Burnett & Heath v Fergbilt Pty Ltd [2015] QCATA 144

CITATION: Burnett & Heath v Fergbilt Pty Ltd [2015] QCATA 144 PARTIES: Greg Burnett and Jacqueline Heath (Appellants) v Fergbilt Pty Ltd (Respondent) APPLICATION NUMBER: APL480-14 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe OAM, Presiding Member Browne DELIVERED ON: 25 September 2015 DELIVERED AT: Brisbane ORDERS MADE: 1. Each party to bear their own costs of the proceedings. CATCHWORDS: COSTS – COSTS OF APPEAL – where partial success on appeal – where informal offer made to settle dispute – whether costs order should be made in the interests of justice Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 32, s 100, s 102 Queensland Civil and Administrative Tribunal Rules 2009 (Qld) r 86 Ralacom Pty Ltd Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412; cited REPRESENTATIVES: This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). -- 1 of 4 -- 2 REASONS FOR DECISION [1] On 21 April 2015, the Appeal Tribunal granted leave to appeal to Greg Burnett and Jacqueline Heath (the homeowners). The decision of the Tribunal made on 21 October 2012 was set aside and the appeal listed for further oral hearing.1 [2] On 15 July 2015, the Appeal Tribunal ordered the homeowners to pay Fergbilt Pty Ltd the sum of $5,492.00.2 [3] The homeowners now seek orders from the Appeal Tribunal that Fergbilt pay their costs of the application for leave to appeal or appeal.3 They say Fergbilt should be ordered to pay their costs because they were substantially successful in the appeal proceedings. The homeowners say they made an offer ‘during mediation’ to pay Fergbilt the sum of $5,000 to settle the dispute.4 They say that the interests of justice require a costs order to be made against Fergbilt. [4] Fergbilt says that the interests of justice do not require an order for costs to be made in this matter. Fergbilt says that ultimately it was successful in its claims for variations ‘albeit less than what was originally sought’.5 What is the Appeal Tribunal’s power to award costs? [5] The starting position in relation to costs is that each party to a proceeding must bear their own costs for the proceeding.6 [6] There is a discretion under s 102 of the QCAT Act to make an order ‘requiring a party to a proceeding to pay all or stated part of the costs of another party’ if it considers that the ‘interests of justice require it to make the order’. [7] The power to award costs under s 102 of the QCAT Act confers a ‘broad discretionary power on the decision-maker’.7 The question to be determined by the Appeal Tribunal is whether the circumstances relevant to the discretion contained in s 102(1) of the QCAT Act (the interests of justice) ‘point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100’.8 [8] There are relevant matters to be considered in determining whether it is in the interests of justice to award costs under s 102(3) of the QCAT Act including the nature and complexity of the dispute; the relative strengths of 1 Reasons for decision made on 21 April 2015. 2 Amended order made on 21 September 2015. 3 Application for miscellaneous matters filed on 21 July 2015. 4 Ibid. 5 Response to the application for miscellaneous matters filed by Fergbilt on 14 August 2015 in accordance with Directions made on 23 July 2015 6 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 100. 7 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412, [4]. 8 Ibid, [29]. -- 2 of 4 -- 3 the claims made by each of the parties; and, whether a party has acted in a way that unnecessarily disadvantages another party.9 Should the homeowners be awarded costs? [9] The homeowners were only partially successful on appeal because some of the contentions raised in the application for leave to appeal or appeal were refused and/or dismissed. [10] The homeowners were successful on appeal in relation to an error in the interpretation of the contract and variations that were not put in writing. The Appeal Tribunal found that the learned Member did not consider the contract in relation to findings made about variation 3.10 The Appeal Tribunal found that Fergbilt should not be entitled to claim for the concreting work in variation 7, which formed part of the contract. This was because, for the purposes of s 84 of the Domestic Building Contracts Act 2000 (Qld), it would not be fair to the homeowners to allow Fergbilt to claim for the work.11 [11] The homeowners raised contentions that were not successful on appeal about an amount claimed by Fergbilt in variation 6, that the learned Member was biased against them, and an order requiring them to pay Fergbilt for defective work. [12] The Appeal Tribunal found that it was open to the learned Member to find that Fergbilt can recover the amount of $2,940 for variation 6 and refused that ground of appeal.12 [13] The Appeal Tribunal dismissed the ground of appeal alleging bias.13 [14] The ground of appeal about paying for defective work was refused and the Appeal Tribunal found that the homeowners failed to establish there were circumstances in which new evidence should be permitted.14 [15] The application for miscellaneous matters seeking an order for costs attaches a copy of receipts and invoices payable for filing fees in relation to the appeal, the costs to obtain an audio recording of the hearing at first instance and legal costs.15 There is no formal offer in writing (of the $5,000) that the homeowners say was made to Fergbilt at ‘mediation’. [16] There is no evidence before us that a formal offer to settle the appeal proceedings has been made to Fergbilt for the purposes of the QCAT Act (in the interests of justice) and the additional power to award costs under 9 QCAT Act s 102(3). 10 Reasons made on 21 April 2015, [14]. 11 Ibid, [24]. 12 Ibid, [20]. 13 Ibid, [31]. 14 Ibid [32]-[37]. 15 Legal costs include an invoice in the amount of $726 payable to Jones Company Solicitors and Jennifer Sheenan of legal counsel. -- 3 of 4 -- 4 the QCAT Rules.16 Under that rule, a party that makes an offer to settle which is not accepted may recover costs if the decision of the tribunal is not more favourable to the other party than the offer.17 [17] The Homeowners say they offered to pay Fergbilt $5,000 at mediation. The Homeowners have had an opportunity to prepare the application and supporting material in relation to costs. There is no evidence before us that the offer was made in writing to Fergbilt and that the offer was made to resolve the appeal proceedings. In the absence of a written offer (to Fergbilt) we cannot be satisfied that Fergbilt was given an opportunity to consider the offer on the basis that it (the offer) is capable of bringing the appeal proceedings to a complete conclusion. Furthermore, we cannot be satisfied the offer (of $5,000) was made to resolve the appeal proceedings or the proceedings at first instance (before the learned Member). The issue of costs in relation to the proceedings before the learned Member would involve a separate application for costs in respect of those proceedings. The Appeal Tribunal can only consider the homeowners’ application for costs in relation to the appeal proceedings. [18] We are not satisfied that the interests of justice require a costs order to be made in favour of the homeowners in the appeal proceedings. The homeowners were only partially successful on appeal and there is no evidence before us that an offer of settlement was made to Fergbilt. The starting position in relation costs in that each party is to bear its own costs of the proceedings. The homeowners have failed to satisfy us that there is a compelling reason to order costs. The order is that each party is to bear their own costs of the proceeding. 16 Queensland Civil and Administrative Tribunal Rules 2009 (Qld) r 86. 17 QCAT Rules r 86. -- 4 of 4 --