Turner v Zachary Developments Pty Ltd
[2011] QCAT 497
•26 September 2011
| CITATION: | Turner and Anor v Zachary Developments Pty Ltd [2011] QCAT 497 |
| PARTIES: | Mr Wayne Turner Mrs Judith Elaine Turner (Applicants/Appellants) |
| v | |
| Zachary Developments Pty Ltd (Respondent) |
| APPLICATION NUMBER: | B455-05 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | John Bertelsen, Adjudicator |
| DELIVERED ON: | 26 September 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. Each party bears their own costs of the proceedings. |
| CATCHWORDS: | Costs – partial success in proceedings – costs discretion |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Wayne Turner & Mrs Judith Elaine Turner represented by Mr Poiner of counsel |
| RESPONDENT: | Zachary Developments Pty Ltd represented by Mr Hackett of counsel instructed by Wilson Lawyers |
REASONS FOR DECISION
On 23 December 2010 the Tribunal ordered the respondent pay to the applicants the sum of $31,878.26 (the decision). Submissions on costs were invited to be heard on the papers.
Applicable Law
The application was brought pursuant to the provisions of the Commercial and Consumer Tribunal Act 2003 (CCT Act) on 4 August 2005. By the time of hearing in 2010 the governing legislation was the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). Section 271 of the QCAT Act provides that the Queensland Civil and Administrative Tribunal (QCAT) must deal with the subject of an existing proceeding under the QCAT Act with the qualification that:
(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.
Therefore sections 70 and 71 of the CCT Act are the provisions relevant for a costs decision in this instance. Section 70 of the CCT Act provides as follows:
The main purpose of this division is to have parties pay their own costs unless the interests of justice require otherwise.
Section 71 provides as follows:
In a proceeding, the tribunal may award the costs it considers appropriate on—
(a) the application of a party to the proceeding; or
(b) its own initiative.The costs the tribunal may award may be awarded at any stage of the proceeding or after the proceeding has ended.
If the tribunal awards costs during a proceeding, the tribunal may order that the costs not be assessed until the proceeding ends.
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.
A party to a proceeding is not entitled to costs merely because—
(a) the party was the beneficiary of an order of the tribunal;
or
(b) the party was legally represented at the proceeding.
The power of the tribunal to award costs under this section is in addition to the tribunal’s power to award costs under another provision of this or another Act.
The tribunal may direct that costs be assessed—
(a) in the way decided by a presiding case manager; or
(b) by a person appointed by the tribunal.
Section 71(4) of the CCT Act, in particular, sets out those matters the Tribunal can have regard to in deciding whether to award costs i.e. warrant a departure from the “primary principle” that each party bear their own costs. It is not exhaustive. These are addressed as follows:
(a) The outcome of the proceeding
The award in favour of the applicants was moderate by any measure and confined to defective and/or incomplete work rather than demolition as asserted prior to and at hearing. The respondent maintained its counter claim of some $35,000 during the course of the proceeding and at hearing. Nevertheless much of the hearing was taken up with defects/incomplete works rather than evidence of the requirement for demolition. In particular the bulk of expert evidence subsequent to November 2005 (apart from Mr Griffiths report re demolition) confirmed defects/incomplete works and rectification). Both parties could argue success of sorts. Neither party was so overwhelmingly successful such as to make a costs order on the basis of success.
(b) The conduct of the parties to the proceeding before and during the proceeding
It is clear from the record that this proceeding was an old matter having taken some five years from date of issue to hearing. That delay was largely due to the slowness with which the applicants prosecuted their application. They went to extraordinary lengths presenting numerous statements and reports which in the early stages were directed to the applicants’ demolition claim but at the same time exhibited a reluctance to produce material which did not favour their cause, that ultimately leading to a costs order against them (Supreme Court scale) at the direction hearing that took place on 27 June 2008 and the inclusion of a guillotine provision against them. That order (after amendment) set the application down for a ten day hearing in October 2008. Further material filed by the applicants and the respondent’s need to respond lead to a further directions hearing on 11 September 2008 at which consent orders were made for the filing of amended claim, response and counterclaim. All previous directions were vacated and costs reserved with no order as to the costs thrown away by reason of the vacation of the October trial dates. Subsequently on 31 March 2009 the Tribunal ordered joint experts reports by engineers Fox and Leddy and building consultants Dyer and Griffiths. On 30 September 2009 the Tribunal ordered the drafting of a joint statement of agreed facts and list of issues. Due to change of applicants’ legal representation the application was set down for a compulsory conference on 14 April 2010. That conference failed to resolve the issues. After one further and final directions hearing the application was allotted a reduced six days for hearing. The respondent having submitted an offer of $20,000 on 20 July 2010 contended that in reality that offer would have constituted a better result than the $31,878.26 awarded. The correct comparison in this instance is as between offer and award. As the offer was less than the award the respondent’s argument for costs subsequent to date of offer is not made out. The applicants did not reduce or amend their claim particularly after the 30 November 2005 experts’ agreement. It is the case however defects requiring rectification were the subject of ongoing dispute. If that experts’ agreement did not identify defects the respondent could have argued that the applicants’ persistence with their claim was unwarranted. As it transpired the applicants’ case was weakened. During 2006-2008 the applicants failed to progress their claim. Nor however did that hiatus do the respondent any credit. There is nothing so reprehensible in the conduct of the parties such as to weigh in favour of a costs order in favour of either the applicants or the respondent.
(c) The nature and complexity of the proceeding
By consent order made 19 May 2008 the parties were permitted legal representation. Despite such order being a consent order the Tribunal must have been satisfied that engaging legal representation was justified. That alone could enliven “the discretion to award costs in favour of the successful party, at least in the absence of any countervailing consideration”[1]. But the respondent was required to prepare for the hearing of the whole of the applicants’ complex claim of over half a million dollars. A number of experts particularly building and engineering were involved in the course of the proceeding and at hearing. The award was a minor monetary success, hardly what one might term a resounding success, a pyrrhic victory restricted to matters of rectification the bulk of which were identified in November 2005. Such is a countervailing consideration that neutralises any discretion to award costs in the applicants’ favour yet insufficient to give rise to a costs order in the respondent’s favour on the basis of complexity and legal representation.
[1] Tamawood Ltd & Anor v Paans [2005] QCA 111 [15 April 2005].
(d) The relative strengths of the claims made by each of the parties to the proceeding
The applicants persisted with their claim under multiple heads of damage a major one of which was demolition and reconstruction. That the claim was modified and reduced at the hearing’s conclusion would be of little comfort to the respondent which pursued its defence of the demolition issue and all other heads of damage with greater vigour than the applicants. A number of witnesses gave evidence in respect of all the heads of damage sought with resultant shortcomings leading the applicants to revise their claim down. The strength of the applicants’ case is to be largely measured in terms of a minor monetary success and counter claim dismissal. The strength of the respondent’s case is to be largely measured in terms of diminution of the applicants’ claim bearing in mind the dismissal of its own counter claim. There is nothing so overwhelming or divergent in the strength of claim and counter claim such as to warrant departure from the primary principle.
(e) Any contravention of an Act by a party to a proceeding
[10] No finding was made to the effect that the respondent breached provisions of the Domestic Building Contracts Act 2000. There was no contravention of any Act requiring consideration on the issue of costs.
(f) Anything else the Tribunal considers relevant
[11] The finding that the respondent was not entitled to terminate the contract was based on substantial breach. That conclusion was reached after closely considering multiple contractual issues. There is nothing about that finding nor in the decision that says the respondent’s purported termination of the contract was frivolous.
Conclusion
[12] The Tribunal finds there is no compelling factor that warrants a costs order either way.
Order
[13] Each party is to bear their own costs of the proceedings.
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