Imperial Homes (Qld) Pty Limited v Queensland Building and Construction Commission (No 2)
[2014] QCAT 135
•14 April 2014
| CITATION: | Imperial Homes (Qld) Pty Limited v Queensland Building and Construction Commission (No 2) [2014] QCAT 135 |
| PARTIES: | Imperial Homes (Queensland) Pty Ltd (Applicant) |
| v | |
| Queensland Building and Construction Commission (Respondent) |
| APPLICATION NUMBER: | GAR013-13 |
| MATTER TYPE: | General administrative review matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Paratz |
| DELIVERED ON: | 14 April 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. That the Queensland Building and Construction Commission pay the costs of Imperial Homes (Qld) Pty Limited, of and incidental to the proceedings, for the period between the Experts Conclave on 25 October 2013 and up to and including the Hearing on 5 November 2013, and submissions thereafter, on a standard basis to be assessed on the District Court scale of costs. 2. Imperial Homes (Qld) Pty Limited shall deliver to the Queensland Building and Construction Commission, a realistic estimate of the costs claimed, including an explanation of the basis of the estimate, sufficiently detailed to facilitate some broad examination of its reasonableness, having regard to the District Court scale of costs. 3. If the Queensland Building and Construction Commission and Imperial Homes (Qld) Pty Limited are unable to agree on an amount of the costs within 14 days of the delivery of the estimate of costs, the costs shall be assessed by Hickey & Garrett, Legal Costs Assessors, Level 21, 141 Queen Street, Brisbane 4000. 4. Queensland Building and Construction Commission shall pay the costs of Imperial Homes (Qld) Pty Limited (as agreed or assessed) within 14 days of such agreement or assessment. |
| CATCHWORDS: | Where application for costs – where finding that direction to rectify is set aside – whether one party should bear costs where the other party is seeking a ruling on a question of law - whether in the interests of justice to order costs – where an experts conclave resulted in clear agreements as to fact – where hearing proceeded after clear agreement between experts – where meaning of the defects policy of the QBCC was in consideration - where the builder did everything that could be reasonably required of it – where costs allowed for period after experts conclave Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 100, 102(1) Mulford v Queensland Building Services Authority [2009] QCCTB 64 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 |
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
I delivered a decision in this matter on 31 January 2014 setting aside a Direction to Rectify. I gave directions as to seeking costs.
The direction as to costs were as follows:-
If either party wishes to seek costs:
(a)The party seeking costs is to file in the Tribunal and give to the other party a clear description of the costs and orders sought, and submissions in support, by 4pm on 28 February 2014.
(b)The other party is to file in the Tribunal and give to the other party submissions in reply by 4pm on 11 March 2014.
(c)The issue of costs will be determined on the papers not before 11 March 2014.
Imperial Homes filed submissions on 28 February 2014 seeking the following orders:
That the Respondent pay the costs of and incidental to the hearing on 5 November 2013, fixed in accordance with the Magistrates Court scale G items 5(a), 6(d), 6(e), 6(f) and 8(a) in the total sum of $7,933.00 including GST.
The QBCC filed submissions in reply on 13 March 2014. They opposed the awarding of the costs, and submitted that each party should bear its own costs. In the alternative, the Commission submitted that if the Tribunal was minded to award costs against the Commission, that orders should be made on the basis that:
(a)the assessment and amount of costs should be limited to a date the period between the Experts Conclave on 25 October 2013 and up to and including the hearing on 5 November 2013 (ie six (6) business days), and
(b)the costs should be assessed on the District Court Scale
This is the decision on costs.
This matter concerned a Direction to Rectify which was issued. The direction was as follows:
1.The installation of the concrete footings and the concrete floor slab of the dwelling is not in accordance with the BCA Volume 2-2006 Part 2.1 Structure P2.1 (a) & (b) in that;
-The design of the building footing system did not take into consideration the possible influence of the significant trees on adjoining sites.
-The noted defect has resulted in movement of the buildings footing system and consequential damage to the structure.
-Pertains to items 1, 2 & 3 on the BSA complaint form.
2.The installation of the stormwater drainage pipes connected to a dwelling is not in accordance with AS 2870-1996 6.6 Additional requirements for Class H and E sites – (f) in that;
-Articulation is not installed within 3 m of the dwelling, breakages and damage has occurred to stormwater drainage pipes that have allowed water to pond against the buildings footing system.
-The noted defect has resulted in movement of the buildings footing system and consequential damage to the structure.
-Pertains to item 1, 2 & 3 on the BSA complaint form.
3.The installation of the external finished surface surrounding the dwelling is not in accordance with the BCA Volume 2-2006 Part 3.1.2.3 Storm water drainage (a) in that:
-the external finished surface surrounding the slab is not drained to move surface water away from the building or graded to give a slope of not less than 50mm over the first 1m from the building.
-The noted defect has allowed water to pond against the dwellings footing system, has resulted in movement and damage to the buildings footing system and consequential damage to the structure.
-Pertains to items 1, 2, & 3 on the BSA complaint form.
4.On completion of remedial rectification to the building the licensee is requested to provide the Authority a detailed floor level survey of the building. The levels noted on the survey are to be reduced to a relative “0” datum being the lowest point on the slab. The floor level survey will be used for comparison over the monitoring period to establish stabilisation of the floor slab, prior to completion of cosmetic repairs by the licensee.
-Pertains to item 1,2 & 3 on the BSA complaint form
The essential question in the matter was whether the builder had done all things reasonably required of him as a builder, and in accordance with the defects policy of the authority.
There was no question that the house was subsiding. The issue as to the subsidence was whether it was because of faulty engineering of the footings, or faulty construction by the builder.
The matter involved two aspects:
a) an engineering question as to whether the subsidence occurred because of faulty design of the footings or faulty construction.
b) a question of law which arose if the subsidence occurred because of faulty design of the footings, as to whether the builder had complied with the defects policy.
The engineering question was very much in contention until the Experts Conclave. At the Conclave that question was completely resolved. The experts came to the clear joint view that:
On the basis of the available investigations it is our opinion that we are unable to identify any possible construction issues which have significantly contributed to the footing movement. The construction components considered include the footings system construction, site drainage, plumbing and masonry articulation.
(and that)
Agree the footing design/drawings do not take into account the existing trees on the adjoining property
(and)
The trees are the major contributing factor to the ongoing subsidence at the back of the house.
From the time of the Experts Conclave, the only question which remained for determination was whether the builder had complied with the defects policy.
The experts agreed that the engineer had visited the site and had taken photographs of the trees, and that the engineer should have taken this into account in the design of the footings:
·The design report contained a photograph of the trees
(and)
·At 2 locations in footing design documentation, the designer identifies that trees should be kept at an appropriate distance from the house and that the site should be maintained in accordance with CSIRO BTF 18.
·Where tree/s are located on an adjoining property outside the control of all parties associated with the site, competent design should include due allowance of the tree/s.
·The documentation available to us included a design report with photographs and suggests that the engineer or his/her representative visited the site prior to the completion of the design and issuing of an engineering compliance certificate stating that the design takes account of site conditions (including information provided by the builder).
The Commission submits that:-
(vi)It is submitted that it would be contrary to the interests of justice for the Commission to pay the applicant’s costs, in circumstances where judicial clarity was sought upon a difficult argument, being whether or not strict compliance with the defects policy was required (pertaining to item 1 of the direction)
I take from this submission that the Commission was desirous of obtaining a ruling on the legal question as to whether the Defects policy is to be adhered to strictly; or whether (as I have found) that it is the intent of the defects policy that is to be observed, which will depend upon a consideration of the circumstances in each case.
I appreciate that the Commission may wish to have a ruling on this question, as it is an issue that arises regularly in the work of the Commission. I am aware of other cases that have come before the Tribunal that would have involved consideration of the same issues. Some of those cases potentially had great significance in terms of the number of properties involved, and the value of the claims that might fall on to the Insurance fund.
I consider that it is entirely reasonable for the Commission to test that question of law and seek to obtain a ruling on the law. However, should the builder in this case bear his costs for participating in what may be seen to have been run as a “test case” on a question of law, and where the builder was highly unlikely to have been found liable?
It is quite common in general litigation where a “test case” is run, that it is agreed at the outset that the party seeking the ruling will pay the costs of both parties.
In this matter the circumstance was whether the builder should have given clear written notice to the engineer that there were trees on the adjoining property; or whether as a matter of fairness and reasonableness that it was unnecessary to do so when the engineer had inspected the site, had taken a photo of the trees and had attached that photo to its report.
I found that it was beyond doubt that the engineer was aware of the trees at the time of designing the footings, and that the builder was not required to have given written notice about the trees, when it was patently obvious that the engineer knew about them.
I consider that the Commission could easily have come to that same conclusion itself as to the facts. It was clear from the expert’s joint report that the engineer had been aware of the trees when designing the footings; that the builder had done nothing wrong as to the construction; and that the builder had relied on the professional advice given to him, which was given by independent professionals who were in possession of all relevant information.
From that time on, it was futile to pursue this builder. The argument that the builder should have given written notice of the trees to the engineer, when the trees were as obvious to the engineer as they were to the builder, is almost spurious, and had no realistic hope of success if any level of latitude was found in the strict application of the wording of the defects policy. The only reasonable reason that the matter should have proceeded to hearing, in my view, would have been to obtain a ruling in law that may be of application in other cases.
The Tribunal may make an order under s 102(1) of the QCAT Act “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”.
In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2),[1] the President noted that:
4.The starting point concerning costs in QCAT is that each party must bear its own: QCAT Act, s 100. This presumption may, however, be displaced if the Tribunal considers it in the interests of justice to order a party to pay all or part of the costs of another party: s 102(1). 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.
5.In determining whether it is in the interests of justice to award costs against another party the Tribunal may have regard to the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; and, whether a party has acted in a way that unnecessarily disadvantages another party: QCAT Act, s 102(3).
[1][2010] QCAT 412.
The Commission has obtained the ruling in law that it was seeking. I do not consider that this builder should bear the costs of that determination, from the point when it became clear that he had done everything that could be reasonably required of him. That time was from the date of the Experts Conclave.
Before the Conclave, the engineering issues were fairly in contention, and the usual costs rule in s 100 that each party bear their own costs should apply. From that date on however, the situation changes as to costs.
I consider that the Commission had no realistic prospects of success on the facts, and a poor argument as to the fairness of its direction to rectify, after the conclave.
I consider that I should exercise the broad discretion under s 102(1) of the QCAT Act and order that the Commission should, in the interests of justice, pay the costs of the builder from the date of the conclave to, and including, the hearing.
I do not intend that this ruling should in any way inhibit parties participating in an expert’s conclave. To the contrary, this matter demonstrates the great value of an experts conclave, and the significant costs that can be saved if one is held, and at as early an opportunity as possible. The length of this hearing was significantly reduced, and so the costs were significantly reduced, because of the joint expert’s findings. If the views of the experts had been accepted for what they clearly led to in terms of a final conclusion, then the costs of a hearing could have been avoided altogether.
The Commission submits as to the period as to costs that:
(vii)If the tribunal is minded to make a costs order against the Commission, the assessment and amount of costs should be limited to a date the period between the experts conclave on 25 October 2013 and up to and including the hearing on 5 November 2013 (ie six (6) business days) (which seems to accord with quantum of costs sought by the Applicant in its submissions)
I agree that this period seems to accord with the period sought by the builder in its submissions. It also accords with my findings. I accept the submissions of the Commission in this regard, and agree with them. I shall allow costs for the period which the Commission indicates, extending it to include submissions made after the hearing.
Scale of Costs
I sought submissions as to the applicable scale of costs. There is no specified scale in the QCAT Act or Rules.
The builder submitted that:
10. Appropriate scale
It is submitted that the rectification costs would have been well over $50,000.00, on the instructions provided, on a commercial basis. In that regard, it is submitted that the appropriate scale would be the Magistrates Court scale “G” from 1 July 2013 to date, as identified in schedule 3 of the Uniform Civil Procedure Rules 1999 (Q)
The builder then went on to quantify that amount as a total of $7,933.00 (including GST).
The Commission took a different view. It submitted that:
16.Notwithstanding that the cost of rectification was not a matter for determination by the Tribunal at this hearing, nor was any evidence led by the parties on this point, the review application involved a review of an administrative decision rather than a monetary claim.
17.It is submitted that the Magistrates Court scale is not appropriate for an administrative review, and would only be applicable where the cost of rectification of the defective building work has been quantified, which was not the case here.
18.Should the Tribunal be satisfied that it is appropriate for discretion be exercised in awarding costs in favour of the applicant, the Commission submits that the District Court scale is the appropriate scale of costs, as this matter is not one that related to a monetary claim or a dispute within the jurisdiction of the Magistrates Court.
The Commission referred to the decision in Mulford v Queensland Building Services Authority.[2] The Member there referred with approval to the decision in Residential Resorts of Australia Pty Ltd v QBSA.[3] In that case the member noted that:[4]
The Tribunal has historically found that the appropriate scale in a review application of an administrative character is the District Court scale. (Peter Boyd Enterprises Pty Ltd v QBSA [2008] CCT QR098-06 and Habitat Development Pty Ltd v QBSA [2008] CCT QR01-06). In Peter Boyd Enterprises Pty Ltd v Queensland Building Services Authority [2008] QCCTB 126 (7 August 2008), Member Heyworth-Smith was minded to award costs on a District Court scale in circumstances analogous to the case at hand, where the applicant:
(a)reviewed a direction to rectify issued by the Authority;
(b)was entirely successful in its application and the ultimate result; and
(c)the ultimate result and that the matter was complex both legally and in terms of its factual context.
[2][2009] QCCTB 64 at [23].
[3][2009] QCCTB 39.
[4][2009] QCCTB 39 at [66].
I accept the Commissions submissions that this is an administrative review, and that there was no quantification of the rectification costs. This matter is analogous to the matter in Peter Boyd Enterprises in that this was a review of a direction to rectify, the builder was wholly successful, and the matter may be said to have been complex in terms of law and fact.
I shall therefore allow costs on the District Court scale, noting that costs on the District Court scale may nevertheless exceed the Magistrates Court scale of costs which the builder was seeking.
Conclusion
I will allow the builder its costs from the date of the expert’s conclave on the District Court scale.
The District Court costs will need to be agreed or assessed. In order to minimise costs, and to avoid the necessity for the full preparation of a costs statement in compliance with the Uniform Civil Procedure Rules, if possible, I shall adopt the procedure envisaged in District Court of Queensland Practice Direction Number 3 of 2007 for agreed or fixed costs, to provide for provision of a realistic estimate of costs.
I order as follows:
1. That the Queensland Building and Construction Commission pay the costs of Imperial Homes (Qld) Pty Limited, of and incidental to the proceedings, for the period between the Experts Conclave on 25 October 2013 and up to and including the Hearing on 5 November 2013, and submissions thereafter, on a standard basis to be assessed on the District Court scale of costs.
2. Imperial Homes (Qld) Pty Limited shall deliver to the Queensland Building and Construction Commission, a realistic estimate of the costs claimed, including an explanation of the basis of the estimate, sufficiently detailed to facilitate some broad examination of its reasonableness, having regard to the District Court scale of costs.
3. If the Queensland Building and Construction Commission and Imperial Homes (Qld) Pty Limited are unable to agree on an amount of the costs within 14 days of the delivery of the estimate of costs, the costs shall be assessed by Hickey & Garrett, Legal Costs Assessors, Level 21, 141 Queen Street, Brisbane 4000.
4. Queensland Building and Construction Commission shall pay the costs of Imperial Homes (Qld) Pty Limited (as agreed or assessed) within 14 days of such agreement or assessment.
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