Monsour v C & R Darvill Pty Ltd
[2023] QCAT 62
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- Unreported Judgment
- Monsour v C & R Darvill Pty Ltd[2023] QCAT 62
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Monsour v C & R Darvill Pty Ltd[2023] QCAT 62
Monsour v C & R Darvill Pty Ltd[2023] QCAT 62
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Monsour & Anor v C & R Darvill Pty Ltd [2023] QCAT 62 |
PARTIES: | marie monsour (first applicant) bruce monsour (second applicant) v C & R Darvill Pty Ltd atf c & r darvill family trust (respondent) |
APPLICATION NO/S: | BDL065-18 |
MATTER TYPE: | Building matters |
DELIVERED ON: | 31 January 2023 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member Howe |
ORDERS: | The Applicants pay the Respondent costs fixed at $107,385.88 within 14 days of the date hereof. |
CATCHWORDS: | ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – COSTS – where the applicant owners failed in building dispute proceedings – where the respondent builder succeeded in its counter application – where the builder claimed indemnity costs – where indemnity costs were not appropriate despite a written offer of settlement made prior to hearing – where an order for payment of standard costs was appropriate Domestic Building Contracts Act 2000 (Qld) (repealed), s 84(4) Queensland Building and Construction Commission Act 1991 (Qld), s 77(3)(h) Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102, s 105, s 107 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86 Arcon Constructions Pty Ltd v QBSA [2013] QCAT 573 Australian Securities and Investments Commission v Atlantic 3-Financial (Aust) Pty Ltd (No 3) [2008] QSC 9 Aurizon Operations Limited v Commissioner of State Revenue [2022] QCAT 340 Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53 Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 Neverfail Pty Ltd as Trustee for The Harris Siksna Family Trust v Radford (No. 2) [2017] QCATA 73 Oaks Hotels & Resorts Limited v Knauer [2020] QCATA 90 Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 Owltown Pty Ltd v Norwinn Commercial (costs) [2020] QCATA 145 Rainbow Builders Pty Ltd v The State of Queensland through the Department of Housing and Public Works (No 2) [2016] QCAT 497 Sand & Surf Design Pty Ltd v Surrey & Anor [2014] QCATA 225 The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] 2 QSC 84 Thompson v Body Corporate for Arila Lodge & Anor; Thompson v Body Corporate for Arila Lodge & Anor (No 2) [2018] QCATA 133 Campbell v The Body Corporate for 70 Bowen St & Ors [2020] QCATA 26 Wyatt v Albert Shire Council [1987] 1 Qd R 486 |
APPEARANCES & REPRESENTATION: | 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]Dr and Mrs Monsour commenced proceedings in the Tribunal seeking recovery of money paid to the respondent builder as overpayments and damages for rectification of defective building work totalling $259,946.25, together with a claim for $30,111.39 out of pocket expenses and costs.
- [2]The builder made a counter application for money owed in respect of a progress claim and for unpaid variation work, which latter required the builder to establish exceptional circumstances justifying payment pursuant to s 84(4) of then in force Domestic Building Contracts Act (2000) (Qld) (repealed). The claim by the builder was originally for $272,973.04, but reduced to $184,543.12 as at date of trial.
- [3]Following a hearing extending over 8 days commencing 27 October 2020, Dr and Mrs Monsour were ordered to pay the builder the sum of $134,407.62.
- [4]The builder has applied for its costs.
- [5]There is an initial claim for indemnity costs based on a formal offer of settlement made by the builder on 13 October 2020, 14 days prior to hearing.
Indemnity costs
- [6]By the written offer of settlement the builder offered to pay Dr and Mrs Monsour $50,000 in consideration of both parties discontinuing their respective claims, with each party to bear their own legal costs, and subject to the parties entering into a suitably worded deed of settlement. The written offer was identified as a closed offer of settlement under Division 3 of Part 8 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘the Rules’) and was open for acceptance for 1 day, expiring on 14 October 2020.
- [7]Section 105 QCAT Act provides:
Other power to award costs
The rules may authorise the tribunal to award costs in other circumstances, including, for example, the payment of costs in a proceeding if an offer to settle the dispute the subject of the proceeding has been made but not accepted.
- [8]The Rules provides for such consequence of not accepting an offer of settlement in r 86:
Additional power to award costs if particular offers to settle rejected
- (1)This rule applies if—
- (a)a party to a proceeding, other than a proceeding for a minor civil dispute, makes another party to the proceeding a written offer to settle the dispute the subject of the proceeding; and
- (b)the other party does not accept the offer within the time the offer is open; and
- (c)in the opinion of the tribunal, the decision of the tribunal in the proceeding is not more favourable to the other party than the offer.
- (2)The tribunal may award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made.
- (3)If a proceeding involves more than 2 parties, this rule applies only if the acceptance of the offer would have resulted in the settlement of the matters in dispute between all the parties.
- (4)In deciding whether a decision is or is not more favourable to a party than an offer, the tribunal must—
- (a)take into account any costs it would have awarded on the date the offer was given to the other party; and
- (b)disregard any interest or costs it awarded relating to any period after the date the offer was given to the other party.
- [9]The offer was not accepted by Dr and Mrs Monsour.
- [10]There is no requisite period that an offer made under the Rules must remain open for acceptance, unlike the UCPR.
- [11]Another difference is that, under the UCPR, where a defendant makes a formal offer, the defendant must pay the plaintiff’s costs on the standard basis to the date of service of the offer and the plaintiff must pay the defendant’s costs on the standard basis thereafter, subject to a general discretion in the court to make another order if appropriate. Under the Rules there is no such entitlement to costs to date of offer.[1]
- [12]In Owltown Pty Ltd v Norwinn Commercial (costs) [2020] QCATA 145, Member Gordon explained:
[44] It is clear from the wording of rule 86(2) that if the rule is engaged it merely empowers the tribunal to make a costs award. The decision whether or not to do so remains discretionary, having regard to the applicable and relevant circumstances. As was said in Neverfail Pty Ltd as Trustee for The Harris Siksna Family Trust & Anor v Radford (No. 2) [2017] QCATA 73, (Justice Carmody and Senior Member Brown) if rule 86 is engaged, ‘It is not the most important consideration but part of the matrix of circumstances to be weighed in exercising the discretion to award costs’. It was relevant to consider: (a) the stage of the proceeding at which the offer was received; (b) the time allowed to the offeree to consider the offer; (c) the extent of the compromise offered; (d) the offeree’s prospects of success, assessed as at the date of the offer; and (e) the clarity with which the terms of the offer were expressed.
- [13]I repeat what I said in Aurizon Operations Limited v Commissioner of State Revenue [2022] QCAT 340 about the Tribunal costs regime when a formal offer of settlement is made:
[7] A written offer pursuant to r 86 does not give the offeror an entitlement to costs on an indemnity basis where the offer proves better than the final result. Rather, after such an offer (regardless whether it is pursuant to the Rules or a Calderbank1 offer)2 the question arises for address, was it reasonable for the offeree to continue the litigation in light of the offer? If the answer is no, then an award of indemnity costs against the latter may be appropriate on the basis that the primary purpose of any costs order is to protect a successful party from undue depletion of its resources and an award of costs on the standard basis may be insufficient protection.3
[8] Some relevant factors to consider in determining whether it was reasonable not to accept an offer include those identified in J & D Rigging Pty Ltd v Agripower Australia Limited & Ors [2014] QCA 234 namely, the stage of the proceedings at which the offer was made, the time allowed the offeree to consider the offer, the extent of the compromise offered, the offeree’s prospects of success assessed as at date of offer, the clarity of the terms of offer and whether an application for indemnity costs was foreshadowed in the event of rejection.
1 Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586. 2 McGee v QBCC [2018] QCATA 124 [65]. 3 Resolute Mining Ltd v Commissioner of State Revenue (No 2) [2020] QSC 302 [6]. 4 Following Hazeldene’s Chicken Farm Pty Ltd v Victorian Work Cover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298.
- [14]The Appeal Tribunal in Oaks Hotels & Resorts Limited v Knauer [2020] QCATA 90 said similar things about the operation of r 86.
- [15]The offer of settlement proved to be far more favourable to Dr and Mrs Monsour than the outcome of hearing. As stated, there are other factors to be considered however.
- [16]Though the offer was made 14 days before the scheduled start of the hearing, as at date of offer, the significant evidence of Mr Ray, the expert quantity surveyor engaged by the builder, was not to hand. As at date of offer, the only expert evidence dealing with the value of work done by the builder was that offered by the owners’ own quantity surveyor, Mr Davies.
- [17]Further, the offer said nothing about indemnity costs being sought if the offer was not accepted. This was relevant given Dr and Mrs Monsour were not legally represented (despite what I say below about that being a choice of Dr and Mrs Monsour).
- [18]The offer was only open for acceptance for one day, a Tuesday, when Dr Monsour was presumably in his clinic treating patients.
- [19]In these circumstances I determine it was not unreasonable for the Monsours not to accept the offer. It follows that an award of indemnity costs is not appropriate.
Standard costs
- [20]I determine an award on the standard basis is appropriate however.
- [21]Both parties have placed emphasis on the factors for consideration listed in s 102 QCAT Act. Those factors follow the base premise set by s 100 that in Tribunal matters, parties are usually expected to bear their own costs.
- [22]Section 100 of the QCAT Act however is subject to contrary provision made in the QCAT Act or an enabling Act. The Queensland Building and Construction Commission Act 1991 (Qld) is just such an enabling Act, making alternate provision about costs.
- [23]Section 77(3)(h) of the QBCC Act gives the Tribunal a general discretion to award costs. There are no specific limitations.
- [24]
- [25]In Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72, Gaudron and Gummow JJ in discussing the judicial exercise of discretion awarding costs said:
66. By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. As Devlin J said in Smeaton Hanscomb & Co Ltd v Sassoon I Setty, Son & Co (No 2)[95], when setting aside an arbitrator's costs award:
"the arbitrator is not directing his mind to one of the most, if not the most, important of the elements which ought to affect his discretion, namely the result of the case. Prima facie, a successful party is entitled to his costs. To deprive him of his costs or to require him to pay a part of the costs of the other side is an exceptional measure".[4]
- [26]In Rainbow Builders Pty Ltd v The State of Queensland through the Department of Housing and Public Works (No 2) [2016] QCAT 497 Senior Member Brown concluded a successful litigant in a building dispute in the Tribunal should generally be entitled to an order for costs, and will only be deprived of its costs as an exceptional measure.
- [27]In the matter at hand the builder was successful in both defending against the claim brought by Dr and Mrs Monsour, and in its counter application.
- [28]Dr and Mrs Monsour submit however that they were disadvantaged by the conduct of the builder at hearing in a number of respects, foremost being the late amendment of the builder’s Response and Counter Application to add a reference to s 84(2) of the Domestic Building Contracts Act 2000 (Qld) (repealed).
- [29]They submit that in result the appropriate order, despite the clear success of the builder, is that both parties should bear their own costs.
- [30]Dr and Mrs Monsour rely on a number of authorities, all of which concern late amendment of pleadings. There are no pleadings in the Tribunal.[5] The issues are not uncommonly identified by the Tribunal rather than the parties from the material filed by the parties, the application, any response or response and counter application, the statements of evidence and the parties’ submissions and evidence given during the course of hearing.
- [31]Leave was granted the builder to amend the existing Response and Counter Application to add a reference to s 84(2) of the Domestic Building Contracts Act 2000 (Qld) (repealed). Counsel stated when seeking leave to amend at commencement of proceedings:
The substance of what my client seeks in respect of unpaid variations is already the subject of the evidence in the proceeding, and so it’s merely an express reference to that section. For the purposes section 84, your Honour, we are required to make an application to the tribunal for variations which otherwise do not comply in certain written respects with normal provisions of the Act.[6]
- [32]In so far as Counsel suggested the builder was required to make an application to the Tribunal for the purposes of s 84 and it had not already done so, the builder had already filed a Counter Application. Accordingly the amendment was in large part a cautionary formality. A Counter Application suffices as an application made to the Tribunal where separate application to deal with matters in relation to which orders are sought is required.[7]
- [33]The groundwork for the claim under s 84 DBCA had already been laid in the material filed by the builder beforehand. The additional oral testimony by Mr Darvill (in particular, which is commented on by Dr and Mrs Monsour) only expanded on the existing material.
- [34]But in any case it cannot be accepted that Dr and Mrs Monsour were ignorant of the workings of s 84 DBCA before the amendment sought by Counsel. It had already been raised by the owners’ own solicitors at the time of their purported termination of the contract, and the following exchange at the time of the request to amend shows exact and particular knowledge about it on the part of Dr Monsour:
DR MONSOUR: Well, I oppose that, number one. We have a contract and, in that contract, sets out the conditions of variations by agreement. Section 11 of the contract – Residential Building Contract General Conditions, RBC04/214, and it’s a Masters Builders contract and that’s what the builder has signed and it is what we have signed. And from day one we were under that contract. So with regards to the variation, it is set out very clearly with regards to either a builder wanting to do variations or the homeowner wanted to do variations, and we maintain that the variations are not in accordance with the contract, which is signed by Darvill’s and ourselves.
MEMBER: All right, well rather than go back to Mr Sheahan, what if I say this to you: section 93 of the Domestic Building Contracts Act says the parties can’t contract out of the provisions of the Act. So Mr Sheahan is saying, “I want to rely upon the provisions of the Act”.
DR MONSOUR: What date was that Act enforced (sic)?
MEMBER: Well, it certainly was enforced (sic) before and during the currency of your contract.
DR MONSOUR: Right, because I’m of the understanding that the law changed some six months after we had signed …
MEMBER: That’s right.
DR MONSOUR: … our contract. So we signed that contract back in 2014.
MEMBER: Yes, it doesn’t make any difference, this was …
DR MONSOUR: Right.
MEMBER: … extant at that time. This was the governing legislation up until 30th of June 2015. For any contracts signed before that, this was the legislation that you had to comply with.[8]
(emphasis added)
- [35]Indeed, the DBCA was repealed 6 months and some days after the date of contract.
- [36]There are other complaints made by Dr and Mrs Monsour, about time wasted by Counsel, long oral testimony by the builder, late provision of expert reports to the other. This issue by issue, piecemeal denigration of conduct by the losing side is not to be encouraged as reasons for an apportionment of costs.[9] The builder was successful and Dr and Mrs Monsour were not. No greater delay was caused by the builder’s conduct at the hearing than that due to delay and confusion caused by the self-represented party.
- [37]Without the involvement of the legal representatives for the builder, Counsel in particular, the hearing would have been chaotic, the evidence far more confusing than was the case and the proceedings generally hampered by pursuit of irrelevant issues and evidence.
- [38]I conclude that the builder is entitled to an award of costs of the proceedings on the standard basis.
Fixed costs
- [39]By s 107 of the QCAT Act the Tribunal is enjoined to fix costs if possible.
- [40]When fixing costs the Tribunal is not bound by any particular scale of costs. If costs cannot be fixed, then the Tribunal may make an order that the costs be assessed by a scale under the rules applying to a court.
- [41]
- [42]I shall fix costs here. The builder has supplied copies of all relevant invoices including Counsel’s fee notes and the accounts submitted by the quantity surveyor expert.
- [43]The costs incurred prior to Dr and Mrs Monsour commencing proceedings are not costs of the proceedings however, and the costs of the solicitors who instructed at hearing are reduced by that amount charged in their initial account of 18 November 2019 of $1,630.20 (but allowing the costs of initial contact of counsel). Those disallowed fees represent double up costs referable to change of solicitor.
- [44]The costs of the solicitors initially engaged to defend the claim filed by Dr and Mrs Monsour and pursue a counterclaim, Messrs McCarthy Durie, are only costs in the proceedings from and including March 2018.
- [45]The cost of the expert quantity surveyor, Accurate Estimating Services Pty Ltd is a recoverable cost.
- [46]I accept the following are the builder’s solicitor own client costs of the proceedings:
McCarthy Durie (from March 2018)$ 23,057.12
All Building Law$ 52,551.71
Counsel$ 68,200.00
Quantity surveyor fees$ 17,200.00
Total$161,078.83
- [47]Given a broad brush approach is permitted, I take into consideration that there is a global or usual view that standard costs generally or usually work out to be two thirds of the costs actually incurred.[13]
- [48]I shall adopt that approach. On that basis I fix the builder’s costs at $107,385.88.
Footnotes
[1] Neverfail Pty Ltd as Trustee for The Harris Siksna Family Trust v Radford (No. 2) [2017] QCATA 73 [38].
[2] [33].
[3] Wyatt v Albert Shire Council [1987] 1 Qd R 486.
[4] [66].
[5] Sand & Surf Design Pty Ltd v Surrey & Anor [2014] QCATA 225 [39].
[6] Transcript 1-2 Line 42.
[7] Rule 48(2) QCAT Rules.
[8] T1-4 L15 to T1-5 L1.
[9] Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53.
[10] Arcon Constructions Pty Ltd v QBSA [2013] QCAT 573 [32].
[11] Australian Securities and Investments Commission v Atlantic 3-Financial (Aust) Pty Ltd (No 3) [2008] QSC 9 [32] citing Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119.
[12] The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] 2 QSC 84 [8].
[13] Thompson v Body Corporate for Arila Lodge & Anor; Thompson v Body Corporate for Arila Lodge & Anor (No 2) [2018] QCATA 133 [59]; Campbell v The Body Corporate for 70 Bowen St & Ors [2020] QCATA 26 [24].