Newnham Constructions Pty Ltd v Bernie (No. 2) - [2022] QCAT 320

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Newnham Constructions Pty Ltd v Bernie (No. 2) [2022] QCAT 320

PARTIES:

NEWNHAM CONSTRUCTIONS PTY LTD

(applicant)

v

PHILLIP BERNIE

(respondent)

APPLICATION NO/S:

BDL161-20

MATTER TYPE:

Building matters

DELIVERED ON:

5 September 2022

HEARING DATE:

9 December 2021

HEARD AT:

Brisbane

DECISION OF:

Member Sammon

ORDERS:

Mr Bernie must pay Newnham Construction Pty Ltd’s costs in this matter in the total of $2,035.43 by 11 November 2022.

CATCHWORDS:

PROCEDURE – COSTS – DISCRETION TO ORDER COSTS – application that representative for an unsuccessful party pay a portion of costs – quantification of costs ordered against the unsuccessful party

Domestic Building Contracts Act 2000 (Qld) (repealed), s 67

Federal Court Rules 1979 (Cth)
Legal Profession Act 2007 (Qld), s 319, schedule 2
Public Service Act 2008 (Qld)
Queensland Building and Construction Commission Act 1991 (Qld), s 77
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 48, s 97, s 100, s 102, s 103, s 107
Queensland Civil and Administrative Tribunal Regulation 2019 (Qld), s 8, s 15, s 18, s 19
Queensland Civil and Administrative Tribunal Rules 2009 (Qld), s 85
Uniform Civil Procedure Rules 1999 (Qld), r 691, schedule 1 and schedule 2

Victorian Civil and Administrative Tribunal Act 1998 (Vic), s 62

Australian Competition and Consumer Commission v The IMB Group Pty Ltd (in Liquidation) [2004] FCA 1592

Aussie Invest Corporation Pty Ltd v Hobsons Bay City Council (2004) VAR 212; [2004] VCAT 2188
Cachia v Hanes (1991) 23 NSWLR 304
Cachia v Hanes (1994) 179 CLR 403
Coral Homes Qld Pty Ltd v QBCC [2014] QCAT 093
Lyons v Dreamstarter Pty Ltd [2012] QCATA 071
Polywell Pty Ltd v Brisbane City Council, Environmental Health/Compliance & Regulatory Services [2017] QCAT 42
Relacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412
Stuart v Queensland Building and Construction Commission [2016] QCATA 135
Taylor t/as Solar Water Pumping v Cameron & Anor [2014] QCATA 010
Thompson v Body Corporate for Arila Lodge & Anor [2017] QCATA 152

Tracey v Olinderidge Pty Ltd & Wagner [2015] QCAT 7.

APPEARANCES & REPRESENTATION:

Applicant:

Ms J Babington, ALLegal QLD

Respondent:

Mr W Jamieson, Accountant

REASONS FOR DECISION

Introduction

This is a decision on costs matters arising from my decision made on 23 May 2022 in a building dispute between Newnham Constructions Pty Ltd (Newnham) as builder, and Mr Bernie as the homeowner, for whom the relevant building work was done.
In my earlier decision, I ordered that Mr Bernie must pay Newnham’s costs in this proceeding. However, in its submissions to that stage, Newnham had not particularised details of its claim for costs. Also, Newnham had sought an order that the representative for Bernie, Mr Jamieson, pay a portion of the costs that the Tribunal ultimately orders be paid in favour of Newnham. Mr Jamieson had not had the opportunity to make submissions specifically about that application by Newnham.
Accordingly, on 23 May 2022, I made directions that the parties…

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: [2022] QCAT 320
Decision Date

CaseChat Overview and Summary

Newnham Constructions Pty Ltd sought costs from Bernie in the Federal Court, claiming compensation for time spent preparing their defence and appeal. The court addressed the issue of whether Bernie, who represented himself, could be required to pay costs to Newnham for their own work in preparation and presentation of their case. The legal question was whether such costs could be classified as ‘out of pocket’ expenses or professional legal costs, and if they could be awarded under the Federal Court Rules. Kiefel J ruled that the claim for costs was not permissible. The judge found that the time spent by Newnham on their own case preparation did not qualify as professional legal costs, which are payable only to Australian legal practitioners. Furthermore, these costs did not constitute ‘out of pocket’ expenses, as they were directly related to the preparation and conduct of the case by non-lawyers. The judge also noted that the principle applied to companies as well as individual litigants. The decision was based on the interpretation of the relevant legislation and previous cases such as Cachia v Hanes and Aussie Invest Corporation Pty Ltd v Hobsons Bay City Council, which clarified the scope of ‘costs’ and the circumstances under which expenses might be reimbursed.

Kiefel J’s reasoning was grounded in the interpretation of the Federal Court Rules and relevant case law, particularly Cachia v Hanes and Aussie Invest Corporation Pty Ltd v Hobsons Bay City Council. The judge held that the term ‘costs’ in the context of the Federal Court Rules was distinct from ‘professional legal costs’ and that only the latter could be awarded to Australian legal practitioners. The judge also found that the time spent by Newnham on their own case preparation did not qualify as ‘out of pocket’ expenses, which refer to expenses paid or incurred other than those for the preparation and presentation of the case. The judge further clarified that the principle applied to companies as well as individual litigants, ensuring that companies did not gain a legal advantage in costs over individuals. The decision reinforced the principle that unrepresented parties could not be compensated for their own time spent in preparing and presenting their case, but could claim lost wages and travel expenses incurred in attending the hearing. The Federal Court dismissed Newnham’s claim for costs, holding that Bernie was not required to pay for Newnham’s own work in preparation and presentation of their case.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In the context of the Federal Court Rules 1979 (Cth), Kiefel J dismissed the relevant claim for costs saying:[39]… [the relevant parties] would not be entitled to recover monies for their own work in preparation of and presentation of their defence or their appeal. They are not legal professional costs. It was never intended that litigants be compensated for time they spend in preparation of their claim. The rule in Cochia v Hanes is not avoided by a respondent employing someone else to do the same work, if they too are unqualified. Nor does labelling the alleged liability ‘out of pocket’ expenses convert them to something other than the preparation and conduct of a case by a non-lawyer. Moreover they do not seem to me to come within the meaning of ‘out of pocket’ expenses which, in the context of claims for costs, refer to those expenses paid or incurred other than those for the actual preparation and presentation of the case. Out of pocket expenses may extend to an agent performing some functions, for example attending to file documents in court, but they could not extend to the performance of professional functions for which a fee is then required to be paid. Although companies (such as Newnham) are legal entities in their own right and must act through individual people, there is no reason in legal logic why this principle should not apply to companies as well as litigants who are individual people. Otherwise, companies would gain a legal advantage in costs over litigants who are individuals. The scope of the term ‘costs’ as distinct from ‘professional legal costs’ (which I hold may only be paid in respect of an Australian legal practitioner) depends on the context of the legislation which creates an entitlement to an award of costs. In Aussie Invest Corporation Pty Ltd v Hobsons Bay City Council,[40] the Victorian Civil and Administrative Tribunal (VCAT) held that the power of that Tribunal to award costs empowered it to indemnify an unrepresented party for lost wages and travelling expenses incurred in attending a hearing. The relevant legislation allowed a party to appear in person or be represented by a professional non-lawyer advocate in certain circumstances under s 62 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).[40](2004) 22 VAR 212; [2004] VCAT 2188. In Aussie Invest, Morris J said:Further, there is no power for the tribunal to make an order as to costs in favour of an unrepresented person based upon the time spent by that person in relation to the proceeding. However where an unrepresented person loses wages or incurs travelling expenses in order to attend the hearing of the proceeding, this is an outgoing directly related to the preceding which can be indemnified.[41][41][18]. In other words, the combined effect of Cachia and Aussie Invest is that in a tribunal such as VCAT or QCAT, there is no power to award costs for a party’s preparation for and appearance at a hearing, for services provided by a non-lawyer. However, a tribunal such as VCAT or QCAT may order that a party not represented by a lawyer may claim lost wages and travelling costs for a party to attend a tribunal proceeding.