Thorneton Avenue Pty Ltd v Body Corporate for the Avenues CTS 19609
[2013] QCAT 681
•17 December 2013
| CITATION: | Thorneton Avenue Pty Ltd v Body Corporate for the Avenues CTS 19609 [2013] QCAT 681 |
| PARTIES: | Thorneton Avenue Pty Ltd (Applicant) |
| v | |
| Body Corporate for the Avenues CTS 19609 (Respondent) |
| APPLICATION NUMBER: | OCL155-10 |
| MATTER TYPE: | Other minor civil dispute matters |
| HEARING DATE: | 9 December 2013 |
| HEARD AT: | Brisbane |
| DECISION OF: | Dr Forbes, Member |
| DELIVERED ON: | 17 December 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The application, in so far as it subsists, is dismissed. 2. There is no order for costs. |
| CATCHWORDS: | CONTRACT FOR SERVICES – body corporate and caretaker – extent of caretaking duties – market review – whether review necessarily determined remuneration increase – whether, following market review, any moneys owing to either party – application for costs – whether QCAT s 100 is displaced – whether interests of justice require an order under s 102 – whether applicant seeking costs substantially successful – whether respondent’s defence and counterclaim vexatious – whether each party contributed to prolixity of proceedings – no order as to costs Queensland Civil and Administrative Tribunal Act 2009 ss 28, 32, 48, 100, 102 Forsyth & Ors v Haraba Pty Ltd t/as Brisbane Gateway Resort [2013] QCAT 375 Keyte v Chief Executive, Department of Justice and Attorney General [2012] QCATA 238 |
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
On 15 January 2013 these orders were made:
It is declared that the Applicant Thorneton Avenue Pty Ltd is entitled to a market remuneration review for the year 5 April 2009 to 4 April 2010, to be determined by a valuer in accordance with Clauses 4 and 1.1(o) of the subject caretaking agreement.
It is declared that the duties of Thorneton Avenue Pty Ltd, with respect to mowing and maintenance of lawns at “The Avenues”, Morayfield, are limited to common property areas unless and until the parties, for valuable consideration, otherwise agree.
Order that the parties file and serve, by 4 pm on Monday 18 February 2013 minutes of any further orders required to implement this decision.
Order that, if the parties do not agree upon a valuer according to Clause 1.1(o) of the subject agreement by 4 pm on Monday 25 February 2013, they shall, within seven (7) days thereafter, apply to the President of the Real Estate Institute of Queensland to appoint a valuer pursuant to the said Clause 1.1(o).
Order that the questions of costs and interest are reserved until the valuer’s determination is known.
On 17 June 2013 Mr D R Linkhorn, valuer, determined the market remuneration for the caretaker, as at 5 April 2009, to be $63,440.10 (excluding GST) and recommended a caretaker’s office equipment allowance of $1,325 (excluding GST).
In subsequent negotiations the parties failed to agree upon orders to finalise these proceedings.
On 1 October 2013 the Tribunal directed the parties to make written submissions, consistent with its orders of 15 January 2013 and the valuer’s determination of 17 June 2013, upon these matters:
a) any principal moneys claimed to be now due and owing, by way of overpayment or otherwise, by either party to the other, in consequence of the said orders and determination, and particulars thereof. Any such claim, unless quantum is agreed, shall be certified on affidavit by a duly qualified and independent practising accountant;
b) any interest claimed upon such moneys shall be similarly certified, unless quantum is agreed;
c) any claim for costs, with particulars of dates and quantum, together with reasons why the Tribunal should depart from the provisions of section 100 of the Queensland Civil and Administrative Tribunal Act 2009.
The parties duly filed and exchanged submissions on 8 November 2013, and replies on 22 November 2013.
It is common ground that the next Market Adjustment Date is 4 April 2014.
The Applicant’s (Thorneton’s) position on the matters in controversy is that no question of overpayment or reimbursement of remuneration arises, and that it should receive an order for costs at the standard rate, based on the Supreme Court scale.
Thorneton’s position rests upon a distinction, didactically reiterated, between Market Remuneration and actual remuneration:
The Market Remuneration is but one contractual component the parties may use to help determine [actual] remuneration. There is no mechanism upon which the Respondent could ... insist on the Market Remuneration figure being made the remuneration figure, as it is now trying to do ...[1]
[1]Thorneton’s “replying submissions” 22 November 2013 paragraph 35.
I shall return to that point in a moment, merely pausing to note that the Respondent, at the hearing, raised the issue of an ‘unearned premium’.[2] That being so, it was appropriate to give the Respondent an opportunity to establish that point, if it could do so.
[2]Respondent’s submissions 10 December 2012 paragraph 29; Reasons for Decision 15 January 2013 at [94].
The effect of a “market review” clause depends on the provisions of the particular contract in which it appears. In some cases it determines the actual remuneration.[3] In others, perhaps more common, it is not necessarily decisive.[4]
[3]For example, Forsyth & Ors v Haraba Pty Ltd t/as Brisbane Gateway Resort [2013] QCAT 375; Baycloud v Dowling Investments [2005] NSWSC 237; Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust [2004] NSWSC 214.
[4]For example, Tri-Star Petroleum Co v. GPT Funds Management Ltd [2009] QSC 71; Eureka Funds Management Limited & Anor v Freehills Services Pty Ltd [2008] VSCA 156; Domino's Pizza Enterprises Limited v Seldex Pty Ltd [2009] QSC 137.
The contract between the present parties is of the latter kind. The caretaker may call for a market review five years after the commencement date (5 April 2004) and every five years thereafter. If such a review takes place, and a new actual remuneration is not agreed within 30 days after the market adjustment date, the rate payable rises by the greater of (i) an increase in the Market Remuneration, or (ii) last year’s rise in the official Consumer Price Index.[5]
[5]Clause 4.1 of the subject agreement.
It follows that if a scheduled Market Review does not occur, or if the review supports an increase less than the CPI increment, the caretaker still has the benefit of a predictable rise in the CPI. Accordingly, Mr Linkhorn’s determination, although hardly gratifying to Thorneton, could not result in a reduction of its income, or prevent it from rising in line with the CPI.
The Respondent’s position is that Thorneton should be ordered to reimburse it in the amount of $458.26 (including GST). No interest is claimed. In support of that claim the Respondent tenders an affidavit by Graeme Devlin, accountant, sworn on 7 November 2013.
The Respondent’s claim depends on the proposition that an ‘unearned premium’ is embedded in the remuneration, because, before Thorneton became caretaker, an allowance was made for the mowing and maintenance of “on lot” areas, in addition to common areas. That argument is accompanied by a plea for rectification of the contract.[6] Suffice it to say that that plea comes far too late in the proceedings to be entertained.
[6]Respondent’s submissions 8 November 2013 paragraphs 9.1 - 9.12.
The evidence of the ‘unearned premium’, such as it is, is insufficient to dispose of the fact that the contract, before and after amendment, limits the caretaking duties to ‘the Common Property and not to any Lots or to any exclusive areas’.[7] Apparently Thorneton’s easy-going predecessors did not insist on that distinction, but the precise arrangements between them and the Respondent are as difficult to discern as the boundaries between private and common land when Thorneton came on the scene. ‘It hadn’t been discussed’.[8] Regardless of Clause 5.5 of the contract, the Respondent treated the distinction as ‘vague’[9], and in practice seems to have regarded ‘common property’ as including unfenced private land.[10] When 49 new units and “on lots” were added to the estate in 2006-2008, there was no commensurate increase in the previous caretaker’s income.
[7]Clause 5.5.
[8]Transcript 6.2064 (Atkinson).
[9]Transcript 6.2062 (Atkinson).
[10]Transcript 6.838, 6.876 (Ratcliffe); 6.1785 (Atkinson).
The Respondent has not discharged its onus of proving the alleged ‘unearned premium’. Accordingly, its claim for $458.26 is dismissed.
Thorneton’s claim for costs
Thorneton seeks an order for costs of and incidental to these proceedings on the standard basis of the Supreme Court scale. It acknowledges, of course, that in so doing it must displace the strong presumption in section 100 of the QCAT Act, and bring itself with the exception recognised in section 102.
Section 102 cross-refers to section 48[11]. Thorneton refers particularly to section 48(1)(f): ‘vexatiously conducting the proceeding’.
[11]QCAT Act s 102(3)(a).
Thorneton also relies on these passages in Tamawood Ltd & Anor v Paans[12]:
[T]he Tribunal found that each party was justified in engaging the services of legal representatives ... That finding alone could be, in my view, 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 ...
If orders for costs were not 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. [That] would truly be contrary to the interests of justice ...
[12][2005] 2 Qd R 101; [2005] QCA 111 at [30] and [32] respectively, per Keane JA.
Tamawood was constructed upon sections 70 – 72 (particularly section 71) of the former Commercial and Consumer Act 2003 (CCTA). Thorneton’s unqualified submission is that those provisions are analogous to section 102 of the QCAT Act.[13] But a close comparison of the respective provisions suggests otherwise. It is true that subsection 102(3) of the QCAT Act reproduces several of the discretionary factors that appeared in subsection 71(4) of the CCTA, as well as ‘the conduct of the parties’.[14] But the QCAT Act refers more explicitly to ‘acting in a way that unnecessarily disadvantages another party’[15], and proceeds to elaborate that generality by reference to section 48(1) and its seven specific instances of vexation. Further, while the QCAT Act expresses a strong presumption[16] that each party shall ‘usually’ bear its own costs, the CCTA opened on a more positive note, authorising the former Tribunal to ‘award the costs it considers appropriate on ... the application of a party ... [and even] on its own initiative’.[17] It should not be assumed that the discretion conferred by section 102 of the QCAT Act is quite so open as that contained in the former CCTA. That Act had no initial barrier akin to section 100 of the present Act. As Keane JA observed in Tamawood:
The nature and extent of [a power to award costs] can only discerned by a close consideration of the terms of the statute that creates the power ... In the performance of this task, observations of the courts in relation to the operation of other statutory regimes ... may afford general assistance but they cannot be allowed to distract attention from the terms of the particular statute in question.[18]
[13]Thorneton’s submissions 8 November 2013, paragraph 31.
[14]CCTA s 71(4)(b).
[15]QCAT Act s 102(3)(a).
[16]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2012] QCAT 412 at [29] per Wilson P; Arcon Constructions Pty Ltd v Queensland Building Services Authority [2013] QCAT 573 at [29]; Keyte v Chief Executive, Department of Justice and Attorney General [2012] QCATA 238 at [30]. The facts in Ralacom, where a non-party intermeddled in the proceedings, are remote from the present case.
[17]CCTA s 71(1).
[18]Tamawood Pty Ltd & Anor v Paans [2005] 2 Qd R 101; [2005] QCA 111 at [23] per Keane JA, emphases added.
Thorneton says that the Respondent acted vexatiously[19], and that its defences, which failed, were ‘fanciful and devoid of merit’.[20] It seeks to identify the unimpressive demeanour of one witness for the Respondent with the Respondent’s attitude in general.[21] Going further, it describes the opposing witnesses without exception as ‘aggressive and evasive... clearly driven by personal animus’[22], (I do not share that impression) and the Respondent’s conduct of its case as vindictive and truculent. One recalls the time-honoured repartee of the kettle and the pot.
[19]Thorneton’s submissions 8 November 2013, paragraph 43.
[20]Thorneton’s submissions 8 November 2013, paragraph 41.
[21]Thorneton’s submissions 8 November 2013, paragraph 35.
[22]Thorneton’s submissions 8 November 2013, paragraph 42.
Thorneton presents itself as a ‘reluctant litigant’, frustrated by the Respondent’s intransigent refusal to negotiate. The fact that Thorneton was seeking an increase of more than $30,000[23] upon an existing wage of about $78,000[24] probably made negotiations a little difficult.
[23]Letter Thorneton’s solicitors to Respondent 4 November 2009, Exhibit 2 attachment 22.
[24]Thorneton’s submissions 22 November 2013 paragraph 28.
Thorneton says that ‘the third day of the hearing was taken up by the Respondent’s ‘novation’ argument’.[25] That is a hyperbolic submission; the application to add a plea of novation was dismissed early that day.
[25]Thorneton’s submissions 8 November 2013, paragraph 45.
Thorneton contends that its action was wholly successful[26]:
This case was about entitlement to a Market Remuneration review only. It was never about quantum of remuneration.[27]
[26]Thorneton’s submissions 8 November 2013, paragraph 66.
[27]Thorneton’s submissions 8 November 2013, paragraph 64; 22 November 2013 paragraph 60.
That is a patently disingenuous submission. The market review was never an end in itself, but a means to a hoped-for end, namely a large increase in the caretaker’s pay. This contest, for three years and more, was not about making an abstract point; understandably, but unsuccessfully, it was about a lot more money. Two days after Thorneton became caretaker, its solicitors informed the Respondent:
We are instructed by our client that they wish to invoke the Market Review ... It is apparent ... that the current remuneration [$77,392.63 per annum] is substantially well [sic] below market ... [W]e propose that the current remuneration be increased to $110,000 per annum plus GST”.
That was the proposal which struck the irascible chairman of the Body Corporate as ‘outrageous’.
The counterclaim failed, but as Thorneton now concedes, this protracted action ‘did not return a figure greater than CPI for the Applicant’.[28] There sits beside the Applicant’s aspirational figure of $110,000 the duly appointed valuer’s estimate of $63,440.10. After all the contentions, elaborate complexities, and amendments the application yielded what is realistically described as a Pyrrhic victory. An early warning that a market review might be much ado about nothing[29] deserved more careful consideration than it received.
[28] Thorneton’s submissions 8 November 2013, paragraphs 25, 65.
[29]Letter Godwins’ solicitor to Thorneton’s 8 September 2009; quoted in the Decision at [22].
This was a contest between two unrelentingly litigious parties, seemingly regardless of cost and delay. If there was vexation, one hardly outdid the other. Apart from a couple of mutually convenient extensions of time, agreement was ever-elusive. Thorneton presented a long list of objections to evidence, as in a jury case, without regard to relative importance, or to the procedural provisions of the QCAT Act.[30] The Respondent pursued a convoluted counterclaim that was dubious, albeit not frivolous.
[30] QCAT Act s 28, particularly s 28(3)(b).
When a valuer was required there was a deadlock; the Real Estate Institute had to arbitrate. Thorneton then brought an ill-conceived and expensive application to disqualify the appointee. If the Respondent had made an application for the costs of that episode, its plea would have deserved serious consideration.
Sympathy for the people who have to fund this inflated case does not dissuade me from leaving its costs where they fall. I am not satisfied that the interests of justice warrant an order under section 102 of the QCAT Act.
ORDERS
The application, in so far as it subsists, is dismissed.
There is no order for costs.
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