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Gedoun Constructions Pty Ltd v Agius[2021] QCAT 250

Gedoun Constructions Pty Ltd v Agius[2021] QCAT 250

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Gedoun Constructions Pty Ltd v Agius [2021] QCAT 250

PARTIES:

Gedoun constructions pty ltd

(applicant)

v

mark elliot agius

(respondent)

APPLICATION NO:

BDL308-18

MATTER TYPE:

Building matters

DELIVERED ON:

29 January 2021

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member McVeigh

ORDER:

The respondent must pay the applicant’s costs thrown away as a consequence of the respondent being granted leave to file a report by a new wind expert, fixed at $42,023.75.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – building contract dispute – where respondent granted leave to file a new expert report on third day of hearing – whether applicant entitled to costs thrown away – whether costs should be awarded on an indemnity basis – whether costs should be fixed

Queensland Building and Construction Commission Act 1991 (Qld), s 77(3)(h)

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 107, s 121(4)

Cassimatis & Anor v Australian Securities and Investment Commission (2016) 334 ALR 350

Cruceru v Medical Board of Australia [2016] QCAT 111

Lyons v Dreamstarter Pty Ltd [2011] QCATA 142

Lyons v Dreamstarter Pty Ltd [2012] QCATA 71

TLL Investment Pty Ltd v The Body Corporate for The Grange CTS 30993 (No 2) [2018] QCAT 444

Todrell Pty Ltd v Finch & Anor [2007] QSC 386

REPRESENTATION:

 

Applicant:

Connolly Suthers

Respondent:

Becker Watt Lawyers

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

Background

  1. [1]
    On 26 August 2020, the third day of the hearing, I gave the respondent owner leave to file a report by a new wind expert.  The parties were directed to file written submissions in respect of costs occasioned as a consequence of granting that indulgence.
  2. [2]
    The applicant builder’s submissions and a supporting affidavit from William Evans were filed on 8 September 2020.  Mr Evans is a partner of the firm Connolly Suthers.  He has the conduct of the proceedings for the applicant.
  3. [3]
    The respondent’s submissions and a supporting affidavit from Michael Campbell were filed on 2 October 2020.  Mr Campbell is on the roll of court approved cost assessors.  He has had no previous involvement in the proceedings.
  4. [4]
    The applicant’s submissions in reply were filed on 9 November 2020. 
  5. [5]
    At my request the applicant provided further material on 3 December 2020. 
  6. [6]
    Although I am not obliged to give reasons for a costs decision, including the fixing of costs,[1] I do so given the amount of costs claimed. 

Relevant legislation

  1. [7]
    Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) provides that, subject to an enabling Act, each party must bear its own costs of the proceedings. 
  2. [8]
    The Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) is the relevant enabling Act for these proceedings.  Section 77(3)(h) of the QBCC Act confers specific jurisdiction on this tribunal to award costs in building disputes. 
  3. [9]
    Section 107 of the QCAT Act requires that, if possible, when a costs order is made, the costs be fixed. 

Costs claimed

  1. [10]
    The applicant claims costs thrown away by the late substitution of the respondent’s expert on wind issues, on an indemnity basis, to be fixed at $123,080.32.
  2. [11]
    The respondent resists the costs order on the bases that he has not acted unreasonably, or alternatively that the applicant’s own unreasonableness was the cause of it incurring the costs claimed.  If a costs order is to be made, the respondent submits that the costs should be determined with a proper cost assessor’s statement.  If costs are to be fixed, the respondent submits that a fixed amount of $4,000 plus GST is adequate and proportionate. 
  3. [12]
    In reply, the applicant submits that its costs can be fixed by reference to its solicitor’s affidavit and that any perceived unfairness can be addressed by giving a percentage discount.  The applicant submits that on a party/party basis it should recover 70% of its actual costs. 

Relevant facts

  1. [13]
    Classification and design wind speed for the property is a significant issue in these proceedings. 
  2. [14]
    As the respondent’s counterclaim was significantly greater than the applicant’s claim, the hearing proceeded on the basis that the respondent’s witnesses were called first. 
  3. [15]
    The respondent filed a number of reports from WindTech Consultants Pty Ltd (Windtech) on the topic of classification and design wind speed for the property.  The respondent indicated that Mr Huynh from Windtech would be called to give evidence regarding the classification and design wind speed for the property. 
  4. [16]
    The applicant engaged Peter Wright, consulting engineer, to advise it about wind classification for the site.  He has prepared a number of reports touching on the issue of classification and design wind speed for the property which have been filed in the proceedings.  His reports provide both his own opinions and comment on the opinions of Windtech.
  5. [17]
    When Mr Huynh was called to give evidence on 26 August 2020, counsel for the applicant objected on the basis that Mr Huynh was not appropriately qualified to give expert evidence in the field of classification and design wind speed.  Rather than argue the objection, the respondent applied for an adjournment of the hearing and for leave to file a report by a new wind expert. 
  6. [18]
    While I gave leave to file a report by a new wind expert, I did not adjourn the hearing as there were other issues in respect of which the hearing could progress.  The matter remains part heard.

Exercise of discretion

  1. [19]
    Section 77(3)(h) of the QBCC Act gives this tribunal a broad general discretion to award costs as are justified in the particular circumstances.  The discretion must be exercised judicially, upon facts connected with or leading up to the litigation. [2]  

Relevant facts

  1. [20]
    Relevant facts are set out below.
    1. (a)
      The respondent has been legally represented throughout the proceedings.
    2. (b)
      Practice Direction 4 of 2009 limits each party to calling evidence from only one expert for each area of expertise.
    3. (c)
      The respondent retained Mr Hutton, an engineering expert, to undertake a detailed design review of the property.  Mr Hutton in turn relied on the wind classification for the site provided by Windtech in a report on the site wind climate dated 20 February 2019.  That report was filed as an attachment to the report of Mr Hutton.  The author of that report was not identified.[3]
    4. (d)
      The applicant engaged Mr Wright of Hughes, Beal & Wright Pty Ltd, consulting engineers.  His report dated 1 March 2020 (RP2), provided his opinion on the wind classification for the site and commented on the February 2019 Windtech report.[4] 
    5. (e)
      The respondent filed a second report from Windtech, dated 18 March 2020.
    6. (f)
      Mr Wright prepared a further report (RP3), dated 25 July 2020, which commented on the second Windtech report dated 18 March 2020. 
    7. (g)
      The respondent then engaged Dr Holmes, another expert in site wind climate, to provide a report on site wind speed classification.  His report was filed on 30 March 2020. 
    8. (h)
      A conclave of experts (not solely the experts regarding site wind classification) was scheduled for 5 May 2020.  At the conclave the respondent sought to rely on Dr Holmes.  The solicitors for the applicant objected to the participation of Dr Holmes.  The conclave did not proceed.
    9. (i)
      During case management hearings:[5]
      1. it emerged that the Windtech reports had been prepared by Mr Huynh and Dr Truong;
      2. the solicitors for the applicant expressed concerns about the qualifications of Mr Huynh;
      3. Senior Member Brown alerted the respondent to the need to make an application on notice if he wished to call an expert other than Mr Huynh to give evidence relating to classification and design wind speed for the property.
    10. (j)
      On 22 June 2020 Senior Member Brown issued various procedural directions, including reserving the costs of the conclave on 5 May and of an application brought by the applicant.
    11. (k)
      The respondent filed the third Windtech report dated 14 August 2020.
    12. (l)
      The respondent chose Mr Huynh as the person he wished to rely on as an expert in the field of classification and design wind speed for the property, knowing that there was some doubt about his qualifications to give expert evidence at the hearing.
    13. (m)
      Mr Huynh’s formal qualifications are as an aeronautical engineer.
    14. (n)
      On the third day of the hearing the respondent chose not to argue against the applicant’s objections to the expertise of Mr Huynh, but sought leave to introduce a new expert. 

Is it just and reasonable to order the respondent to pay the costs thrown away?

  1. [21]
    In Lyons v Dreamstarter Pty Ltd[6] Justice Alan Wilson said:

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.[7]

  1. [22]
    The applicant submits that it is just that the respondent pay the price of the indulgence granted to him, i.e. that he should pay the applicant’s costs thrown away by the late withdrawal of Mr Huynh’s evidence.  Counsel for the respondent conceded that there would be a price to pay when he made the application to adjourn the hearing and to introduce evidence from a fresh expert.  I accept the applicant’s submission that costs should follow the event.  The respondent should pay the costs thrown away due to the grant of his application for leave to introduce fresh expert evidence. 
  2. [23]
    I reject the respondent’s submissions that the applicant acted unreasonably.  The applicant had raised concerns about the identity of the respondent’s wind expert on a number of discrete occasions before the hearing commenced. 
  3. [24]
    I also reject the respondent’s submissions that the applicant disadvantaged the respondent by not allowing him to call multiple experts.  It is clear from Practice Direction 4 of 2009 that each party is limited to calling evidence from only one expert for each area of expertise. 
  4. [25]
    I also reject the respondent’s submissions that the costs result from an implied request by the applicant to the respondent to withdraw his expert.  The respondent chose how he wished to address the challenge to Mr Huynh’s expertise – he could have argued that Mr Huynh was qualified to give evidence, but chose not to do so.

Should costs be awarded on an indemnity basis?

  1. [26]
    The applicant seeks costs on an indemnity basis.  In TLL Investment Pty Ltd v The Body Corporate for The Grange CTS 30993 (No 2)[8] Member Cranwell adopted the test for awarding costs on an indemnity basis as set out by Chesterman J in Todrell Pty Ltd v Finch & Anor:[9]

Whether there was something irresponsible about the conduct of the losing party which exposed its opponent to costs which should, in fairness, be ordered on an indemnity basis.

  1. [27]
    I adopt the approach of Chesterman J.  I find that the respondent’s conduct in continuing to rely on Mr Huynh for months after questions had been raised about his expertise, only to resile from that position, without argument, on the third day of the hearing, was irresponsible.  Despite knowing:
    1. (a)
      that Mr Huynh’s formal qualifications were not directly applicable to domestic construction;
    2. (b)
      that Mr Huynh’s employer had concerns about his ability to participate in the conclave of experts;
    3. (c)
      that the applicant had pressed for the respondent to rely on a single wind expert;
    4. (d)
      that the applicant had taken issue with Mr Huynh’s expertise;
    5. (e)
      that if he wished to call an expert other than Mr Huynh to give evidence relating to classification and design wind speed for the property he needed to make an application on notice,

until the third day of the hearing, the respondent continued to put forward Mr Huynh as his expert regarding site wind classification.  That conduct exposed the applicant to costs which, in fairness, should be awarded on an indemnity basis.

What costs have been thrown away?

  1. [28]
    Guidance for deciding the extent of the costs thrown away is to be found in Cassimatis & Anor v Australian Securities and Investment Commission.[10]  Edelman J stated:

The question of whether costs have been thrown away involves a causal inquiry.  It is necessary to ask whether costs that were incurred would not have been incurred but for the relevant event.[11]

  1. [29]
    There is no doubt that but for the need to address the Windtech reports the applicant would not have incurred the following costs:
    1. (a)
      perusing the Windtech reports;[12]
    2. (b)
      briefing its expert, Mr Wright, to respond to those reports;[13]
    3. (c)
      the costs associated with the aborted expert conclave on 5 May (aborted because the respondent sought to have an expert other than Mr Huynh attend);[14]
    4. (d)
      preparing to cross-examine Mr Huynh;
    5. (e)
      preparing to lead evidence from Mr Wright to address wind issues raised in the Windtech reports;
    6. (f)
      preparing the application to exclude Mr Huynh’s evidence;
    7. (g)
      preparing this application for costs.
  2. [30]
    Mr Evans swears that the applicant incurred not only the costs listed above, but also:
    1. (a)
      the costs associated with its application filed 15 May 2020 seeking to limit the respondent to one expert on the wind related issues;
    2. (b)
      the costs related to the directions hearing on 11 June 2020 which dealt with that application, preparation of submissions and submissions in reply; and
    3. (c)
      costs of complying with the order of Senior Member Brown made 19 June 2020.
  3. [31]
    Not all the costs of engaging Mr Wright have been thrown away.  The applicant always needed to engage an expert.  That expert always had to review relevant material, visit the site and prepare a report providing their opinion.  Further, Mr Wright’s evidence is not limited solely to wind issues.
  4. [32]
    I note that Senior Member Brown reserved the costs in his directions given 19 June 2020.  I also note that there were other matters addressed at the directions hearing on 11 June 2020.  I am not in a position to make a finding that the only reason that the applicant incurred the costs set out in the preceding paragraph can be attributed to the indulgence granted to the respondent.  Those costs remain reserved. 

Should the costs thrown away be fixed?

  1. [33]
    In Cruceru v Medical Board of Australia[15] Hon JB Thomas, Judicial Member, stated:

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.

  1. [34]
    The respondent opposes the fixing of costs on the basis that the task would involve too much guess work and estimation.  Guess work is not necessary as I have been provided with:
    1. (a)
      the costs agreement made by the applicant and its solicitors;
    2. (b)
      a spreadsheet prepared by Mr Evans, a solicitor of more than 12 years’ standing, who has the carriage of the matter, which breaks down work done, by six-minute units, with a narrative of what was done;
    3. (c)
      counsels’ fee agreements;
    4. (d)
      counsels’ tax invoices, redacted to remove irrelevant work;
    5. (e)
      Mr Wright’s tax invoices which list time spent on individual tasks; and
    6. (f)
      a second spreadsheet prepared by Mr Evans which further subdivides the first spreadsheet by reference to categories of work identified in his affidavit. 
  2. [35]
    My assessment of costs will compensate the applicant for costs it has actually incurred.
  3. [36]
    I have allowed solicitors’ fees of $21,857.50.  I have reviewed the matter transaction statement provided by Mr Evans on a line-by-line basis and decided that the costs thrown away are:
    1. (a)
      $922.50, i.e. all the costs claimed in paragraph 15(a) in Mr Evans’ affidavit, conceded as being wasted by the respondent;
    2. (b)
      $1,710 of the costs claimed in paragraph 15(b) in Mr Evans’ affidavit, on the basis that items related to the engagement and initial briefing of Mr Wright would have been incurred regardless of the identity of the respondent’s expert and on the basis that costs relating to considering the Brazier Motti report will not be wasted;
    3. (c)
      $315 of the costs claimed in paragraph 15(d) in Mr Evans’ affidavit, on the basis that costs associated with the conclave have been reserved and will be dealt with in future;
    4. (d)
      $1,462.50 of the costs claimed in paragraph 15(e) in Mr Evans’ affidavit, on the bases that the costs associated with the aborted conclave, the subsequent application and directions hearings have been reserved and will be dealt with in future and on the basis that costs relating to considering the Brazier Motti report will not be wasted;
    5. (e)
      $9,267.50 of the costs claimed in paragraph 15(f) in Mr Evans’ affidavit, on the basis that costs associated with directions hearings have been reserved and will be dealt with in future;
    6. (f)
      $1,575, i.e. all the costs claimed in paragraph 15(g) in Mr Evans’ affidavit;
    7. (g)
      $6,605, i.e. all the costs claimed in paragraph 15(h) in Mr Evans’ affidavit.
  4. [37]
    I have allowed $11,687.50 of Mr Campbell’s fees, specifically:
    1. (a)
      $8,287.50 from invoice 20170290;
    2. (b)
      $3,400 from invoice 20170293.
  5. [38]
    I have made no allowance for Ms Vass’ fees as I could not identify any items that appear to be solely referable to dealing with evidence from Mr Huynh. 
  6. [39]
    I have allowed $8,478.75 for Mr Wright’s fees.  This is made up as follows:
    1. (a)
      nil for invoice 2019-053-AC1 because it relates to preparation of his report 2019-053-RP1[16] which is his desk top review of wind speed for the site;
    2. (b)
      nil for invoice 2019-053-AC2 because it relates to his inspection of the site which he would always have had to do;
    3. (c)
      $2,100 for invoice 2019-053-AC3 which relates to preparation of his report 2019-053-RP2;[17]
    4. (d)
      $3,675 for invoice 2019-053-AC3 which relates to preparation of two reports, 2019-053-RP3[18] and 2019-053-RP4.  2019-053-RP3 refers to footings and other structural issues and is dated 25 July and 2019-053-RP4 is dated 3 July 2020.  I have divided the total hours claimed for the month and allowed the hours recorded after 3 July 2020;
    5. (e)
      $2,037.75, half the amount of invoice 2019-053-AC6 which relates to preparation for the hearing, because Mr Wright’s evidence goes beyond the wind issue as he also addresses structural matters.
  1. [40]
    In total the respondent should pay $42,023.75 costs thrown away as a consequence of granting the indulgence to the respondent.  No allowance has been made for GST. 
  2. [41]
    In order to avoid any confusion in future costs considerations, I note that the fact that the applicant has not recovered particular items of costs claimed is purely due to my assessments that they were not thrown way.  Should the applicant become entitled to its costs in future, there is no reason why it could not claim costs included in this claim, but not regarded as costs thrown away. 

Footnotes

[1]  As a costs decision is not a final decision under section 121(4) of the QCAT Act.

[2] Lyons v Dreamstarter Pty Ltd  [2011] QCATA 142.

[3]  Trial bundle, p 3403 – 3404.

[4]  Trial bundle, p 219 – 251.

[5]  I had the benefit of a transcript of the directions hearing held on 17 July 2020, prepared by the solicitors for the applicant.

[6]  [2012] QCATA 71.

[7]  Ibid, [11].

[8]  [2018] QCAT 444.

[9]  [2007] QSC 386, [4].

[10]  (2016) 334 ALR 350.

[11]  Ibid, [57].

[12]  Conceded by the respondent in his submissions.

[13]  Conceded by the respondent in his submissions.

[14]  Conceded by the respondent in his submissions.

[15]  [2016] QCAT 111, [49].

[16]  Trial bundle, p 195-217.

[17]  Trial bundle, p 219-251.

[18]  Trial bundle, p 355-398.

Close

Editorial Notes

  • Published Case Name:

    Gedoun Constructions Pty Ltd v Agius

  • Shortened Case Name:

    Gedoun Constructions Pty Ltd v Agius

  • MNC:

    [2021] QCAT 250

  • Court:

    QCAT

  • Judge(s):

    Member McVeigh

  • Date:

    29 Jan 2021

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Cassimatis & Anor v Australian Securities and Investment Commission (2016) 334 ALR 350
3 citations
Jump To
Cite 1 - (2016) 334 ALR 350
Cite 2 - (2016) 334 ALR 350
Cite 3 - (2016) 334 ALR 350
Cruceru v Medical Board of Australia [2016] QCAT 111
2 citations
Jump To
Cite 1 - [2016] QCAT 111
Cite 2 - [2016] QCAT 111
Lyons v Dreamstarter Pty Ltd [2012] QCATA 71
3 citations
Jump To
Cite 1 - [2012] QCATA 71
Cite 2 - [2012] QCATA 71
Cite 3 - [2012] QCATA 71
Lyons v Dreamstarter Pty Ltd [2011] QCATA 142
2 citations
Jump To
Cite 1 - [2011] QCATA 142
Cite 2 - [2011] QCATA 142
TLL Investment Pty Ltd v The Body Corporate for the Grange (No 2) [2018] QCAT 444
2 citations
Jump To
Cite 1 - [2018] QCAT 444
Cite 2 - [2018] QCAT 444
Todrell Pty Ltd v Finch[2008] 2 Qd R 95; [2007] QSC 386
2 citations
Jump To
Cite 1 - [2007] QSC 386
Cite 2 - [2007] QSC 386

Cases Citing

Case NameFull CitationFrequency
Gedoun Constructions Pty Ltd v Agius [2022] QCATA 1882 citations
1

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