Grasso v CMG Consulting Engineers Pty Ltd
[2012] QCAT 205
•18 May 2012
| CITATION: | Grasso and Anor v CMG Consulting Engineers Pty Ltd [2012] QCAT 205 |
| PARTIES: | Steven Grasso Diane Grasso |
| v | |
| CMG Consulting Engineers Pty Ltd |
| APPLICATION NUMBER: | BD330-08 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | B Cotterell, Member |
| DELIVERED ON: | 18 May 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. CMG Consulting Engineers Pty Ltd pay Steven Grasso and Diane Grasso’s costs of and incidental to the proceedings against CMG Consulting Engineers Pty Ltd, including reserved costs, on a standard basis to be assessed on the District Court scale of costs. 2. Steven Grasso & Diane Grasso shall deliver to CMG Consulting Engineers Pty Ltd an itemised claim for costs referring to the relevant items contained in the District Court scale of costs. 3. If within 14 days of that delivery, the parties have not agreed on an amount of costs, the costs shall be assessed by Hickey and Garrett, Legal Costs Assessors, Level 21, 141 Queens Street, Brisbane, 4000. 4. CMG Consulting Engineers Pty Ltd shall pay Steven Grasso & Diane Grasso’s costs (as agreed or assessed) within 14 days of such agreement or assessment. |
| CATCHWORDS: | Costs Queensland Building Services Authority Act 1991, s 77(1)(h) 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
On 3 September 2008 the applicants filed an application in the former Commercial and Consumer Tribunal seeking relief arising out of a building dispute, pursuant to section 77(1) of the Queensland Building Services Authority Act 1991 (QBSA Act). On 3 December 2008 a Consent Order was made that the parties were permitted legal representation in the proceedings.
The matter eventually proceeded to a hearing in Cairns on 8, 9 and 10 November 2011.
The Applicants seek their costs incurred in the Application, pursuant to section 102 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
The Applicants seek costs on a standard basis (on the District Court Scale).
Costs jurisdiction
It is material to the application for costs that the matter had been commenced in QCAT’s predecessor the Commercial and Consumer Tribunal (CCT) and was, when QCAT commenced on 1 December 2009, a ‘pending proceeding’ under s 245 of the QCAT Act.
The Appeal Tribunal has identified in a previous matter[1], that s 271 should not be read in a way which results in the application of the costs provisions of the Commercial and Consumer Tribunal Act2003 but, rather, to mean that while QCAT only has the power in pending proceedings which the CCT had (including the power to award costs), the question whether costs should be awarded must be determined by reference to the QCAT costs provisions.
[1] Queensland Building Services Authority v Johnston [2011] QCATA 265.
Section 100 of the QCAT Act provides that "other than as provided under the QCAT Act or an enabling Act, each party to a proceeding must bear the party's own costs for the proceeding."
The proceeding arises out of a building dispute. The Tribunal draws its jurisdiction to deal with building disputes from the Queensland Building Services Authority Act 1991 (QBSA Act). Section 77(1)(h) of that Act provides that the Tribunal “may award costs” in a proceeding arising out of a building dispute.
When considering an appeal with respect to how the Tribunal should deal with costs arising out of building disputes, Deputy President Kingham, in Lyons v Dreamstarter Pty Ltd[2] said that pursuant to section 7 of the QCAT Act, section 77(1)(h) of the QBSA Act modifies section 100 of the QCAT Act, so that section 77(1)(h) is read as part of the QCAT Act. Section 77(1)(h) does not provide guidance or prescription about the occasions for or conditions of exercise of the power to award costs.
[2] [2010] QCAT 447 (14 September 2010).
Her Honour went on to say that a jurisdiction given in general terms, such as the jurisdiction to award costs in s77(1)(h) of the QBSA Act, “allows the Tribunal to make an order as to costs that is justified in the circumstances. It is a broad general discretion which must be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation.”
The QCAT cost provisions (Ch 2, Pt 6, Div 6) commence with s 100 which, on its face, indicates a plain intention that costs orders will not be an integral feature of QCAT’s operations:
‘other than as provided under this Act or an Enabling Act, each party to a proceeding must bear the party’s own costs for that proceeding’.
However, under s 102 the Tribunal may make an order for costs ‘… if the Tribunal considers the interests of justice require it to make the order’: s 102(1). Under s 102(3) in deciding whether to award costs the Tribunal may have regard to certain matters including:
(a)Whether a party in a proceeding is acting in a way that unnecessarily disadvantages another party;
(b)The nature and complexity of the dispute;
(c)The relative strengths of the claims made by each party;
(d)…
(e)The financial circumstances of the parties;
(f)Anything else the Tribunal considers relevant.
As the QCAT Appeal Tribunal has observed about these provisions, the question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ points so compellingly to a costs order that they overcome the strong contra-indication against costs orders contained in s 100[3] at para [29].
[3]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412.
The factors material to the discretion here include the long history of the matter including, in particular, the many directions orders previously made about expert evidence; the occurrence of an experts’ conclave in late 2010; the number of experts and the range of experts involved in that conclave and the resulting complexity of both the factual and legal issues.
In conjunction, these factors point strongly towards an exercise of the discretion in the applicants’ favour. In addition, as Keane JA observed in Tamawood Ltd & Anor v Paans [2005] QCA 111 at [30], the fact that each party was justified in engaging legal representatives may, in some circumstances, be itself a sufficient basis for concluding that the interests of justice warrant the exercise of discretion to award costs in favour of the successful party, at least in the absence of any countervailing consideration. No such consideration arises here.
In Grasso & Anor v CMG Consulting Engineers Pty Ltd [2012] QCATA 32, the President said in connection with an application for costs by CMG Consulting Engineers Pty Ltd (CMG) about this matter that:
“Those Reasons show that the factual issues including, in particular, the history of expert reports and evidence in this long building case had a degree of complexity;…”
The President went on to say that:
“Those factors are persuasive that the matter did have a degree of complexity and difficulty”
and on that basis he awarded CMG costs in that appeal application.
Here CMG oppose the applicants’ application for costs
Respondent’s submissions
The Applicants submit that this Tribunal has power to award costs pursuant to section 70 and 71 of the Commercial and Consumer Tribunal Act 2003 (CCT Act) and section 102 of the QCAT Act, in the interests of justice.
CMG firstly submit that the Applicants and CMG should be ordered to bear their own costs.
CMG then submit that when considering s 102(3) the Tribunal should note:
a) CMG did not act in a way unnecessarily disadvantageous to the Applicants at any time. The Tribunal accepts that there is no evidence to support a claim to the contrary.
b) CMG submits that the nature and complexity of the dispute was ultimately not such as would warrant an award of costs. The Tribunal rejects this submission which is contrary to CMG’s submission for costs to the Appeal Tribunal referred to above in relation to this very matter. While the Applicants did initially claim against others, by the time of the hearing in Cairns the matter remained complex and both parties were legally represented due to that complexity. The matter was complex and arguable points were raised on both sides.
c) CMG submits that there are no factors which indicate to the Tribunal that either the Applicants or CMG had a relatively stronger claim than the other. The Tribunal rejects this argument, as at the end of the hearing the Applicants were successful with their claim.
d) CMG submits that if the financial circumstances of the parties are considered, such considerations should only be relevant to the extent “that any appearance of CMG being able to satisfy an award of costs…” The financial circumstances here that appear relevant to the Tribunal are those of the Applicants. The Tribunal found that the Applicants have a house in need of significant repair and the Tribunal finds, on the basis of their submissions as to their financial circumstances, that if they are denied their costs in this matter this will significantly impair their ability to rectify the house.
CMG submit that there is no basis for an award of indemnity costs. The Tribunal accepts this submission in the knowledge that the Applicants have not requested costs on that basis.
CMG refer to rule 86 in their submissions in relation to the offer to settle dated 25 May 2011 which was not accepted by the CMG. The Tribunal declines to rule on the validity or otherwise of the offer as this is unnecessary but finds that the reference to this rule is irrelevant under the circumstances here being considered.
The proper exercise of a wide discretion as to costs usually results in an award of costs to the successful party unless there are special circumstances which justify a different outcome. That is because such an order generally results in a just outcome.
Findings
The Tribunal finds that:
(a)the matter was complex and arguable points were raised on both sides;
(b)both sides were granted legal representation which occurred both at the hearing in Cairns and throughout the preparation of the matter;
(c)on the basis of the Applicants’ submissions as to their financial circumstances, if they are denied their costs in this matter this will significantly impair their ability to rectify the house;
(d)at the end of the hearing the Applicants were successful with their claim which shows that they had a relatively stronger case than CMG;
(e)the Applicants are entitled to their costs only against CMG;
(f)the District Court scale of costs is appropriate under the circumstances.
The cases require that if a successful party is to be deprived of their costs or indeed ordered to pay the costs of an unsuccessful party there must be very good reasons why it is just to do so.
McHugh J in Oshlack v Richmond River Council[4] explained the position as follows:
"...subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or defendant ... The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party, the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation... The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion... The court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute... There are few, if any, exceptions to the usual order as to costs outside the area of disentitling conduct."
[4] (1998) 193 CLR 72 at [69] per McHugh J.
Given the outcome of the decision and the reasons for that decision the Tribunal cannot find any special circumstances which would justify a different order to an order that CMG pay the Applicants their costs of the Application.
For these reasons, the Tribunal declines to order that each party bear their own costs and instead makes the following orders.
Orders
The Tribunal orders that:
1.CMG Consulting Engineers Pty Ltd pay Steven Grasso and Diane Grasso’s costs of and incidental to the proceedings against CMG Consulting Engineers Pty Ltd, including reserved costs, on a standard basis to be assessed on the District Court scale of costs.
2.Steven Grasso & Diane Grasso shall deliver to CMG Consulting Engineers Pty Ltd an itemised claim for costs referring to the relevant items contained in the District Court scale of costs.
3.If within 14 days of that delivery, the parties have not agreed on an amount of costs, the costs shall be assessed by Hickey and Garrett, Legal Costs Assessors, Level 21, 141 Queens Street, Brisbane, 4000.
4.CMG Consulting Engineers Pty Ltd shall pay Steven Grasso and Diane Grasso’s costs (as agreed or assessed) within 14 days of such agreement or assessment.
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