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Terera & Anor v Clifford  QCAT 82
Sandra Phyllis Terera and Robert Bohlar
On the papers
Member McLean Williams
12 April 2016
MINOR BUILDING WORKS - Claim for defective building work by Applicant homeowners - Counterclaim by Respondent tiling contractor for unpaid invoices - Circumstances where Applicant wholly unsuccessful on claim and Respondent fully succeeding on counterclaim - Discussion of general principles governing costs in QCAT building matters
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s100
Queensland Civil and Administrative Tribunal Rules 2009 (Qld)
Queensland Building and Construction Commission Act 1991 (Qld), s77(3)
Lyons v Dreamstarter Pty Ltd  QCATA 071
Latoudis v Casey (1990) 170 CLR 534
Tamawood Ltd & Anor v Paans  QCA 111
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
- This dispute involved a claim by the Applicants pursuant to s.77 of the Queensland Building and Construction Commission Act 1991 (‘QBCC Act’) for relief in relation to allegedly defective tiling work, as was performed by the Respondent at the Applicants’ home; as well as a counter-claim by the Respondent, in the amount of $1,631, being the balance of the moneys claimed to be owed to him, pursuant to the agreement between the Applicants and the Respondent for the performance of the tiling work.
- The substantive matter was heard before me on 2 February 2015.
- On the same day as the hearing I gave an ex tempore decision, dismissing the Applicants’ claim and awarding the Respondent the full amount of his counterclaim, plus interest, and costs.
- On 13 February 2015 the Applicants filed an Application for leave to appeal and appeal against my decision. The appeal was not heard until 10 December 2015. In reasons handed down on 5 February 2016 the Appeal Tribunal dismissed the substantive appeal, yet determined that the question of costs ought be remitted for my further consideration, according to law.
- Pursuant to directions made on 24 February 2016 the parties were ordered to file written submissions on costs, so that the question could be determined without the need for another oral hearing. Both the Applicants and the Respondent filed submissions on costs on 18 March 2016.
- These now are my reasons for decision on the matter of costs.
- The Respondent seeks his costs in matter BDL137-14 pursuant to s 77(3)(h) of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’). The Respondent also points to s 107 of the QCAT Act, and says that the Tribunal must, if possible, fix the amount to be awarded as costs, and submits that these should now be fixed in the sum of $5,303.10 (inclusive of GST). Those factors that the Respondent now says tell in favour of an award of costs to him are:
- The claim was wholly dismissed.
- The counterclaim was wholly successful.
- The matter was recognised by QCAT as involving complex issues of fact and law (in light of the fact that leave had been given for legal representation, in an earlier interlocutory application).
- The Respondent’s costs are not excessive, and these were all reasonably and properly incurred.
- As against that, the Applicants submit that the Respondent should not be entitled to costs, because:
- (i)The Applicants did not agree to the Respondent being legally represented.
- (ii)Section 100 of the QCAT Act states that the Tribunal is a “no-cost” jurisdiction, and the only departure from that should be in the precise circumstances specified in s.102 (none of which are presently enlivened).
- (iii)The QCAT Rules (in Division 2) state that the Tribunal may not order costs, where the matter is a minor civil dispute.
- (iv)The Applicant’s claim was not frivolous, or vexatious, or otherwise commenced unreasonably.
- (v)It would be a gross miscarriage of justice to require the payment of the Respondent’s legal costs in circumstances in which they can ill-afford it, and in circumstances where they have already been required to pay for the Respondent’s poor workmanship in full, with interest.
- As a starting point, I observe that, despite the quantum of the claim and counterclaim in matter BDL 137-14 being much less than the $25,000 cap for minor civil matters, this matter was not dealt with before the Tribunal as if it were a minor civil dispute. The claim and counterclaim have always been on the QCAT building list, and was treated as a dispute governed by the provisions of the QBCC Act. I further record that there is absolutely no basis for any suggestion that the Applicants have - at any time - conducted themselves in any manner that is either frivolous, vexatious, or in any way unreasonable.
- Next, it must be recognised that in the case of building matters, the position that ordinarily pertains before QCAT on the question of costs is to be addressed in markedly different terms from those that might be assumed from a cursory reading of s.100 of the QCAT Act. In Lyons v Dreamstarter Pty Ltd, the then QCAT President Justice Alan Wilson said:
 Under the QCAT Act the usual position is that parties will bear their own costs: s 100. That provision contains, however, an introductory phrase (‘Other than as provided under this Act or an enabling Act…’) and, as the Deputy President identified in her decision in Mr Lyon’s appeal, there is a relevant enabling Act which applies to the dispute here and contains provisions about costs: s 77 of the Queensland Building Services Authority Act 1991, which, in s 77(2)(h) gives the Tribunal a power to award costs.
 As the learned Deputy President also identified, this is what ss 6 and 7 of the QCAT Act refer to as a ‘modifying provision’ and it prevails over the provision of the QCAT Act which must therefore be read, with any necessary changes, as if the modifying provision was part of the QCAT Act.
 The effect, as the Learned Deputy President went on to say, is to give QCAT a broad general power to award costs in cases caught by these provisions which, in the case of s 77(2)(h), is to be exercised ‘judicially’.
- Although the Applicants claim to have ‘not agreed’ to the Respondent having retained a solicitor, that is not a germane argument, given that it was the Tribunal that determined the matter to be sufficiently complex to warrant a grant of leave for legal representation. As was observed by Keane JA in Tamawood Ltd & Anor v Paans  QCA 111 at ,  and :
 …the Tribunal found that each party was justified in engaging the services of legal representatives to assist them in the conduct and defence of what the Tribunal recognized to be complex proceedings. That finding alone could be, in my view, a sufficient basis to conclude that the interests of justice warranted the exercise of the discretion to award costs in favour of the successful party, at least in the absence of any countervailing consideration…
 If orders for costs were not to be made in favour of successful parties in complex cases, then just claims might not be prosecuted by persons who are unable to manage complex litigation by themselves. Such a state of affairs would truly be contrary to the interests of justice; and an intention to sanction such a state of affairs cannot be attributed to the legislature which established the Tribunal.
 …In the absence of countervailing considerations, 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…
- The general power to award costs in matters such as this one is a discretion, that is to be exercised judicially: ‘that is to say, not by reference to irrelevant or extraneous considerations, but upon facts connected with or leading up to the litigation’. Of the matters raised by the Applicants as factors militating against an award of costs (as summarised at , above), only the final contention remains for further analysis: that it would be a gross miscarriage of justice to require the payment of the Respondent’s legal costs in circumstances in which they can ill-afford it, and in circumstances where they have already been required to pay for the Respondent’s poor workmanship in full, with interest.
- In relation to that argument, I am unpersuaded. There has been no finding by the Tribunal of any poor workmanship by the Respondent, given that the evidence adduced by the Applicants would not permit me to make such a finding. That issue cannot be raised again at this late juncture, in circumstances where it has already been ruled upon, and that finding has been upheld on appeal. Equally, there is absolutely no evidence before me going to the Applicant’s claimed difficult financial circumstances, such that this is not a factor that I am able to take into further consideration.
- In sum therefore, the totality of the matters raised by the Applicants are not enough to displace those considerations identified by Keane JA in Tamawood Ltd & Anor v Paans, as are now referenced by me in , above.
- As a final matter, I am required, by s 107 of the QCAT Act, to fix an amount for an award of costs, if this is possible. The Respondent seeks $5,303.10, and submits that this amount was reasonably and properly incurred.
- Although the hourly rates, and time expended - as now claimed by Mr Panayi for legal work performed by him on behalf the Respondent - do not seem excessive, there is no affidavit evidence before me to underpin the contention in the Respondent’s costs submission that all of his incurred costs were necessary and reasonable. That gives me some cause for pause.
- Furthermore, I observe that the cost claim is, in effect, a claim for indemnity costs: yet in circumstances where the nature of the case, (and particularly the non-egregious conduct of the Applicants), does not warrant the making of an indemnity costs order.
- Conscious as I am of the risk of the Respondent’s success being eroded by requiring that he bear the costs of representation which were reasonably necessary to achieve the outcome, it still seems to me that, in all of the circumstances of the case – and in particular the very modest quantum of the respective claims – it is now necessary for me to fix a sum for costs that is less than the indemnity sum sought by the Respondent.
- Looking at the table of costs set out in paragraph 9 of the Respondent’s costs submission it seems to me that approximately 30% of these relate to matters arising before leave was granted by the Tribunal for legal representation. Accordingly, I now fix a sum for costs in the amount of 70% of the sum claimed.
- In all the circumstances I assess costs in the amount of $3,712.17, inclusive of GST.
In strict terms, this is untrue. Division 2 of the QCAT Rules (rr. 83 - 87) serves to limit the costs that may be awarded under s.102 of the QCAT Act in the case of minor civil disputes.
Lyons v Dreamstarter Pty Ltd  QCATA 071 at .
Now: QBCC Act, the provision however remains the same, albeit to have been renumbered, as s.77(3)(h).
Citing Lyons v Dreamstarter Pty Ltd  QCATA 142 at ; and Latoudis v Casey (1990) 170 CLR 534 at 557.
Latoudis v Casey (1990) 170 CLR 534 at 557, per Dawson J.
- Published Case Name:
Sandra Phyllis Terera and Robert Bohlar v Alan Clifford
- Shortened Case Name:
Terera v Clifford
 QCAT 82
Member McLean Williams
12 Apr 2016
|Event||Citation or File||Date||Notes|
|Primary Judgment|| QCATA 25||05 Feb 2016||Leave to appeal  QCAT 534. Leave to appeal costs order granted and remitted to QCAT.|
|Primary Judgment|| QCAT 82||12 Apr 2016||Remitted QCAT decision on costs|
|Notice of Appeal Filed||File Number: Appeal 10580/16||17 Oct 2016||-|
|Appeal Determined (QCA)|| QCA 181||18 Aug 2017||Application for leave to appeal  QCATA 25 and  QCAT 82 refused: Morrison JA and Atkinson and Douglas JJ.|