Contract Constructions Pty Ltd v Bartlett [2015] QCAT 72

CITATION: Contract Constructions Pty Ltd v Bartlett [2015] QCAT 72 PARTIES: Contrast Constructions Pty Ltd (Applicant) v Mr Brett Andrew Bartlett (Respondent) APPLICATION NUMBER: BD469-08 MATTER TYPE: Building matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Browne DELIVERED ON: 4 March 2015 DELIVERED AT: Brisbane ORDERS MADE: 1. Each party to bear their own costs of the proceedings. CATCHWORDS: COSTS – where partial success at hearing – whether the broad general discretion to award costs should be exercised Queensland Building and Construction Commission Act 1991 (Qld), s 77 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102 Contrast Constructions Pty Ltd v Bartlett [2013] QCAT 322 Contrast Constructions Pty Ltd v Bartlett [2013] QCAT 399 Contrast Constructions Pty Ltd v Bartlett [2014] QCATA 262 Lyons v Dreamstarter Pty Ltd [2011] QCATA 142, cited Queensland Building Services Authority v Johnston [2011] QCATA 265, cited Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412, cited -- 1 of 7 -- 2 Tamawood Ltd & Anor v Paans [2005] QCA 111, cited APPEARANCES: 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). REPRESENTATIVES: APPLICANT: Contrast Constructions Pty Ltd represented by Mr G Robinson of Counsel instructed by Mills Oakley Lawyers RESPONDENT: Mr Brett Bartlett represented by Mr P Hackett of Counsel instructed by Smith Leonard Fahey Lawyers REASONS FOR DECISION [1] This building dispute was commenced in the former Commercial and Consumer Tribunal in September 2009.1 The matter proceeded to hearing before me in QCAT over five days and final orders were made on 5 July 2013.2 [2] Both parties filed an application for leave to appeal or appeal the Tribunal’s decision. On 9 September 2014, the Appeal Tribunal determined the appeal on the papers.3 The appeals were allowed in part and an order made that the amount awarded to Mr Bartlett (initially) in the sum of $218,940.17 be reduced by $2,900.00 to the amount of $216,040.17 plus interest.4 The Appeal Tribunal also considered the issue of costs in relation to the appeal and determined that each party bear their own costs.5 [3] Mr Bartlett now seeks orders from the Tribunal that Contrast Constructions pay Mr Bartlett’s costs of the proceedings (for the building dispute) to be assessed upon the Supreme Court Scale, if not agreed.6 Contrast Constructions do not agree with the orders sought by Mr Bartlett. Contrast 1 The Commercial and Consumer Tribunal was abolished with the introduction of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) on 1 December 2009. 2 Contrast Constructions Pty Ltd v Bartlett [2013] QCAT 322. On 5 August 2013 an amended order was made - see Contrast Constructions Pty Ltd v Bartlett [2013] QCAT 399. 3 Contrast Constructions Pty Ltd v Bartlett [2014] QCATA 262. 4 Interest was allowed on the sum of $216,040.17 at the rate of 10% per annum compounding monthly between 15 December 2009 and 4 February 2013. 5 Contrast Constructions Pty Ltd v Bartlett [2014] QCATA 262, [135]. 6 Outline of costs by Mr Bartlett filed 25 November 2013, [13]. -- 2 of 7 -- 3 Constructions contend that the appropriate order is that there be no order as to costs.7 Power to award costs under the QCAT Act [4] The building dispute proceeded before QCAT as a pending proceeding for the purposes of s 245 of the QCAT Act. In Queensland Building Services Authority v Johnston8 the Appeal Tribunal said that claims for costs in a pending proceeding ought to be determined by application of the QCAT Act rather than the costs provisions of the previous Commercial and Consumer Tribunal Act 2003. [5] The relevant costs provisions under the QCAT Act are contained in sections 100 and 102. The starting point in relation to costs under the QCAT Act is that 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’.9 [6] There is power under the Queensland Building and Construction Commission Act 1991 (QBCC Act) for the Tribunal to make orders to ‘resolve the [building] dispute’ and the Tribunal may exercise the power to ‘award costs’.10 [7] The power to make an order for costs under s 77 of the QBCC Act involves the exercise of a discretion. In Lyons v Dreamstarter Pty Ltd11 the Appeal Tribunal said that s 77 does confer jurisdiction on the Tribunal and that the Tribunal may make an order for costs. The Appeal Tribunal said in Lyon’s case that s 77 ‘does not provide further guidance or prescription about the occasions for or conditions of exercise of that power’.12 The exercise of a broad general discretion must be ‘exercised judicially’. The then Deputy President, Judge Kingham said: A jurisdiction given in general terms allows the Tribunal to make an order as to costs that is justified in the circumstances. It is a broad general discretion which must be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation.13 [8] In Tamawood Ltd & Anor v Paans14 the Court of Appeal said that in determining costs under the former Commercial and Consumer Tribunal Act 2003 that ‘in the absence of any countervailing consideration’15 and in circumstances where legal representation was justified in complex proceedings, it would not be in the interests of justice to preclude the 7 Submissions in reply on behalf of the applicant filed 9 December 2013. 8 [2011] QCATA 264. 9 QCAT Act s 100. 10 Queensland Building and Construction Commission Act 1991 s 77. 11 QCATA 142. 12 Ibid, [32]. 13 Lyon’s case, ibid, [33]. See Oshlak v Rickmond River Council (1998) 193 CLR 72, [88]. 14 [2005] QCA 111. 15 Ibid, [30]. -- 3 of 7 -- 4 ‘successful party from recovering costs that were reasonably necessary to achieve a satisfactory outcome’.16 Keane JA said: There is a clear distinction, in terms of the interest of achieving justice, between the mere fact of having representation and the fact of having reasonably obtained that representation because of the complexity of the case. In the absence of countervailing considerations, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome.17 [9] In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)18 the Appeal Tribunal said that the principles in Tamawood’s case do provide guidance about the ‘circumstances in which it may be in the interests of justice’ to award costs against another party in this Tribunal (under the QCAT Act).19 The then President, Justice Wilson said: …[Tamawood’s case was] a case decided under the costs provision of the now repealed Commercial and Consumer Tribunal Act 2003 (CCT Act). Although those provisions are not analogous to the equivalent provisions under the QCAT Act, 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 [10] In Ralacom’s case Justice Wilson also considered the view expressed by Keane JA in Tamawood’s case about whether it would be in the interests of justice to not award costs to a successful party in circumstances where it was reasonably necessary to achieve a satisfactory outcome. Justice Wilson said: …Keane JA was of the view that where the complexity of the matter justified legal representation, it would not be in the interests of justice to bar the successful party from recovering costs that were reasonably necessary to achieve a satisfactory outcome.21 [11] I accept that, consistent with the view expressed by Keane JA in Tamawood’s case, whether it was necessary for a successful party to reasonably incur the cost of legal representation to achieve a satisfactory outcome is a relevant consideration in the exercise of the broad general discretion under s 77 of the QBCC Act. [12] In this case Mr Bartlett says that Contrast Constructions did not have success on all of its claims and that Mr Bartlett was (save for the counter- claim for liquidated damages) ‘largely successful on all issues whether arising by the claim or counterclaim’.22 Mr Bartlett says the defence filed included a ‘set-off in respect of the matters the subject of the 16 Ibid, [33]. 17 Ibid, [33]. 18 [2010] QCAT 412. 19 See Ralacom’s case, [22]. 20 Ralacom’s case, [21]. 21 Ralacom’s case, [26]. See Tamawood’s case, [33]. 22 Outline on costs in reply by Mr Bartlett filed on 9 December 2013, [8]. -- 4 of 7 -- 5 counterclaim’.23 He says the set-off succeeded and resulted in a net payment to Mr Bartlett. He says the costs orders proposed by Contrast Constructions (that there be no order as to costs) ‘would provide for a perverse outcome in those circumstances’.24 [13] Mr Bartlett also says that the first day of the hearing resulted in amendments being made by Contrast Constructions to the time adjustment claims and that ‘viewed objectively’ Contrast Constructions has success on its claim in the percentage of ‘about’ 21.7%.25 Mr Bartlett says that success was ‘entirely extinguished by Mr Bartlett’s entitlement to set-off and his counterclaim’.26 [14] There is a further consideration raised by Mr Bartlett in relation to the orders sought for costs and that is at the commencement of the hearing Contrast Constructions admitted that it owed Mr Bartlett money.27 Mr Bartlett also refers to several admissions made by Mr Durkin (for Contrast Constructions) at the hearing, for example, in relation to abandoning the site. Mr Bartlett says he was put to considerable expense in bringing the matter to hearing where it was ‘admitted that he was owed monies’.28 Mr Bartlett also says that Contrast Constructions commenced proceedings (with amendments to the pleadings) to seek the sum of $318,185.24. The judgment against Contrast Constructions was for $219,162.84 being a difference of $537,348.08.29 Should an order for costs be made? [15] I accept the submissions made by Mr Bartlett about the nature of the proceedings. As identified in the Tribunal’s reasons (for the building dispute) the proceedings were complex and protracted, there was a voluminous amount of material; and the hearing took five days with an additional hearing day. The Tribunal said: There were many disputed issues during construction of the house, a change in architect, and issues about incomplete and defective works. The parties could not resolve the issues and proceedings were commenced in the former Commercial and Consumer Tribunal in September 2009... The matter proceeded to a hearing before QCAT over 5 days [and an additional day] and both the builder and Mr Bartlett were legally represented. The material before the Tribunal was voluminous including 38 exhibits which were tendered at the hearing. On the second day of the hearing the Tribunal made orders in relation to an application to strike out and leave to adduce further evidence…30 [16] I do not accept Mr Bartlett’s submission that a costs order in the terms proposed by Contrast Constructions (no order as to costs) would provide a ‘perverse outcome’ in all of the circumstances. 23 Ibid, [9]. 24 Ibid, [9]. 25 Ibid, [11]. 26 Ibid, [11]. 27 Ibid, [13]. 28 Ibid, [15]. 29 Ibid. 30 Contrast Constructions decision [2013] QCAT 322, [6] and [7]. -- 5 of 7 -- 6 [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 who seeks an order that Contrast Constructions pay his costs has been successful and whether such costs were ‘reasonably necessary to achieve a satisfactory outcome’.31 [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 counterclaim. 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 $190,197.00.32 The Tribunal made the ultimate finding that Mr Bartlett’s claim for liquidated damages ‘must fail’.33 [19] Mr Bartlett was largely successful in his claim for the assessment of the defective and incomplete works. However, the findings made by the Tribunal about the assessments were based on the evidence given at the hearing by the expert witnesses in relation to the assessment of the outstanding works including incomplete and defective items. The expert witnesses had previously attended an expert conclave and prepared a joint report identifying items agreed and items in dispute. The expert witnesses did not agree on all of the assessed items and there were still a number of disputed items that had to be determined by the Tribunal at the hearing.34 At the hearing further concessions were made by both of the expert witnesses about some of the disputed items. However, there were still a number of disputed items (assessed by the experts) to be determined by the Tribunal at the hearing.35 [20] The Tribunal also made findings about the conduct of the contracting parties and the contract based on the evidence before it including the oral evidence given at the hearing by Mr Durkin and Mr Thompson for Contrast Constructions. The oral evidence of Mr Thompson was relevant to the assessment of the claims made by Contrast Constructions for which they were partially successful for adjustment of time costs (ATC) totalling the 31 Ibid, [33]. See Ralacom’s case, [27]. 32 Contrast Constructions decision [2013] QCAT 322, [60] and see Appeal decision, [17]. 33 Contrast Constructions decision ibid, [80] and [81] and see Appeal decision, [52] to [67]. 34 Contrast Constructions decision [2013] QCAT 322, [84]. 35 Ibid, see [84]. -- 6 of 7 -- 7 amount of $236,306.00.36 The Tribunal assessed the total claim made by Contrast Constructions for ATC in the amount of $59,143.00. [21] I have also considered the offers of settlement referred to by Mr Bartlett in his written submissions that he says were made by Contrast Constructions on 23 December 2010 and 18 January 2013 respectively. The offers require Mr Bartlett to pay money to Contrast Constructions.37 [22] I am not satisfied that the offers of settlement give ‘some indication’ as to why the matter was required to be litigated and why the interests of justice require costs to be paid to Mr Bartlett by Contrast Constructions, as submitted by Mr Bartlett.38 As I have already said there were many contested issues to be determined by the Tribunal at the hearing and the Tribunal made findings based on the evidence including the oral evidence given at the hearing. The consideration of whether one or both of the parties had prior to the hearing made a genuine attempt to resolve the proceedings is but one of the factors to be considered by the Tribunal in exercising the broad discretion to award costs under s 77 of the QBCC Act. [23] In this case, both of the parties had some success with their respective claims. Both of the parties have been put to expense in relation to the proceedings. Both of the parties were legally represented in the proceedings. I am not satisfied that Mr Bartlett was the ‘successful party’ and that in all of the circumstances the legal costs in proceeding to a hearing were reasonably necessary to achieve a satisfactory outcome. I am satisfied that the appropriate order for costs in relation to the proceedings is that each party bear its own costs. 36 Submissions on costs on behalf of the applicant filed 25 November 2013, [8]. 37 The offer made on 23 December 2010 required Mr Bartlett to pay Contrast Constructions the amount of $50,000.00 and the offer made on 18 January 2013 required Mr Bartlett to pay Contrast Constructions the amount of $20,000.00. See Outline of costs by Mr Bartlett filed on 25 November 2013, [12]. 38 Outline of costs by Mr Bartlett filed on 25 November 2013, [12]. -- 7 of 7 --