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Wharton v Duffy Constructions (QLD) Pty Ltd QCATA 12
Wharton v Duffy Constructions (QLD) Pty Ltd  QCATA 12
Duffy Constructions (QLD) Pty Ltd
On the papers
Senior Member Stilgoe OAM
18 January 2016
APPEAL – LEAVE TO APPEAL – COSTS – where appeal filed out of time – where application for extension of time – where application for extension of time refused – where application for costs of appeal on indemnity basis – whether grounds for indemnity costs
Queensland Building and Construction Commission Act 1991 (Qld) s 77(3)(h)
Fountain Selected Meats (Sales) Pty. Limited v International Produce Merchants Pty. Limited  FCA 202; (1988) 81 ALR 397
Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Lyons v Dreamstarter Pty Ltd  QCATA 71
APPEARANCES and REPRESENTATION (if any):
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).
REASONS FOR DECISION
- Duffy Constructions (QLD) Pty Ltd did some renovation work for Bev Wharton in 2010. Two years later, Ms Wharton discovered cracking in her home. She complained to the Queensland Building and Construction Commission in 2014, saying that Duffy’s work caused the cracking. The Commission rejected Ms Wharton’s complaint so she filed an application in the tribunal. On 25 May 2015, the tribunal dismissed her application. On 26 June 2015, the tribunal ordered that Ms Wharton pay Duffy’s costs.
- Ms Wharton filed an application for leave to appeal on 28 July 2015. It was apparent from the grounds for appeal that Ms Wharton was appealing the tribunal’s decision of 25 May 2015. The application was filed out of time, so I directed that she file an application for an extension of time. On 9 November 2015, I refused the application for an extension of time. The application for leave to appeal was dismissed.
- Duffy wants Ms Wharton to pay its costs of the application for leave to appeal, relying on s 77(3)(h) of the Queensland Building and Construction Commission Act 1991 (Qld). Section 77(3)(h) modifies the usual tribunal position that parties should bear their own costs of tribunal proceedings. Instead, subject to the exercise of the tribunal’s discretion, costs follow the event. That is, that Duffy should be entitled to its costs of the application for leave to appeal.
- Duffy has applied for costs on an indemnity basis on the District Court Scale.
- Ms Wharton’s submissions seem to accept that she should pay Duffy’s costs but she disputes that costs should be on an indemnity basis and she submits that the Magistrate Court Scale is the appropriate scale.
- The principles which guide me in considering whether to order indemnity costs were summarised by Sheppard J in Colgate Palmolive Co v Cussons Pty Ltd. Relevantly, I should order costs on a standard basis unless there is some special or unusual feature to justify the exercise of discretion to order indemnity costs.
- Duffy argues that there are a number of special or unusual feature in this case. It says that Ms Wharton demonstrated a desire to “unduly pursue proceedings using baseless contentions and by wilfully disregarding the known fact that the Commission decided Duffy was not responsible for the cracks in Ms Wharton’s home”. It says that Ms Wharton irresponsibly relied on an expert report which was prepared without reference to essential information. It says that Ms Wharton was not properly advised at the start of proceedings. It says that Ms Wharton did not submit any argument as to why the learned member’s decision as to costs should be stayed. It says that Ms Wharton’s grounds for appeal were misconceived. It says that Ms Wharton has unnecessarily disadvantaged Duffy and wasted the tribunal’s resources.
- Ms Wharton’s decision to pursue a case through the tribunal in the face of the Commission’s findings is relevant to the costs on the tribunal below, but not to the costs of the application for leave to appeal. Similarly, her reliance on a flawed expert report and the failure to obtain early advice were matters for the tribunal below. Indeed, the tribunal’s decision to award costs of the hearing below takes these factors into account.
- Duffy’s strongest argument in favour of an order for indemnity costs is that Ms Wharton’s application for leave to appeal is misconceived. Ms Wharton submits that her decision to file an application for leave to appeal was reasonable.
- Ms Wharton’s first three grounds of appeal take issue with the Commission’s process in investigating her initial complaint. They are not matters that can be the subject of an application for leave to appeal. Ms Wharton’s final ground of appeal is that she disagreed with the decision because the tribunal did not address her request that the Commission engage an independent investigator.
- Ms Wharton’s submissions are entirely without foundation. Her claim was a standard building dispute. It is not the tribunal’s role to direct a third party to conduct an independent investigation; it was for Ms Wharton to file evidence to support her case. It is not the tribunal’s role to investigate the Commission’s decisions; the tribunal does have that power, but in another jurisdiction and only when the Commission is a party. As Ms Wharton points out in her application for leave to appeal, the tribunal made its decision about the evidence in April 2015. The time for challenging that decision was long gone.
- I therefore do not accept that Ms Wharton’s decision to file an application for leave to appeal was reasonable.
- One of the special or unusual features identified by Sheppard J was that articulated by Woodward J in Fountain Selected Meats (Sales) Pty. Limited v International Produce Merchants Pty. Limited:
I believe that it is appropriate to consider awarding 'solicitor and client' or 'indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law.
- It seems that Ms Wharton did not have the benefit of legal advice when she filed her application for leave to appeal. That is unfortunate, as timely advice may have persuaded Ms Wharton to take a different approach to the tribunal’s decision. While I agree that the failure to take proper advice and the decision to proceed with a hopeless case in the absence of proper advice may be grounds for indemnity costs in ordinary civil litigation, I am not persuaded to take the same approach in the tribunal setting.
- As Ms Wharton points out, the tribunal’s usual position is that parties represent themselves and that they bear their own costs. Even though the enabling Act, the Queensland Building and Construction Commission Act 1991, alters the presumption against costs, the tribunal is still a jurisdiction where ordinary people expect to litigate with a minimal risk of a cost order.
- I might have been inclined to order indemnity costs if Duffy had written to Ms Wharton warning of its intention to seek indemnity costs and inviting her to withdraw her application for leave to appeal. Without that step, Ms Wharton was entitled to assume that her risk of exposure to a costs order would be no more than the costs order of the tribunal below. Therefore, I decline to order costs on an indemnity basis.
- I do not agree with Ms Wharton’s submission that costs should be assessed on the Magistrates’ Court Scale. Although the quantum of her claim was within the Magistrates Court, an appeal, even in the tribunal, requires a greater degree of application and skill. Before the inception of the tribunal, the District Court heard appeals from decisions under the Queensland Building and Construction Commission Act 1991. It is, therefore, appropriate that Ms Wharton pay Duffy’s costs on the District Court Scale.
- Duffy wants an order that Ms Wharton pay its costs as and from 26 June 2015. Ms Wharton filed the application for leave to appeal on 28 July 2015. Any costs Duffy incurred between the date of the tribunal’s decision and the date Ms Wharton filed the application for leave to appeal are costs of enforcement. They are not costs that can be the subject of an order of this tribunal.
- Published Case Name:
Bev Wharton v Duffy Constructions (QLD) Pty Ltd
- Shortened Case Name:
Wharton v Duffy Constructions (QLD) Pty Ltd
 QCATA 12
Senior Member Stilgoe
18 Jan 2016