Albion Projects Pty Ltd v Simpson and Anor (No 3) [2014] QCAT 645

CITATION: Albion Projects Pty Ltd v Simpson and anor (No 3) [2014] QCAT 645 PARTIES: Albion Projects Pty Ltd ABN 82 122 540 576 (Applicant) v Jonathon Simpson And Kim Simpson (Respondents) APPLICATION NUMBER: BDL104-13 MATTER TYPE: Building matter HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member R F King-Scott DELIVERED ON: 8 December 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. The Respondents pay the Applicant’s costs of and incidental to the application on the District Court scale on a standard basis up to 1 December 2013 and thereafter on an indemnity basis to be agreed by 19 December 2014, or failing agreement; a. The Applicant must file in the Tribunal and give to the respondents a short form assessment of costs prepared by an approved Costs Assessor together with any submissions in support of the costs sought to be paid by 16 January 2015; b. If within 14 days of the receipt of the assessment by the Respondents the parties have not agreed costs, the costs should be assessed by Hickey and Garrett, Legal Costs Assessors, level 21, 141 Queen Street Brisbane 4000; c. The Respondents to pay the Costs Assessors’ costs of the assessment. 2. The Respondents shall pay to the Applicant the assessed costs within -- 1 of 4 -- 2 14 days of receipt of the assessment. CATCHWORDS: Costs – Calderbank offer – where offer to settle more favourable – where costs ordered on an indemnity and standard basis 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 [1] A decision in this matter was delivered on 15 October 2014. The damages assessed, including GST, amounted to $251,304.37. In addition, I awarded interest at a rate of 15% per annum for 2.5 years which amounted to a further $67,085.35. Both parties were given leave to file written submissions in relation to costs. Both parties have complied. [2] The unsuccessful party, the Respondents, concede that a Costs Order is warranted, but disputes the Applicant’s claim that the costs be assessed on an indemnity basis. Further, they oppose the Tribunal fixing costs and submit that the costs should be assessed by an independent Costs Assessor. Indemnity versus Standard Costs [3] The power to award costs in building matters is contained in s 77 of the Queensland Building and Construction Commission Act 1991. The power is discretionary but is not otherwise circumscribed. The ordinary rule where a court or a Tribunal awards costs of one party to the litigation to be paid by another party is that the costs be paid on a party and party basis.1 [4] To depart from the rule, there must be some special or unusual feature of the case to warrant such action.2 Shepherd J instances various circumstances where costs have been awarded on a solicitor and client (indemnity) basis.3 See also Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2)(2005) 13 VR 435. [5] In Harrison v Schipp [2001] NSWCA 13, Giles JA (with whom Handley and Fitzgerald JJA agreed) said at [139]: Departure from the settled practice of costs on a party and party basis is discretionary, and beyond the need for a sufficient special or unusual feature in the case, no fixed rule can be laid down. Some of the matters thought to justify it are collected by Shepherd J in Colgate Palmolive Co v Cussons Pty Ltd at 233 – 234. 1 Colgate Palmolive Co v Cussons (1993) 46 FCR 225. 2 Colgate Palmolive [supra] at 233. 3 Colgate Palmolive [supra] at 233. -- 2 of 4 -- 3 [6] The Applicant submits it made a Calderbank offer4 of $170,000 all up on 20 November 2013. The same offer had been made at a Compulsory Conference on 30 August 2013. The Applicant submits that as it has recovered more than twice the amount of the offer, an indemnity costs order is justified. [7] The Respondents resist an indemnity order as they submit that their rejection of the offer was not unreasonable. They argue that a term of the offer was that on payment of the sum the Respondents would indemnify the Applicant from all liability, including legal costs on an indemnity basis with respect to any claim made by any other party in respect of the installation of the bluestone tiles.5 [8] The defects apparent on the bluestone tiles was an issue in the proceedings before the Tribunal right up to the eve of hearing. A claim of $500,000 was substantial and exceeded the other claimed items combined. It was abandoned as an issue in the Tribunal on the morning of the first day of hearing. I am not aware whether it was abandoned completely or is to be litigated elsewhere. [9] Nevertheless, I do not see that the indemnity required as a term of the settlement was as onerous as the Respondents submit. If the litigation before the Tribunal was to be brought to an end, it was appropriate that the compromise deal with all potential issues including the bluestone tile issue. [10] The Respondents raise a number of other issues in their opposition to an assessment of costs on an indemnity basis. In my opinion, those other issues do not persuade me against an indemnity costs order, save for the observations I will make later in these reasons. [11] Any order for indemnity costs, in my opinion, can only be made from the date of the rejection of the offer, which I take to be 1 December 2013. Up to that time, I am prepared to order that the costs be paid on a standard basis. I do not consider that any earlier offer could have been properly considered by the Respondents, as the earlier offer preceded the commencement of proceedings in the Tribunal. [12] I note that the conclave of experts was compromised by the Applicant’s expert consulting with the Applicant’s solicitors contrary to the Tribunal’s Practice Direction No 4 of 2009. An application was brought by the Respondents to exclude the expert’s evidence, or alternatively, to hold a further conclave. The Tribunal ordered that a further conclave be held and reserved the costs. No conclave was held because of the unavailability of the expert in the short time available before the hearing. [13] In respect of the costs of that application, I am of the opinion that each party should bear its own costs. 4 Calderbank v Calderbank [1976] FAM 93. 5 See Applicant’s solicitors’ letter dated 20 November 2013. -- 3 of 4 -- 4 Fixed costs versus costs assessed [14] Because of the costs order I intend to make I do not propose to fix costs. In my opinion, s 107 of the Queensland Civil and Administrative Tribunal Act 2009 was not intended to require the Tribunal to carry out an assessment of costs in complex and extensive litigation such as this where both standard and indemnity costs are to be assessed. The wording of the section clearly, envisages the situation where it is not always possible to fix the costs. I propose to order, that failing agreement, the costs be assessed by a Costs Assessor appointed by the Tribunal. [15] The order of the Tribunal will be that the Respondents pay the Applicant’s costs of and incidental to the application on a standard basis up to 1 December 2013 and thereafter on an indemnity basis to be agreed or assessed on the District Court scale, such costs not to include reserved costs arising from the order of the Tribunal dated 17 March 2014. [16] I will also make the following orders should the parties not be able to agree on the amount of the costs. a) The Respondents pay the Applicant’s costs of and incidental to the application on the District Court scale on a standard basis up to 1 December 2013 and thereafter on an indemnity basis to be agreed by 19 December 2014, or failing agreement; i) The Applicant must file in the Tribunal and give to the respondents a short form assessment of costs prepared by an approved Costs Assessor together with any submissions in support of the costs sought to be paid by 16 January 2015; ii) If within 14 days of the receipt of the assessment by the Respondents the parties have not agreed costs, the costs should be assessed by Hickey and Garrett, Legal Costs Assessors, level 21, 141 Queen Street Brisbane 4000; iii) The Respondents to pay the Cost Assessors costs of the assessment. b) The Respondents shall pay to the Applicant the assessed costs within 14 days of receipt of the assessment. -- 4 of 4 --