly.  The learned Member was at pains to set out the authorities on the matter of separate determination of an issue before hearing.  Given the challenging nature of that application, and given the matter was a matter of discretion to be exercised by the learned Member[4], it is perhaps best to also describe the appeal against exercise of discretion in the circumstances as challenging rather than, as submitted, entirely reasonable.

   [4]Which the Member made clear in his decision – A.L Builders Pty Ltd v Fatseas [2014] QCAT 092 at [17].

9. Generally the respondents have been put to the expense of defending the appeal.  It is only fair in the circumstances that as between the parties the unsuccessful party pay the costs of the appeal.

10. There is no reason why the usual order as to costs should not apply, at least with respect to the costs of the appeal.  The applicant must pay. 

11. Additionally however the respondents seek an order for the costs of the application before the learned Member. The learned Member made an order for costs.  He reserved them.  Although the costs of the proceeding will be within the discretion of the Tribunal at hearing, one might anticipate the usual rule that costs follow the event will also apply to these reserved costs.[5] 

    [5]And see UCPR r 698.

12. This application is in effect asking that the order made by the learned Member, after his detailed consideration of the circumstances of the application before him, and assumedly the cost order made in light of those circumstances, be set aside.  In our opinion that is not appropriate.  As with the issue of separate determination of a preliminary issue, there is no indication the discretion of the learned Member miscarried with respect to his cost order.  As explained in our decision on the substantive aspects of the appeal, it is not to the point that we might make a different order than the learned Member.  In any case, there is nothing unfair in leaving costs to be dealt with at final hearing after all the evidence has been heard and the conduct of the parties assessed.

13. As to the appropriate scale of costs, this matter originated in the Magistrates Court but was transferred to the Tribunal by consent of the parties on 22 September 2012.  Since that time and prior to the filing of the application for determination of a preliminary issue, the counter-application of the respondents has increased their claim to an amount within the jurisdiction of the Supreme Court.  It is appropriate that the costs of the appeal be ordered on the standard basis on the Supreme Court scale.