Rainbow v Nelson
[2010] QCAT 388
•12 August 2010
CITATION: Rainbow v Nelson [2010] QCAT 388
PARTIES: | Mr & Mrs Heath & Debbie Jane Rainbow |
| v | |
| Mr Timothy Peter Nelson |
| APPLICATION NUMBER: | BD046-07 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 2 March 2010 |
| HEARD AT: | Brisbane |
| DECISION OF: | Richard Oliver, Senior Member |
| DELIVERED ON: | 12 August 2010 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | Each party to pay their own costs. |
| CATCHWORDS : | Application for costs; consideration of section 71 of the Commercial and Consumer Tribunal Act; consideration of the conduct of the parties. |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Heath Rainbow and Debbie Rainbow; self represented |
| RESPONDENT: | Timothy Peter Nelson represented by Russell Ensbey of Sawford Voll Solicitors. |
REASONS FOR DECISION
On 16 September 2009 the former Commercial and Consumer Tribunal made an order that the Respondent pay to the Applicant the sum of $8121.65. Subsequent to that order being made, the parties were invited to make submissions on costs.
The determination of the question of costs was delayed because of an appeal however the application was listed for hearing on 2 March 2010. Both parties have filed submissions in support of the application.
The parties have relied on the former Commercial and Consumer Tribunal Act (“CCT Act”), and it seems, by reason of the transitional provisions of the Queensland Civil and Administrative Act (“QCAT Act”) the former Act is applicable to this application even though it is not a “pending proceeding” within the definition of section 245 of the QCAT Act because at the commencement of the Queensland Civil and Administrative Tribunal on 1 December 2009 this proceeding had been heard and determined. Therefore it is an “other proceeding” within the definition of section 257 of the QCAT Act, which provides
(1)This section applies to an existing tribunal proceeding that is not a pending proceeding;
(2)At the commencement, the proceeding is taken to be a proceeding before QCAT;
(3)QCAT has jurisdiction to deal with the matter the subject of the proceeding under this Act.
But, both these sections must be read in conjunction with section 252(3) which provides:
If, under a former Act, a person has applied to a former tribunal to deal with a final decision of the former tribunal and the application has not been heard at the commencement-
(a)the application is taken to be an application made to QCAT under this Act; and
(b)in hearing the application, QCAT has, and only has, the functions of the former tribunal under the former Act.
Here, the application is an application for costs as a consequence of the final decision and therefore it is an application to “deal with a final decision”. Subsection (5) includes certain matters that are to be included in the definition of “deal with a final decision,” but that definition is not (?).
Therefore when considering the application for costs, the matters relevant are those contained in the former CCT Act, section 71(4). However, the starting point remains section 70 of the CCT Act which stipulates that the “main purpose” of that Act was that the parties paid their own costs.
Section 70 also enlivens a discretion where “the interests of justice” do require otherwise, that is, the making of a costs order.
In Tamawood Ltd.& Anor v Paans,[1] Justice Keane considered the application of sections 70 and 71 of the CCT Act and said:
“As I have already said, in my view, the language of s 70 and s 71(5)(a) is sufficiently clear to negate the proposition that costs should, prima facie, follow the event unless the Tribunal considers that another order is more appropriate. In this regard, it is clear that the power of a court or tribunal to award costs to a party is now a creature of statute. The nature and extent of that power can only be discerned by close consideration of the terms of the statute which creates the power and prescribes the occasions for, and conditions of, its exercise. In the performance of this task, observations of the courts in relation to the operation of other statutory regimes relating to costs may afford general assistance but they cannot be allowed to distract attention from the terms of the particular statute in question”.
[1] (2005) QCA 111
An examination of section 70 then involves a determination of what circumstances can be said to be in the interests of justice to deviate from the “main purpose of the division.” His Honour then considered the intent of the legislation and gave a general example of when a costs order might necessarily be considered and said:
“if orders for costs were not to be made in favour of successful parties in complex cases, then just claims might not be prosecuted by persons who are unable to manage complex litigation by themselves. Such a state of affairs would truly be contrary to the interests of justice; and an intention to sanction such a state of affairs cannot be attributed to the legislature which established the tribunal”
10. But in doing so regard must be had to the matters in section 71(4)and section 71(5). His Honour went on to say:
“To say this is not to ignore section 71(5)(b). There is a clear distinction, in terms of the interest of achieving justice, between the mere fact of having representation and the fact of having reasonably obtained that representation because of the complexity of the case. In the absence of countervailing consideration, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of representation which was reasonably necessary to achieve that outcome. Finally in this regard, it should also be borne in mind that s 71(4)(a) of the Act expressly recognised that “the outcome of the proceeding is a consideration which is relevant to the exercise of discretion conferred by s 71(1) of the Act.”
11. It follows that not only must regard be had to section 71(4)(a), but regard must also be had to the remaining subsection of section 71(4) where relevant.
12. Therefore the starting position here is that the parties have to pay their own costs of the proceeding. The next consideration is whether, having regard to the interests of justice, in reliance on the factors set out in section 71(4) and the provisions of section 71(5), another order is warranted.
Outcome of the proceeding
13. The Applicant’s have succeeded however the damages assessed are significantly lower than that which was claimed by them in the filed material.
14. The assessment of damages largely turned on a finding of the true contractual relationship between the Applicant and the Respondent but even so, it was found that the Respondent undertook defective building work for which he had to pay compensation.
Conduct of the parties
15. Of primary concern in this case, in my view, is the application of section 71(4)(b) and section 71(4)(e) of the CCT Act.
16. It was rather extraordinary that the Respondent, a licensed builder, sought to defend the claim on the basis that the contract entered into between himself and the Applicants was “a sham”. He promoted a defence, which was not made out and which was in direct contravention of section 52(2) of the Domestic Building Contracts Act. In fact, there is also a finding that the Respondent was prepared to, and did enter into a contract with the Applicants in circumstances where he was not then licensed to do so.
17. The findings also reflect badly on Mr Nelson in that he was prepared to execute a formal building contract in circumstances where he believed (the Tribunal finding to the contrary) that he was not legally bound and was simply assisting Mr Rainbow to obtain finance. This shows a wilful disregard of his obligations as the licensed contractor not only under the Domestic Building Contracts Act but also the Queensland Building Services Authority Act.
18. In addition, the hearing of the application was extended due to the protracted questioning of the applicant about the contractual relationship. As found, contractual documents were prepared with a degree of particularity and signed by both parties. The documents were prepared by Mr Nelson.
19. As an alternate claim the respondent relied on abandonment of the contract and to some extent this was successful.
20. However, having regard to section 71(4)(ii) the respondent’s conduct in perusing the sham argument is, in my view, sufficient to disentitle Mr Nelson, as an exercise of discretion, to any costs.
21. However the applicant also relied on the contract when clearly there came a time when, again as found, the contract had come to an end. This also protracted the hearing as the applicant was attempting to claim for the cost of completion in circumstances where no such claim could be maintained.
22. The respondent submits I should take into account the findings on creditability. This is a relevant consideration particularly when considering the merits of the claim for cost of rectification. Unfortunately Mr Rainbow’s credit was found to be wanting is many respects, particularly when it came to the cost of sheeting the inside of the house. These are matters which should also be taken into account.
23. In my view both parties conduct resulted in an unnecessarily protracted hearing but I also regard the position taken by Mr Nelson with respect to the contractual relationship, given his clear responsibilities under the governing legislation, as the more blameworthy.
Complexity
24. I accept that the issues, both in fact and at law, were of sufficient complexity to justify legal representation.
Offer to Settle
25. The Respondent relies on a formal offer to settle of $5,000 made on 9 April 2009. The respondent relies on this to evidence an intention to try to resolve the dispute. If the offer had exceeded the amount ordered to be paid then section 142 would have application. However, this offer does not assist the applicant because it was less than the amount ordered to be paid to the applicant by the respondent.
26. The fact that an offer was made does not, in the circumstances of this case really advance the position of the respondent.
Conclusion
27. It seems to me, having regard to the findings made about the conduct of the parties in this proceeding, this is a clear case where the interests of justice do not require a departure from the main purpose of division 7 of the CCT Act that the parties should pay their own costs. I am mindful of the fact that although the applicant was successful, it was at a significantly reduced amount and if the only issue for determination had been the defective work, the hearing would have been much shorter. Both parties contributed to the protracted hearing time and therefore both should bear responsibility for this given the findings and the result.
28. Therefore the decision of the Tribunal is that both parties should bear there own costs of the application.
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