Henley Properties (Qld) Pty Ltd v Salam
[2015] QCAT 148
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- Unreported Judgment
- Henley Properties (Qld) Pty Ltd v Salam[2015] QCAT 148
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Henley Properties (Qld) Pty Ltd v Salam[2015] QCAT 148
Henley Properties (Qld) Pty Ltd v Salam[2015] QCAT 148
CITATION: | Henley Properties (Qld) Pty Ltd v Salam [2015] QCAT 148 |
PARTIES: | Henley Properties (Qld) Pty Ltd (Applicant) |
v | |
Muhammad Salam Seowmee Salam (Respondent) |
APPLICATION NUMBER: | BDL122-13 |
MATTER TYPE: | Building matters |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member McLean Williams |
DELIVERED ON: | 1 May 2015 |
DELIVERED AT: | Brisbane |
ORDERS MADE: |
|
CATCHWORDS: | Costs – circumstances where applicant succeeded under s 84 of the Domestic Buildings Contract Act 2000 – further circumstances where building contract entitles builder to legal costs of attempted recovery of amounts under the building contract Domestic Building Contracts Act 2000 (Qld), s 84 Queensland Building and Construction Commission Act 1991 (Qld), s 77 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86 Tamawood Limited & Anor v Paans [2005] QCA 111 Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 |
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).
REPRESENTATIVES:
APPLICANT: | Henley Properties (Qld) Pty Ltd represented by Gemma Twemlow, solicitor of Mills Oakley Lawyers |
RESPONDENT: | Muhammad Salam and Seowmee Salam represented by Russell Ensbey, solicitor of CBP Lawyers |
REASONS FOR DECISION
- [1]On 3 September 2014, reasons for decision and orders were published in this matter. By the orders made on that date, the respondents were ordered to pay the applicant the sum of $17,779.53 within 21 days. This was nearly all of the total sum claimed by the applicant.
- [2]Further, the parties were invited on that occasion to make written submissions on the question of costs, and further or ancillary orders were made by me that the question of costs then be determined, on the papers. These now are my reasons for decision, in relation to the question of costs.
- [3]The original proceeding was a domestic building dispute in relation to the non-payment, by the respondents, of sums of money referrable to building variations which had been requested by the respondents and then agreed, in writing, between the parties during the course of construction. Although the variations had been reduced to writing, as is revealed in my reasons for decision in the primary dispute, the variation documents did not comply with the strict requirements of the Domestic Building Contracts Act 2000 (Qld) (‘DBC Act’).
- [4]Although the applicant commenced its claim before QCAT seeking payment of sums owing under a building contract, ultimately, the applicant only succeeded by reason of s 84(4) of the DBC Act, which enables QCAT to approve an amount, in defined circumstances, in the case of variations that do not comply with s 79, s 80, s 82 and s 83 of the DBC Act.
- [5]At the end of the reasons for decision in the primary dispute, I invited submissions in relation to the question of costs because of clause 31.1 in the building contract. Relevantly, clause 31.1 provided 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. [The emphasis has been included]
- [6]The question arises whether the substantial success of the applicant before QCAT in the primary proceedings is a matter now captured by clause 31.1, in the sense of it having been an ‘attempted recovery’ of an amount under the contract.
- [7]The applicant contends that it should be entitled to its costs because of clause 31.1 of the contract, and also because of the decisions in Tamawood Limited & Anor v Paans[1], and Lyons v Dreamstarter Pty Ltd[2] that holds that in building cases the ordinary discretion in relation to costs applies with the result that s 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) that provides that parties should bear their own costs, is displaced.
- [8]The applicant also points to the fact that, even prior to the commencement of proceedings before QCAT, it had made a number of offers to the respondents in relation to the replacement of the tiles in their home. The applicant says that these offers were ultimately much more favourable than the trivial result obtained by the respondents before QCAT on their counter-claim. The applicant contends that these offers should now be considered on the question of costs in view of s 105 of the QCAT Act, which discusses the discretion of the Tribunal to award costs where ‘an offer to settle the dispute the subject of the proceedings has been made but not accepted’; and also r 86(1) of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘QCAT Rules’) which provides additional powers to award costs, when a more favourable written offer to settle has been made, yet rejected.
- [9]Finally, the applicant refers to s 48 of the QCAT Act as affording another basis by which it should be entitled to costs, which speaks of circumstances in which one party causes a disadvantage to another, in the sense of having conducted proceedings vexatiously, or unnecessarily.
- [10]I am unpersuaded that s 48 of the QCAT Act is now an operative consideration. Because the applicant did not comply with the provisions of the DBC Act the respondents were always entitled to object to the payment of the variation claims, thus making it inapposite to speak of the respondent as having acted either vexatiously or oppressively. As I found in the primary dispute, the only bases upon which the applicant could succeed against the respondents was by invoking s 84(4) of the DBC Act which required that it obtain the benefit of a statutory discretion, only exercisable by this Tribunal. That the respondents put the applicant to that step does not make the respondents conduct either vexatious or oppressive.
- [11]Equally, I do not think that the fact that offers were made by the applicant to resolve the respondents complaints before QCAT proceedings were on foot is now a matter that can be taken into consideration under either s 105 of the QCAT Act or r 86 of the QCAT Rules. These provisions have in contemplation settlement offers made after Tribunal proceedings have been commenced, and not before.
- [12]In relation to the contention that s 77(2)(h) of the QBCC Act displaces the effect of s 100 of the QCAT Act, such that costs should follow the substantial success of the applicant in its claim against the respondents, it is to be observed that the effect of Lyons v Dreamstarter and also Tamawood v Paans requires no more than recognition that the ordinary rule[3] about costs in QCAT matters is displaced in building matters, and that the discretion in relation to costs is to otherwise be exercised judicially. On a balancing of competing considerations there is not enough in my view to warrant the making of a costs order in favour of the applicant.
- [13]In the end, the only matter for real scrutiny is the point first raised by me in the primary reasons for decision and that is the question whether clause 31.1 of the contract might allow the applicant to recover legal costs associated with an ‘attempted recovery’ of an amount under this contract?
- [14]In their submissions the respondent say that costs should not be allowed pursuant to clause 31.1 of the contract because of the fundamental fact of the applicant’s non-compliance with the consumer protection regime contained in Part 7 of the DBC Act. The respondents contend that it would be contrary to the interests of justice for the applicant to be rewarded by an award of costs in circumstances where its own conduct, in breach of the legislation, necessitated that the matter be determined by this Tribunal. I accept that submission. The Applicant is a large building company and is very prominent within the Queensland domestic building industry. By its own admission it has failed to adhere with a regulatory requirement which it ought be instantly familiar, and should be able to comply with, simply by ensuring it adopts proper internal administrative procedures. It would not, in my view, be appropriate in these circumstances to make an order for costs. Section 31.1 of the Contract should in my view be read narrowly so as not to defeat the consumer protection regime created by Part 7 of the DBC Act. Ultimately the attempted recovery by the applicant of an amount under the contract was in reality a statutory recovery under s 84(4) of the DBC Act, such that it would be wrong to categorise it differently.
- [15]The respondents further submit that they ought now be entitled to an award of costs on the standard basis on the applicable Magistrates Court Scale, no matter the fact of their having only very modest success on their counterclaim. I cannot agree with that contention, which to my mind would give rise to an injustice. The respondents’ considerable persistence in resisting this claim – although legally permissible given the requirements of Part 7 of the DBC Act – must be assessed in its proper context. That is that the respondents had refused to pay for variations that it had at all times requested and that had been reduced to writing in very substantial (yet nonetheless imperfect) compliance with the requirements of Part 7. In those circumstances the claim of an entitlement to costs is most untenable.
- [16]In all of the circumstances the appropriate order is that there should be no order as to costs.