Gillham v Kernohan Construction Pty Ltd (No. 3)
[2024] QCATA 59
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- Gillham v Kernohan Construction Pty Ltd (No. 3)[2024] QCATA 59
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Gillham v Kernohan Construction Pty Ltd (No. 3)[2024] QCATA 59
Gillham v Kernohan Construction Pty Ltd (No. 3)[2024] QCATA 59
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Gillham v Kernohan Construction Pty Ltd (No. 3) [2024] QCATA 59 |
PARTIES: | AUSTIN GILLHAM (applicant/appellant) v KERNOHAN CONSTRUCTION PTY LTD T/AS KERNOHAN CONSTRUCTION (respondent) |
APPLICATION NO/S: | APL191-19 |
ORIGINATING APPLICATION NO/S: | BDL116-15 |
MATTER TYPE: | Appeals |
DELIVERED ON: | 23 May 2024 |
HEARING DATE: | On the papers |
DECISION OF: | Senior Member Brown Member Howe |
ORDERS: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – POWER TO AWARD GENERALLY – SCALE OF COSTS – WHERE NO SCALE PROVIDED Where appellant pursued a number of grounds of appeal – Where majority of appeal grounds were unsuccessful but appellant ultimately succeeded on appeal – Whether costs should be awarded to the appellant – Whether costs should be limited based on the extent of the appellant’s success on appeal – Fixing costs – Appropriate basis upon which to fix costs Queensland Building and Construction Commission Act 1991 (Qld) s 77 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 102, s 107 Australian Conservation Foundation Inc v Forestry Commission of Tasmania (1988) 81 ALR 166 Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304. Cretazzo v Lombardi (1975) 13 SASR 4 Gillham v Kernohan Construction Pty Ltd [2022] QCATA 19 Lyons v Dreamstarter Pty Ltd [2012] QCATA 71. Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 Partington v Urquhart (No. 4) [2019] QCATA 96. Short v Crawley (No 40) [2008] NSWSC 1302 Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256 |
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) |
Applicant: | Queensland Legal |
Respondent: | Bathersby Legal |
REASONS FOR DECISION
- [1]Mr Gillham was successful in appealing the decision of the Tribunal in a proceeding for a building dispute.[1] The costs of the appeal fall to be determined.
- [2]The tribunal may award costs in a proceeding for a building dispute.[2] This power extends to appeal proceedings.[3] The power to award costs requires the exercise of a broad general discretion not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation.[4]
The parties’ submissions
- [3]Mr Gillham says that the costs of the proceeding below have not been determined, the tribunal ordering that the question of costs be adjourned pending the determination of the appeal. Mr Gillham says that the submissions on costs in the proceeding below are relevant to the determination of costs in the appeal proceeding.
- [4]Mr Gillham says that in building dispute proceedings the usual rule is that costs should follow the event unless special or exceptional circumstances exist such as to warrant from this approach to deprive the successful party of its costs. Mr Gillham says that where the costs of legal representation have been incurred by a party in circumstances where a matter is complex, it is not in the interests of justice for the party’s success to be eroded by requiring the party to bear their own costs.
- [5]Mr Gillham says that he was successful in the appeal. He says that the respondent’s claim below was originally for an amount of $78,588.32 and that, on appeal, this amount has been reduced to $1,934.78. Mr Gillham says that the dispute was a complex one, with highly contested claims and counterclaims, expert evidence and a four day hearing below which justified the parties being legally represented in the appeal.
- [6]Kernohan says that of the 34 grounds of appeal relied upon by Mr Gillham, he was ultimately successful on only 2 grounds involving an amount of $10,812.78. Kernohan says that Mr Gillham was therefore unsuccessful on 95% of his grounds of appeal and, by reference to the ‘value’ of the grounds of appeal, Mr Gillham’s success was 10%. Kernohan says that it was in fact the successful party and that Mr Gillham should be ordered to pay its costs of the appeal.
- [7]Kernohan says that regard may be had to the matters set out in s 102(3) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) in deciding whether to award costs. Kernohan says:
- The appeal involved some degree of complexity;
- Mr Gillham’s claim was weak as is evidenced by the extent to which he was largely unsuccessful in the appeal.
- [8]Kernohan also says that the Appeal Tribunal should determine the costs of the proceeding below.
Consideration
- [9]There can be no doubt that the grounds of appeal were numerous and that Mr Gillham was largely unsuccessful in establishing error by the tribunal below. Of the two grounds of appeal on which Mr Gillham was successful, one was a minor mathematical error amounting to $38.94 which was conceded by Kernohan. The sole successful ground of appeal related to error by the tribunal below in relation to the cost of removal of a concrete slab around the perimeter of the house. We found that Kernohan ought to have been aware of the existence of the slab and that the variation claim by Kernohan relating to the costs of the removal of the slab should not have been allowed.
- [10]In bringing the appeal on the 34 grounds relied upon by Mr Gillham, Kernohan was put to considerable expense in defending the proceeding. This was undoubtedly a matter involving a degree of complexity both legally and factually however it should be noted that Mr Gillham himself contributed to this complexity in pursuing an appeal on a multitude of grounds that were almost entirely unsuccessful.
- [11]Generally speaking, costs are not apportioned between issues and the costs of a proceeding are determined by reference to the outcome of the proceedings as a whole without attempting to differentiate between particular issues on which the successful party may not have succeeded.[5] Unreasonable or improper conduct is not a necessary condition for moderating a costs order to reflect a party’s failure on a particular issue.[6] A court will generally only deprive the successful party of the costs relating to an issue on which it was unsuccessful when that issue was clearly dominant or separable. An issue or group of issues is “clearly dominant” when it is clearly dominant in the proceedings as a whole.[7] The general rule may be departed from more readily against a successful plaintiff who has pressed additional issues which have failed, than against a successful defendant who has unsuccessfully raised additional issues.[8]
- [12]In Bostik Australia Pty Ltd v Liddiard (No 2)[9] the New South Wales Court of Appeal summarised the relevant principles governing the making of an order for costs to reflect the time taken in dealing with a particular issue in which the successful party in the proceeding or on the appeal did not succeed:
- Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).
- In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal.
- If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27].
- Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed).
- A separable issue can relate to “any disputed question of fact or law” before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34].
- Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272.
- [13]Given the multitude of appeal grounds it is appropriate to set out in table form each of the grounds of appeal, the damages amount relevant to the ground and whether the ground was successful:
Number | Ground of appeal | Amount (where specified in the reasons for decision) | Successful/ unsuccessful |
Failing to find entitlement of Mr Gillham to deduct an amount from payment claim 4b. | $3,136.00 | Unsuccessful | |
Failing to find Kernohan not required to pay Mr Gillham an amount for gutter guard | $4,840.00 | Unsuccessful | |
2 and 15. | Failing to find Mr Gillham was entitled to retain reduced cost to builder from change in soffit sheeting | $5,000.00 | Unsuccessful |
Awarding interest on moneys withheld by Mr Gillham calculated on an incorrect basis | $38.94 | Successful | |
Failing to find Mr Gillham was entitled to deduct an amount for ducted air conditioning | $7,500.00 | Unsuccessful | |
Failing to find Mr Gillham was entitled to deduct an amount for professional cleaning | $1,821.60 | Unsuccessful | |
Failing to find Mr Gillham was entitled to deduct an amount for the builder’s margin | $5,229.29 | Unsuccessful | |
Awarding interest to Kernohan in respect of monies paid to Master Builders |
| Unsuccessful | |
8 and 9. | Awarding variations claimed by Kernohan |
| Unsuccessful |
Finding that Kernohan was entitled to claim a variation for removal of concrete slab | $10,773.84 | Successful | |
11 and 34. | Finding Mr Gillham was not entitled to reimbursement for variations claimed; Finding that Kernohan was not required to pay Mr Gillham for level bedding | $8,228.00
$7,700.00 | Unsuccessful |
Finding Mr Gillham was not entitled to deduct an amount for the builder’s margin relating to painting |
| Unsuccessful | |
13 and 14. | Finding that Mr Gillham was entitled to recover liquidated damages based on an incorrect period; Finding that Kernohan had validly suspended the works |
| Unsuccessful |
Finding that Mr Gillham was not entitled to claim actual damages in addition to liquidated damages | $28,932.00 | Unsuccessful | |
Incorrectly applying builder’s margin |
| Unsuccessful | |
Finding Kernohan not liable to pay Mr Gillham for relocating pavers |
| Unsuccessful | |
20, 22, 23 and 24. | Finding that Kernohan was not liable to pay Mr Gillham in respect of various items of building work | $9,619.00 | Unsuccessful |
Finding that Kernohan was not liable to pay Mr Gillham in respect of garden swale | $7,498.92 | Unsuccessful | |
Finding that Kernohan was not liable to pay Mr Gillham in respect of rectification of gaps in internal walls and ceilings and removal of cornices | $28,697.50 | Unsuccessful | |
Finding that Kernohan was not liable to pay Mr Gillham in respect of the cost of cleaning a rainwater tank | $172.50 | Unsuccessful | |
Finding that Kernohan was liable to pay Mr Gillham for building items removed | $500.00 | Unsuccessful | |
Finding that Kernohan was not liable to pay Mr Gillham in respect of the cost of windows | $9,066.20 | Unsuccessful | |
Failing to apply a builder’s margin to cost of replacing windows |
| Unsuccessful | |
Finding that Kernohan was not liable to Mr Gillham in respect of a shortened walkway | $854.85 | Unsuccessful | |
Finding that Kernohan was not liable to Mr Gillham in respect of reinstated manholes | $302.93 | Unsuccessful | |
Failing to find that Mr Gillham was entitled to the cost of installing a safe | $220.00 | Unsuccessful | |
Finding that Kernohan was not liable to pay Mr Gillham in respect of pest control works | $440.00 | Unsuccessful |
- [14]Reference to the above table illustrates the extent to which Mr Gillham was unsuccessful on the vast majority of the grounds of appeal. The table also gives some force to Kernohan’s submissions that any costs order should reflect the extent to which Mr Gillham was unsuccessful both by reference to the number of grounds of appeal and the limited financial extent of the successful grounds.
- [15]Nevertheless, Mr Gillham was successful in the appeal and the quantum of his success was not insubstantial. It is relevant however that Mr Gillham was the appellant and pressed a large number of unsuccessful grounds of appeal.
- [16]As the authorities make clear, where an appellant has mixed success any apportionment of costs is a matter of discretion and mathematical precision is not possible.
- [17]In all of the circumstances the appropriate order is that Kernohan pay Mr Gillham’s costs of the appeal. As we have observed, Mr Gillham’s success was limited and he was successful in having the amount payable to Kernohan reduced by an amount of $10,812.78. The quantum of Mr Gillham’s success places the matter firmly in the Magistrates Court monetary jurisdiction. It is therefore appropriate that the costs recoverable by Mr Gillham be restricted accordingly.
- [18]We have considered how, on the one hand, Mr Gillham’s success in the appeal is properly reflected in an order for costs and, on the other, ensuring that the limited success he enjoyed in the context of the appeal generally is also reflected in the costs order. We are also mindful of the significant costs the parties have incurred to date.
- [19]The Tribunal must fix costs if possible.[10] Fixing the costs will obviate the need for costs to be assessed which would inevitably result in further expense and delays.
- [20]The tribunal has observed in a number of decisions that a scale based approach to the assessment of costs is generally appropriate in building disputes. However, this is a matter in which we consider a departure from that general approach to be appropriate. It is appropriate that the costs are determined by reference to Scale D of Part 2, Schedule 2 of the Uniform Civil Procedure Rules 1991. The following amounts are reasonable under that scale:
Instructions to sue (1) $ 1,431.00
Preparation for hearing (7(a)) $ 4,647.00
Counsel’s fees on settling notice of appeal (8(a)) $ 333.30
Counsel’s fees on hearing (8(f)) $ 2,155.00
Attendance of solicitor at hearing (10(a)) $ 861.10
Total $ 9,427.40
- [21]In addition to the above, the following outlays should be allowed:
Filing fees on Application for leave to appeal or appeal $ 691.60
Sundry amounts – postage, phone calls etc $ 50.00
Total $ 741.60
Total costs and outlays $10,169.00
- [22]We fix the costs payable by Kernohan to Mr Gillham in the amount of $10,169.00.
- [23]Kernohan must pay Mr Gillham’s costs of the appeal in the amount of $10,169.00 within 14 days.
- [24]The costs of the proceeding below should be remitted for determination by the tribunal as constituted for that proceeding.
Footnotes
[1] Gillham v Kernohan Construction Pty Ltd [2022] QCATA 19.
[2] Queensland Building and Construction Commission Act 1991 (Qld), s 77(3)(h).
[3] Partington v Urquhart (No. 4) [2019] QCATA 96.
[4] Lyons v Dreamstarter Pty Ltd [2012] QCATA 71.
[5] Cretazzo v Lombardi (1975) 13 SASR 4.
[6] Short v Crawley (No 40) [2008] NSWSC 1302.
[7] Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15; Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256.
[8] Australian Conservation Foundation Inc v Forestry Commission of Tasmania (1988) 81 ALR 166.
[9] [2009] NSWCA 304.
[10] QCAT Act, s 107(1).