RCTC Pty Ltd v Rappa
[2011] QCAT 67
•3 March 2011
| CITATION: | RCTC Pty Ltd v Rappa [2011] QCAT 67 |
| PARTIES: | RCTC Pty Ltd |
| v | |
| Alejando & Frank Rappa |
| APPLICATION NUMBER: | BD252-07 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Dr Elena Marchetti, Member |
| DELIVERED ON: | 3 March 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | The respondents pay the applicant: (a) The applicant’s costs of and incidental to the proceeding up to 26 October 2009 on a standard basis in accordance with the Supreme Court Scale of Costs. (b) Subject to any adjustment found to be necessary as a result of the costs order made on 29 June 2010, the respondents pay the applicant’s costs of and incidental to the proceeding from 27 October 2009 on an indemnity basis. (c) If within fourteen (14) days the amount of the applicant’s costs payable under (a) and (b) above is not agreed between the applicant and the respondents, then the costs are to be assessed by Hickey & Garrett, Legal Costs Assessors, Level 21, 141 Queen Street, Brisbane. (d) The respondents are to pay the applicant’s costs (as agreed or assessed) within fourteen (14) days of such agreement or assessment. |
| CATCHWORDS : | Costs – where offer to settle – offer rejected – final decision not more favourable to applicant than offer – costs awarded on an indemnity basis from date of offer – costs awarded on a standard basis from commencement of proceeding to date of offer Commercial and Consumer Tribunal Act 2003, ss 71, 142 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
On 29 June 2010 I ordered that the respondents pay the applicant the sum of $272,304.06 comprising $217,204.00 for the unpaid balance of a building contract less the cost to rectify defects; $9,446.18 for costs thrown away as a result of the actions of the respondents; and $45,653.88 for interest owing under the building contract.
The applicant is now applying for the following costs, to be adjusted as a result of the initial costs order:
on an indemnity basis from 27 October 2009, which is when the applicant made an offer to settle to the respondents;
on a standard basis from the commencement of the proceeding to 26 October 2009.
Sections 271(1) and (2) of the Queensland Civil and Administrative Tribunal Act 2009 (“QCAT Act”) state that QCAT ‘must’ deal with matters under the QCAT Act or an enabling Act and that in doing so:
(a) QCAT has, and only has, the functions that the former entity had in relation to the matter under the former Act, and
(b) QCAT can, and can only, make a decision the former entity could have made in relation to the matter under the former Act.
Costs from 27 October 2009
Sections 142(1) and (2) of the former Act (the Commercial and Consumer Tribunal Act 2003 (“CCT Act”)), stated that, if:
(1) …
(a) A party to a proceeding serves another party to the proceeding with a written offer to settle the matters in dispute between the parties; and
(b) The other party does not accept the offer within the time is open; and
(c) The offer complies with this division; and
(d) In the opinion of the tribunal, the decision of the tribunal on the matters in dispute is not more favourable to the other party than the offer.
(2) The Tribunal must award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made.
Division 7 of Part 7 of the CCT Act set out the requirements for making a settlement offer. Section 138(2) stated that the offer must be made by signed writing and must be served on the party to whom the offer relates.
On 27 October 2009 the applicant sent a facsimile to the respondents’ representative, Mr Gunter A. Lion, offering to settle the dispute by the respondents paying the sum of $80,000.000 to the applicant within 7 days of the acceptance of the offer. The offer to settle was made within the terms of section 140(2) of the CCT Act, which required the offer remain open for at least 14 days from the date of service of the offer.
The offer to settle was not accepted by the respondents.
I am satisfied that the applicant’s offer complied with Division 7 of Part 7 of the CCT Act and that since the decision of the Tribunal was not more favourable to the respondent than the offer, I am required to award the applicant all reasonable costs incurred in conducting the proceeding after 27 October 2009, adjusted as a result of the initial costs order.
The applicant submits that an order for ‘reasonable costs’ pursuant to section 142(2) of the CCT Act is akin to an order for costs to be awarded on an indemnity basis in this matter. In making this submission the applicant relies on the reasoning of Member Lohrisch in Marshall, KH & Ken & Daryl Marshall Pty Ltd v Seckhold, DG & G [2005] QCCTR 60.
[10] More recently, the President, Justice Wilson considered what types of matters warrant the awarding of costs on an indemnity basis in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412. He relied on a number of cases, in particular, Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 in determining that the applicant pay the respondent’s costs on an indemnity basis. Justice Wilson at [58] referred to the decision of Sheppard J in stating that the following factors may warrant the award of costs on an indemnity basis:
(i) the fact that proceedings were commenced or continued in wilful disregard of known facts;
(ii) the making of allegations which ought never to have been made;
(iii) the undue prolongation of a case by groundless contentions;
(iv) evidence of particular misconduct that causes loss of time to the Court and to other parties;
(v) imprudent refusal of an offer to compromise.
[11] He noted at [62] that the conduct of the applicant’s representative, Mr Jamieson, and sole director, Ms Raschilla, in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments had ‘bordered on the inexplicable’ and ‘resulted in the respondent incurring unnecessary costs’.
[12] In the present case, I find that the respondents irresponsibly did not accept an offer to compromise and that the applicant’s submissions in relation to the meaning of reasonable costs are correct. I therefore, order that the respondents pay the applicant’s costs of and incidental to the proceeding from 27 October 2009 on an indemnity basis, subject to an adjustment as a result of my initial costs order.
Costs from the commencement of the proceedings to 26 October 2009
[13] According to section 106 of the QCAT Act the Tribunal may award costs ‘at any stage of a proceeding or after the proceeding has ended’. Having said that, the starting point for any determination as to the award of costs is that each party pay their own costs for the proceedings (section 100 of the QCAT Act, which was also reflected in section 70 of the CCT Act).
[14] Under the current QCAT Act and the former CCT Act there is provision for the award of costs against a party under certain circumstances. In this particular case it is appropriate to apply the provisions of the CCT Act, in particular section 71(4), which stated:
In deciding whether to award costs, and the amount of the costs, the tribunal may have regard to the following –
(a)the outcome of the proceeding;
(b)the conduct of the parties to the proceeding before and during the proceeding;
(c)the nature and complexity of the proceeding;
(d)the relative strengths of the claims made by each of the parties to the proceeding;
(e)any contravention of an Act by a party to the proceeding;
(f)for a proceeding to which a State agency is a party, whether the other party to the proceeding was afforded natural justice by the State agency;
(g)anything else the tribunal considers relevant.
[15] The applicant has provided submissions, which point to the following facts as support for its claim for costs:
the outcome of the proceeding was almost entirely in the applicant’s favour;
the conduct of the respondents from when the hearing commenced to the finalisation of the matter was unreasonable and caused the applicant significant additional costs;
the complexity of the matter justified the engagement of legal representatives, and as a result of the applicant’s success, the interests of justice warrant a costs order being made in the applicant’s favour.
[16] The respondents’ submissions focus on the award of costs and interest granted in my original order dated 29 June 2010. They do not make any submissions in relation to the further award of costs.
[17] Although the applicant submits that the conduct of the respondents was unreasonable, the conduct referred to in the submission is during the hearing and not in relation to conduct prior to the offer to settle. This line of argument therefore, does little to assist me in making a determination in relation to costs from the commencement of the proceedings to 26 October 2009.
[18] I accept that the outcome of the proceeding was almost entirely in the applicant’s favour, however, based on the complexity of the matter, this outcome would have been difficult to predict at the outset, and it is therefore not indicative of the fact that the respondents’ defence and counter-claim lacked merit.
[19] Both parties were given leave to obtain legal representation, however, only the applicant did so, engaging both solicitors and a barrister. The respondents instead, engaged a representative who was not legally trained. It may be argued, according to the propositions outlined in the decision of Keane JA in Tamawood v Paans [2005] 2 Qd R 101 at [30], that the complexity of the matter justified the obtaining of legal representation and that this would be ‘a sufficient basis to conclude that the interests of justice warranted the exercise of the discretion to award costs in favour of the successful party, at least in the absence of any countervailing consideration’.
[20] This building dispute was a complex matter, which required careful analysis of a large amount of evidence and the application of the relevant law by someone with appropriate legal expertise. Such complexity justified the engagement of legal representatives and in my view, there are no countervailing considerations, which would support the view that costs should not be awarded against the respondents in the matter.
[21] Accordingly, I order that the respondents pay the applicant’s costs of and incidental to the proceeding from the commencement of the proceeding to 26 October 2009 on a standard basis.
Orders
[22] That the respondents pay the applicant:
(a)The applicant’s costs of and incidental to the proceeding up to 26 October 2009 on a standard basis in accordance with the Supreme Court Scale of Costs.
(b)Subject to any adjustment found to be necessary as a result of the costs order made on 29 June 2010, the respondents pay the applicant’s costs of and incidental to the proceeding from 27 October 2009 on an indemnity basis.
(c)If within fourteen (14) days the amount of the applicant’s costs payable under (a) and (b) above is not agreed between the applicant and the respondents, then the costs are to be assessed by Hickey & Garrett, Legal Costs Assessors, Level 21, 141 Queen Street, Brisbane.
(d)The respondents are to pay the applicant’s costs (as agreed or assessed) within fourteen (14) days of such agreement or assessment.
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