Better Homes Queensland Pty Ltd v O'Reilly
[2013] QCATA 122
•24 April 2013
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| CITATION: | Better Homes Queensland Pty Ltd v O’Reilly and Anor [2013] QCATA 122 |
| PARTIES: | Better Homes Queensland Pty Ltd (Appellant) |
| v | |
| Scott O’Reilly Meilyn O’Reilly (Respondents) |
| APPLICATION NUMBER: | APL224-11 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Judge Horneman-Wren SC, Deputy President Peter Apel, Member |
| DELIVERED ON: | 24 April 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Better Homes Queensland Pty Ltd must pay Scott O’Reilly and Meilyn O’Reilly costs of and incidental to these proceedings in an amount to be agreed, or failing an agreement as assessed on a standard basis with reference to the District Court scale. |
| CATCHWORDS: | APPEALS – where the appeal was dismissed – where the respondents applied for costs on an indemnity basis – whether an order for costs was in the interests of justice – whether costs should be ordered on an indemnity basis Queensland Civil and Administrative Tribunal Act 2009, s 100, s 102 Better Homes Queensland Pty Ltd v O’Reilly & Anor [2012] QCATA 37, related |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (“QCAT Act”).
REASONS FOR DECISION
The Tribunal
Proceedings between the parties were initially heard by the Queensland Civil and Administrative Tribunal (QCAT) over four days in Cairns. The Tribunal found against the Appellant in an ex tempore judgment delivered by the Member at the conclusion of the final day’s hearing.
The Appellant subsequently appealed the decision of QCAT, at first instance, to the Appeal Tribunal. That appeal was dismissed.
The question now for the Appeal Tribunal is whether the circumstances of the conduct of the appeal and its outcome are such that the Appeal Tribunal would consider that the interests of justice require it to make a costs order and thereby displace the primary position on costs set out in s 100 of the QCAT Act.
The Respondent seeks orders that its costs be paid by the Appellant:
(a)assessed on an indemnity basis (Solicitor/Own Client) on the District Court scale, unless agreed; or alternatively
(b)assessed on the standard basis (Party/Party) on the District Court scale, unless agreed.[1]
[1] Respondent’s Submissions dated 20/03/2012, paragraph 1.
The Appellant seeks an order that each party bear their own costs of the appeal.[2]
[2] Appellant’s Submissions dated 26/03/2012, paragraph 1.
Relevant Statutory Provisions
The Power to award to costs is provided for by Division 6 of Part 6 of Chapter 2 of the QCAT Act.
The primary provision is s 100 of the QCAT Act, which provides that other then as provided for under the act or an enabling act each party must bear their own costs of the proceeding.
Section 102 of the QCAT Act provides for the circumstances in which an order for costs can be made by the Tribunal.
102Costs against party in interests of justice
(1)The tribunal may make an order requiring a party to a proceeding to pay all or stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make an order.
…
(3)In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following:-
(a)whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);
(b)the nature and complexity of the dispute the subject of the proceeding;
(c)the relative strengths of the claims made by each of the parties to the proceeding;
(d)for a proceeding for the review of a reviewable decision –
(i)whether the Appellant was afforded natural justice by the decision maker for the decision; and
(ii)whether the Appellant genuinely attempted to enable and help the decision maker to make the decision on the merits.
(e)the financial circumstances of the parties to the proceeding;
(f)anything else the tribunal considers relevant.
Consideration of Submissions
The Respondent submits that this is a case where the interests of justice require an order that the Appellant pay it’s costs because –
(a)the Appellant ought to have been cognisant that not every error of law will result in a decision being set aside on appeal as the error must be such as to vitiate the decision;
(b)the weight of the evidence presented by the Appellant at the hearing at first instance, and agitated at the appeal, was insufficient to meet the test of exceptional circumstances and unreasonable hardship pursuant to s 84(4) of the Domestic Building Contracts Act 1991;
(c)the costs in the appeal should be viewed differently from costs in a proceeding because, if the Appellant fails, the Respondent has had to face the additional burden and expense of the appeal, in litigation in which the Respondent has already been successful;
The Appellant, on the other hand, submits that in these proceedings the interests of justice do not require an order for costs to be made against it because –
(a)there is no evidence that it acted unreasonably or disadvantaged the Respondents;
(b)the nature and complexity of the question of law warranted the appeal;
(c)the Respondent’s success in defending the appeal alone is not a justification to award costs, and that the Appellant had reasonable prospects of success in its appeal;
(d)there is nothing before the Tribunal that evidenced the financial circumstances of the Respondent to the proceedings and therefore there is no material which will show that the Respondents will suffer financially as a result of a costs order not being imposed;
(e)there are no other circumstances of which the Appellant is aware that in the interests of justice would compel the Appeal Tribunal to make an order for costs against the Appellant.[3]
[3] Appellant’s Submissions, paragraph 6.
Findings in appeal decision
It was found in the decision of the Appeal Tribunal that there was an error of law in the Reasons for Decision given by the Member at first instance. That error was the Member’s failure to state a conclusion on the critical question; of whether there were exceptional circumstances before moving to consider whether there was unfairness to the homeowner or whether the builder could demonstrate unreasonable hardship.
However, notwithstanding that error of law, the decision made by the learned Member was found to be the correct decision on the evidence before him. The Appeal Tribunal concluded that there would be no utility in allowing the appeal.[4]
[4] Better Homes Queensland Pty Ltd v O’Reilly & Anor [2012] QCATA 37, at [18] and [22].
Analysis
Considering the provisions of s 102 of the QCAT Act setting out considerations to which regard may be had in deciding whether to award costs, the Tribunal makes the following observations:
(a)The Appellant has not acted in a way that unnecessarily disadvantaged the Respondent. Whilst there is no doubt that the fact the appeal was run at all would cause the Respondent to incur costs, lose time and face the inconvenience and disruption that being involved in litigation entails (a matter which shall be considered separately), given that an error law was found in the decision of the Member at first instance, the Appellant was reasonably justified in commencing the appeal to ventilate the issue of the error of law, and question whether the decision of the Member at first instance was sound in the context of that error. That is a reasonably justifiable course of action, and it should not be seen as pursuing a course of action that has caused unnecessary disadvantage to the Respondent.
(b)The complexity of the issue of itself would not be a ground to justify a costs order. The Respondent submits that the appeal was complex in that it required an analysis of –
(i)a multi-factor test under s 84(2) of the Domestic Building Contracts Act;
(ii)the weight of evidence given by parties and experts;
(iii)principles of natural justice and due process in the giving of reasons for the decision with the grounds of appeal;
(iv)preparing submissions in response to the Appellant’s five grounds of appeal and thirteen pages of submissions with an oral hearing.
The Appellant, on the other hand, argues that the nature and complexity of the question of law warranted the appeal.
Whilst the appeal did require a careful examination of the decision of the Member at first instance, the test created by s 84(2) of the Domestic Building Contracts Act is not a complex test or difficult to apply.
(c)There was a significant disparity in the strengths of the claims made by each of the parties to the proceeding. Notwithstanding the Appellant being able to demonstrate an error of law made in the decision of the Member at first instance, the Appellant nonetheless failed before the Appeal Tribunal it had not put forward sufficiently strong evidence (or in some respects, evidence at all) of exceptional circumstances within s 84(4)(a)(i) of the Domestic Building Contracts Act nor of unreasonable hardship within s 84(4)(a)(ii) of that act.
(d)The Respondent has been put to the expense of the appeal. The Respondent submits that the Appeal Tribunal is entitled to take this into account under s 102(3)(f) of the QCAT Act. In Grasso & Anor v CMG Consulting Engineers Pty Ltd (No. 2),[5] The President, Alan Wilson J, said –
The last factor is in my view relevant. Whilst QCAT operates in a different statutory costs environment from the Civil Courts, it has been accepted there that costs in an appeal may be viewed differently from costs in a proceeding – because, if the Appellant fails, the Respondent has had to face the additional burden and expense of the appeal in litigation which he or she has already been successful.
[5] [2011] QCATA 326 at [13].
His Honour[6] also cited with approval observations made by Keane JA (as his Honour then was) in Tamawood Ltd v Paans[7] that the fact that each party was justified in engaging legal representatives may, in some circumstances, be itself a sufficient basis to award costs in favour of the successful party, at least in the absence of any countervailing consideration.
[6] Grasso & Anor v CMG Consulting Engineers Pty Ltd (No. 2) [2011] QCATA 326 at [14].
[7] [2008] QCA 111 at [30].
In these circumstances it is in the interests of justice that a costs order be made pursuant to s 102 of the QCAT Act.
The remaining question is the appropriate basis of the assessment of those costs.
The basic principle is that indemnity cost orders are the exception rather than the norm.[8]
[8]Mizikovsky v Queensland Television Limited & Ors [2013] QCA 68, at [55].
This case does not demonstrate any of the features which would warrant a departure from the usual course that costs should be awarded on a party and party basis.[9]
[9] Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at [33].
For the reasons already stated the Appellant’s proceedings were not unwarranted or unmeritorious, notwithstanding that they were ultimately unsuccessful. This is not an appropriate case for the imposition of an indemnity costs order. Assessment of costs on a standard basis is appropriate.
Notwithstanding that the amount in dispute was well within the jurisdiction of the Magistrates Court, as these proceedings were an appeal in the Appeal Tribunal, the appropriate scale for the assessment of costs is the District Court scale.
Orders
The Appellant is ordered to pay the Respondent’s costs of and incidental to the appeal proceedings in an amount as agreed to between the parties, or failing an agreement as assessed on a standard basis with reference to District Court scale.
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