Lewis Constructions Pty Ltd v Pollock
[2012] QCAT 398
•3 September, 2012
| CITATION: | Lewis Constructions Pty Ltd v Pollock and Anor (No 2) [2012] QCAT 398 |
| PARTIES: | Lewis Constructions Pty Ltd |
| v | |
| Andrew Pollock Belinda Pollock |
| APPLICATION NUMBER: | BD429-09 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Ann Fitzpatrick, Member |
| DELIVERED ON: | 3 September, 2012 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | [1] Lewis Constructions Pty Ltd’s application for costs is allowed. [2] Andrew Pollock and Belinda Pollock’s application for costs is dismissed apart from the order made below. [3] Andrew and Belinda Pollock are to pay Lewis Constructions Pty Ltd’s costs of and incidental to the proceeding on the standard basis of assessment in accordance with the District Court Sale of Costs. [4] If the amount of Lewis Constructions Pty Ltd’s costs is not agreed between Andrew and Belinda Pollock and Lewis Constructions Pty Ltd within 14 days, the costs are to be assessed by Hickey & Garrett, Legal Costs Consultants, Level 21, 141 Queen Street, Brisbane at the cost of Andrew and Belinda Pollock. [5] Andrew and Belinda Pollock are to pay Lewis Constructions Pty Ltd’s costs (as agreed or assessed) within 14 days of such agreement or assessment. [6] Lewis Constructions Pty Ltd is to pay to Andrew and Belinda Pollock the cost of the reports prepared by Mr Van de Hoef of NJA Consulting dated 17 March, 2011, 1 August, 2011 and 4 August, 2011 and the cost of the appearance of Mr Vrbancic at the hearing, within 14 days of presentation to it of the tax invoices relating to these items of cost. |
| CATCHWORDS: | Costs of claim and counter-application – exercise of discretion as to costs in the Tribunal Queensland Building Services Authority Act 1991, s 77(1)(h) Hallett & Ors v Queensland Building Services Authority [2011] QCAT 355 |
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 13 June, 2012 a decision in this matter was handed down. The applicant was successful in obtaining an order for a substantial sum although less than the sum claimed. The respondents’ counter-application was successful with respect to part of their counter-application in an amount of $2,083.00 for damages for the cost of remedial works to 23 columns and $5,435.00 for the cost of other rectification work. The amounts were significantly less than the amount claimed in the counter-application.
Both parties were legally represented during the hearing. Both parties have sought costs.
Considerations applicable to the awarding of costs
This proceeding was commenced in the former Commercial and Consumer Tribunal. The functions of that Tribunal are now largely performed by the Queensland Civil and Administrative Tribunal. More recently the Tribunal has determined that pending proceedings such as this proceeding, should have costs issues determined under the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).[i] 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.
This matter involved 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 the QBSA Act provides that the Tribunal “may award costs”, in proceedings arising out of a building dispute. 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.[ii]
Deputy President Kingham, in Lyons v Dreamstarter Pty Ltd[iii] said that a jurisdiction given in general terms, such as the jurisdiction to award costs in s 77(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.”[iv]
The QCAT costs provisions relevantly provide at s 102 that the Tribunal may make an order for costs if the Tribunal considers the interests of justice require it to make the order. Relevant considerations include:
· whether a party is acting in a way that unnecessarily disadvantages another party;
· the nature and complexity of the dispute;
· the relative strengths of the claims made by each party;
· the financial circumstances of the parties;
· anything else the tribunal considers relevant.
Relevant to the exercise of my discretion is the established principle that in the absence of special circumstances a court will exercise its discretion to award costs to the successful party. McHugh J in Oshlack v Richmond River Council[v] said:
“…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 areas of disentitling conduct.”
Additionally the Queensland Court of Appeal has held that where a party has reasonably incurred legal costs and has been successful before a tribunal it could not be said to be in the interests of justice to allow that success to be eroded.[vi]
Applicant’s submissions
[10] The applicant has submitted that it is entitled to an order that the respondents pay its costs on a standard basis on the District Court scale, as agreed by the parties, or if no agreement as assessed.
[11] The applicant acknowledges that the amount ordered in its favour was less than the amount claimed, however says that the amount of the reduction was not significant when compared to the total value of the works completed.The applicant points out that the respondent succeeded only to a limited extent in a set off for the cost of rectification work in the sum of $5,435.00 and in a counter application for damages for remedial work in the sum of $2,083.80.
[12] As to the conduct of the parties the applicant submits that the filing of an amended counter-application between the first hearing dates and the resumed dates prolonged the matter and resulted in increased costs to the applicant.
[13] The applicant submits that the matter was complex, it took 8 hearing days and that legal representation was justified in the circumstances.
[14] Although not particularized in the submissions the applicant asserts that the complexity of the case arose from the manner in which the respondents conducted their case and that the respondents’ claims were flawed. The applicant asserts that its case was strong and supported by compelling evidence largely preferred to that of the respondents.
Respondents’ submissions
[15] The respondents submit that the applicant recovered less than half the amount it originally claimed, the original amount was not supported by any evidence, and further it was the report of their expert builder which caused the applicant’s quantity surveyor to revise down the quantum of the claim ultimately made after obtaining a quantity surveyor’s report. The point is made that by the time the quantity surveyor had provided his second report the matter was well under way and they had incurred significant legal and professional costs.
[16] The respondents have made submissions in relation to the compulsory conference held in this matter. I have ignored those submissions on the basis of the confidential nature of that proceeding.
[17] The respondents submit that the matter was not complex and came down to a preference for the evidence of one witness over another. They refer to their previous objection to legal representation being granted in the case.
[18] In response to the applicant’s submissions the respondents say that their ignorance of the law, before obtaining legal advice, in terms of reliance on a fixed price contract should not be used against them. Finally in relation to the applicant’s submissions in relation to their pleading of negligence they submit that it should not weaken their case in relation to costs that they have not been successful on a matter that cannot even be heard by the Tribunal.
Findings
[19] I find that there are no special circumstances in this case which justify a departure from the principle that a successful party is entitled to their costs.
[20] I find that the matter was lengthy and complex and the appointment of legal representatives was justified.
[21] I do not find that the applicant acted in any way which unnecessarily disadvantaged the respondents. In particular I do not consider the fact that the applicant did not succeed in the full amount of its claim or that the claim was originally cast for a higher amount than ultimately sought, should disentitle it from an award of costs. The reasonable cost of the works in question was always a central issue at the hearing. I do not consider the applicant’s submissions in relation to the conduct of the respondents in the way in which they pleaded or conducted their response and counter-application adds anything to the applicant’s entitlement to its costs.
[22] The applicant succeeded in recovering a substantial sum on a quantum meruit basis and in defending all but a limited part of the respondents’ counter-application. On that basis I find that it had the stronger case relative to the respondents.
[23] For these reasons I order that the respondents pay to the applicant its costs of the proceedings, in an amount if not agreed to be assessed.
[24] The respondents succeeded in setting off the cost of rectification work in the sum of $5,435.00 against the award in favour of the applicant. The respondents also succeeded in relation to the cost of rectification of 23 steel columns in an amount of $2,083.80. The total amount claimed in the counter-application was $173,629.00 together with an entitlement to reduce the value of building works performed by further sums representing the cost of building work omitted form the approved plans, the value of works which were incomplete and the cost to rectify defective items of work. Although a relatively small award was made, I am conscious that the respondents incurred the cost of 3 experts, Mr Van de Hoef, Mr Vrbancic and Mr Haskard in relation to the steel columns issue. Their success in relation to offset of the cost to rectify defective items also involved expert evidence, however, that evidence is harder to isolate from the broader work performed by the respondents’ experts in responding to the claim.
[25] The principles governing recovery of the costs of a counterclaim were discussed by Dixon J in Smith v Madden[vii]:
“In such a case the taxation of the costs of the action and of the counterclaim is governed by the principle that the party receiving the costs of the claim should recover the general costs and whatever was reasonably incurred in bringing and maintaining or defending the action, as the case may be, considered as if there had been no counterclaim, and that the party receiving the costs of the counterclaim should recover the further or increased costs reasonably incurred in bringing and maintaining or defending the counterclaim.”
[26] I do not consider it just that the respondents, having failed in relation to all but one item of the counter-application and a limited number of items of defective work, should recover all of its costs of the counter-application.
[27] This Tribunal is charged in the objects of the QCAT Act with ensuring matters are dealt with in an economical way.
[28] In light of the relatively limited success of the respondents in their counter-application and in order to avoid the cost and complexity of:
· isolating the time and cost of witnesses in dealing with the limited number of successful claims in relation to the cost of rectification of items of work; and
· determining the extent to which the successful part of the counter-application increased the costs of the general action;
I intend to order only that the applicant pay to the respondents the costs of the reports prepared by Mr Van de Hoef of NJA Consulting, dated 17 March, 2011, 1 August, 2011 and 4 August, 2011, in relation to the issue of the corroding columns together with the costs of the attendance at the hearing of Mr Vrbancic.
These costs relate solely to the steel columns’ issue. I note that Mr Van de Hoef and Mr Haskard addressed other matters in other reports and that they were required to give evidence in relation to other matters, making it difficult to tease out a percentage of their work relating only to the 23 steel columns. I do not consider the cost and complexity of doing so can be justified.
Orders
[29] Lewis Constructions Pty Ltd’s application for costs is allowed.
[30] Andrew Pollock and Belinda Pollock’s application for costs is dismissed apart from the order made below.
[31] Andrew and Belinda Pollock are to pay Lewis Constructions Pty Ltd’s costs of and incidental to the proceeding on the standard basis of assessment in accordance with the District Court Sale of Costs.
[32] If the amount of Lewis Constructions Pty Ltd’s costs is not agreed between Andrew and Belinda Pollock and Lewis Constructions Pty Ltd within 14 days, the costs are to be assessed by Hickey & Garrett, Legal Costs Consultants, Level 21, 141 Queen Street, Brisbane at the cost of Andrew and Belinda Pollock.
[33] Andrew and Belinda Pollock are to pay Lewis Constructions Pty Ltd’s costs (as agreed or assessed) within 14 days of such agreement or assessment.
[34] Lewis Constructions Pty Ltd is to pay to Andrew and Belinda Pollock the cost of the reports prepared by Mr Van de Hoef of NJA Consulting dated 17 March, 2011, 1 August, 2011 and 4 August, 2011 and the cost of the appearance of Mr Vrbancic at the hearing, within 14 days of presentation to it of the tax invoices relating to these items of cost.
[i]Hallett & Ors v Queensland Building Services Authority [2011] QCAT 355; Queensland Building Services Authority v Johnston [2011] QCATA 265.
[ii][ii] Lyons v Dreamstarter Pty Ltd [2011] QCATA 142.
[iii]Ibid.
[iv]Ibid at para 33.
[v]Oshlack v Richmond River Council (1998) 193 CLR 72.
[vi]Tamawood Limited & Anor v Paans [2005] QCA 111.
[vii][1946] HCA 19.
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