Pierpont v Zanetti & Ors
[2012] QCAT 171
•18 April 2012
| CITATION: | Pierpont v Zanetti and Ors [2012] QCAT 171 |
| PARTIES: | Adrian Pierpont |
| v | |
| Paul Zanetti Michelle Zanetti (First Respondents) Adpoint Developments Pty Ltd (Second Respondent) |
| APPLICATION NUMBER: | B141-04 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Ann Fitzpatrick, Member |
| DELIVERED ON: | 18 April 2012 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | a. The Applicant and Second Respondent pay the First Respondents’ costs of the Application dated 29 July, 2010 on a standard basis to be assessed on the District Court scale of costs. b. The First Respondents shall deliver to the Applicant and Second Respondent an itemised claim for costs referring to the relevant items contained in the District Court scale of costs. c. If within 14 days of that delivery, the parties have not agreed on an amount of costs, the costs shall be assessed by Hickey and Garrett, Legal Costs Assessors, Level 21, 141 Queens Street, Brisbane, 4000. d. The Applicant and Second Respondent shall pay the First Respondents’ costs (as agreed or assessed) within 14 days of such agreement or assessment. |
| CATCHWORDS: | Costs 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):
Decision made on the papers.
REASONS FOR DECISION
On 7 April, 2004 the applicant filed an application in the former Commercial and Consumer Tribunal seeking relief arising out of a building dispute, pursuant to section 77(1) of the Queensland Building Services Authority Act 1991 (QBSA Act). The First Respondents filed a counter-application.
The matter proceeded in this Tribunal to a hearing. On 26 March, 2010 the hearing was adjourned part heard, on the basis of a purported compromise between the parties.
Subsequently, the First Respondents contended that the matter had not been compromised as Mrs Zanetti had not signed the Settlement and Release Agreement. By Application for Miscellaneous Matters dated 29 July, 2010 the First Respondents sought orders including that the proceeding had not been compromised by the Settlement and Release Agreement.
On 3 November, 2010 the Tribunal found in favour of the First Respondents that the proceeding was not compromised and ordered that the parties file and serve any application for costs in relation to the application.
The Applicant and Second Respondent seek their costs incurred in defending the Application, dated 29 July, 2010 pursuant to section 102 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). Alternatively they submit that it is appropriate for the Tribunal to make an order pursuant to section 103 of the QCAT Act against the First Respondents’ previous legal representatives, Winchester Young & Maddern. In their submissions in reply to the submissions filed by the First Respondents, they further argue that if the Tribunal is not minded to order the First Respondents to pay the Applicant’s and Second Respondent’s costs then each party should bear their own costs for the proceeding.
The First Respondents submit that the Applicant and Second Respondent should be ordered to pay the First Respondents’ costs of the Application on a standard basis (on the District Court Scale).
Background
In the decision relating to the First Respondents’ Application, I found that the parties did not intend to be bound by a settlement agreement until the agreement had been executed by all the parties.
The intention of the parties was discerned by reference to contextual matters including the conduct of the parties and the subject matter of the settlement agreement.
First Respondents’ submissions
The First Respondents submit that this Tribunal has power to award costs pursuant to section 70 and 71 of the Commercial and Consumer Tribunal Act 2003 (CCT Act) and section 102 of the QCAT Act, in the interests of justice.
[10] The First Respondents address the matters to which the Tribunal may have regard in deciding whether to award costs in the interests of justice.
[11] They say first that they were wholly successful in their application.
[12] As to the conduct of the parties, they say that:
(a) the application was necessary as a result of the Applicant and the Second Respondent seeking to enforce the agreement, in circumstances where the Applicant and Second Respondent did not intend the Agreement to be binding in the absence of Mrs Zanetti’s signature on the document; and
(b) Mr Zanetti made two attempts to seek a resolution of the matter with the Applicant before the Application was heard, however, those approaches were not taken up by the Applicant.
[13] The First Respondents submit that the issues were complex. They rely on the decision of Keane JA in Tamawood v Paans[i] where, inter alia, his Honour said that in the absence of countervailing considerations the engagement of legal representation was justified because of the complexity of the case and a party has been successful, it is not in the interests of justice for the successful result to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome.
The Applicant and Second Respondent’s submissions
[14] The Applicant and Second Respondent submit that it is in the interests of justice that costs be awarded to them and that the Tribunal may take into account anything it considers relevant.
[15] In particular they say that they were required to incur unnecessary legal costs in defending the Application, in circumstances where the Applicant’s and Second Respondent’s understanding that the proceeding had been compromised, arose solely as a result of the conduct of the First Respondents and their legal representative.
[16] It is submitted that improper conduct on the part of the First Respondents resulted in a complex dispute.
[17] The Applicant and Second Respondent say that the First Respondents’ lawyer, Mr Young, acted in a way that unnecessarily disadvantaged them, in that he represented to them and the Tribunal that Mrs Zanetti consented to the terms of the Settlement Agreement, in circumstances where she had not provided any such instruction. Further they allege he failed to advise them upon becoming aware that Mrs Zanetti refused to sign the Settlement Agreement and that she intended to seek legal advice as to whether she was bound by the terms of the Settlement Agreement.
[18] The Applicant and Second Respondent complain that they would not have agreed to adjourn the proceeding but for the conduct of Mr Zanetti and the lawyer Mr Young. They submit that they have suffered delay in the resolution of the proceeding and costs have been increased.
[19] The Applicant and Second Respondent seek costs against the First Respondents pursuant to section 102 of the QCAT Act and in the alternative against their solicitors Winchester Young & Maddern, pursuant to section 103 of the QCAT Act. Costs are sought on a “reasonable costs incurred basis” on the District Court scale or on a standard basis according to the District Court Scale of Costs.
[20] In their submissions in reply a further submission is made that given the conduct of the First Respondents which has disadvantaged the Applicant and Second Respondent, it is not in the interests of justice for the Applicant and Second Respondent to be ordered to pay the First Respondents’ costs of the Application.
[21] I note the Applicant and Second Respondent’s submissions in reply assert that it was reasonable in the circumstances for them to consider the Settlement Agreement was binding upon the parties and to oppose the Application on that basis.
[22] They say that the First Respondents have benefited by delaying the resolution of the proceeding and that it would be contrary to the interests of justice to award them costs arising from their need to bring the Application only necessary because of their own conduct.
[23] The Applicant and the Second Respondent refer to a number of authorities to the effect that neither the CCT nor the QCAT jurisdictions are “costs follow the event” jurisdictions and that the outcome of the Application is merely a factor which the Tribunal may choose to consider. They say that the Tribunal should not consider the outcome of the Application due to the conduct of the First Respondents and their lawyer.
[24] Finally, it is said that due to the circumstances surrounding the Settlement Agreement, the adjournment of the hearing on 26 March, 2010, and the way in which the Application came before the Tribunal, the interests of justice clearly indicate that the Applicant and the Second Respondent should not be ordered to pay the costs of the First Respondent. An alternative submission is made that each party should bear their own costs in accordance with section 100 of the QCAT Act.
Costs jurisdiction
[25] This proceeding was commenced in the former Commercial and Consumer Tribunal, where orders were sought arising out of a building dispute. The relevant functions of that Tribunal are now performed by the Queensland Civil and Administrative Tribunal. The proceeding is a “pending proceeding” as defined in the QCAT Act. The Tribunal has recently determined that pending proceedings should have costs issues determined under the QCAT Act.[ii]
[26] 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.”
[27] The proceeding arises out of 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 that Act provides that the Tribunal “may award costs”, in a proceeding arising out of a building dispute.
[28] When considering an appeal with respect to how the Tribunal should deal with costs arising out of building disputes, Deputy President Kingham, in Lyons v Dreamstarters Pty Ltd[iii] said that 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.
[29] Her Honour went on to say that a jurisdiction given in general terms, such as the jurisdiction to award costs in s77(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]
Legal principles
[30] The proper exercise of a wide discretion as to costs usually results in an award of costs to the successful party unless there are special circumstances which justify a different outcome. That is because such an order generally results in a just outcome.[v]
Findings
[31] Both parties have made submissions as to why, in the interests of justice, they should be awarded costs. In light of the Dreamstarters decision, the parties submissions are misdirected to the extent that those submissions have been made for the purpose of overcoming the starting position in s100 of the QCAT Act that each party must bear their own costs; rather than in assisting the Tribunal in the exercise of a broad discretion as to the award of costs.
[32] However, the parties have harnessed the grounds on which they rely to make their “interests of justice” arguments and those grounds are also relevant to the question of whether it is just that the successful First Respondents should be awarded their costs as a result of that success or whether special circumstances exist to justify a different order.
[33] I find that it is relevant and accept the submissions of the First Respondents that they were wholly successful in the Application and that it was necessary to bring the Application.
[34] The Applicant and Second Respondent have submitted that they were justified in thinking the action had been compromised on the terms of the settlement agreement because of the conduct of the First Respondents and their legal representative and as a result were drawn into a complex dispute. They go further and allege improper conduct on the part of the First Respondents and assert that the First Respondents’ solicitor represented to the Tribunal during the hearing that Mrs Zanetti consented to the terms of the Settlement when she had not provided any such instructions.
[35] The matter was complex and arguable points were raised on both sides. I accept that it was not unreasonable for the Applicant and First Respondent to resist the Application. However, just because their position was not unreasonable does mean it is just that they should be awarded their costs of the application, when they ultimately failed in the arguments they raised.
[36] To the extent that the Applicant and Second Respondent assert improper conduct on the part of the First Respondents and conduct by the First Respondents’ lawyer which has disadvantaged them, it is not possible in my consideration of the costs issue, for me to conclude anything about the conduct of persons involved in this matter other than that found in my original decision.
[37] I found that it was the intention of the parties that the settlement agreement was not binding until all the parties had signed the document recording the settlement agreement. It was not improper conduct on the part of the First Respondents or conduct on the part of their lawyer that caused the disadvantage to the Applicant and the Second Respondent. It was the failure of all parties to sign the Settlement Agreement document that caused the Applicant and the Second Respondent to suffer the disadvantage of the hearing being adjourned, the costs of the matter escalating and delay being caused.
[38] I found no improper conduct by the First Respondents. With respect to the representation made to the Tribunal in the hearing by the First Respondents’ lawyer, I did not in the end find that the representation was determinative of the outcome.
[39] The cases require that if a successful party is to be deprived of their costs or indeed ordered to pay the costs of an unsuccessful party there must be very good reasons why it is just to do so.[vi]
[40] McHugh J in Oshlack v Richmond River Council[vii] explained the position as follows:
“…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 area of disentitling conduct.”
[41] Given the outcome of the decision and the reasons for that decision I cannot find any special circumstances which would justify a different order to an order that the Applicant and Second Respondent pay the First Respondents their costs of the Application. In particular, I do not think the conduct raised by the Applicant and the Second Respondents in their submissions amounts to the sort of special circumstances or disentitling conduct which would justify a different order than the order sought by the First Respondents.
[42] For these reasons, I decline to order that the First Respondents pay the Applicant and Second Respondents’ costs and I decline to order that each party bear their own costs.
[43] I decline to make an order pursuant to section 103 of the QCAT Act that the lawyers for the First Respondents pay the Applicant and Second Respondent’s costs. The conduct of Mr Young, the lawyer for the First Respondents, of which the Applicant and the Second Respondent complain, was not determinative of the result in the Application and was not the direct cause of the disadvantage they assert. That fell to the type of agreement they were found to have entered. That is an agreement which was not binding until all parties had signed the settlement document.
[44] Further, I consider that in the context of the application which was before me, the reference in section 103 of the QCAT Act to “a representative of a party to a proceeding” unnecessarily disadvantaging another party to “the proceeding”, is a reference to the conduct of the representative in the proceeding before me, that is the application. Mr Young was not the representative of the First Respondents in proceeding before me and it was not conduct during the application which is complained of by the Applicant and Second Respondent.
Orders
[45] I order that:
(a) The Applicant and Second Respondent pay the First Respondents’ costs of the Application dated 29 July, 2010 on a standard basis to be assessed on the District Court scale of costs.
(b) The First Respondents shall deliver to the Applicant and Second Respondent an itemised claim for costs referring to the relevant items contained in the District Court scale of costs.
(c) If within 14 days of that delivery, the parties have not agreed on an amount of costs, the costs shall be assessed by Hickey and Garrett, Legal Costs Assessors, Level 21, 141 Queens Street, Brisbane, 4000.
(d) The Applicant and Second Respondent shall pay the First Respondents’ costs (as agreed or assessed) within 14 days of such agreement or assessment.
[i][2005] 2 Qd R 101.
[ii]Hallett & Ors v Queensland Building Services Authority [2011] QCAT 355; Queensland Building Services Authority v Johnston [2011] QCATA 265.
[iii][2011] QCATA 142.
[iv]Ibid, at para [33].
[v]See the discussion in LexisNexis Butterworths, Halsbury’s Laws of Australia, Vol 20 (at 17 April, 2012), 325 Practice and Procedure, Judgments and Execution, (2) Costs, “Discretion to award costs” [325-9420] and “Costs follow the event”[325-9425].
[vi]Ibid, “Where successful party bears own costs” [325-9435].
[vii](1998) 193 CLR 72 at para [67].
3
0
0