Lightweight Structures Pty Ltd v See
[2016] QCAT 521
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- Unreported Judgment
- Lightweight Structures Pty Ltd v See[2016] QCAT 521
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Lightweight Structures Pty Ltd v See[2016] QCAT 521
Lightweight Structures Pty Ltd v See[2016] QCAT 521
CITATION: | Lightweight Structures Pty Ltd v See [2016] QCAT 521 |
PARTIES: | Lightweight Structures Pty Ltd (Applicant) v Patrick and Julie See (Respondent) |
APPLICATION NUMBER: | BDL182-14 |
MATTER TYPE: | Building matters |
HEARING DATES: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member King-Scott |
DELIVERED ON: | 16 December 2016 |
DELIVERED AT: | Brisbane |
ORDERS MADE: | The Respondents pay the Applicant:
such sums to be paid by 4.00 pm on 31 January 2017. |
CATCHWORDS: | Interest – under contract. Costs – whether costs should be awarded on an indemnity basis – Calderbank offer - conduct of the parties – ulterior motive for proceedings. The Uniting Church v Takacs (No 2) [2008] NSWCA 172; Emanuel Management Pty Ltd (in Liq) & Ors v Foster’s Brewing Group Ltd Ors and Coopers & Lybrand & Ors [2003] QSC 299 |
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
Introduction
- [1]The hearing of this matter took place over several days commencing on 13 July 2015 and culminating in the decision of the Tribunal on 19 September 2016. During that time there were additional directions hearings.
- [2]The Applicant has been successful in the claim. I invited submissions in respect of the claim for interest and costs. Submissions have been provided by both parties.
Interest
- [3]The contract, being a Master Builders Minor Works Contract Residential contract provided for default interest under Item 10 at the rate of 15% on a daily basis. The sum that remained unpaid under the contract and was in dispute was deposited in the Master Builders Trust Account and was paid out to the Applicant on the Tribunal’s decision being handed down. The Applicant claims interest on that amount of $13,337.16 calculated in accordance with Item 10. The Respondents do not appear to dispute the mechanism of calculation or the accuracy of the amount.
- [4]The Respondents resist the claim for interest on several bases. Firstly, that there must be some set off for accretions, if any, on the monies held in the Master Builders Trust Account paid out to the Applicant. I agree with that submission, however, I am not aware that there were any accretions. Secondly, that the delays allegedly perpetrated by the Applicant and its failure to take part in the mediation suggested by the Respondents should not rewarded with an award of interest. Thirdly, the Applicant did not have to rectify the defects in the structure and this has saved it costs in doing so and, therefore, no interest should be paid on the amount saved, which was not quantified for the purpose of the submissions.
- [5]I will address the issue of delay later in these Reasons. However, I do not consider there is any basis to deny the Applicant’s entitlement to interest. I award interest of $13,337.06.
Costs
- [6]The Tribunal has powers to award costs pursuant to s 77(3) of the Queensland Building and Construction Commission Act 1991 displacing the usual no costs provision in Tribunal matters as provided by s 100 of the Queensland Civil and Administrative Tribunal Act 2009.
- [7]The Applicant is claiming indemnity costs. Its grounds for doing so are shortly:
- The Respondents rejected a Calderbank offer;
- The Respondents conducted themselves in a manner which caused the proceedings to become unusually long, overcomplicated and cumbersome;
- The Respondents acted for collateral and/or ulterior motives.
- [8]The Respondents submit that there should no order as to costs because of the manner in which the proceedings were instituted and then contested.
- [9]The Respondents say they attempted to have the matter mediated by the Master Builders Association but that the Applicant, through its director Trevor Scott, in the course of email discussions with the Respondent made a pre-emptive attack by filing these proceedings in the Tribunal.
- [10]The Applicant relies upon a letter dated 18 July 2014 written on a without prejudice basis to the Respondents following their complaints about the structure, the letter contained several options to resolve the Respondents complaints.
- [11]The QCAT Rules 2009 relating to offers do not apply as no proceeding, as defined, was on foot at the time this offer was made. I presume, it was for that reason it found its way into the filed material before the Tribunal. Although it was written on a without prejudice basis, it would appear that both parties waived the privilege.
- [12]Is the letter of 18 July 2014 a Calderbank offer? At the time it was made there were no proceedings on foot. Indeed, at that time there was no claim of defective workmanship only that the structure had not been built according to the conceptual design. All of the options in the letter were solutions to the Respondents’ complaints and costed out with no apparent concession. The last option was to offer a $1,000 discount on the contract price. It is this offer that the Applicant relies upon for submitting that the Tribunal’s decision is more favourable. The letter does not contain a time limit by which the offer, if it is one, should be accepted. It merely suggests that the parties should reach a solution by the 23 July 2014. I note that the proceedings were filed the day after that date. Further, I note it makes no reference to costs. I am not prepared to accept the letter of 18 July 2014 as a Calderbank offer.
- [13]The Respondents also question whether it was a real and genuine element of compromise.[1] I think it was. However, the parties, not unusually viewed their respective positions and responsibility for the dispute quite differently. As it happens, had it been accepted the Respondents would have been very much better off than they are after the Tribunal’s decision. However, the Applicant’s position was improved in the proceedings when the Respondents decided to dismantle the structure. Had they not done so there was a real possibility that the Applicant may have been required to make some rectifications at a cost at least exceeding a $1,000.[2]
- [14]The Respondents say, thereafter, they were always willing to negotiate. They rely upon an offer made upon their Counsel, Mr Andrew See, in about November 2014. Essentially, that offer was for each party to walk away with the Respondents being refunded the amount they had paid into the Master Builders Trust Account. Not surprisingly, the Applicant did not accept it and did not pursue any further settlement negotiations.
- [15]There were plenty of opportunities to do so in the course of the proceedings but neither party seemed intent on trying to resolve the issues.
Delay
- [16]The Respondents in their submissions set out a number of instances where it is alleged that Applicant delayed the proceedings.
- [17]The first experts’ conclave to be held on 25 November 2014 was adjourned because Trevor Scott, the Applicant’s director, put himself forward as an expert. That was not accepted by the Tribunal and it delayed the holding of a further conclave until another expert was retained. That expert was Mr Jeremy Hunter, however, he was unavailable because of work commitments for some time and Mr Jason Lindsay attended on behalf of the Applicant. I should interpolate here that Mr Jeremy Hunter was wholly unsatisfactory as an independent expert on the grounds that I set out in the Reasons at paragraph [114].
- [18]There was delay in the finalisation of the joint experts’ report however it was the fact that the experts had misconceived the paint system that caused delay. The experts, initially, considered it was a powder coated structure when, in fact, the contract clearly stated that it was to painted as in fact it was, and that, one would have considered, would have been patently obvious on an inspection. I consider both parties were responsible for that delay.
- [19]It is submitted by the Respondents that I advised the parties that I would deliver a decision by Christmas 2015. I agree that I gave that indication but the parties then brought a series of applications. The first in October 2015, was by the Applicant, for leave to provide a further response to the Respondent’s written submissions in the nature of a Rejoinder. The next application[3] was by the Applicant to reopen the hearing as a consequence of the dismantling of the structure which it was submitted would affect the relief that the Tribunal could order, which, indeed, was the case. The Respondents then applied[4] to call further evidence of latent defective building work discovered after the structure had been dismantled and to amend their Response and Counter Claim to allege a total failure of consideration.
- [20]Again, I consider both parties were responsible for that delay.
- [21]Another issue that took up a significant amount of time was whether the structure had body corporate approval and whether it would have been required to have been removed by the body corporate. I will refer to this later in these reasons.
Indemnity costs
- [22]The Applicant seeks an order that costs be paid on an indemnity basis. As stated earlier its argument for indemnity costs is three fold. Firstly, the rejection of the Calderbank offer. Secondly, the Respondents conduct of the litigation and, thirdly, the Respondents brought and prosecuted the proceedings with an ulterior motive in mind. I have already considered the effect of the Calderbank offer.
Respondents conduct of the litigation
- [23]In support of the second ground for the claim for indemnity costs, the applicant submits that the Respondents made allegations of fact which were contrary to their own evidence; they made allegations of law which, properly advised, were bound to fail; their evidence was argumentative and in part inadmissible; the written submissions were voluminous and in part vexatious; they sought to reopen the matter on a specific reopening ground (the existence of a latent defect) but failed to prove the reopening ground.
- [24]There is some merit in those submissions. The claim of collateral warranty, on the evidence available, could never have been established. The late claim of a total failure of consideration also was not pursued. The fact that one of the crucial representations, allegedly, made by Mr Scott at a meeting that had been recorded could not be found in the recording was of concern. I also note that the evidence of latent defective work purportedly discovered when the structure was dismantled was not pursued. However, the experts did consider there was work requiring rectification though they differed on the issue whether the structure required dismantling in order to carry out the repairs and the extent of rectification work required.
- [25]Of more concern was the Respondents’ attack on the credit of Mr Scott. The Applicant submitted that the Respondents both expressly and by inference claimed that Mr Scott was some how shady or unprofessional and he lacked skill as an engineer. This submission was rejected as preposterous by the Respondents. A perusal of the transcript bears out the Applicant’s complaint. At the out set of the hearing the Respondents’ Counsel Mr A See attacked Mr Scotts credit submitting that There’s been a series – litany of sharp practices that is alleged against (him) not only in terms of the representations that he’s made,… Further he attacked his qualifications that he was not a registered engineer. Mr Scott agreed that he was not registered. There was no evidence led that he should have been registered. Mr Scott outlined his qualifications in the course of cross-examination which included a Masters of Engineering Membrane Light Weight Structures and Diploma of Building Design and Technology. Despite this Mr See continued to make gratuitous remarks when cross examining Mr Scott such as Just help me for a minute then, because I’m a bit like you, I’m not an engineer…[5] The attack on Mr Scott’s skill and qualifications was not warranted, however, I do not consider it went to the extent that warranted the awarding of indemnity costs in Emanuel Management Pty Ltd (in Liq) & Ors v Foster’s Brewing Group Ltd Ors and Coopers & Lybrand & Ors.[6]
- [26]I do not think that the Respondents arguments were completely devoid of merit. I don't think their conduct in this respect is sufficient to warrant an indemnity costs order.
Ulterior motive
- [27]The third ground is based on the Tribunal's finding that the Respondents were intent on removing the structure irrespective of the outcome of the proceeding. That finding was based on the perceived threat of Body Corporate action. The Applicant submits that the Respondents led evidence at trial to justify the removal of the structure and blame the Applicant as the cause.
- [28]At the outset counsel for the Respondents, Mr A See, submitted before any witness was called that … the structure is to be removed because there are about five complaints that are alive from other tenants or other unit holders at that location.[7]
- [29]Ultimately, I decided that it was unnecessary to determine that issue. However, what was of concern to the Tribunal was that during the hearing of the matter in which the removal of the structure was in issue, there had been proceedings before the Adjudicator for the Body Corporate and Community Management Committee to have the structure removed. Yet those determinations were not brought to the attention of the Tribunal until the Applicant became aware of it after the initial hearing.[8]
- [30]The Tribunal findings did not go so far as to find an ulterior motive, and I am not prepared to do so in respect of the claim for costs.
- [31]Under s. 107 of the QCAT Act if the Tribunal makes a costs order, under that Act or an enabling Act, it is required to fix costs, if possible.
- [32]
Having regard to the objects of the QCAT Act, the discretion to fix costs under s 107 is an extremely wide one and is to be exercised robustly. The fixation of a round or approximate sum will often be a preferable option to increasing costs and wasting money and effort in the production of itemized assessments. However, in the present case an itemized assessment was already available, and his Honour fixed them at that figure.
- [33]The Applicant claims costs of $45,867.41 in an itemised bill being annexure A to the affidavit of Lucille Scott. The Applicant like the Respondents were represented by counsel who were directly briefed. The costs therefore, are less than they would have been had solicitors been engaged. There are some small amounts that were paid to solicitors in the course of the proceedings. The bulk of the fees are outlays for filing fees, transcripts, experts and counsel.
- [34]Applying a broad brush approach, I have fixed costs on a standard basis at $30,000.00.
Orders
such sums to be paid by 4.00 pm on 31 January 2017.
- [35]Accordingly, I order the Respondents pay the Applicant:
- Interest of $13,337.06;
- Costs fixed at $30,000.00;