Nazzari v Gray (No 2)[2023] QCAT 327

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

Overview

1. [1]
   On 11 May 2023 I delivered my decision in this proceeding.^[1] I ordered the respondent to pay the applicants $197,681.24 in damages for breach of contract. That was against a claim pressed of $219,681.24 being what the applicants asserted was the cost to them in being left to rectify substantially defective work constructed by the respondent. The applicants also sought orders that the respondent provide them with certain inspection certificates. They were not successful in that regard.
2. [2]
   In addition, the applicants sought their costs of the proceeding. Upon delivering my decision on the substantive relief sought, I ordered that costs be reserved together with procedural orders for the filing of written submissions on costs should the parties not reach an agreement thereon, and that unless either party requests a hearing on costs in those written submissions then the issue of costs will be determined on the papers.
3. [3]
   It is apparent that no agreement was reached. On or about 9 June 2023 the applicants filed their submissions, simultaneously serving same on the respondent.^[2] Therein, the applicants sought an order that the respondent pay them costs fixed at $82,179.45, alternatively costs to be assessed on the standard basis against the District Court Scale. They did not seek an oral hearing.
4. [4]
   Despite the directions on costs accompanying my decision on the substantive claim affording the respondent an opportunity to provide his written submissions on costs, no such submissions were filed. Accordingly I considered and decided the issue of costs on the basis of the applicants’ submissions only.
5. [5]
   For the reasons given herein, I saw no reason the applicants should be denied the order on costs they seek. In my opinion it was in all respects appropriate.

The Issue of an Appeal

6. [6]
   Before discussing my reasons for that conclusion there is the issue of an appeal that, in my opinion, for completeness and certainty, I should address briefly.
7. [7]
   In early June 2023, the respondent commenced an appeal proceeding in this Tribunal’s Appeal Division against my decision.^[3] That appeal is pending. Whether or not this is the reason the respondent did not file any submissions on costs is entirely unknown. It may be that he is of the view that because he has appealed my decision then the issue of costs should not progress until the appeal is determined. If that is so, he is respectfully mistaken.
8. [8]
   The start of an appeal against a decision of this Tribunal does not affect the operation of the decision or prevent the taking of action to implement a decision.^[4] Notwithstanding the appeal, as McMurdo P observed in Virgtel Ltd & Anor v Zabusky & Ors (No 2), with whom Mullins and Philippides JJ agreed, absent special or exceptional circumstances the applicants are entitled to the fruits of their victory.^[5] In my opinion this extends to an entitlement to costs.
9. [9]
   The Appeal Tribunal in Gedoun Constructions Pty Ltd v Agius relatively recently cited such,^[6] and whilst such was raised in circumstances where an appellant sought a stay of a costs order, in my opinion such applies equally to the present circumstances. If there were any such special or exceptional circumstances that would have dictated a deferral of a decision on costs, it was open for the respondent to have made such a submission in, or as, his submissions on costs in satisfaction of the directions I gave.
10. [10]
    In that absence of anything from the respondent to that effect, and given what I have just said about the applicants’ entitlement to the fruits of their victory, the mere fact that the appeal proceeding has been commenced is no reason for me to not to have decided the issue of costs in this proceeding.

The Applicants’ Case on Costs

11. [11]
    The applicants presented their case for costs noting that s 100 of the QCAT Act provides that each party bears their own costs, other than as provided for under that Act or an enabling Act. In that regard they say the relevant enabling provision is that found in s 77 of the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act), such providing this Tribunal with a discretionary power to award costs.^[7]
12. [12]
    The applicants also submit, as a further or alternative argument, that s 102 of the QCAT Act gives this Tribunal a discretion to award costs if it considers the interests of justice require it make the order.^[8]
13. [13]
    Notwithstanding those submissions, they also say that the general rule is that costs are in the discretion of the Tribunal but follow the event unless the Tribunal orders otherwise. In making that submission they refer me to the decision of the Queensland Court of Appeal in Speets Investments Pty Ltd v Bencol Pty Ltd (No 2)^[9], and the Uniform Civil Procedure Rules Rule 681.^[10]
14. [14]
    As I will discuss later in these reasons, the applicants’ submission as I have just briefly summarised them are not entirely clear as to what they say is the source of the discretionary power given to this Tribunal, but save only for that point the premise of their case for costs is sufficiently clear. Their case is then expressed in relatively simple terms, namely:

    1. on a proper analysis of the determination of the issues they should be regarded as the “wholly or materially successful party” such that the respondent ought to be required to pay their costs;^[11] and
    2. there should not be any discount for the lack of success in obtaining an order for the provision of the certificates given the fact that such was a result of the fact that these certificates were only provided during the hearing;^[12] and
    3. in this instance it is appropriate that I fix the costs, relative to which they provided, as part of their submission, an independent costs assessment by Mr Hartwell who expresses his opinion as to an assessment of standard costs on the District Court Scale.^[13]

The Relevant Statutory Provisions

15. [15]
    Before embarking on a consideration of these submissions, in my opinion it is not only beneficial to any reader of these reasons but necessary that I first set out the relevant statutory provisions.^[14]

QBCC Act

77  Tribunal may decide building dispute

1. A person involved in a building dispute may apply, as provided under the QCAT Act, to the tribunal to have the tribunal decide the dispute.

2. …

3. Without limiting the tribunal’s powers to resolve the dispute, the tribunal may exercise 1 or more of the following powers—

…

8. award costs.

QCAT Act

100  Each party usually bears own costs

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 proceeding.

102  Costs against party in interests of justice

1. The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order.

2. However, the only costs the tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section.

3. In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following—

1. whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);

2. the nature and complexity of the dispute the subject of the proceeding;

3. the relative strengths of the claims made by each of the parties to the proceeding;

4. …

5. the financial circumstances of the parties to the proceeding;

6. anything else the tribunal considers relevant.

107 Fixing or assessing costs

1. If the tribunal makes a costs order under this Act or an enabling Act, the tribunal must fix the costs if possible.

2. If it is not possible to fix the costs having regard to the nature of the proceeding, the tribunal may make an order requiring that the costs be assessed under the rules.

3. The rules may provide that costs must be assessed by reference to a scale under the rules applying to a court.

QCAT Rules

87 Assessing costs

1. This rule provides for how costs are to be assessed under section 107 of the Act if the tribunal makes a costs order that requires the costs be assessed under the rules.

2. The costs must be assessed—

1. by an assessor appointed by the tribunal; and

2. if the tribunal directs the costs be assessed by reference to the scale of costs applying to a court—by reference to the scale of costs directed by the tribunal.

3. The assessor is to decide the procedure to be followed on the assessment of the costs.

16. [16]
    Against this statutory background I turn to the applicants’ case, noting once again that this is the only case before me, the respondent having not filed any material on the issue of costs.

Consideration of the Applicants’ Case

17. [17]
    It is commonly accepted that costs of a proceeding follow the event unless there is an order to the contrary determined in the exercise of a discretion. It is trite law that the rationale for such is generally considered to be as expressed by McHugh J, with whom Brennan CJ generally agreed, in Oshlack v Richmond River Council, being:^[15]

The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.

18. [18]
    In Colagrande & Ors v D A Radic Pty Ltd trading as David Radic Prestige Homes the Appeal Tribunal cited with approval the reasons of Campbell JA of the NSW Court of appeal in Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) wherein a list of factors were adopted relevant to ousting the presumption that costs follow the event set out by McHugh J in Oshlack v Richmond River,^[16] thus in turn being adopted by the Appeal Tribunal. These are:^[17]

    1. where the successful party effectively invited the litigation;
    2. where the successful party unnecessarily protracted the proceedings;
    3. where the successful party succeeded on a point not argued before a lower court;
    4. where the successful party prosecuted the matter solely for the purpose of increasing the costs recoverable;
    5. where the successful party had obtained relief which the unsuccessful party had already offered in settlement of the dispute.

What is the starting point?

19. [19]
    On the basis of that which I have just noted, there should be no doubt that the discretionary power is to be exercised in light of that general rule. Thus the issue that arises here is from where the requisite discretion arises. As I noted it earlier herein, on this point the applicants’ submissions are somewhat confused. It is not UCPR r 681 as the submissions seem to suggest, rather it is found within the proper construction of the provisions of the QCAT Act read together with the relevant provisions of the QBCC Act wherein this Tribunal’s power to award costs is found. When properly construed, those two statutes read together show the relevant starting point from which the discretion is ultimately exercised.
20. [20]
    It has been longstanding law that the approach to deciding the question of costs in a building dispute starts with s 77 of the QBCC Act. As it was expressed in 2011 in Lyons v Dreamstarter Pty Ltd:^[18]

[30]The learned Member correctly identified that the primary costs provision in the QCAT Act (s 100) exhibits a strong intention that the usual position in the Tribunal is that parties will bear their own costs. The Tribunal may make an order requiring a party to pay the costs of another if it considers the interests of justice require it to make the order.

[31]However, there are other provisions that fall to be considered. Section 100 contemplates that, by providing an exception if another provision of the QCAT Act or an enabling Act otherwise provides. …

[32]Section 77 of the QBSA Act confers jurisdiction on the Tribunal to determine building disputes such as the one brought by Dreamstarter. Section 77(1)(h) provides that, in such proceedings, the Tribunal may award costs. The section does not provide further guidance or prescription about the occasions for or conditions of exercise of that power.

[33]A jurisdiction given in general terms allows the Tribunal to make an order as to costs that is justified in the circumstances. It is a broad general discretion which must be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation.

[34]Accordingly an enabling Act, the QBSA Act, does, provide otherwise. As a result, the usual position as to costs in the Tribunal is displaced. That result is reinforced by other provisions dealing with the relationship between the QCAT Act and enabling Acts.

[35]Section 6(7) contemplates that an enabling Act may include provisions about matters that may add to, otherwise vary or exclude provisions of the QCAT Act dealing with such matters. They include provisions dealing with the conduct of proceedings for jurisdictions conferred by the enabling Act, including the practices and procedures and the Tribunal’s powers for the proceedings (s 6(7)(b)). Such provisions are referred to as modifying provisions (s 7(1)(b)).

[36]To the extent of any inconsistency between them, a modifying provision prevails over the provisions of the QCAT Act and the QCAT Act must be read, with any necessary changes, as if the modifying provision were part of it (s 7(2)(3)).

21. [21]
    These observations have been cited with approval, or at least in part, in later decisions of the Appeal Tribunal. One of these is Colagrande & Ors v D A Radic Pty Ltd trading as David Radic Prestige Homes.^[19] Therein the Appeal Tribunal also made these observations immediately following its citation of the decision in Lyons v Dreamstarter Pty Ltd:^[20]

In Partington v Urquhart (No 4) the QCAT appeal tribunal stated:

We have a discretion under s 77(3)(h) of the QBCC Act to award costs and can make an order for the whole or any part of the costs of the appeal as we, in the circumstances, consider to be just. In exercising such a discretion, it is usual that the general costs of an appeal follow the event. (footnotes omitted)

The comments by the appeal tribunal in Partington reflect the general principle articulated by the Queensland Court of Appeal in Tamawood Ltd v Paans:

In the absence of countervailing considerations, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome.

22. [22]
    The Court of Appeal decision referred to therein is Tamawood Ltd v Paans,^[21] in which Keane JA (as he then was) delivered the leading decision with Williams JA and Philippides J concurring. That matter concerned provisions under the now repealed Commercial and Consumer Tribunal Act 2003 (Qld), the Tribunal constituted thereunder in effect being the predecessor to QCAT. Those provisions were s 70 and s 71 of that Act. Therein Keane JA made this observation:^[22]

As I have already said, in my view, the language of s. 70 and s. 71(5)(a) is sufficiently clear to negate the proposition that costs should, prima facie, follow the event unless the Tribunal considers that another order is more appropriate. In this regard, it is clear that the power of a court or tribunal to award costs to a party is now the creature of statute. The nature and extent of that power can only be discerned by close consideration of the terms of the statute which creates the power and prescribes the occasions for, and conditions of, its exercise. In the performance of this task, observations of the courts in relation to the operation of other statutory regimes relating to costs may afford general assistance but they cannot be allowed to distract attention from the terms of the particular statute in question. The language of the provisions of the Act to which I have referred is sufficiently clear to negate the proposition that success in the proceedings is sufficient to establish a prima facie entitlement to the beneficial exercise of the discretion conferred by s. 71(1) of the Act….

23. [23]
    Referencing those observations and others made by Keane JA, in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) Wilson J, the then President of this Tribunal, observed that although those provisions are not analogous to the equivalent provisions under the QCAT Act, namely s 100 and s 102, the principles found in Tamawood provide guidance about the circumstances in which it may be in the interests of justice for this tribunal to award costs against parties,^[23] expressing his view as follows:^[24]

The similar QCAT Act provision to s 70 is, it might be said, in terms that more plainly indicate that the legislature had turned its face against awards of costs in this tribunal: s 100 says that ‘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 proceeding’.

In considering ss 70 and 71 Keane JA (as his Honour then was) referred, however, to two matters relevant here. First, his Honour held that the CCT provisions negated the traditional proposition that costs should prima facie follow the event (unless of course that the Tribunal considers that another order is more appropriate) and that the nature and extent of the power to award costs could only be discerned by close consideration of the terms of the statute which created and prescribed the occasions and conditions for its exercise . Sections 100 and 102 of the QCAT Act attract the operation of the same principles.

Second, Keane JA was of the view that where the complexity of the matter justified legal representation, it would not be in the interests of justice to bar the successful party from recovering costs that were reasonably necessary to achieve a satisfactory outcome.

That conclusion must, here, be considered in the light of the difference between s 70 of the CCT Act and s 100 of the QCAT Act. Section 70 speaks of a ‘main purpose’, but s 100 mandates that parties shall bear their own costs. Section 70 contains, within itself, a reference to the condition or circumstance in which the main purpose may be subsumed to the interests of justice; s 100 has no such proviso, although it appears later, in s 102(1).

Under that subsection QCAT has a discretion to make a costs order ‘…if the tribunal considers the interests of justice require it…’. Section 102(3) says that, in deciding whether to award costs, the tribunal may have regard to matters not dissimilar to those set out in s 71 of the CCT Act including, in particular for present purposes, the nature and complexity of the dispute and the relative strength of each party’s claims.

Under the QCAT Act the question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100.

24. [24]
    Judicial Member McGill SC revisited this analysis of the costs provision both in this Tribunal in its original and appeal jurisdictions.
25. [25]
    In Marzini v Health Ombudsman (No 4), the learned Judicial Member made this observation:^[25]

The formulation of A Wilson J has subsequently been widely accepted as stating the correct approach to these provisions, but the wording is curious. There is nothing in the terms of s 100 to show a “strong contra-indication” against costs orders. Leaving aside the reference to a provision of another Act, when s 100 and s 102 are read together, the position is that no order for costs is to be made unless the Tribunal considers the interests of justice require it to do so. This is in essence the interpretation attributed to the terms of the earlier Act in Tamawood at [28]. The QCAT Act provisions could have been drafted to entrench that approach. The terms of the sections make it clear that the starting point is that no order for costs is to be made, but authorises a costs order if the interest of justice require it. The use of the word “require” suggests that the interests of justice must clearly support a costs order; but to say that they must do so “compellingly”, and to treat s 100 as having “a strong contra-indication against costs orders”, is to read into the statutory discretion restrictions which are not based on the terms of the Act.

26. [26]
    Judicial Member McGill SC also referred to other decisions of this Tribunal in which these provisions had been considered. One of these was a decision of another Judicial Member, the Hon P Lyons QC, in Thompson v Cannon [2020] QCAT 109. Of that decision, the learned Judicial Member observed:^[26]

In Thompson v Cannon [2020] QCAT 109 the Hon P Lyons QC considered the operation of these provisions in a matter where the parties had resolved a dispute at mediation but the applicant was then difficult about giving effect to the agreement. He said at [34]: “The key question raised by s 102 is whether the Tribunal considers that the interests of justice require it to make an order for costs.” He noted that s 102(3) did not refer to the outcome of the proceeding, but did refer to the means of the parties, which differed from the usual position in courts. He said, of s 102(3)(f), that “the Tribunal could only consider a matter to be relevant, if there is a rational connection between that matter and a conclusion that the interests of justice require an order for costs.”

27. [27]
    As to his conclusions on the relevant test, later Judicial Member McGill SC expressed it in this manner:^[27]

In my opinion the correct approach to the operations of s 100 and s 102 of the QCAT Act is similar to that formulated by the Hon P Lyons QC in Thompson v Cannon (supra): The ultimate question posed by the statutory provisions is whether in a particular case the interests of justice require the Tribunal to make a costs order. That is the effect of the terms of the statute. Because of the use in s 102(1) of the word “require”, the default position of no order as to costs should not be too readily departed from. I respectfully agree with the approach of the Hon J B Thomas QC in Lee (supra) to the comments of Keane JA in Tamawood (supra), and with his analysis of the considerations relevant to the interests of justice in disciplinary proceedings in Antley (supra). I do not consider that there is any justification in the words of the statute for any further constraint on the operation of the power to order costs under s 102, although the section directs attention to a number of matters which may in a particular case be usefully considered. The reference to “any other matter the Tribunal considers relevant” shows that this list is not to be read in a confining sense.

28. [28]
    The learned Judicial Member subsequently revisited this issue in Cowen v Queensland Building and Construction Commission and made these observations:^[28]

I have previously, in Marzini v Health Ombudsman (No 4) [2020] QCAT 365, set out my views on the interpretation and application of the QCAT Act s 100 and s 102. I adhere to those views. There are two particular matters I should mention. One is that in Marzini I did not particularly discuss the QCAT Act s 105, and Rule 86 of the QCAT Rules, which did not arise in that matter. The other relates to my comment on the statement of A Wilson J, the then President of the Tribunal, in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 at [28] that the question when a costs order was sought was “whether the circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100.” I said that this was curious, as I did not consider that there was any such strong contra-indication in the words of s 100.

In saying that I had overlooked that the heading to that section is part of the Act, and hence relevant to the interpretation of the Act. Presumably his Honour found the strong contra-indication in the wording of the heading: “Each party usually bears own costs”. Even so, I consider that it goes a long way to draw that proposition from the expression of a legislative expectation that the application of the terms of the statute will “usually” mean that no order for costs will be made. The expectation must have been directed to the operation of the Tribunal as a whole. In any particular case, either there will be an order for costs or there will not, and it is meaningless to talk of the “usual” order in a particular case. To say that an order for costs will be unusual, in a context where parties are ordinarily not to be legally represented anyway, is not a particularly strong statement. It was not said, for example, that such an order is to be made only in exceptional circumstances.

Having considered that matter, I remain of the view that the relevant test is that in s 102(1): whether the interests of justice require that order. As I said in Marzini, the use of the term “require” shows that an order for costs should not be too readily made, and I accept that it may fairly be said that the wording of the heading to s 100 is another indication to the same effect. In so far as his Honour went further in Ralacom at [29], I consider that his statement cannot confine the discretion conferred on the Tribunal under s 102(1), or modify the test in that section.

29. [29]
    In reaching his conclusions in that matter, the learned Judicial Member then expressed this view: ^[29]

… The question is whether the interests of justice require that an order for costs, and what order, be made. In my opinion the starting point as to the identification of the interests of justice is the passage from Tamawood cited earlier: that it would be unjust for the appellants’ success to be substantially eroded by having to pay their own costs incurred in achieving their success in the first review. This was a case where the appellants’ legal expenses were reasonably incurred. It is then a question of whether there are any other relevant countervailing considerations, and what comes from a consideration of the specific matters in the QCAT Act s 102(3).

30. [30]
    In my opinion this line of authority is not only informative it also sets out with clarity and certainty the approach to be taken in considering the question of costs in a building dispute in this Tribunal. It identifies with certainty that the starting point is not s 100 of the QCAT Act, but rather the discretion that is afforded this Tribunal under s 77(3)(h) of the QBCC Act read in conjunction with s 102 of the QCAT Act, namely the interest of justice provision to which the applicants have referred.
31. [31]
    That being so, the relevant consideration required is not simply whether costs should follow the event but rather whether the ‘interests of justice’ dictate that I should order costs in the applicants’ favour. It is this approach that is the exercise of the discretion judicially upon facts connected with or leading up to the litigation consistent with the observation in that regard in Lyons v Dreamstarter Pty Ltd to which I referred earlier in paragraph [19]. However, that being said, once the question of the interests of justice has been asked and answered, it is only then that I should turn to the question of whether costs should follow the event, that event being the success by the applicants albeit slightly less than they had sought. Such arises from the passage in Cowen v Queensland Building and Construction Commission to which I just referred.
32. [32]
    This then takes me to the applicants’ submissions.

The question of ‘the interests of justice’

33. [33]
    Whilst they referred to the interest of justice provisions, they did so with a degree of brevity. It would have been helpful had they expanded on this argument addressing with some degree of substance the relevant provisions of s 102 of the QCAT Act. However, even with the absence of that substance and the brevity of the submission, I was still able to readily conclude that it would be unjust for the applicants’ success to be substantially eroded by them having to pay their own costs incurred in achieving that success. In my opinion that would be against the interest of justice. I explain why in the following paragraphs.
34. [34]
    As I have noted it earlier in these reasons where I extracted the relevant parts of the legislation, the criteria is as laid out in s 102(3)(a) to (c) and (e) of the QCAT Act. I address each of them in turn.

The question of disadvantage

35. [35]
    I assume the applicants may say the respondent has disadvantaged them in unsuccessfully defending their claims against him, and so put them to the cost and aggravation of the proceeding. If that is a correct assumption on my behalf, respectfully that is not the nature of the disadvantage relative to assessment of the interests of justice question. Such an argument finds a place in the third criterion, namely the relative strengths of the competing claims, to which I turn to later herein.
36. [36]
    The respondent was entitled to defend the claim made against him. Presumably, he held an opinion that his defence was of substance. The mere fact that he did so with a defence of no substance does not amount to a disadvantage to the applicants. What this criterion is directed towards is the conduct of the parties within the proceeding,  one example of which is in some instances found to be a disadvantage is a party’s consistent failure to have complied with timelines for the conduct of the proceeding which has caused the other party to incur additional costs unnecessarily.^[30]
37. [37]
    In my opinion there is nothing in the respondent’s conduct of the proceeding that could be discerned from the material on the file or the respondent’s conduct of the hearing before me that had unnecessarily disadvantaged the applicants.

The nature and complexity of the dispute

38. [38]
    The dispute in this proceeding was, of itself, not unusual in its nature such that it gave rise to a basis for disrupting the position of both parties bearing their own costs. However, whilst the issues within the dispute may not have been unusual in terms of a building dispute, the issues were at the very least technically complicated and in my opinion they did make the nature and complexity of the dispute something that should properly be considered in determining the question of costs.
39. [39]
    Relevantly, in terms of evidence it was ultimately expert heavy requiring the input and assistance of legal representatives to not only comprehensively address it but to have done so with the aim of creating efficiencies in the conduct of the proceeding and more importantly the hearing. It also gave rise to relevant legal argument, in particular the issue of the extent of permissible deviation, and the question of cost-of-cure vs diminished value, such which also dictated the need for legal representation.
40. [40]
    In my opinion, looking at it from the applicants’ perspective, it can only be the case that it is these costs they seek to recover, and I consider that to be correctly so. It is a relevant discretionary factor properly exercised in the applicants’ favour.

The relative strengths of the claims made by each

41. [41]
    It will undoubtedly not be overlooked by any reader of these reasons that the applicants were not entirely successful in pressing their claim. But that does not mean that there was some strength to the defence raised in meeting it. The difference between that claimed and the damages awarded is for one item only, namely vinyl flooring rectification for which I did not allow the applicants their claim. This was not however because the respondent successfully argued the work was not defective. To the contrary I found the work to be at the very least substandard in terms of its finish. Rather it was because the applicants did not provide sufficiently probative evidence of the value of the cost of rectification or alternatively the diminished value of a substandard finish, and accordingly I did not allow them any amount for damages against it.^[31]
42. [42]
    That being said, as to the strengths of the claims made, in my opinion overall the outcome reflects the differences and nothing  more of substance needs to be said about it. On a simple balancing exercise, the respondent’s case was effectively without any strength whereas the applicants was strong. Once again it is a relevant discretionary factor properly exercised in the applicants’ favour.

The financial circumstances of the parties

43. [43]
    Here, the applicants are homeowners and the respondent is a builder conducting a commercial enterprise. But that of itself does not dictate the relevant financial circumstances of the parties. Something more than merely the status of the parties is required. In my opinion this criterion should be viewed in terms of where it might be said that a party could simply not survive financially without a costs order in its favour or where one is made against it.
44. [44]
    There is nothing before me to inform me either way in regard to this criterion. Accordingly there is no basis for me to consider it in the exercise of my discretion.

Anything else the Tribunal considers relevant

45. [45]
    There is nothing else arising from the material before me, or was raised in the hearing, that I consider relevant.

Conclusion on the Interests of Justice issue

46. [46]
    Overall, in consideration of these criteria, whilst three of the criteria do not provide any basis for the exercise of the discretion, it seems to me that this is a case where the discretion should be exercised in the applicants’ favour. The issues that arose in this proceeding and that were ultimately before me for determination were technically complicated such giving rise to the need for expert evidence, such which of themselves gave rise to related legal argument, all of which dictated the need for legal representation without which it would have been challenging for the applicants to present their case themselves. It is for this very reason that in my opinion they appropriately sought legal representation and input from an expert. It is the costs of this for which an order for costs should follow. The interests of justice dictate that to be so.

Should costs ‘follow the event’?

47. [47]
    This being so, it leads me back to the Appeal Tribunal’s reasons in Colagrande.
48. [48]
    Firstly, in my opinion none of the factors, as I have noted them in paragraph [18] herein identified by the Appeal Tribunal as ousting the presumption that costs follow the event, are present.^[32] In the same way as the Appeal Tribunal found it therein, on the material that was before me in the hearing and now in terms of the costs submissions I am satisfied that there has not been any disentitling conduct on the part of the applicants.
49. [49]
    Secondly, as to the references therein to Tamawood Ltd v Paans which I extracted in paragraph [21] herein, immediately following it the Appeal Tribunal observed that a successful party has a ‘reasonable expectation’ of being awarded costs against the unsuccessful party.^[33] There is no doubt the applicants’ hold that same reasonable expectation. In my opinion, it is an expectation that should be met.

Conclusion on whether the Applicants’ should be awarded costs

50. [50]
    For all of the reasons I have just discussed, in my opinion it must follow that the applicants are entitled to their costs of the proceeding. An order will be made to that effect.

What is the correct basis for assessment – Should I fix the costs?

51. [51]
    Under s 107 of the QCAT Act, if I am to makes a costs order under either the QCAT Act or an enabling Act, I must fix costs if possible. However if I am unable to fix the costs having regard to the nature of the proceeding, then I may make an order requiring the costs be assessed under the QCAT Rules. Those rules provide that costs must be assessed by reference to a scale under the rules applying to a court. Under r 87(2)(b) of the QCAT Rules, if I direct costs to be assessed by reference to the scale of costs applying to a court, then I am to direct which scale is applicable.
52. [52]
    Whilst the applicants primary argument is that I should fix the costs, in the alternative they submit that an appropriate order for costs is for assessment on a standard basis. Their proposed order for costs at a fixed amount is consistent with that. That being so, for completeness I should make a brief observation. There is nothing before me to suggest that an order on an indemnity basis is appropriate, and moreover the applicants do not seek one. Accordingly I need not address the question of indemnity costs in these reasons.
53. [53]
    Thus, turning to the question of whether I should fix costs, it is apposite to return once again to the decision of the Appeal Tribunal in Colagrande wherein the following observation in this regard was made:^[34]

The tribunal should, if making an order for costs, fix the costs if possible. Doing so avoids the risk of protracted, and expensive, disputes about the quantum of costs. Factors to be considered in deciding whether to fix costs include:

1. The amount of the costs involved;

2. Can the tribunal fix the costs fairly between the parties;

3. Is there sufficient evidence before the tribunal to undertake a rational and reasonable assessment of the costs including costs estimates or bills;

4. Will the costs of the evidence relevant to the assessment of a gross sum be proportionate to the amount of the costs claimed;

5. Where the evidence is inadequate as to a particular aspect of the costs, should a discount be adopted rather than refusing to fix the costs.

54. [54]
    In my opinion, when considering these factors, I do not see any reason this proceeding, and the costs to the parties, should be expanded any further by requiring an assessment of costs be undertaken. In all respects it is in order for costs to be fixed by me.
55. [55]
    As I noted it at paragraph [14](c) herein, the applicants’ rely on the report of an independent costs assessment, Mr Hartwell who expresses his opinion as to an assessment of standard costs on the District Court Scale. I have read and considered that report. As Mr Hartwell states therein:^[35]

Having consider the material with which I was briefed, I do not consider the costs and disbursements rendered by this matter to be excessive. Rather, I consider them to [be] (sic) at about the mid-range which you might expect a solicitor to charge in in (sic) a matter.

56. [56]
    He then notes the rule of thumb is that a standard costs assessment usually results in the recovery of approximately 60% to 80% of solicitor’s costs. Applying this rule he then provided a short discussion on his assessment of the solicitor’s costs which he marked down to 70%, to which he added disbursements including Counsel’s fees and Expert’s fees which where he considered it necessary he also marked these down. The end result is he opines his estimate of costs and disbursements assessed on a standard basis would be $82,817.45.
57. [57]
    I see no reason to doubt the accuracy and efficacy of Mr Hartwell’s report. He has considered it as if it would be an assessment against the District Court Scale which I accept as being the correct Scale and would have been the Scale to which I referred in my order should I have ordered an assessment. I also accept it as being correct and a proper basis upon which I should fix the costs of this proceeding.

Conclusion

58. [58]
    For all the reasons I have given herein, the applicants are entitled to their costs of this proceeding, and that those costs should be fixed at $82,179.45. There will be orders made to that effect.