Queensland Judgments
Authorised Reports & Unreported Judgments
  • sclq logo
  1. Caselaw
  2. QCATA
  3. 2020
  4. Mt Cotton Constructions Pty Ltd v Greer - [2020] QCATA 157

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

Mt Cotton Constructions Pty Ltd v Greer[2020] QCATA 157

Mt Cotton Constructions Pty Ltd v Greer[2020] QCATA 157

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Mt Cotton Constructions Pty Ltd v Greer & Anor [2020] QCATA 157

PARTIES:

MT COTTON CONSTRUCTIONS PTY LTD

(applicant)

v

KATE GREER

(first respondent)

DAMIEN GREER

(second respondent)

APPLICATION NO/S:

APL145-17

ORIGINATING

APPLICATION NO/S:

BDL190-14

MATTER TYPE:

Appeals

DELIVERED ON:

17 November 2020

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Senior Member Brown

Member Burke

ORDERS:

  1. Leave to appeal refused.
  2. The parties must file in the Tribunal three (3) copies and exchange one (1) copy of written submissions (no longer than 4 pages) in respect of the question of costs of the appeal within 14 days of the date of these orders.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – APPEAL AS TO COSTS – RELEVANT PRINCIPLES – WHERE WRONG EXERCISE OF DISCRETION – where the tribunal awarded costs on an indemnity basis in circumstances where an offer to settle was made but not accepted – whether error in the application of s 105 of the QCAT Act and r 86 of the QCAT Rules - consideration of the costs consequences flowing from a failure to accept a Calderbank offer – consideration of the reasonableness of the party in rejecting the offer

Domestic Building Contracts Act 2000 (Qld) (repealed), s 84(3), s 84(4)

Queensland Building and Construction Commission Act 1991 (Qld), s 77

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102(1), s 102(3), s 105, s 142(2)(c), s 142(3)(a)(iii)

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

Barescape Pty Ltd as trustee for the V’s Family Trust & Anor v Bacchus Holdings Pty Ltd as trustee for The Bacchus Holdings Trust & Anor (No 12) [2012] NSWSC 1591

Bellgrove v Eldridge (1954) 90 CLR 613

Cachia v Grech [2009] NSWCA 232

Fick v Groves (No2) [2010] QSC 182

Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388

Greer & Anor v Mt Cotton Constructions Pty Ltd [2018] QCATA 196

House v R (1936) 55 CLR 499

Lee Manson t/as Manson Homes v Brett & Anor [2018] QCATA 109

Lyons v Dreamstarter Pty Ltd [2011] QCATA 142

McGee v Queensland Building and Construction Commission & Anor [2018] QCATA 124

McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577

Mt Cotton Constructions Pty Ltd v Greer [2017] QCAT 11

Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98

Maggbury Pty Ltd v Hafele Australia Pty Ltd [2000] QCA 172

Norbis v Norbis (1986) 161 CLR 513

Olindaridge Pty Ltd & Wagner v Tracey [2015] QCATA 175

Pivovarova v Michelsen [2016] QCATA 45

QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41

Robinson v Harman (1848) 154 ER 363

Salam & Anor v Henley Properties (QLD) Pty Ltd [2016] QCATA 98

Wharton v Duffy Constructions (QLD) Pty Ltd [2016] QCATA 12

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

Senior Member Brown:

What is the appeal about?

  1. [1]
    Mt Cotton Constructions (‘MCC’) entered into a contract with Mr and Mrs Greer (‘Greers’) to carry out building works at their property. The parties fell into dispute.  In August 2014, MCC commenced proceedings in the tribunal. The Greers counter claimed seeking recovery of monies paid in respect of contractual variations claims that did not comply with Part 7 of the Domestic Building Contracts Act 2000 (Qld) (‘DBCA’).[1] They also sought damages for the cost of rectification of defective building work.
  2. [2]
    Various offers to settle the proceedings were made by the parties:
    1. (a)
      25 June 2014 by the Greers – Greers to pay to MCC $75,000 (the first offer);
    2. (b)
      26 June 2014 by MCC – Greers to pay MCC $240,000 and retain the right to pursue a claim for defects (the second offer);
    3. (c)
      9 July 2014 by the Greers – Greers to pay MCC $100,000 in respect of all claims save for defects not apparent at the date of the offer, MCC to deliver certificates in respect of work carried out at the premises, return certain items and provide the Greers with certain electrical wiring details. Each party to bear their own costs. Offer expressed to be a Calderbank offer of settlement (the third offer);
    4. (d)
      6 November 2015 by the Greers - Greers to pay MCC $30,000 in respect of each party’s claims save for defects not apparent at the date of the offer. Each party to bear their own costs. Offer expressed to be a Calderbank offer of settlement (the 4th offer);
    5. (e)
      20 June 2016 by MCC – Greers to pay to MCC $125,000 inclusive of costs and interest (the fifth offer);
    6. (f)
      8 September 2016 by the Greers – proceedings by both parties be discontinued.  MCC to deliver to the Greers all certificates to enable a certifier to certify the works. Each party to bear their own costs. Offer expressed to be a Calderbank offer of settlement (the sixth offer);
    7. (g)
      14 September 2016 by MCC – subject to the resolution of certain certification issues the parties ‘walk away’ on the basis as proposed in the sixth offer (the seventh offer);
    8. (h)
      23 September 2016 by the Greers – MCC to deliver certain specified certificates. Both parties ‘walk away’ subject to execution of a deed (the eighth offer);
    9. (i)
      27 September 2016 by MCC – on the same terms as the eighth offer (the ninth offer);
    10. (j)
      4 October 2016 by MCC – in the same terms as the ninth offer (the tenth offer).
  3. [3]
    On 17 January 2017, the tribunal dismissed MCC’s application and the Greers’ counter-application.[2] The Greers appealed. The appeal was allowed and the decision at first instance set aside.[3] The appeal tribunal ordered that the matter be returned to the tribunal for rehearing.[4]
  4. [4]
    The tribunal at first instance also delivered a separate decision in relation to the costs of the proceedings.[5] The tribunal ordered that MCC pay the Greers’ costs, including the costs of the counter-application from 6 November 2015 (the date of the 4th offer), on an indemnity basis. MCC appeals this decision.

Appeals in QCAT – the statutory framework

  1. [5]
    An appeal against a costs order may be made only if the leave of the appeal tribunal is first obtained.[6] A party cannot appeal to the appeal tribunal against a cost-amount decision.[7]
  2. [6]
    In determining whether to grant leave to appeal, the usual principles considered by the appeal tribunal include:
    1. (a)
      is there a reasonably arguable case of error in the primary decision;[8]
    2. (b)
      is there a reasonable prospect that the applicant will obtain substantive relief;[9]
    3. (c)
      is leave necessary to correct a substantial injustice to the applicant caused by some error;[10] and
    4. (d)
      is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage.[11]

Costs in QCAT – the statutory framework

  1. [7]
    Other than as provided under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) or an enabling Act, each party should bear their own costs.[12] The enabling Act in the proceedings below and in this appeal is the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’). By s 77(3)(h) of the QBCC Act, the tribunal may award costs. The power to award costs under s 77(3)(h) applies in appeal tribunal proceedings.[13]
  2. [8]
    The discretion to order costs under s 77(3)(h) is a broad and general one, to be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation.[14] In exercising the broad discretion conferred under s 77(3)(h), the matters set out at s 102(3) of the QCAT Act may also be considered by the tribunal.[15]
  3. [9]
    The QCAT Act also provides that the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘QCAT Rules’) may authorise the tribunal to award costs in other circumstances including where an offer to settle has been made and not accepted.[16]
  4. [10]
    Rule 86 of the QCAT Rules provides:

Additional power to award costs if particular offers to settle rejected

  1. (1)
    This rule applies if—
  1. (a)
    a party to a proceeding, other than a proceeding for a minor civil dispute, makes another party to the proceeding a written offer to settle the dispute the subject of the proceeding; and
  1. (b)
    the other party does not accept the offer within the time the offer is open; and
  1. (c)
    in the opinion of the tribunal, the decision of the tribunal in the proceeding is not more favourable to the other party than the offer.
  1. (2)
    The tribunal may award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made.
  1. (3)
    If a proceeding involves more than 2 parties, this rule applies only if the acceptance of the offer would have resulted in the settlement of the matters in dispute between all the parties.
  1. (4)
    In deciding whether a decision is or is not more favourable to a party than an offer, the tribunal must—
  1. (a)
    take into account any costs it would have awarded on the date the offer was given to the other party; and
  1. (b)
    disregard any interest or costs it awarded relating to any period after the date the offer was given to the other party.

The Tribunal’s decision

  1. [11]
    At first instance MCC’s claim and the Greers’ counterclaim were dismissed.[17] It is however necessary to examine why the claims were dismissed.
  2. [12]
    The learned member found:
    1. (a)
      the parties had entered into a binding domestic building contract;
    2. (b)
      the contract was for a fixed price;
    3. (c)
      there was significant additional domestic building work performed by MCC outside the scope of work covered by the fixed price contract;
    4. (d)
      any building work performed by MCC outside of the scope of works agreed under the contract was variation work;
    5. (e)
      MCC was not entitled to pursue a claim in quantum meruit in respect of the variation work;
    6. (f)
      section 84(4) of the DBCA does not remove any entitlement by a builder to monetary or other consideration where the builder fails to comply with the requirements of Part 7 of the DBCA. Section 84(4) limits the builder’s process of recovery to the tribunal process found in s 84(4);
    7. (g)
      there is no clear legislative intent to be derived from the wording of ss 84(3) and (4) of the DBCA that the builder’s right to retain payment of monies made to it voluntarily for variations which fail to comply with the requirements of the DBCA is abrogated so as to entitle the owners to subsequently recover monies so paid;
    8. (h)
      the Greers were not entitled to recover the monies voluntarily paid by them for the variation work performed by MCC;
    9. (i)
      the failure by MCC to comply with the requirements of the DBCA in relation to variations did not make the contract or the additional variation work illegal, void or unenforceable;
    10. (j)
      in breach of the contract, building work performed by MCC was defective;
    11. (k)
      the reasonable value of the variation work carried out by MCC was $162,099.54;
    12. (l)
      the cost to rectify defective work and complete incomplete building work was $45,526.09;
    13. (m)
      the fixed contract price (of $152,009) should be reduced by $19,449.20 in respect of prime cost items;
    14. (n)
      the Greers suffered no loss taking into consideration, principally, the value of the variation works and the total amount paid by the Greers to MCC.
  3. [13]
    In undertaking the assessment of the Greers’ entitlement to damages, the learned member:
    1. (a)
      determined the contract price;
    2. (b)
      deducted an adjustment for PC items;
    3. (c)
      added the value of the non-compliant variations; and
    4. (d)
      deducted the amount paid by the Greers to MCC to arrive at the amount outstanding to the builder of $55,530.94.
  4. [14]
    In applying the principles in Bellgrove v Eldridge[18] and Robinson v Harman[19] the learned member deducted from the amount of $55,530.94 the costs of rectification and completion works of $45,526.09 and concluded that the Greers had suffered no loss.
  5. [15]
    Both parties contended that the usual order, that costs follow the event, should not apply given the offers to settle that were made.[20]
  6. [16]
    After considering the basis upon which the tribunal may order costs in building disputes, the learned member observed:[21]

[30] Section 86 of the Rules creates an exception to the usual order as to costs by encouraging settlement and focusing attention on the conduct of a party who does not accept a reasonable offer to settle. The power to award “all reasonable costs incurred by that party in conducting the proceeding after the offer was made” in s 86(2) has been held to encompass cost orders on an indemnity basis.

  1. [17]
    The member, referring to the 4th offer, stated:[22]

[45] I conclude that as at the date of the offer of 6 November 2015 it was unreasonable for the builder to refuse the offer of settlement. By that date the builder should have understood that it had very limited prospects of success in its claim, and faced at minimum (leaving aside the claim for restitution) a substantial claim against it for defective building work which would be offset against any award for variations, if there be any award.

[46] In these circumstances I conclude the offer made 6 November 2015 was an offer to which the discretion granted by s 86 of the Rules should be applied. Given that finding the subsequent offers to settle made by the builder in the period immediately before hearing become irrelevant. I should comment that by September 2016 the very substantial additional costs incurred by the owners after 6 November 2015 made the decision of the owners to proceed to hearing regardless that the parties were very close to settlement a reasonable one because the costs of the owners were very substantial by that stage and an order for costs in their favour an attractive commercial proposition.

[47] Given those findings, what order is appropriate? I conclude what is appropriate that from the time of making the offer, which offer encompassed both claim and counter application, the owners should have their costs on an indemnity basis in respect of the proceedings.

[48] The matter was complex and work done by the legal advisers extensive. The solicitor own client costs of the owners to date is suggested to be $293,484.41. I conclude it is not appropriate that I attempt to fix indemnity costs. The costs should be assessed by cost assessors. Given the claim by the builder was $350,345.02 until shortly before hearing, it is appropriate that the costs be assessed on the District Court scale.

The grounds of appeal

  1. [18]
    The grounds of appeal relied upon by MCC are that:[23]
    1. (a)
      the tribunal erred in determining that:
      1. the usual order is that costs follow the event;
      2. rule 86 of the QCAT Rules is an exception to the usual order;
    2. (b)
      the tribunal erred in failing to exercise jurisdiction and determine whether to make orders as to costs pursuant to s 102(1) of the QCAT Act or s 77(3)(h) of the QBCC Act;
    3. (c)
      the tribunal erred in determining that MCC acted unreasonably in rejecting the 4th offer in circumstances where the offer did not include costs and MCC’s costs were likely to make the offer of nominal benefit and where each party’s evidence was substantially incomplete at the time of making the offer;
    4. (d)
      the tribunal erred in determining that MCC should pay the costs of the entire proceeding from 6 November 2015 by failing to take into consideration relevant considerations including the various offers exchanged between the parties (the sixth to tenth offers) and the substantial costs of preparing for the hearing;
    5. (e)
      the tribunal erred:
      1. in failing to exercise jurisdiction and determine whether to make orders in MCC’s favour under rule 86 of the QCAT Rules on the basis of the ninth and tenth offers; and
      2. in considering the reasonableness of the actions of the Greers in refusing to accept MCC’s offers, in failing to take into account relevant considerations, or alternatively reached a plainly unreasonable conclusion contrary to the facts, in failing to find the rejection of MCC’s offers unreasonable;
    6. (f)
      the tribunal erred in determining that MCC pay the Greers’ costs on an indemnity basis because the tribunal failed to take into account relevant considerations being the sixth to tenth offers and the substantial costs incurred in preparing for, and conducting, the hearing.

Consideration

  1. [19]
    The first issue to be addressed is the consequence of the decision of the appeal tribunal to set aside the decision at first instance and remit the proceedings for rehearing. At first blush it might appear that those circumstances compel an order allowing leave to appeal the costs decision and remitting the matter of costs for reconsideration by the tribunal. If the final decision in the substantive proceeding below no longer stands, can the decision about costs stand? In approaching the determination of this question it is necessary to consider the claims by the parties below and the effect of the findings both at first instance and on appeal.
  2. [20]
    We have set out at paragraph [12] the salient findings made by the learned member below. The findings referred to at sub-paragraphs (a) to (j) were not disturbed on appeal. It should also be noted that MCC did not cross appeal the decision.
  3. [21]
    The starting point in the present appeal, which will also be the starting point for the tribunal below in rehearing the matter, is that MCC failed in its claim to recover any monies in respect of the building works undertaken. The Greers, on the other hand, were successful in their claim for damages for defective and incomplete work although they failed in their claim that MCC repay monies it received in respect of non-compliant variations. The appeal tribunal found:

[77] The learned member embarked upon the exercise of valuing the variation works rather than determining the contract price agreed between the parties. In assessing the Greers’ entitlement to damages for MCC’s breach the learned member was first required to make a finding as to what was agreed between the parties in relation to the variation works. This included making findings as to the scope of works, the price of the works and any other relevant matters including, for example, the completion date for the works as varied. In failing to proceed in this manner, the learned member was unable to make findings as to what amount was due and payable under the contract as varied.[24]

  1. [22]
    The Greers were therefore substantially successful in the proceedings below and on appeal. It follows that the rehearing below will be confined to the assessment of the Greers’ entitlement to damages.
  2. [23]
    On this basis it can be said that the Greers remain substantially successful. It follows that the decision about costs would not be set aside merely because the decision in the substantive proceedings was set aside. We will address what may flow from this in relation to the costs of the rehearing later in these reasons.
  3. [24]
    The learned member found in relation to the 4th offer that:
    1. (a)
      the offer was in writing and more favourable to MCC than the final decision;[25]
    2. (b)
      it was unreasonable for MCC to refuse the offer;[26]
    3. (c)
      the offer was an offer for the purposes of r 86 of the QCAT Rules;[27]
    4. (d)
      the subsequent offers became irrelevant for the purposes of considering an award of costs.[28]
  4. [25]
    It was on the basis of the 4th offer that the learned member proceeded to consider and determine costs.
  1. [26]
    The learned member found:
    1. (a)
      the matter was complex and the work done by legal representatives substantial;[29]
    2. (b)
      the Greers should have their costs to be assessed on the District Court scale on the indemnity basis.[30]
  2. [27]
    The learned member made the following findings in support of his conclusion that it was unreasonable for MCC to have refused the 4th offer:-
    1. (a)
      Had the offer been accepted legal costs for both parties would have been much reduced;
    2. (b)
      The pleadings were well advanced and the statements of evidence filed and exchanged;
    3. (c)
      The offer was rejected by MCC before the period open for acceptance and on the eve of the compulsory conference;
    4. (d)
      MCC must have known its claim was weak as:
      1. MCC had failed to get variations signed or costs agreed before performing work;
      2. the fixed price contract was an obvious problem;
      3. at no time did MCC apply to the tribunal for approval to recover the claimed variation amounts;
      4. MCC had the benefit of informed legal advice;
      5. that its initial claim was inflated and could not be substantiated and this fact should have been clear to MCC.
  3. [28]
    In determining the issue of the costs of the proceedings below the learned member considered the principles relevant to Calderbank offers and offers to settle made under the QCAT Rules, observing that while a Calderbank offer may be an offer for the purposes of r 86, not all Calderbank offers fall within the rule.[31] An offer which could have been made under the rules, but was not, may nevertheless be taken into consideration in respect of costs orders at trial.[32]
  4. [29]
    In McGee v Queensland Building and Construction Commission & Anor[33] the appeal tribunal stated:

[62] In our view, in exercising the discretion to award costs, the relevant matters the tribunal must consider are the same irrespective of whether the written offer is expressed as a Calderbank offer or falls for consideration as an offer under rule 86. Both require a value judgment of the offer and the conduct of the parties in the context of the nature and circumstances of the proceedings.

[63] The costs consequences flowing from a successful offer made under rule 86 were considered in Lyons v Dreamstarter Pty Ltd where Wilson J held:

As to the basis upon which costs should be assessed, it was said in several decisions in this jurisdiction in QCAT’s predecessor, the Commercial and Consumer Tribunal, that the phrase ‘all reasonable costs’, which appeared in s 142 of the Commercial and Consumer Tribunal Act 2003 and now it appears in QCAT r 86(2) should be construed to mean indemnity, rather than standard costs. That construction of the phrase can reasonably be applied to the same words, where they appear in QCAT r 86(2). Plainly, the rule is intended to encourage parties to be realistic about prospects in QCAT proceedings and to carry appropriate sanctions if that does not occur. (footnotes omitted)

  1. [30]
    I agree with the statement in McGee. Where an offer is expressed as a Calderbank offer and the offer also satisfies r 86 of the QCAT Rules, the same considerations apply in exercising the discretion to award costs, including indemnity costs. There is no prima facie presumption in proceedings in the tribunal that an order for indemnity costs will be made in favour of a party who obtains a final decision more favourable than a Calderbank offer or a r 86 offer.
  2. [31]
    I turn now to a consideration of the grounds of appeal.

Ground of appeal 1

  1. [32]
    The learned member observed that ‘the usual order in the circumstances should be that costs follow the event’. This statement must be read in the context in which the words appear. The learned member had noted that neither party had been successful in the proceedings below: MCC had failed in its claim to recover the value of variations and the Greers had failed to establish their claims for damages for defective and incomplete building work and for the recovery of amounts paid to MCC for non-compliant variations. The learned member observed that as neither party had succeeded in respect of their claims, the appropriate order was no order as to costs, with each party to bear their own costs. In referring to the ‘usual order’ the learned member was referring to the situation where neither party to a proceeding is successful and each party bears their own costs.
  2. [33]
    The learned member observed that ‘… (rule) 86 of the Rules creates an exception to the usual order as to costs by encouraging settlement and focusing attention on the conduct of a party who does not accept a reasonable offer to settle.’
  3. [34]
    The learned member  referred to the decision of the NSW Supreme Court in Barescape Pty Ltd as trustee for the V’s Family Trust & Anor v Bacchus Holdings Pty Ltd as trustee for The Bacchus Holdings Trust & Anor (No 12).[34] The passage referred to by the learned member related to a consideration of the costs consequences flowing from a failure to accept a Calderbank offer. In referring to the ‘usual order’ as to costs, I understand the learned member was contextualising r 86 within the broader statutory framework of the QCAT Act. By s 100 of the QCAT Act each party must bear their own costs for a proceeding unless the QCAT Act or an enabling Act otherwise provides. Section 105 of the QCAT Act provides that the QCAT Rules may authorise the tribunal to award costs in other circumstances including where an offer to settle has been made but not accepted. Rule 86 empowers the tribunal to make an order for costs in specified circumstances. When viewed in this broader context, the learned member’s findings are merely a statement of the effect of r 86 within a broader construction of the QCAT Act and the general presumption in the Act against costs.
  4. [35]
    There was no error by the learned member. Ground of appeal 1 is not made out.

Ground of appeal 2

  1. [36]
    MCC says that the learned member failed to consider whether costs should be awarded pursuant to s 102(1) of the QCAT Act or s 77(3)(h) of the QBCC Act. The consequence of this, says MCC, is that the learned member failed to identify and take into account the ‘comparator’ position.
  2. [37]
    MCC also says that the learned member was required to identify a ‘baseline position’ by reference to the application of the QCAT Act or the QBCC Act in relation to costs.
  3. [38]
    Section 100 of the QCAT Act is expressed in clear terms: Other than as provided under the QCAT Act or an enabling Act each party to a proceeding must bear their own costs. Once an enabling Act provides for an award of costs, costs fall for consideration under the enabling Act and the presumption against costs found in s 100 is displaced to the extent that such a presumption is not expressed in the enabling Act.
  4. [39]
    The learned member correctly identified that the QBCC Act was the relevant enabling Act and that s 77(3)(h) of the QBCC Act empowered the tribunal to make a costs order. Section 77 of the QBCC Act is a modifying provision and prevails to the extent of any inconsistency with the QCAT Act.[35] There is no strong contra-indication in s 77 against a costs order: broadly speaking, costs may be awarded, if an award is justified in the relevant circumstances.[36] The matters referred to at s 102(3) of the QCAT Act may be relevant in considering whether to award costs, reflecting as they do relevant matters in exercising a general discretion to award costs. There is nothing in s 77 of the QBCC Act to suggest that s 105 of the QCAT Act and r 86 of the QCAT Rules may not be considered in relation to an application for costs in a proceeding for a building dispute.
  5. [40]
    The submissions by MCC in relation to a ‘comparator’ and a ‘baseline position’ are misconceived.
  6. [41]
    Ground of appeal 2 is not made out.

Ground of appeal 3

  1. [42]
    The learned member dealt with reasonableness of MCC’s actions in rejecting the 4th offer at reasons [40] to [45].
  1. [43]
    The learned member correctly found that the offer came within r 86 as:
    1. (a)
      the offer was in writing;[37]
    2. (b)
      the offer was rejected by MCC;[38]
    3. (c)
      the decision of the tribunal was not more favourable to MCC than the offer.[39]
  2. [44]
    MCC says that the learned member failed to take into account relevant considerations in assessing the reasonableness of MCC’s actions in rejecting the offer such as that:
    1. (a)
      there were many interlocutory steps to complete before there could be a trial;
    2. (b)
      the state of the expert evidence;
    3. (c)
      the quantum of the offer.
  3. [45]
    Although not expressed thus, the essence of MCC’s submission is that the exercise of the learned member’s discretion miscarried. The exercise of a judicial discretion calls for value judgments in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right.[40]
  4. [46]
    The principles governing when a court will upset a discretionary decision were settled in House v R[41] and may be summarised as circumstances:
    1. (a)
      where the decision maker acts upon a wrong principle;
    2. (b)
      where the decision maker allows extraneous or irrelevant matters to guide or affect him/her;
    3. (c)
      where the decision maker mistakes the facts;
    4. (d)
      where the decision maker fails to take into account a material consideration or takes into account an irrelevant consideration;
    5. (e)
      where the decision is plainly unjust or unreasonable.
  5. [47]
    At reasons [33] the learned member referred to the decision of Applegarth J in Fick v Groves (No 2)[42] and the relevant considerations in relation to the reasonableness or otherwise of a party rejecting a Calderbank offer. In relation to the 4th offer the learned member found that:
    1. (a)
      the offer was made at a time when the pleadings were well advanced, with an Amended Claim by MCC and an Amended response and counter application by the Greers having been filed 8 months previously;[43]
    2. (b)
      at the time the offer was made many of the statements of evidence ultimately relied on at the hearing had been filed and exchanged;[44]
    3. (c)
      the time for acceptance of the offer was reasonable;[45]
    4. (d)
      the offer was rejected on the eve of the compulsory conference which was ‘rather foolish’. A more reasonable approach to the offer would have been to wait until after the conference following which both parties would have been in a better position to understand the issues and the prospects of success;[46]
    5. (e)
      at the time of the offer MCC must have known its claim was weak for the following reasons:-
      1. MCC had failed to get variations signed or costs agreed before performing the work;
      2. the fixed price contract between the parties was ‘an obvious problem’;
      3. MCC had not made an application to the tribunal for recovery of an amount for the non-compliant variations under the provisions of the DBCA.
    6. (f)
      MCC had the benefit of informed legal advice;
    7. (g)
      prior to November 2015 MCC had to hand the statements of evidence of the Greers, and of the architect, alerting MCC to:
      1. the challenge to MCC’s claim that the signed fixed price contract was not the true contract between the parties;
      2. the assertion by the Greers that they had not agreed to variations;
      3. the challenge by the Greers to the reasonableness of MCC’s costs claimed in performing the work;
    8. (h)
      MCC’s progress claims were confusing and there was a disconnect between variations, progress claims and supporting invoices;
    9. (i)
      it should have been very clear to MCC at the time of the offer that its initial claim was inflated and could not be substantiated.
  6. [48]
    It is clear that the learned member took into consideration the totality of the evidence filed by the parties at the time of the 4th offer. I agree with the learned member that it should have been apparent to MCC at the time of the offer that its case was not strong. MCC had clearly plotted a course in the litigation that placed reliance upon the assertion that the agreement between the parties in respect of the subject building works was a cost plus contract. This explains the failure by MCC to make an application to the tribunal for approval of the non-compliant variations. Absent a finding that the agreement was a cost plus contract, MCC’s position could not be sustained. As events transpired, the tribunal found that the agreement between the parties was a fixed price contract. This finding was not appealed. In the absence of an application for approval of the non-compliant variations, MCC was left with no basis upon which to recover any monies from the Greers in respect of the building works.
  7. [49]
    More importantly, at the time the 4th offer was made, MCC must have known that if it was left with no basis upon which to claim for the value of the building works it performed, the Greers could – and would – pursue their counter claim. At the time of the 4th offer it was clear from the counter claim by the Greers that the claim for damages for defective and incomplete works was substantial and estimated to exceed $100,000 including the cost of rectification works already carried out. Ultimately those damages were assessed by the learned member at $45,526.09.
  8. [50]
    It was also the fact that at the time the 4th offer was made:
    1. (a)
      the Greers had filed an expert’s report in relation to the claimed defective and incomplete building work;
    2. (b)
      MCC had filed an expert’s report in relation to the claimed defective and incomplete building work;
    3. (c)
      A conclave of the building experts had been held and a joint experts’ report prepared which identified the (largely agreed) items of defective and incomplete building work and which also identified the opinions of the respective experts as to the required works to be undertaken.
  9. [51]
    It should therefore have been clear to MCC at the time of the offer that there was a significant prospect of a finding adverse to MCC in respect of defective and incomplete work. Even if, as was the case, the Greers had not at that stage filed a report by a quantity surveyor costing the required works, Mr Scroope (the principal of MCC) was a highly experienced builder and was in a position to make an informed decision about the estimated cost of the works required to be carried out.
  10. [52]
    MCC says that the offer did not include costs and was therefore of nominal benefit to MCC given the costs it had incurred. Ultimately this submission carries little weight. Nominal or otherwise the offer was, if accepted, of benefit to MCC in light of the final decision in the proceedings.
  11. [53]
    Ground of appeal 3 is not made out.

Ground of appeal 4

  1. [54]
    MCC argues that the tribunal erred in determining that MCC should pay the costs of the entire proceeding from 6 November 2015 by failing to take into consideration relevant considerations including the various offers exchanged between the parties (the sixth to tenth offers) and the substantial costs of preparing for the hearing.
  2. [55]
    MCC says that all of the circumstances of the case were relevant in the determination of whether to award indemnity costs. MCC says that the learned member erred in finding that the subsequent offers to settle made by MCC after the 4th offer were irrelevant.
  3. [56]
    The learned member’s statement must be read in context. The member was clearly referring to the relevance of subsequent offers and the application of r 86 to such offers. In other words, a formal offer having been made by the Greers which was more favourable to MCC than the final decision, any subsequent offers made by MCC did not fall for consideration under r 86. There can be no doubt that more than one offer made in a proceeding may fall for consideration under r 86. Indeed, all that is required is that the offer is in writing and is an offer to settle the dispute the subject of the proceeding. However r 86 is clearly intended to invest certain offers with a particular significance and consequence. If, in a proceeding, more than one offer is made satisfying the requirements of r 86, the offer made first in time is, absent extraordinary circumstances such as fraud or material non-disclosure, the only offer relevant for the purposes of r 86 in determining costs. To adopt a contrary view would be to significantly erode the clear intent of s 105 of the QCAT Act and r 86. As I have observed, the purpose of r 86 is to encourage parties to resolve matters in a timely and cost effective manner. That encouragement comes in the form of the possibility of a costs penalty if the offer is not accepted.
  4. [57]
    Notwithstanding my observations above, it is clear that the learned member did in fact make reference to the offers made by MCC in September and October 2016. The learned member stated:

[46] … I should comment that by September 2016 the very substantial additional costs incurred by the owners after 6 November 2015 made the decision of the owners to proceed to hearing regardless that the parties were very close to settlement a reasonable one because the costs of the owners were very substantial by that stage and an order for costs in their favour an attractive commercial proposition.[47] 

  1. [58]
    The reference by the learned member to the parties being ‘very close to settlement’ can only be a reference to the offers passing between the parties in September and October 2016. The learned member therefore did consider the offers made by MCC in September and October 2016 in making his determination.
  2. [59]
    Ground of appeal 4 is not made out.

Ground of appeal 5

  1. [60]
    In ground 5, MCC argues that the tribunal erred:
    1. (a)
      in failing to exercise jurisdiction and determine whether to make orders in MCC’s favour under rule 86 of the QCAT Rules on the basis of the ninth and tenth offers; and
    2. (b)
      in considering the reasonableness of the actions of the Greers in refusing to accept MCC’s offers, in failing to take into account relevant considerations, or alternatively reached a plainly unreasonable conclusion contrary to the facts, in failing to find the rejection of MCC’s offers unreasonable.
  2. [61]
    For the reasons set out above there was no error by the learned member in not considering MCC’s offers in September and October 2016 under r 86. I am also satisfied for the reasons above that the learned member did consider the offers made by MCC in September and October 2016. The 4th offer was made in November 2015. Almost 12 months later MCC made further offers to settle. By this stage, and as the learned member found, the Greers had incurred significant costs. It was in no way unreasonable for the Greers to consider at that stage that it was commercially preferable to proceed to a hearing with a view to achieving a result more favourable than the 4th offer and to seek an order for costs.
  3. [62]
    Ground of appeal 5 is not made out.

Conclusion

  1. [63]
    MCC has failed to make out any of the grounds of appeal. It follows that leave to appeal is refused.
  2. [64]
    Upon rehearing, and depending upon the outcome of the rehearing, any costs recovered by the Greers in respect of the proceedings below will no doubt be taken into consideration by the tribunal in making any further costs orders.

Member Burke:

  1. [65]
    I have had the benefit of reading the reasons provided by the Senior Member and agree with the conclusions reached and orders proposed.

Footnotes

[1]Now repealed.

[2]Mt Cotton Constructions Pty Ltd v Greer [2017] QCAT 11.

[3]Greer & Anor v Mt Cotton Constructions Pty Ltd [2018] QCATA 196.

[4]Ibid.

[5]Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98.

[6]Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), 142(3)(a)(iii).

[7]Ibid, s 142(2)(c).

[8]QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.

[9]Cachia v Grech [2009] NSWCA 232, [13].

[10]Ibid.

[11]Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577, 578, 580.

[12]QCAT Act, s 100.

[13]See Olindaridge Pty Ltd & Wagner v Tracey [2015] QCATA 175 followed in Pivovarova v Michelsen [2016] QCATA 45. See also Wharton v Duffy Constructions (QLD) Pty Ltd [2016] QCATA 12 followed in Lee Manson t/as Manson Homes v Brett & Anor [2018] QCATA 109.

[14]Lyons v Dreamstarter Pty Ltd [2011] QCATA 142.

[15]Salam & Anor v Henley Properties (QLD) Pty Ltd [2016] QCATA 98.

[16]QCAT Act, s 105.

[17]Mt Cotton Constructions Pty Ltd v Greer [2017] QCAT 11.

[18](1954) 90 CLR 613.

[19](1848) 154 ER 363.

[20]Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98, [26].

[21]Ibid, [30] (citations omitted, emphasis in original).

[22]Ibid, [45] – [48].

[23]Application for leave to appeal or appeal filed 5 May 2017.

[24]Greer & Anor v Mt Cotton Constructions Pty Ltd [2018] QCATA 196, [77].

[25]Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98, [41].

[26]Ibid, [45].

[27]Ibid, [46].

[28]Ibid.

[29]Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98, [48].

[30]Ibid, [47].

[31]Ibid, [34].

[32]Maggbury Pty Ltd v Hafele Australia Pty Ltd [2000] QCA 172.

[33][2018] QCATA 124, [62] – [63].

[34][2012] NSWSC 1591.

[35]QCAT Act, s 7; Olindaridge Pty Ltd & Wagner v Tracey [2015] QCATA 175.

[36]Olindaridge Pty Ltd & Wagner v Tracey [2015] QCATA 175, [7].

[37]QCAT Rules, r 86(1)(a).

[38]Ibid, r 86(1)(b).

[39]Ibid, r 86(1)(c).

[40]Norbis v Norbis (1986) 161 CLR 513.

[41](1936) 55 CLR 499.

[42][2010] QSC 182.

[43]Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98, [41].

[44]Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98, [43].

[45]Ibid, [42].

[46]Ibid.

[47]Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98, [46].

Close

Editorial Notes

  • Published Case Name:

    Mt Cotton Constructions Pty Ltd v Greer & Anor

  • Shortened Case Name:

    Mt Cotton Constructions Pty Ltd v Greer

  • MNC:

    [2020] QCATA 157

  • Court:

    QCATA

  • Judge(s):

    Senior Member Brown, Member Burke

  • Date:

    17 Nov 2020

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
Bellgrove v Eldridge (1954) 90 CLR 613
2 citations
Jump To
Cite 1 - (1954) 90 CLR 613
Cite 2 - (1954) 90 CLR 613
Cachia v Grech [2009] NSW CA 232
2 citations
Jump To
Cite 1 - [2009] NSW CA 232
Cite 2 - [2009] NSW CA 232
Fick v Groves (No 2) [2010] QSC 182
2 citations
Jump To
Cite 1 - [2010] QSC 182
Cite 2 - [2010] QSC 182
Glenwood Properties Pty Ltd v Delmoss Pty Ltd[1986] 2 Qd R 388; [1986] QSC 221
2 citations
Jump To
Cite 1 - [1986] 2 Qd R 388
Cite 2 - [1986] 2 Qd R 388
Greer v Mt Cotton Constructions Pty Ltd [2018] QCATA 196
3 citations
Jump To
Cite 1 - [2018] QCATA 196
Cite 2 - [2018] QCATA 196
Cite 3 - [2018] QCATA 196
House v The King (1936) 55 CLR 499
2 citations
Jump To
Cite 1 - (1936) 55 CLR 499
Cite 2 - (1936) 55 CLR 499
Lee Manson t/as Manson Homes v Brett [2018] QCATA 109
2 citations
Jump To
Cite 1 - [2018] QCATA 109
Cite 2 - [2018] QCATA 109
Lyons v Dreamstarter Pty Ltd [2011] QCATA 142
2 citations
Jump To
Cite 1 - [2011] QCATA 142
Cite 2 - [2011] QCATA 142
Maggbury Pty Ltd v Hafele Aust Pty Ltd [2000] QCA 172
2 citations
Jump To
Cite 1 - [2000] QCA 172
Cite 2 - [2000] QCA 172
McGee v Queensland Building and Construction Commission [2018] QCATA 124
2 citations
Jump To
Cite 1 - [2018] QCATA 124
Cite 2 - [2018] QCATA 124
McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd[1989] 2 Qd R 577; [1989] QSCFC 53
2 citations
Jump To
Cite 1 - [1989] 2 Qd R 577
Cite 2 - [1989] 2 Qd R 577
Mt Cotton Constructions Pty Ltd v Greer [2017] QCAT 11
3 citations
Jump To
Cite 1 - [2017] QCAT 11
Cite 2 - [2017] QCAT 11
Cite 3 - [2017] QCAT 11
Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98
15 citations
Jump To
Cite 1 - [2017] QCAT 98
Cite 2 - [2017] QCAT 98
Cite 3 - [2017] QCAT 98
Cite 4 - [2017] QCAT 98
Cite 5 - [2017] QCAT 98
Cite 6 - [2017] QCAT 98
Cite 7 - [2017] QCAT 98
Cite 8 - [2017] QCAT 98
Cite 9 - [2017] QCAT 98
Cite 10 - [2017] QCAT 98
Cite 11 - [2017] QCAT 98
Cite 12 - [2017] QCAT 98
Cite 13 - [2017] QCAT 98
Cite 14 - [2017] QCAT 98
Cite 15 - [2017] QCAT 98
Norbis v Norbis (1986) 161 C.L.R., 513
2 citations
Jump To
Cite 1 - (1986) 161 C.L.R., 513
Cite 2 - (1986) 161 C.L.R., 513
Olindaridge Pty Ltd & Wagner v Tracey [2015] QCATA 175
4 citations
Jump To
Cite 1 - [2015] QCATA 175
Cite 2 - [2015] QCATA 175
Cite 3 - [2015] QCATA 175
Cite 4 - [2015] QCATA 175
Pivovarova v Michelsen [2016] QCATA 45
2 citations
Jump To
Cite 1 - [2016] QCATA 45
Cite 2 - [2016] QCATA 45
QUYD Pty Ltd v Marvass Pty Ltd[2009] 1 Qd R 41; [2008] QCA 257
2 citations
Jump To
Cite 1 - [2009] 1 Qd R 41
Cite 2 - [2009] 1 Qd R 41
Robinson v Harman (1848) 154 ER 363
2 citations
Jump To
Cite 1 - (1848) 154 ER 363
Cite 2 - (1848) 154 ER 363
Salam v Henley Properties (QLD) Pty Ltd [2016] QCATA 98
2 citations
Jump To
Cite 1 - [2016] QCATA 98
Cite 2 - [2016] QCATA 98
V's Family Trust & Anor v Bacchus Holdings Pty Ltd as trustee for the Bacchus Holdings Trust & Anor (No.12) [2012] NSWSC 1591
2 citations
Jump To
Cite 1 - [2012] NSWSC 1591
Cite 2 - [2012] NSWSC 1591
Wharton v Duffy Constructions (QLD) Pty Ltd [2016] QCATA 12
2 citations
Jump To
Cite 1 - [2016] QCATA 12
Cite 2 - [2016] QCATA 12

Cases Citing

Case NameFull CitationFrequency
Swimsmith Pty Ltd t/as Brisbane Prestige Plunge Pools v McMahon (No 2) [2021] QCAT 2443 citations
1

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.