Bartlett v Contrast Constructions Pty Ltd [2016] QCATA 199

CITATION: Bartlett v Contrast Constructions Pty Ltd [2016] QCATA 199 PARTIES: Brett Andrew Bartlett (Applicant/Appellant) v Contrast Constructions Pty Ltd (Respondent) APPLICATION NUMBER: APL144-15 MATTER TYPE: Appeals HEARING DATE: On the Papers HEARD AT: On the Papers DECISION OF: Senior Member O’Callaghan Member Paratz DELIVERED ON: 14 December 2016 DELIVERED AT: Brisbane ORDERS MADE: 1. Leave to Appeal is granted. 2. The Appeal is allowed. 3. Contrast Constructions Pty Ltd is to pay the costs of Brett Andrew Bartlett in BD469-08 on the District Court scale on a standard basis. 4. Brett Andrew Bartlett shall deliver to Contrast Constructions Pty Ltd, a realistic estimate of the costs claimed, including an explanation of the basis of the estimate, sufficiently detailed to facilitate some broad examination of its reasonableness, having regard to the District Court scale of costs. 5. If Brett Andrew Bartlett and Contrast Constructions Pty Ltd are unable to agree on an amount of the costs within 14 days of the delivery of the estimate of costs, the costs shall be assessed by an assessor to be nominated by the Registrar upon request by either party. -- 1 of 11 -- 2 6. Contrast Constructions Pty Ltd shall pay the costs of Brett Andrew Bartlett (as agreed or assessed) within 14 days of such agreement or assessment. CATCHWORDS: APPEALS – PROCEDURE- QUEENSLAND – POWERS OF COURT - COSTS ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL Where the Court of Appeal allowed liquidated damages in a building claim – Where the Member had found that each party should bear their own costs – Where the decision of the Court of Appeal significantly altered the balance of success in the action between the parties - Where the matter was a complex building dispute –Where both parties were represented by Solicitors and Counsel - Whether the Tribunal should exercise its discretion to award costs Tamawood Pty Ltd & Anor v Paans [2005] QCA 111 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Contrast Constructions Pty Ltd v Bartlett [2014] QCATA 262 Contrast Constructions Pty Ltd v Bartlett [2015] QCAT 072 Bartlett v Contrast Constructions Pty Ltd [2016] QCA 119 Ryan v Worthington Simmons Builders [2016] QCATA 116 APPEARANCES and REPRESENTATION (if any): APPLICANT: Smith Leonard Fahey Lawyers RESPONDENT: Mills Oakley Lawyers 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 -- 2 of 11 -- 3 Senior Member O’Callaghan [1] In this matter the Appeal Tribunal consisted of Mr. Paratz, QCAT Member and me. I have had the benefit of reading his reasons in draft. I agree with his reasons, and his conclusions, and the order he proposes. Mr. Paratz [2] This is an Appeal as to costs. It is part of a long history of protracted proceedings in relation to the building of a residential house at St. Lucia in Brisbane between 2006 and 2009. The owner was Mr Bartlett, and Contrast Constructions Pty Ltd (‘Contrast’) was the builder. [3] The initial proceedings were commenced in the former Commercial and Consumer Tribunal in September 2009. Proceedings then continued in this Tribunal1, the matter was heard over five days from 4 February 2013, and on 1 July 2013, and a decision was delivered on 5 July 2013. [4] An Appeal against the primary finding was heard by the Appeal Tribunal on 9 September 20142. An order was made that Contrast pay Mr Bartlett the amount of $216,040.17 plus interest, and that each party bear their own costs of the Appeal. [5] Subsequent to that decision, Mr Bartlett sought orders from the original Tribunal that Contrast pay his costs of the proceedings on the Supreme Court Scale. A decision in relation to that Application was made by the original Tribunal on 4 March 20153 that each party was to bear their own costs of the proceedings. [6] Mr Bartlett then instituted this Appeal on 7 April 2015 to the Appeal Tribunal, from that decision of the Tribunal of 4 March 2015 as to the costs of the initial proceedings. [7] Concurrently, Mr Bartlett appealed the decision of the Appeal Tribunal as to the substantive issues. That Appeal was heard by the Court of Appeal on 3 August 2015. [8] A Direction was made in this Appeal on 18 August 2015, that this Appeal Tribunal would not deliver its decision in this Appeal until receipt of the Court of Appeal decision in the substantive matter. [9] The decision of the Court of Appeal as to the substantive issues was delivered on 4 May 2016. The Orders of the Court of Appeal were as follows:- 1. Grant leave to appeal. 1 Case Code BD469-08. 2 Contrast Constructions Pty Ltd v Bartlett [2014] QCATA 262. 3 Contrast Constructions Pty Ltd v Bartlett [2015] QCAT. -- 3 of 11 -- 4 2. Allow the appeal 3. Set aside orders 2 and 3 made by the Appeal Tribunal on 9 September 2014 and instead order as follows: (i) Set aside the order made in the Tribunal on 5 August 2013 and order instead that Contrast Constructions Pty Ltd is to pay Mr Bartlett the sum of $402,037.17, plus interest on that sum in an amount to be fixed by the Court. 4. Direct that, in the event that the parties do not agree upon the amount of interest, the parties file within 14 days a written submission limited to two pages as to the calculation and amount of interest. 5. The respondent pay the appellant’s costs of the application for leave to appeal and of the appeal, including the costs associated with the respondent’s notice of contention. [10] Relevantly, in essence, the Court of Appeal found that the Member at first instance, and the Appeal Tribunal, made errors of law in finding that Mr Bartlett was not entitled to liquidated damages. That finding results in an increase in the award to Mr Bartlett of $185,000.00. [11] Fraser JA said as to costs of the substantive appeal that4: [84] The Appeal Tribunal allowed in part both the appeal by Mr Bartlett and an appeal by the builder. In the result the amount of the award by the Member ($218,940.17 plus interest of $130,363.36) was reduced by $2,900 (for claim) to $21,604.17 plus interest at 10 per cent per annum compounding monthly between 15 December 2009 and 4 February 2013. The addition of $185,997 for claim results in a total amount for claim of $402,037.17. The effect of the third ground of Mr Bartlett’s appeal to this Court is that compound interest as provided by the contract should run from a date or dates which differ from the date specified by the Member (the date of termination). The builder did not contradict Mr Bartlett’s argument that compound interest should run from a date earlier than that which the Member fixed, but the Member’s order did not comprehend liquidated damages. If the parties cannot resolve this issue by agreement, they should have the opportunity of making further submissions upon. [85] Upon the footing that Mr Bartlett’s appeal to this Court should substantially succeed, he should have the costs of his application and appeal in this Court. [86] Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 states the general rule that: “Other than is provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceeding.” Section 102 of that Act empowers the Tribunal to make an order requiring a party to a proceeding to pay all or some of the costs of another party if the Tribunal considers that the interests of justice require it. The Appeal Tribunal considered that there 4 Bartlett v Contrast Constructions Pty Ltd [2016] QCA 119 at paras 84 to 86. -- 4 of 11 -- 5 had been limited success by each party and that it was appropriate that each party bear their own costs. The orders I propose would very substantially increase the magnitude of Mr Bartlett’s success, but it would remain the case that each party succeeded to some extent in the Appeal Tribunal. It is also relevant that one of the errors of law I have found was not articulated in Mr Bartlett’s argument in that tribunal. In those circumstances I consider that there should be no order as to costs in the Appeal Tribunal. [12] This is the decision on the Appeal as to the costs of the proceeding in the Tribunal. Provisions as to costs in building disputes in the Tribunal [13] Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 provides the basic rule as to costs in the Tribunal, that each party bears their own costs: (100) Each party usually bears own costs 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 proceeding. [14] That basic rule is subject to the provisions of Section 102 which provides that the Tribunal may make an order as to costs in the interests of justice, having regard to certain factors. That section relevantly provides as follows: (102) Costs against party in interests of justice (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 …. (e) the financial circumstances of the parties to the proceeding; (f) anything else the tribunal considers relevant -- 5 of 11 -- 6 [15] In building disputes however, a specific provision as to costs is contained in Section 77(3)(h) of the Queensland Building and Construction Commission Act (Qld) 1991 which provides that the Tribunal may award costs in deciding a building dispute. [16] The Tribunal has discussed the principles applicable in a costs application in a building dispute in these terms5:- [13] The Tribunal’s discretion to award costs in a building dispute is a broader and more general discretion than the one conferred by the QCAT Act because there is an express power to award costs conferred by the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’), the relevant enabling Act. Unlike in the QCAT Act, there is no strong contra-indication in s 77 of the QBCC Act against a costs order. [14] This appeal arises from a building dispute. The Appeal Tribunal has previously expressly considered whether the power to award costs conferred by the QBCC Act extends to an appeal or whether it is confined to the originating proceeding. I agree that the Appeal Tribunal’s power to award costs arises under s77 of the QBCC Act. It remains necessary to consider whether an award of costs is justified in the circumstances. [15] In Lyons v Dreamstarter Pty Ltd the then President, Justice Wilson stated at [11]: The discretion to award costs starts with the proposition that it is just and reasonable that a party who causes another to incur costs should reimburse the other party for them. Otherwise, the factors affecting the discretion will vary in each case. [16] The Appeal Tribunal, in exercising its general discretion to award costs, may consider the factors referred to in s 102(3) of the QCAT Act. [17] The then Deputy President, Judge Kingham in Ascot v Nursing & Midwifery Board of Australia16 stated at [9]: The considerations identified in s 102(3) are not grounds for awarding costs. They are factors that may be taken into account in determining whether, in a particular case, the interests of justice require the tribunal to make a costs order. [18] Those considerations are largely in the nature of what may be regarded as ‘entitling’ or ‘disentitling’ factors. Submissions of the Applicant Owner [17] Submissions were first filed in this Appeal by the Applicant owner on 27 May 2015. 5 Ryan v Worthington Simmons Builders [2016] QCATA 116. -- 6 of 11 -- 7 [18] The owner submitted6 that the correct test as principles as to awarding of costs in the Tribunal was as set out by Keane JA in Tamawood Pty Ltd & Anor v Paans7. His Honour said: [30] First, the Tribunal found that each party was justified in engaging the services of legal representatives to assist them in the conduct and defence of what the Tribunal recognized to be complex proceedings. 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. The Tribunal erred in failing to appreciate the implication of this finding for an understanding of where the interests of justice lay in relation to the costs of the proceedings. [19] The owner referred to the decision of the President in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)8 and submits: 12. In Ralacom the President considered the applicability of the Tamawood decision in determining costs under the QCAT Act and said that 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’. [20] The owner submits that the principles in Tamawood and Ralacom were enlivened in this matter, and that some countervailing consideration would be required to deprive the owner of a costs order9; and that no countervailing consideration is identified by the learned Member. [21] Further submissions were filed after the decision of the Court of Appeal in the substantive appeal was handed down10. It is convenient to reproduce the central paragraphs of that submission: (4) The decision of the Court of Appeal allowed the applicant/appellant’s appeal in respect of liquidated damages (a claim which the Member wholly rejected). (5) As a consequence, the recovery by the applicant/appellant against the respondent was increased to the sum of $402,037.17 plus interest on that sum of $290,092.58. A copy of the Court of Appeal’s Order is attached. (6) There can in the circumstances following the Court of Appeal decision be no doubt that Mr Bartlett was the successful party and that any success the respondent had was very modest. (7) It is incorrect to submit, as the respondent’s solicitors do, that “the Court of Appeal’s position is closely analogous with the present circumstances”. The passage quoted did not seek to revisit the 6 Applicant/Appellants Further submissions filed 27 May 2015 at [19]. 7 [2005] QCA 111 at [30]. 8 [2010] QCAT 412 at [21]. 9 Applicant/Appellants Further submissions filed 27 May 2015 at [15]. 10 Applicant/Appellant’s supplementary submissions following the decision of the Court of Appeal. -- 7 of 11 -- 8 principles in Tamawood and Ralacom. Properly applied, those principles require an order for costs in favour of Mr Bartlett in respect of the proceedings. Submissions of the Respondent Builder [22] Submissions were first filed in this Appeal by the Respondent builder on 27 May 2015. [23] The builder notes11 that the President in Ralacom distinguished the principle expounded by Keane JA in Tamawood referred to above by stating: (27) That conclusion must, here, be considered in the light of the difference between s 70 of the CCT Act and s 100 of the QCAT Act. Section 70 speaks of a ‘main purpose’, but s 100 mandates that parties shall bear their own costs. Section 70 contains, within itself, a reference to the condition or circumstances in which the main purpose may be subsumed to the interests of justice; s 100 has no such proviso, although it appears later. [24] The builder submits that the finding by the member that the owner was not ‘largely successful’ was reasonable and that the owner has demonstrated no error at law or otherwise in that regard. [25] Further submissions were filed after the decision of the Court of Appeal in the substantive appeal was handed down12. [26] The builder notes that in the substantive appeal, that Fraser JA (with the president and North J agreeing) did not disturb the order of the Appeal Tribunal that there be no order as to costs, and submitted that: 4. Respectfully, the Court of Appeal’s position is closely analogous to the present circumstances where each of the parties succeeded to some extent at the hearing at first instance. It is submitted that there are no circumstances relevant to the ‘interests of justice’ as to the exercise of the discretion to award costs. 5. Contrast relies on its previous written submissions in the appeal. Discussion [27] The Tribunal always retains a discretion to order costs. Building disputes do not start from the position that each party bears their own costs. [28] For that reason, the submission of the owner that the effect of the decision in Tamawood is that costs must be awarded unless a countervailing reason is shown, is incorrect. 11 Respondent’s further submissions on costs filed on 17 June 2015 at [17]. 12 Respondent’s supplementary submissions on costs filed 11 May 2016. -- 8 of 11 -- 9 [29] The question for the Member was whether an award of costs to Mr Bartlett was justified in the circumstances. [30] In her decision in this matter the central considerations of the learned Member as to costs were as follows13: [18] In this case both of the parties were legally represented in the proceedings and both parties were partially successful in their respective claims. Mr Bartlett was not ‘largely successful’ on all issues whether arising by the claim or counter-claim. [31] The findings of the Court of Appeal had the effect of significantly altering the outcome to that at first instance. The Court of Appeal allowed liquidated damages of $185,997.00, which was an additional amount of approximately 85% on top of the amount of $218,940.17 allowed by the learned Member on the claim at first instance, and had the effect (together with interest of $290,092.58) of approximately doubling the gross amount awarded to the owner from a total of $349,303.55 to a total of $692,129.75. [32] The decision of the Court of Appeal therefore substantially altered the balance of success between the parties. [33] This was a complex, highly-contested matter conducted by both parties with the aid of Solicitors and Counsel. It has proceeded through several steps of appeal. In every respect it has resembled a piece of commercial litigation similar to that which may otherwise be found in the District Court or Supreme Court. [34] The Member at first instance found that the proceedings were complex and protracted, there was a voluminous amount of material, and the hearing took five days with an additional hearing day14, and she considered her exercise of discretion in these terms15: [17] In exercising the broad general discretion to award costs under s 77 of the QBCC Act I must consider the submissions made by Mr Bartlett in support of his application for costs in the context of all of the circumstances including amongst others (for example) the nature of the proceedings, the strengths and weaknesses of the claims made by both parties, whether one of the parties has acted in a way that unnecessarily disadvantages another party and any other matters relevant to the exercise of the broad general discretion to award costs. Consistent with the view expressed by Keane JA in Tamawood’s case I must also consider whether Mr Bartlett has been successful and whether such costs were ‘reasonably necessary to achieve a satisfactory outcome”. 13 Contrast Constructions Pty Ltd v Bartlett [2015] QCAT 072 at [18]. 14 ibid [15]. 15 Ibid [17]. -- 9 of 11 -- 10 [35] The member went on to find that both parties were partially successful in their respective claims, and importantly noted that16: In particular, Mr Bartlett was not successful in a significant part of his counter-claim for liquidated damages. Mr Bartlett claimed liquidated damages for the period from 21 March 2008 to 15 December 2009 (inclusive) plus interest that equals an amount of $190,197.00. The Tribunal made the ultimate finding that Mr Bartlett’s claim for liquidated damages ‘must fail’. [36] The Court of Appeal decision means that the members exercise of discretion to refuse Mr Bartlett’s cost application was based on incorrect findings. She took into account Mr Bartlett’s failure to succeed in his claim for liquidated damages in concluding that he was not largely successful in his claim. [37] The effect of the decision of the Court of Appeal however is to result in the owner being ‘largely successful’. [38] In considering whether a costs order should be made in light of the Court of Appeal decision, the question is whether it is justified to make a costs order. [39] The Tribunal deals with a very wide range of matters, from simple matters conducted by litigants in person for modest amounts of money, through to full-blown commercial-type disputes such as this. The discretion of the Tribunal will have regard to the nature of the dispute. [40] If this dispute had been brought in a court, then the usual rule that costs follow the event would apply, and the owner would undoubtedly be awarded costs in light of the result as determined by the Court of Appeal. [41] The owner will have accrued significant costs in pursuing his rights through the extensive hearing in this matter, which may bear heavily on the amounts he has been awarded as to the nett amount he finally receives as an outcome. It would not be in the interests of the justice if he was unable to ‘enjoy the fruits of his victory’ by having them substantially diminished by costs. [42] I consider that this a matter in which costs should be allowed, having regard to the complexity and nature of the proceedings, and the high level of success of the owner. [43] An appellant requires leave to appeal against a costs order pursuant to section 143(3)(iii) of the QCAT Act. Leave to appeal will ordinarily only be granted where there is some question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage; or, there is a reasonably arguable case of error in the primary decision and a reasonable prospect that the applicant would obtain further substantive relief. Another question sometimes asked is: is 16 Ibid [18]. -- 10 of 11 -- 11 leave necessary to correct a substantial injustice to the applicant, caused by some error? [44] I have found that the effect of the Court of Appeal decision is that the learned Member erred in the exercise of her discretion. A substantial injustice will result if leave is not granted. Leave to appeal is granted. [45] I therefore find that the appeal as to costs is allowed, and that Contrast Constructions Pty Ltd is to pay the costs of the hearing in the Tribunal to Brett Andrew Bartlett on a standard basis. The amount that the owner has recovered is within the monetary jurisdiction of the District Court. It is therefore appropriate to order that costs be assessed on that Scale. In an attempt to reduce further costs to the parties, I will make orders in accordance with the Practice Direction of that Court as to provision of estimates. [46] I order as to costs that :- 1. Contrast Constructions Pty Ltd is to pay the costs of Brett Andrew Bartlett on the District Court scale on a standard basis in BD469-08. 2. Brett Andrew Bartlett shall deliver to Contrast Constructions Pty Ltd, a realistic estimate of the costs claimed, including an explanation of the basis of the estimate, sufficiently detailed to facilitate some broad examination of its reasonableness, having regard to the District Court scale of costs. 5. If Brett Andrew Bartlett and Contrast Constructions Pty Ltd are unable to agree on an amount of the costs within 14 days of the delivery of the estimate of costs, the costs shall be assessed by an assessor to be nominated by the Registrar upon request by either party. 6. Contrast Constructions Pty Ltd shall pay the costs of Brett Andrew Bartlett (as agreed or assessed) within 14 days of such agreement or assessment. -- 11 of 11 --