Travers v Marco Realty Group Pty Ltd (No 2)
[2021] QCAT 236
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Travers & Anor v Marco Realty Group Pty Ltd & Anor (No 2) [2021] QCAT 236
PARTIES: TERRI TRAVERS AND GLENISE FIELD (applicants)
v
MARCO REALTY GROUP PTY LTD & FRANCO BAARDT
(respondents)
APPLICATION NO/S:
BDL088-19
MATTER TYPE:
Building matters
DELIVERED ON:
6 July 2021
HEARING DATE:
On the papers
HEARD AT:
Brisbane
DECISION OF:
Member King-Scott
ORDERS: The Tribunal orders
1. The respondents pay the applicants the sum of $500.00 in respect of their claim.
2. The respondents pay the applicants’ costs fixed at $14,500.00.
3. The said sums to be paid by 4:00 pm 6 August 2021.
CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW EVENT GENERAL PRINCIPLES AND EXERCISE OF DISCRETION – INDEMNITY COSTS RELEVANT CONSIDERATIONS GENERALLY– applicant successful – amount recovered substantially less than amount claimed but not trivial – costs of unsuccessful interlocutory applications brought by the respondent – whether applicant should recover costs – late joinder and lost opportunity to make formal offer – individual alter ego of company that incurred costs – apportionment of costs
Queensland Building and Construction Commission Act 1991 (Qld) s. 77
Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss. 42 (1)(c), 48, 100 and 102
Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873
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
The applicants, Mrs Glenise Field and Ms Terri Travers were partially successful in their claim against the respondents Marco Realty Group Pty Ltd and Franco Baardt.[1]
[1]Travers & Anor v Marco Realty Group Pty Ltd & Anor [2021] QCAT.
Their claim was for $32,000.00 or alternatively, the sum of $19,714.20 for damages with interest. There was also a claim for late completion damages calculated at $50.00 per day from 15 February 2018 until date of completion.
In fact, following 2 days of hearing the applicants succeeded in recovering only $500.00 for defective and incomplete work. In view of the magnitude of their claim the outcome might be considered a Pyrrhic victory!
The law
The Tribunal has powers to award costs pursuant to s77(3) of the Queensland Building and Construction Commission Act 1991 displacing the usual no costs provision in Tribunal matters as provided by s100 of the Queensland Civil and Administrative Tribunal Act 2009.
Where there is a discretion to award costs the usual rule is that costs follow the event.
Under s102 of the QCAT Act relevantly provides:
(1) 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.
…
(3) In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following—
(a)whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);
(b)the nature and complexity of the dispute the subject of the proceeding;
(c)the relative strengths of the claims made by each of the parties to the proceeding;
(d)…
(e)the financial circumstances of the parties to the proceeding;
(f)anything else the tribunal considers relevant.
Section 48(1) of the QCAT Act is as follows:
This section applies if the tribunal considers a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including by—
(a)not complying with a tribunal order or direction without reasonable excuse; or
(b) not complying with this Act, an enabling Act or the rules; or
(c)asking for an adjournment as a result of conduct mentioned in paragraph (a) or (b); or
(d) causing an adjournment; or
(e) attempting to deceive another party or the tribunal; or
(f) vexatiously conducting the proceeding; or
(g)failing to attend conciliation, mediation or the hearing of the proceeding without reasonable excuse.
In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd[2] Devlin J (as he then was) considered the case of a plaintiff that succeeded in recovering only £52 of its claimed £2,028. Further, the plaintiff’s success arose from a late amendment of its claim during the trial. Devlin J said:
No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct. In applying that rule, however, it is necessary to decide whether the plaintiff really has been successful, and I do not think that a plaintiff who recovers nominal damages ought necessarily to be regarded in the ordinary sense of the word as a “successful” plaintiff. In certain cases, he may be, e.g., where part of the object of the action is to establish a legal right, wholly irrespective of whether any substantial remedy is obtained. To that extent a plaintiff who recovers nominal damages may properly be regarded as a successful plaintiff, but it is necessary to examine the facts of each particular case.
…
In substance, therefore, the defence consisted of one point, although it was addressed to alternative contentions of the plaintiffs. I found that, though it was a good point in fact, it was not right to say in law that there was no breach of contract, and, therefore, I held that trivial damages ought to follow. The plaintiffs, therefore, have not established anything which is of the least value to them, and, in my judgment, they are not to be regarded as successful plaintiffs. If the matter stopped there, therefore, I should treat the defendants as having succeeded and award them the costs of the action.
[2][1951] 1 All ER 873 at 874 - 875.
The Respondents’ claim
The respondents have been substantially successful in defending the claim.
They submit that the ordinary rule should apply, and each party should bear their own costs.
The respondents submit that they offered monetary settlement to the applicants on several occasions, but the offers had been refused each time. There is no written evidence of any offers before the Tribunal. The terms and details of these offers are unknown. However, the applicants made written offers, which I will refer to below, but no counter-offers were made to these offers by the respondents.
Mr Baardt, in his submissions, alleges that the applicants were deceitful in:
(a)Stopping their staff and contractors from carrying out the jobs on site; and
(b)Not notifying the company of any defects within 5 days after completion; and
(c)Waiting several months before advising of defects; and
(d)Not giving them the applicants’ building report to work from.
In my opinion, these issues were canvassed in the hearing and are referred to in my reasons[3] it is not necessary for me to comment further on the specifics of these allegations as I do not consider them to be relevant to the issue of costs.
[3]Travers & Anor v Marco Realty Group Pty Ltd & Anor [2021] QCAT paragraph [28] to [31].
I observe that the respondents, during proceedings leading up to the hearing, made several attempts to frustrate the applicants in prosecuting their claim. I will refer to those attempts later.
The Applicants’ claim
The applicants seek an order that the respondents pay the costs of the proceedings to be agreed or assessed in default of agreement. Alternatively, they seek an order that costs be fixed at $30,000.00. If the Tribunal is not prepared to make either of those orders then the applicants have a fall-back position that the respondents jointly and severally pay the applicants costs as follows:
(a)The filing fee of $338.20;
(b)Costs of the application filed on 25 June 2020 on an indemnity basis fixed at $5,000.00;
(c)Costs of the application filed on 27 July 2020 on a standard basis fixed at $500.00; and
(d)Costs of the applicants’ application filed on 2 March 2021 on a standard basis fixed at $1,000.
It is not clear why the claim for costs in respect of the application filed on 25 June 2020 is on an indemnity basis. It was an application by the respondent company to strike out the proceedings.
Resolution
The applicants allege that the respondents have acted in a way that has disadvantaged them by attempting to deregister the respondent company during the proceedings. I interpolate here that I have already made adverse findings against Mr Baardt in respect of this issue.[4]
[4]Travers & Anor v Marco Realty Group Pty Ltd & Anor [2021] QCAT Paragraph [15].
The applicants allege that Mr Baardt’s actions caused them to incur costs in seeking advice and achieving reregistration of the company.
The respondent company applied to the Tribunal in an Application for Miscellaneous Matters filed on 25 June 2020 to strike out the applicants’ proceedings. It was refused in a decision of the tribunal on 5 August 2020.
The respondent company again applied to the Tribunal in an Application for Miscellaneous Matters filed on 27 July 2020 for an adjournment which was refused by the Tribunal on 28 July 2020.
It is tolerably clear from the applications referred to above that the respondents were unsuccessful in the various attempts to thwart the applicants’ claim. However, in bringing the applications they put the applicants to significant expense.
The applicants have not articulated their reasons why there should be indemnity costs for the strikeout proceedings. It is always difficult to strike out proceedings on the merits of the case. I suspect that, at the time, the application had little prospect of success. Ultimately that was the case.
In my opinion the applicants ought to be awarded the costs associated with those unsuccessful applications, but it should be on a standard basis. I fix the costs of the strike out application at $3,000.00. Costs for the unsuccessful applications I fix at $4,500. The filing fee is not part of those costs.
The resolution of how the remaining costs of the proceeding should be dealt with is more difficult.
The applicants made offers in writing and later orally to settle the matter. By letter dated 28 January 2020 the applicants offered to settle all claims for $65,000. The same offer was made in writing by letter dated 7 April 2020. It was followed with a telephone call on 1 May 2020 when the same offer was made and again on 7 August 2020 when the claim was reduced to $60,000.00.
The offers were at the very high end of the range and, in persistently repeating the offer at the same level, the applicants appeared to concede no weakness in their case. I my opinion the offers represented an unreasonable assessment of the applicants’ prospects.
On the other hand, the respondents must have been aware that the joint expert report contained defective items that the experts agreed the respondent company was liable for. There was always going to be a finding of incomplete or defective work. Had the respondent company made a modest offer to cover those amounts then it would have been entitled to the order it seeks.
Much of the hearing time involved issues that the applicants failed to successfully establish.
Neither the respondent company nor Mr Baardt responded to the offers save, perhaps, to reject them. One may suspect that may have been because Mr Baardt knew that the company was insolvent and he, personally, was exposed to no liability.[5]
[5]Travers & Anor v Marco Realty Group Pty Ltd & Anor [2021] QCAT Paragraph [38].
The matter is further complicated by the fact that only late in the proceeding was Mr Baardt joined as a respondent, consequently, he did not have an opportunity of protecting himself against an adverse decision by making a formal offer before the hearing. On the other hand, Mr Baardt really was the alter ego of the company and was responsible for the way the defence was conducted. On balance I consider he should also be responsible for any costs that the company is ordered to pay.
Although the amount recovered by the applicants is modest it could not be said to be trivial. The applicants have been successful and are entitled to recover some of their costs.
In all the circumstances, I am prepared to allow the sum of $10,000 which represents a portion of their costs claimed to be $55,011.51.[6] I fix those costs at $10,000.
[6]See affidavit of Danial Jordan Devitt filed 20 May 2021.
I find that the respondents are jointly and severally liable to pay the claim and costs.
In conclusion I make the following orders:
a) The respondents pay the applicants the sum of $500.00 in respect of claim.
b) The respondents pay the applicants costs fixed at $14,500.00.
c) The said sums to be paid by 4:00 pm 6 August 2021.
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