Dreamstarter Pty Ltd t/a Protech Builders v Lyons [2010] QCAT 447

CITATION: Dreamstarter Pty Ltd t/a Protech Builders v Lyons [2010] QCAT 447 PARTIES: Dreamstarter Pty Ltd t/a Protech Builders v Andrew Lyons APPLICATION NUMBER: BDL222-10 MATTER TYPE: Building matters HEARING DATE: Decision on the papers HEARD AT: Brisbane DECISION OF: Peta Stilgoe DELIVERED ON: 14 September 2010 DELIVERED AT: Brisbane ORDERS MADE: Application for security for costs is dismissed CATCHWORDS : SECURITY FOR COSTS – where applicant a $2 company – where response and counterclaim not yet filed Queensland Civil and Administrative Tribunal Act ss 3(b), 4(c), 28(d), 69, 100, 102 and 109 Ralacom Pty Ltd –v- Body Corporate for Paradise Island Apartments (No. 2) – Tamawood Ltd –v- Paans APPEARANCES and REPRESENTATION (if any): This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009 -- 1 of 4 -- REASONS FOR DECISION 1. Dreamstarter Pty Ltd (“Dreamstarter”) and Mr Lyons are involved in a typical building dispute. Dreamstarter has brought proceedings in the tribunal for payment of a progress claim, variation and a provisional sum, the total of which is $98,734.70 plus interest. It also asserts that Mr Lyons has wrongly terminated the building contract and has, therefore, claimed for loss of profit in the sum of $25,110.00. 2. Mr Lyons has brought an application for security for costs in the sum of $200,000. 3. Mr Lyons has not yet filed a response to the claim. He has, however, filed an affidavit in which he asserts that Dreamstarter has breached the contract in numerous and material ways that entitle him to terminate the contract. It seems that he will be claiming damages well in excess of the jurisdiction of this tribunal. That claim will be an issue for another day. 4. Section 109 of the Queensland Civil and Administrative Tribunal Act (“the Act”) provides that the tribunal may give security for costs if, under the Act or an enabling Act, the tribunal may award a party’s costs for a proceeding. The matters to which the tribunal may have regard are set out in section 109(4): a) The financial circumstances of the parties to the proceeding; b) The prospects of success or merits of the proceeding; c) The genuineness of the proceeding against the applicant; d) Anything else the tribunal considers relevant. The tribunal may award costs 5. Section 100 of the Act provides that, other than as provided under the Act or an enabling Act, each party to a proceeding must bear the party’s own costs. Section 102 of the Act sets out the matters to which a tribunal may give consideration when determining whether to award costs. Apart from each party informing the tribunal that their case is a strong one, neither has descended to much detail about the factors that may influence the tribunal to order costs in this case. 6. Dreamstarter has referred the tribunal to paragraph [29] of the decision of the President in Ralacom Pty Ltd –v- Body Corporate for Paradise Island Apartments (No. 2)1: “Under the QCAT Act the question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100.” 7. Mr Lyons has not pointed to any matter that will “overcome the strong contra-indication against costs orders in section 100”. There is no certainty that Mr Lyons, if successful, will be awarded his costs of this proceeding. The financial circumstances of the parties to the proceeding 1 [2010] QCAT 412 -- 2 of 4 -- 8. Dreamstarter acknowledges that it is a company of limited assets. If that was the only criterion, then it is probable that an order for security for costs would be appropriate. However, section 109(4)(a) of the QCAT refers to the financial circumstances of both parties. In Tamawood Ltd –v- Paans2, the applicant’s limited means was a significant factor in Justice Keane’s decision to award costs. His Honour’s comments in paragraph [33] of the judgment are most commonly quoted in support of an application for costs: “…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.” 9. Mr Lyons has not given the tribunal any information about his financial position. The prospects of success or merits of the proceeding 10. As I have previously observed, although Mr Lyons has not filed a response, both parties contend that they have strong prospects of success. A consideration of this aspect of section 109 favours neither party. The genuineness of the proceeding against the applicant 11. Dreamstarter has issued a progress claim, a variation and a claim for a provisional sum. It has pleaded the provisions of the contract that it says entitle it to do so. On the face of the application, there is no reason to suspect that Dreamstarter’s claim is not genuine. Anything else the tribunal considers relevant 12. Legal representation in the tribunal is not as of right. Neither party has applied for leave to be legally represented. Unless and until Mr Lyons is granted leave to be legally represented, it is difficult to see how he can claim security for costs incurred in engaging lawyers. 13. Section 3(b) of the QCAT Act states that the objects of the Act are to have the tribunal deal with matters in a way that is accessible, fair, just, economical, informal and quick. Section 4(c) requires the tribunal to ensure proceedings are conducted in an informal way that minimises costs to parties and is as quick as is consistent with achieving justice. That imperative is largely repeated in section 28(d), which requires the tribunal to act with as little formality and technicality and as much speed as …the matters before the tribunal permit. Mr Lyons has not demonstrated how his application meets any of these legislative requirements. 14. Mr Lyons has provided an affidavit from Mr Winter as to the likely costs of this proceeding. That affidavit does not provide a detailed assessment of costs, as is commonly required in applications to the Supreme or District Courts. Accordingly, this tribunal cannot assess accurately what proportion of the costs will be incurred at what point in the proceeding. 15. Importantly, Mr Winter does not acknowledge the different procedure adopted by this tribunal. It is inconceivable that the tribunal would grant security for costs in respect of the whole proceeding when the parties had [2005] 2 Qd R 101 -- 3 of 4 -- not yet engaged in a compulsory conference under section 69 of the Act and thereby not had the benefit of directions about the conduct of the proceedings. 16. Mr Lyons’ application for security for costs is dismissed. -- 4 of 4 --