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  • Unreported Judgment

Mair Renovations v Miller

 

[2016] QCAT 317

CITATION:

Mair Renovations v Miller [2016] QCAT 317

PARTIES:

Jeffrey Mair t/as Mair Renovations

Pamela Mair t/as Mair Renovations

(Applicants)

 

v

 

Duncan Thomas Miller

Genevieve Kay Miller

(Respondents)

APPLICATION NUMBER:

BDL271-13

MATTER TYPE:

Building matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Browne

DELIVERED ON:

6 September 2016

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. Jeffrey Mair t/as Mair Renovations and Pamela Mair t/as Mair Renovations (‘Mair Renovations’) is to pay Duncan Thomas Miller and Genevieve Kay Miller’s (‘the Millers’) costs of and incidental to the proceeding (including reserved costs) on the standard basis of assessment in accordance with the District Court Scale of Costs up to and including 15 July 2014.
  2. Mair Renovations is to pay all of the Millers’ reasonable costs (being actual costs incurred by the Millers providing the costs are reasobably incurred and of a reasonable amount) of and incidental to the proceeding from 16 July 2014.
  3. If the amount of the Millers’ costs are not agreed between Mair Renovations and the Millers within 14 days, the costs are to be assessed by a cost assessor to be appointed by the Principal Registrar.
  4. Mair Renovations is to pay the Millers’ costs (as agreed or asessed) within 14 days of such agreement or assessment.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – OTHER MATTERS – where parties legally represented – where respondent substantially successful at hearing – where respondent sought order for costs – where respondent made offer to settle – whether discretion to award costs should be exercised

Queensland Building and Construction Commission Act 1991 (Qld), s 77

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102

Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86

Landbuilt Pty Ltd v Ricchetti [2012] QCAT 209

Lyons v Dreamstarter Pty Ltd [2011] QCATA 142

Lyons v Dreamstarter Pty Ltd [2012] QCATA 071

Mair Renovations v Miller [2014] QCAT 474

Mair Renovations v Miller (No 2) [2014] QCAT 506

Mair Renovations v Miller [2015] QCAT 333

Mair Renovations v Miller [2016] QCATA 079

Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412

Tamawood Ltd & Anor v Paans [2005] QCA 111

APPEARANCES:

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

  1. [1]
    In 2013, proceedings were commenced against Duncan Thomas Miller and Genevieve Kay Miller (‘the Millers’) to recover money payable under a building contract plus variations and the cost of flooring for residential building work undertaken for the Millers.
  2. [2]
    The Millers filed a response and counter-claim for the cost of rectification of building work, rental costs and lost rental income from Jeffrey Mair and Pamela Mair trading as Mair Renovations (‘Mair Renovations’).
  3. [3]
    The building dispute proceeded to a hearing before me over six days and following a further directions hearing on 2 April 2015, the Tribunal made a decision on 24 August 2015.[1]
  4. [4]
    After the Tribunal’s decision, Mair Renovations filed an application for leave to appeal or appeal the decision. On 20 May 2016, the Appeal Tribunal determined the appeal and made orders that leave to appeal is refused and the appeal is dismissed.[2]
  5. [5]
    The Millers now seek an order from the Tribunal that Mair Renovations pay their costs. The Millers’ say that the building dispute originated in the District Court of Queensland and was transferred to the Tribunal by order made on 31 October 2013. The Millers say that they were substantially successful with their counter-claim, whilst Mair Renovations were substantially unsuccessful.[3]
  6. [6]
    The Millers submit that an offer to settle the building dispute was made by them to Mair Renovations in correspondence dated 15 July 2014. The Millers say that this offer was, for the purposes of r 86 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘the QCAT Rules’), a written offer to settle the dispute and the decision of the Tribunal was not more favourable to Mair Renovations than the offer made.[4]
  7. [7]
    The Millers submit that the Tribunal should make the following orders as to costs:
    1. Mair Renovations pay the Millers’ costs of and incidental to the proceeding on the standard basis of assessment assessed on the District Court Scale of costs up until 15 July 2014; and
    2. Mair Renovations pay all of the Millers’ reasonable costs of and incidental to the proceeding from and including 15 July 2014.[5]
  8. [8]
    Mair Renovations do not agree with the proposed orders sought by the Millers. Mair Renovations contend that in order to decide on costs it is necessary for the Tribunal to consider the matters raised in s 102(3) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’). Mair Renovations contend that the conduct of the Millers (in the proceeding) is a ‘relevant consideration’ in this matter.[6] Mair Renovations submit that the matter was not complex; and their financial position is a relevant consideration because, as submitted, ‘they face financial humiliation with the prospect of bankruptcy’.[7]
  9. [9]
    Mair Renovations submit that the Millers’ ‘do not come to the Tribunal with their request for costs with clean hands’.[8] Mair Renovations say that the Millers did not pay the money due under the contract including money owing to the builder for variations. Mair Renovations say that this is not a matter warranting a costs order and as submitted, the position is that each party bear their own costs unless ‘special circumstances can be shown [by the Millers and/or Mair Renovations]’.[9]

What is the Tribunal’s power to award costs?

  1. [10]
    The starting point in relation to costs under the QCAT Act is that other than as provided under this Act or an enabling Act, ‘each party to a proceeding must bear the party’s own costs for the proceeding’.[10]
  2. [11]
    There is power to award costs under the Queensland Building and Construction Commission Act 1991 (Qld) (‘the QBCC Act’).[11] Section 77 of the QBCC Act relevantly provides that without limiting the Tribunal’s powers to resolve the dispute, the Tribunal may, amongst others, ‘award costs’.[12]
  3. [12]
    The power to make an order for costs under s 77 of the QBCC Act involves the exercise of a discretion. In Lyons v Dreamstarter Pty Ltd,[13] the Appeal Tribunal said that s 77 does confer jurisdiction on the Tribunal and that the Tribunal ‘may’ make an order for costs. In this case, the Appeal Tribunal said that that s 77 does not provide further guidance about the occasions or conditions of exercise of that power. The Appeal Tribunal said that the broad discretion of power must be ‘exercised judicially’. The Appeal Tribunal said:

A jurisdiction given in general terms allows the Tribunal to make an order as to costs that is justified in the circumstances. It is a broad general discretion which must be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation.[14]

  1. [13]
    It was observed by the Appeal Tribunal in another decision of Lyons v Dreamstarter Pty Ltd[15] (Lyon’s case) that the power to award costs under the Queensland Building Services Authority Act 1991 (Qld) (as it was then known) indicates that the question of costs is to be addressed in ‘markedly different terms from s 100 of the QCAT Act’.[16] The Appeal Tribunal referred to the High Court that said that there is no ‘automatic rule’ that costs follow the event or that the unsuccessful party must compensate the successful one.[17] The Appeal Tribunal observed that the discretion to award costs starts with the proposition that ‘it is just and reasonable that a party who causes another to incur costs should reimburse the other party for them’.[18] The Appeal Tribunal said that otherwise the factors ‘affecting’ the decision to award costs will vary in each case.[19]
  2. [14]
    In Tamawood Ltd & Anor v Paans[20] the Court of Appeal considered the issue of costs under the former Commercial and Consumer Tribunal Act 2003 (Qld). The Court of Appeal said that when determining costs ‘in the absence of any countervailing consideration and in circumstances where legal representation was justified in complex proceedings, it would not be in the interests of justice to preclude the ‘successful party from recovering costs that were reasonably necessary to achieve a satisfactory outcome’.[21] Keane JA said:

There is a clear distinction, in terms of the interest of achieving justice, between the mere fact of having representation and the fact of having reasonably obtained that representation because of the complexity of the case. 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.[22]

  1. [15]
    In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)[23] the Tribunal said that the principles in Tamawood’s case do provide guidance to the Tribunal about the ‘circumstances in which it may be in the interests of justiceto award costs against another party under the QCAT Act.[24]
  2. [16]
    In Ralacom’s case the Tribunal also considered the view expressed by Keane JA in Tamawood’s case about whether it would be in the interests of justice to not award costs to a successful party in circumstances where it was reasonably necessary to achieve a satisfactory outcome. The Tribunal said it would not be in the interests of justice to bar a successful party from recovering costs that were reasonably necessary to achieve a successful outcome.[25]
  3. [17]
    I find Tamawood’s case helpful in exercising the broad discretion under s 77 of the QBCC Act. I accept that, consistent with the view expressed by Keane JA in Tamawood’s case, whether it was necessary for a successful party to reasonably incur the cost of legal representation to achieve a satisfactory outcome is a relevant consideration in exercising the broad discretion under s 77.
  4. [18]
    In this case, the Millers rely on the power to award costs under s 77 of the QBCC and r 86 of the QCAT Rules. That Rule applies if a party to a proceeding makes a written offer to settle the dispute, the other party does not accept the offer within the timeframe provided in the offer and the decision made by the Tribunal is not more favourable to the other party than the offer that was made. In those circumstances, the Tribunal may award the party who made the offer ‘all reasonable costs incurred by that party in conducting the proceeding after the offer was made’.[26]
  5. [19]
    In Lyon’s case the former President of QCAT, Justice Wilson as he was then known, said that r 86 is ‘called up’ when the offer is not accepted, but the eventual outcome is ‘not more favourable’ to the party refusing the offer, than the offer itself.[27]

Should an order for costs be made?

  1. [20]
    I accept the Millers’ submission that they were substantially successful with their counter-claim, whilst Mair Renovations was substantially unsuccessful.[28]
  2. [21]
    At the time of the hearing, Mair Renovations claimed the amount of $156,936.70 plus interest as money owing under the contract and an amount for flooring. Mair Renovations also sought an order requiring them to attend to rectification of defective work including a retaining wall. The Millers claimed the amount of $212,688.00 plus interest for damages for the defective work performed including such items as the retaining wall, painting defects and other defects. The Millers also claimed the amount of $11,464.24 for additional rental and the amount of $28,800.00 for lost rental.
  3. [22]
    I allowed some of the variations claimed by Mair Renovations but did not allow the total claim of $156,936.70 for money owing under the contract. I found that Mair Renovations’ claim must fail because the certificates for payment prepared and relied upon by Mair Renovations were not issued in accordance with the contract; and there was no independent evidence before me in relation to the assessment of the work performed by them.[29] I did not allow the claim for flooring because I found that the contract price did include the supply and installation of flooring. The total amount allowed for the variations claimed was $26,187 plus interest. I was not satisfied that an order requiring Mair Renovations to attend to rectification of the defective works that included rectifying a retaining wall would result in a resolution of the matter.
  4. [23]
    I allowed the Millers’ claim for rectification costs but did not allow their claim for rental costs and lost rental income. I found that there was no implied term in the contract for completion of the contract work within six or seven months as claimed by the Millers. I also found that there was no date for practical completion provided for in the contract and there was no provision that entitled the Millers to claim lost rental. I also found that the Millers did not act reasonably and did not take steps to mitigate their loss in respect of their claims for lost rental. After allowing some of Mair Renovations’ claims for variations and the Millers’ claim for rectification costs, the Tribunal ordered that Mair Renovations pay the total amount of $200,870.28 to the Millers.[30]
  5. [24]
    The ultimate findings made by the Tribunal are relevant to the issue before me now in relation to costs and more importantly the offer made by the Millers to settle the proceedings. This is because there was, as submitted by the Millers, an offer made to Mair Renovations to resolve the proceedings before the Tribunal hearing. Mair Renovations did not accept the Millers’ offer and proceeded to a hearing. The Tribunal’s ultimate decision was more favourable to the Millers and the offer of settlement made to Mair Renovations.
  6. [25]
    The Millers have attached a copy of various documents to their written submission that include a copy of letters exchanged between the parties’ legal representatives making offers to settle the proceedings on a ‘without prejudice’ basis. There is also an email sent by one of the parties to the other party that makes an ‘open’ offer to resolve the proceedings.
  7. [26]
    The first offer made by Duncan Miller (on behalf of the Millers) to Mair Renovations is contained in an email dated 24 June 2014. Mr Miller states that he and Mrs Miller ‘will agree’ to Mair Renovations fixing the wall (meaning the retaining wall) and other defects on certain conditions. The email states ‘please note that there is no binding agreement until we have both signed a document setting out the agreed terms’. The email also states that ‘this proposal is made on an open basis’.
  8. [27]
    On 24 June 2014 Mair Renovations’ legal representative, Daley Law Practice sent a letter to the Millers on a ‘without prejudice save as to costs’ basis. The letter referred to discussions that took place at a compulsory conference and the offer made was effectively to agree to the re-instatement of the contract and for the appointed architect (Mr Eccles) to complete his responsibilities under the contract and to finalise his assessment and certificates. The letter invited the Millers to give their written agreement to the contract by 2 July 2014.
  9. [28]
    On 9 July 2014 the Millers in a letter from their legal representative CBP Lawyers wrote to Mair Renovations’ legal representative Daley Law Practice, rejecting the offer contained in the letter dated 24 June 2014.
  10. [29]
    On 15 July 2014 the Millers in a letter from their legal representative, CBP Lawyers wrote to Mair Renovations’ legal representative Daley Law Practice on a ‘without prejudice, save as to costs’ basis. The letter effectively contained two offers referred to as ‘alternate offers’ and identified as ‘Offer one’ and ‘Offer two’. Both offers were on terms that acceptance would be ‘in full and final settlement of all claims in the proceedings by your clients and our clients (including interest and costs)’. The offers were open for a period of 14 days. The letter also enclosed a copy of a costing prepared by a building expert in relation to the cost of rectifying the defective work as listed in the Scott schedule being, as stated, ‘in the order of $181,492 plus the cost of installation of ground anchors for the eastern wall’.
  11. [30]
    Offer one required the Millers to pay Mair Renovations the sum of $50,000 within 28 days and required the Millers to allow Mair Renovations ‘reasonable access’ to their property to enable rectification of the items of defective work contained in the Scott schedule as provided in the letter. Offer two required Mair Renovations to pay the sum of $150,000 to the Millers within 28 days.
  12. [31]
    I accept the Miller’s submission that they, as submitted, ‘sought to negotiate a resolution of the proceedings’ in June and July 2014 once quantum of their claim had ‘become clearer’.[31] It is evident from the offer made on 15 July 2014 that the Millers attempted to resolve the entire proceedings on the basis that Mair Renovations be given an opportunity to attend to rectification of the defective items of work; or alternatively pay an amount of money to the Millers to enable rectification works to be completed by them.
  13. [32]
    There is nothing in Mair Renovations’ submissions, which would persuade me that I should not make an order for costs in the Millers favour in reliance upon r 86 of the QCAT Rules.
  14. [33]
    Mair Renovations argue that the Millers did not allow Mair Renovations’ agent (Mr Eccles) to participate in the compulsory conference that took place on 13 December 2013. As provided under sections 70 and 74 of the QCAT Act, respectively, a compulsory conference is to be held in private and evidence of anything said or done during a compulsory conference for a proceeding ‘is not admissible at any stage in the proceeding’.
  15. [34]
    Notwithstanding the fact that the discussions between the parties during the compulsory conference are private and not admissible in the future conduct of the proceedings, Mair Renovations has failed to persuade me that the Millers’ conduct in this matter warrants the exercise of discretion to not make a costs order in favour of the Millers.
  16. [35]
    I do not accept the submission made by Mair Renovations that the Millers, as submitted, ‘do not come to the Tribunal with their request for costs with clean hands’. As I have said, the Millers were substantially successful with their counter-claim at the hearing of the building dispute and I am satisfied that the Millers have made a genuine attempt to resolve the proceedings because an offer of settlement was made.
  17. [36]
    The offer made by the Millers on 15 July 2014 is set out in clear terms with the obvious intention to settle or resolve the proceedings. The Millers’ offer was made after expert evidence had been obtained and a Scott schedule prepared that identified the defective items of work that required rectification. The Millers’ offer was made before the hearing of interlocutory applications that had been made by both parties. Mair Renovations filed an application for an interim order to determine the issue of whether the contract was terminated by the Millers. That application was filed by Mair Renovations on 15 July 2014 and a decision made by the Tribunal on 25 September 2014.[32] The Millers filed an application for miscellaneous matters to join Robert Eccles and Robert Eccles Pty Ltd (the architect) as a party to the proceeding. That application was filed by the Millers on 15 July 2014 and a decision was made by the Tribunal on 17 October 2014.[33] The Tribunal dismissed both applications and reserved the costs in relation to the application for an interim order.[34]
  18. [37]
    Mair Renovations has failed to persuade me that there is a compelling reason why I should not exercise my discretion to award costs in the Millers favour. Mair Renovations say that this matter was not complex and that they will experience financial hardship if an order for costs is granted against them stating that the applicant (Mair Renovations) is no longer licenced to build and will have to rely upon their personal assets to meet such a debt.
  19. [38]
    There is no material before me to support Mair Renovations’ submission that a costs order against them will result in financial hardship and this is otherwise a compelling reason not to make an order for costs. I accept that a cost order will require Mair Renovations to pay money to the Millers but the same consideration as to payment of money arises in respect of the Millers. The Millers have also incurred legal costs in relation to this building dispute because both parties were legally represented throughout the proceeding.
  20. [39]
    I do not accept Mair Renovations submission that s 100 of the QCAT applies in this case. The relevant legislation and the power to make a costs order is as provided under s 77 of the QBCC Act. I do not accept Mair Renovation’s submission that the matter was not complex. As I have said there were many issues addressed in the hearing that proceeded over six days with evidence given by both parties and expert witnesses.
  21. [40]
    In this case, there was an offer made by the Millers prior to the final hearing in this matter and before determination of the interlocutory applications. The Millers’ offer proposed settlement on terms that would result in the final resolution of the matter. The purpose of r 86 is, as said by the Tribunal in Landbuilt Pty Ltd v Ricchetti,[35] to ‘provide some protection on costs to the party who makes a genuine effort to resolve the litigation to avoid incurring the costs of the matter proceeding to hearing’.[36]
  22. [41]
    I am satisfied that an order for costs should be made in the Millers favour. Mair Renovations should be ordered to pay the Millers costs of and incidental to the proceedings on the standard basis of assessment in accordance with the District Court Scale of Costs up to and including 15 July 2014. Thereafter an order requiring Mair Renovations to pay all of the Millers reasonable costs should be made because the Millers have made an offer of settlement for the purposes of r 86 of the QCAT Rules. The Millers offer made on 15 July 2014 was a written offer to Mair Renovations to settle the dispute, the offer was not accepted by Mair Renovations and the matter proceed to a hearing. The decision of the Tribunal is not more favourable to Mair Renovations than the offer made. An order requiring Mair Renovations to pay all of the Millers reasonable costs of and incidental to the proceeding from 16 July 2014 should be made. I will also make an order that allows the parties an opportunity to attempt to resolve the issue of costs before proceeding to an assessment.  I make those orders accordingly.

Footnotes

[1] Mair Renovations v Miller [2015] QCAT 333.

[2] Mair Renovations v Miller [2016] QCATA 079.

[3]Submissions on behalf of the respondents as to costs dated 6 October 2015.

[4]Ibid.

[5]Ibid.

[6]Submissions on behalf of the applicants in response to the respondents’ claim for costs dated 19 November 2015.

[7]Ibid.

[8]Submissions on behalf of the applicants in response to the respondents’ claim for costs dated 19 November 2015.

[9]Ibid.

[10]QCAT Act, s 100, s 102.

[11]Formerly the Queensland Building Services Authority Act 1991 (Qld).

[12]QBCC Act, s 77(2)(h).

[13][2011] QCATA 142.

[14]Ibid, [33]; see Oshlak v Richmond River Council (1998) 193 CLR 72, [88].

[15][2012] QCATA 071.

[16]Ibid, [10].

[17]Ibid, [11]; see Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at [26].

[18][2012] QCATA 071, [11]; see Latoudis v Casey (1990) 170 CLR 534.

[19]Ibid, see Donald Campbell & Co v Pollak (1927) AC 732 at 811-12.

[20][2005] QCA 111.

[21]Ibid, [33].

[22]Ibid.

[23][2010] QCAT 412.

[24]Ibid, [21].

[25]Ibid, [26].

[26]QCAT Rules, r 86.

[27] Lyon’s case, [14].

[28]Submissions on behalf of the respondents as to costs dated 6 October 2015.

[29]Ibid.

[30]Submissions on behalf of the respondents as to costs dated 6 October 2015.

[31]Submissions on behalf of the respondents as to costs dated 6 October 2015.

[32] Mair Renovations v Miller [2014] QCAT 474.

[33] Mair Renovations v Miller (No 2) [2014] QCAT 506.

[34]Ibid.

[35][2012] QCAT 209.

[36]Ibid, [17].

Close

Editorial Notes

  • Published Case Name:

    Mair Renovations v Miller

  • Shortened Case Name:

    Mair Renovations v Miller

  • MNC:

    [2016] QCAT 317

  • Court:

    QCAT

  • Judge(s):

    Member Browne

  • Date:

    06 Sep 2016

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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