Mt Cotton Constructions Pty Ltd v Greer (No 2)
[2016] QCAT 387
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- Unreported Judgment
- Mt Cotton Constructions Pty Ltd v Greer (No 2)[2016] QCAT 387
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Mt Cotton Constructions Pty Ltd v Greer (No 2)[2016] QCAT 387
Mt Cotton Constructions Pty Ltd v Greer (No 2)[2016] QCAT 387
CITATION: | Mt Cotton Constructions Pty Ltd v Greer & Anor (No 2) [2016] QCAT 387 |
PARTIES: | Mount Cotton Constructions Pty Ltd (Applicant) v Damian Greer and Kate Greer (Respondents) |
APPLICATION NUMBER: | BDL190-14 |
MATTER TYPE: | Building matters |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Senior Member Brown |
DELIVERED ON: | 24 October 2016 |
DELIVERED AT: | Brisbane |
ORDERS MADE: | Mt Cotton Constructions Pty Limited must pay to Damian Greer and Kate Greer the costs of and incidental to the application for miscellaneous matters filed 25 July 2016 fixed in the amount of $11,485.50 within fourteen (14) days. |
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW EVENT – GENERAL PRINCIPLES AND EXERCISE OF DISCRETION – INDEMNITY COSTS – RELEVANT CONSIDERATIONS GENERALLY - where application by applicant to rely on further evidence refused – whether “special or unusual feature” justifying award of indemnity costs – fixing costs Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 6, 7, 100, 106, 107(1) Queensland Building and Construction Commission Act 1991 (Qld) ss 77(3)(h) Uniform Civil Procedure Rules 1999 (Qld) rr 690, 702, Schedule 2 Mt Cotton Constructions P/L v Greer [2016] QCAT 281 Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 In The Will of Bruce George Gillespie Deceased (No 2) [2012] QSC 369 Lewis v Hillhouse & Anor [2005] QSC 78 LPD Holdings (Aust) Pty Ltd v Phillips, Hickey and Toigo [2013] QCA 305 Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 531 Feyen v Charlton & Ors (No 2) [2016] QSC 138 Cruceru v Medical Board of Australia [2016] QCAT 111 |
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 (Qld) (QCAT Act).
REASONS FOR DECISION
- [1]On 4 August 2016 I refused an application for miscellaneous matters filed on 25 July 2016 by Mount Cotton Constructions Pty Limited (MCC) to rely upon further expert evidence. The application was opposed by the Greers who now seek their costs of the application.
- [2]I will not restate at length the background to the application for miscellaneous matters and my reasons for refusing the application. Suffice it to say my reasons make clear the grounds for such refusal.[1]
- [3]Other than as provided for under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceeding.[2]
- [4]The Queensland Building and Construction Commission Act 1991 (Qld) is the relevant enabling Act in respect of this proceeding. Section 77(3)(h) of the QBCC Act gives the Tribunal the power to award costs. 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.[3]
- [5]The Appeals Tribunal has observed:
Section 6(7) contemplates that an enabling Act may include provisions about matters that may add to, otherwise vary or exclude provisions of the QCAT Act dealing with such matters. They include provisions dealing with the conduct of proceedings for jurisdictions conferred by the enabling Act, including the practices and procedures and the Tribunal’s powers for the proceedings (s 6(7)(b)). Such provisions are referred to as modifying provisions (s 7(1)(b)).
To the extent of any inconsistency between them, a modifying provision prevails over the provisions of the QCAT Act and the QCAT Act must be read, with any necessary changes, as if the modifying provision were part of it (s 7(2)(3)).
There is a clear inconsistency between a provision that confers on the Tribunal a broad and general discretion to award costs (QBSA Act, s 77(1)(h)) and one which states that, unless otherwise provided each party must bear their own costs (QCAT Act, s 100).[4]
- [6]If the tribunal may award costs under the QCAT Act or an enabling Act, the costs may be awarded at any stage of a proceeding or after the proceeding has ended.[5] Accordingly, the discretion to award costs in the present application is to be exercised in accordance with the established principles.
General principles in awarding costs
- [7]A successful litigant is, generally speaking, entitled to an order of costs, and to deprive a successful party of their costs is an exceptional measure.[6] A successful party is entitled to recover their costs of a standard basis absent some special or unusual feature to justify a court departing from the usual practice.[7]
Costs on an indemnity basis
- [8]The Court of Appeal has observed in relation to awarding indemnity costs (footnotes omitted):
Whilst the awarding of costs on an indemnity basis will always ultimately depend upon the exercise of a discretion in the particular circumstances of each individual case, the justification for an award of indemnity costs continues to require some special or unusual feature of the particular case. As was observed by Basten JA in Chaina v Alvaro Homes Pty Ltd the general rule remains that costs should be assessed on a party and party basis, and the standard to be applied in awarding indemnity costs ought not “be allowed to diminish to the extent that an unsuccessful party will be at risk of an order for costs assessed on an indemnity basis, absent some blameworthy conduct on its part”.[8]
- [9]In Colgate-Palmolive Company v Cussons Pty Ltd[9] Sheppard J set out a number of principles or guidelines in relation to awarding indemnity costs
1. The problem arises in adversary litigation, i.e. litigation as between parties at arm’s length. Different considerations apply where parties may be found to be entitled to the payment of their costs out of a fund or assets being administered by or under the control of a trustee, liquidator, receiver or person in a like position, eg a government agency or statutory authority.
2. The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis. In this court the provisions of O 62, rr 12 and 19, and the Second Schedule to the rules [of the Federal Court] will apply to the taxation. In many cases the result will be that the amount recovered by the successful party under the Order will fall short of (in many cases well short of) a complete indemnity.
3. This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it. No doubt any consideration of whether there should be any change in the practice would require the resolution of the competing considerations mentioned by Devlin LJ in Berry v British Transport Commission and Handley JA in Cachia v Hanes on the one hand and by Rogers J in Qantas on the other. The relevant passages from the respective judgments have been earlier referred to.
4. In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis.
The circumstances of the case must be such as to warrant the court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v Barnes (39 Ch D at 141) said the court had a general and discretionary power to award costs as between solicitor and client “as and when the justice of the case might so require”. Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v Preston ([1982] 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo: “the categories in which the discretion may be exercised are not closed”. Davies J expressed (at 6) similar views in Ragata.
5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v. Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Kent (SC(NSW)(CA), 27 Sept 1993, unreported) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
6. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or justice.
What do the parties say?
- [10]The Greers say that the conduct of MCC in bringing the application, without merit, has caused the Greers to incur costs they would otherwise not have incurred. The Greers refer to s 102(3) of the QCAT Act and the matters to which the Tribunal may have regard in deciding whether to award costs including whether a party causes an adjournment or vexatiously conducts the proceedings. These are also considerations in exercising the general discretion to award costs.
- [11]The Greers say that even had the application for miscellaneous matters been successful, they would have been entitled to their costs on an indemnity basis.
- [12]MCC says that the costs of the application should be reserved for determination by the Tribunal “in light of all the circumstances of the proceeding.”[10] MCC accepts the general discretionary power of the Tribunal to award costs. As to the issue of the basis upon which costs should be awarded, MCC refers to Feyen v Charlton & Ors (No 2)[11] and the observations by McMeekin J that:
Effectively special or unusual circumstances and some evidence of unreasonable conduct by the party in the bringing or the defending of an action is required. Such an order should not be seen as too readily available.
- [13]In awarding indemnity costs, MCC says that the appropriate approach is that contained in Uniform Civil Procedure Rules 1999. Rule 703(3) provides:
When assessing costs on the indemnity basis, a costs assessor must allow all costs reasonably incurred and of a reasonable amount, having regard to—
(a) the scale of fees prescribed for the court; and
(b) any costs agreement between the party to whom the costs are payable and the party's solicitor; and
(c) charges ordinarily payable by a client to a solicitor for the work.
- [14]MCC says that although the application was refused it was supported by detailed submissions by reference to the relevant authorities. It says that the application was not doomed to fail and that any award of costs should be on a standard basis or in a fixed sum reflective of such basis.
Consideration
- [15]In dismissing the application for miscellaneous matters I made a number of findings regarding the conduct of MCC:
- The application was brought after a lengthy delay by MCC[12];
- The explanation for the delay proffered by MCC was unconvincing[13];
- The explanation by MCC for its change in position regarding the evidence upon which it sought to rely was less than satisfactory[14];
- MCC made a decision in April 2016 not to pursue expert evidence in relation to the quantum meruit claim[15];
- The delay by MCC in bringing the application for miscellaneous matters was significant[16].
- [16]MCC’s solicitor said that after having received further expert evidence from the Greers in July 2016, he reviewed the evidence and formed the view that there were insufficient timesheets or supplier invoices in respect of the contract works to allow substantial or full recovery on a quantum meruit basis. Mr Scroope, the director of MCC, said that he did not consider that the further expert evidence was necessary at the time of the April 2016 application but that he subsequently reviewed the evidence in July 2016 which led him to form the view that expert evidence to support the quantum meruit claim was required.
- [17]The conduct of MCC in first pursuing an application to rely upon further expert evidence to support the quantum meruit claim, then abandoning the application in April 2016 and then bringing essentially the same application in July 2016 can be readily criticised as my reasons for refusing the application make clear. In my view however there is not the necessary special or unusual feature of the application and the conduct of MCC and the circumstances in which the application was brought to warrant an order that MCC pay the Greers’ costs of the application on an indemnity basis.
- [18]The application was not hopeless or otherwise bound to fail. The outcome of the application for miscellaneous matters turned upon the exercise by the Tribunal of the discretion to allow, or not allow, late evidence. The explanation offered by MCC for the change in tactics and delay in addressing the issues relating to the evidence was found to be less than satisfactory. That explanation, and the explanation offered by MCC’s solicitor, could not be entirely reconciled. In the event, the discretion to allow the late evidence was not exercised in favour of MCC. Notwithstanding this, the circumstances of the application do not fall within the (non-exhaustive) categories of cases identified by Sheppard J in Colgate-Palmolive Company. As McMeekin J observed, an order for indemnity costs should not be seen as too readily available.
- [19]The circumstances of the application do not warrant departure from the usual order that costs be on the standard basis. The appropriate order is that MCC pay the Greers’ costs of and incidental to the application for miscellaneous matters on the standard basis.
Fixing the costs
- [20]
690 Solicitors' costs
(1) For assessing costs on the standard basis under this part, a solicitor is entitled to charge and be allowed the costs under the scales of costs for work done for or in a proceeding in the court.
(2) The scales of costs are in –
(a) for the Supreme Court—schedule 1; or
(b) for the District Court—schedule 2; or
(c) for Magistrates Courts—schedule 3.
(3) For an assessment for Magistrates Courts on the standard basis, the scale in schedule 3 appropriate for the amount the plaintiff recovers applies.
- [21]The Greers have submitted what they say is a record of the fees accrued by their solicitors in relation to the application.[19] Those fees are calculated on an itemised time basis at an hourly rate of between $470.00 and $570.00 (plus GST). The total amount claimed by the Greers, including Counsel’s fees, is $15,819.10 inclusive of GST.
- [22]Any assessment of costs on the standard basis should be on the District Court scale of fees. When assessing costs on a standard basis, costs are allowed for the “necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed”.[20] Standard costs generally do not include items not strictly necessary for the party to establish their case.
- [23]The hourly rate under the District Court scale for attendances by a solicitor involving skill or legal knowledge is $244.00. The scale is GST inclusive. Doing the best I can and having considered in detail the items identified in the assessment submitted by the Greers I fix the standard costs of the application for miscellaneous matters, including counsel’s fees, in the amount of $11,485.50.
- [24]MCC seeks to have payment of the costs deferred until after the hearing of the proceeding. I am not persuaded that there is any good reason for payment of the costs to be deferred.
Orders
- [25]Mt Cotton Constructions Pty Limited must pay to Damian Greer and Kate Greer the costs of and incidental to the application for miscellaneous matters filed 25 July 2016 fixed in the amount of $11,485.50 within fourteen (14) days.
Footnotes
[1]Mt Cotton Constructions P/L v Greer [2016] QCAT 281.
[2]QCAT Act s 100.
[3]Lyons v Dreamstarter Pty Ltd [2011] QCATA 142.
[4]Ibid at [35] – [37].
[5]QCAT Act s 106.
[6]In The Will of Bruce George Gillespie Deceased (No 2) [2012] QSC 369.
[7]Lewis v Hillhouse & Anor [2005] QSC 78.
[8]LPD Holdings (Aust) Pty Ltd v Phillips, Hickey and Toigo [2013] QCA 305.
[9](1993) 46 FCR 225; [1993] FCA 531.
[10]Applicant’s submissions at [1].
[11][2016] QSC 138 at [16].
[12]Mt Cotton Constructions Pty Limited v Greer & Anor [2016] QCAT 281 at [32].
[13]Ibid at [36].
[14]Ibid at [37].
[15]Ibid at [43].
[16]Ibid at [44].
[17]QCAT Act s 107(1).
[18]Cruceru v Medical Board of Australia [2016] QCAT 111.
[19]Affidavit of Timothy James Mitchell filed 24 August 2016.
[20]UCPR r 702.