Baque v Rivergum Homes Pty Ltd

[2013] QCATA 200

CITATION: Baque v Rivergum Homes Pty Ltd [2013] QCATA 200

PARTIES:	Mr Kenneth Charles Baque (Applicant/Appellant)
V
Rivergum Homes Pty Ltd (Respondent)

APPLICATION NUMBER: APL484-11

MATTER TYPE: Appeals

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Richard Oliver, Senior Member
Kate Buxton, Member

DELIVERED ON: 4 July 2013

DELIVERED AT: Brisbane

ORDERS MADE: The applicant pay to the respondent by 1 August 2013 costs in the sum of $95,260.42 and interest in the sum of $85,643.91 plus daily interest of $60.83 until payment.

CATCHWORDS:

Costs and Interest – where  application for costs of the original proceeding and the appeal – where contractual interest claimed – where tribunal’s  jurisdiction to award costs considered –  where contract provided for the recover of costs for debt collection – whether costs can be quantified – where  interest calculated under the contract.

Queensland Civil and Administrative Tribunal Act2009, s 102
Queensland Building Services Authority Act s 77

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of Queensland Civil and Administrative Tribunal Act2009 (QCAT Act).

REASONS FOR DECISION

1. Following the decision on 6 February 2013 to allow the appeal in part, affirming the original finding in relation to liability for payment under the contract but allowing reconsideration of the issues of costs and interest, this Appeal Tribunal invited further submissions from the parties on those issues.

1. The appellant, Mr Baque, originally complained that the learned Member had denied him procedural fairness in making decisions on the issue of cost and interest without inviting further submissions from the parties.  We accepted the desirability of hearing further from the parties in relation to the issue of costs and interest both in the original building dispute application and in this appeal and allowed the parties to make further submissions by 28 February 2013.

1. The respondent, Rivergum Homes Pty Ltd, duly filed written submissions on that date.  Those submissions were received from Mr Baque.  His former solicitors filed a notice on 11 March 2013 that Mr Baque was no longer represented by them and now acted for himself.  He has not sought any extension of time nor sought to file written submissions after that date. 

Jurisdiction to award costs

1. QCAT determined this “building dispute” and the related appeal under the Queensland Building Services Authority Act 1991 (Queensland).  That Act provided the Tribunal with a power to award costs.[1] Not only does the Tribunal have power to order costs under this Act, in this case there is also a contractual obligation imposed on Mr Baque to pay costs under clause 34.1 of the contract. It provides:

“the owner must pay to the builder any debt collection costs, including any legal fees on a solicitor and own client basis, associated with recovering or attempted recovery of an amount under the contract.”

[1] QBSA Act s77(2)(h).

1. Rivergum Homes has been wholly successful, both at first instance and on appeal, in relation to its claim against Mr Baque.  The general rule that costs follow the event does not apply as a matter of course in the Tribunal, however, because of the power conferred under the QBSA Act and the contractual obligation under clause 34.1 we see no reason why it should not apply in this instance.

1. Mr Baque received the benefit of the new relocatable home fixed on his land and simply chose not to pay for it. Despite numerous demands for payment, the only way Rivergum Homes could recover the cost of the home was to institute proceedings in the Tribunal. The defence raised by Mr Baque had no merit. Even if we were to consider the matters referred to on s 102 of the QCAT Act, this is certainly a case where the interest of justice warrant the making of a costs order against Mr Baque.

1. We also accept the submissions of the applicant that the conduct of Mr Baque in responding to the application resulted in unnecessary delays in bringing this matter to a final determination.

Quantification of costs

1. Section 107 of the QCAT Act says the Tribunal must fix the costs if possible. The only material before the Tribunal in relation to the quantification of the costs incurred by Rivergum Homes in BD191-09 and in this appeal are contained in the affidavit of Ms Farhadi-Fard filed 28 February 2013. That affidavit identifies the sum of $95,260.42 as the solicitor and own client costs billed by the respondents solicitors pursuant to the costs agreement between the respondent and those solicitors. Ms Farhadi-Fard has deposed to the reasonableness of those fees. Included in these costs are the costs initially awarded by the learned member below in the sum of $64,000.00.

1. There is no material filed by either party in relation to the quantification of costs sustained by the respondent had those costs been assessed on the District Court sale or any other scale.  However, equally, there is no submission on behalf of Mr Baque that it is unreasonable or inappropriate to award the respondent its costs on the solicitor own client basis claimed. Indeed clause 34.1 of the contract specifically provides for solicitor and own client costs, which is virtually the same as indemnity costs.

1. Given the nature of the proceedings and the extensive material filed, the need for oral hearings further submissions in other expenses to which the respondent has been put, the sum of $95,260.42 seems wholly reasonable.  We will therefore fix the costs in this amount and order that Mr Baque pay to Rivergum Homes Pty Ltd that sum.

Interest

1. Rivergum Homes claims its interest pursuant to the contract between it and Mr Baque.  The effect of our finding in this appeal is that contract, once signed by Rivergum Homes Pty Ltd, took effect and is the valid and enforceable contract between the parties.  Clause 33.1 of the contract provides as follows:

If the owner does not pay any amount owing to the builder in full by the due date then the owner must pay default interest on such amounts that is unpaid from time to time.

1. “Default interest” is defined in clause 38.1 as follows:

“default interest” means the annual rate equal to the Commonwealth Bank overdraft index rate: quarterly charging cycle plus 5%. 

1. We accept the submission on behalf of Rivergum Homes that this is an enforceable term of the contract and we accept the submissions in relation to the interest rate contained in paragraph 32 and 33:

32.     Interest from commencement of proceedings BD191-09 to date is calculated on the claim amount of $152,170.00 as follows:

$152,170.00 x 1,283 days (25 August 2009 to 28 February 2013) x 14.59%
  365 days

= $78,040.16

33.     Daily interest will accrue at $60.83 per day.

1. Accrued interest from 1 March to 3 July (125 days) is $7,603.75.

1. Interest to the date of this decision is therefore $85,643.91.

Order

1. The applicant pay to the respondent by 1 August 2013 costs in the sum of $95,260.42 and interest in the sum of $85,643.91 plus daily interest of $60.83 until payment.