HK Developments Pty Ltd v Carter (No 2)
[2014] QCAT 437
•5 September 2014
| CITATION: | HK Developments Pty Ltd v Carter (No 2) [2014] QCAT 437 |
| PARTIES: | HK Developments Pty Ltd (Applicant) |
| V | |
| Nathan Carter (Respondent) |
| APPLICATION NUMBER: | BDL056-11 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Gardiner |
| DELIVERED ON: | 5 September 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The application by HK Developments Pty Ltd for costs is dismissed. |
| CATCHWORDS: | BUILDING MATTER – COSTS – where both parties unrepresented – where matter had many complicated issues– where delays alleged – where order made in favour of builder – whether costs should be awarded Queensland Building and Construction Commission Act 1991 (Qld), s 77 Lyons v Dreamstarter Pty Ltd [2011] QCATA 142; followed Lyons v Dreamstarter Pty Ltd [2012] QCATA 071; followed |
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 (Qld) (QCAT Act).
REASONS FOR DECISION
HK Developments Pty Ltd brought an application to QCAT in a building dispute between itself as builder and its client Nathan Carter.
On 14 July 2014 this Tribunal handed down a decision in this building dispute in favour of HK Developments.
HK Developments had made a costs application in the event of the successful outcome. A timetable for submissions was directed and the application for costs was set to be heard on the papers. This is a consideration of that application.
Costs are determined under section 77(2)(h) of the Queensland Building and Construction Commission Act 1991 (Qld).
The effect of this section, which modifies the general position under the QCAT Act, is to give the Tribunal a broad general power to award costs in cases caught by these enabling provisions.[1] This enabling Act allows that while the power must be exercised judicially it is ‘in markedly different terms from s 100 of the QCAT Act’[2] which starts with the parties bearing their own costs.
[1] Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 at [33].
[2] Ibid at [10].
As his Honour the then President of QCAT determined in the appeal decision of Lyons v Dreamstarter Pty Ltd[3] about section 77,
“The 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. Otherwise the factors affecting the discretion will vary in each case.”
[3] Ibid at [11].
This matter is representative of many building disputes between builders and home owners that come before QCAT. Both parties were legally unrepresented – at their election.
The matter commenced in March 2011 and had a tortured passage in this tribunal. On the first listed day of the originally listed multi-day hearing, it was apparent that neither party was in a position to progress their claim on the material filed at that point.
As required by sections 28 and 29 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) this tribunal endeavoured to assist the parties by lengthy explanations of the material required to be filed by the parties, in substance and form, to determine the matter. The matter was then adjourned to allow the parties further preparation time.
Despite this detailed and direct assistance, I record in my reasons dated 14 July 2014 “The evidence produced by the parties for this hearing was at best confused (despite continual assistance by the Tribunal over the period of the hearing) and, from Mr Carter, extremely detailed.”
That this hearing took so long and was so complicated is an example of what may happen when unrepresented parties who are emotionally and directly involved in a matter with many legal issues, represent themselves, fail to comprehend the complex legal and factual issues involved, and fail to address them in a succinct and coherent manner.
Of course, parties have the right to represent themselves and this tribunal will take every step it can to assist them with the presentation of their case – as was done here – but ultimately, each party is responsible for the material it places before the Tribunal to support the outcome it is seeking.
HK Developments seeks its costs as payment of the filing fee, of legal fees from a solicitor’s firm it engaged at the time termination was considered and its own costs associated with the hearing process.
Should HK Developments be paid the costs it claims?
In its brief submissions in support of this application, HK Developments blames Mr Carter for the protracted proceedings, citing “countless applications… countless experts hearings and mediations … the list is endless…” by Mr Carter. HK Developments makes no other submissions in support of the application.
In his reply, Mr Carter submits:
i)The length of the proceedings was no fault of either party:
ii)QCAT clerical errors delayed the matter;
iii)Mr Carter’s expert withdrew from the matter (through no fault of Mr Carter) and another expert had to be found;
iv)The delay in the adjournment of the first hearing should be equally borne by both parties as both parties were underprepared;
v)The second hearing was delayed by the unavailability of the member and not caused by either party;
vi)That overall, the delays were not caused by the parties;
vii)Mr Carter had the right to test the claims of HK Developments Pty Ltd;
viii)The outcome reduced significantly the original claims of HK Developments Pty Ltd.
Mr Carter relies on the provisions of the QCAT Act in relation to costs. As I have explained above, this is not the determinant legislation for this application. However, I have considered his submissions in the light of the requirements of section 77(2)(h) of the Queensland Building and Construction Commission Act 1991 (Qld).
In essence, I agree with Mr Carter. The parties did have the right to have the competing claims heard and determined and there was a live argument between them – as there is with most building matters.
In determining the conduct of this complicated and complex matter each party elected not to engage legal representation. The price they paid was the investment of their own time, energy and emotion in a process that was foreign to them, about legal issues they did not initially understand.
The assistance of the tribunal is limited in these circumstances by the requirements of even-handed procedural fairness and natural justice and by the need, in the end, to be the decision maker.
That is why it took such a long time. It may be that this process would have been shortened by the involvement of lawyers on both sides to guide these parties and to present an objective assessment to both sides to allow negotiations to occur. We will never know.
I do not agree with the blame HK Developments visits on Mr Carter in its submissions. Each party was culpable in different ways for the length of these proceedings. HK Developments was no more ready to proceed on the first set of hearing days than Mr Carter was.
The second hearing proceeded as smoothly as it could – mostly because of careful hearing management by this tribunal rather than anything the parties contributed. But this is no different from any unrepresented hearing and is a daily responsibility for QCAT members.
Mr Carter is wider in casting his net of blame. He lays some of the blame at the feet of the QCAT registry. On reviewing the file notes of the contact between Mr Carter and the registry case managers, Mr Carter was a demanding, at times, unreasonable litigant in his interactions with the registry staff. I place no reliance on these allegations as reason for delay in this matter.
It would have assisted HK Developments, if I was minded to award costs, if there would have been costs to allow. As it is, HK Developments now finds it difficult to point to many costs or disbursements that would be allowable in self-represented matters.
The High Court decision in Cachia v Hanes[4] is authority for the proposition that costs means reimbursement for work done or expenses incurred by a legal practitioner and compensation for the loss of time or effort of a litigant in person cannot be said to constitute costs. Costs were never intended to compensate for any loss by a litigant. This decision is also authority to say that it is not permissible to treat as a disbursement any loss of earnings incurred by a litigant in presenting or conducting a case[5].
[4] [1994] HCA 14 in the majority judgment at paragraphs 10 and 11.
[5] See Von Reisner v Commonwealth of Australia (no 2) [2009] FCAFC 172 at para 8.
Considering the legal costs sought by HK Developments, an examination of the ledger of the solicitor engaged by the company in the early part of this matter shows that the work was done prior to the filing of the QCAT application with limited legal work once the application was filed.
I am satisfied that this work was at a time when HK Developments Pty Ltd was considering its position in the developing argument with Mr Carter around such issues as termination of the contract. I am not satisfied that this work represents legal costs in this application.
I therefore do not consider that any of the legal costs incurred by HK Developments were directly or necessarily incurred in the conduct of these proceedings and do not make any award of costs in that respect.
The balance of the costs sought by HK Developments relates to its own time and is not recoverable, as discussed. HK Developments has not indentified any specific expert’s costs or disbursements that may be recoverable.
There are therefore no applicable costs that are recoverable by HK Developments in these proceedings.
I note in passing that even if HK Developments were able to point to applicable costs it incurred in these proceedings, I would not, in my discretion, allow costs. HK Developments originally claimed $88,793.00 (final payment and damages) plus interest. It was only successful in respect of an award of $52,832.00 plus interest. When the figures are rounded, this is effectively about 60 percent of the original claim.
Mr Carter was entitled to have his arguments heard, and they have been found to have substantial foundation. In the circumstances the most appropriate order as to costs would have been that each party bear their own costs in any event, as each party has expended significant time and effort and each has been successful to some extent.
I am satisfied that overall, despite the order against Mr Carter, HK Developments Pty Ltd should be responsible for its own costs in this litigation. I am not satisfied it is just and reasonable to exercise my discretion to award costs even though the examination starts with the proposition that a party who causes another to incur costs should reimburse the other party.
The application for costs is dismissed.
3
0