Beaumont v McGill

[2010] QCAT 257

CITATION:  Beaumont v McGill [2010] QCAT 257

PARTIES:   Jason Paul & Patricia Suzanne Beaumont

v

Mr Anthony McGill

APPLICATION NUMBER:            BD314-06

MATTER TYPE:   Building matters

HEARING DATE:   23 March 2010

HEARD AT:   Brisbane

DECISION OF:   Dr Bridget Cullen Mandikos

DELIVERED ON:   23 March 2010

DELIVERED AT:   Brisbane

ORDERS MADE:   Respondent to pay costs.

CATCHWORDS: Legal Costs, Interlocutory Proceedings, sections 60, 70 and 71 of the Commercial and Consumer Tribunal Act 2003 (Qld); Tamawood Ltd. & Anor v Paans [2005] QCA 111.

APPEARANCES and REPRESENTATION (if any):

Hearing on the papers

REASONS FOR DECISION

This is an application seeking 2 orders for costs, made by the Applicants in the originating proceedings, Jason Paul Beaumont and Patricia Suzanne Beaumont (“the Beaumonts”), as follows:

1Costs in relation to an application made by the Respondent, Anthony McGill (“Mr McGill”) on 5 October 2006, seeking summary dismissal of the Beaumont’s originating application, or in the alternative, an order that the Beaumont’s statement of claim be struck out as failing to disclose a cause of action; and

2Costs in relation to a related application made by the Beaumonts on 6 October 2006 as a consequence of Mr McGill’s 5 October 2006 application, seeking to amend their statement of claim.

These proceedings have endured a long and protracted history, having been commenced in the former Commercial and Consumer Tribunal (“CCT”) in 2006.

The CCT has amalgamated into the Queensland Civil and Administrative Tribunal (“QCAT”). QCAT now hears and decides all matters previously dealt with by the CCT: section 256 Queensland Civil and Administrative Tribunal Act 2009 (“QCAT Act”).

Submissions by the parties on costs

Following direction by QCAT, both parties to these proceedings have filed written submissions relevant to the issue of costs.  The Beaumonts filed a compendium of relevant materials with QCAT on 8 February 2010, including submissions, affidavit material, schedules outlining the Beaumont’s costs on a standard basis, and other related materials.  These submissions were supplemented on 9 February 2010, with the additional filing of written submissions prepared by Mark Williams, Counsel for the Beaumonts.

Mr McGill has also filed submissions with QCAT, on 8 February 2010, and which include correspondence, a copy of relevant CCT directions, and written submissions.

The necessity of the Beaumont’s 6 October 2006 application

In short, the Beaumonts submit that their 6 October 2006 application to amend their statement of claim needed to be brought urgently, as a consequence of Mr McGill’s having brought his 5 October 2006 application.  The Beaumonts assert that had Mr McGill not brought the 5 October 2006 application, they would have been able to address the issue of amendment during the ordinary course of events, where pleadings might be amended on a non-urgent basis prior to the hearing of the matter.  Ultimately, and this is of particular importance, Mr McGill’s 5 October 2006 application, asserting that the CCT did not have jurisdiction to hear the Beaumont’s application (with which the CCT disagreed), was unsuccessfully appealed to the District Court. 

I think that there is much merit to what is said by the Beaumonts with regard to the correlation between their 6 October 2006 application and Mr McGill’s 5 October 2006 application.  To describe this matter as protracted is somewhat of an understatement.  This matter has been adrift at sea, caught up in interlocutory waves, without sight of land, or the main points in issue between the parties, for some years now.  In part, I think that the lawyers at the helm of Mr McGill’s ship have, in particular, contributed to this process, as I will explain further below.

For purposes of completion, I set out a brief chronology of events relevant to this issue:

26 June 2006	Application filed by the Beaumonts in the CCT, seeking disclosure of records substantiating the actual cost of work performed by Mr McGill pursuant to a cost plus building contract.
14 July 2006	Defence filed.
25 July 2006	By consent, both parties granted legal representation by the CCT.
12 September 2006	Directions hearing relating to jurisdiction, which Mr McGill failed to appear for.
5 October 2006	Mr McGill filed application in the CCT disputing jurisdiction.
6 October 2006	Beaumonts filed application in the CCT seeking leave to file and serve an amended statement of claim, and also seeking costs of same.
12 April 2007	Beaumonts filed an amended schedule to statement of claim.
4 February 2008	Mr McGill’s 5 October 2006 application disputing jurisdiction is dismissed by the CCT.
March 2008	Mr McGill appeals decision of the CCT, dismissing his application disputing jurisdiction, to the District Court.
17 July 2008	District Court, Andrews SC DCJ dismisses Mr McGill’s appeal, and determines that the CCT has jurisdiction to hear the parties’ dispute.
12 February 2008	Beaumonts apply for costs, and directions are issued.
3 October 2008	CCT directs parties to file submissions relevant to the costs of and incidental to the 5 October 2008 application by Mr McGill.
13 November 2008	CCT further directs parties to make submissions with regards to the 5 October 2008 application, on the issue of costs.
4 February 2010	QCAT orders that the Beaumont’s application concerning costs will be made on the papers.

Beaumonts were awarded costs by the District Court

Following the dismissal of Mr McGill’s appeal relating to his 5 October 2006 application, Judge Andrews awarded the Beaumonts their costs of and incidental to the application for leave and District Court appeal on a standard basis.  Though the rules in the CCT relating to costs presumed that parties should bear their own costs, I consider the District Court’s decision in this regard to be persuasive in terms of suggesting that the Beaumonts should also have their costs of the proceedings in the CCT that led to the unsuccessful appeal, as well as the costs incurred by their 6 October 2006 urgent application to amend their statement of claim. Importantly, as noted above, there is a nexus between the Beaumont’s 6 October 2006 application and Mr McGill’s unsuccessful 5 October 2006 application, wherein Judge Andrews determined that the CCT had jurisdiction to hear the Beaumont’s originating application. 

Factors relevant to an award of costs

The starting point vis-à-vis costs in the former CCT was contained in section 70 of the Commercial and Consumer Tribunal Act 2003 (“CCT Act”):

The main purpose of this division is to have parties pay their own costs unless the interests of justice requires otherwise.

As I interpret section 70, the CCT jurisdiction was not a “cost follow the event” jurisdiction, but rather, if the interest of justice were such that the parties should not pay their own costs, the CCT had authority to make such an order.

In considering whether the interests of justice warrant an award of costs, regard must be had to the factors contained in section 71(4) of the CCT Act, namely:

(a)  the outcome of the proceeding;

(b)  the conduct of the parties to the proceeding before and during the proceeding;

(c)  the nature and complexity of the proceeding;

(d)  the relative strengths of the claims made by each of the parties to the proceeding;

(e)  any contravention of an Act by a party to the proceeding;

(f)   for a proceeding to which a State agency is party, whether the other party to the proceeding was afforded natural justice by the State agency;

(g)  anything else the tribunal considers relevant.

Further, section 71(5) of the CCT Act provides that a party is not entitled to costs merely because-

(a)  the party was the beneficiary of an order of the tribunal; or

(b)  the party was legally represented at the proceeding.

The parties have drawn my attention to the decision of Justice Keane, as he was then, in Tamawood Ltd. & Anor v Paans [2005] QCA 111 (“Tamawood”).  In Tamawood, His Honour considered the application of sections 70 and 71 by the CCT and said:

“As I have already said, in my view, the language of s 70 and s 71(5)(a) is sufficiently clear to negate the proposition that costs should, prima facie, follow the event unless the Tribunal considers that another order is more appropriate. In this regard, it is clear that the power of a court or tribunal to award costs to a party is now a creature of statute. The nature and extent of that power can only be discerned by close consideration of the terms of the statute which creates the power and prescribes the occasions for, and conditions of, its exercise. In the performance of this task, observations of the courts in relation to the operation of other statutory regimes relating to costs may afford general assistance but they cannot be allowed to distract attention from the terms of the particular statute in question”.

Following on from His Honour’s comments, it is then necessary to determine what circumstances enliven an “interests of justice” consideration sufficient to justify deviation from the main purpose of section 70 of the CCT Act (that parties are to bear their own costs). His Honour next considered the intent of the CCT Act, and provided a general example of circumstances that might warrant the awarding of costs:

“If orders for costs were not to be made in favour of successful parties in complex cases, then just claims might not be prosecuted by persons who are unable to manage complex litigation by themselves.  Such a state of affairs would truly be contrary to the interests of justice; and an intention to sanction such a state of affairs cannot be attributed to the legislature which established the Tribunal.

To say this is not to ignore s 71(5)(b) of the Act. There is a clear distinction, in terms of the interest of achieving justice, between the mere fact of having representation and the fact of having reasonably obtained that representation because of the complexity of the case. In the absence of countervailing considerations, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome. Finally in this regard, it should also be borne in mind that s 71(4)(a) of the Act expressly recognises that “the outcome of the proceeding” is a consideration which is relevant to the exercise of the discretion conferred by s 71 (1) of the Act.”

The Beaumonts have also argued that they are entitled to their costs in accordance with the provisions of section 60 of the CCT Act, which provides as follows:

Conduct of proceeding causing disadvantage

(1)This section applies if the tribunal considers a party to a proceeding is acting in a way that unreasonably disadvantages another party to the proceeding including by-

(a)not complying with a direction or order of the tribunal without reasonable excuse; or

(b)asking for an adjournment as a result of not complying with a direction or order of the tribunal; or

(c)vexatiously conducting the proceeding; or

(d)causing an adjournment.

(2)The tribunal may-

(a)order that the party causing the disadvantage compensate the other party for any costs incurred unnecessarily; or

(b)if the party causing the disadvantage is the applicant, dismiss the applicant’s claim; or

(c)if the party causing the disadvantage has filed a counterclaim, dismiss the counterclaim.

(3)The tribunal may refuse to continue with the proceeding until an       order under subsection (2) (a) is complied with.

Mr McGill’s 6 October 2006 application was unsustainable

In their submissions, the Beaumonts assert that Mr McGill’s “objection to jurisdiction was unsustainable from the beginning and despite being told so several times by the Applicants it was pressed”.  There are numerous comments made by His Honour Judge Andrews, in the course of his District Court judgement, supporting the Beaumont’s assertions that Mr McGill (or his legal representatives) should have known that his objections to jurisdiction were unsustainable: McGill v Beaumont & Anor [2008] QDC 171. For example, at paragraphs 21 and 22 of the judgment, His Honour Judge Andrews uses the term “obtuse” to refer to Mr McGill’s grounds of appeal and written submissions. At paragraphs 26 and 27, His Honour indicates that Mr McGill put on little evidence in support of his submissions.

As paragraph 38, His Honour Judge Andrews indicated that the respondent “raised oral arguments at the hearing which are not obvious from reading the Notice of Appeal”.  Then, at paragraph 40, Judge Andrews indicated that Mr McGill’s Counsel raised questions relating to the definition of “domestic building dispute”, but without reliance upon any authority for same.

Continuing, at paragraph 44, Judge Andrews again uses the term “obtusely” to make reference to Mr McGill’s argument that the CCT lacked jurisdiction because the Beaumonts were owner-builders.  At paragraph 46, Judge Andrews again indicates that Mr McGill’s Counsel did not rely on any authority in support of the jurisdiction-owner-builder submissions.  This trend, of making arguments unsupported by legal authority, was again enunciated at paragraph 53, where His Honour indicated that Mr McGill’s Counsel “cited no authority for the proposition that this approach involved an error of law”.

The effect of Mr McGill’s unsustainable 6 October 2006 application on the proceedings

The progression of the Beaumont’s originating application has been delayed by the demonstrably unsustainable 6 October 2006 application by, minimally, a period of 18 months.  Tribunals, the CCT and QCAT included, are meant to result in cost-effective, timely justice for ordinary citizens, without the legalism that is part of the Court process.  The 6 October 2006 application has, together with other conduct by the legal representatives outlined below, obfuscated this process. 

The general tenor of the correspondence exchanged by the solicitors in this matter, most particularly the solicitors acting for Mr McGill, is demonstrative of the state of affairs that has led to the unnecessarily protracted nature of this litigation.  By way of example, in a letter dated 10 February 2010, also copied to QCAT, Mr McGill’s solicitor expresses an inordinate level of frustration at having received the same material from the Beaumont’s solicitors on three separate occasions.  The issue to which the letter makes reference is the direction of QCAT to make submissions in relation to the costs issue.  This should be, on the part of the solicitor, a reasonably unemotional, straightforward affair, that does not necessitate correspondence peppered with exclamation points, bold underlining, and a demand for the Beaumont’s solicitors to indicate whether they “still believe that our client has not filed any submissions in relation to your client’s application for costs”. 

Whilst good grace might have required the Beaumont’s solicitors to ignore the written outburst and simply respond with the factual information, they have not chosen to do so.  On 11 February 2010, the Beaumont’s solicitors delivered a response noting the “obviously emotionally distressed” letter of Mr McGill’s solicitors.  All of this correspondence does nothing to advance either party’s case, nor does it aide the Tribunal in assessing the merits of the costs application.  It is of concern that, in a jurisdiction that does contemplate parties are to bear their own legal costs, that the parties would be paying for such exchanges to take place.  When the solicitors themselves descend to such frustrated exchanges, it becomes apparent to the Tribunal that the main issues in contention between the parties, and the merits thereof, have been lost. 

Conclusion

Had Mr McGill not been overzealous in pursuing the unsustainable jurisdictional point raised in his 5 October 2006 application, the Beaumont’s 6 October 2006 application would not have been necessary at that juncture.  I am satisfied that the Beaumont’s application seeking leave to amend their statement of claim was necessary following the filing of Mr McGill’s 5 October 2006 application, as Mr McGill, although in receipt of the Beaumont’s proposed amendments for some time, declined to respond to same.  I accept the Beaumont’s submission that their amendments could have been dealt with during the normal course of a directions hearing, without the necessity of a further application, had Mr McGill proceeded in a constructive fashion.

In the circumstances, I consider that Tamawood supports the Beaumont’s argument that the normal costs provisions of the CCT, and now QCAT, should be deviated from in the interests of justice.  To require the Beaumonts to bear their own legal costs, of an application (and the subsequent related application) that should have been viewed as untenable from the start, would be unjust, and poses the risk of creating a costs impediment to the Beaumonts making it to the hearing, whether or not they are ultimately successful.

It is my view that Mr McGill’s conduct, through his legal representatives, both in making the application on 5 October 2006, and progressing the matter by appeal to the District Court, was designed to avoid engaging with the main issues in dispute.  The Beaumonts have been waiting some 4-years for their dispute to be heard, all the while funding the cost of their own litigation. 

While QCAT has yet to hear their originating application, the unnecessary making of interlocutory applications, in circumstances such as this, which very much appear to be driven to achieve strategic advantage, should not be permitted by the Tribunal.  In this regard, I consider it important to note that Mr McGill was acting with legal assistance.  It is concerning, in view of the commentary generally interspersed throughout Justice Andrews’s District Court decision, that Mr McGill’s representatives took the path they chose despite having little legal authority to support their submissions.  In circumstances where the Tribunal permits legal representation, it is anticipated that the representation will result in enhanced clarity about the real issues in dispute between the parties.  By extension, this should mean that applications, where made, are fully supported by legal authority.  That Judge Andrews’ decision referred to Mr McGill’s submissions as “obtuse”, and lacking authority, indicates that Mr McGill’s legal representatives had set sail in uncharted waters, where the rational response should have been to avert course.

The factors discussed above have led me to conclude that it is appropriate to award the Beaumonts all of the costs they have sought by way of this application.  For clarity, and to avoid any further dispute between the parties, this includes the costs of both the 5 October 2006 and 6 October 2006 applications.  This also includes an additional figure for costs representing the Beaumont’s Counsel’s preparation of supplementary submissions on costs dated 30 October 2008.

ORDERS

Mr McGill to pay the Beaumont’s costs of the 5 October and 6 October 2006 applications, to be assessed on the standard basis using the District Court scale of costs. 

Mr McGill to indicate no later than 4.00 pm on Friday, 9 April 2010, whether he disputes the Beaumont’s itemised standard costs, as already provided.

No response or no dispute by Mr McGill

In the event that Mr McGill neither indicates agreement with the costs as already provided, nor disputes the costs, the Tribunal awards costs in accordance with those figures:

• 5 October 2006 application $14,814.30

• 6 October 2006 application $8098.40
• Beaumont’s Counsel’s written submission dated 30 October 2008 $330.00

In this circumstance, Mr McGill is to pay the Beaumont’s costs no later than 4.00 pm on Friday, 9 April 2010.

Dispute by Mr McGill

In the event that Mr McGill disputes the Beaumont’s costs as provided, within the timeframe specified above, the costs are to be assessed by Hickey & Garrett, Legal Cost Consultants, Suite 4, Level 21, 141 Queen Street, Brisbane QLD 4000.

In this circumstance, Mr McGill is to pay the Beaumont’s costs, as assessed by Hickey & Garrett, no later than 14-days following delivery of the assessment by Hickey & Garrett.