Dyer v Spence (No 2)[2017] QCAT 375

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]
   On 19 June 2017, I ordered Mr Dyer, a builder, to pay Ms Spence $138,826.18 in respect of her claims against him arising out of a domestic building contract between them.  I also made directions for the making of any application for costs.
2. [2]
   On 21 July 2017, in accordance with my directions, Ms Spence made an application for her costs.  Mr Dyer was given the opportunity to make submissions in response but none have been filed.  It is appropriate to decide the costs application on the papers, as there has been no request for an oral hearing.
3. [3]
   Ms Spence seeks costs on a full indemnity basis for all her costs of and incidental to this dispute on the grounds that Mr Dyer unnecessarily caused her significant prejudice and disadvantage.  Ms Spence claims she incurred costs in the sum of $141,957.71, an amount more than the amount awarded to her by my decision of 19 June 2017.  Ms Spence provided copies of invoices from her solicitors, counsel, experts and other outlays to substantiate the costs incurred.
4. [4]
   I previously ordered Mr Dyer to pay Ms Spence’s costs thrown away by his request for a late adjournment of the final hearing in the sum of $22,856.27.  She now seeks an order for the balance, $119,101.44. 
5. [5]
   As at 21 July 2017, Mr Dyer had not paid Ms Spence’s costs thrown away, which were ordered to be paid by 28 October 2016.
6. [6]
   The QCAT Act provides, ‘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 proceedings.’^[1] 
7. [7]
   The Tribunal’s discretion to award costs in a building dispute^[2] is a broader and more general discretion than the one conferred by the QCAT Act^[3] because there is an express power to award costs conferred by the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’), the relevant enabling Act.  Unlike in the QCAT Act, there is no strong contra-indication in section 77 of the QBCC Act against a costs order. 
8. [8]
   It remains necessary to consider whether an award of costs is justified in the circumstances.
9. [9]
   In Lyons v Dreamstarter Pty Ltd^[4] the then President, Justice Wilson stated at [11]:

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.^[5] Otherwise, the factors affecting the discretion will vary in each case^[6].

10. [10]
    The Tribunal, in exercising its general discretion to award costs, may consider the factors referred to in section 102(3) of the QCAT Act.
11. [11]
    The then Deputy President, Judge Kingham in Ascot v Nursing & Midwifery Board of Australia^[7] stated at [9]:

The considerations identified in s 102(3) are not grounds for awarding costs.  They are factors that may be taken into account in determining whether, in a particular case, the interests of justice require the tribunal to make a costs order.

12. [12]
    Those considerations are largely in the nature of what may be regarded as ‘entitling’ or ‘disentitling’ factors. 

Is it in the interests of justice to exercise the discretion to award costs?

13. [13]
    I find that it is in the interests of justice to award Ms Spence costs in these proceedings. If the Tribunal makes a costs order, it is to fix the costs if possible.^[8] 
14. [14]
    Ms Spence’s submissions do not expressly address the factors in section 102(3) of the QCAT Act.

Whether a party acts in a way that unnecessarily disadvantages another party^[9]

15. [15]
    I find that Mr Dyer acted in a way that unnecessarily disadvantaged Ms Spence.  This is a factor in favour of an award of costs to Ms Spence.
16. [16]
    Ms Spence’s submissions particularly rely upon this factor. 
17. [17]
    By letter dated 29 October 2014 to Mr Dyer, Ms Spence’s solicitors sought details about Mr Dyer’s claims for payment so that she could ascertain whether monies were due to Mr Dyer or a refund was due to Ms Spence.   In late November 2014, Mr Dyer commenced these proceedings claiming $30,146.00 in respect of moneys owing for work performed under the contract and in respect of variations, having failed to provide the information requested. 
18. [18]
    On 9 January 2015, Ms Spence filed a Response seeking the claim be dismissed with costs. 
19. [19]
    On 18 November 2015, Ms Spence filed an Amended Response and Counter-application, which sought orders that Mr Dyer pay significant sums to Ms Spence on various bases together with her costs.
20. [20]
    On 6 April 2016, the application was listed for a final hearing on 9 and 10 June 2016. 
21. [21]
    On 9 June 2016, Mr Dyer sought and I granted an adjournment to allow him to obtain legal advice. The application was re-listed for final hearing on 8 and 9 September 2016.
22. [22]
    Quite unusually, on 13 July 2016, Mr Dyer filed a Notice of Withdrawal of his claim. This action necessitated a further directions hearing on 22 July 2016.
23. [23]
    From a review of the file, it is apparent that Mr Dyer failed to comply with numerous directions, in particular failing to file and serve statements of evidence including expert reports. Mr Dyer never filed any expert’s reports.  I accept that such failure lead to additional directions hearings, delay and cost to Ms Spence. 
24. [24]
    The documents filed purporting to be statements of evidence on 7 May 2015 and on 9 February 2016 were quite voluminous as they attached copies of a large number of primary documents such as supplier invoices. The statements did not clearly explain the relevance of the documents.  I accept that the state of Mr Dyer’s evidence would have increased Ms Spence’s costs because it lead to further correspondence and further directions to seek to clarify the evidence.  A possible explanation for the state of Mr Dyer’s evidence is that he was self-represented for most of the proceedings.
25. [25]
    Unfortunately, some non-compliance with directions is not unusual.  However, I accept that the extent and degree of non-compliance and the withdrawal of the claim in July 2016 after pursuing the claim since November 2014 is evidence that Mr Dyer’s conduct unnecessarily disadvantaged Ms Spence.  As Ms Spence points out Mr Dyer’s pursuit of his claim delayed her ability to make and/or to have determined a claim under the home owners insurance scheme operated by the Queensland Building and Construction Commission.  Ms Spence contends that but for Mr Dyer commencing the proceedings she would not have made a counter-application and would have pursued her claim under the home owners insurance scheme.  She has been put to considerable expense and inconvenience in having to defend Mr Dyer’s claims.

The nature and complexity of the dispute^[10]

26. [26]
    Both parties were granted leave to be legally represented.^[11]
27. [27]
    I accept that the proceeding involved some complex factual and legal issues, which warranted legal representation. 
28. [28]
    This is a factor in favour of an award of costs but it is not determinative.^[12]

The relative strengths of the claims^[13]

29. [29]
    Mr Dyer withdrew his claim before it was determined.  He did not file a Response to Ms Spence’s counter-application and he failed to appear on the adjourned final hearing date.  Some of the evidence he had filed in support of his claim related to some of Ms Spence’s heads of counter-claim.  Ms Spence was substantially successful.  In this sense, Ms Spence’s claims were stronger on the matters on which she succeeded. 
30. [30]
    This is a factor in favour of an award of costs.

The financial circumstances of the parties^[14]

31. [31]
    On balance, this is a factor in favour of an award of costs to Ms Spence.
32. [32]
    Ms Spence submits that her financial circumstances have been significantly depleted by these proceedings and Mr Dyer’s defective work. The evidence before me, which I accept, is that Ms Spence’s husband died a short time prior to her engaging Mr Dyer to perform the building work. Ms Spence’s submissions outline that after her husband’s death she was left a non-paid homemaker and that she has had to rely upon her personal savings, which are now exhausted and borrowings to fund her defence of these proceedings.
33. [33]
    There is little evidence of Mr Dyer’s financial circumstances before me.  Ms Spence contends that Mr Dyer remains a licensed builder and continues to earn an income.  
34. [34]
    A search of the QBCC website confirms Mr Dyer holds a current site supervisor’s licence and has earning capacity. 

Anything else the Tribunal considers relevant^[15]

35. [35]
    A factor, which is sometimes relevant, is whether or not either party sought to protect itself through the making of offers to settle.^[16]   Ms Spence did not refer me to any relevant settlement offers.
36. [36]
    On 9 June 2016, I ordered the Registry to remove attachment ‘S’ to Mr Dyer’s statement filed 9 February 2016 and place it in a sealed envelope, which was not to be opened until after the substantive decision in the matter was made. I have now viewed attachment ‘S’, which consists of correspondence between Mr Dyer’s then solicitors and Ms Spence’s solicitors. 
37. [37]
    Relevantly on 9 April 2015, Mr Dyer offered to settle all claims between them on the basis that Ms Spence pay him $21,000.00.  The outcome of the proceedings reveal that Ms Spence was justified in not agreeing to settle on that basis. 
38. [38]
    I note that Ms Spence filed her Counter-application some months after this offer was made.^[17]
39. [39]
    The costs Ms Spence has incurred in securing the benefit of the decision will significantly erode her success if she is not awarded costs.

Indemnity costs

40. [40]
    Ms Spence seeks costs on a full indemnity basis for all her costs of and incidental to this dispute.
41. [41]
    The applicable principles, as to whether to order indemnity costs, were summarised in Colgate Palmolive Co v Cussons Pty Ltd.^[18]  Essentially there needs to be some special feature to justify the exercise of the discretion.  The special feature has been described as something ‘irresponsible’ or ‘unreasonable’ on the part of the other party.^[19]
42. [42]
    I am satisfied that, in the current circumstances, commencing proceedings and then choosing to abandon them immediately before the final hearing is a special or unusual feature. 
43. [43]
    I have reviewed the invoices and the individual claims.  I am not satisfied that items 6 and 19, each for $445.00, in respect of Coastal Building Certifications charges are in the nature of costs and so disallow those claims. They relate to fees paid to extend the Council building approval.
44. [44]
    Having regard to my previous order for costs, I fix Ms Spence’s costs of the proceeding in the sum of $118,211.44.  It is appropriate to allow some time for payment.