Scott Canty & Sons Pty Ltd v Shakspeare (No 2)
[2018] QCAT 159
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- Unreported Judgment
- Scott Canty & Sons Pty Ltd v Shakspeare (No 2)[2018] QCAT 159
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Scott Canty & Sons Pty Ltd v Shakspeare (No 2)[2018] QCAT 159
Scott Canty & Sons Pty Ltd v Shakspeare (No 2)[2018] QCAT 159
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Scott Canty & Sons Pty Ltd v Shakspeare (No 2) [2018] QCAT 159 |
PARTIES: | SCOTT CANTY & SONS PTY LTD (applicant) v ANTHONY SHAKSPEARE & URSULA SHAKSPEARE (respondents) |
APPLICATION NO/S: | BDL231-14 |
MATTER TYPE: | Building matters |
DELIVERED ON: | 4 June 2018 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member King-Scott |
ORDERS: |
|
CATCHWORDS: | COSTS of proceedings – INTEREST on claim – jurisdiction to award interest on claim for restitution doubted – exercise of discretion based on the applicant’s conduct – inordinate delay – decision was not as favourable as open written offers – indemnity cost fixed Queensland Building and Construction Commission Act (1991), s 77(3)(c) Queensland Building and Construction Commission Regulation (2003), s 34B Queensland Civil and Administrative Tribunal Rules (2009), r 86(2) Lyons v Dreamstarter Pty Ltd [2012] QCATA 71 Serisier Investments Pty Ltd v English [1989] 1 QdR 678 Tamawood Ltd 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). | |
REASONS FOR DECISION
- [1]This matter was heard over three days in August and September 2017. On 2 February 2018 the following orders were made:
- (a)the respondent's to pay the applicant the sum of $28,245 by 4 pm on 28 February 2018;
- (b)the respondent's counterclaim was dismissed;
- (a)
- [2]A timetable was set for submissions in relation to claims for interest and costs.
- [3]The applicant has made a claim for interest and for costs. On 1 March 2018 an order was made to stay the decision for payment pending a decision in respect of costs.
Interest
- [4]The applicant claims interest under section 34B of the Queensland Building and Construction Commission Regulation 2003 which erroneously refers to section 77(2)(c) of the Act. The proper reference should be to section 77(3)(c) which provides that the tribunal has power to award damages and interest on the damages at the rate, and calculated in the way, prescribed under a regulation. I note that subsection (d) empowers the tribunal to order restitution but there is no reference to interest.
- [5]Pursuant to the regulation the applicant claims interest at a rate of 10% on $28,245.00 from 13 June 2009 to the date of the decision being 2 February 2018.
- [6]The applicant also claims costs to be assessed on the Magistrate's Court scale.
- [7]The respondents deny the applicant's claim for interest as they submit the tribunal has no jurisdiction to allow the claim. Their argument is that the applicant's claim was a quantum meruit claim for restitution and not for damages. The tribunal is a creature of statute and the provisions referred to above do not allow for interest to be paid on amount awarded for restitution. No authority is referred to and, indeed, I suspect none exists. Nevertheless, as a matter of statutory interpretation the argument has merit. However, for reasons that will be referred to later, it is not necessary to make a decision on this point.
- [8]The power to award interest under section 77(3) of the Queensland Building and Construction Commission Act 1991 (the Act) is discretionary.[1] I was referred to the decision of Thomas J (as he then was) in Serisier Investments Pty Ltd v English [1989] 1 Qd R 678 where His Honour said at 679:
There are sometimes circumstances in which it would be unfair to order a defendant to pay interest over the whole period. This includes the situation where the defendant is unaware of the existence of any claim or liability and would have ordered his affairs differently had he been advised of it, or where a defendant may have offered amends at an earlier date had the claim be made. A far more common case in which the interest is not allowed from the date of loss is where the plaintiff has been guilty of unreasonable delay in prosecuting the claim. The public policy of having claims brought an determiner promptly seems to underlie this approach. Goff J thought that "this may be to encourage plaintiffs to prosecute their claims with diligence and also because such conduct may lull a defendant into a false sense of security, leading him to think that the claim will not be pursued against him" (B.P. Exploration (Libya) Co Ltd v Hunt (No 2) at 847).
- [9]It is submitted by the respondents that there are number of significant periods that there was unreasonable delay by the applicant in commencing proceedings. Those delays have been conveniently set out by the respondents and I repeat them here:
- (a)Following completion of the works in February 2009 to September 2009 there were no further invoices issued and no formal demand for payment was made;
- (b)The demand for payment made on 12 June 2009 for $120,000, was not a formal demand but a claim for an amount which was plainly significantly more than the applicant was entitled to;
- (c)That demand for payment caused the respondents to pay $47,755;
- (d)Following the receipt of that further payment the applicant took no steps for a further three months until it issued an invoice in September 2009;
- (e)No steps were taken by the applicant until July 2010 when it sent a further demand for payment and claimed the inflated sum of $333,780.23 as the construction costs;
- (f)The respondent made two offers in July 2010 of $40,000 and $57,000 both offers were rejected;
- (g)The applicant threatened, on 27 July 2010, to commence proceedings but took no further steps to do so until over 4 years later;
- (h)Even then, when proceedings were commenced, the applicant failed to serve them on the respondents but obtained a default judgement and took steps to enforce a judgement by commencing bankruptcy proceedings against the respondents;
- (i)The respondents, successfully, had the bankruptcy proceedings dismissed with costs and the judgement set aside with costs on 3 June 2016.
- (a)
- [10]The respondents between 22 September 2008 and 23 December 2008 promptly paid on receipt each of the 4 invoices which totaled $203,000. No further invoices were issued by the applicant between December 2008 and September 2009. It was at the meeting on 12 June 2009 that the applicant informed the respondents that they owed him $120,000. Following that statement the respondents paid the additional $48,755.
- [11]When the two offers were made by the respondents and rejected by the applicant, the applicant's solicitors, on 27 July 2010, in open correspondence stated, inter alia, that… in the absence of any further offers by your client (our client) will now commence proceedings for the recovery of the outstanding debt. Please confirm you have instructions to accept those proceedings.
- [12]Proceedings were not commenced in 2010, 2011, 2012 or 2013. There was no further correspondence from the applicant’s solicitors until 7 December 2012. There then was a further gap until proceedings were commenced in September 2014.
- [13]No explanation for the delay has ever been provided to the Tribunal.
- [14]Taking all of these matters into account, the cause for the delay is entirely the responsibility of the applicant. The respondents had a reasonable basis for assuming that the applicant had given up any claim it had against the respondents. In the exercise of my discretion I do not propose to make any award of interest.
Costs
- [15]In the decision of Lyons v Dreamstarter Pty Ltd [2012] QCATA 71 Alan Wilson J President at [11] observed:
The High Court has said that there is no automatic rule that costs "follow the event" (i.e., the outcome of the proceeding) or that the unsuccessful party must compensate successful one.[2] 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. Otherwise, the factors affecting the discretion will vary in each case.
- [16]The respondents submit, and I agree, that they did not cause the applicant to incur the costs in respect of these proceedings. The decision of the Tribunal is not more favourable than either of the two offers that were made before the commencement of proceeding.
- [17]The applicant submits that, at the time the offers were made, it did not have the benefit of pleadings or other details to precisely know how the respondents intended to defend the claim. Had Mr Canty kept accurate accounts he would have been well aware of his position. Further, as I have commented on in my earlier reasons Mr Canty had complete contempt for the legislative requirements that regulated him as a builder. In those circumstances, where the contract and variations are not in writing, he cannot be surprised that he might encounter difficulties in recovering any outstanding amounts.
- [18]It is submitted that the applicant had very limited capacity to assess the favourability or otherwise of the respondents offers as against the probability of the respondents defending the claim at trial. Further, it is submitted that the delay between when the offers were made and the ultimate proceedings should significantly remove or at least weaken their connection.
- [19]The delay in seeking final payment and the manner in which Mr Canty went about it was all his own doing.[3] I do not think he can now rely upon it for his own benefit in explaining why he could not consider the reasonableness of the offer. The Tribunal was critical of the manner in which the claim was reconstructed and the inaccuracy of the claim.
- [20]Pursuant to section 86 of the Queensland Civil and Administrative Tribunal Rules 2009 the Tribunal may award the party who made the offer all reasonable costs incurred by that party. See 86 (2). Reasonable costs can include indemnity costs which I believe should be the case here.[4]
- [21]The costs incurred in these proceedings, excepting the costs of the bankruptcy proceedings and the proceedings to set aside the judgement which have been paid by the applicant, have been detailed in the affidavit of Mr Jason Kerr who acted as solicitor for the respondents. Those costs amount to $56,368.36 which includes counsel's fee. I consider the costs reasonable and I fix them at that figure on an indemnity basis.
Orders
- [22]I make the following orders:
- (a)The order of 2 March 2018 staying paragraph 1 of the order made on 2 February 2018 is lifted;
- (b)The order of 2 February 2018 be varied to read the Respondents pay the Applicant the sum of $28,245.00 by 4.00pm on 22 June 2018;
- (c)The Applicant pay the Respondents the sum of $56,368.36 by 4.00pm on 22 June 2018.
- (a)