Thomas v Nielson
[2012] QCAT 225
•30 May 2012
| CITATION: | Thomas v Nielson [2012] QCAT 225 |
| PARTIES: | Kevin Thomas |
| v | |
| Pamela Nielson |
| APPLICATION NUMBER: | BDL373-10 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Sandra G Deane, Member |
| DELIVERED ON: | 30 May 2012 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. Mr Thomas’ application for costs is allowed. 2. Ms Nielson’s application for costs is dismissed. 3. Ms Nielson is to pay Mr Thomas’ costs of and incidental to the proceeding, including reserved costs (if any) on the standard basis of assessment in accordance with the District Court Scale of Costs. 4. If the amount of Mr Thomas’ costs are not agreed between Mr Thomas and Ms Nielson within 14 days, the costs are to be assessed by Hickey & Garrett, Legal Costs Consultants, Level 21, 141 Queen Street, Brisbane at Ms Nielson’s cost. 5. Ms Nielson is to pay Mr Thomas’ costs (as agreed or assessed) within 14 days of such agreement or assessment. |
| CATCHWORDS: | COSTS – where party successful – where counterclaim substantially reduced – where offer to settle – assessment of costs Queensland Civil and Administrative Tribunal Act 2009, ss 100, 102, 105, 107 Queensland Building Services Authority Act 1991, s 77 Lyons v Dreamstarter [2011] QCATA 142 Malay Industries Pty Ltd v Queensland Building Services Authority [2010] QCAT 310 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of Queensland Civil and Administrative Tribunal Act2009 (QCAT Act).
REASONS FOR DECISION
Background
By decision dated 20 March 2012 Mr Thomas was successful in his claim for the balance of moneys owed under the building contract. Ms Nielson’s counterclaim was substantially reduced and allowed in the amount of $4,665.
I directed the parties to make submissions in relation to costs. I also directed that unless a party requested an oral hearing these applications would be determined on the papers.
Submissions from Mr Thomas and Ms Nielson have been received. No party has requested an oral hearing.
Mr Thomas seeks the following orders:
a)Ms Nielson pay Mr Thomas’ costs on the District Court Scale for the period to 18 August 2011;
b)Ms Nielson pay all reasonable costs Mr Thomas incurred after 18 August 2011;
c)If the parties cannot agree the amount that an assessor be appointed at Ms Nielson’s costs.
Ms Nielson seeks the following orders in the alternative:
a)For the period up to 23 November 2011 there be no order as to costs; and
b)From the period between 23 November 2011 and 2 February 2012 Mr Thomas pay Ms Nielson’s costs as assessed or agreed; OR
c)There be no order as to costs.
Law
The QCAT Act provides “Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceedings.”[1]
[1] Section 100 QCAT Act.
Section 102(1) states “The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order.”
Section 102(3) sets out criteria to which the Tribunal may have regard.
Power to award costs under the Queensland Building Services Authority Act 1991 (QBSA Act)
Section 77 of the QBSA Act confers jurisdiction on the Tribunal to determine building disputes such as the one brought by Mr Thomas. This section has been considered by the Appeal Tribunal in Lyons v Dreamstarter.[2]
[2] [2011] QCATA 142.
In that decision the Appeal Tribunal noted that section 77(1)(h) provides that the Tribunal may award costs and does not provide further guidance or conditions of exercise of that power. The Appeal Tribunal also noted at [33]-[34] that “A jurisdiction given in general terms allows the Tribunal to make an order as to costs that is justified in the circumstances.[3] 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.[4] Accordingly an enabling Act, the QBSA Act, does, provide otherwise. As a result, the usual position as to costs in the Tribunal is displaced.”
[3] Oshlak v Richmond River Council (1998) 193 CLR 72 at 88.
[4] Latoudis v Casey (1990) 170 CLR 534 at 557.
The Queensland Court of Appeal has held that where a party has reasonably incurred legal costs and has been successful before a tribunal, it could not be said to be in the interest of justice to allow that success to be eroded.[5]
[5] Tamawood Limited & Anor v Paans [2005] QCA 111.
The usual rule in court proceedings is that a successful party is entitled to its costs to indemnify it for incurring the expense of the proceedings.
Mr Thomas was initially self represented but applied for leave to be represented when Ms Nielson foreshadowed a significant counterclaim in the order of $100,000.
Ultimately Ms Nielson’s counterclaim was successful only to the extent of $4,665.
Factors which may be considered by the Tribunal in exercising its general discretion to award costs include the matters referred to in section 102(3) of the QCAT Act.
Whether a party is acting in a way that unnecessarily disadvantages another party[6]
[6] Section 102(3)(a) QCAT Act.
As indicated in my Reasons for Decision Ms Nielson attempted to act in ways inconsistent with a number of her agreements and the Tribunal’s directions including attempting to resile from:
a)the direction of 18 August 2011 that the final account was payable;
b)the direction of 14 December 2011 that an Amended Response and Counterclaim consistent with the position adopted in Exhibit 1 be filed.
Implicit in the direction of 18 August 2011 is that Practical Completion was achieved as contended for by Mr Thomas. Ms Nielson sought to resile from that position without seeking to set aside the direction.[7]
[7] Amended Response and Counterclaim 21 December 2011.
In the Reasons for Decision I found Exhibit 1 had been sent to the Tribunal on Ms Nielson’s express instructions.
At the directions hearing on 25 January 2012 Ms Nielson foreshadowed that she would seek to resile from the admissions contained in Exhibit 1 and at the hearing on 2 February 2012 Ms Nielson made applications which were inconsistent with Exhibit 1.
Those applications were refused. Together with the application for an adjournment they each caused the final hearing to be extended beyond that which would otherwise have been necessary had Ms Nielson not attempted to resile from her positions and caused Mr Thomas to expend more legal costs than would otherwise have been necessary both in terms of preparation but also at the hearing.
Ms Nielson relies upon correspondence on 31 January 2012 in relation to the proposed adjournment.[8] The difficulty with this submission is that the reference to payment of Mr Thomas’ costs thrown away was not unequivocal but rather a statement that upon being advised of his costs instructions would be sought.
[8] Affidavit James Matthew Lavercombe filed 27 April 2012.
Ms Nielson appears to also rely upon this correspondence to submit that Mr Thomas should have accepted the ‘offer’ detailed in Exhibit 1. The difficulty with this submission is that by this time Ms Nielson had attempted to resile from the admissions made in Exhibit 1 and so Mr Thomas was left with no choice other than to proceed with the hearing and seek to resist Ms Nielson’s applications to be permitted to resile from the admissions.
Ms Nielson submits that Mr Thomas pursued irrelevant matters at the hearing being the evidence given by Ms Nielson’s former lawyers in relation to Exhibit 1. As should be plain from my Reasons for Decision such evidence was central to determining Ms Nielson’s preliminary applications. If Ms Nielson had not applied to resile from the position outlined in it then that evidence would not have been required. It is Ms Nielson’s conduct that lead to Mr Thomas expending costs in relation to this aspect of the matter.
I am satisfied that Ms Nielson’s behaviour unnecessarily disadvantaged Mr Thomas in resiling from positions previously agreed and the subject of directions because Mr Thomas was required to meet these allegations or to prepare to meet these allegations.
This is a factor in favour of awarding costs to Mr Thomas.
The nature and complexity of the dispute
This matter involved a number of complex issues particularly when Ms Nielson continued to attempt to resile from her agreements and the directions made.
This is a factor in favour of awarding costs to Mr Thomas.
The relative strengths of the claims made
Ultimately Mr Thomas’ case was found to be admitted and Ms Nielson’s claim in excess of $100,000[9] was only successful to the extent of $4,665.
[9] Respondent’s Counter application filed 21 January 2011.
This is a factor in favour of awarding costs to Mr Thomas.
Anything else that the Tribunal considers relevant
The making of offers to settle are relevant matters to be considered.
Offers
Mr Thomas relies upon a formal offer to settle made on 18 August 2011 in which he offered to settle upon the basis that he receive $18,000 in full and final settlement of any claims or future claims in respect of these proceedings or the works.[10]
[10] Part of Attachment LQ2 to Applicant’s submissions dated 20 April 2012.
The final outcome was that Ms Nielson was required to pay Mr Thomas significantly more than the amount of the offer.
The offer to settle was cast more broadly than simply settling these proceedings. It included settlement for liability for rectifying category 2 defects. It was not necessary to quantify the reasonable costs of rectifying category 2 defects as this was not an issue in dispute as Mr Thomas agreed he would rectify them.
The QCAT Act and the QCAT Rules allows the Tribunal to award costs if an offer to settle had been made but not accepted. The Tribunal may award all reasonable costs incurred in conducting the proceeding after the offer was made.[11]
[11] Section 105 QCAT Act; QCAT Rules, r 86.
Ms Nielson relies upon the effect of Exhibit 1 as being the ‘first offer that put beyond doubt the previously contested and undetermined issues’[12] and contends that before 23 November 2011 a genuine dispute existed. Ms Nielson submits that Exhibit 1 detailed a mechanism for determining the amount Ms Nielson owed Mr Thomas and that if that amount had been determined the amount allowed for the rectification works would have been less than the amount found ultimately by the Tribunal.
[12] Respondent’s submissions 20 April 2012.
Ms Nielson also contends that the hearing was unnecessary and just gave effect to the contents of Exhibit 1 and Mr Thomas ought to have relied upon Exhibit 1 as the basis for judgment.
The difficulty with this submission is that:
a)Exhibit 1 was not a settlement offer – it was a letter to the Tribunal making admissions as to the matters remaining in dispute;
b)Even if it could be construed as a settlement offer the amount to be paid to Mr Thomas was not readily ascertainable at the time it was made;
c)It is unclear as to what process for obtaining judgment Ms Nielson refers;
d)As matters transpired Mr Thomas in fact sought findings that his claim was admitted in reliance on Exhibit 1 (ie judgment) and to limit the evidence of matters relating to Ms Nielson’s counterclaim in the way contemplated by Exhibit 1. It was Ms Nielson who sought to expand matters for determination.
e)Ms Nielson in a letter dated 21 November 2011 from her then lawyers to Mr Thomas’ lawyers appears to have offered to settle on the basis of paying $11,735 to Mr Thomas.[13] Ms Nielson does not expressly refer to this correspondence although it appears that this is the correspondence referred to in Exhibit 1.
[13] Attachment to Applicant’s submissions dated 27 April 2012.
It is clear that the decision was more favourable to Mr Thomas than Ms Nielson’s offer dated 21 November 2011.
It is possible that the decision was not more favourable than the offer of 18 August 2011 to Ms Nielson.
However I am not satisfied that there is sufficient evidence to find that the decision was not more favourable than the offer of 18 August 2011 to Ms Nielson and that therefore she ought to have accepted Mr Thomas’ offer.
There is no evidence as to rectification costs of the category 2 defects which also were to be settled as part of the settlement offer because that was not an issue in dispute in these proceedings. By nature category 2 defects are minor but there were quite a few.
Conclusion
The factors considered above are in favour of awarding costs to Mr Thomas. I am satisfied that the circumstances of this case warrant an award of costs in Mr Thomas’ favour but not an award of all reasonable costs.
Fixing or assessing costs
If the Tribunal makes a costs order it must fix the costs if possible.[14] If it is not possible the Tribunal may make an order requiring costs be assessed by reference to a scale under the rules applying to a court.[15]
[14] Section 107(1) QCAT Act.
[15] Section 107(2) and (3) QCAT Act.
Mr Thomas has not provided to the Tribunal any evidence of his legal costs for example in the form of a short form assessment prepared by a costs assessor and therefore it is not possible for the Tribunal to fix those costs.
Mr Thomas submits that the District Court scale should be used. Ms Nielson contends that there is no basis for this as Mr Thomas’ claim was always less than the District Court jurisdictional threshold.
This Tribunal has previously accepted that an itemised scale such as the District or Supreme Court scale may be preferable to a lump sum scale such as the Magistrates Court. This Tribunal and the Commercial and Consumer Tribunal often considered the District Court Scale as appropriate.[16]
[16]Malay Industries Pty Ltd v Queensland Building Services Authority [2010] QCAT 310; Wulf v Cooper [2008] CCT BD247-06.
I agree that the District Court Scale is appropriate.
On this basis it is appropriate that Ms Nielson be ordered to pay Mr Thomas’ costs of and incidental to the proceedings on the standard basis of assessment on the District Court Scale of Costs.
Mr Thomas seeks an order in relation to costs associated with this proceeding incurred including the original filing fee, fees charged by experts and car parking fees for attending Tribunal hearings.[17]
[17] Attachment LQ3 to Applicant’s submissions dated 20 April 2012.
Amounts claimed are:
a)Filing Fee $ 255.00
b)Experts fees
i) Invoice dated 6 February 2012 Bevan Sim $3,158.10
ii) Invoice dated 6 July 2011 Bevan Sim $3,158.10
iii) Invoice dated 6 May 2011 Archicentre Limited $5,207.50
iv) Invoice dated 11 July 2011 AMD $1,254.00
c)Fees paid to Cleveland Magistrates Court
i) Receipt dated 13 April 2011 – photocopy $ 60.00
ii) Receipt dated 18 April 2011 – photocopy $ 10.00
iii) Receipt dated 13 April 2011 – inspection $ 11.50
d)Car parking
i) 18 August 2011 – compulsory conference $ 70.00
ii) 8 June 2011 – directions hearing $ 35.00
iii) 14 December 2011 – directions hearing $ 42.84
iv) 29 March 2011 – compulsory conference $ 35.00
v) 3 March 2011 – meeting with Lawyers Qld $ 22.00
It seems Mr Thomas is seeking both an order that some cost in the nature of specific outlays be fixed and an order that costs be assessed if not agreed.
I am not satisfied that it is appropriate to both fix some costs and order an assessment if other costs are not agreed.
It is not possible to fix all the costs and therefore I order that costs be assessed if not agreed.
Orders
Mr Thomas’ application for costs is allowed.
Ms Nielson’s application for costs is dismissed.
Ms Nielson is to pay Mr Thomas’ costs of and incidental to the proceeding, including reserved costs (if any) on the standard basis of assessment in accordance with the District Court Scale of Costs.
If the amount of Mr Thomas’ costs are not agreed between Mr Thomas and Ms Nielson within 14 days, the costs are to be assessed by Hickey & Garrett, Legal Costs Consultants, Level 21, 141 Queen Street, Brisbane at Ms Nielson’s cost.
Ms Nielson is to pay Mr Thomas’ costs (as agreed or assessed) within 14 days of such agreement or assessment.
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