Ricchetti v Lanbuilt Pty Ltd
[2012] QCATA 111
•27 June, 2012
CITATION: Ricchetti and Ors v Lanbuilt Pty Ltd [2012] QCATA 111
PARTIES: Clem Ricchetti
Angela Ricchetti
Bruno Ricchetti
(Applicant/Appellants)v Lanbuilt Pty Ltd
(Respondent)
APPLICATION NUMBER: APL023-11
MATTER TYPE: Appeals
HEARING DATE: On the papers
HEARD AT: Brisbane
DECISION OF: Justice Alan Wilson, President
Ms Joanne Browne, Member
DELIVERED ON: 27 June, 2012
DELIVERED AT: Brisbane
ORDERS MADE:
1. That the applicants pay the respondent’s costs of and incidental to the application for leave to appeal from and after 11 May 2011, assessed on an indemnity basis.
2. The respondent shall file and serve its detailed claim for those costs, with an accompanying affidavit from its solicitor verifying the claim, within 28 days.
3. The applicants shall file and serve any submissions in response within 28 days thereafter.
CATCHWORDS: COSTS – COSTS OF APPEAL – where pending proceeding – where difficult and complex proceeding – where parties legally represented – where the respondent had made an offer to settle – where respondent was the successful party in appeal proceedings – where the respondent sought an order for costs of the application for leave to appeal – whether costs order should be made in the interests of justice – whether strong contra-indication to overcome the mandate in s 100 of the Queensland Civil and Administrative Tribunal Act 2009 that each party bear its own costs – whether the Tribunal should exercise its discretion to award costs under r 86 of the Queensland Civil and Administrative Rules 2009
Queensland Civil and Administrative Tribunal Act 2009, ss 32, 100, 102(1), 102(3), 245
Queensland Civil and Administrative Tribunal Rules 2009, r 86Ascot v Nursing & Midwifery Board of Australia [2010] QCAT 364 cited
Demac Homes (Qld) Pty Ltd v Queensland Building Services Authority & Ors [2011] QCAT 331 cited
Grasso & Anor v CMG Consulting Engineers Pty Ltd (No 2) [2011] QCATA 326 cited
Queensland Building Services Authority v Johnston [2011] QCATA 265 applied
Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 cited
Ricchetti v Lanbuilt Pty Ltd [2011] QCATA 266 cited
Tamawood Ltd & Anor v Paans [2005] QCA 111 citedTodrell Pty Ltd v Finch & Ors; Croydon Capital Pty Ltd v Todrell Pty Ltd & Anor) [2007] QSC
386 cited
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (“QCAT Act”).
REASONS FOR DECISION
JUSTICE ALAN WILSON
[1]I have had the advantage of reading the reasons of QCAT Member, and fellow member of the Appeal Tribunal in this matter, Ms Joanne Browne.
[2]I agree with those reasons, and the orders she proposes.
MEMBER JOANNE BROWNE
[3]This building dispute relates to proceedings commenced in 2007 by Lanbuilt Pty Ltd in the former Commercial and Consumer Tribunal (“CCT”) against Mr Clem and Mrs Angela Ricchetti, and Mr Bruno Ricchetti.
[4]The former CCT was abolished with the introduction of QCAT on 1 December 2009.
[5]The original dispute proceeded to hearing before a Senior Member of QCAT (in Townsville), and final orders were made on 17 December 2010.
[6]The Ricchettis applied for leave to appeal that decision. The application for leave to appeal was heard by the Appeal Tribunal in Townsville on 7 June 2011 but refused, with reasons, on 15 September 2011.
[7]Lanbuilt now seek orders from the Appeal Tribunal that the Ricchettis pay their costs of the building dispute and of the Ricchettis’ application for leave to appeal, (on an indemnity basis) to be agreed or, failing agreement, to be assessed.
[8]Each party has prepared and filed written submissions in relation to the applications for costs. The written submissions identify issues relevant to both applications for costs – the building dispute, and the application for leave to appeal.
[9]The application for costs in relation to the building dispute will be determined separately by QCAT.
[10]Lanbuilt contends that particular grounds exist, in the interests of justice, to overcome the strong contra-indication against costs awards that appears in s 100 of the QCAT Act.
[11]Lanbuilt further contends that because it made an offer to settle the appeal proceedings to the Ricchettis (which was not accepted) and the outcome of the appeal proceedings was less favourable than the offer, it can therefore rely on QCAT’s additional power to award costs under r 86 of the Queensland Civil and Administrative Tribunal Rules 2009 (“QCAT Rules”).
[12]The Ricchettis oppose the application for costs made by Lanbuilt, and submit that the Appeal Tribunal should order that each party bear its own costs. The Ricchettis are not legally represented in opposing the application for costs of the application for leave to appeal, and prepared their own written submissions.
Power to award costs under the QCAT Act
[13]The former CCT had not, at the time the matter was listed for hearing before QCAT, started to hear the subject of the proceedings. The building dispute proceeded before QCAT as a pending proceeding for the purposes of s 245 of the QCAT Act.
[14]It was held in Queensland Building Services Authority v Johnston[1] that claims for costs in a pending proceeding ought to be determined by application of the QCAT Act rather than the costs provisions of the previous Commercial and Consumer Tribunal Act 2003 (“CCT Act”). The relevant provisions under the QCAT Act are contained in ss 100 and 102.
[1] [2011] QCATA 265.
[15]The QCAT Act provides:
“[o]ther than as provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceeding.”[2]
[2] QCAT Act, s 100.
[16]Under s 102(1) of the QCAT Act there is, however, a discretion to make an order “requiring a party to a proceeding to pay all or stated part of the costs of another party” if the Tribunal considers that the “interests of justice require it to make the order”.[3]
[3] QCAT Act, s 102(1).
[17]The Tribunal’s power under s 102(1) of the QCAT Act to order a party to pay all or part of the costs of another party confers a “broad discretionary power on the decision-maker”.[4] The prima facie question to be determined by the Tribunal is whether the circumstances relevant to the discretion contained in s 102(1) of the QCAT Act (the interests of justice) “point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100”.[5]
[4]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412, at [4].
[5]Ibid, at [29].
[18]The QCAT Act further provides that relevant matters to be considered in determining whether it is in the interests of justice to award costs include the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; and, whether a party has acted in a way that unnecessarily disadvantages another party.[6]
[6] QCAT Act, s 102(3).
[19]It was held by the Court of Appeal in Tamawood Ltd & Anor v Paans[7], in determining costs under the CCT Act, that “in the absence of any countervailing consideration”[8], and in circumstances where legal representation was “justified”[9] in complex proceedings, it would not be in the interests of justice to preclude the “successful party from recovering costs that were reasonably necessary to achieve a satisfactory outcome”.[10]
[7] [2005] QCA 111.
[8] Ibid, at [30].
[9] Ibid, at [30].
[10]Ibid, at [33], cited in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412, at [26].
[20]In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)[11], the President considered the applicability of the Tamawood decision in determining costs under the QCAT Act and said that the,
“the principles found in Tamawood provide guidance about the circumstances in which it may be in the interests of justice for this tribunal to award costs against parties.”[12]
[11] [2010] QCAT 412.
[12]Ibid, at [21].
[21]It was also observed, however, that the applicability of the principles expressed in Tamawood must be considered in the context of the relevant sections of the QCAT Act – in particular, it was noted that s 100, “mandates that parties shall bear their own costs”[13].
[13]Ibid, at [27]
Application for costs
[22]Lanbuilt, in written submissions, contends that the Riccchettis have failed to comply with the directions of QCAT in relation to filing and serving written submissions in respect of the application for costs of the building dispute. This issue will be considered by QCAT in determining the application for costs of the building dispute (in a separate decision).
[23]The Ricchettis, in their written submissions, say that they have paid considerable money towards legal fees and are not now in a position to “obtain further legal advice in relation to this matter [the application for costs]”.[14]
[14] Costs Submissions by the Defendant [the Ricchettis] filed 26 March 2012, at page 1.
[24]The Ricchettis also say that they had been “informed by [their] previous lawyers”[15] in relation to defending the claim and did not in any way “vexatiously”[16] conduct proceedings. The Ricchettis refer to the decision in Ascot v Nursing & Midwifery Board of Australia[17] and submit that their case was “arguable, the issues complex”[18] and they did not act so unreasonably or unnecessarily disadvantage Lanbuilt so as to justify a costs order being made against them.[19]
[15] Ibid, at page 3.
[16] Ibid, at page 5.
[17][2010] QCAT 364.
[18] Costs Submissions by the Defendant [the Ricchettis] filed 26 March 2012, 5.
[19] Ibid, at page 5.
[25]It is not argued by Lanbuilt that the Ricchettis’ appeal was vexatious. The issues were complex, but only because of the way they chose to argue their application for leave to appeal – that is, by attempting to revisit, and re-argue, a number of factual findings made by the original decision maker. Although they have prepared their own submissions, we are satisfied that the Ricchettis have said all that might reasonably be advanced on their behalves to resist Lanbuilt’s claim for the costs associated with the appeal.
[26]It was observed, in the decision of the QCAT Appeal Tribunal in Grasso & Anor v CMG Consulting Engineers Pty Ltd (No 2)[20], that an application for costs in an appeal might warrant a different approach to the discretion the Tribunal has about costs:
“… if the appellant fails, the respondent has had to face the additional burden and expense of the appeal, in litigation in which he or she has, already, been successful. This is a matter the QCAT Appeal Tribunal is entitled to take into account, under s 102(3)(f) of the QCAT Act.”[21]
[20] [2011] QCATA 326.
[21] Ibid, at [13].
[27]The Ricchettis were not successful in their application for leave to appeal the primary decision. They alleged that the presiding Senior Member had made errors of fact, or mixed law and fact, and that his reasons were inadequate. The Appeal Tribunal, having traversed the many issues raised by the Ricchettis (in the appeal), held that the application was “an attempt to revisit the case run before the learned Senior Member [of QCAT]”[22]. The Appeal Tribunal also determined that there was no “inadequacy in the reasons constituting an error of law”[23].
[22] Ricchetti v Lanbuilt Pty Ltd [2011] QCATA 266, at [9].
[23] Ibid, at [3].
[28]The decision of the Appeal Tribunal, given after the parties had delivered both written and oral submissions, showed that none of the Ricchettis complaints warranted a grant of leave to appeal. The application for leave to appeal may fairly be described as adventurous, and unwarranted; but, of course, Lanbuilt was compelled to resist it.
[29]These are relevant factors to be considered in exercising the discretion to award costs under s 102(1) of the QCAT Act. They compel the conclusion that Lanbuilt has a reasonable claim for its costs associated with the Ricchettis’ failed application for leave to appeal.
[30]Lanbuilt also claims, however, that it should have its costs on an indemnity basis because it made an offer to settle the appeal, which the Ricchettis should have accepted.
Offer to settle
[31]Lanbuilt contends that it “made sensible concessions and attempted to narrow the issues in dispute at the hearing”[24]. Lanbuilt also relies upon the fact that it made an offer to the Ricchettis, prior to the appeal proceedings, on a “without prejudice, save as to costs” basis (i.e., the kind of offer usually called a “Calderbank offer”).
[24] Costs Submissions on behalf of Lanbuilt, filed 23 February 2012, at para [43].
[32]Lanbuilt again refers the Appeal Tribunal to the decision in Ralacom[25], and the authorities relevant to the exercise of the discretion to award costs on an indemnity basis. Lanbuilt contends that the factors relevant to the application for costs on an indemnity basis include (amongst others) the rejection by the Richettis of an offer to settle and “an undue prolongation of the case by groundless contentions”[26], and that the matter was further “aggravated”[27] by an application for leave to appeal in which the Ricchettis “sought to re-agitate these contentions”[28].
[25]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412.
[26] Costs Submissions on behalf of Lanbuilt, filed 23 February 2012, at [59].
[27] Ibid, at [59].
[28] Ibid, at [59].
[33]It is argued by Lanbuilt that the conduct of the Ricchettis was “something irresponsible”[29] which exposed them to costs, the Ricchettis having rejected the offer of settlement and then proceeded with the application for leave to appeal. This was, in Lanbuilt’s submission, a relevant factor, of the kind considered by Chesterman J in Todrell Pty Ltd v Finch (No 2)[30], “which exposed [Lanbuilt] to costs which should, in fairness, be ordered on the indemnity basis”[31].
[29] Ibid, at [61].
[30]Todrell Pty Ltd v Finch & Ors; Croydon Capital Pty Ltd v Todrell Pty Ltd & Anor) [2007] QSC 386, at [4].
[31]Costs Submissions on behalf of Lanbuilt filed 23 February 2012, at [61].
[34]Lanbuilt refer the Appeal Tribunal to QCAT’s additional power to award costs under the QCAT Rules.[32] Under that rule, a party that makes an offer to settle which is not accepted may recover costs if the decision of the Tribunal is not more favourable to the other party than the offer.[33]
[32] QCAT Rules, r 86.
[33] QCAT Rules, r 86(1)(c).
[35]Lanbuilt offered, on 4 May 2011, to pay the Ricchettis the sum of $20,000. The offer was made to “finalise” all applications (costs in relation to the building dispute, and the application for leave to appeal). The offer was to remain open until 4.00pm on 11 May 2011.
[36]The Ricchettis argue, in response, that they have already incurred considerable expense in legal fees; they believed that they had an arguable case and have acted reasonably – they made offers to settle the building dispute, and they (effectively had) acted on the advice of their legal representatives.
[37]It was, ultimately, the Ricchettis’ decision to proceed with the application for leave to appeal. They have not (in their written submissions) advanced any basis for not accepting the offer made by Lanbuilt on 4 May 2011.
[38]The Appeal Tribunal is satisfied that the offer made by Lanbuilt (if accepted) would have been capable of bringing the proceedings (both the application for costs of the building dispute and the appeal) to a complete conclusion. The offer was effectively an “all inclusive” offer and would have resulted in the application for leave to appeal not proceeding to a hearing on 7 June 2011.
[39]The Appeal Tribunal accepts Lanbuilt’s submission that the offer made (if accepted) would have resulted in Lanbuilt not incurring unnecessary additional costs in the proceedings comprising of the costs of legal representation in relation to the application for leave to appeal; and costs in relation to proceeding with an application for costs of both the building dispute; and, the appeal.
[40]It has previously been determined by the Tribunal that “Calderbank offers” may be relevant to the exercise of the discretion to award costs in circumstances where the offer is made at a time when,
“all the relevant facts are known [so] the recipient can make an informed decision having regard to the consequences of non-acceptance.”[34]
[34]Demac Homes (Qld) Pty Ltd v Queensland Building Services Authority & Ors [2011] QCAT 331, at [39].
[41]The wording of the offer was clear and effectively put the Ricchettis on notice as to Lanbuilt’s intention to seek costs if it was refused; Lanbuilt warns (in the offer) that it will be “strongly opposing” the application for leave to appeal and will be seeking costs of the appeal proceedings.
[42]At the time the offer was made, the Ricchettis were in a position to make an informed decision about the offer. It was made only a few weeks before the listed hearing date for the appeal, at a time when the grounds upon which they sought leave were apparent, and they were in a position to fully consider them in the face of the offer.
[43]These circumstances attract the operation of r 86 of the QCAT Rules in a way that is adverse to the Ricchettis. Under r 86(2), the Tribunal may award the party who made the offer “all reasonable costs that were incurred by that party in conducting the proceeding after the offer was made”. Here, the offer was much more advantageous to the Ricchettis than the eventual outcome of their failed application for leave to appeal. It should have been accepted. Lanbuilt ought to have its costs on an indemnity basis.
[44](I am also, for the sake of completeness, satisfied that the interests of justice point compellingly to a costs order being made, on an indemnity basis, to otherwise overcome the strong contra-indication against costs orders in s 100 of the QCAT Act.)
[45]Lanbuilt is entitled, then, to the benefit of an order that the Ricchettis pay its costs of and incidental to the application for leave to appeal from and after the date the offer expired, 11 May 2011, assessed on an indemnity basis.
[46]The Appeal Tribunal must, under s 107(1) of the QCAT Act, fix costs if possible. Lanbuilt seek an order for indemnity costs to be agreed between the parties, and failing agreement, to be assessed. The legal representatives for Lanbuilt should, to enable the Appeal Tribunal to attempt to fix an amount for costs, submit a detailed claim for their client’s costs of and incidental to the failed application for leave. The claim should effectively identify how the costs have been calculated.
[47]Lanbuilt should file and serve that detailed claim, with an accompanying affidavit from its solicitor verifying the claim, within 28 days. The Ricchettis should file and serve any submissions in response within 28 days thereafter. The amount of costs to be fixed will then be determined on the papers by the Appeal Tribunal.
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