Bieto v Triline Australia Pty Ltd (No 2)
[2003] QDC 307
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- Unreported Judgment
- Bieto v Triline Australia Pty Ltd (No 2)[2003] QDC 307
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Bieto v Triline Australia Pty Ltd (No 2)[2003] QDC 307
Bieto v Triline Australia Pty Ltd (No 2)[2003] QDC 307
DISTRICT COURT OF QUEENSLAND
CITATION: | Bieto & Ors v Triline Australia Pty Ltd (No 2) [2003] QDC 307 |
PARTIES: | JOSE BIETO, JOSIANE BIETO, FRANCOIS BIETO, LOUIS BIETO and MICHEL BIETO Appellants v TRILINE AUSTRALIA PTY LTD Respondent |
FILE NO/S: | Appeal 1901 of 2001 |
DIVISION: | |
PROCEEDING: | Appeal |
ORIGINATING COURT: | Queensland Building Tribunal |
DELIVERED ON: | 22 September 2003 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 20 August 2003 |
JUDGE: | McGill DCJ |
ORDER: | Appeal allowed; decision of the Queensland Building Tribunal of 28 March 2001 in Application number C095-99 be varied by: (a) substituting $43,890 for the sum of $3,375 which the applicant before the tribunal was ordered to pay the respondents before the tribunal; (b) substituting “22 September 2003” for “the date hereunder” in paragraph 1 of that decision; (c) substituting, for paragraph 2 of that decision, an order that the applicant pay three-quarters of the respondents’ costs of the proceeding in the tribunal, including reserved costs, to be assessed if not agreed on the District Court scale appropriate where the amount recovered exceeds $50,000; assessment of the costs payable under the order of the Tribunal as varied be delegated to a Deputy Registrar of the District Court; appellants’ costs of and incidental to this appeal be paid by the respondent; respondent granted an indemnity certificate in respect of the appeal under s 15(3) of the Appeal Costs Fund Act 1973. |
CATCHWORDS: | APPEAL AND NEW TRIAL – Costs – appeal from Queensland Building Tribunal – whether jurisdiction to grant respondent certificate under Appeal Costs Fund Act 1973. DAMAGES – Interest – breach of contract causing diminution in value of land – whether available – basis of award – appropriate rate and date of commencement. INFERIOR TRIBUNALS – Building Tribunal – whether power to award interest by statute or as damages – basis of award where breach of contract causing diminution in value of land. INTEREST – Damages – breach of contract causing diminution in value of land – basis of award – appropriate rate and date of commencement. PRACTICE – Costs – Building Tribunal – whether separate issues – whether costs for party successful overall to be limited because of separate issues on which party failed. Queensland Building Tribunal Act 2000 ss 92, 93(2)(c). Appeal Costs Fund Act 1973 s 4. Anderton v Parkes Horticultural Services Pty Ltd (Appeal 2790/96, McGill DCJ, 15.11.96, unreported) – not followed. Colburt v Beard [1992] 2 Qd R 67 – applied. Hungerford v Walker (1989) 171 CLR 125 – applied. Queensland Building Services Authority v Morris (Appeal 3319/97, Robin DCJ, 24.10.97, unreported) – followed. Thiess v TCN Channel 9 Pty Ltd (No 5) [1994] 1 Qd R 156 – applied. |
COUNSEL: | L Boccabella for the appellants |
SOLICITORS: | A J Torbey & Associates for the appellants Clarke & Kann for the respondent |
- [1]This is an appeal from a decision of the Queensland Building Tribunal which on 28 March 2001 ordered that the respondent pay the appellants $3,375 within a particular time, after which interest was to accrue. The appeal is under the Queensland Building Tribunal Act 2000 (“the Act”) s 92. For reasons delivered on 26 March 2003, I ordered that the appeal be allowed, and the matter listed for further consideration. In essence I held that the tribunal had erred because, having rejected a claim for damages advanced on a particular basis by the appellants, the tribunal member ought to have gone on and allowed damages on the correct basis for breaches of contract which had been proved, if necessary giving the parties the opportunity to lead further evidence. I allowed the appeal but stood over for further consideration, after the parties had had the opportunity to consider the detail of my reasons, the question of whether I would remit the matter to the tribunal or deal with the remaining issue, which was whether and to what extent the value of the appellants’ premises had been reduced by the breaches of contract of the respondent.
- [2]I was subsequently advised that the parties had reached agreement about the amount to be taken into account in that way, and that the only matters remaining in issue were interest and costs. The parties agreed that the diminution in value of the appellants’ premises was $37,500, and, as this replaces the amount of $7,000 allowed by the tribunal for loss of amenity, effect is to be given to their agreement by increasing the amount payable by the respondent to the appellants to $33,875. That amount reflects the balance after the total amount payable on the appellants’ claim against the respondent was set-off against the amount found by the tribunal to have been payable on the respondent’s claim against the appellants.
Interest
- [3]In relation to the question of interest, the appellants sought interest from October 1998, when the house was due for completion under the contract. The respondent however submitted that interest should not be awarded, as most of the final amount payable was in respect of the change in value of the property which had been assessed as at the current value.[1]
- [4]The power of this court on appeal is to confirm, annul, vary or reverse the tribunal’s decision: the Act s 92(6)(a), and to make consequential or ancillary orders or directions: (c). It seems to follow that the court’s power to award interest depends on whether this is something which could have been included by the tribunal in its order; if so, the order of the tribunal which is the subject of the appeal may be varied so as to include it. The tribunal had by s 93(2)(c) of the Act power in circumstances of this nature to “award damages, including damages in the nature of interest”.
Interest under Supreme Court Act 1995 s 47
- [5]On the other hand, in my opinion the tribunal did not have any power under s 47 of the Supreme Court Act 1995 to award interest. By subsection (1) of that section there is a power to include interest in a judgment given to “the court” in respect of any proceedings “in a court of record”. In my opinion the reference to “the court” is a reference to the expression “court of record” that appears earlier in the subsection, and the Queensland Building Tribunal was not a “court of record” for the purposes of this section.[2]
- [6]Apart from the fact that the tribunal was not made a court by the Act, it is not a court of record. That was traditionally a court the acts and judicial proceedings of which were enrolled for perpetual memory and testimony, and which had authority to fine and imprison for contempt: Osborne “A Concise Law Dictionary” (5th Ed 1964) p. 96. In Australia the test generally accepted has been the existence of a power to fine or imprison for contempt or another offence: Ex parte Power; Re Devereaux (1956) 57 SR (NSW) 253 at 260. The Queensland Building Tribunal did not have that power; it had only a power to exclude a person from the tribunal (s 79) or to certify a contempt in writing to the Supreme Court for punishment (s 80). Assuming therefore that the expression “court of record” in s 47 is to be given its technical meaning, the Queensland Building Tribunal was not a court of record, and I know of no reason to depart from that meaning in the interpretation of that section.
- [7]Subsection (2) permits the power also to be exercised by an arbitrator or umpire; those terms also have clearly recognised meanings. An arbitrator is normally a person appointed under a contract to adjudicate on a dispute between the parties to a contract, although in some circumstances an arbitrator may be appointed by order of a court. An umpire is a person who is appointed by the arbitrators when there are an even number of arbitrators, in order to resolve the dispute if the arbitrators disagree on the appropriate outcome: Commercial Arbitration Act 1996 s 12. In my opinion this also does not apply to the Queensland Building Tribunal. It may be that the tribunal had functions which were analogous to those of arbitrators under an arbitration agreement, in that both are concerned to resolve the dispute between the parties, but there is a fundamental difference between the basic nature of the two systems.
- [8]Arbitration is essentially based on the contract between the parties, where the parties have agreed to adopt a particular mechanism to settle disputes between them arising out of the contract. The tribunal however was a creation of statute, being established by the legislature for the purpose of resolving disputes within a particular category of cases which are brought before it by anyone who has the sort of dispute in respect of which the tribunal has jurisdiction. In my opinion the position is simply that s 47 of the 1995 Act does not apply. This is unsurprising; that section was taken from the Common Law Practice Act 1867, s 72. The 1995 Act was simply a consolidation act, and did not take into account recent inventions such as the tribunal. In my opinion the tribunal had no power to award interest under s 47 of the Supreme Court Act 1995.
Interest in the nature of damages
- [9]It did however clearly have the power to award damages in the nature of interest. Such damages were discussed by the High Court in Hungerford v Walker (1989) 171 CLR 125, where Mason CJ and Wilson J said at p. 143 that a plaintiff should in principle be awarded compensation which would restore him to the position he would have been in but for the defendant’s breach of contract or negligence, and that the plaintiff sustains an economic loss if his damages are not paid promptly. “The loss may arise in the form of the investment cost of being deprived of money which could have been invested at interest or used to reduce an existing indebtedness. Or the loss may arise in the form of the borrowing cost, ie, interest payable on borrowed money or interest foregone because an existing investment is realised or reduced.” Their Honours rejected any distinction between a liquidated claim and an unliquidated claim at p. 146. See also p. 149.
- [10]This is similar in outcome to a mechanism for awarding interest on the amount payable, although as pointed out by Brennan and Deane JJ at p. 152 there is an important difference in principle between these two situations. The awarding of damages by way of interest makes it necessary to focus on the particular loss that the party entitled to be paid money has suffered as a result of the non-payment, and for that reason it may well be of particular value to a party who can prove some specific loss (for example, where money has been borrowed to pay for rectification works which ought not to have been necessary but for the other party’s breach, where the interest actually paid on the money borrowed may well be recoverable under the principle in this case). Because of the reference to the investment cost in relation to money which does not reimburse specific borrowings, consideration needs to be given to how the successful party might have deployed the money had it been paid when it ought to have been paid, that is to say, if the obligation to pay it was not unjustifiably disputed.
From when interest runs
- [11]In the present case relevantly the loss suffered by the appellants was in the form of diminution of value. It was therefore not a situation where they incurred actual expenditure, so there can be no question of reimbursement of the consequential costs of borrowing to reimburse actual expenditure. Rather the position is simply that they have been deprived of the opportunity cost to invest the damages payable. In principle damages payable for breach of contract are to place the party in the same position as if the contract had been performed properly.[3] In the present case, if the contract had been performed properly the appellants on completion would have been provided with a house with foundations which were not defective. Because the contract was not performed properly, the appellants received a house with defective foundations, which was as a result less valuable. In my opinion, that was a loss which they suffered at the time of practical completion, when as the tribunal found they ought to have taken possession of the house.[4]
- [12]Strictly speaking the valuation evidence should have been directed to any diminution in value in the premises at that time. This is different from a situation where it is appropriate to measure the loss by reference to the cost of rectification work; in such circumstances, if rectification work is reasonably delayed it will often be appropriate to assess the damages as at the date when rectification ought reasonably to have been undertaken, or if it has not yet been undertaken, as at the date of trial.[5] In such circumstances, it may well be appropriate to assess damages by reference to the cost of rectification as at the date of trial, and then not award interest.
- [13]That however is not the present case. The appellants are essentially receiving compensation for diminution in value, which was suffered at that time. In principle therefore they are entitled to interest from the time when they suffered that loss, although a question arises as to the effect of any change in values between that time and the time the subject of the agreement as to valuation. The parties proceeded on the basis that the written agreement was as to the loss in current value; I think that the written agreement is ambiguous on this, but will assume that it reflects current values.
- [14]Insofar as there is any difference in value between the time when the premises ought to have been handed over to the plaintiff, and now, as to which there is no evidence, it is very likely that that is attributable to changes in land value during the relevant period. The value of improvements is affected by both changes in replacement cost (which tends to increase over time) and the increasing effect of a “new for old” factor, which justifies some deduction from the replacement cost as the premises are not new, which also tends to increase over time. In these circumstances, it is tempting to assume that increases in value over time will be attributable to changes in the value of land rather than improvements, which have not changed (at least for the better) during that period.
- [15]In this case however what is in issue is not the value of the improvements, but the extent of the diminution in that value because of the deficiencies in the foundations. That I suspect will be even less susceptible to change over time than the value of improvements overall. It is in effect what would have to be taken off the price to make it equally saleable, bearing in mind that the purchaser would be faced with these problems, which to some extent affected the way in which the house can be used.[6] It may even be the case that a bigger discount would be necessary for this purpose with a new house than with one which is four years old.
- [16]In these circumstances, I am comforted in applying a presumption of continuance, and on that basis conclude that the diminution in value as agreed, assuming it is a current diminution in value, reflects the diminution in value at the earlier relevant date, and on that basis reflects the loss suffered at that time. Putting the appellants in the same position as if the contract had not been breached, in circumstances where damages are assessed on this basis, notionally involves giving them compensation for the reduced value of the premises at the time when the premises are handed to them.
- [17]In these circumstances, it is I think correct to say that the damages are not reimbursing expenditure which has been incurred in the past, or indeed which will be incurred in the future. Nor is it the case that the loss will only be suffered in the future when the house is sold. A person whose property has been devalued has suffered a loss, even if the loss has not been realised in money.[7] The damages are compensating for a loss which has been suffered in the past, and the damages by way of interest reflect the loss which the appellants have suffered because of the delay in payment of the damages. This is the loss that was referred to in Hungerford v Walker (supra) as opportunity cost, that is to say the effect of being deprived of money which could have been used to repay borrowings, or invested at interest: p. 143.
- [18]Interest should run from the date of breach, that is the date on which the respondent ought to have provided a house properly built in accordance with the contract but did not. Although the contractual date of completion was in October 1998 the tribunal found that practical completion was achieved in accordance with the contract on 4 March 1999: p. 52. The tribunal dealt separately with the question of damages for delay, and in my opinion therefore it is appropriate to allow interest in relation to diminution in value by reference to the date of practical completion. Assuming that the money has not yet been paid, it follows that the appellants are entitled to interest for four and a half years at 6.57 percent, an amount of $10,015. That sum should be added to the amount otherwise payable by the respondent, to produce a total of $43,890.
Rate of interest
- [19]The appellants borrowed money from the Commonwealth Bank to pay for the house which was being built by the respondent,[8] and, having obtained a less valuable house from the respondent than ought to have been obtained, in my opinion it would have been reasonable to have used the money, had it been paid as compensation for diminution of value at the date of practical completion, to reduce the amount of the housing loan. Accordingly it is appropriate to assess interest by way of damages in this case in my opinion on the basis of the interest rate charged to the appellants on the housing loan. The evidence that I have is that that rate was, at least at some stage, 6.57 percent, and I will allow interest at that rate to reflect the additional interest the appellants have paid on the housing loan which otherwise would have been avoided if compensation for the diminution in value had been paid promptly and at the date of completion.
- [20]Had I not considered that this was an appropriate case in which to assess damages by way of interest by reference to the cost of borrowing money which would to that extent have been repaid had the damages been paid when the cause of action arose, but rather assessed damages by reference to the rate of interest at which that money could have been invested in a secure investment, the appropriate rate would have been the rate of interest payable on a bank term deposit, and in accordance with the approach indicated in GPS Power v Gardiner Willis Associates [2001] QSC 35, I would have adopted six percent for that rate.
Costs
- [21]The tribunal never dealt with the question of costs, the appeal being instituted before that issue had been resolved. The appellants seek the costs of the appeal and the costs before the tribunal. They submit that the agreed diminution in value is substantial by comparison with the contract price of the house, being in excess of 60 percent.[9] By the date of practical completion the appellants had paid the respondent under the contract much more than the value of the house delivered. It was submitted that the issue about the foundations and their inadequacy was the major issue before the Queensland Building Tribunal, and that it was necessary to go through a lengthy hearing before the tribunal and a substantial appeal before the appellants obtained justice in relation to the deficiency in the foundations. It was noted that the first appellant had pointed out to the respondent that there was a problem with the foundations even before the slab was laid, in August 1998.[10]
- [22]The appellants also relied on evidence that they were in very modest financial circumstances, with no significant assets other than this house and land in which they were living, and with the first and second appellants (the parents) receiving the aged pension.[11] The house is substantially encumbered in respect of a housing loan and they have two other loans, money borrowed to pay part of the substantial cost of pursuing this claim.
- [23]On the other hand, the respondent submitted that there had been a number of issues in the tribunal. So far as the respondent’s claim in the tribunal was concerned, that was successful and an issue raised by the appellants as to the terms of the contract was resolved against the appellants. There were a number of other issues where the appellants were either entirely unsuccessful, or received substantially less than the amount claimed, and even in relation to the deficiency of the foundations the appellants claim throughout was that they were entitled to the cost of substantial rectification works, in effect the cost of demolishing and reconstructing the house on proper foundations, and they had not succeeded to that extent. There were seven issues pursued in the appeal, in respect of which the appellants had at best succeeded on two.
Proceeding in the tribunal
- [24]The matter had a substantial history in the tribunal. There had been separate applications made in the tribunal by the appellants and by the respondent; on 11 June 1999 the applications were joined, with the present respondent having the carriage of the joined application in the tribunal.[12] It was originally listed for hearing on 15 November 1999 for four days, but on the second day of the hearing the respondent applied for the appointment of an independent expert which application was successful, and the hearing was adjourned. The costs of the adjournment were reserved.[13] The tribunal appointed Mr Beale as an independent expert, and he subsequently gave evidence in respect to his report on 5 September 2000. There were also directions hearings on 6 April 2000, 24 August 2000 and 6 October 2000 before the matter was set down to commence on 16 October 2000. It then ran for seven days.
- [25]The tribunal member who conducted the hearing delivered reasons on 28 March 2001 which ran to 55 pages. The respondent before me was pursuing a claim for $9,610 as the balance owing under the contract. In relation to that claim, the appellants asserted that certain extras claimed ought to have been included in the contract price. It appears that the extras in question came to $1,447,[14] and the tribunal after consideration of the evidence resolved this issue in favour of the respondent. This issue occupied about nine pages of the tribunal’s reasons, so that it was not a trivial aspect of the dispute.
- [26]The remaining matters in issue before the tribunal were those raised in the appellants’ cross-claim. Undoubtedly the dispute about the foundations was the most substantial issue. Because of the appointment of the independent expert, and the acceptance by the tribunal of the evidence of that expert, the tribunal member focused in his reasons on the evidence of that expert and what flowed from it. This occupied 32½ pages of the tribunal’s reasons.
- [27]The tribunal then over the next 10½ pages dealt with the other issues as follows:
- (i)Cornices wrong size – this complaint was justified but rectification involving replastering the house was held to be unreasonable, and $500 for loss of amenity was allowed.
- (ii)Septic tank – cost of supply delivery and installation - claim failed.
- (iii)Connection of storm water – claim failed.
- (iv)Credit difference in local authority fees – claim failed.
- (v)Area surcharge refund – claim failed.
- (vi)Connection of power supply – claim succeeded - $425 allowed.
- (vii)Credit for variation in garage – claim failed.
- (viii)Rent to November 1999 – claim succeeded in part, $2,520 allowed to March 1999.
- (ix)Petrol costs to November 1999 – claim succeeded in part, $2,540 allowed to March 1999.
- (x)Rent and petrol costs for the future – claimed failed.
- (xi)Damages for time and inconvenience visiting site to attend to animals and trees – claim failed.
- (xii)Loss of amenity expectation and enjoyment – claim succeeded - $7,000 allowed.
- (xiii)Damages for anxiety and distress – claimed failed.
- [28]Overall therefore a total of $12,985 was allowed in respect of the five claims which succeeded in whole or in part. These were set off against the respondent’s claim, which produced the balance of $3,375 in favour of the appellants.
The appeal
- [29]The appeal was argued on 5 February 2002. I delivered reasons for judgment extending to about 28 pages. After some introductory remarks I dealt, on just over two pages, with the question of responsibility for the design of the foundations, in respect of which the appellants were successful on the appeal. I then dealt with the suitability of the design, essentially by way of background; this aspect was found in favour of the appellants by the tribunal and that was not disputed. I then noted that the findings of defective construction were not disputed before me, before passing to the question of damages which then occupied 15 pages. On this issue the appellants failed to persuade me that they were entitled to damages measured by reference to the cost of demolition and reconstruction of the house, or the (greater) cost of engineering works to rectify the deficiencies in the foundations of the existing house, but did persuade me that they were entitled to damages based on reduction in value of the house because of the defects in the foundations. I was not able to assess that reduction at the time, but suspected then that it would be substantial, and the subsequent agreement (based on expert valuation evidence, I understand) vindicates my suspicion and also demonstrates that in respect of this issue the appellants have ultimately succeeded in obtaining substantial compensation.
- [30]I then turned to other matters argued on the appeal, in respect of all of which the appellants failed; this occupied just under eight pages of my reasons, although I think it is fair to say that only one of these, involving an issue of construction of the terms of the contract between the parties, was a matter which required any detailed analysis or presented any great difficulty in the context of an appeal of this nature. That particular point required some careful consideration; resolution of the other issues raised on the appeal I found essentially straightforward.
- [31]There were no relevant offers, and at the end of the day the appellants have obtained substantial relief in relation to serious deficiencies in the design and construction of the home. The deficiency in design of the foundations, although a matter for which the respondent is contractually responsible, did not involve any moral fault on the part of the respondent, given the finding of the tribunal that the soil testing undertaken before construction commenced (and before the foundations were designed) was reasonable in extent and in fact failed to identify the particular problems the site posed. But the significant deficiencies in the construction of the foundations identified by the tribunal were certainly the fault of the respondent, through its subcontractors and because of the failure to exercise proper supervision, even though its attention had been drawn to the matter specifically by Mr Bieto, and this aspect of the respondent’s position does not excite any sympathy.
- [32]Certainly the claim in relation to the foundations was the substantial matter argued, involving much more evidence and difficulty, and much more money, than any of the other issues. On the other hand there were a number of other separate issues pursued, in respect of most of which the appellants were unsuccessful. To some extent this would have made the proceedings longer and more complicated than they needed to be, both the proceedings in the tribunal and on the appeal. Given that the appeal was argued over only one day, however, it is difficult to see that the inclusion of these additional issues on the appeal would have had any real effect on the costs of the appeal, even though they certainly had some effect on the amount of work that it was necessary for me to do in order to prepare a judgment on the appeal.[15] It is however more difficult for me to assess the extent to which the costs in the tribunal would have been increased by the inclusion of issues on which the appellants were unsuccessful, but I would be surprised if it did not lead to some not insignificant increase in the costs before the tribunal.
- [33]The respondent relied on two propositions. The first was the general approach in relation to the taxation of costs where there was a claim and a counter-claim laid down in Smith v Madden (1946) 73 CLR 129 at 133-4, that the costs of the counter-claim were only those associated with the extra issues raised by the counter-claim. The other was that it was reasonable to require that a litigant who had succeeded only upon a portion of his or her claim should bear the expense of litigating the other portion or portions: X & Y v Pal (1991) 23 NSWLR 26 per Clarke JA. On this basis the respondent submitted that it should receive the costs of the claim and should pay a proportion of the costs of the cross-claim, bearing in mind that on a number of issues the cross-claim of the appellant were unsuccessful. In relation to the appeal, it was submitted that the appellant succeeded only in two of the seven grounds argued, so the appellant should not receive all its costs of the appeal.
- [34]In my opinion the respondent’s approach is unduly technical, and does not take sufficient account of the extent to which the issues in relation to the foundations dominated the proceeding before the tribunal, and the appeal, both in terms of the amounts involved, the technical complexity of the issues raised, the time taken, and the dominance of these issues within the judgments of the tribunal and this court of appeal. It also seems to me that the traditional approach to apportioning costs between a claim and a cross-claim is not appropriate in this case, partly because two separate claims were originally consolidated by the tribunal, and the outcome as to costs should not in my opinion be significantly affected by the fact that the tribunal chose to give carriage to the consolidated proceeding to the respondent rather than to the appellants. In addition, the statute encouraged the tribunal to resolve issues without formality and technicality.[16] It is also necessary to have regard in relation to costs to the specific provisions of s 61 of the Act, particularly subsections (4) and (5).
- [35]The approach of a court to questions of costs in circumstances where there are a number of issues in a trial and each party succeeds on some of them was discussed by the Full Court in Colburt v Beard [1992] 2 Qd R 67, where there was a preference for assessing costs by reference to heads of controversy, and in a way which avoided complicated forms of taxation which would follow if costs were awarded in respect of particular issues in a technical sense. That approach was endorsed by the court in Thiess v TCN Channel 9 Pty Ltd (No 5) [1994] 1 Qd R 156 at 208, and applied by the court in that case where consideration was given to the identification of substantial issues in controversy, taking into account the time and effort devoted to them, their importance in the context of the overall litigation, and the extent to which controversy in relation to them was resolved in favour of one or the other party, before finally formulating a practical and simple order, that one party pay one third of the costs of the trial of the other party: p. 210. The court also noted that in circumstances of this nature it was important to be cognisant of the way in which the costs of each party had to be borne as a result of the order made. I am not aware of any later decisions which authoritatively reject this approach. It seems to me that, in view of the essentially practical approach of the Full Court in Thiess and Colburt, these authorities provide useful guidance in the context of a proceeding under the Act.
- [36]Approaching the matter in that way, I consider that the appellants ought to have been successful before the tribunal in relation to the matter which was the major matter in controversy between the parties before the tribunal, albeit not the only matter. Although the appellants ought not to have succeeded on their claims as formulated before the tribunal, they ought to have received substantial damages for breach of contract, and in this respect it is significant to note that the respondent’s position was not that the appellants were entitled only to damages on the basis of diminished value, but that the appellants were not entitled to any significant damages in respect of the state of the foundations. Had the issue about the foundations been the only matter in contention the appellants would have certainly succeeded in relation to that issue to a sufficient extent to justify their receiving all of their costs. There was in addition some success in relation to some of the other issues raised, although in respect of most of them the appellants were unsuccessful.[17]
- [37]In my opinion in the context of this case it is correct to identify the dispute about the foundations as the central, dominant issue of the litigation, and to treat the outcome in relation to that issue as the starting point in relation to the question of costs. This is in contradistinction to using the outcome in the respondent’s claim as the starting point in relation to costs, the approach adopted in Smith v Madden. I do not consider however that the other issues which the appellants pursued, on which they were unsuccessful before the tribunal, were so insignificant or so closely connected with the central issue that no regard should be had to them.[18] I think that in all the circumstances of the case it is appropriate to have some regard in the costs order to the fact that there were a number of issues run in respect of which the respondent was forced to incur costs, and in respect of which the appellants were unsuccessful. I consider it unjust to the respondent simply to order that the respondent pay all of the appellants’ costs of the proceedings before the tribunal.
- [38]Bearing in mind the approach adopted in Thiess, I consider that it is appropriate to make allowance for this factor by reducing the costs payable to the appellants in the tribunal. On that basis I will order the respondent to pay three quarters of the appellants’ costs of the proceedings in the tribunal. Consistent with what I understand the practice of the tribunal ordinarily was, those costs are to be assessed on the District Court scale where the amount recovered was in excess of $50,000 (bearing in mind the difficulty and technical complexity of the issues raised in relation to the foundations).
- [39]With regard to the reserved costs, I have not been able to find any expression of reasons for the costs being reserved.[19] It appears that the application for the appointment of an independent expert was only made after the hearing had commenced, and was made by the respondent, and as a result of the success of that application the balance of the hearing had to be aborted. That circumstance suggests that the respondent should pay those reserved costs. It is not clear to me whether in the long run the appointment of an independent expert saved costs overall, or increased them. However, I really do not know very much about the circumstances under which the order came to be made on 17 November 1999, and it may well be that the costs of the adjournment as such will not be very great. In all the circumstances I will not deal with the reserved costs differently from the costs of the proceeding before the tribunal generally, so the costs order in relation to the tribunal in favour of the appellants will apply to the reserved costs as well.
- [40]There is one matter I should specifically mention. The appellants relied on their financial circumstances as a factor favouring an order for costs in their favour. I have not been able to find any authority to support the proposition that this is a relevant consideration in relation to the discretion as to costs. The closest I can find is one case[20] where the court apparently took into account in relation to costs that a party was disabled by poverty from bringing forward witnesses to support a case. Nothing of that kind occurred here, or at least, nothing of that kind was relied on on behalf of the appellants. In my opinion this is not a relevant consideration, and I have not taken it into account in relation to the question of costs.
- [41]With regard to the costs of the appeal, I am not persuaded that those costs were significantly increased by the inclusion of issues in respect of which the appellants were unsuccessful, and I am not persuaded to apportion the costs of the appeal. Relatively little attention was given to the other issues either in oral argument or written submissions. I order the respondent to pay the appellant’s costs of the appeal to be assessed.
- [42]Ordinarily the costs if not agreed would have been assessed, as to the proceedings in the tribunal, by the tribunal, and as to the proceedings in the court, by a deputy registrar. The tribunal however has since been abolished,[21] and it does not appear to me to be open to remit the question of the assessment of costs to the tribunal. Bearing in mind that the costs are to be assessed as if the matter was a proceeding in the District Court, the practical way to deal with the matter is for this court to assess those costs, and for that purpose I will delegate the assessment to a deputy registrar. For practical purposes therefore both assessments if not agreed will be undertaken by a deputy registrar in the usual way. I hope however that the parties can reach some agreement in the matter to avoid incurring further legal costs on this issue.
Respondent’s application under the Appeal Costs Fund Act
- [43]The respondent sought an indemnity certificate in respect of the appeal, on the basis that the appeal succeeded on a question of law, and it was appropriate to grant the certificate because the appeal had succeeded in relation to an approach adopted by the tribunal, or rather the failure of the tribunal to go on and deal with the damages on the correct basis. The respondent’s case was that the appellants were not entitled to damages at all, but it was not a case where the respondent had been contending for a position which the tribunal adopted but the court concluded was wrong. This position was supported by counsel for the appellants, and I think there is some justification in it.
- [44]I have previously expressed the view however that it is not open to this court to issue a certificate under s 15(2) of the Appeal Costs Fund Act, because the Queensland Building Tribunal is not a “court” as defined in s 4 of that Act. That definition is wide enough to include something like the tribunal but only if “there is an appeal to a superior court of law or which may state a case for the opinion or determination of the superior court on a question of law …” There was an appeal from the tribunal to the District Court under s 92, and the tribunal had power to state a case on a question of law for the opinion of the District Court under s 91 of the Act. In Anderton v Parkes Horticultural Services Pty Ltd (Appeal 2790/96, 15.11.96, unreported)[22] I held that the term “superior court” was used in its technical sense, which did not include the District Court: Stevens v Trewin [1968] Qd R 401 at 417. I was concerned that, unless the expression “superior court” was given its technical sense, the word “superior” was unnecessary, since, if the issue is simply where the court sits in the hierarchy of appeals, any court to which there was a right of appeal from a board or other body would be regarded as “superior” to that body in the terms of that hierarchy. I was also concerned that there might be difficulties with the definition in s 4 if the term “court” in the definition of “court” in that section was itself to be defined in accordance with that definition.
- [45]Subsequently his Honour Judge Robin, in Queensland Building Services Authority v Morris (Appeal 3319/97, 24.10.97, unreported) also considered the question and, with some misgivings, concluded that the expression “superior court” was not used in s 4 in the technical sense, but was used in a more informal sense, which would include the District Court. Accordingly his Honour allowed a certificate under s 15 in relation to an appeal to the District Court from the Queensland Building Tribunal. I understand that Judge Robin’s decision has subsequently been followed on other occasions. I concede that his construction is one which may produce the result that the legislation will be thought to work better than it otherwise would, as I recognised in Anderton. His Honour also pointed out a number of other Queensland statutes where the term “superior court” was used other than in its technical sense, and drew attention to the interpretation of “superior contractor” adopted in Hewitt Nominees v Commissioner for Railways [1978] Qd R 256.
- [46]One consideration which I think favours the interpretation adopted by Judge Robin is that, if the term “court” is interpreted as I had interpreted it previously, it seems a little curious that s 15 gives a power both to the Supreme Court and to the District Court to issue an indemnity certificate in respect of an appeal to that court “against the decision of a court,” which the provision in subsection (1) dealing with the Supreme Court would take full advantage of the definition of “court” (the Supreme Court being of course a superior court) but the provision in subsection (3) dealing with the District Court, although using the same term “court”, would have little scope for the operation of the extended definition of that term in s 4, because, apart from appeals to the District Court from a Magistrates Court, there would not be many other occasions when the District Court would deal with an appeal from a board or other body or person within the extended definition of “court”. If there was an appeal from a board or other body or person to a superior court in the technical sense, that is the Supreme Court, it is unlikely that the appeal would be brought (or even could be brought) to the District Court.[23] The use of the same term in subsection (3) suggests that the legislature had in mind that the extended definition of that term in s 4 would apply to appeals to the District Court as well as to appeals to the Supreme Court, and that in turn suggests that the legislature was not using the expression “superior court” in a technical sense.
- [47]It may be, as well, that in my decision in Anderton I was assuming a greater degree of technical precision in the drafting of statutes than my experience since that time would lead me to attribute to the legislature of Queensland.
- [48]In the light of these considerations, the persuasive exposition of his Honour Judge Robin in Morris, and the desirability of judicial comity on this issue, I will no longer follow my earlier decision in Anderton, and prefer to follow the decision in Morris. On that basis, I am now persuaded that there is jurisdiction to give a certificate under s 15(3) of the Appeal Costs Fund Act where an appeal against a decision of the Queensland Building Tribunal to the District Court on a question of law succeeds. That is what has occurred in the present case; I concluded that it was an error of law for the tribunal to fail to go on to award damages on the proper basis. I consider that, in accordance with the ordinary approach to the exercise of the discretion under s 15, it is appropriate in the circumstances of this case to grant a certificate to the respondent in relation to the costs of the appeal, and I do so. This of course will not affect the costs of the proceeding in the tribunal.
Footnotes
[1] The tribunal made an order for interest but only post-judgment interest. There was no challenge by either party to that order, but it should be varied to substitute the date of my judgment.
[2] Heaven Building Contractors Pty Ltd v Jokarta Pty Ltd [1998] QBT 159.
[3] The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 116.
[4] Miliangos v George Frank (Textiles) Ltd [1976] AC 443 at 468.
[5] Dodd Properties Ltd v Canterbury City Council [1980] 1 WLR 433.
[6] It emerged in the course of the evidence before the tribunal that the damages had to take into account that it would be desirable to avoid landscaping which tended to increase the moisture content of the soil near the house, the prospect of some minor damage which will have to be repaired from time to time, a small risk of more serious damage, and any other factor which adversely impacts on the value as a result of this defect in the foundations.
[7] Francis v Wharton [1994] 2 Qd R 584 at 589, 590.
[8] Affidavit of Bieto sworn 20 August 2003 para 9: for the rate of interest on this loan, see Exhibit JB4.
[9] The contract price was $58,620.
[10] Exhibit 56 before the tribunal.
[11] Affidavit of Bieto sworn 20 August 2003.
[12] Order of the chair of the tribunal 11 June 1999.
[13] Order of Member White 17 November 1999 at para 2. It does not appear that on any other occasion the tribunal made any specific order as to costs of any of the various directions hearings or other interlocutory steps. Presumably the costs of all those hearings and orders are treated as costs in the cause.
[14] Reasons of the tribunal p. 4.
[15] Fortunately for the parties, they are not charged court fees by reference to the time that I spent preparing reasons for judgment.
[16] Queensland Building Tribunal Act 2000 s 41(3), (4).
[17] These were separate issues, lacking a common substratum of fact: cf Inn Leisure Industries Pty Ltd v D F McCloy Pty Ltd (1991) 28 FCR 172.
[18] The exception was claim (xiii) in [27], which was consequential on the central claim.
[19] This issue was not addressed specifically in argument.
[20] Hasker v Summers (1884) 10 VLR (E) 204.
[21] Commercial and Consumer Tribunal Act 2003.
[22] My decision on the merits of that appeal appears at (1996) 17 Qld Lawyer R 48.
[23] At one time it was possible to have an appeal under the Justices Act from the decision of a magistrate either to the District Court under s 222, or the Supreme Court under s 209, but that choice has for some time been removed, and in any case the Magistrates Court is clearly a court.