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Partington & Anor v Urquhart (No. 4) QCATA 96
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Partington & Anor v Urquhart (No 4)  QCATA 96
JOHN URQUHART T/AS HART RENOVATIONS
ORIGINATING APPLICATION NO/S:
25 June 2019
On the papers
Senior Member Howard, Presiding
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – POWER TO AWARD GENERALLY – GENERALLY – whether application for costs validly made – whether Tribunal has jurisdiction to award costs – where s 77(3)(h) of the QBCC Act ‘modifies’ the costs provisions in the QCAT Act – where obligation to exercise the costs discretion judicially – where offers to settle – where there is question as to the application of principles relating to Calderbank offers
Queensland Building and Construction Commission Act 1991 (Qld), s 77(3)(h)
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 6(7), s 7(2), s 61(1)(c), s 74, s 102, s 102(3)(f), s 105, s 106, s 107
Calderbank v Calderbank  Fam Law 93
Donald Campbell & Co Ltd v Pollak  AC 732
Earnshaw v Loy (No 2)  VR 252
Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1
Hazeldene’s Chicken Farm Pty Ltd v Victorian
Howitt v Alexander & Sons Ltd  SC 154
Interchase Corporation Ltd v ACN 010 087 573 Pty Ltd (2000) 45 ATR 445
Jaycar Pty Ltd v Lombardo  NSWCA 284
John Urquhart t/as Hart Renovations v Partington  QCA 199
Lakis v Lardis (No 3)  NSWSC 1296
Lee Manson t/as Manson Homes v Brett  QCAT 282
Low v MCC Pty Ltd  QSC 6
Merrin v Commissioner of Police  QCA 181
NMFM Property Pty Ltd v Citibank Ltd (No 11) (2001) 109 FCR 77
Overton Investments Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (2001) 113 LGERA 439
Partington v Urquhart  QCATA 204
Partington v Urquhart  QCATA 67
Partington & Anor v Urquhart (No 2)  QCATA 120
Partington & Anor v Urquhart (No 3)  QCATA 136
Urquhart v Partington  QCAT 133
Van Essen v Lee  Tas SR 324
Weiman and Paige  FamCA 788
Willing v Hollobone (1972) 3 SASR 532
WorkCover Authority (No 2)  13 VR 435
Yanner v Eaton (1999) 201 CLR 351
S McNeil instructed by Blue Fox Legal
S B Whitten instructed by Saal & Associates
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
- This is an application for costs brought by Mr and Mrs Partington (‘the Partingtons’) who were ultimately successful in a building dispute against Mr Urquhart, the builder contracted to complete renovations at their home. The proceedings were commenced in the Tribunal in March 2010. The matter was determined at first instance in favour of the builder on 19 February 2013. The Partingtons appealed. The matter went to the Appeal Tribunal, from there to the Court of Appeal on select issues, and from there was remitted to a differently constituted Appeal Tribunal for determination. The reconstituted Appeal Tribunal ultimately allowed the appeal on 10 August 2018. Our reasons for decision were published.
- We made orders that the Partingtons were entitled to damages and interest of $171,938.50 and that Mr Urquhart (‘the builder’), was entitled to a quantum meruit in the sum of $160,162.89.
- After submissions on the issue, we determined there was no basis upon which the Tribunal could award interest on the quantum meruit. Accordingly, no award of interest on the quantum meruit claim was made. Submissions were also sought regarding the form the final orders should take, given our uncertainty as to whether any payments had been exchanged between the parties. The parties advised that no payments had been made by either party to the other since the Tribunal’s 2013 decision.
- The Tribunal's 2013 decision awarded certain costs thrown away by an adjournment in favour of the builder. The builder submitted that the costs were assessed at $11,693.50. We confirmed that order in order 5 of 10 August 2018. We subsequently made orders fixing the costs payable pursuant to the 2013 order in that sum. We took that outstanding amount into account in formulating our final orders, by adding it to the quantum meruit awarded to the builder.
- We made final orders in the Appeal in these terms:
- Order 3, 4(a) and 4(b)(i) of the Tribunal’s Orders of 10 August 2018 are confirmed.
- (a) On the application for a domestic building dispute of John Urquhart t/as Hart Renovations, Phillip Partington and Evelyn Partington pay to John Urquhart t/as Hart Renovations the sum of $160,162.89;
- (b)on the cross application of Phillip Partington and Evelyn Partington, John Urquhart t/as Hart Renovations pay to Phillip Partington and Evelyn Partington the sum of $171, 938.50, such sum being inclusive of interest;
- (c)that the costs referred to in paragraph (b) of the Tribunal’s order of 19 February 2013 be fixed in the sum of $11,693.50;
- (d)in the premises in paragraph 2(a) to 2(c) hereof, the net sum payable by John Urquhart t/as Hart Renovations to Phillip Partington and Evelyn Partington is the sum of $82.11.
- It will be noted that order 2(d) reflects the summation of the sums payable pursuant to 2(a) to 2(c).
- We made no order as to costs in respect of the appeal proceedings.
- The Partingtons have since applied for costs of the appeal and of the original proceedings. They did so initially by way of correspondence received by the Tribunal on 24 August 2018. On 19 September 2019, we made directions inviting submissions as to costs. The Partingtons forwarded an amended application for costs and accompanying submissions to the Tribunal on 5 October 2019. The builder filed his submissions on costs on 26 October 2018.
- The Partingtons seek the following orders as to costs:
- An order pursuant to s 102 and s 105 of the Queensland Civil and Administrative Tribunal Act 2009 that the Respondent pay the Applicants’ costs of the appeal proceedings (including the costs of this application) and the costs of the proceedings at first instance in an amount to be fixed.
- In the alternative to order 1, an order pursuant to s 102 and s 105 of the QCAT Act 2009 the Respondent pay the Applicants’ costs of the proceedings (including this application and any costs assessment) and the proceedings at first instance to be assessed on the indemnity basis or alternatively on the standard basis.
- The builder argues the Tribunal has no jurisdiction to hear the application for costs or, in the alternative, that the application should be dismissed.
Relevant costs provisions
- Section 77(3)(h) of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’) provides that the Tribunal may exercise the power to award costs in a building dispute. To this extent s 77(3)(h) is a ‘modifying provision’ within the meaning of s 6(7) of the Queensland Civil and Administrative Act 2009 (Qld) (‘QCAT Act’). If there is an inconsistency between a provision in the QCAT Act and a modifying provision, the modifying provision prevails.
- Section 77(3)(h) of the QBCC Act does not identify matters which should be taken into account in the exercise of the discretion to award costs. In such circumstances it is well established that the obligation is to act judicially. The obligation to exercise the costs discretion ‘judicially’ is discussed in Dal Pont’s The Law of Costs:
The central and overriding principle is that of doing justice to the parties in each particular case, it being judicially remarked that there is ‘no better test than the test of what is fair and just between the parties’.
- Section 7(2) of the QCAT Act provides that if there is an inconsistency between a provision in the QCAT Act and a modifying provision, the modifying provision prevails, accordingly s 77(3)(h) of the QBCC Act prevails over s 100 of the QCAT Act. The better view, in our opinion, is that s 77(3)(h) is also inconsistent with s 102 of the QCAT Act, since the latter section qualifies the discretion in s 100 of the QCAT Act. However, the point is of little moment since s 102 is permissive and permits in any event the taking into account of ‘anything else the tribunal considers relevant’. Accordingly, we approach the discretion on the basis that it must be exercised judicially in the manner in which that requirement has been applied by the authorities.
- The building work the subject of the appeal ceased in May 2009. At that time the Partingtons had refused to pay a progress payment which the builder claimed was owed. The Partingtons had argued the payment was not owing because the work had not been completed (the work had not reached the enclosed stage), and there was defective and incomplete work. The builder terminated the contract due to the non‑payment and claimed for money owed under the contract, damages, interest and costs for breach of contract. He later amended his claim to include, in the alternative, a claim for quantum meruit. The Partingtons filed a response contending the works had not reached the enclosed stage, the contract was not lawfully terminated by the builder, and cross-claimed damages for defective and incomplete building work, liquidated damages and breach of contract generally.
- On 9 September 2010, by letter from their solicitors to the solicitors for the builder, the Partingtons offered to settle the matter by payment to the builder of $70,000 or alternatively, $75,000 in the following terms:
- (i)Our client will pay your client $70,000 made up of a first instalment of $57,000 payable within 14 days of acceptance of this offer with the balance of $13,000 payable within 6 weeks of acceptance;
- (ii)Alternatively, our client will pay to your client $75,000 with a first instalment of $57,000 payable within 14 days of acceptance of this offer and the balance of $18,000 payable within 14 weeks of acceptance; and
- (iii)A suitably worded Deed of Settlement is to be prepared and executed by the parties.
- The builder did not accept the offer.
- The matter was heard over 4 days commencing on 27 August 2012.
- On 19 February 2013, the Partingtons were ordered to pay the builder almost $215,000 plus costs. This was on the basis that the Member found the enclosed stage had been completed and accordingly, that the builder was entitled to the progress payment and to terminate the contract. The builders’ damages and default interest under the contract was assessed at around $280,000. The Partingtons were held entitled to damages by way of rectification costs for defective work in the amount of $62,000. The figure of $215,000 had been reached after deducting the Partingtons’ damages for rectification from the builder’s award. The Partingtons were also ordered to pay to the builder the costs thrown away as a result of an adjournment of the hearing and experts conclave listed for 22 August 2011. Those costs were to be assessed.
- An appeal was filed in March 2013.
- Shortly after the commencement of the appeal, on 23 May 2013, the Partingtons offered to pay $103,456.23.
- On 12 June 2013, the Partingtons offered to pay $134,000 (plus the amount of the costs thrown away which had not been assessed at that time).
- We pause at this point to note that the Partingtons refer to several written offers made by them in the course of the proceedings. Two of these offers were made at compulsory conferences held at the Tribunal on 12 July 2010 and 27 August 2012. These offers are inadmissible under s 74 of the QCAT Act and have not, therefore, been taken into account in our determination.
- The two offers made after the filing of the appeal were not accepted.
- An application for a stay of the first instance decision was refused on 1 July 2013.
- The appeal was first heard before the Appeal Tribunal on 15 September 2014.
- On 19 May 2015 the Appeal Tribunal allowed the appeal (‘the first Appeal Tribunal decision’). It allowed the appeal because the front door had not been on when the invoice for the enclosed stage was issued. Further, that the issue as to the meaning of ‘structural flooring’ had not been properly addressed. The first Appeal Tribunal ordered that the claim and counter-claim be returned to the Tribunal for rehearing.
- The builder appealed to the Court of Appeal. The Court of Appeal granted leave to appeal and allowed the appeal on 8 April 2016, set aside the previous decision of the Appeal Tribunal and returned the matter to the Appeal Tribunal for determination according to law (‘the Court of Appeal decision’). The appeal was allowed by the Court of Appeal on the basis that neither the absence of the front door at the time of the first enclosed stage claim, given that it was installed by the time of the second enclosed stage claim, nor the incomplete flooring to the first floor, as it was not structural flooring, precluded the enclosed stage from being reached. Because other matters raised before the Appeal Tribunal had not been determined by the Appeal Tribunal, including other issues relevant to whether the enclosed stage had been reached, the Court of Appeal remitted the matter to the Appeal Tribunal.
- On 8 May 2016, the Partingtons applied for special leave to appeal the decision of the Court of Appeal to the High Court. Leave was refused.
- On 10 August 2018, we allowed the appeal as outlined at the outset (‘the second Appeal Tribunal decision’). In short, we found that the enclosed stage had not been reached and that the builder was therefore not entitled to terminate the contract. He was, however, entitled to a quantum meruit claim of around $160,000. The Partingtons were entitled to damages and interest of about $172,000. Once the costs that were ordered in the original hearing were brought to account (about $11,000) the difference between the amounts ordered to each party was less than $100.
- In one real sense, ultimately, there was no winner. While that might be true had that been the result at first instance, the Partingtons on appeal went from a position of having to pay the builder $214,946.00 to being owed $82.11. In that sense, the Partingtons were successful on appeal, even though we found each of them was entitled to a significant amount on their claim and counter-claim respectively.
- We turn now to consider the submissions of the parties in relation to costs of the appeal and at first instance. The offers made by the Partingtons have been considered, where relevant, as part of the general discretion to award costs. Even if properly characterised as Calderbank v Calderbank (‘Calderbank’), offers we concluded that, as those offers had not been unreasonably rejected by the builder, they did not give rise to an entitlement to claim indemnity costs. We note that, in any event, there is no automatic entitlement to indemnity costs following the rejection of a Calderbank, offer that proves to be generous.
Partingtons’ submissions: appeal costs
- The Partingtons submit that the interests of justice require that the builder pay their costs of the appeal (including the costs of the first instance proceedings) for the following reasons:
- (i)The Partingtons were successful in the appeal. While there is no automatic rule that costs follow the event, that it is just and reasonable that a party who causes another to incur costs should reimburse the other party for those costs.
- (ii)The Partingtons were successful in that the Appeal Tribunal:
- (i)Determined the enclosed stage had not been reached;
- (ii)Increased rectification costs from $62,000 to $68,735;
- (iii)Determined they were not liable to pay default interest.
- (iii)The importance of the matter to the Partingtons. The dispute was in relation to their home. The renovation was unfinished, large sections of the home were unusable and significant work was required to make it liveable. As a result of the incomplete and substantially deficient building work, the Partingtons were forced to rent for a lengthy period of time. Those costs were not recovered.
- (iv)The financial position of the Partingtons. They have spent hundreds of thousands of dollars and months of their time in the dispute. To compound that:
- (i)After filing the stay the Partingtons sought a stay of the orders pending the determination of the appeal, and sought Mr Urquhart’s consent to the stay.
- (ii)Mr Urquhart did not consent to the stay and the Tribunal refused to order a stay.
- (iii)Mr Urquhart took steps to enforce the order in the District Court. The Partingtons do not claim any entitlement to the costs of those enforcement proceedings, but of course those proceedings increased the costs incurred by the Partingtons.
- (iv)When the hearing of the appeal listed for 3 September 2013 was adjourned (on the application of Mr Urquhart made the day before) the Tribunal ordered the original decision be stayed. The Partingtons submit that the costs thrown away as a result of that adjournment should be paid by Mr Urquhart, particularly noting the similarity in the circumstances of the costs order against the Partingtons made in the decision at first instance (and affirmed by the Appeal Tribunal).
- (v)The complexity of the matter.
- (vi)The length of time that has elapsed since the building work stopped (May 2009) and the myriad proceedings that resulted.
- (vii)The costs incurred by the Partingtons. They have incurred more than $140,000 in legal costs in relation to the Appeal Tribunal (the vast majority of which were incurred after 23 May 2013 (the date of the Partingtons’ first written offer in the Appeal proceedings).
- (viii)The Partingtons have incurred more than $300,000 in legal costs and disbursements in this dispute since May 2009, as well as investing months of their time.
- (ix)The offers to settle made by the Partingtons both in the proceedings below and in the Appeal proceedings. Those offers are detailed below in relation to indemnity costs.
- (x)Offers to settle that have been made by the Partingtons.
- (xi)The Partingtons also argue that their position with respect to the meaning of “structural flooring” was a reasonable one when decisions after the Court of Appeal’s decision are considered, namely, Low v MCC Pty Ltd  QSC 6 at  and Lee Manson t/as Manson Homes v Brett  QCAT 282 at ‑.
- The Partingtons summarise their appeal costs in their submissions which costs total $142,650.56. They submit that given the long and tortuous history of the matter, the costs incurred to date by both parties and the unlikelihood of reaching agreement as to costs, that the costs be fixed at a sum of $90,000 which is about 63% of their actual costs. The Partingtons say they are prepared to have the costs fixed in a substantially lower amount than their actual costs to avoid having to incur costs in proceeding with an assessment.
The builder’s submissions: appeal costs
- The builder argues that the Tribunal has no jurisdiction to hear or determine the application for costs because the Appeal Tribunal delivered its final decision on 10 August 2018 and neither referred to costs nor asked for submissions about costs. The builder says that an application for costs was never formally filed or served.
- In the alternative the builder argues that, in essence, both parties succeeded in the claims they advanced albeit not to the extent sought. On that basis, it is argued, the builder is entitled to the costs of his application and the Partingtons to their costs of the counter application. The builder maintains there is no reason why these costs should not be offset and the appropriate order be that there is no order as to costs or alternatively that each party bear their own costs.
- The builder says that it is irrelevant that the Partingtons have spent $300,000 on legal fees. The Partingtons have said they spent $203,276.66 for the proceedings at first instance and before the Appeal Tribunal. It is only those costs that are potentially relevant. Costs incurred in the Court of Appeal proceedings or in jurisdictions other than the Tribunal are not recoverable in this application. As such, the costs of an unsuccessful stay application and of enforcement proceedings in the District Court are irrelevant. Further, the rent the Partingtons paid because they could not live in their home are also irrelevant. That the Partingtons were unsuccessful in claiming the rent as part of their damages does not make it relevant to a costs order.
- The builder also argues that many interim applications were made by the parties during the course of the proceedings and that the costs of those applications should be excluded because costs were not sought and no appeal was brought. Alternatively, the builder should get the costs of the applications in which he was successful and likewise for the Partingtons.
- Further, that any costs order should only apply from the date leave was granted for legal representation and then only for the time the parties were legally represented.
Consideration: appeal costs
- The Partingtons requested costs in their application for leave to appeal or appeal, in submissions in August 2018 and by way of an amended application for costs with submissions submitted to the Tribunal on 6 October 2019. The Partingtons sought the leave of the Tribunal to file the application, if required.
- We do not accept that the Tribunal lacks jurisdiction to consider the application for costs. The application was made by the Partingtons in the application for leave to appeal or appeal and was not dealt with in our decision. That the Tribunal on 19 September 2018 made orders without inviting submissions as to costs does not preclude either party from making an application for costs. Moreover, the QCAT Act makes clear that the Tribunal can award costs even after the proceeding has ended. Section 106 of the QCAT Act provides:
106 Costs awarded at any stage
If the tribunal may award costs under this Act or an enabling Act, the costs may be awarded at any stage of a proceeding or after the proceeding has ended.
- Accordingly, we consider the Appeal Tribunal has jurisdiction to consider the application for costs and to make such order as is appropriate.
- We are prepared to waive the requirement for the applicant to have formally filed and served an application for costs in this instance pursuant to the power in s 61(1)(c) of the QCAT Act. We are satisfied that the builder has not been prejudiced. The builder received the Partingtons’ submissions as to costs and responded to them. We also do not accept the builder’s argument that the application was defective because it was signed by only one of the appellants.
- We have a discretion under s 77(3)(h) of the QBCC Act to award costs and can make an order for the whole or any part of the costs of the appeal as we, in the circumstances, consider to be just. In exercising such a discretion, it is usual that the general costs of an appeal follow the event.
- Both parties referred to legal issues which they thought should have been decided differently and which, if they had, would have saved costs. In Jaycar Pty Ltd v Lombardo, it was held:
“If the error of the judge is not one brought about by one of the parties…the costs of rectifying that error should, prima facie, be treated as one of the vicissitudes of litigation. Therefore, the costs of rectifying the error should prima facie follow the event.”
- We find that it is in the interests of justice for the Partingtons to recover some of their costs of the appeal. While we accept that, ultimately, both parties were entitled to a monetary sum, the Partingtons were successful in their claim for damages for the costs of rectification although not to the much more significant extent they sought in the appeal, but the builder failed to uphold his award for the remainder of the contract sum. Although the builder was successful in the quantum meruit claim the Appeal Tribunal held that the Partingtons were justified in refusing payment of the enclosed stage progress payment. In so determining, the Partingtons achieved some significant success in respect of a major aspect of the appeal.
- Moreover, and importantly, the Partingtons before the hearing of the Appeal had made 3 offers to the builder to settle the dispute between them for sums substantially higher than the ultimate sum which lay between their respective claims after the appeal. These offers commenced as early as 9 September 2010 and concluded after the filing of the appeal with an offer of $134,000 together with some further costs to be paid. For these reasons, the builder should, in our view, pay the Partingtons costs of the appeal.
- We do not here consider the earlier offers carry any significant weight, given that the Partingtons’ counter-claim was not clear until shortly before the original hearing. However, in respect of the offers made after the appeal was instituted, the builder says it was reasonable to reject them because he was not to know that the Appeal Tribunal would be applying what the builder described as ‘new law’. The new law was said to be that a particular stage must be complete except for minor defects and omissions and that defects or omissions that were not minor were a bar to claiming the progress payment to which that work related. The builder argued that many of the decisions cited by the Appeal Tribunal in support of its determination as to when a progress stage is complete were decided after the appeal was instituted. Further, that the builder already had a decision in his favour. Accordingly, the builder submits, it was reasonable, in the circumstances, for both parties to run the appeal and there should, consequently, be no order as to costs of the appeal or that both parties pay their own.
- Without delving into the legal principles upon which our decision was based, those principles, including that each progress stage had to be complete before the builder was entitled to payment, was not new law. A close examination of the principles relating to “substantial performance” equally showed that that doctrine did not apply to a progress payment under this type of building contract. That was also not new law. Finally, it is also, in our view, clear that the matter was ultimately a matter of the interpretation of the contract.
- Accordingly, we do not accept the argument that new law was created or that the reasoning was not such as could have been reasonably foreseen by the builder.
- The Partingtons set out their costs in a Table in their submissions. Those costs expressly exclude the costs of ‘enforcement proceedings’, Court of Appeal and High Court proceedings.
- The builder points out, correctly, that the costs should not include the costs of the Court of Appeal and High Court but, as we have noted, they do not purport to do so. Otherwise there is no serious attack on the quantification of the legal costs.
- The Partingtons have requested that the costs be fixed at this point rather than be assessed.
- Section 107 of the QCAT Act provides:
107 Fixing or assessing costs
(1) If the tribunal makes a costs order under this Act or an enabling Act, the tribunal must fix the costs if possible.
- There is real attraction in adopting that course given the length of the time the litigation has taken and the obvious desirability of finality in respect of this litigation. We are mindful of the authorities which consider the ability of a court or Tribunal to fix costs in other jurisdictions. We note, for example, the observations of Sackar J in Lakis v Lardis (No 3):
“Importantly finality to the litigation is essential in everyone’s interest including the Court. In many cases that factor alone will weigh heavily on whether a Court should exercise discretion to order a lump sum assessment. If it assesses a lump sum the Court has routinely applied a discount to the lump sum figure so as to allow for contingencies: Hamod v New South Wales  NSWCA 375 at ; Ann Ross v John William Padget  NSWSC 1851 at  and .”
- And further:
“Of its nature, specification of a gross sum is not the result of a process of taxation or assessment of costs. As was said in Beach Petroleum NL v Johnson at 124, the gross sum “can only be fixed broadly having regard to the information before the Court”; in Hadid v Lenfest Communications Inc at  it was said that the evidence enabled fixing a gross sum “only if I apply a much broader brush than would be applied on taxation, but that … is what the rule contemplates”. The approach taken to estimate costs must be logical, fair and reasonable (Beach Petroleum NL v Johnson at 123; Hadid v Lenfest Communications Inc at ). The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available (Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA).”
- In determining whether we have sufficient confidence in the amounts claimed by the Partingtons we take into account the length and complexity of the proceedings and also the fact that the quantification of the costs is not seriously challenged.
- We note, however, that this sum would represent an award on an indemnity costs basis. We are not prepared to award costs on an indemnity basis. We have considered the submissions of the builder in this regard and we find that the conduct of the builder in not accepting the offers made by the Partingtons was not such in all of the circumstances as to be unreasonable. Again, we point to the complexity of the dispute between the parties, to the fact that each had claims neither of which were readily capable of quantification and which involved the resolution of matters of fact and of law of some complexity.
- Accordingly, we decline the Partingtons’ claim to indemnity costs.
- That leaves us with the task of fixing the Partingtons’ costs on a standard basis, as best we can, on the material available. The Partingtons seek the sum of $90,000 by way of costs of the appeal. The Partingtons submit that this is in the order of 63% of their actual costs. The exercise of the costs discretion in this context is necessarily broad brush. The Partingtons seek to have their costs fixed but in circumstances which do not involve their proper assessment nor the opportunity on a fully itemised bill for the builder to challenge them.
- We consider that it is appropriate to adopt a conservative approach to the Partingtons’ costs. Doing the best we can in light of the offers made by the Partingtons in the appeal proceeding and their partial but significant success in the appeal proceedings, assess those costs at $55,000 or approximately 60% of the $90,000 appeal costs claimed by the Partingtons.
Costs at first instance
- The Partingtons argue, in effect, that the reason the Member below ordered that each party was to bear their own costs was because although he thought the builder was entitled to his progress payment he recognised the Partingtons had a strong case with respect to their counter-claim. The Partingtons say that the outcome of the appeal showed that they had a strong case but that the builder’s claim in contract was misconceived. This, they argue, should result in a different costs decision.
- The Partingtons argue that the costs of the appeal should include the costs of the proceedings at first instance for reasons including the following:
- (i)The outcome of the appeal is such that the Partingtons should not have been forced to incur any of the costs of the proceedings;
- (ii)Not only were the Partingtons largely successful in their cross-claim for rectification costs, the builder was not entitled to issue the enclosed stage invoice, stop work or terminate the contract, and had to rely on a quantum meruit claim that was added after he commenced proceedings;
- (iii)The net effect of the dispute applying the reasoning of the Appeal Tribunal is that (disregarding interest and costs) the Partingtons were only ever liable to pay the builder $36,443.89 and then only after an order awarding quantum meruit;
- (iv)The Partingtons’ offer to pay $57,000 in September 2010 was substantially more than the amount to which the builder became entitled (again, disregarding interest and costs).
- The Partingtons claim costs and disbursements at first instance of $60,626.10. Again, they submit that the Tribunal should make an order fixing costs, on this occasion at $40,000.
The builder’s submissions
- The builder argues that as the Partingtons did not appeal the costs order of the original decision that the Appeal Tribunal has no power to overturn that decision.
- The builder argues that while it has been determined that the Partingtons were justified in their opposition to his claim in contract, it was always the case that he would have to succeed either on his claim in contract or on the claim for quantum meruit. There is no reason to deny him the cost of his application.
- While the Partingtons succeeded in their counter claim, albeit for a much smaller sum than claimed, their case had been constantly shifting. The builder refers to the claimed defects which went from 6 minor defects when the progress payment was first claimed, to 21 items listed in the response and counter claim to 90 by the time of the joint experts report. It was not until the time of the joint experts report that there was any proper quantification of the Partingtons’ claim but that even then they ignore the rectification costs set out in that report in their “current cost claim” document that was tendered as exhibit 32 in the original proceedings.
- The builder says in response to the argument that the Partingtons should never have had to incur the cost of the proceedings, that it is not so because he needed to enforce what he saw were his rights (whether in contract or quantum meruit).
- Finally, the builder submits that given the constantly changing nature of the Partingtons’ claim and the amounts they claimed, if the Appeal Tribunal was minded to award costs, they should be reduced by 75% to take account of the unnecessary costs they caused the builder to incur through their failure to properly articulate their claim. Alternatively, that he should be awarded at least 50% of his costs of defending the Partingtons’ claim as costs thrown away by his having to consider and respond to their constantly changing claim.
Consideration: costs at first instance
- The Appeal Tribunal has power to consider the costs of the original proceeding in which we conducted a rehearing significantly affecting the outcome, irrespective whether an appeal about costs was made. The Partingtons claim the costs at first instance and the costs of the appeal proceedings in their application for costs submitted to the Tribunal on 5 October 2018.
- The builder was successful at first instance, albeit in a claim based on the outstanding contractual sum rather than a quantum meruit. The Partingtons were successful in respect of some of the defects but not in respect of the predominant part of their damages claim. The costs of the Partingtons vindicating their position in respect of their claim for damages on appeal is included within the award we have made with respect to the appeal costs. True it is, with hindsight, had the Partingtons succeeded at first instance in the same manner they would have had a reasonable claim for their costs. However, so too would the builder, who was successful in his claim and, on appeal, although not successful in his claim for damages was successful in his claim on a quantum meruit. Put another way, had the ultimate result been reached at first instance each party would have had a reasonable argument that it should be awarded its costs on its own claim; or, alternatively, in the circumstances, that there be no order as to costs it being a reasonable proposition that in broad terms the favourable costs orders otherwise would have been about the same.
- In those circumstances, we would, but for one matter which requires closer attention be inclined to make no order as to costs in respect to the hearing at first instance.
- The matter which requires further consideration is the Partingtons’ offer of 9 September 2010 which we have set out above, but which in broad terms involved the payment by the Partingtons to the builder of $70,000 or $75,000, depending on the builder’s preferred time for payment. In respect of this offer, the builder submits, inter alia, that it was made approximately 3 months after the Partingtons filed their response and counter-application; that it was impossible for the builder to assess the reasonableness of the offer in circumstances where, at that time, the monetary value of the Partingtons’ counter application had yet to be advised; and that the offer permitted only 4 days for its consideration and acceptance.
- In our view, there is real substance in the observations of the builder concerning the nature of the offer made. The offer was made very early in complex proceedings. It allowed very little time, in the circumstances, for consideration. We would add that, as the builder has elsewhere submitted, the Partingtons claim developed considerably over time and ultimately was a very different claim from the one originally made. Particulars of the defective work and of the rectification costs were not clear until expert evidence was obtained.
- In all of the circumstances, we are not inclined to make an order as to costs in respect of the proceeding at first instance.
- In conclusion, we make the following orders:
- John Urquhart t/as Hart Renovations shall pay to the Partingtons the sum of $55,000 by way of costs of and incidental to the appeal proceedings, by 4:00pm on 23 July 2019.
- In respect of the hearing at first instance, there be an order that there be no order as to costs.
See Urquhart v Partington  QCAT 133.
See John Urquhart t/as Hart Renovations v Partington  QCA 199.
See Partington & Anor v Urquhart (No 2)  QCATA 120.
For ease of reference and to simplify matters we have referred to Mr and Mrs Partington as the Partingtons and to Mr Urquhart as the builder. No disrespect is intended.
Tribunal Order of 19 February 2013, Order 2.
The respondent disputes that the amended application for costs was filed.
Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) s 7(2).
See, eg, Overton Investments Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (2001) 113 LGERA 439, 447 (Stein JA).
G E Dal Pont, Law of Costs (LexisNexis, 3rd ed, 2013) [6.15] citing Earnshaw v Loy (No 2)  VR 252, 253 (Sholl J); Howitt v Alexander & Sons Ltd  SC 154, 159 (Lord Russell).
QCAT Act s 102(3)(f).
Partington v Urquhart  QCATA 67, 18 .
 Fam Law 93.
Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2)  13 VR 435; Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1, 9 .
 Fam Law 93.
See, eg, Interchase Corporation Ltd v ACN 010 087 573 Pty Ltd (2000) 45 ATR 445, 452; NMFM Property Pty Ltd v Citibank Ltd (No 11) (2001) 109 FCR 77.
Donald Campbell & Co Ltd v Pollak  AC 732, 811–2.
Partington v Urquhart  QCATA 204.
Application for leave to appeal and appeal filed 23 March 2013, Part D .
Willing v Hollobone (1972) 3 SASR 532, 533–5 (Bray CJ); Merrin v Commissioner of Police  QCA 181 .
Weiman and Paige  FamCA 788 .
Van Essen v Lee  Tas SR 324, 325.
Yanner v Eaton (1999) 201 CLR 351, 412.
 NSWCA 284 .
Partingtons’ submissions dated 5 October 2018, .
 NSWSC 1296.
- Published Case Name:
Partington & Anor v Urquhart (No. 4)
- Shortened Case Name:
Partington & Anor v Urquhart (No. 4)
 QCATA 96
Senior Member Howard, Member Traves
25 Jun 2019