Haimes v Queensland Building and Construction Commission
[2025] QCAT 88
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- Unreported Judgment
- Haimes v Queensland Building and Construction Commission[2025] QCAT 88
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Haimes v Queensland Building and Construction Commission[2025] QCAT 88
Haimes v Queensland Building and Construction Commission[2025] QCAT 88
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Haimes v Queensland Building and Construction Commission & Ors [2025] QCAT 88 |
PARTIES: | LUKE HAIMES (applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (first respondent) RUSSELL STOCKTON LISA STOCKTON (second respondents) |
APPLICATION NO/S: | GAR188-18 |
MATTER TYPE: | General administrative review matters |
DELIVERED ON: | 10 March 2025 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member Deane |
ORDERS: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – POWER TO AWARD GENERALLY – STATUTORY BASIS GENERALLY – whether the interests of justice require an award of costs – where costs applied for in interests of justice – where unsuccessful application not an unnecessary disadvantage necessitating costs – where complexity of dispute not a determinative factor in awarding costs – where not all costs sought incurred as a result of this proceeding Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 48, s 61, s 100, s 102 Ascot v Nursing & Midwifery Board of Australia [2010] QCAT 364 Fuge v Queensland Building and Construction Commission [2014] QCAT 383 Haimes v Queensland Building and Construction Commission & Ors [2024] QCAT 326 Health Ombudsman v du Toit [2024] QCA 235 Marzini v Health Ombudsman (No 4) [2020] QCAT 365 Queensland Building and Construction Commission v B&L Constructions Qld Pty Ltd (No 2) [2023] QCATA 107 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Tamawood Ltd v Paans [2005] 2 Qd R 101 |
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) |
Applicant: | CH Matthews, instructed by All Building Law |
Second Respondents: | K McAuliffe-Lake, instructed by Aitchison Reid |
REASONS FOR DECISION
- [1]Mr Haimes (‘the Contractor’) unsuccessfully applied to set aside the decision of the Queensland Building and Construction Commission (‘QBCC’) that a domestic building contract had been validly terminated by Russell Stockton and Lisa Stockton (‘the Homeowners’) having the consequence of allowing a claim for non-completion under the Statutory Insurance Scheme (‘SIS’).[1]
- [2]By decision made 2 July 2024, I confirmed the QBCC’s decision and set a timetable if a party wished to seek costs and for the question of costs to be determined on the papers.
- [3]The Homeowners applied for orders that the Contractor pay their costs.[2] Submissions and evidence have been received.[3] Neither the Homeowners nor the Contractor objected to the other parties’ minor non-compliance with the timeframes in the Decision of 2 July 2024 for bringing or responding to the costs’ application. To the extent necessary, I extend the timeframes for compliance.[4]
- [4]I proceed to determine the Homeowners’ application for costs. The delay in determining this costs application since the last submissions were received is regrettable and relates to resourcing issues.
- [5]The Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) provides, ‘[o]ther 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.’[5] This position may be displaced, if the Tribunal considers the interests of justice require it to make an order for a party to pay all or a part of the costs of another party.[6] The relevant enabling Act, the Queensland Building and Construction Commission Act 1991 (Qld) (‘the QBCC Act’) does not provide for the awarding of costs in review proceedings.
- [6]The Contractor opposes the costs order sought and submits that:
- the appropriate order is that each party bear their own costs;
- alternatively, if the Tribunal is satisfied that a costs order ought to be made in the interests of justice (which is denied), it ought to be limited both by way of percentage for representative success and the scale on which those costs may be claimed. In this regard he submits that the appropriate order is that he pay 30% of the Homeowners’ costs of the review proceedings on the standard basis, to be assessed on the Magistrates Court scale.
- [7]
The public policy intent of the provisions in the QCAT Act is plain. The tribunal was established as a no costs jurisdiction. That may be departed from where the interests of justice require it. The considerations identified in s102(3) are not grounds for awarding costs. They are factors that may be taken into account in determining whether, in a particular case, the interests of justice require the tribunal to make a costs order.
- [8]Section 102(3) of the QCAT Act sets out the matters that the Tribunal may have regard to in deciding whether to award costs. Those factors are discussed below.
- [9]The Homeowners contend that it is in the interests of justice for a costs order to be made as it would be unjust for their success to be substantially eroded by having to pay their own costs incurred in achieving their success. This submission is made in similar terms to the observations of Keane JA, as he then was, in Tamawood Ltd v Paans (‘Tamawood’)[9] in relation to similar but different provisions of the Commercial and Consumer Tribunal Act 2003 (Qld). The Contractor contends that the interests of justice do not require a costs order in favour of the Homeowners against him.
- [10]
- [36]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)...
- [37]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. One matter which is relevant is that this proceeding is one where there was a right to legal representation.
- [11]The Court of Appeal in Health Ombudsman v du Toit[11] recently:
- endorsed the approach in Marzini that no order for costs is to be made unless the Tribunal considers the interest of justice require it to do so;[12]
- found that the language of sections 100 and 102 are to be construed in the context of the QCAT Act as a whole[13] and that an important contextual consideration is that the Tribunal ‘deals with a multiplicity of matters which vary in nature both in terms of complexity and seriousness of outcomes’;[14]
- found that sections 100 and 102 should be construed in the context that section 43(2) gives a limited class of persons an entitlement to be represented;[15]
- noted that the discretion under section 102(1) ‘is wide’ and noted that what constitutes the interests of justice ‘will vary according to the circumstances of each case’;[16]
- agreed that the use of the word ‘require’ suggests that the interests of justice must clearly support a costs order[17] and disapproved the approach in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) (‘Ralacom’);[18]
- found that in construing section 102 consistently with the objects and purposes of the QCAT Act it is not to be read down by the terms of section 100 because section 100 is specifically subject to other provisions of the QCAT Act;[19]
- noted that in Tamawood the provisions under consideration ‘did not expressly provide for a usual rule that each party bear their own costs subject to a discretion to make a costs order where the interests of justice required such an order to be made’;[20]
- noted that Tamawood was a commercial building case and that different considerations may apply to a question of costs in disciplinary proceedings;[21]
- noted in relation to the decision-maker’s statutory function ‘it was a matter for the Tribunal, in the particular circumstances of the proceedings, as to how much weight was to be ascribed to this consideration’[22] and noted that this ‘will vary according to the circumstances of each case’.[23]
- [12]
- [13]In a jurisdiction where the starting point is that parties bear their own costs, it is incumbent upon parties to be mindful of the costs they are incurring and their relativity to the potential benefit sought from the proceeding.
Whether a party acts in a way that unnecessarily disadvantages another party to the proceedings[25]
- [14]I am not satisfied that this is a factor in favour of an award of costs.
- [15]Section 48(1)(a) to (g) of the QCAT Act sets out a non-exhaustive list of specific considerations for when a party to a proceeding may be acting in a way that unnecessarily disadvantages another party. As I understand the Homeowners’ submissions, none of those considerations are sought to be relied upon.
- [16]The Homeowners contend that the Contractor’s reliance on numerous bases, with slim prospects of success, and filing evidence about factual matters, which were required to be responded to but not squarely relied upon in final submissions, created undue complexity and increased the Homeowners’ costs, thereby unnecessarily disadvantaging them.
- [17]The Contractor submits that the bases identified by the Homeowners as having slim prospects of success were primarily matters of law and consumed limited hearing and submission time and therefore limited time, cost and expense.
- [18]In such Tribunal matters, it is not unusual that a party’s case at final hearing does not rely upon all evidence filed or issues raised earlier in the proceeding. This may be a disadvantage, but I am not satisfied that it constitutes acting in a way that unnecessarily disadvantages another party.
- [19]Further the Homeowners say that the Contractor’s decision to rely upon his own expertise rather than engage an independent expert caused disadvantage to them because an independent report would have ‘almost inevitably narrowed the technical issues in dispute…and lessened the costs incurred by’[26] them. I am not satisfied that the Homeowners’ costs in these proceedings would necessarily have been lessened. Most of the Homeowners’ experts’ costs were incurred in their own proceedings against the QBCC rather than in this proceeding.
- [20]If the Contractor had engaged an independent expert the Tribunal would almost certainly have:
- convened an experts’ conclave and required the production of a joint report, which would have had associated additional costs.
- requested the experts to give concurrent evidence during the oral hearing, which would likely have had associated additional costs.
- [21]Mr Helisma’s evidence at the oral hearing was of relatively short duration and he did not attend during Mr Haimes’ testimony.
- [22]The Homeowners point to the Contractor’s unsuccessful application to have certain issues determined as preliminary points as acting in a way that unnecessarily disadvantaged them by increasing costs.
- [23]By directions dated 24 January 2019:
- the Contractor was directed to make an application for determination of a preliminary issue by 20 February 2019;
- the QBCC and the Homeowners were directed to file submissions in response by 27 February 2019; and
- such an application was to be determined on the papers.
- [24]By directions made 14 March 2019, the application filed 6 February 2019 was dismissed. Given the relatively short period of time which this unsuccessful application occupied in this proceeding, and having regard to the invoices in evidence, I am not satisfied that being required to respond to this application constitutes an unnecessary disadvantage.
The nature and complexity of the dispute[27]
- [25]
- [26]The issue for determination was whether the Homeowners properly terminated the Contract in accordance with the relevant policy of the SIS.[29]
- [27]As my quite lengthy reasons for decision demonstrate, the nature and complexity of the dispute, which involved quite technical arguments as to the proper construction of the building contract and whether the Homeowners had properly terminated the contract, warranted legal representation. Whether a party has validly terminated a building contract is often a complex matter both factually and legally particularly where the Homeowners relies upon paragraph (d) of the Policy i.e. “any breach of the contract by the contractor” as distinct from the other more specific conditions.
- [28]The Contractor unsuccessfully raised quite a number of bases, on which he relied to claim that the Breach Notice and Termination Notice were invalid, including because they were signed by the Homeowners’ solicitors rather than the Homeowners and that the Homeowners were in substantial breach for failing to pay progress claims where two invoices, each in the amount of $230 (incl GST) rather than progress claims had been issued.
- [29]I accept that the number of bases relied upon by the Contractor added to the complexity and costs of the proceedings.
- [30]The Homeowners relied on many claimed breaches in their Breach Notice, which on the evidence before me were not substantiated because I was not satisfied that the Contractor was in breach or even if he was in breach, I was not satisfied that it was a substantial breach, or the Homeowners had waived strict compliance. The Homeowners relied on many claimed breaches in their Termination Notice, which on the evidence before me, were not substantiated.
- [31]The number of claimed breaches relied upon by the Homeowners also added to the complexity and costs of the proceedings.
- [32]Both the Contractor and the Homeowners pursued arguments which were ultimately unsuccessful. Costs were incurred by all parties in bringing and responding to those unsuccessful claims.
- [33]The evidence filed by both the Contractor and the Homeowners had deficiencies, which added to the complexity. The QBCC’s final submissions[30] highlighted some of these aspects. In my reasons, I observed that it was likely that corroborating evidence could have been provided by the Contractor and the Homeowners, but such evidence was not provided.[31] I also observed that the Homeowners ‘did not produce documentary evidence as to finance approval nor explain why it was not produced’.[32]
- [34]Both the Contractor and the Homeowners added to the complexity and costs of the proceedings.
The relative strengths of the claims[33]
- [35]The Contractor did not succeed in setting aside the Decision. However, this is not determinative.
- [36]I found that the Contractor ‘was in substantial breach in respect of certain (but not all) claimed breaches in the Breach Notice when it was given’ and I was ‘not satisfied that he had rectified or commenced to substantially rectify at least some of those substantial breaches within the notice period.’[34]
- [37]As referred to earlier, the Homeowners relied on many claimed breaches, which on the evidence before me were not substantiated. The Homeowners also unsuccessfully contended that the Contractor repudiated the Contract.[35]
Whether the Homeowners were afforded natural justice by the QBCC decision maker?
- [38]This is not a factor sought to be relied upon.
Whether the Homeowners genuinely attempted to enable and assist the QBCC to make the decision on the merits?
- [39]This is not a factor in favour of an award of costs against the Contractor.
- [40]The Homeowners participated in the internal review and put forward documents in support of their position that they had lawfully terminated. The Contractor also participated in the internal review and put forward documents in support of his position that the Homeowners had not lawfully terminated. As referred to earlier, it is likely that both the Contractor and the Homeowners could have produced corroborating documents to the QBCC and subsequently to the Tribunal, which if produced were likely to have reduced some of the complexity.
The financial circumstances of the parties[36]
- [41]I am not satisfied that this is a factor in favour of an award of costs against the Contractor.
- [42]The Homeowners contend that they were not in a financial position to absorb the additional costs arising from the defective work without the SIS payment and the QBCC had indicated that if the decision was set aside, they may, in some circumstances, be required to repay the amount paid out under the SIS so they were required to meaningfully participate in the proceedings to ensure their interests were protected.
- [43]The Homeowners have not filed supporting documentary evidence as to their financial position. The original Contract price was $1,357,911.[37] This indicates the Homeowners have substantial means.
- [44]During the final hearing Mr Stockton gave oral evidence in relation to the obtaining of finance to the effect that there was no risk that finance would not be approved because of their strong asset position.[38] This also indicates the Homeowners have substantial means.
- [45]The evidence before me is that the house was sold on or about 12 March 2019. During the final hearing Mr Stockton gave oral evidence that the house had been sold for $3.8 million.[39] This indicates the Homeowners have substantial means, although I accept that no documentary evidence of the sale price or clear documentary evidence of the total cost to the Homeowners of the house and land has been placed before me.
- [46]There is no evidence of the Contractor’s financial position before me.
Anything else the Tribunal considers relevant[40]
- [47]The Homeowners submit that their success ought not be eroded by their legal costs. I accept that this is a factor in favour of an award of costs. However, there are some countervailing issues I consider below, including that not all the costs sought were in fact incurred in respect of this proceeding.
- [48]The Policy provides that the maximum amount payable under it is $200,000 if all conditions are satisfied. The evidence before me is that the Homeowners’ claim for the maximum amount was allowed. If the Decision the subject of the Contractor’s review application had been set aside, under certain circumstances, the QBCC may have sought return of the funds paid out.
- [49]Ms Reid, the Homeowners’ solicitor, gave evidence[41] of the costs incurred by the Homeowners including certain costs incurred prior to this proceeding being commenced including in relation to the Homeowners’ proceedings with the QBCC and costs incurred prior to leave for representation being granted in this proceeding.
- [50]The Homeowners sought costs to be fixed at $105,111.91[42] as follows:
- Experts’ costs in the amount of $22,253.00 (incl GST);
- Counsels’ fees in the amount of $42,009.00 (incl GST);
- Transcript fees in the amount of $2,794.18 (incl GST);
- Solicitors’ costs in the amount of $37,158.47 (incl GST);[43]
- Disbursements in the amount of $897.26 (incl GST).
- [51]Whilst the Homeowners have expressly sought to exclude some prior costs incurred, on the evidence before me, some of the costs sought relate to costs incurred prior to the Contractor filing the Application to review a decision on 5 June 2018.
- [52]The Homeowners had commenced review proceedings against the QBCC.[44] Those proceedings were finalised by way of consent directions dated 29 November 2017. Most of the experts’ costs were incurred prior to these proceedings being commenced. The most significant experts’ costs relate to evidence prepared and filed by the Homeowners in the previous proceedings brought by them to review the QBCC decision, denying their claim against the SIS.[45] According to the Tribunal’s records, the Contractor was not a party to those proceedings and no order for costs was made in those proceedings. The Homeowners relied in these proceedings upon the expert report prepared and filed in their own prior review proceedings.
- [53]There is evidence before me, and I accept, that:
- the QBCC wrote to the Homeowners on 6 July 2018 and foreshadowed making an application to join them to these proceedings;
- on 28 September 2018 the Homeowners were served with a joinder application;
- the Homeowners were reluctant to be joined but felt they had no choice because the QBCC could not confirm that it would not require them to repay amounts paid under the SIS if the decision under review was set aside and advised that there may be some information which becomes available, which would have impacted the QBCC’s decision to allow their claim;
- the Homeowners were joined on 8 November 2018 and all parties were granted leave to be legally represented.[46]
- [54]
- [55]Whilst this was a review of the QBCC’s decision as distinct from a domestic building dispute, the dispute was largely a contest between the Contractor and the Homeowners. Although the review proceedings were not strictly in relation to a monetary value, the evidence is that the Homeowners’ claim up to $200,000 was permitted because of the QBCC’s decision, the subject of the review. The Contractor is usually required to indemnify the QBCC for such payments from the SIS.[49] Therefore, the proceedings have some of the same elements as a commercial or monetary dispute.
- [56]The Contractor submits that the Homeowners did not need to engage their independent expert, thereby incurring costs, and could have relied upon the QBCC’s technical staff. This submission appears to omit consideration of the fact that most of Mr Helisma’s fees were in fact incurred in the Homeowners’ prior proceedings, which lead to the QBCC amending its decision, which became the decision under review in this proceeding.
- [57]On the evidence before me a quite modest amount of $2,695 (incl GST) was incurred in experts’ fees in these proceedings. A further amount was claimed for costs incurred prior to the Homeowners being joined, however, the evidence before me does not clearly indicate that such work was for the purposes of this proceeding.
- [58]I am not satisfied that all the disbursements claimed directly relate to these proceedings. The disbursement claimed in respect of the invoice dated 13 December 2017 in the amount of $33 is an amount incurred prior to these proceedings being commenced on 5 June 2018 and the Homeowners being joined on 8 November 2018. The disbursement claimed in respect of invoice dated 18 April 2019 in the amount of $66 is an amount incurred because of work performed in 2017, potentially relevant to GAR215-17 rather than these proceedings.
- [59]A review of the invoices in evidence show they include costs not directly relating to these proceedings, including relating to:
- work performed prior to these proceedings being commenced, totalling $5,019.85;[50]
- communications with the QBCC subsequent to GAR215-17 being finalised, prior to these proceedings being commenced;[51]
- the Contractor’s internal review, prior to these proceedings being commenced;[52]
- civil claims against the Contractor.[53]
- [60]I am not satisfied that it is appropriate to consider that such costs have eroded the benefit obtained in having the decision confirmed.
- [61]As referred to earlier in these reasons, costs were incurred by all parties, including the Homeowners, in relation to the Homeowners pursuit of a number of ultimately unsuccessful claims and their non-disclosure of documents, which likely would have lessened the complexity of some of the issues to be determined. I take this into account in considering the extent to which costs have eroded the benefit obtained.
Conclusion
- [62]On balance, I am not satisfied that the interests of justice require the Tribunal to make an award of costs.
- [63]While ultimately successful in having the Decision under review confirmed, many of the arguments advanced by the Homeowners, each of which no doubt contributed to the quite significant costs incurred by the Homeowners, were not supported on the evidence before me. It is likely that these unsuccessful arguments would have increased the costs of the Contractor. The evidence of the Homeowners was in some respects deficient, as referred to earlier, which added to some of the complexity. The costs incurred have eroded the benefit of the Homeowners’ overall successful claims, however, at least some of that is due to their own decisions or actions.
- [64]I am not satisfied that the factors clearly support the award of costs against the Contractor. I decline to exercise my broad discretion to award costs against the Contractor in these circumstances.
Footnotes
[1] Haimes v Queensland Building and Construction Commission & Ors [2024] QCAT 326.
[2] Application for miscellaneous matters filed 6 August 2024 (by email 5 August 2024 at 7.20pm) together with statements of evidence.
[3] Contractor’s submissions dated 5 September 2024; Homeowners’ submissions and evidence in reply filed 20 September 2024; No submissions were received from the QBCC.
[4] Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), s 61.
[5] Ibid, s 100.
[6] Ibid, s 102.
[7] [2010] QCAT 364.
[8] Ibid, [9].
[9] [2005] 2 Qd R 101.
[10] [2020] QCAT 365, [36]-[37].
[11] [2024] QCA 235.
[12] Ibid, [50].
[13] Ibid, [21].
[14] Ibid, [22].
[15] Ibid, [31].
[16] Ibid, [32].
[17] Ibid, [62].
[18] [2010] QCAT 412.
[19] [2024] QCA 235, [64].
[20] Ibid, [52].
[21] Ibid, [53].
[22] Ibid, [76].
[23] Ibid, [72].
[24] Queensland Building and Construction Commission v B&L Constructions Qld Pty Ltd (No 2) [2023] QCATA 107, [6], [44].
[25] QCAT Act, s 102(3)(a).
[26] Submissions dated 5 August 2024, [25].
[27] QCAT Act, s 102(3)(b).
[28] Fuge v Queensland Building and Construction Commission [2014] QCAT 383, [21].
[29] Haimes v Queensland Building and Construction Commission & Ors [2024] QCAT 326, [14].
[30] Filed 13 April 2021.
[31] Haimes v Queensland Building and Construction Commission & Ors [2024] QCAT 326, [228].
[32] Ibid, [239].
[33] QCAT Act, s 102(3)(c).
[34] Haimes v Queensland Building and Construction Commission & Ors [2024] QCAT 326, [66].
[35] Ibid, [267].
[36] QCAT Act, s 102(3)(e).
[37] Haimes v Queensland Building and Construction Commission & Ors [2024] QCAT 326, [103].
[38] Transcript, 1-84, lines 10-31, 1-85, lines 12-19.
[39] Ibid, 1-84, line 27.
[40] QCAT Act, s 102(3)(f).
[41] Statements dated 5 August 2024 and 20 September 2024.
[42] Submissions filed 20 September 2024, [31].
[43] Calculated as 70% of $53,083.53 (incl GST).
[44] GAR215-17.
[45] Ibid.
[46] Directions Hearing, Directions 8 November 2018.
[47] Submissions filed 12 October 2018.
[48] [2010] QCAT 412.
[49] QBCC Act, s 71.
[50] Invoices dated 13 December 2017, 2 February 2018 and 9 February 2018.
[51] Invoice dated 13 December 2017.
[52] Invoice dated 2 February 2018.
[53] Invoice dated 16 August 2018.