A L Builders Pty Ltd v Fatseas [2015] QCAT 273

CITATION: A L Builders Pty Ltd v Fatseas [2015] QCAT 273 PARTIES: A L Builders Pty Ltd (Applicant) v Nicholas Fatseas and Tricia Fatseas (Respondents) APPLICATION NUMBER: BDL302-12 MATTER TYPE: Building matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member King-Scott DELIVERED ON: 10 July 2015 DELIVERED AT: Brisbane ORDERS MADE: The Applicant pay to the Respondents as agreed, or failing agreement within 28 days hereof, as assessed by Queensland Independent Costs Services, Costs Assessors: [1] The Respondents’ costs of the application on a standard basis, by reference to the District Court of Queensland Scale of Costs; [2] The Respondents’ costs of the Magistrates Court of Queensland at Brisbane proceeding being M10308/11 reserved to the Tribunal by order of the Magistrates Court of Queensland on 25 September 2012 on a standard basis on the Magistrates Court Scale of Costs; [3] The Respondents’ costs reserved by order of the Tribunal in proceedings made 21 March 2014 and 24 March 2014 on a standard basis by reference to the District Court of Queensland Scale of Costs; [4] Half of the Respondents’ costs of the -- 1 of 4 -- 2 counterclaim on a standard basis by reference to the District Court of Queensland Scale of Costs; The assessed amounts to be paid within 28 days of delivery of such assessments. CATCHWORDS: BUILDING MATTERS - costs – building dispute – award of costs outside the usual rule of the Tribunal that each party bear their own costs – success on some issues – exercise of discretion 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 (Qld) (QCAT Act). REASONS FOR DECISION [1] The decision in this matter was delivered on 8 May 2015. I dismissed the Applicant/Builder’s application for $384,494.85. I allowed only $191,559.86 of the Respondent/Owners’ counterclaim of $1,697,630.80.1 I directed the parties file their submissions as to costs. Those submissions have been filed within the time limits directed. [2] The Applicant/Builder [for convenience I will hereinafter refer to the parties as Owner and Builder] failed in its application which was for moneys due under the contract, essentially on the basis of accounting errors. It was apparent on the material that the Owners had paid all of the amounts outstanding and more. [3] A significant amount of time was spent on the issue of whether the contract between the parties was a fixed price contract as alleged by the Owners, or a costs plus contract as alleged by the Builder. On this issue, I found for the Builder, but it was in a sense a pyrrhic victory, as it recovered nothing. [4] On the other hand, a substantial part of the counterclaim which I disallowed may have been recoverable had I found it was a fixed price contract. [5] It was agreed by all parties that the matter was a complex and difficult building dispute. It certainly warranted legal representation and representation by counsel. [6] Section 77 of the Queensland Building & Construction Commission Act 1991 (Qld) displaces the usual order in Tribunal proceedings that each 1 There was also an unquantified claim for damages for distress and inconvenience that was disallowed. -- 2 of 4 -- 3 party bear their own costs.2 The general rule about costs is thereby incorporated into building disputes before the Tribunal.3 The general rule is that a successful party is entitled to procure its costs against the other party. That is, costs should follow the event. [7] That might not be appropriate in some instances, such as the delinquent behaviour of the winning party, or the pyrrhic nature of the win.4 The Tribunal has a discretion. [8] A lot of hearing time was directed to issues such as the nature of the contract and the principal defects such as the driveway, Travertine tiles and water leaks / waterproofing. [9] The Builder was successful on the nature of the contract and the driveway and water leaks / waterproofing issues. The Owners were successful on the Travertine tile issue and some other defects. [10] The Builder tried to have the issue of the nature of the contract, that is, whether it was a fixed contract or a costs plus contract, determined summarily. It failed at first instance.5 [11] It appealed and failed on appeal.6 [12] The Owners were awarded costs on the Supreme Court scale on a standard basis for the Appeal only. The costs of the initial hearing were reserved. [13] The Builder initially brought proceedings in the Magistrates Court. Those proceedings were transferred to the Tribunal. The costs were reserved to the Tribunal. [14] The Builder’s claim for moneys owing under the contract failed because of the poor state of the Builder’s accounts. As I found, on a detailed analysis by the Owners’ legal representatives, it became apparent that nothing was owing. However, the Builder was successful in proving that the contract was a costs plus contract, which had some effect on the Owners’ success in the counterclaim. [15] It is quite clear from the reasons for the decision, and despite my findings as to the credibility of the principal witnesses, that the decision as to the nature of the contract could only have been properly determined after a full hearing. It was inappropriate to have it determined summarily. For that reason, I am of the opinion the Owners should recover their costs of 2 Lyons v Dreamstarter Pty Ltd [2012] QCATA 71. 3 A L Builders Pty Ltd v Nicholas Fatseas and Tricia Fatseas (No 2) [2014] QCATA 319. 4 See rules 681(1) and 684 Uniform Civil Procedure Rules 1999. Those rules do not apply to the QCAT Act but they do provide some assistance in determining when and what awards of costs should be made in the interests of justice. See QCAT Act s.102(1). Colburt v Beard (1992) 2 Qd R 67. 5 A L Builders Pty Ltd v Nicholas Fatseas and Tricia Fatseas [2014] QCAT 092. 6 A L Builders Pty Ltd v Nicholas Fatseas and Tricia Fatseas [2014] QCATA 171. -- 3 of 4 -- 4 the hearing before Member Favell7. Those costs should be on a standard basis on the District Court scale. [16] In my opinion, the Owners should also recover the costs of defending the application and I allow those costs on a standard basis on the District Court scale. In addition, I order that the Builder pay the Owners the reserved costs of the Magistrates Court proceeding on a standard basis on appropriate Magistrates Court scale. [17] With respect to the counterclaim, as I observed earlier, the Owners failed on a number of substantial issues. It was observed by Mr Bowden of Counsel for the Builder in his submissions in relation to costs that out of the 130 claims the Owners advanced, they failed on 92, as well as failing in their claim for damages for distress and inconvenience. I agree they failed on many of their claims. [18] Taking all of these matters into account and to minimise the difficulty that the costs assessor would have if I directed costs to be paid on success or failure on individual issues, in the exercise of my discretion, I will direct that the Owners recover half only of the costs of the counterclaim to be assessed on a standard basis on the District Court scale. [19] I order Applicant pay to the Respondents as agreed, or failing agreement within 28 days hereof, as assessed by Queensland Independent Costs Services, Costs Assessors: a) The Respondents’ costs of the application on a standard basis, by reference to the District Court of Queensland Scale of Costs; b) The Respondents’ costs of the Magistrates Court of Queensland at Brisbane proceeding being M10308/11 reserved to the Tribunal by order of the Magistrates Court of Queensland on 25 September 2012 on a standard basis on the Magistrates Court Scale of Costs; c) The Respondents’ costs reserved by order of the Tribunal in proceedings made 21 March 2014 and 24 March 2014 on a standard basis by reference to the District Court of Queensland Scale of Costs; d) Half of the Respondents’ costs of the counterclaim on a standard basis by reference to the District Court of Queensland Scale of Costs; The assessed amounts to be paid within 28 days of delivery of such assessments. 7 A L Builders Pty Ltd v Fatseas [2014] QCAT 92. -- 4 of 4 --