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Queensland Building and Construction Commission v Russell[2015] QCATA 148

Queensland Building and Construction Commission v Russell[2015] QCATA 148

CITATION:

Queensland Building and Construction Commission v Russell [2015] QCATA 148

PARTIES:

Queensland Building and Construction Commission

(Applicant/Appellant)

v

Cedric Ernest Russell

(Respondent)

APPLICATION NUMBER:

APL182-14

MATTER TYPE:

Appeals

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Senior Member O'Callaghan

Member Paratz

DELIVERED ON:

25 September 2015

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The QBCC is to pay the costs of Mr Russell on the District Court scale on a standard basis in GAR232-11 from 18 March 2013.
  2. The QBCC is to pay the costs of Mr Russell on the District Court scale on a standard basis in GAR003-13.
  3. The QBCC is to pay the costs of Mr Russell on the District Court scale on a standard basis in APL182-14.
  4. Mr Russell shall deliver to the QBCC, a realistic estimate of the costs claimed, including an explanation of the basis of the estimate, sufficiently detailed to facilitate some broad examination of its reasonableness, having regard to the District Court scale of costs.
  5. If Mr Russell and the QBCC are unable to agree on an amount of the costs within 14 days of the delivery of the estimate of costs, the costs shall be assessed by an assessor to be nominated by the Registrar upon request by either party.
  6. The QBCC shall pay the costs of Mr Russell (as agreed or assessed) within 14 days of such agreement or assessment.

CATCHWORDS:

APPEAL – COSTS – Where the Tribunal found that two decisions of the QBCC to direct rectification should be set aside – where the Appeal Tribunal upheld the decision of the Tribunal – where the builder applied for costs of both Applications to review and of the Appeal – whether the QBCC appropriately considered the question of unfairness at an appropriate time – where the builder had suffered significant financial hardship due to the costs of the proceedings – where an order for costs against the QBCC was found to be appropriate

Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 102

Queensland Civil and Administrative Tribunal Rules 2009 (Qld) r 86

Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 at [29]

Fuge v Queensland Building and Construction Commisssion [2014] QCAT 383

APPEARANCES:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REPRESENTATIVES:

APPLICANT:

Queensland Building and Construction Commission

RESPONDENT:

Shand Taylor Lawyers

REASONS FOR DECISION

Senior Member O'Callaghan

  1. [1]
    In these applications the Tribunal comprised of Member Paratz and me. I have Member Paratz’s reasons in draft. I agree with the reasons and the orders he proposed.

Member Paratz

  1. [2]
    The Tribunal determined two Applications[1] for Review of decisions of the Queensland Building and Construction Commission (‘QBCC’) as to the issue of Directions to Rectify on 21 March 2014. An Order was made that the parties make submissions as to costs within 14 days of that order, and that the matter of costs be determined on the papers.
  1. [3]
    The QBCC filed an Appeal[2] against the decision on 17 April 2014. The QBCC filed an Application to Stay a Decision in relation to the costs issues on 30 April 2014. The Tribunal made an order on 20 June 2014 staying the decision on costs in the two Applications to Review.
  2. [4]
    The Appeal was determined on 1 May 2015, and the Application for leave to appeal and appeal was dismissed.
  3. [5]
    Mr Russell filed an Application on 12 May 2015 seeking costs in the two Applications to Review, and in the Appeal. Directions were made on 18 May 2015 lifting the stay of the decision on costs in the two Applications, and directing the parties to file submissions as to costs by 4 June 2015, and that the matter of costs would be determined by a Member of the Tribunal on the papers not before 4 June 2015.
  4. [6]
    Submissions were received from both parties as to costs, as directed. I will deal with the costs application for each of the Applications, and for the Appeal, in these reasons.

Submissions by Mr Russell as to GAR 232-11 and GAR003-13

  1. [7]
    The Applicant is seeking costs of both of the Review Applications of $87,813.61 (comprising $72,458.61 in legal fees and $15,335.00 in engineering fees).
  2. [8]
    He submits that the QBCC:[3]

in numerous respects, acted in a way that unnecessarily disadvantaged (him). The material indicates numerous instances where (the QBCC) either failed to take properly into account (his) communicated position or failed to adequately respond to (his) representations on matters relevant to the proceedings. Had (the QBCC) reasonably responded to any or all of the matters raised by (him) and his representatives, the proceedings might have been resolved or at least the issues narrowed significantly.

  1. [9]
    As evidence of the way he was disadvantaged, he refers to:
    1. a)
      Failing to consult with him about factual issues before issuing the direction to rectify, particularly as to external retaining walls, site drainage, termite management and masonry articulation.
    2. b)
      Maintaining the direction to rectify after being explicitly informed of these factual matters early in the proceedings.
    3. c)
      Attempting to abandon the settlement agreement that it had signed, thereby unnecessarily complicating the proceedings and increasing his costs.
    4. d)
      Refusing to acknowledge or respond to his communications following the completion of the settlement agreement works.
  2. [10]
    He argues that the majority of the Tribunal’s findings were in his favour and relate to matters where either his evidence was uncontested and/or were consistent with the position he adopted from the outset. He refers specifically to:[4]
    1. a)
      Issues relating to the rear embankment and the protection of the rear embankment
    2. b)
      evidence relating to site drainage
    3. c)
      evidence in relation to masonry articulation
  3. [11]
    He contends that he was denied natural justice by the QBCC failing to consult with him; by carrying out site meetings without him; by refusing to acknowledge his evidence about his dealings with the homeowners; and by failing to respond to his representations as to the settlement agreement works.
  4. [12]
    He submits that he made genuine attempts to help the QBCC by attending all site meetings to which he was invited; was responsive to requests for information, and proactively sought to keep the QBCC advised of developments; and participated in compulsory conferences and was willing to participate in a negotiated resolution of the issues in dispute.

Submissions by Mr Russell as to APL182-14

  1. [13]
    Mr Russell is seeking costs of the Appeal proceedings fixed in the amount of $11,442.25.
  2. [14]
    He refers to his costs submissions in the two applications as relevant to the tribunal’s exercise of its discretion in relation to the costs of the appeal, and specifically as to the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; and the financial circumstances of the parties.
  3. [15]
    He contends that he was justified in opposing the appeal.

Submissions by the QBCC as to costs orders

  1. [16]
    The QBCC opposes the application for costs.
  2. [17]
    It points out these were merits review matters, and refers to the decision of Senior Member Oliver in Fuge v Queensland Building and Construction Commission[5] where he commented that:

[13] Here, not only does the Commission have an obligation to assist the Tribunal, it also has to have regard to the objects of the QBCC Act. It has a statutory obligation to administer the Act, to ensure that industry standards are maintained, and achieve a reasonable balance between the interests of building contractors and consumers.

  1. [18]
    The QBCC submitted that in order to succeed an Applicant must demonstrate to the Tribunal that “the interests of justice point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in section 100”[6].
  2. [19]
    A joint experts report, filed in the course of the review proceedings, found defects in the construction of the garage wall, termite treatment, slope of surface drainage away from the house, studs in the garage, footings at the interface of upper and lower floors, and as to the sufficiency of rectification works that had been performed by Mr Russell.
  3. [20]
    The QBCC submits that:[7]

35. The circumstances of this case, including the accepted fact that the Applicant did carry out defective building work, fall well short of pointing so compellingly to a costs award such as to overcome the strong contra-indication against such an award.

  1. [21]
    It submits that it did not act in a way that disadvantaged Mr Russell, but to the contrary, proactively engaged with him throughout the QCAT process.
  2. [22]
    It also submits that it was carrying out a statutory function, and the fact that Mr Russell had carried out defective work clearly gave prospects that its decisions would be upheld.[8]
  3. [23]
    The QBCC accepted that the nature of the dispute may be considered complex, but argued that mere factual complexity does not support an order for costs; and that the appropriateness of legal representation does not of itself justify the making of a costs order.
  4. [24]
    It submitted that:

[55] On its face, there was nothing to suggest action or inaction by others was a contributing factor. The position of the (QBCC) in considering the building work and rectification work to be both defective and unsatisfactory was consistent with the joint expert evidence.

  1. [25]
    It submitted that ultimately the Tribunal preferred the evidence of Mr Russell over that of the expert witnesses, but that there was nothing about the facts of the matter which suggest that was a forgone conclusion, and it is unsurprising that the applications proceeded to a final hearing.[9]
  2. [26]
    It submits that Mr Russell’s assertion that he was denied natural justice by the QBCC throughout the history of the matter was baseless, and simply not borne out by the evidence.
  3. [27]
    It submitted as to the financial circumstances of the parties that to apply S 102(3)(e) in the manner suggested by Mr Russell would render the Commission vulnerable to a costs order in every case in it which it appears in the tribunal, and that:

[70]..This would effectively prejudice the Commission permanently and irrevocably on the question of costs in any matter before this Tribunal arising from the exercise of the (QBCC) statutory powers. With respect, this cannot be the intention of the sub-section in question.

  1. [28]
    In relation to the offer of settlement, it submitted that the Tribunal retained a discretion as to costs where an offer was made, and that as there was[10]no evidence presented at the hearing, or at all, which altered the position of either expert, there was no proper basis for the respondent to accept the offer”.
  2. [29]
    It submitted that[11] there was no justification for awarding indemnity costs, and that traditionally the making of an order on the indemnity basis requires evidence of misconduct, and that no case of this sort could be made out against the QBCC.
  3. [30]
    It also submitted that it is not possible on the material to fix costs pursuant to section 107 of the QCAT Act as there are many items in the “Matter Cost Summary Report” prepared by Mr Russell’s solicitor that are of questionable relevance to these proceedings,[12] and refers specifically to the discounts shown:

The basis for or quantification of each “Discount” is not otherwise explained leading to the inescapable conclusion that the Applicant’s material does not enable the Tribunal to determine the costs incurred by the Applicant that are attributable to applications GAR232-11 and GAR003-13 with any certainty.

  1. [31]
    It submits that if awarded, an assessment of Mr Russell’s costs is reasonable and necessary.

Should costs be awarded generally?

  1. [32]
    The application for costs by Mr Russell is generally based upon the premise that the findings of the Appeal Tribunal vindicated the attitude he took in the initial proceedings as to Direction to Rectify; and as to the attitude he took that the further work which he conducted was pursuant to a settlement agreement and not pursuant to the Direction to Rectify.
  2. [33]
    The Appeal Tribunal did not interfere with the findings of fact of the Learned Member who heard the matter, and found that no error of law was made.
  3. [34]
    The initial premise in the Tribunal is that each party usually bears their own costs under s 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
  4. [35]
    However, the tribunal has specific power under s 102 of that Act to make a costs order against a party in the interests of justice. In deciding whether to make a costs order under that section, the Tribunal may have regard to:
  1. (b)
    the nature and complexity of the dispute the subject of the proceeding
  1. (e)
    the financial circumstances of the parties to the proceeding
  1. (f)
    anything else the Tribunal considers relevant
  1. [36]
    The Tribunal has recognised that building cases which contain an element of complexity are often similar in nature and conduct to commercial disputes such as may be litigated in a Court, and that it is at times appropriate to award costs in such cases. The President, Justice Wilson, noted that:[13]

[9] In building cases that have elements of complexity, the Queensland Court of Appeal has suggested that costs awards will not be surprising.[14] That case concerned, however, costs provisions in different legislation governing QCAT’s predecessor Tribunal.

[10] In any event, the power to award costs under the QBSA Act, while expressed in succinct terms, indicates that the question of costs is to be addressed in markedly different terms from s 100 of the QCAT Act.

  1. [37]
    Whilst such costs orders generally arise in building disputes, having regard to s 77(h) of the Queensland Building and Construction Commission Act 1991 (Qld), as referred to by Justice Wilson, similar considerations may be seen to be applicable in a review application which has a similar pattern and treatment of evidence as if it were a building dispute, as has occurred in this instance.
  2. [38]
    Section 102 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) provides that in deciding whether to award costs, the Tribunal may have regard in a proceeding for the review of a reviewable decision as to:

i) whether the applicant was afforded natural justice by the decision-maker for the decision; and

ii) whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits.

  1. [39]
    The decision in Fuge points to a balance being needed between the interests of builders and consumers. The QBCC in this matter has proceeded to pay the costs of substantial rectification works to the property - those works have benefited the home-owner. However, if the works, whilst being required to rectify defects that needed attention, cannot be fairly attributed to the builder, due to acts of the consumer, a fair balance would not be achieved if the builder was required to pay those costs.
  2. [40]
    That same balance would apply to a consideration of costs flowing from the conduct of the proceedings.

Should costs be awarded in GAR232-11?

  1. [41]
    Mr Russell has incurred significant expense in reviewing the decision of the QBCC as detailed in the Affidavit of his solicitor, Mr O'Sullivan.
  2. [42]
    Mr Russell submits that he has suffered financial hardship due to the proceedings:[15]

The respondent is a recently retired sole trader with no significant assets. His financial resources have been significantly depleted by the original review proceedings and subsequent appeal to the extent that he now relies upon the pension and financial support of his wife to meet his day to day living expenses. He was forced to sell his interest in his residential home to fund the costs associated with the review proceedings and was unable to afford legal representation for the actual hearing of the applications. He still owes money to parties who have assisted him with these applications and the settlement agreement works.

  1. [43]
    The QBCC gave Mr Russell a Direction to Rectify based on his having performed defective work.
  2. [44]
    The Tribunal at first instance found that Mr Russell had conducted defective work. However, it also found that it was unfair to give a Direction to Rectify in the circumstances.
  3. [45]
    The Tribunal found that the unfairness arose due to the lack of maintenance conducted by the homeowner, and due to her delay in notifying the QBCC of the defects.
  4. [46]
    The learned Member commented as to maintenance that:

[106] I accept the owners agreed to be responsible for landscaping, retaining walls and surface drainage. I conclude this was done to save them money. Mr Russell says if they had done that work most of the problems with soil and water would not have occurred. Further, Ms Taylor’s failure to undertake even marginal maintenance with respect to the drainage installed has contributed to her own problems.

  1. [47]
    As to the delay, he commented that:

[115] In Ms Taylor’s complaint to the Commission made 29 March 2011 she claimed for the first time she noticed water coming in from under the house into the house was 29 December 2010. She specifically refers to water coming into the entry and damaging floorboards, and points to the cause as water entry under the house. In light of her emails of 8 and 14 November 2007 I do not accept that was true. I conclude she was aware for years prior to that of the problems with respect to water entry and soil and mud build up resulting in damage to her property.

  1. [48]
    He concluded that it was unreasonable to direct rectification:

[117] I find that delay was in breach of the stipulations of the rectification of Building Work Policy, and taken together with the failure of the owners to perform landscaping or retention works as agreed or perform even marginal maintenance in respect of the drainage left on site at the end of construction, makes it unfair and unreasonable to direct Mr Russell to rectify the identified defective building work.

  1. [49]
    The QBCC was found to be correct in its contentions as to the quality of the work conducted, and the QBCC was entitled to investigate that aspect and pursue it.
  2. [50]
    The question then becomes as to at what point in time the QBCC should have considered, and been able to make a judgment as to fairness itself, and whether Mr Russell has been caused unreasonable expense thereafter.
  3. [51]
    The issues of maintenance and the awareness of the owner of the need to control water flow was raised by Mr Russell at the very inception of the proceedings. In the initial Application filed on 3 August 2011 he made these allegations of fact (amongst other matters)[16]:

The applicant verbally advised the owners on more than one occasion of the importance of protecting the embankments and otherwise landscaping the block to ensure the appropriate diversion of water around the house and offered to provide advice to the owners’ landscaping contractor (when appointed) about the protection of the embankments and site drainage generally.

And

The complainant has been aware of the need to address the external works since late 2007 and the applicant has made numerous attempts to assist the complainant and encourage the complainant to carry out the external landscaping and retaining works he had discussed with them during construction. In recent times, the complainant has refused the applicant access to inspect complaints and/or resolve the matter.

  1. [52]
    The chronology of these matters is of significance. The first application GAR232-11 (filed on 3 August 2011) was a review of a decision made on 6 July 2011, to direct rectification. The second application GAR003-13 (filed 4 January 2013) was a review of a decision made by the QBCC on 4 December 2012, in relation to rectification works that Mr Russell did perform.
  2. [53]
    From the material before the Tribunal it is apparent that at the time the compromise agreement with respect to GAR232-11 was finalised in March 2012 the issue of the need for the owner to carry out maintenance work was recognised. The scope of works covered by the agreement specifically excluded:

Ongoing maintenance of external drains that may continue to experience blockages if the owner does not complete landscaping works and associated site drainage works and any other water or other damage caused to the house in the future by reason of failures of the external drainage systems.[17]

  1. [54]
    It is also apparent that during the execution of the rectification works Mr Russell’s solicitors corresponded with the QBCC regarding the owners apparent failure to maintain the works and how that impacted on Mr Russell’s progress. In a letter in May 2012[18] they said:

… our client has always maintained the position that the owner’s continued failure to undertake any landscaping works and otherwise maintain the yard has contributed significantly to drainage issues being experienced around the house.

… during our client’s most recent visit to the site earlier this week, it was significantly overgrown and it was apparent that the grass had not been mown by the owner for a considerable period of time.

  1. [55]
    Further in a letter in July 2012[19] the solicitor’s noted ‘… the owner’s failure to maintain the site and to undertake landscaping works she had previously agreed to undertake, also contributed to these issues.
  2. [56]
    Mr Russell continued with the rectification works and continued to re-iterate that he was doing so in accordance with the compromise agreement.[20]
  3. [57]
    In December 2013 the QBCC made the second decision that the works carried out by Mr Russell were carried out pursuant to the direction to rectify and were unsatisfactory.
  4. [58]
    Mr Russell continuously maintained (as it turns out, correctly) that the rectification works were done pursuant to the compromise agreement and not the direction to rectify.
  5. [59]
    In circumstances where the direction to rectify had been stayed, there was continued inaction by the home owner in her obligations to maintain the property (embodied in the settlement agreement) and Mr Russell had carried out works whilst denying any liability to do so, the QBCC at this time should reasonably have contemplated if the direction to rectify should be withdrawn. Mr Russell had carried out further works. The option was available at that point to the QBCC to issue a fresh direction to rectify those works. It chose not to, but rather to persist with the first direction and the second misconceived decision that the works carried out pursuant to that direction were unsatisfactory.
  6. [60]
    Settlement offers were exchanged early in 2013. In a letter dated 21 February 2013 to Mr Russell’s lawyers,[21] the QBCC offered to settle GAR 232-11 on the following basis:

In circumstances where your client has elected to comply with direction to rectify and/or Complete No 36440 (“Direction”), despite the Tribunal ordering a stay of the direction on 20 October 2011, the Authority offers to resolve the above case on the following basis:

  1. Leave is granted to the Applicant to withdraw application GAR232-11 for review.
  2. The parties are to bear their own costs of and incidental to the application for review.
  1. [61]
    The QBCC noted in that letter that the offer was made under Part 8, Division 3 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) and was made as an open offer.
  2. [62]
    Mr Russell rejected that offer and made a counter-offer by a letter dated 4 March 2013 from his solicitors to the QBCC:[22]

5. In any event, our client has addressed the items in the Direction.

Our client therefore offers to resolve this matter on the following basis:-

a) The Authority withdraw the Direction either in whole or in part.

b)  If the direction is fully withdrawn, the parties consent to the dismissal of application GAR232-11 bearing their own costs;

c) If the Direction is partially withdrawn, the costs involved for both parties (and time before QCAT) can be reduced by any narrowing of the issues.

This offer remains open for acceptance for a period of 14 days. In the event that it is not accepted, our client will reserve the right to produce a copy of this letter to QCAT in support of an application that the respondents pay his costs of and incidental to these proceedings on the indemnity basis.

  1. [63]
    There was correspondence between the parties as to withdrawal of the applications, and addressing the question of costs.
  2. [64]
    That offer was not accepted by the QBCC and the matters proceeded further.
  3. [65]
    If the QBCC had accepted the offer by Mr Russell of 4 March 2013, then the whole of the costs of GAR232-11 thereafter would have been saved.
  4. [66]
    During the period when Mr Russell’s offer of settlement in GAR232-11 was open (4 March 2013 to 18 March 2013) the QBCC was preparing its Statement of Reasons in GAR003-13, and would have been reviewing its files generally.
  5. [67]
    I consider that this was the latest reasonable point at which the QBCC should have had regard to the defects policy, and to have considered the issue of unfairness. At that time, the QBCC was effectively considering the whole of the matters.
  6. [68]
    The complainant failed to have any external landscaping or retaining works carried out, and there is no evidence of the owners carrying out any maintenance to the property.
  7. [69]
    The Offer of Settlement made by Mr Russell dated 4 March 2013 required an acceptance within 14 days.
  8. [70]
    I consider that the offer of settlement made by Mr Russell dated 4 March 2013 is a relevant consideration as to costs. The Tribunal is entitled to take that offer into consideration as to costs. The offer in itself may not serve to result in a compelling reason for a costs order to be made, as the offer is complex, and there may be argument as to whether the decision made by the Tribunal was ‘not more favourable to the other party than the offer[23].
  9. [71]
    The making of, and the nature and effect of the offer, however, is a matter which can be considered by the Tribunal as a relevant matter under section 102(3)(f).
  10. [72]
    The following considerations are relevant:
    1. a)
      This was a complex dispute and the use of legal representation for both parties was approved at an early date.
    2. b)
      Mr Russell is in a poor financial position, and these proceedings have caused him significant hardship. The QBCC is in a secure financial position and would not be significantly disadvantaged by a costs order against it.
    3. c)
      The QBCC did not properly consider the ultimate issue of unfairness at an appropriate date.
    4. d)
      The review of the decision matter has resulted in significant costs being incurred by Mr Russell. thereafter.
    5. e)
      Mr Russell made an offer of settlement which was in accord with the subsequent decision of the Tribunal, but was rejected, and which if accepted, would have resulted in savings of costs thereafter.
  11. [73]
    I do not find that Mr Russell was denied natural justice by the decision-maker, but I are satisfied that Mr  Russell genuinely attempted to enable and help the QBCC to make its decision on the merits, as referred to in s 102(d), which is a factor to consider in the awarding of costs.
  12. [74]
    Having regard to all these considerations, I consider that it is in the interests of justice that a costs order be made in favour of Mr Russell.
  13. [75]
    I therefore consider that the appropriate order in GAR 232-11 in the circumstances, having regard to the considerations in a cost application, and that a costs order should be made in favour of Mr Russell from the date of the expiration of that offer on 18 March 2013.

Should costs be allowed in GAR 003-13?

  1. [76]
    The Tribunal found that the second decision of the QBCC was not properly issued, as it was not work undertaken pursuant to the Direction to Rectify:

[133] I conclude that was is clear, or intended by the document is that the builder was not agreeing to perform rectification of defective work identified in the Direction to rectify by performing the agreed work.

[134] Accordingly regardless of the adequacy or otherwise of the agreed work, it was not open to the Commission to write to Mr Russell on 6 December, 2012 informing him that the agreed work he had done pursuant to the compromise was unsatisfactory rectification work performed in compliance with the direction to rectify of 6 July 2011.

[135] That decision by the Commission is reviewable by the Tribunal. Application GAR003-13 is therefore concluded with my finding that the agreed work performed by Mr Russell pursuant to the compromise was not rectification work in compliance with the direction to rectify of 6 July 2011 and the decision of 6 December 2012 should be set aside.

  1. [77]
    That finding was upheld by the Appeal Tribunal. The effect of these findings is that the second decision of the QBCC was found to be without any proper foundation in law.
  2. [78]
    The decision of the QBCC to issue the Second Direction to rectify should therefore not have been made.
  3. [79]
    It was always Mr Russell’s position that the subsequent work that Mr Russell did, was not work done to comply with the initial direction to rectify, but was work specifically provided for in the Agreement reached at the compulsory conference.
  4. [80]
    The contention that the further works were being done pursuant to the settlement agreement, was continuously raised by the Solicitors for Mr Russell. In a letter dated 14 June 2012 to the QBCC they said[24]:

You will also be aware that our client has agreed (without admission) to carry out certain rectification work in accordance with the agreement dated 9 March 2012.

  1. [81]
    In a letter dated 8 August 2012 from Mr Russell’s solicitor to the QBCC, they said:[25]

Despite our client’s concerns about how this matter has been handled and the ongoing difficulties he has experienced with Ms Taylor (as communicated to the Authority) between March 2012 and May 2012, our client remains prepared to carry out the scope of works identified in the settlement agreement, subject to the terms of that agreement.

  1. [82]
    In a letter dated 29 August 2012 to the QBCC, they said:[26]

We wish to clarify the following matters to ensure there are no future misunderstandings in relation to the matter:-

Our client intends doing the work in compliance with the settlement agreement, which our client believes remains on foot despite the difficulties experienced earlier this year.

and go on to say:

We will otherwise presume that the Authority is agreeable to the above matters and our client will finalise his arrangements to commence the agreed works. Further advice will be given of the proposed commencement time once those arrangements are finalised.

  1. [83]
    The QBCC phrased the work in a letter to Mr Russell’s solicitor of 30 August 2012[27] as rectification:

The Authority is proceeding on the basis that your client intends to undertake rectification on 10 September 2012.

  1. [84]
    Mr Russell’s solicitors responded to that phrasing in a letter to the QBCC of 4 September 2012:[28]

The Authority has subsequently made allegations about our client’s compliance with the settlement agreement and has on one occasion suggested it was of the view the settlement agreement was “voided”, although no factual or legal basis for that assertion has been identified. The Authority’s recent communications have also referred to our client’s proposed works as “rectification works”. Our client’s position has consistently been that none of the work he undertook is defective or requires rectification – this is reflected in the settlement agreement signed by the Authority. The work he intends undertaking is work he has agreed to do under the terms of the settlement agreement. Our client is therefore anxious to avoid any misunderstanding of the basis upon which he is undertaking the work.

  1. [85]
    The QBCC indicated in a letter to Mr Russell’s solicitors of 5 September 2012 that it did consider the further works as rectification:[29]

The Authority continues to require compliance by your client with direction to rectify and/or complete no. 36440

  1. [86]
    Mr Russell’s solicitors responded the next day in a letter dated 6 September 2012 to the QBCC[30] that they disagreed with that contention:

We refer to your facsimile dated 5 September 2012.

We note that by QCAT order made 20 October 2011, the Authority’s direction to rectify number 36440 has been stayed. Our client therefore has no obligation to comply with that direction to rectify and the Authority has no legal basis for requiring our client’s compliance at this time.

Our client accepts, however, that he does have obligations under the settlement agreement entered into in March 2012 and remains ready, willing and able to comply with the terms of that settlement agreement.

  1. [87]
    After Mr Russell had completed further work, and after the QBCC had issued the Second Direction to Rectify, Mr Russell’s solicitors wrote to the QBCC:[31]

We have a copy of your letter to Mr Russell dated 6 December 2012 enclosing the Authority’s Re-Inspection report and report of Mr Van de Hoef.

We note the covering letter suggest the work undertaken by our client was rectification work under the direction to rectify. As we have advised on numerous previous occasions:-

The direction to rectify has been stayed and is not currently operative; and

The work carried out by our client was done under the settlement agreement entered into between Mr Russell and the Authority in March 2011.

Notwithstanding these points, we note the Authority has purported to make a decision to which section 86(1)(f) of the QBSA Act applies.

  1. [88]
    In considering whether to award costs of GAR 003-13, I have regard to the following factors:
    1. a)
      There was not a proper basis for the second decision.
    2. b)
      Mr Russell, through his Solicitors, maintained consistently, from the time they first became aware that the QBCC was considering viewing the further works as rectification works, that these were works subject to an agreement, and were not rectification works under a direction. That position was wholly vindicated.
    3. c)
      Mr Russell has incurred significant costs in reviewing the decision of the QBCC.
    4. d)
      Mr Russell is in a poor financial position, and these proceedings have caused him significant hardship. The QBCC is in a secure financial position and would not be significantly disadvantaged by a costs order against it.
  2. [89]
    Having regard to all these considerations, I consider that it is in the interests of justice that a costs order be made in favour of Mr Russell.
  3. [90]
    In the circumstances, it is appropriate that Mr Russell should be able to recover the whole of his costs in GAR 003-13.

Should costs be allowed in APL 182-14?

  1. [91]
    The QBCC appealed from the decisions of the Tribunal in both GAR232-11 and GAR003-13.
  2. [92]
    The findings of the Tribunal were upheld.
  3. [93]
    The considerations as to s 102 of the QCAT Act discussed previously, apply equally as to the appeal:-
    1. a)
      This was a complex dispute, and the use of legal representation for both parties was approved at an early date.
    2. b)
      Mr Russell is in a poor financial position, and these proceedings have caused him significant hardship. The QBCC is in a secure financial position and would not be significantly disadvantaged by a costs order against it.
    3. c)
      The QBCC did not properly consider the ultimate issue of unfairness at an appropriate date, and there was not a proper basis for its second decision.
    4. d)
      Mr Russell has incurred significant costs in reviewing the decisions of the QBCC.
  4. [94]
    Having regard to all these considerations, I consider that it is in the interests of justice that a costs order be made in favour of Mr Russell.
  5. [95]
    Having regard to these considerations, I consider it appropriate that the QBCC should pay Mr Russell’s cost of the Appeal.

What costs should be awarded?

  1. [96]
    I do not consider that the basis of indemnity costs are made out, as I am not satisfied that the QBCC has acted in a way that constitutes misconduct, or in such an unreasonable fashion that indemnity costs are warranted, and that standard costs should apply.
  2. [97]
    Mr Russell has urged that we fix costs to save further proceedings. However I will not presume to dissect from the detailed records provided by Mr Russell’s solicitor the costs that were incurred from the date indicated. The parties should attempt to reach agreement as to the resulting costs, and if they are unable to reach agreement, the amount will have to be assessed.
  3. [98]
    I consider that the District Court scale is the appropriate scale, and in an attempt to reduce further costs to the parties, will make orders in accordance with the Practice Direction of that Court as to provision of estimates.
  4. [99]
    I order that :-
    1. The QBCC is to pay the costs of Mr Russell on the District Court scale on a standard basis in GAR232-11 from 18 March 2013.
    2. The QBCC is to pay the costs of Mr Russell on the District Court scale on a standard basis in GAR003-13.
    3. The QBCC is to pay the costs of Mr Russell on the District Court scale on a standard basis in APL182-14.
    4. Mr Russell shall deliver to the QBCC, a realistic estimate of the costs claimed, including an explanation of the basis of the estimate, sufficiently detailed to facilitate some broad examination of its reasonableness, having regard to the District Court scale of costs.
    5. If Mr Russell and the QBCC are unable to agree on an amount of the costs within 14 days of the delivery of the estimate of costs, the costs shall be assessed by an assessor to be nominated by the Registrar upon request by either party.
    6. The QBCC shall pay the costs of Mr Russell (as agreed or assessed) within 14 days of such agreement or assessment.

Footnotes

[1]  GAR232-11; GAR003-13.

[2]  APL182-14.

[3]  Submissions on costs for the Applicant filed 11 June 2015.

[4]  Mr Russell Submissions on Costs filed 11 June 2015, para 18.

[5]  [2014] QCAT 383.

[6]  Ref Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 at [29].

[7]  Submissions of the QBCC on costs filed 11 June 2015.

[8]  Submissions of the QBCC on costs filed 11 June 2015, para [41].

[9]  Submissions of the QBCC on costs filed 11 June 2015 at [63].

[10]  Submissions of the QBCC on costs filed 11 June 2015 at [73].

[11]  Submissions of the QBCC on costs filed 11 June 2015 at [76] and [77].

[12]  Submissions of the QBCC on costs filed 11 June 2015 at [79].

[13] Lyons v Dreamstarter Pty Ltd [2012] QCATA 071.

[14] Tamawood v Paans [2005] QCA 111, per Keane JA at [32].

[15]  Mr Russell submissions on costs as to Appeal filed 11 June 2015, para 16.

[16]  Application filed 3 August 2011, Annexure A, page 2.

[17]  Exhibit CER-A17 to the Affidavit of Cedric Ernest Russell sworn 21 January 2013.

[18]  Exhibit CER-A20 to the Affidavit of Cedric Ernest Russell sworn 21 January 2013.

[19]  Exhibit CER-A31 to the Affidavit of Cedric Ernest Russell sworn 21 January 2013.

[20]  For example, Exhibit CER-A56 to the Affidavit of Cedric Ernest Russell sworn 21 January 2013.

[21]  Exhibit REO7 to the Affidavit of Roderick O'Sullivan sworn 4 April 2014.

[22]  Exhibit REO8 to the Affidavit of Roderick O'Sullivan sworn 4 April 2014.

[23] Queensland Civil and Administrative Tribunal Rules 2009 (Qld) r 86.

[24]  Attachment CER-A29 to the Statement of Cedric Russell filed on 25 January 2013.

[25]  Attachment CER-A33 to the Statement of Cedric Russell filed on 25 January 2013.

[26]  Attachment CER-A37 to the Statement of Cedric Russell filed on 25 January 2013.

[27]  Attachment CER-A38 to the Statement of Cedric Ernest Russell filed on 25 January 2013.

[28]  Attachment CER-A39 to the Statement of Cedric Ernest Russell filed on 25 January 2013.

[29]  Attachment CER-A40 to the Statement of Cedric Ernest Russell filed on 25 January 2013.

[30]  Attachment CER-A41 to the Statement of Cedric Ernest Russell filed on 25 January 2013.

[31]  Attachment CER-A60 to the Statement of Cedric Ernest Russell filed on 25 January 2013.

Close

Editorial Notes

  • Published Case Name:

    Queensland Building and Construction Commission v Russell

  • Shortened Case Name:

    Queensland Building and Construction Commission v Russell

  • MNC:

    [2015] QCATA 148

  • Court:

    QCATA

  • Judge(s):

    Senior Member O'Callaghan, Member Paratz

  • Date:

    25 Sep 2015

Appeal Status

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

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