Nichols v Blacklow t/as Earth Spirit Home Pty Ltd
[2013] QCAT 213
| CITATION: | Nichols v Blacklow t/as Earth Spirit Home Pty Ltd [2013] QCAT 213 |
| PARTIES: | George Nichols (Applicant) |
| v | |
| Brett Blacklow t/as Earth Spirit Home Pty Ltd (Respondent) |
| APPLICATION NUMBER: | BDL301-11 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 9,10 April 2013 |
| HEARD AT: | Brisbane |
| DECISION OF: | Susan Gardiner, Member |
| DELIVERED ON: | 8 May 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. George Nichols pay Earth Spirit Home Pty Ltd the sum of $254,612.04. 2. The monies held in the Master Builders Association in the names of the parties and any interest accrued thereon be paid directly to Earth Spirit Home Pty Ltd in part satisfaction of the amounts owing by George Nichols to Earth Spirit Home Pty Ltd under paragraph (1) of this order. 3. George Nichols pay interest at the rate of 10% to Earth Spirit Home Pty Ltd for outstanding fees owing to it by Mr Nichols from the date the invoices were due and payable to the date payment is made under paragraph (1) of this order. 4. George Nichols pay interest at the rate of 10% to Earth Spirit Home Pty Ltd on any amounts Earth Spirit has paid to suppliers or subcontractors from the date the payments were made to the date payment is made under paragraph (1) of this order. 5. The amount of interest shall be calculated by the solicitors representing the parties from evidence presented at the hearing of this matter. 6. If the amount of interest is not agreed between the parties, liberty is given to the parties to apply on this interest calculation only. 7. George Nichols must pay to Earth Spirit Home Pty Ltd the costs of these proceedings to be agreed on the District Court Scale of Costs, or failing agreement: (i) Earth Spirit Home Pty Ltd must file in the Tribunal and give to George Nichols a short form assessment of costs together with any submissions on the amount of costs payable by 10 June 2013. (ii) George Nichols must file and give to Earth Spirit Home Pty Ltd any submissions in reply by 24 June 2013. (iii) The amount of the costs payable by George Nichols will be determined on the papers without an oral hearing. |
| CATCHWORDS: | BUILDING MATTER – where claim for return of funds in Master Builders Association and counter claim for monies owing under an oral contract – where five written building contracts entered into but with no intention to create legal relations – where three oral contracts created and changed as circumstances changed –where dispute about the terms of the contracts – where matters of credit at issue – where builder wholly successful – where payment of monies owing orders with interest and costs made in favour of the builder Queensland Building Services Authority Act 1991 s77 Domestic Building Contracts Act 2000 s 7 Queensland Civil and Administrative Act 2009 ss100, 102 Jones v Dunkel [1959] HCA 8 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | George Nichols represented by Mr D. Cliff of M.S. and Cliff Lawyers |
| RESPONDENT: | Brett Blacklow t/as Earth Spirit Home Pty Ltd represented by Mr R. Ensby Special Counsel of Hemming and Hart Lawyers |
REASONS FOR DECISION
This is a dispute between Mr George Nichols (representing the Nichols family group) and Mr Brett Blacklow on behalf of Earth Spirit Home Pty Ltd (a building company) about building work carried out by Earth Spirit.
Mr Nichols wants the return of $250,000 currently held in the Master Builders Association, deposited there by the parties as part of an agreement during a building project. Mr Blacklow wants to be paid for outstanding invoices for subcontracting obligations and supplies he says are outstanding from work undertaken by Earth Spirit for Mr Nichols. Mr Blacklow claims invoices and obligations totalling $ 254,612.04 plus interest and his legal costs. He would like the money currently in the Master Builders fund to be paid to Earth Spirit as part payment of that amount.
The members of the Nichols family planned a property development in 2007. The planning involved the building of ten houses[1] on land at Wakerley. Initially, five of the homes were for members of the extended family, the children of George and Peter Nichols (including Philip and Melinda Nichols). The other five were a commercial/profit making venture.
[1] Statement of George Nichols signed 11 April 2012 at paragraph 19.
The family members involved in the planning were George Nichols (the patriarch), his wife Jennifer (now deceased), his brother Peter Nichols married to Debra Nichols, George’s son Phillip Nichols then married to Melinda Nichols; and George’s son Nick Nichols. Philip and Melinda Nichols have since separated. Collectively they are the Nichols Group.
This planning involved not only the building of the initial five homes, but that Philip and Melinda Nichols (whose financial position was not stable) would gain experience in property development (through their company Asden Developments Pty Ltd) by managing the development. Mr Nichols had been involved in previous property developments.
Phillip Nichols introduced Mr Blacklow from Earth Spirit to the Nichols Group. Mr Blacklow designed the houses, later preparing the building contracts for the five family homes for each of the children. Mr Blacklow says the driving force in this family group was George Nichols who gave the instructions for family members to be home owners in each contract. It is an example of the good working relationship that Earth Spirit had with Mr Nichols specifically, and the Nichols Group generally, that Ms Debra Nichols asked Mr Blacklow in June 2009 to assign the lots to individual family members so that there was no allegation of favouritism.
The contracts were mostly signed in 2009.[2] Mr Blacklow says he never met the lot owners, except for Melinda Nichols.
[2] Statement of George Nichols signed 11 April 2012 at paragraph 20.
Mr Blacklow says he agreed to Phillip and Melinda Nichols managing the project on the basis that Earth Spirit was reimbursed for all costs associated with the supervision and that Earth Spirit would have the final authority over the site. Mr Blacklow says he also insisted that his health and safety inspector visit the site regularly and for Asden Developments to be responsible additionally for these costs.[3] Supporting this evidence is an invoice for the health and safety inspector sent to Asden Developments by Earth Spirit on 16 December 2009 and paid in full.[4]
[3] Exhibit BB-08 to the statement of Brett Blacklow signed 22 June 2012.
[4] Exhibit BB-09 to the statement of Brett Blacklow signed 22 June 2012.
George Nichols says it was Brett Blacklow’s idea to involve Phillip to cut building costs while using Earth Spirit’s building licence but with Mr Blacklow as a weekly supervisor. George Nichols says the Nichols would pay Asden Developments and Asden Developments would pay Earth Spirit. It is not necessary for me to identify the originator of this building arrangement.
[10] Mr Blacklow says he dealt with George Nichols, Phillip and Melinda Nichols and Debra Nichols and reiterates he did not have any direct contact with the proposed family owners of the homes. Mr Blacklow also says that Mr Nichols told him he was funding the development. Mr Nichols agreed in his oral evidence that ultimately, the Nichols Group was funding the development on behalf of the children.
[11] Mr Nichols says the payment arrangement was that Asden Developments would hire contractors and buy materials and then be reimbursed by the Nichols group for the lot owners. This payment would include a 10% loading to offset Asden Developments’ running costs. George Nichols says at all times the Nichols Group acted as agents and financiers for the lot owners.
[12] The Nichols Group and Mr Blacklow or Earth Spirit never formally signed a contract.
[13] Asden Developments Pty Ltd commenced the development process with the purchase of materials and engagement of subcontractors. However, Mr Blacklow says there were significant defects with the work undertaken. Mr Nichols agrees with this as evidenced by an email dated 13 September 2010 between himself and Mr Blacklow.
[14] Progress on the site under the control of Asden Developments as site managers was slow and chaotic. By December 2009, work had started but significant problems had developed on the site with health and safety and the construction itself. By June 2010, the project was still in the early stages of construction. There were further continuous delays and on 27 October 2010 Mr Nichols, Phillip Nichols and an on site representative met with Mr Blacklow about the progress of the development.
[15] Some of the frames of the houses were coming close to the six month period after which they would have to be demolished and there were numerous other site and management issues. After discussions, both Mr Blacklow and Nr Nichols agree that Asden Developments would be removed from management on site and Earth Spirit would become the construction manager from 1 November 2010.[5] This seems to have occurred despite the concerns Mr Nichols now raises in his statements about the quality and consistency of Mr Blacklow’s supervision and attendances. Again, there was no formal contract signed to reflect this agreement.
[5]This is evidenced by an email, dated 16 December 2010, (Attachment “Q” to the statement of Mr Blacklow) sent to all parties concerned by Debra Nichols on behalf of George, Jenny, Peter and Debra Nichols.
[16] Mr Nichols says Asden Developments was to continue overseeing the ordering of materials specified by Mr Blacklow and be in control of payments. Mr Nichols agreed to pay Earth Spirit $12,000 per week to complete the construction capped at $240,000. Payments were made to Earth Spirit under this agreement.[6]
[6] Statement of Brett Blacklow signed 22 June 2012 at para 51.
[17] Earth Spirit took over the site on 1 November 2010 and Brent Lucas (an electrical contractor working on the homes) gave evidence saying the site was cleaned up and started going forward at a reasonable pace from that time.
[18] What remained confused were the financial arrangements. Lexanne Schumann gave evidence saying Asden Developments employed her in early November 2010 as a site based purchasing officer for the development project. She assisted in the preparation of paperwork for purchasing materials, engagement of contractors and approval of payments. Quotes were obtained on behalf of Asden Developments.
Agreement at Meeting of 15 December 2012
[19] By 15 December 2012, Asden Developments was refusing to pay invoices and contractors. Mr Blacklow was of the view that the Nichols Group had overpaid Asden Developments for the completed work on the site by a considerable amount.
[20] On 15 December 2012, a further meeting was held at West End. Attending that meeting were George Nichols, Peter and Debra Nichols and Brett Blacklow.
[21] Although again nothing was put in writing, all parties agree that out of this meeting:
i) Asden Developments would have no further involvement in the project and that Earth Spirit would manage the construction.
ii) The Nichols Group would continue to pay Earth Spirit the weekly management fee and all costs incurred by Earth Spirit moving forward. The Nichols Group would pay $250,000 into the Master Builders Association, although the reason for the deposit is now in dispute.
iii) Mr Blacklow suggested the retention of Ms Schumann on site by the Nichols Group as “eyes and ears” for the group in the work undertaken by Earth Spirit. Mr Nichols gave evidence that this employment was an arrangement between Mr Blacklow and Debra Nichols.
[22] Now the evidence diverges. Mr Blacklow says the Nichols Group payment responsibility to Earth Spirit was to date from 1 November 2010. Mr Nichols disagrees saying 15 December 2010 going forward only. Mr Blacklow also says the Nichols Group agreed to pay any monies owing by Asden Developments to Earth Spirit. Mr Nichols says he doesn’t recall agreeing to that and he was not privy to any financial arrangements between Asden Developments and Earth Spirit.
[23] Mr Blacklow says after the meeting at West End he was provided all outstanding invoices. Mr Blacklow says that night he went through the invoices and identified the ones that need to be paid immediately to be able to continue the project. He asked Debra Nichols for $64,055.91 to pay the urgent supply invoices and contractors. This amount was transferred to Earth Spirit for distribution and the urgent accounts duly paid.
[24] On that night, with the demise of Asden Developments, the Nichols Group had no arrangements in place for to pay invoices and Earth Spirit’s system was the only vehicle available to make payments. Mr Blacklow prepared a spreadsheet of outstanding debts.[7]
[7] Exhibit MN-11 to the statement of Melinda Nichols signed 8 April 2013
Deposit into Master Builders Trust Account
[25] On 16 December 2012, Mr Blacklow prepared and signed a trust account deposit form for Master Builders for the $250,000. The space on the form giving the reason for the deposit was left blank. Mr Blacklow signed as an “other party”. Ms Schumann faxed the form to Mr Nichols.
[26] Mr Nichols completed the form but added the words “To guarantee payment for expenditure for PC items using Earth Spirit Homes P/L accounts. Money to be returned on completion”. Ms Rebecca Lefevre says on the same day she collected the form and a cheque for $250,000 from Mr Nichols and deposited the form and the cheque with the Master Builders Association.
[27] Mr Blacklow says when Mr Nichols signed, he had added the notation as to the purpose of the deposit form unknown to him and not countersigned by him. Although the bank cheque for the deposit and form were returned to Earth Spirit’s office for depositing with Master Builders, Mr Blacklow did not again sight it. There was clearly no meeting of minds over the terms of the deposit.
[28] On 17 December 2012, Debra Nichols informed Earth Spirit through Mr Blacklow and Ms Schumann that Jagger Pty Ltd (a Nichols Group company) would be responsible for the payment of materials, subcontractors and Earth Spirit’s fees. Mr Blacklow says he agreed to Jagger using existing Earth Spirit trading accounts as Jagger had none itself and Mr Blacklow expected to be reimbursed according to the agreement with the Nichols Group. Mr Blacklow says Debra Nichols told him she would be paying the bills.
[29] The agreement to reimburse is supported by the evidence of Ms Schumann who says Debra Nichols advised her after the payment of the Master Builders deposit, that Jagger could make purchases on Earth Spirit accounts, as the Master Builders deposit would secure the debts. Ms Schumann says Debra Nichols told her that Mr Nichols would not allow Jagger to have its own trading accounts. Ms Schumann says she assisted Debra Nichols in the payment of a number of accounts under the agreement and gives examples of the accounts paid.
[30] Ms Schumann’s says about this time Debra Nichols advised her employer changed from Asden Developments to Jagger Pty Ltd. Ms Schumann understood Jagger to be a company controlled by the Nichols Group. Ms Schumann performed similar duties and Jagger paid her until the end of her employment. Ms Schumann agrees with this and says all quotes, purchase orders and invoices were then sent to Debra Nichols.
[31] On 21 December 2010, Earth Spirit issued an invoice to the Nichols Group for its management fees[8] as agreed for 4 weeks ($48,000).[9] George and Peter Nichols paid this invoice with two cheques of $32,000 and $16,000 respectively in early January 2011. This division of payments reflects the agreement within the Nichols Group whereby George Nichols was responsible for 2/3rds of the project (his and Phillip’s share) and Peter Nichols was responsible for the remaining 1/3rd.
[8] Exhibit BB-31 to the statement of Brett Blacklow signed 22 June 2012.
[9] Exhibit BB-33 to the statement of Brett Blacklow signed 22 June 2012.
[32] Asden Developments went into liquidation on 22 December 2010.[10]
[10] Statement of George Nichols filed 12 April 2012 at paragraph 18.
Queensland Building Services Authority gets involved
Circumstances were about to become more chaotic.
[34] The Queensland Building Services Authority contacted Earth Spirit in early 2011 saying the Authority had received a complaint about contractual arrangements on site (amongst other things). In early February 2011, the QBSA visited the site. Mr Blacklow says as a result of the discussions with the QBSA, five new cost plus building contacts were prepared by him and forwarded to Debra Nichols for the lot owners to sign. He says he never saw the contracts again.
[35] Also arising for the discussions with the QBSA, Mr Blacklow says Earth Spirit entered new subcontract agreements with site workers.
[36] In early February 2011, the Nichols Group was using Earth Spirit’s trading accounts and paying these bills. Mr Blacklow points to the use of the Bunning’s account for invoices totalling $3,555.14 and as advised by Ms Schumann, the payment by Debra Nichols (he presumes through Jagger).[11]
[11] Exhibits BB-34-35 to the statement of Brett Blacklow signed 22 June 2012.
[37] At this point circumstances appear to have changed for the Nichols Group. Mr Nichols and Debra Nichols appear to have encountered some health issues. From Earth Spirit’s point of view, payments effectively ceased. Neither Earth Spirit nor any contractors or suppliers were effectively paid from early February 2011. Neither did the Nichols Group involve itself in ongoing discussions with the QBSA.
[38] On 14 February 2011, Mr Blacklow says he had a telephone conversation with Nick Nichols (George Nichols’ son) who advised him that the Nichols Group was tied up in actions concerning the liquidation of Asden Developments. Mr Blacklow says he told Nick Nichols that he was worried he would be left with the project bills and that Nick Nichols told him “We wouldn’t do that to you”.[12]
[12] Statement of Brett Blacklow signed 22 June 2012 para 98.
[39] Nick Nichols was present at the hearing of this matter. He gave no evidence in writing or orally to refute this conversation and I accept the honesty of the evidence Mr Blacklow gives in relation to this conversation.
[40] Mr Blacklow says Mr Nichols stopped payments under the December 2010 agreement from an invoice due on 22 February 2011. In all, there are eight invoices claimed by Mr Blacklow as unpaid and substantial debts/obligations to suppliers and subcontractors.
[41] Ms Schumann says she has sighted many unpaid Earth Spirit invoices to Jagger and says they appear to be legitimate invoices, showing purchase numbers reflecting Ms Schumann’s purchase system and purchase orders.
[42] Mr Nichols wants the Master Builders fund monies returned to him. He says the relationship with Earth Spirit is over and as all contracts have been terminated, the monies should come back to him. Mr Nichols says any monies owing to Mr Blacklow are owed by Asden Developments – now in liquidation.
Matters of credit as between George Nichols and Brett Blacklow
[43] On many crucial matters, there is opposing evidence between Mr Nichols and Mr Blacklow and I must decide which version of the facts I believe.
[44] Mr Nichols presented his evidence in an unconvincing manner on many occasions under cross-examination. On a number of important occasions, he simply refused to answer the question or simply said he did not agree. On many of these matters, for example the crucial meeting at West End on 15 December 2010, other members of the Nichols Group were present. These people could have supported Mr Nichols’ evidence with their own independent recollections in direct evidence. In particular, the understanding of the agreement known by Debra Nichols would have been of assistance to this decision. It seems that her actions in relation to accounts that night, the next day and going forward, supports Mr Blacklow’s version of events.
[45] Ms Debra Nichols did not give evidence and I was given no reason why she did not attend. I am left to assume her evidence may not have supported Mr Nichols. As I have commented earlier, Nick Nichols was also at the hearing of this matter but did not give evidence. Again, I am left to assume his evidence may not have supported Mr Nichols.[13]
[13] Jones v Dunkel [1959] HCA 8.
[46] I found Mr Blacklow to be an honest direct witness with reasonable explanations for all matters and a detailed recall of events in his written and oral evidence. For example, when asked why he used the vehicle of a deposit with Master Builders to guarantee his fees, he said he had just attended a contractual course with that Association and that had been their advice.
[47] Mr Blacklow said he has been in the industry for 15 years and has strong relationships with a number of subcontractors and suppliers whom he uses on many jobs because of the quality and reliability of their work. Some of these were on other projects during this period. Mr Blacklow says he values his reputation as a contractor and to ensure continued relationships with subcontractors and suppliers, he values ensuring they will be paid.
[48] Mr Blacklow says it made no commercial sense for him to enter an arrangement on 15 December 2010 that did not guarantee his payments and those of his sub-contractors and suppliers. I agree with this. Other direct evidence from independent persons such as Ms Schumann also supports Mr Blacklow’s direct evidence in many areas.
[49] I am satisfied Mr Nichols was the guiding hand and financier in this whole project and that he informally controlled the arrangements. I believe he clearly knew the financial arrangements between Asden Developments and Earth Spirit. I do not believe he misunderstood any agreement with Mr Blacklow arising from the meeting on 15 December 2010. I do not believe his evidence to this Tribunal was completely honest, either because he did not recall or because he now remembers the events in a way that suits his purposes.
[50] Where the evidence differs between Mr Nichols and Mr Blacklow I accept Mr Blacklow’s evidence.
Outstanding Liabilities
[51] Mr Blacklow had now paid many of the liabilities left at the termination of work by Earth Spirit both for goods supplied or for subcontractors. He says this is because of his ongoing relationships with the contractors and suppliers and to protect his reputation. He has provided a spreadsheet of invoices identifying these outstanding accounts. There are also a number who are yet to be paid and to whom Mr Blacklow has obligations as head contractor.
[52] Mr Blacklow says his worst fears concerning liability have come true with an earlier QCAT decision finding him liable for the monies owing to one subcontractor, K C Painting and Decorating, despite his oral arrangement with the Nichols Group.[14] In his view he is now exposed to all subcontractors and suppliers.
[14] K C Painting and Decorating v Jagger Pty Ltd & Anor [2013] 011.
Discussion
[53] This was a development for the benefit of the youngest generation of the Nichols family supervised and organised by the older generation and the controller and director of this family development was Mr Nichols.
[54] I am satisfied on the evidence before me there was no intention by the parties to work under the five contracts for the individual houses or to create a contractual relationship.[15] The contracts were there to fulfil what the parties thought were their obligations under the Building Services Authority Act 1991. Those contracts, once entered, were then ignored. There is no evidence to show any regard to them, indeed Mr Blacklow never met all but one of the contractors, having himself chosen which child would be the beneficiary of which lot.
[15] Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8.
[55] I am satisfied that the designated lot owners in the written agreements from the beginning, never intended to be bound to each or to create contractual agreements binding them with Earth Spirit, for example to actually pay for the house construction on the lot chosen for them by Mr Blacklow. The children simply expected houses at the end of the development organised by their fathers and directed by Mr Nichols as the eldest brother.
[56] The real but oral contracts for the progress of the development were between Mr Nichols and various (and at times different key members) of the Nichols Group, in particular, Phillip, Melinda, Peter, Debra and Nick Nichols.
[57] I am satisfied there were three oral contracts. The second and third contracts were variation of the first as circumstances changed. Although initially only five children's homes were to be built, the long goal was the building of the ten houses and the giving of one house to each child with final five built to be sold as the profit of the arrangement.
[58] Initially the plan was also to advantage Philip Nichols by giving him experience in development but when that didn't work, the plan reverted (as evidenced by the second agreement at the meeting on 27 October 2010) to simply finishing the project.
[59] Again circumstances changed and the agreement again changed to reflect the new circumstances and aimed at finishing the build, the final agreement being that entered into orally at the meeting on 15 December 2010.
[60] As there were more than two houses in this development, I am satisfied the provisions of Domestic Building Contracts Act 2000 do not apply (s7(2)(b)).
[61] The relevant terms of the final agreement between Mr Nichols (representing the Nichols Group) and Mr Blacklow (representing Earth Spirit) on the evidence of Mr Blacklow, (which I prefer where it differs from Mr Nichols) was as follows:
The Nichols would pay Earth Spirit $12,000 per week to complete the construction of the five children's homes capped at $240,000;
Earth Spirit's costs would be either paid or reimbursed by the Nichols Group and these decisions about suppliers and contractors would be made by Earth Spirit;
Any outstanding monies owed by Asden Developments to Earth Spirit would be paid by the Nichols Group;
The arrangement described above for the payment of urgent outstanding demands would be actioned between Mr Blacklow and Debra Nichols;
Security for the costs of Earth Spirit of $250,000 would be paid into Master Builders. I do not accept there were the specific terms as alleged by Mr Nicols in relation to this payment.
[62] Mr Blacklow's claim for monies owing falls into two groups. The first claim of $137,747 (collated in submissions from exhibit 41) is for invoices for work from Earth Spirit or for work of contractors or goods from suppliers engaged by Earth Spirit, paid or unpaid. These are direct responsibilities of Earth Spirit as head contractor on the project.
[63] The second group is for invoices issued by Jagger for the work of contractors or goods from suppliers engaged by Earth Spirit at Earth Spirit's direction. This claim is for $116,864.32. Earth Spirit as head contractor also has the liability for the Jagger invoices, paid or unpaid.
[64] The total amount for both sets of invoices is $ 254,612.04.
[65] I order that Mr Nichols pay Earth Spirit the sum of $ 254,612.04 to be satisfied in part, by any monies held in the Master Builders Association
Interest
[66] Mr Blacklow has applied for interest on the outstanding monies.
[67] Under section 77(2)(c) of the Queensland Building Services Authority Act 1991, I may award interest as prescribed by regulation from the date an amount becomes payable until it is paid. If the parties entered into a contract, interest awarded is payable at the rate specified in the contract [16] but this matter involves oral contracts and fine detail such as interest rates was never considered.
[16] Queensland Building Services Authority Regulation 2003: s34B.
[68] The current rate under the regulation is 10%.
[69] I am satisfied that it is appropriate that interest should be awarded to Earth Spirit Home Pty Ltd for outstanding fees owing to it by Mr Nichols from the date the invoices were due and payable. I am also satisfied that interest should be payable on any amounts Earth Spirit has actually paid to suppliers or subcontractors from the date the payments were made.
[70] I am not satisfied it is appropriate to pay Earth Spirit interest on any outstanding debs to suppliers or subcontractor that has not actually been paid.
[71] I will order that this amount be calculated by the solicitors representing the parties from evidence presented at the hearing of this matter. If this amount is not agreed (and I see no reason why this would not be so), I will give liberty to the parties to apply on this calculation only.
Costs
[72] Mr Blacklow also seeks Earth Spirit’s costs.
[73] The application for costs is determined for under s 77(2)(h) of the QBSA Act. 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.[17] This enabling Act allows that while the power must be exercised judicially,[18] it is “in markedly different terms from s 100 of the QCAT Act” [19] which starts with each party bearing its own costs.
[17] Lyons v Dreamstarter Pty Ltd [2011] QCATA 142.
[18] Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 at para 33.
[19] Lyons v Dreamstarter Pty Ltd [2012] QCATA 071 at para 10.
[74] As His Honour the President of QCAT determined in the appeal decision of Lyons v Dreamstarter Pty Ltd[20] about s 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.
[20] Lyons v Dreamstarter Pty Ltd [2012] QCATA 071 at para 11.
[75] Mr Nichols had strong legal representation in these proceedings. He has been found to be a less than reliable witness on matters of credit.
[76] Earth Spirit has been wholly successful with its application. Mr Blacklow has been held out of funds outstanding to the company for a considerable period and many subcontractors and suppliers were not prepared to work or supply Earth Spirit until the outstanding matters are settled.
[77] I consider in the exercise of the discretion, that costs be awarded in this matter against Mr Nichols
Final Orders
[78] The final orders of the Tribunal will be:
George Nichols pay Earth Spirit Home Pty Ltd the sum of $254,612.04.
The monies held in the Master Builders Association in the names of the parties and any interest accrued thereon be paid directly to Earth Spirit Home Pty Ltd in part satisfaction of the amounts owing by George Nichols to Earth Spirit Home Pty Ltd under paragraph (1) of this order.
George Nichols pay interest at the rate of 10% to Earth Spirit Home Pty Ltd for outstanding fees owing to it by Mr Nichols from the date the invoices were due and payable to the date payment is made under paragraph (1) of this order.
George Nichols pay interest at the rate of 10% to Earth Spirit Home Pty Ltd on any amounts Earth Spirit has paid to suppliers or subcontractors from the date the payments were made to the date payment is made under paragraph (1) of this order.
The amount of interest shall be calculated by the solicitors representing the parties from evidence presented at the hearing of this matter.
If the amount of interest is not agreed between the parties, liberty is given to the parties to apply on this interest calculation only.
George Nichols pay to Earth Spirit Home Pty Ltd the costs of these proceedings to be agreed on the District Court Scale of Costs, or failing agreement:
i) Earth Spirit Home Pty Ltd must file in the Tribunal and give to George Nichols a short form assessment of costs together with any submissions on the amount of costs payable by 10 June 2013.
ii) George Nichols must file and give to Earth Spirit Home Pty Ltd any submissions in reply by 24 June 2013.
iii) The amount of the costs payable by George Nichols will be determined on the papers without an oral hearing.
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