Campbell v Kerry M Ryan Pty Ltd (No 2)

[2012] QCAT 422

CITATION: Campbell v Kerry M Ryan Pty Ltd (No 2) [2012] QCAT 422

PARTIES:	Stephen John Campbell (Applicant)
v
Kerry M Ryan Pty Ltd (Respondent)

APPLICATION NUMBER:   BDL266-10

MATTER TYPE: Building matters

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Michelle Howard, Acting Senior Member 

DELIVERED ON: 7 September 2012

DELIVERED AT: Brisbane

ORDERS MADE:     1.    The application for costs is dismissed.

CATCHWORDS : 

COSTS – DOMESTIC BUILDING DISPUTE – where building contractor failed to reduce variations to the contract to writing as required by the Domestic Building Contracts Act 2000 – where applicant homeowner wholly unsuccessful on claims made against the contractor

Queensland Building Services Authority Act 1991
Queensland Civil and Administrative Tribunal Act 2009

Lyons v Dreamstarter Pty Ltd [2011] QCATA 142

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

1. Mr Campbell made a claim against Kerry M Ryan Pty Ltd (referred to as KMR), a house removalist business for damages arising out of a contract for the sale and delivery of a removal house.

2. I heard the matter over two days.  Mr Campbell was wholly unsuccessful on his claim.  I dismissed the claim and made directions for the making of any costs application and submissions.

3. KMR now seeks its costs on the District Court Scale, on the basis of the original quantum of the claim of $178,649.83.  At hearing, the quantum of damages sought, for breach of contract was amended to $71,592.55.

The parties’ submissions

1. In support of its claim, KMR submits that because of complexity, leave was granted for legal representation.  Also, it says that Mr Campbell should have exhausted his complaints regarding the issues raised in the proceeding with the Building Services Authority (BSA) and allowed KMR to complete rectification required, before applying to the Tribunal.  It further submits that the unsuccessful application for security for costs made by Mr Campbell during the proceedings occasioned unnecessary costs for KMR.  Further, KMR submits that the ‘exceptionally broad’ claim was without merit noting that it was dismissed entirely, despite Mr Campbell being allowed to adduce further evidence at the hearing.

2. It argues that KMR is a family-run, business which does not have significant funds to spend on litigation and that the costs of the proceeding have been significant.

3. Mr Campbell submits that both parties should bear their own costs.  Although he acknowledges that the success of KMR in the proceeding weighs in favour of an award to it, he submits that other relevant factors weigh in his favour.

4. He says that the BSA complaint process is not relevant since the proceeding turned on the Tribunal’s findings about the contractual arrangements between the parties and the parties’ rights and obligations arising from those arrangements.  The BSA could not resolve these issues but the Tribunal could.  He argues that the application for security for costs is not a basis for awarding costs generally in the proceeding.  He points also to KMR’s failure to fully comply with directions to file its material, necessitating further directions being made and costs being incurred in this process.  Complexity, of itself, he argues does not give rise to an order for costs.

5. Mr Campbell further argues that the decision turned largely on questions of credit, and the Tribunal’s preference of evidence presented by KMR is merely a determination on the balance of probabilities of the relevant facts.  Therefore, it is incorrect, Mr Campbell argues, to proceed on the basis that his claim lacked merit.  He submits that he did not proceed against documentary or other independent evidence contradicting his claim.  Further, he submits that KMR’s failure to reduce the variations to the contract to writing as a contractor is required to do under the Domestic Building Contracts Act 2000 (DBC Act) led to a situation where application to the Tribunal became inevitable.

6. Lastly, he argues that he is a school bus driver with an ‘average’ income, leaving him little after expenses, tax and mortgage.  Accordingly, an order for costs would be a severe impost.

Discussion and decision

1. The Queensland Building Services Authority Act 1991 (QBSA Act) is the enabling Act under which the Tribunal has jurisdiction for building disputes. It provides for a broad general discretion to make costs orders which displaces the usual contra-indication against costs provided for in the QCAT Act.[1]  The erosion by legal costs of a party’s success at hearing has been considered not to be in the interests of justice.[2]

   [1]QBSA Act, s 77(2)(h); and see discussion in Lyons v Dreamstarter Pty Ltd [2011] QCATA 142.

   [2]Tamawood Ltd v Paans [2005] 2 Qd R 101, [33]; Stuart Homes and Renovations v Denton [2012] QCAT 43.

2. Mr Campbell’s application was filed on 24 August 2010.  Both parties were granted leave for legal representation from early in the proceedings, orders having been made on 1 December 2010.

3. The quantum of Mr Campbell’s claim was originally $178,649.83, although at hearing it was significantly reduced to $71,592.55.  There were a number of components to his claim relating to the location of the removal house; the height of the building; the demolition of components of the existing dwelling on Mr Campbell’s land; the materials used to construct the gable end walls; damage to external cladding; the roof sheeting and roof void.  All aspects of his claim failed and his application was dismissed.  Numerous factual disputes had to be determined.  I did generally prefer the evidence of KMR and its witnesses where there was conflict in the evidence given.

4. In my view, the security of costs application is not of significance in the current consideration.

5. If a costs order is not made, the success of KMR in the proceedings will be eroded to some extent.  That said, KMR had responsibility under the DBC Act to reduce any variations to the written contract to writing.  It failed to do so.  At the very least the contest about some aspects of the claim in respect of which Mr Campbell relied upon oral variations to the written contract to support his claim would likely have been unnecessary if KMR had complied with its responsibilities under the DBC Act.  I do not find the argument that Mr Campbell should have exhausted the BSA complaints process before commencing proceedings compelling in circumstances where there was dispute about the contractual arrangements between the parties. 

6. On the evidence before me, neither party is well placed to bear the costs of the failed claim.

7. In my view, the balance weighs against making a costs order in favour of KMR, despite the total failure of the claim, in recognition of KMR’s failure to discharge its obligations under the DBC Act.

8. I make orders accordingly.