Higgins v Mosely Holdings Pty Ltd t/as Ash Mosely Homes
[2014] QCAT 656
•16 December 2014
| CITATION: | Higgins and anor v Mosely Holdings Pty Ltd t/as Ash Mosely Homes [2014] QCAT 656 |
| PARTIES: | Karen Higgins Frank Baars (Applicant) |
| v | |
| Mosely Holdings Pty Ltd t/as Ash Mosely Homes (Respondent) | |
| APPLICATION NUMBER: | BDL 172-13 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Favell |
| DELIVERED ON: | 16 December 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | The Applicants pay the Respondents costs to be assessed by a costs assessor to be agreed between the parties within 14 days otherwise to be assessed by Hickey and Garrett Legal Costs Assessors, Level 21, 141 Queen Street Brisbane 4000 on the standard basis to be assessed on the Magistrates Court scale of costs applicable to claims of up to $50,000.00. |
| CATCHWORDS: | Building matters – costs Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 86, s 100, s 102, s 107 Ascot v Nursing and Midwifery Board of Australia [2010] QCAT 364 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Nerida Whelan, solicitor Williams Graham Carman |
| RESPONDENT: | John Eylander, Turner Freeman Lawyers |
REASONS FOR DECISION
The Applicant and the Respondent had entered into a Master Builders Association building contract for the construction of a dwelling at 24 Alexander Street, Clifton Beach.
After a two day hearing held in Cairns in early February the Tribunal in response to an application for rectification of works ordered that the Respondent arrange for the rectification of a waterproof membrane to be carried out by a date in July 2014.
As the parties wished to be heard on costs the parties were ordered to file any applications and submissions on costs.
The parties have filed submissions.
The Respondent seeks its costs in the proceedings to be paid by the Applicant assessed on the standard basis (party/party basis) on the District Court scale.
The Applicants submit that there should be no departure from the position contained in s 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) and that each party should bear its own costs.
The Respondent submits that this is an appropriate case where the interests of justice require an order that the Applicant pay the Respondents costs on multiple grounds. They summarise those grounds as follows:
(a) The Applicants sought to scandalise the proceedings for improper purposes with the filing of documents relating to the Respondents Queensland Building Services Authority file and previous complaints history.
(b) The Applicants sought to present evidence from a complainant in a previous QCAT Tribunal dispute with the Respondent.
(c) The Applicants sought to ventilate complaints and personal grievances against the Respondent in circumstances where two independent building inspectors including the regulator had inspected and certified the items in dispute.
(d) Seeking to re-open or go behind a previous QCAT consent order
(e) The relative strength of the Appellants claim was poor and unmeritorious.
Chapter 2 Part 6 Division 6 of the QCAT Act 2009 deals with costs. Section 100 of the QCAT Act provides:
Each party usually bears own costs
Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own cost for the proceeding.
Section 102 provides:
Costs against party in interests of justice
(a) The Tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the Tribunal considers the interests of justice require it to make the order.
Section 102(3) allows the Tribunal in deciding whether to award costs to 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;
(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 applicant was afforded natural justice by the decision-maker for the decision; and
(ii).whether the applicant 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.
The jurisdiction to award costs is a wide power accompanied by discretion. Any discretion must be exercised judicially and not arbitrarily, capriciously or so as to frustrate the legislative intent.[1]
[1]Oshlack v Richmond River Council [1998] 193 CLR 72 at 81 per Gaudron and Gummow JJ.
Any costs orders should serve a compensatory function not a punitive one.[2]
[2]Latoudis v Casey [1990] 170 CLR 534 at 543 per Mason CJ, at 563 per Toohey J, at 567 per McHugh J.
As has been recognised, there is no common law jurisdiction in tribunals to award costs. The power is entirely a creation of statute.[3]
[3]Night v FP Special Assets Ltd (1992) 174 CLR 178, 193.
As Judge Kingham, Deputy President of QCAT, in Ascot v Nursing and Midwifery Board of Australia [2010] QCAT 364 said:
“The public policy intent of the provisions in the QCAT Act is plain. The Tribunal was established as a no costs jurisdiction. That may be departed from where the interests of justice require. The considerations identified in s 102(3) are not grounds for awarding costs. They are factors that may be taken into account in determining whether, in a particular case, the interests of justice require the tribunal to make a costs order.”
In Ralacom Pty Ltd v Body Corporate for Paradise Island CTS 17653 (no. 2) [2010] QCAT 412 the President Justice Wilson said:
“The phrase “in the interests of justice” is not defined in the Act but is to be construed according to its ordinary and plain meaning which obviously confers a broad discretionary power on the decision-maker.”
Ralacom Pty Ltd v Body Corporate for Paradise Island relied in part on the decision of the Court of Appeal in Tamawood Ltd & Anor v Paans [2005] QCA 111, a case decided under the costs provision of the now repealed Commercial and Consumer Tribunal Act 2003.
Commenting on that Act the President Justice Wilson said in Ralacom Pty Ltd v Body Corporate for Paradise Island:
“Although those provisions are not analogous to the equivalent provisions under the QCAT Act, the principles found in Tamawood provide guidance about the circumstances in which it may be in the interests of justice for this Tribunal to award costs against parties.”
His Honour considered the wording of the CCT cost provisions and said:
“The similar QCAT Act provision to s 70 (of the CCT Act) is, it might be said, in terms that more plainly indicate that the legislature has turned its face against awards of costs in this Tribunal: s 100 says that “other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceeding”.
In considering s 70 and 71 Keane JA (as His Honour then was) referred however to two matters relevant here. His Honour held that the CCT provisions negated the traditional proposition that costs should prima facie follow the event (unless of course the tribunal considers that another order is more appropriate) and that the nature and extent of the power to award costs could only be discerned by close considered of the terms of the statute which created and prescribed the occasions and conditions for its exercise. Sections 100 and 102 of the QCAT Act attract the operation of the same principles.
Keane JA was of the view that where the complexity of the matter justified legal representation it would not be interests of justice to bar the successful party from recovering costs that were reasonably necessary a satisfactory outcome.
That conclusion must, here, be considered in the light of the difference between s 70 of the CCT Act and s 100 of the QCAT Act. Section 70 speaks of a “main purpose”, but s 100 mandates that parties shall bear their own costs. Section 70 contains, within itself, a reference to the condition of circumstance in which the main purpose may be subsumed to the interests of justice; s 100 has no such proviso although it appears later, in s 102(1).
Under that subsection QCAT has discretion to make a costs order “…if the tribunal considers the interests of justice require it…” Section 102(3) says that, in deciding whether to award costs, the tribunal may have regard to matters not dissimilar to those set out in s 71 of the CCT Act including, in particular for present purposes, the nature and complexity of the dispute and the relative strengths of each parties’ claims.
Under the QCAT Act the question that would 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 point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100.”
The Respondent submits that it is appropriate that the Applicants be ordered to pay the Respondent’s costs to be assessed on the District Court scale on a solicitor/client basis by an assessor appointed by the Tribunal. The Respondent contends that it is appropriate that costs be assessed on the District Court scale on the standard basis (party/party).
Section 107 of the QCAT Act and s 87 of the QCAT Rules provide for the Tribunal’s power to fix or assess costs.
Section 87 of the Rules provides:
(1) This Rule provides for how costs are to be assessed under section 107 of the Act if a tribunal makes a costs order that requires the costs to be assessed under the Rules.
(2) The costs must be assessed –
(a) by an assessor appointed by the tribunal; and
(b) the tribunal directs costs to be assessed by reference to the scale of costs applying to a Court – by reference to the scale of costs directed by the tribunal.
The Applicant seeks an order pursuant to s 86(2) of the QCAT Rules.
The Respondent submits that because of the Applicants hostility towards the Respondent it is appropriate that an order be made pursuant to s 87(2)(a).
In support of its claim for costs the Respondent submits that the outcome of the proceeding clearly favoured the Respondent. In my view that is correct. The only item of defective work was performed by another and it was to be rectified except that the person who was to carry out the work was prevented from doing so prior to the hearing.
I note in the submissions the contention made that the work performed by the Respondent is subject to statutory warranties and the Respondent has complied with all requests to rectify issued by the Queensland Building and Construction Commission as well as actual defects notified by the homeowner.
In the submissions by the Applicant my attention was drawn to the question of unnecessary disadvantage as referred to in s 102(3)(a).
In Queensland Building Services Authority v Johnston [2011] QCATA 77 Member Deane said that when considering whether to make a costs order for unnecessary disadvantage, the disadvantage must be “unnecessary as distinct from a disadvantage experienced in the usual course of a dispute proceeding”.[4] When considering unnecessary disadvantage “the tribunal must consider the extent to which a party causing disadvantage is familiar with its practices; the capacity of the party causing disadvantage to act on the tribunal’s orders and directions; and whether the party is acting deliberately”.[5]
[4]At paragraph [31].
[5]Queensland Building Services Authority v Johnston [2011] QCATA 77 at paragraph [30].
The Applicants submit in resisting the claim for costs that the conduct relied on by the Respondent to justify the claim that the Respondent was caused unnecessary disadvantage is not sufficient to demonstrate that the Applicants acted in a manner that did in fact unnecessarily disadvantage the Respondent.
The Respondents say that they introduced evidence they believed to be relevant to the proceeding. The Applicants were self-represented at the hearing. During the course of the hearing there was evidence sought to be relied on which was not relevant to any of the questions I had to determine. Further there were orders sought which were clearly not within the jurisdiction of the Tribunal to grant. I accept that the Applicants probably did not have an appreciation of how applications were conducted in the Tribunal even having regard to the Tribunal’s functions and its objects.
My observation during the hearing was that there was some animosity between the parties. It was also clear to me that the Applicants were relying on the opinion of their expert Brian Peach and his advice.
In my view the litigation was not complex and it would have been clear to the legal advisors of the Respondent that much of what was contained in the material put forward by the Applicant was not relevant and some of the orders sought were not within the jurisdiction of the Tribunal.
In my view it has not been demonstrated that the Respondent was unnecessarily disadvantaged in such a way that went beyond the ordinary disadvantage suffered as a result of litigious matters.
It is clear that the Respondent has succeeded in resisting the claims made and in respect of the order that was made it was prepared to have the rectification carried out prior to the litigation. However I do not find that the claims made were frivolous or vexatious. In my view from my observation during the hearing the Applicants felt they were justified and entitled to make the application as they did.
Although the Tribunal found against the Applicants it was because it preferred the evidence called on behalf of the Respondent or there was a lack of sufficient evidence to support a particular claim. That does not mean that the Applicants’ claim was fundamentally misconceived and bound to fail. In my view the disparity between the strengths of each party’s case is not sufficient to require a costs order in the interests of justice.
This is not a case where an order pursuant to Rule 86 is sought.
In support of the costs submissions by the Applicants further affidavits were filed. The receipt of them was objected to by the Respondent. The objection by the Respondent was objected to by the solicitors for the Applicant.
Given the submissions that were made by both sides which were directed to the costs provisions in the QCAT Act and my conclusion that if the costs provisions in the QCAT Act were appropriate the interests of justice would not have required a costs order it is not necessary for me to determine those objections.
This matter was a building dispute.
Section 100 of the QCAT Act contains in introductory phrase (“other than as provided under this Act or an enabling Act”) and as has been identified in Lions v Dreamstarter Pty Ltd[6] there is a relevant enabling act which applies to the dispute and contains a provision about costs.
[6][2012] QCATA 071 at paragraph [6]; [2011] QCATA 142 at paragraph [31].
Section 77 of the Queensland Building Services Authority Act 1991 (Qld) in s 77(2)(h) gives the tribunal a power to award costs.
That provision is what ss 6 and 7 of the QCAT Act refer to as a “modifying provision” and it prevails over the provision of the QCAT Act which must therefore be read with any necessary changes as if the modifying provision was part of the QCAT Act.[7]
[7]Lions v Dreamstarter Pty Ltd [2012] QCATA 071 at [7].
The effect is (as has been said in both Dreamstarter decisions) to give QCAT a broad general power to award costs in cases caught by these enabling provisions which in the case of s 77(2)(h) is to be exercised “judicially”[8].
[8]Lions v Dreamstarter Pty Ltd [2011] QCATA 142 at paragraph [33]; Latoudis v Casey (1990) 170 CLR 534 at 557.
The power to award costs under the QBSA Act, “while expressed in succinct terms, indicates that the question of costs is to be addressed markedly different terms from s 100 of the QCAT Act”.[9] As Justice Allan Wilson President QCAT said in Dreamstarter[10] “the High Court has said that there is no automatic rule that costs “follow the event” (i.e. the outcome of the proceeding) or that the unsuccessful party must compensate the successful one.[11] Their discretion to award costs starts with the proposition that it is just and reasonable that a party who causes another to incur costs should reimburse the other party for them.[12] Otherwise, the factors affecting the discretion would vary in each case.[13]”
[9]Lions v Dreamstarter Pty Ltd [2012] QCATA 071 at paragrpah [10].
[10]At paragraph [11].
[11]Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at [26].
[12]Latoudis v Casey (1990) 170 CLR 534.
[13]Donald Campbell & Co v Pollak (1927) AC 732 at 811-12.
Here the elements of the discretion must include the overwhelming success that the Respondent had. In this case both parties were granted leave to be legally represented however the Applicants selected to represent themselves.
In my view taking into account all the circumstances of the case and in particular the success of the Respondent it is appropriate that there be a costs order.
Under s 107 of the QCAT Act the tribunal must fix the costs if that is possible. The Respondent has not filed any material concerning the quantum of costs. But seeks to have the costs assessed on the District Court Scale by an assessor appointed by the tribunal. No assessor has been put forward.
The solicitors for the Applicants submit that in the event that the tribunal decided to make a costs order against the Applicants the appropriate scale of fees for the calculation of the Respondent’s costs is the Magistrates Court scale for matters under $50,000 not the District Court scale of fees. In support they say that quantum of the Applicant’s claim was not more than $50,000.
I am not able to set the fees and in my view it is appropriate that a costs order be made to be assessed by a costs assessor to be agreed between the parties within 14 days otherwise to be assessed by Hickey and Garrett Legal Costs Assessors, level 21, 141 Queen Street Brisbane 4000 on the standard basis to be assessed on the Magistrates Court scale of costs applicable to claims of up to $50,000.00.
0
8
2