Murphy v Number One Quality Homes Pty Ltd
[2022] QCATA 125
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- Unreported Judgment
- Murphy v Number One Quality Homes Pty Ltd[2022] QCATA 125
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Murphy v Number One Quality Homes Pty Ltd[2022] QCATA 125
Murphy v Number One Quality Homes Pty Ltd[2022] QCATA 125
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Murphy & Anor v Number One Quality Homes Pty Ltd [2022] QCATA 125 |
PARTIES: | Daniel murphy (First applicant) judith murphy (Second applicant) v Number One Quality Homes Pty Ltd (respondent) |
APPLICATION NO/S: | APL309-20 |
ORIGINATING APPLICATION NO/S: | BDL364-18 |
MATTER TYPE: | Appeals |
DELIVERED ON: | 2 September 2022 |
HEARING DATE: | 25 August 2022 |
HEARD AT: | Brisbane |
DECISION OF: | President Mellifont |
ORDERS: | The Applicants pay the Respondent’s costs of the application for leave to appeal against the decision of the Tribunal delivered on 7 September 2020 to be agreed or, in default of agreement, to be assessed by an assessor appointed by the Tribunal by reference to the District Court scale of costs. |
CATCHWORDS: | ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – QCATA – where parties were parties to a building dispute decided by QCAT – where the applicants made an application for leave against the decision – where QCATA dismissed the application for leave to appeal – where no order was made as to costs – whether Tribunal has power to award costs in building dispute – whether costs should be awarded – whether costs should be awarded as per Magistrates Court scale Land and Environment Court Act 1979 (NSW) s 69(2) Queensland Building and Construction Commission Act 1991 (Qld) s 77(3) Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 7, s 100, s 106 Supreme Court Act 1986 (Vic) s 24 ACDG Pty Ltd trading as Swimin Construction v Bryant (No 2) [2017] QCAT 216 Allen & Anor v Contrast Constructions Pty Ltd (No 3) [2021] QCATA 143 Anderson v Nick Ruhle Homes Pty Ltd and Anor (No 2) [2012] QCAT 531 Donald Campbell and Co Ltd v Pollak [1927] AC 732 Fast Access Finance (Beaudesert) Pty Ltd and Anor v Charter and Anor (No 2) [2012] QCATA 172 Grace v Grace (No 9) [2014] NSWSC 1239 In re Elgindata Ltd (No 2) [1993] 1 All ER 232 Latoudis v Casey (1990) 170 CLR 534 Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 McNab Constructions Australia Pty Ltd v Queensland Building Services Authority [2013] QCAT 749 Milne v Attorney-General for the State of Tasmania (1956) 95 CLR 460 Mt Cotton Constructions Pty Ltd v Greer & Anor (No 2) [2016] QCAT 387 Murphy & Anor v Number One Quality Homes Pty Ltd [2021] QCATA 128 Norbis v Norbis (1986) 161 CLR 513 Number One Quality Homes Pty Ltd v Murphy & Anor [2020] QCAT 339 Ohn v Walton (1995) 36 NSWLR 77 Oshlack v Richmond River Council (1998) 193 CLR 72 Ritter v Godfrey [1920] 2 KB 47 Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 Tepko Pty Ltd v Water Board (2001) 206 CLR 1 Timbercorp Finance Pty Ltd (in liquidation) v Allan (Costs) [2016] VSC 633 Warren v Queensland Law Society Incorporated (No 2) [2013] QCAT 234 |
APPEARANCES & REPRESENTATION: | This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) |
REASONS FOR DECISION
Introduction
- [1]The respondent (the applicant below) (Number One) has applied to the Appeal Tribunal for the costs of an application for leave to appeal against a decision of the Tribunal delivered on 7 September 2020,[1] the application having been dismissed on 1 November 2021.[2] The past President dealt with the application for leave to appeal. QCATA[3] was reconstituted by me, as me, with consent of the parties.
Background
- [2]What appear to be the uncontroversial facts were summarised by the Tribunal in the following terms:
- (a)By a cost plus contract between the parties, Number One agreed to undertake building work (a dwelling) for the appellants (the respondents below) (Murphys);
- (b)The building work commenced on 31 July 2017 and was substantially complete by 16 May 2018;
- (c)The Murphys took possession of the dwelling on or around 10 June 2018; and
- (d)The Murphys paid to Number One a total of $651,440.32 under the contract.[4]
- (a)
- [3]The issues in dispute were identified by the Tribunal in the following terms:
- (a)On 3 October 2018 the Murphys withdrew from the contract on the ground Number One had failed to provide the Murphys with:
- A copy of the signed contract; and
- A copy of the consumer building guide;
- (b)Number One engaged in misleading and deceptive conduct in representing to the Murphys that the sum of $462,000.00 would “…more than cover the cost …” of constructing the dwelling;
- (c)Number One undertook unapproved variation work; and
- (d)The building work undertaken by Number One was defective.[5]
- (a)
- [4]On 18 December 2018, Number One filed an application for domestic building dispute. Subsequently, it filed an amended application.[6] The Murphys filed a response,[7] an amended response[8] and a further amended response.[9] Number One filed a reply and answer to the amended response[10] and a reply and answer to the further amended response and counter application.[11]
- [5]On 30 April 2020, at a directions hearing, the Murphys submitted that the question whether they had validly withdrawn from the contract should be determined as a preliminary question. They were directed to file submissions and did so, articulating the preliminary question in the following terms:
Did the Murphys withdraw from the building contract that they entered into with Number One dated 26 September 2017, pursuant to schedule 1B, section 35(3) of the Queensland Building and Construction Commission Act 1991 (Qld), on 3 October 2018? If so, are the Murphys entitled to a refund from Number One of $28,373.92?[12]
Tribunal’s decision
- [6]The Tribunal declined to determine the question as a preliminary question. In so doing, it found support in the comments by Kirby and Callinan JJ in their dissenting judgment in Tepko Pty Ltd v Water Board,[13] that the attractions of trials of issues rather than of cases in their totality:
… are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap … Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question.[14]
- [7]The factors which tell against the determination of a preliminary question, it was said in Reading Australia Pty Ltd v Australian Mutual Provident Society,[15] include that the separate determination of the question may:
- (a)Give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial;[16]
- (b)Result in significant overlap between the evidence adduced on the hearing of the separate question and at trial – possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding.[17] This factor will be of particular significance if the Court may be required to form a view as to the credibility of witnesses who may give evidence at both stages of the hearing of the proceeding; or
- (c)Prolong rather than shorten the litigation.[18]
- (a)
- [8]The Tribunal adopted the factors as a useful guide on whether it is appropriate to determine a preliminary question in a proceeding before the Tribunal.[19]
- [9]Contrary to the Murphys’ submissions, the Tribunal held, the determination of the preliminary question involves questions of both fact and law, and further, and in any case, the determination of the preliminary question will give rise to significant contested factual issues, both at the time of the hearing of the preliminary question and at the time of the final hearing of the proceeding and result in an overlap between the evidence adduced on the hearing of the preliminary question and at the final hearing. There is also the very real possibility that this will prolong rather than shorten the proceeding.[20]
QCATA’s decision
- [10]The Murphys applied to QCATA for leave to appeal against the decision of the Tribunal.
- [11]QCATA reviewed the decision at first instance in some detail. It then continued:
[20] In advancing the present application before this Appeal Tribunal, the Murphys’ arguments were premised on an assertion that the Senior Member had “declined to determine, as a preliminary issue, whether the Murphys had validly withdrawn from the relevant building contract because he found that it was arguable that the Murphys were estopped from doing so.[21]
[21] That assertion, however, wrongly characterises the decision made by the Senior Member. The Senior Member was not engaged in determining the merits of the proposed preliminary questions. The Senior Member’s decision was as to whether the proposed questions ought be entertained for determination as separate preliminary issues.
[22] The arguments otherwise advanced by the Murphys on the present application largely replicated the submissions made before the Senior Member about the non-availability of an estoppel in the context of the QBCC Act and the weight to be afforded to the authority of the decision in M J Arthurs Pty Ltd v Isenbert [2017] QDC 85. In other words, the Murphys’ argument went to the substance of the issues sought to be ventilated under the proposed preliminary questions.
[23] However, the Murphys’ submissions did not, with respect, address the true issue for present purposes, namely why they ought be granted leave to appeal against the exercise by the Senior Member of the discretion to refuse to refer the proposed questions for a separate preliminary hearing.
- [12]In advancing the present application before this Appeal Tribunal, it was observed that the Murphys’ arguments were premised on an assertion the Tribunal below had “… declined to determine, as a preliminary issue, whether the Murphys had validly withdrawn from the relevant building contract because the Senior Member found that it was arguable that the Murphys were estopped from doing so.”[22] The assertion, however, wrongly characterises the decision made by the Tribunal:
The Senior Member was not engaged in determining the merits of the proposed preliminary questions. The Senior Member’s decision was as to whether the proposed questions ought be entertained for determination as separate preliminary issues.[23]
- [13]The Appeal Tribunal later referred to the decision of the Court of Appeal in QUYD Pty Ltd v Marvass Pty Ltd[24] and continued:
… The Senior Member’s decision did not determine any substantive rights. The Murphys remain free to repeat and elaborate on the estoppel versus statute arguments at the final hearing. Accordingly, even if the Senior Member erred, that error was not productive of substantial injustice, and on that basis alone the present application for leave to appeal ought be dismissed.”[25] (Emphasis added)
- [14]The application for leave to appeal was dismissed. No order was made in relation to costs.
Legislation
- [15]The Tribunal’s power to award costs in a building dispute under the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) is found in section 77(3) of the Act. To the extent relevant, the subsection provides:
Without limiting the tribunal’s powers to resolve the dispute, the tribunal may exercise 1 or more of the following powers –
(a) – (g) …
- (h)award costs.
- [16]The provision of the QBCC Act is to be contrasted with s 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”). The section provides the parties to a proceeding must bear the party’s own costs for the proceeding, unless otherwise provided under the Act or an enabling Act.
- [17]Also of relevance to the power to award costs in s 77(3) of the QBCC Act is s 7 of the QCAT Act. The latter section applies if a provision of an enabling Act (modifying provision) provides for:
- (a)The tribunal’s functions in jurisdiction conferred by the enabling Act; or
- (b)A matter mentioned in s 6(7) (relationship between the QCAT Act and enabling Acts generally).[26]
- (a)
- [18]
Murphys’ submissions on costs
- [19]The Murphys submit the application for determination of the preliminary question “… was akin to an application for summary judgment.”[29]
- [20]The Murphys, QCATA held, remain free “… to repeat and elaborate on [the issue raised by the question for preliminary determination] at the final hearing.”[30] Hence, it is submitted, an award of costs should not be made against them when, ultimately, the question may be determined in their favour.[31]
- [21]
Number One’s submissions on costs
- [22]Number One submits[34] the costs of the application for leave to appeal should follow the event, citing the decision in Allen & Anor v Contrast Constructions Pty Ltd (No 3),[35] and that no special or exceptional circumstances exist warranting departing from the usual order as to costs, it is submitted.[36]
Discussion
- [23]In Oshlack v Richmond River Council[37] the broad discretion to award costs in section 69(2) of the Land and Environment Court Act 1979 (NSW) (now repealed) was considered by the High Court of Australia. The subsection, to the extent relevant, provided:
Subject to the rules and subject to any other Act:
- (a)costs are in the discretion of the Court;
- (b)the Court may determine by whom and to what extent costs are to be paid; and
- (c)…
- [24]McHugh J, at [65], observes that although the statutory discretion is broadly stated, it is not unqualified. It clearly cannot be exercised capriciously. Importantly, the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation.[38]
- [25]Later, he continues:
By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs …
…
… The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.[39]
- [26]The principles applicable to an award of costs were conveniently summarised by Derham AsJ in Timbercorp Finance Pty Ltd (in liquidation) v Allan (Costs).[40] The power to award costs, in s 24 of the Supreme Court Act 1986 (Vic), as here, is cast in wide terms. At [13] – [15], his Honour said:
[13] … the power to award costs is in the discretion of the Court. Whilst the discretion is absolute and unfettered, it has to be exercised judicially, that is, not by reference to irrelevant or extraneous considerations, but upon facts connected with or leading up to the litigation.[41] In the exercise of the discretion, practices or guidelines have developed.[42] These practices are not legal rules that confine the exercise of the discretion.[43]
[14] Although costs are in the discretion of the Court, there is a settled practice (sometimes called a general rule) that in the absence of good reason to the contrary, a successful litigant should receive his or her costs.[44] It is not, however, a legal rule devised to control the exercise of the discretion.[45]
[15] It is relevant to observe that the purpose of a costs order is to compensate the successful party for the costs incurred, and not to punish the unsuccessful party. That purpose is a guide to the exercise of the discretion.[46]
- [27]
[32] Section 77 of the QBSA Act confers jurisdiction on the Tribunal to determine building disputes such as the one brought by Dreamstarter. Section 77(1)(h) provides that, in such proceedings, the Tribunal may award costs. The section does not provide further guidance or prescription about the occasions for or conditions of exercise of that power.
[33] A jurisdiction given in general terms allows the Tribunal to make an order as to costs that is justified in the circumstances. It is a broad general discretion which must be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation.
[34] Accordingly an enabling Act, the QBSA Act, does, provide otherwise. As a result, the usual position as to costs in the Tribunal is displaced. That result is reinforced by other provisions dealing with the relationship between the QCAT Act and enabling Acts.[50] (Citations omitted)
- [28]The Murphys’ submission that the application for determination of the preliminary question “… was akin to an application for summary judgment …” is rejected. The application before QCATA is different to an application for summary judgment if only because it is an application for leave to appeal from a decision at first instance refusing the application then made. Even if the application for leave to appeal might be likened to an application for summary judgment, it does not necessarily follow that the unsuccessful party will not be ordered to pay the successful party’s costs.
- [29]That the Murphys remain free to raise the question again at the hearing of the proceeding is not to the point. The Murphys sought determination of the question as a preliminary question and were refused. The costs now sought are the costs of the application for leave to appeal.
- [30]QCATA made no order in relation to costs. However, nothing turns on the absence of an award of costs.[51] Section 106 of the QCAT Act expressly provides that costs may be awarded at any stage of a proceeding, including after it has been determined. Further, and in any case, it is well settled that a court or tribunal, after judgment, may hear and determine a subsequent application for costs.[52]
- [31]There remains consideration of whether there is otherwise good reason for not awarding the costs of the application for leave to appeal in favour of Number One. None has been identified by the Murphys.
- [32]In all the circumstances, the Appeal Tribunal, in the exercise of its discretion, grants the application by Number One for a costs award.
Scale of costs
- [33]In a building case about defective work, described as “…factually and legally uncomplicated…” and the amount awarded was $25,200.00, costs were assessed on the Magistrates Court scale of costs[53] Likewise in ACDG Pty Ltd trading as Swimin Construction v Bryant (No 2)[54] where the dispute involved some complexity but the amounts in dispute were “…relatively modest…”, costs were assessed on the Magistrates Court scale of costs.
- [34]Examples of cases involving building disputes where the costs awarded were assessed on the District Court scale of costs include Mt Cotton Constructions Pty Ltd v Greer & Anor (No 2)[55] and McNab Constructions Australia Pty Ltd v Queensland Building Services Authority.[56] In the latter case, Member Deane assessed costs on the District Court scale of costs because of “…the level of complexity…”.[57]
- [35]In an unsuccessful appeal, it has been said, “…the Tribunal has usually applied the District Court scale.”[58] That is not to say, however, that what is usual is what should occur in any given case. The circumstances of the particular case are what must be considered in deciding the appropriate scale.
- [36]Costs on the Supreme Court scale of costs were awarded in Warren v Queensland Law Society Incorporated (No 2).[59] At [47], Wilson J observed:
A direction is also sought that the costs be assessed by reference to the Supreme Court scale under the Uniform Civil Procedure Rules 1999. That direction is sought on the grounds that, before the introduction of the QCAT Act, reviews of decisions of the Council were only available by way of judicial review in the Supreme Court. I am also reminded that, recognising this historical context, QCAT’s President (a Supreme Court Judge) was appointed to hear and determine Ms Warren’s application. In those circumstances, the scales applying in the Supreme Court are appropriate.
- [37]Given the complexity of the dispute, both factually and legally, the amounts involved, and the importance of the question raised by the application for leave to appeal, I have formed the view that it is appropriate the costs be by reference to the District Court scale of costs.
Conclusion
- [38]The order of the Appeal Tribunal is that the Murphys pay Number One’s costs of the application for leave to appeal against the decision of the Tribunal delivered on 7 September 2020 to be agreed or, in default of agreement, to be assessed by an assessor appointed by the Tribunal by reference to the District Court scale of costs.
Footnotes
[1]Number One Quality Homes Pty Ltd v Murphy & Anor [2020] QCAT 339.
[2]Murphy & Anor v Number One Quality Homes Pty Ltd [2021] QCATA 128.
[3] The appeal tribunal within QCAT.
[4]Number One Quality Homes Pty Ltd v Murphy & Anor (supra), at [10].
[5]Number One Quality Homes Pty Ltd v Murphy & Anor (supra), at [11].
[6] Filed 19 May 2020.
[7] Filed 30 January 2019.
[8] Filed 3 September 2019.
[9] Filed 28 May 2020.
[10] Filed 23 September 2019.
[11] Filed 15 June 2020.
[12]Number One Quality Homes Pty Ltd v Murphy & Anor (supra), at [14].
[13] (2001) 206 CLR 1.
[14] (supra), at [168] and [170].
[15] (1999) 217 ALR 495, at 499, [7] per Branson J.
[16]GMB Research & Development Pty Ltd v The Commonwealth [1997] FCA 934.
[17]GMB Research & Development Pty Ltd v The Commonwealth (supra); Arnold v Attorney-General for Victoria [1995] FCA 727).
[18]GMB Research & Development Pty Ltd v The Commonwealth (supra).
[19]Number One Quality Homes Pty Ltd v Murphy & Anor (supra), at [7].
[20]Number One Quality Homes Pty Ltd v Murphy & Anor (supra), at [56].
[21] Murphys’ submissions at [2].
[22] Murphys’ submissions at [2].
[23]Murphy & Anor v Number One Quality Homes Pty Ltd (supra), at [21].
[24] [2009] 1 Qd R 41.
[25] (supra), at [28].
[26] Section 7(1) of the QCAT Act.
[27] Section 7(2) of the QCAT Act.
[28] Section 7(3) of the QCAT Act.
[29] Murphys’ submissions, at [7].
[30]Murphy & Anor v Number One Quality Homes Pty Ltd (supra), at [28].
[31] Murphys’ submissions, at [8] – [15].
[32] Murphys’ submissions, at [16] and [17].
[33] Murphys’ submissions, at [18] and [19].
[34] Number One’s submissions, at [7].
[35] [2021] QCATA 143.
[36] Number One’s submissions, at [12].
[37] (1998) 193 CLR 72.
[38]In re Elgindata Ltd (No 2) [1993] 1 All ER 232.
[39] (supra), at [66] and [67].
[40] [2016] VSC 633.
[41]Latoudis v Casey (1990) 170 CLR 534 at 537; cited with approval in Oshlack v Richmond River Council (supra), at 86 [34].
[42]Oshlack v Richmond River Council (supra) at 86 [35].
[43]Norbis v Norbis (1986) 161 CLR 513, at 537; Oshlack v Richmond River Council (supra), at 86 [35].
[44]Ritter v Godfrey [1920] 2 KB 47 at 52; Donald Campbell and Co Ltd v Pollak [1927] AC 732 at 809; Milne v Attorney-General for the State of Tasmania (1956) 95 CLR 460, 477.
[45]Oshlack v Richmond River Council (supra) at 86 [35].
[46]Latoudis v Casey (supra), per Toohey J at 563, Mason CJ agreeing; per McHugh J, at 567; Ohn v Walton (1995) 36 NSWLR 77 at 79.
[47] Section 77(3) of the QBCC Act. See also Partington & Anor v Urquhart (No 4) [2019] QCATA 96.
[48] [2011] QCATA 142.
[49] As the President of the Land Court then was.
[50] Ssee also Allen & Anor v Contrast Constructions Pty Ltd (No 3) [2021] QCATA 143.
[51]Allen & Anor v Contrast Constructions Pty Ltd (No 3) (supra).
[52]Grace v Grace (No 9) [2014] NSWSC 1239, per Brereton J at [35]. (There are some very limited exceptions, for example, where there is a specific line of authority in respect of specific legislation to the effect that a Court will be functus when it reaches a certain point, without a costs application being made first. Those exceptions are not relevant here.)
[53]Anderson v Nick Ruhle Homes Pty Ltd and Anor (No 2) [2012] QCAT 531, per Member Wood at [22].
[54] [2017] QCAT 216 at [25] per Member Kanowski.
[55] [2016] QCAT 387.
[56] [2013] QCAT 749.
[57] (supra), at [62].
[58]Fast Access Finance (Beaudesert) Pty Ltd and Anor v Charter and Anor (No 2) [2012] QCATA 172 at [20] per Member Forbes.
[59] [2013] QCAT 234.