Leo v Paulsen - [2010] QCAT 122

CITATION: Leo v Paulsen [2010] QCAT 122

PARTIES: Warren Leo

v
Ben Paulsen

APPLICATION NUMBER: BD534-05

DIVISION: Civil

MATTER TYPE: Building matters

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Peta Stilgoe

DELIVERED ON: 12 January 2010

DELIVERED AT: Brisbane

ORDERS MADE: The applicant pay the respondent’s costs on a standard basis for the period 6 November 2009 to 9 December 2009 on the District Court Scale.

CATCHWORDS: Costs, offers to settle, vexatious proceedings

APPEARANCES and REPRESENTATION (if any):

Mr Derek Cronin, Cronin Litigation Lawyers for the applicant
Mrs Karen Schwede, Lawyers Qld Pty Ltd for the respondent

REASONS FOR DECISION

On 14 December 2009, I ordered that both the applicant’s claim and the respondent’s counterclaim be dismissed. I invited the parties to make submissions as to costs. The applicant is content with no order as to costs. The respondent wants his costs paid on an indemnity basis.

The respondent’s grounds for claiming indemnity costs are:
·The respondent made a settlement offer on 6 November 2009 and the decision of the tribunal was no more favourable to the applicant than that offer.
·The applicant’s proceedings were vexatious.
·The applicant’s conduct during the proceedings, the nature and complexity of the proceedings and the relative strengths of the claims, merits an order for costs.

Settlement offer

Section 142(2) of the Commercial and Consumer Tribunal Act states that, if:
a)A party to a proceeding serves another party to the proceeding with a written offer to settle the matters in dispute between the parties; and
b)The other party does not accept the offer within the time is open; and
c)The offer complies with this division; and
d)In the opinion of the tribunal, the decision of the tribunal on the matters in dispute is not more favourable to the other party than the offer;
the tribunal must award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made. Section 138 requires that an offer must be made by signed writing served on the party to whom the offer relates.
By email of 6 November 2009, the respondent offered to settle this dispute by a payment of $1500.00 “within 14 days after service of a signed notice of acceptance of the offer”. The respondent asserted that the settlement sum was to be paid and accepted “in full and final satisfaction of any and all claims which one party may have either now or in the future against the other in respect of, or arising out of, or otherwise in connection with the proceedings … BD534-05 or the works ….”

The offer was rejected by email from the applicant dated 7 November 2009.

I am satisfied that the respondent’s offer does comply with section 138. The offer is “signed” within the context of section 14 of the Electronic Transactions (Queensland) Act and section 44 of the Commercial and Consumer Tribunal Act allows the tribunal to deem informal service as “service”. I am also…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] QCAT 122
Decision Date: 12 January 2010

CaseChat Overview and Summary

In Leo v Paulsen, the applicant, Warren Leo, filed a claim against the respondent, Ben Paulsen, in the Queensland Civil and Administrative Tribunal (QCAT). The dispute centered around a building matter. Following an application by the respondent for the dismissal of the claim and his counterclaim, the Tribunal dismissed both the claim and counterclaim on 14 December 2009. The respondent subsequently applied for indemnity costs, arguing that the Tribunal's decision was no more favourable than his settlement offer and that the applicant's proceedings were vexatious. The Tribunal found that the respondent's settlement offer complied with the statutory requirements, and the Tribunal's decision was not more favourable to the applicant. Consequently, the Tribunal was required to award the respondent all reasonable costs incurred after the offer was made.

The Tribunal considered the rationale behind the statutory provisions for settlement offers, which aim to encourage serious consideration of settlement offers. It found that, while indemnity costs might be appropriate in some circumstances, the respondent's insistence on a deed of settlement when other means of finalisation were available, led the Tribunal to conclude that it was not reasonable for the respondent to recover costs after 9 December 2009. The Tribunal also found that the applicant's persistence with the claim was not vexatious, as the respondent had not offered to rectify the defective work or compromise the dispute until November 2009. The Tribunal concluded that the applicant's claim was not vexatious, as it was not an abuse of process, intended to harass or annoy, or instituted without reasonable ground.

Regarding costs from the date of the application to 6 November 2009, the Tribunal considered the purpose of the Commercial and Consumer Tribunal Act, which is to have parties pay their own costs unless the interests of justice require it. The Tribunal found that there were no sufficient grounds to overturn the purpose expressed in section 70 of the Act. The Tribunal ordered that the applicant pay the respondent's costs on a standard basis for the period 6 November 2009 to 9 December 2009, assessed on the District Court Scale, and that the applicant also pay the costs of that assessment.

This decision highlights the importance of considering settlement offers and the potential consequences for parties who do not take them seriously. It also demonstrates that the persistence of a claim is not necessarily vexatious, and that the interests of justice should be considered when determining costs in a proceeding.

Orders