Benn v Myles [2012] QCAT 399

CITATION: Benn v Myles & Anor [2012] QCAT 399 PARTIES: Jason Benn (Applicant) v Anthony Myles AJ Myles & Co Pty Ltd ACN 111 244 823 (Respondents) APPLICATION NUMBER: BD492-09 MATTER TYPE: Building matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Joanne Browne, Member DELIVERED ON: 3 September 2012 DELIVERED AT: Brisbane ORDERS MADE: 1. That the Respondent, Mr Anthony Myles pay the Applicant’s, Mr Jason Benn costs of and incidental to the proceedings, including reserved costs, on a standard basis to be assessed on the District Court scale of costs. 2. The Applicant, Mr Jason Benn shall deliver to the Respondent, Mr Anthony Myles an itemised claim for costs referring to the relevant items contained in the District Court scale of costs. 3. If the Applicant and Respondent are unable to agree on an amount of the Applicant’s costs within 14 days of the delivery of an itemised claim for costs, the costs shall be assessed by Hickey & Garrett, Legal Costs Assessors, Level 21, 141 Queen Street, Brisbane 4000. 4. The Respondent, Mr Anthony Myles shall pay the Applicant’s, Mr Jason Benn costs (as agreed or assessed) within 14 days of such agreement or assessment. -- 1 of 6 -- 2 CATCHWORDS: COSTS – where party successful – whether discretion to award costs – assessment of costs Queensland Civil and Administrative Tribunal Act 2009, s 100 Grasso & Anor v CMG Consulting Engineers Pty Ltd (No 2) [2011] QCATA 326 cited Oshlack v Richmond River Council (1998) 193 CLR 72 cited Paradise Island Apartments (No 2) [2010] QCAT 412 cited Queensland Building Services Authority v Johnston [2011] QCATA 265 applied Ralacom Pty Ltd v Body Corporate for Tamawood Ltd & Anor v Paans [2005] QCA 111 cited 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 building dispute relates to proceedings commenced in November 2009 by Mr Benn in the former Commercial and Consumer Tribunal (CCT) against Mr Myles and AJ Myles & Co Pty Ltd (the Respondents). [2] The former CCT was abolished with the introduction of QCAT on 1 December 2009. [3] The dispute proceeded to hearing before QCAT (in Cairns) and final orders were made by the Tribunal on 18 November 2011 – Mr Myles was ordered to pay Mr Benn the amount of $140,340.72. [4] Mr Benn now seeks orders from QCAT that the Respondents pay his costs of and incidental to the application (building dispute) to be agreed or if not agreed as assessed by a duly accredited costs assessor appointed by the Tribunal. [5] Mr Benn’s legal representatives have filed (on his behalf) written submissions in relation to the application for costs. Mr Myles has not filed written submissions notwithstanding directions being made on 20 December 2011 and 26 April 2012 in relation to the filing and -- 2 of 6 -- 3 exchange of written submissions in response to the application for costs.1 The Tribunal is satisfied that Mr Myles has had an opportunity to file submissions (in response) to Mr Benn’s application for costs. Power to award costs under the Queensland Civil and Administrative Tribunal Act 2009 (the QCAT Act) [6] The building dispute proceeded before QCAT as a pending proceeding for the purposes of s 245 of the QCAT Act as the former CCT had not, at the time the matter was listed for hearing before QCAT, started to hear the subject of the proceedings. [7] It was held in Queensland Building Services Authority v Johnston2 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. The relevant provisions under the QCAT Act are contained in ss 100 and 102. In particular s 100 of the QCAT Act provides that each party to a proceeding must bear their costs of the proceeding. [8] In the application for costs Mr Benn (in written submissions) refers the Tribunal to s 102(1) of the QCAT Act and the discretion to require a party to a proceeding to pay all or stated parts of another party’s costs if the Tribunal “considers the interests of justice require it to make the order”. This (s 102(1) of the QCAT Act) effectively confers a “broad discretionary power on the decision-maker”.3 [9] The Tribunal, in considering Mr Benn’s application for costs of the building dispute, must determine whether circumstances “point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100 [of the QCAT Act]”.4 [10] Mr Benn refers the Tribunal to “certain matters” to be considered in exercising its discretion under s 102(3) of the QCAT Act and in determining whether or not it is in the interests of justice to make an order for costs. The relevant matters the Tribunal may consider (under s 102(3)) include: the nature and complexity of the dispute, the relative strengths of the claims made by each of the parties; and whether a party has acted in a way that unnecessarily disadvantages another party.5 The nature of the dispute 1 QCAT Directions dated 20 December 2011 and (amended directions) 26 April 2012 also state that the application (for costs) will be determined on the papers without an oral hearing. 2 [2011] QCATA 265. 3 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412, [4]. 4 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412, [29]. 5 QCAT Act, s 102(3). -- 3 of 6 -- 4 [11] Mr Benn submits that the Tribunal should have regard to the fact that the dispute was a building matter and both parties were legally represented at the hearing in Cairns and in the preparation of the matter. Mr Benn refers the Tribunal to the decision of the Appeal Tribunal in Grasso & Anor v CMG Consulting Engineers Pty Ltd6 and the observations made by the President about some of QCAT’s jurisdictions (for example building cases). The President (in Grasso’s case) considered that some building disputes involving complex issues were similar (in procedure) to that of a court. [12] Mr Benn submits that this particular building dispute also “mimicked the course it would have taken through a Queensland Court” in that (amongst others) the issues were complex, the parties were legally represented, the parties were required to attend compulsory conferences (3 in total), directions hearings (2 in total), expert conclaves (2 in total); and the proceedings were adjourned to enable Mr Myles (the Respondents) to obtain new legal representation. Mr Benn submits that it is more likely that the interests of justice require an order for legal costs to be made in circumstances where the proceedings “mimicked” court procedures and as determined by the Appeal Tribunal (in Grasso’s case) it is therefore appropriate to have regard to principles applicable to court proceedings in determining the issue of costs and whether to exercise a discretion to award costs. The strengths of the case [13] Mr Benn contends that he was successful on central issues to the proceedings – whether the Respondents (Mr Myles) breached his contractual obligations and this involved a finding of mixed fact and law about an exclusion clause (in the contract). Mr Myles was, however, successful in respect of one discrete issue (in his counter-application) in relation to the costs for replacement of a damaged floor (inside the house). Mr Benn submits that there were a number of concessions made by the Respondents’ witnesses at the hearing; and that the “relative weakness” of Mr Myles’ defence otherwise justifies the making of an order for costs. Financial circumstances of the parties [14] Mr Benn submits that he and his wife work; and he intends to complete certain work on the house (the subject of the building dispute) to bring it (the house) to the standard he wanted – it was Mr Benn’s plan to live in the house with his young family. Mr Benn submits that the inference that can be drawn from reading the affidavit material filed on behalf of the Respondents (in the Tribunal proceedings) is that Mr Myles received an insurance payout and used the proceeds (of the insurance monies) to “fund his defence”.7 6 [2011] QCATA 244. 7 Applicant’s written submissions filed 15 December 2011 refers to the Affidavit of Travis Sturgeon dated 2 March 2011. -- 4 of 6 -- 5 [15] Mr Benn submits that Mr Myles should not have used the insurance money to defend the proceedings and that this (the insurance payment) was tantamount to a “windfall payment” and Mr Benn is in a position of “comparative disadvantage” in that he (as consumer) is not in a position to pursue any insurance coverage. In the absence of an order for costs being made in Mr Benn’s favour, Mr Benn submits that a substantial amount of the money to be paid by Mr Myles in accordance with the Tribunal order described as “compensatory” (by Mr Benn) will be used to pay legal costs and expert witness fees. [16] Mr Benn contends that relevant factors exist to demonstrate that it is in the interests of justice to make an order for costs and that such an order (for costs) would contribute towards Mr Benn’s legal costs of the proceedings. Mr Benn submits that the Tribunal also has the power to otherwise make an order in relation to the expenses incurred by Mr Benn – the expert witness expenses and the costs of the expert conclaves. The Tribunal’s findings [17] The issues to be determined by the Tribunal were complex. The Respondents disputed the issues raised by Benn in its response and counter-application and the Tribunal was required to make findings and determinations about many factual and legal issues. The Tribunal was assisted (at the hearing) by the submissions made (orally and in writing) by each of the parties’ legal representatives. This (the parties’ legal representation) is a relevant factor to be considered by the Tribunal, in the absence of any countervailing consideration, in determining Mr Benn’s application for costs as held in the decision of Tamawood Ltd & Anor v Paans8 and more recently by the Appeal Tribunal (as to Tamawood’s applicability) in the decision of Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2). 9 The Tribunal’s finding that the parties’ legal representation was warranted given the nature and complexity of the issues to be determined, may in itself be a sufficient basis for the Tribunal to determine that the interests of justice warrant the exercise of a discretion to award costs in Mr Benn’s favour, in the absence of any countervailing consideration. There is no such consideration before the Tribunal. [18] The Tribunal has also considered the submissions made by Mr Benn in relation to the number of pre-hearing procedural steps – the requirement to attend directions hearings, compulsory conferences and the necessity for the parties to attend expert conclaves. The many pre-hearing steps were referred to by Mr Benn in support of his submission that the proceedings were complex. This is also a relevant factor in determining whether the Tribunal should exercise its discretion in Mr Benn’s favour in making an order for costs in that this building dispute was complex and 8 [2005] QCA 111. 9 [2010] QCAT 412. -- 5 of 6 -- 6 many procedural steps were required before the matter proceeded to a hearing. [19] The outcome of the hearing and the findings made by the Tribunal in determining the application (building dispute) were in Mr Benn’s favour except for one discrete issue – this related to the assessment of damages for the damaged floor boards and the Tribunal’s preference for a particular expert witnesses’ evidence as to the preferred floor system to be used. Mr Benn was otherwise successful with his claim and the Tribunal made an order that Mr Myles pay damages (assessed) in respect of the contracted works to be performed by Mr Myles. The Tribunal has considered Mr Benn’s submission that there will be considerable costs to be paid by him (and his family) in relation to the repairs to be completed on the house (the subject of the dispute) and that he will also be required to pay considerable legal expenses in relation to the application and this will have a significant impact on his ability to complete the rectification works. The expenses incurred by Mr Benn in bringing the application (for a building dispute) in circumstances where the issues were complex and legal representation of the parties was therefore warranted, is another consideration in determining the application for costs. It was held in the decision of Oshlack v Richmond River Council10 that the “primary purpose of an award of costs is to indemnify the successful party”. Had it not been necessary for Mr Benn to commence proceedings in the former CCT (in circumstances where legal representation was warranted) the costs of legal representation would not have been incurred by Mr Benn as the successful party. [20] There is no evidence before the Tribunal in relation to Mr Benn’s application for costs to indicate that the conduct of the Respondents throughout the proceedings attributed to any delay in the matter being listed for a hearing. For example non-compliance (by Mr Myles) with Tribunal directions and a failure to attend directions hearings. There was (however) an adjournment of the hearing on 3 March 2011 and Mr Benn (in written submissions) referred the Tribunal to the affidavit material filed in support of the application for an adjournment (by the Respondents). The Tribunal has considered the material and is not satisfied that it is appropriate to award indemnity costs in relation to the adjournment. [21] The Tribunal is satisfied that the interests of justice point compellingly to a costs order being made in Mr Benn’s favour and that there are relevant factors before the Tribunal to otherwise overcome the strong contra- indication against a cost order being made (in s 100 of the QCAT Act). Mr Myles should therefore pay Mr Benn’s costs of the proceedings to be agreed and failing agreement to be assessed on the District Court scale of costs. 10 (1998) 193 CLR 72, [69]. -- 6 of 6 --