Campbell v Telford & Anor [2013] QCAT 620

CITATION: Campbell v Telford & Anor [2013] QCAT 620 PARTIES: Mr Gregory Campbell (Applicant) v Mr Mark Telford Ms Nynke Heida (Respondents) APPLICATION NUMBER: BDL342-12 MATTER TYPE: Building matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Allen DELIVERED ON: 14 November 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. Mr Telford and Ms Heida are ordered to pay Mr Campbell the amount of $3,609.75 in default interest within 14 days of the date of this order. 2. Mr Telford and Ms Heida are ordered to pay Mr Campbell the amount of $9,811.84 in debt collection costs within 14 days of the date of this order. CATCHWORDS: BUILDING DISPUTE – default interest and debt collection costs – contractual right to costs Lida Build Pty Ltd v Miller & Anor [2013] QCATA 139 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 (QCAT Act). REASONS FOR DECISION [1] This decision relates to interest and debt recovery costs to which Mr Campbell became entitled to as a result of Tribunal’s decision of 7 August 2013 in respect of a building dispute between the parties. The Tribunal -- 1 of 3 -- 2 awarded Mr Campbell an amount of $21,419.10 in respect of his final progress claim and he became entitled to default interest and recovery costs in respect of this amount in accordance with the contract between the parties. [2] The entitlement to and calculation of default interest is contained in clause 33 of the general conditions of the contract as follows “if the owner does not pay any amount owing to the builder in full by the due date, then the owner must pay default interest on such amount that is unpaid from time to time”. Default interest is defined in clause 38 of the general conditions as “the annual rate equal to the Commonwealth Bank overdraft index rate: quarterly charging cycle plus 5%”. [3] The parties were directed to file submissions in regard to the amount payable in respect of default interest. Woods Hatcher, Solicitors and Attorneys on behalf of Mr Campbell calculated his entitlement to default interest as $3,609.75 on the basis that the tax invoice in question No M2013 was issued on 25 June 2012 and was due and payable on 2 July 2012. The number of days between that date and the date of the decision is 401 and the applicable rate of interest is 15.34% which is the relevant CBA rate plus 5%. The Tribunal is satisfied that calculation is on its face correct. [4] Industry Lawyers made submissions on behalf of Mr Telford and Ms Heida. The submissions attempt to re-enliven issues about when practical completion occurred. This was dealt with in the reasons and it is clearly stated that practical completion occurred on 25 June 2012 and further that Mr Telford has accepted that the amount of $21,419.10 is due and payable. It is then submitted that interest should if payable only be payable from the date of the hearing on the basis that it was only at the hearing that certain evidence in regard to the sarking became apparent at the hearing. The interest rate supplied on behalf of Mr Telford and Ms Heida is substantially less than that of Mr Campbell’s but only related to the period around 14 August 2013. [5] Mr Telford had accepted practical completion on 25 June 2012 and that the tax invoice was payable. In which case default interest is payable from the date that payment was due in accordance with clause 33 of the general conditions. The interest rate submitted on behalf of Mr Campbell is preferred as it covers the whole period of 401 days for which interest is payable. Therefore the Tribunal is satisfied that default interest is payable in respect of tax invoice M2013 in the amount of $3,609.75. [6] Mr Telford and Ms Heida are ordered to pay Mr Campbell the amount of $3,609.75 in default interest within 14 days of the date of this order. [7] The entitlement to Debt Collection Costs is contained in clause 34 of the contract general conditions as follows “the owner must pay to the builder any debt collection costs, including any legal fees on a solicitor and own client basis, associated with recovering or the attempted recovery of an amount under this contract”. -- 2 of 3 -- 3 [8] Woods Hatcher submitted in regard to the debt collection costs that the following amounts should be allowed:- a) QCAT application fee $275.00 b) Solicitor and own clients costs from the date of initial instructions $9,536.84 Total $9,811.84 [9] Woods Hatcher notes that Mr Telford and Ms Heida were represented up to the a certain point in the proceeding and that detailed consideration was required to be given to responding to the counterclaim and in all the circumstances of the complexity of the matter Mr Campbell is entitled to recover his costs. [10] Industry Lawyers submit that the costs should be set as nil and refers to s 100 of the Queensland Civil and Administrative Tribunal Act 2009, which is the Tribunal’s general cost provision and further that the amount would have been a minor debt and therefore only the costs available under Rule 84 of the Tribunal’s rules should apply. It was also submitted that the costs should be apportioned between the debt recovery and the counterclaim. [11] As was made clear in the primary decision the costs available under clause 34 of the general conditions are not subject to s100 of the QCAT Act1. Even if the claim had have been filed as a minor debt the costs would have been allowable on the contractual basis. The counterclaim was either withdrawn in parts or dismissed. The Tribunal is satisfied that all of the costs incurred relate to the recovery of the amount due and owing as Mr Telford and Ms Heida were not successful in regard to the counterclaim and it was accepted at the hearing that the tax invoice was payable. [12] The tax invoice should have been paid and the fact it wasn’t gave Mr Campbell to have his costs assessed in accordance with clause 34 of the general conditions. If the tax invoice had been paid and Mr Telford and Ms Heida had brought a claim for defective building work then costs would have been determined under s100 of the QCAT Act. [13] Mr Telford and Ms Heida are ordered to pay Mr Campbell the amount of $9,811.84 in debt collection costs within 14 days of the date of this order. 1 Lida Build Pty Ltd v Miller & Anor [2013] QCATA 139. -- 3 of 3 --