Gargett v Capable Consulting (Aust) Pty Ltd

[2012] QCAT 91

CITATION: Gargett v Capable Consulting (Aust) Pty Ltd and Anor [2012] QCAT 91

PARTIES:	Peter Douglas Gargett (Applicant)
v
Capable Consulting (Aust) Pty Ltd Partreck Patrick Mutokoyi (Respondents)

APPLICATION NUMBER:            BD019-08     

MATTER TYPE: Building matters

HEARING DATE:   On the papers

HEARD AT:   Brisbane

DECISION OF: Mr Richard Oliver, Senior Member

DELIVERED ON:   1 March 2012

DELIVERED AT:   Brisbane

ORDERS MADE:  The respondents both jointly and severely must pay the applicant’s costs of and incidental to the proceeding to be agreed or assessed on the District Court scale of costs from the date of the referral of the proceeding being 18 February 2011 to QCAT and failing agreement to be assessed by Hickey and Garrett, costs assessor, and be paid within 28 days of a delivery of the assessment of costs to the respondents.

CATCHWORDS:

Costs – where original proceeding heard and decided in the Queensland Commercial and Consumer Tribunal – where successful appeal to the District Court – where remitted back to QCAT for rehearing – where applicant largely successful – where interests of justice justify the making of a costs order for the QCAT proceeding – where respondents acted to the disadvantage of the applicants – where costs considered under the Commercial and Consumer Tribunal Act 2003

Queensland Civil and Administrative Tribunal Act2009, s 260
Commercial and Consumer Tribunal Act 2003, ss 70, 72

Tamawood and Anor v Paans [2005] QCA 111

APPEARANCES and REPRESENTATION (if any):

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

REASONS FOR DECISION

1. On 19 May 2011 the Tribunal ordered that the respondents pay to the applicant $9,170.00.  This order was made after a rehearing of the applicant’s claim for money owing under a building contract and the respondents’ counter-claim for defective work.  The hearing was conducted Cairns in September 2010.  The rehearing came about because after the original hearing in the Commercial and Consumer Tribunal, in which the order was that the respondents pay to the applicant $14,129.00, there was an appeal to the District Court of Queensland.  The Court delivered a judgment in the appeal on 18 December 2009.  The appeal was successful and was remitted back to the Tribunal for rehearing.

1. The applicant has now filed an application for costs of the proceeding conducted both in the both Commercial and Consumer Tribunal (“CCT”) and in QCAT.

1. Section 260 of the QCAT Act provides that if the appeal court’s decision is to remit the matter to the former tribunal then the court must remit the matter back to QCAT. QCAT must then deal with the matter under the former Act as if it were still in force.[1]  It is therefore submitted by the applicant, and I accept, that the costs application must be considered under Division 7 of the CCT Act.

   [1] QCAT Act, s 260(3)(a)and (b).

1. The starting point pursuant to section 70 of the CCT Act is that the main purpose of the Division is to have the parties pay their own costs unless the interests of justice require otherwise.

1. In deciding to award costs, in the interest of justice, section 72 sets out the matters the Tribunal may have regard to in exercising the discretion to award costs.

1. In both the proceedings the applicant’s claim was for final payment of $17,720.00 under the contract entered into between himself and the respondents to undertake the building work for a total cost of $174,800.00.  It was not disputed that this sum was owing but the claim was sought to be offset with any cost of rectification and damages for loss of rental.

1. Therefore the main issues in dispute were whether there was defective or incomplete work and if so, the cost to rectify defective work or complete work.  Damages were also claimed for loss of rental on the building because of the delay in completing the building works.  In the end the damages for defective and incomplete work were assessed at $8,550.00 and the claim for lost rent in the sum of $104,722.00 was dismissed.  Interestingly, the respondents abandoned the claim for lost rent in the first hearing but persisted with it in the second hearing.  On any analysis of the facts and the law, the extent of the claim for loss of rent was without merit.

1. I accept the applicant’s contention that it was largely successful in resisting the respondent’s counterclaim.

1. Given the substantial counterclaim and the manner in which the respondents presented their case, the proceeding was sufficiently complex to engage lawyers.  In fact without the assistance of counsel for the applicant the hearing and determination of the matter would have been very difficult.  The written submissions prepared by both parties were of assistance in the QCAT hearing.

1. A perusal of the reasons of the CCT hearing indicate that the hearing involved the usual matters one expects in a typical building case.  There is a claim for money owed by the contractor and a cross claim for defective or incomplete work.  As I have said, the respondent, sensibly, abandoned the claim for rent in that proceeding.  The central issue in the claim for damages for rectification in both proceedings centred around the “head height issue” that it the construction of the extended roof line over the rear door which meant the door could not fully open.  The issue had its complexities and it was perplexing why the applicant installed a door that could not fully open.

1. The dispute was compounded by the actions of the respondents in not assisting the applicant to rectify the door problem by supplying an appropriate drawing or at least attempt to come to some reasonable agreement about the cost to rectify the problem when the detail on the plans was ambiguous.  To carry out this extra work the applicant was entitled, in fact obliged under the Domestic Building Contracts Act 2000, to get a written variation from the respondents.  The respondents were responsible for the drawings which led to the error and it was therefore their responsibility to correct it with a proper and sensible drawing and pay for it.

1. Further, the respondents’ evidence on damages for the rectification at the QCAT hearing was most unsatisfactory.  The respondents relied on expert reports on costings from Mr Santana and Mr Newman.  Neither of these gentlemen was available to give evidence at the hearing or have their evidence tested.  Mr Newman’s quote was very general and of little assistance whereas Mr Santana did not even visit the site.  Having to respond to this evidence placed an unnecessary burden on the applicants.

1. All of this was apparent to the respondents after the first hearing.  Although the reasoning for the assessment of the damages for the counterclaim was somewhat different in the QCAT proceeding.  The weaknesses in the respondents’ case must have been apparent to them upon delivery of the CCT decision.

1. Once the proceeding was referred back to QCAT directions were made for the parties to engage in QCAT’s alternative dispute resolution process.  However, the respondents were not prepared to participate in the compulsory conference process and therefore the matter proceeded to hearing.

1. At the hearing both respondents were represented by Mr Mutokoyi.  Initially he sought to adjourn the hearing despite the Tribunal advising him that the hearing would proceed.  Upon the application for the adjournment being refused he then decided to leave the hearing and did not participate in the morning session.  Because the hearing proceeded ex parte I was reliant on Mr Jonsson to assist me in presenting and considering Mr Mutokoyi’s counter arguments to the applicant's position as a matter of fairness.  Then, in the early afternoon, Mr Mutokoyi did return to the hearing but by that time a large part of the hearing had been concluded.  This conduct was indicative of the respondents’ overall attitude to this litigation, meaning that they never sought to assist either the applicant or the Tribunal to conduct the proceeding in a way that was fair, just, economical and quick.  The respondents’ conduct has been obstructive and has put the applicant to a significant disadvantage in terms of costs.

1. The applicant has been put to the expense of re-litigating the very same matters that were before the CCT with a similar outcome.  All of this may have been overcome if the respondents genuinely engaged in the alternative dispute resolution processes offered by the Tribunal, and which, over the past two years have been proved to be highly successful in assisting parties to resolve disputes.

1. In respect of the CCT hearing I am not satisfied that the conduct of the respondents was such to warrant a costs order.  This was a “standard” building dispute, and the respondents had the good sense not to pursue the damages for loss of rent.  However, in the QCAT proceeding, for the reasons stated above, I am of the opinion that the interest of justice do require the Tribunal to make a costs order in favour of the applicant.

1. I respectfully adopt the comments of Keane JA (as he then was) in Tamawood and Anor v Paans[2] when considering the application of costs provisions in the CCT Act that where a party has been successful “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.” That is particularly so here where the respondents’ conduct not only frustrated the objects of the QCAT Act, they also persisted with unmeritous claims without any probative evidence to support those claims.

   [2] [2005] QCA 111 at paragraph 33.

1. I therefore propose to order that the respondents pay the applicant’s costs to be agreed or assessed on a standard basis under the District Court scale of costs from the date of the referral of the proceeding to QCAT by the District Court.  If the parties cannot agree the costs they are to be assessed by Hickey and Garrett, costs assessors, and be paid within 28 days of the delivery of the assessment to the respondent.