Spence v Queensland Building and Construction Commission (No. 2)
[2020] QCAT 358
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- Unreported Judgment
- Spence v Queensland Building and Construction Commission (No. 2)[2020] QCAT 358
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Spence v Queensland Building and Construction Commission (No. 2)[2020] QCAT 358
Spence v Queensland Building and Construction Commission (No. 2)[2020] QCAT 358
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Spence v Queensland Building and Construction Commission (No. 2) [2020] QCAT 358 |
PARTIES: | robyn belinda spence (applicant) |
v | |
queensland building and construction commission (respondent) | |
APPLICATION NO/S: | GAR282-18 |
MATTER TYPE: | General administrative review matters |
DELIVERED ON: | 17 September 2020 |
HEARD AT: | On the papers |
DECISION OF: | Member Olding |
ORDERS: | The Queensland Building and Construction Commission must pay to Robyn Belinda Spence costs in proceeding GAR282-18 fixed in the amount of $72,000 within 28 days of the date of this order. |
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS GENERAL MATTERS – where applicant substantially succeeded in application for review of decision not to give Directions to Rectify – where interests of justice so compelling as to displace the usual rule that parties bear their own costs Queensland Civil and Administrative Tribunal Act 2009 (Qld), ss 100, 102, 107 Dyer v Spence [2016] QCAT 385 Dyer v Spence [2017] QCAT 211 Dyer v Spence (No 2) [2017] QCAT 375 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Spence v Queensland Building and Construction Commission [2020] QCAT 274 |
REPRESENTATION: | |
Applicant: | Bathersby Legal |
Respondent: | K Joyce, in-house solicitor, Queensland Building and Construction Commission |
REASONS FOR DECISION
- [1]Mrs Spence is dissatisfied with residential building work carried at her property. She complained to the Queensland Building and Construction Commission (“the Commission”). The Commission issued some Directions to Rectify (“DTRs”) to the builder but ultimately declined to issue DTRs in relation to 49 complaint items, either at all or in a few cases in the terms sought by Mrs Spence.
- [2]On 21 July 2020, the Tribunal decided an application by Mrs Spence for review of the Commission’s decision.[1] The Tribunal confirmed the Commission’s decision to refuse to give DTRs in respect of 23 of the complaint items but set aside the Commission’s decision in respect of remaining items, effectively varying or requiring the issue of DTRs for a further 26 complaint items.
- [3]These reasons concern Mrs Spence’s application for costs of the review proceeding, which is opposed by the Commission.
The applicable principles
- [4]The general rule under s 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”) is that each party to a proceeding before the Tribunal bears their own costs. However, under s 102(1) the Tribunal may make an order requiring a party to pay costs of another party “if the tribunal considers the interests of justice require it to make the order”.
- [5]It has been held that for a party to obtain an award of costs “the interests of justice [must] point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in section 100”.[2]
- [6]Various factors the Tribunal may have regard to in deciding whether to award costs are set out in s 102(3).
Context
- [7]The history of the dispute, including the procedural history relating to the DTR decisions and their review, is detailed in the reasons for the Tribunal’s decision on the review.
- [8]In short:
- (a)The Commission initially decided to issue DTRs in respect of 52 complaint items but, after an internal review of that decision sought by the builder, determined that it would not be fair to issue any DTRs as the builder had been denied access to the property.
- (b)After Mrs Spence applied to the Tribunal for review of that decision, the Commission accepted the builder was not being denied access; facilitated an order for reconsideration of the matter; and decided that DTRs should issue for some complaint items, but not others.
- (c)Ultimately, some 49 complaint items remained in dispute.
- (a)
- [9]In purely numerical terms, the outcome of the review relative to the position maintained by the Commission may be summarised as follows:
Complaint items: | ||
Commission’s position | Refused by Commission | Allowed by Tribunal |
(a) No further DTR should issue – DTR already issued. | 8 | 8 |
(b) Building work not defective, or if it is DTR should be refused as a matter of discretion. | 13 | 12 |
(c) Building work incomplete but DTR should be refused as Mrs Spence had already been paid for non-completion under the statutory insurance scheme. | 22 | 0 |
(d) Building work defective, but DTR should not issue as Mrs Spence had been awarded (but not paid) compensation in an earlier building dispute. | 5 | 5 |
(e) Building work defective, but insufficient evidence that the builder was responsible for the defect. | 1 | 1 |
Totals: | 49 complaint items refused by Commission | 26 complaint items accepted by the Tribunal. |
- [10]The table above represents, of course, a purely quantitative analysis of the number of disputed complaint items resolved in favour of Mrs Spence – just over 50%.
- [11]Looking more qualitatively at the conduct and outcome of the proceedings against these categories, I observe:
- (a)Category (a) – which raised whether, a DTR having issued as part of the reconsideration decision, it would be appropriate for a differently-worded DTR to issue.
I would assess the strength of the Commission’s position as relatively weak – no substantive rationale was offered for Commission’s submission. However, this category required relatively little time to resolve as it essentially involved a point of principle.
- (b)Category (b) – which required determination of whether building work was defective and, if so, consideration of discretionary matters.
- (a)
Although I generally accepted the evidence of Mrs Spence’s expert, as observed in the reasons for the review decision, the Commission’s position was supported by expert evidence which I accepted as given in good faith to assist the Tribunal. I would describe the strength of the Commission’s position on these issues as reasonable.
- (c)Category (c) – which required determination of whether DTRs should be refused for incomplete work as a matter of discretion because Mrs Spence had already received an insurance payment for such work.
The argument put on behalf of Mrs Spence was that in the circumstances there was no “double dipping”. The evidence was not as clear as it could have been regarding which complaint items were covered by the insurance payment. I would assess the Commission’s argument as relatively strong and the position put on behalf of Mrs Spence as relatively weak. On the other hand, there was some effort taken in evidence and submissions as a consequence of the Commission’s submissions about whether particular work was complete, which ultimately the Tribunal did not find it necessary to resolve.
- (d)Category (d) – which raised whether a DTR should be refused because Mrs Spence had obtained a judgement (that had not been satisfied) against the builder in respect of the defective items.
Given the amount of time that had passed since the orders were made in the building dispute, and evidence of unsuccessful attempts to enforce the damages award, I was a little surprised that the Commission continued to maintain its position that it would be unfair for a DTR to issue for items covered by the unsatisfied judgement. I would assess the Commission’s position for this category as not strong. On the other hand, relatively little time was required to resolve this matter as the Commission conceded that the work was defective and it was in the end a matter of discretion on which reasonable minds might differ.
- (e)Category (e) – which required determination on the evidence whether the builder was responsible for the defect.
There was no direct evidence on this issue which required the drawing of an inference by the Tribunal. The position adopted by the Commission was not unreasonable on the evidence. Because of the paucity of evidence relatively little time was required to resolve this issue.
- [12]Looking at these matters overall, this much can be said: Certainly it is not the case, as the submissions for Mrs Spence asserted, that the outcome was “favourable to the Applicant and wholly unfavourable to the Respondent”; Mrs Spence was, after all, unsuccessful in respect of 23 of the 49 complaint items. However, this quantitative outcome does not give an accurate overall picture for the reasons indicated above; in particular, that the matters which turned upon and required consideration of detailed expert evidence were largely decided against the Commission.
- [13]Ultimately, I would characterise the outcome in this way: Mrs Spence has enjoyed a substantial degree of success, particularly in those matters which required the most time and effort in terms of expert evidence, but the Commission also enjoyed a not insignificant degree of success.
Consideration
- [14]It is true that the Commission’s position changed through the course of this matter, ranging from initially deciding to give a DTR in respect of 52 complaint items; then refusing to give any; then agreeing to give DTRs for 11 complaint items but declining to give the other requested DTRs; before being ordered by the Tribunal to issue DTRs for 26 additional complaint items.
- [15]However, I would not assess the Commission’s conduct as behaving in a way that “unnecessarily disadvantages” Mrs Spence.[3] There is nothing to indicate that the Commissions made its various decisions other than in good faith based on the information then available and with the benefit of expert advice. Certainly my own impression was that Ms Joyce, who appeared in the review hearing for the Commission, diligently endeavoured to discharge her duty to assist the Tribunal.
- [16]The matter was complex both because of the number of complaint items and the technical nature of the expert evidence. There were also some matters of principle raised as indicated above. I accept, and the Commission does not deny, that it was reasonable for Mrs Spence to engage solicitors and counsel in this matter.
- [17]Looking at Mrs Spence’s position in a holistic way suggests the system for resolution of building disputes and defective building work has substantially failed her, considering:
- (a)Mrs Spence did not initiate the building dispute but rather responded to the builder’s claim;
- (b)Mrs Spence was wholly successful in that proceeding.
- (c)The loss she has suffered for defective work was independently assessed by the Tribunal in the building dispute at $138,826.18 (before interest) but remains and is likely to remain unpaid.
- (d)Additionally, Mrs Spence incurred legal costs in the building dispute, but the Tribunal’s awards of costs totalling over $140,000 is also unpaid and likely to remain so.[4]
- (e)In the review proceeding, Mrs Spence has, quite reasonably in the circumstances, engaged legal assistance, incurring a further $120,000 approximately in costs.
- (f)Thus far, Mrs Spence has received around $70,000 from the statutory insurance scheme, though that may, if the builder fails to comply with the DTRs and the Commission assesses further insurance payouts for the related complaint items, rise to a total of no more than the statutory cap of $200,000.
- (g)So, absent an award of costs in this matter, the maximum amount Mrs Spence will receive will not even cover her legal fees reasonably incurred in endeavouring to obtain a remedy for the wrongs she has suffered. This notwithstanding that Mrs Spence was wholly vindicated in the building dispute proceeding and substantially so in the review proceeding.
- (a)
- [18]That outcome is a function of the operation of the system for dealing with defective residential construction work and the particular circumstances in which Mrs Spence finds herself. I must confine myself to consideration of whether the interests of justice in the review proceedings require an order of costs. And in so doing, I must consider whether the case for an award of costs is so compelling that it displaces the starting point that Mrs Spence should bear her own costs.
- [19]Mrs Spence’s financial situation, which I may take into account,[5] is clearly affected in a substantial and adverse way by the building dispute. However, even putting aside consideration of the outcome and non-payment of the amounts awarded in the building dispute, I am comfortably satisfied that the considerations which I have outlined, taken together, mark this case out as exceptional and one in which the interests of justice require an award of costs.
- [20]Mrs Spence has substantially succeeded; her case was generally strong other than in respect of the non-completion items where she was unsuccessful; and her costs were incurred reasonably to achieve that outcome in a complex case and in circumstances where she had no other practical remedy for the loss she has suffered. It would simply be unjust for her to have any potential benefit she may finally achieve largely wiped out by costs reasonably and necessarily incurred to secure the position to which the Tribunal has determined she was entitled in the review proceeding.[6]
Assessing the costs to be awarded
- [21]Based on the material provided on behalf of Mrs Spence, including invoices for legal fees and outlays, I am satisfied that it is possible for me to fix the costs to be awarded and therefore I must do so.[7]
- [22]Mrs Spence submits that costs should be fixed in the sum of $90,000 which comprises solicitors’ fees reduced to 60% to reflect a claim on the standard basis and outlays, mainly counsel’s fees. The Commission’s submissions are confined to arguments against an award of costs and do not challenge these calculations.
- [23]The extent to which the Commission’s position has prevailed makes an award of 100% of these costs inappropriate. In so saying, I am mindful of the Commission’s reminder that any costs paid by the Commission are funded by industry levies and taxpayers as a whole. The proportion of costs awarded should reflect the substantive outcome of the case. To the extent that costs have been incurred in pursuing unsuccessful claims, it is not appropriate for that cost to be passed on to the industry or the general public; the interests of justice must take into account the interests of the broader community which funds the Commission as well as the position of Mrs Spence. Being sympathetic to the overall plight of Mrs Spence is not a legal basis for awarding all of her costs.
- [24]However, the proportion of the costs to be awarded cannot be calculated in a purely quantitative way based on the proportion of the claims upheld. That would not serve the interests of justice as it would not accurately reflect the costs incurred in various aspects of the matter and the substantive success achieved by Mrs Spence.
- [25]Having regard to the factors discussed above following the tabulated presentation of the outcome of the review, doing my best to make a reasonable assessment of the substantive success enjoyed by Mrs Spence and taking into account the costs required to pursue matters that turned on detailed expert evidence in which Mrs Spence was almost entirely successful, and the reduction of the claimed solicitors’ fees to the standard basis, I consider that an award of 80% of the amount claimed by Mrs Spence strikes the appropriate balance.
- [26]Accordingly, I award costs to Mrs Spence fixed in the sum of $72,000, being 80% of $90,000.
Footnotes
[1] Spence v Queensland Building and Construction Commission [2020] QCAT 274.
[2] Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412, [29].
[3] QCAT Act, s 102(3)(a).
[4] Dyer v Spence [2016] QCAT 385; Dyer v Spence (N0 2) [2017] QCAT 375; Memorandum of Mrs Spence dated 11 August 2020.
[5] QCAT Act, s 102(3)(e).
[6] To be clear, I do not suggest that Mrs Spence is entitled to costs simply because she has been substantially successful in the review proceedings or because of her financial situation created by the issues outlined for that would be inconsistent with the strong contra-indication in s 100. Rather, taken together all of the circumstances to which I have referred in these reasons in my view mark this matter as an exceptional case in which the interests of justice require a costs order.
[7] QCAT Act, s 107.