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McNab Constructions Australia Pty Ltd v Queensland Building Services Authority (No 1)[2010] QDC 132

McNab Constructions Australia Pty Ltd v Queensland Building Services Authority (No 1)[2010] QDC 132

 

DISTRICT COURT OF QUEENSLAND

CITATION:

McNab Constructions Australia Pty Ltd v Queensland Building Services Authority (No 1) [2010] QDC 132

PARTIES:

McNab Constructions Australia Pty Ltd (ACN 102 840 906)

v

Queensland Building Services Authority

FILE NO/S:

BD2699/09

DIVISION:

Civil

PROCEEDING:

Application/Appeal (from CCT) - Orders

ORIGINATING COURT:

Commercial and Consumer Tribunal

DELIVERED ON:

Original reasons delivered on 24 March 2010

Orders delivered on 7 April 2010

DELIVERED AT:

Brisbane 

HEARING DATE:

Heard on the papers

JUDGE:

Dorney QC DCJ

ORDERS:

  1. (1)
    Leave to appeal and file a Notice of Appeal, and leave to file a Notice of Contention, are granted.
  1. (2)
    The decision of the Commercial and Consumer Tribunal of 26 August 2009, that the applicant’s Application in the proceeding filed 20 March 2009 be dismissed, is confirmed.
  1. (3)
    The proceeding is remitted to the Queensland Civil and Administrative Tribunal for further hearing to be dealt with under the Commercial and Consumer Tribunal Act 2003 as if it were still in force and in accordance with the law determined in this appeal.
  1. (4)
    The respondent pay 25% of the appellant’s costs of the appeal to be assessed on the standard basis.
  1. (5)
    The costs of the interlocutory Application heard in the Commercial and Consumer Tribunal be at the discretion of the Queensland Civil and Administrative Tribunal in accordance with the transitional provisions of the Queensland Civil and Administrative Tribunal Act 2009.

CATCHWORDS:

PROCEDURE – COSTS – RECOVERY OF COSTS – where utility of successful outcome for the appellant was limited – where the argument advanced by the appellant invoked an issue of public importance.

Queensland Civil and Administrative Tribunal Act 2009 ss 259, 260

Uniform Civil Procedure Rules rr 681, 684

Neumann Contractors P/L v Peet Beachton Syndicate Limited (No 2) [2009] QSC 383

Pertzel v Qld Paulownia Forests Ltd & Anor [2008] QCA 287; [2008] QCA 344

Waterman v Girling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111

Yara Nipro Pty Ltd v Interfert Australia Pty Ltd (No 2) [2010] QSC 19

COUNSEL:

D. Fraser QC with B. Codd for the Applicant

J. Bond QC with M. Hindman  for the Respondent

SOLICITORS:

Lenz Moreton Solicitors for the Applicant

HWL Ebsworth Solicitors for the Respondent

Introduction

  1. [1]
    On 24 March 2010 I delivered reasons for deciding that the appropriate relief in this appeal is to remit the whole of the case to the Tribunal from which this appeal originated for further hearing.

QCAT

  1. [2]
    By force of the Queensland Civil and Administrative Tribunal Act 2009 (“QCAT Act”) the Commercial and Consumer Tribunal was abolished and QCAT took its place.
  1. [3]
    The relevant transitional provisions under the QCAT Act are s 259 and s 260. The former, by s 259(1), states that the section applies if, before the commencement, a person has, under a former Act, appealed to a court against the decision of a former Tribunal and the appeal has not been finally dealt with at the commencement. Since s 259 is applicable, by s 259(2) the court must hear and decide the appeal under the former Act as if it were still in force. This has been done.
  1. [4]
    Therefore, it is now necessary to have recourse to s 260 of the QCAT Act for the purposes of the relief to be granted. By s 260(1) it applies to an appeal to which s 259 applies. By s 260(2) the court’s decision in the appeal must be dealt with in the way the court’s decision would have been dealt with under the former Act if it were still in force. This brings into play s 260(3) which states that, if the court’s decision in the appeal is to remit the matter to the former Tribunal, with or without directions:-
  1. (a)
    the court must remit the matter to QCAT; and
  1. (b)
    QCAT must deal with the matter under the former Act as if it were still in force.
  1. [5]
    For completeness, s 244 of the QCAT Act contains the relevant definitions of a “decision of a former Tribunal”, a “former Act”, and a “former Tribunal”. All apply here.
  1. [6]
    Consequently, the orders to be made need to take into account those transitional provisions pursuant to Division 4 of Part 2 of Chapter 7 of the QCAT Act.

Form of Orders (Apart from Costs)

  1. [7]
    The submissions of both parties, pursuant to leave given by me on 24 March 2010, do not differ much as to the nature of the orders to be made, save for the issue of costs.
  1. [8]
    In summary form, both parties agree that Orders 1, 2 and 3 are in an appropriate form.
  1. [9]
    As to Order 5, the respondent is content with the form of Order that I had been inclined to make, namely:-

“The costs of the interlocutory Application heard in the Tribunal be at the discretion of the Tribunal.”

  1. [10]
    The applicant/appellant however suggests that Order 5 should read:-

“The costs of the interlocutory Application heard in the Tribunal be determined by the Tribunal in accordance with sections 70 and 71 of the Commercial and Consumer Tribunal Act 2003 (repealed) subject to further submissions by the parties to the Tribunal.”

  1. [11]
    The difference between what I had suggested and what is submitted by the applicant/appellant seems, to me at least, marginal. The Tribunal (now QCAT) would be constrained in any event even under the Order that I was inclined to make to have recourse to s 70 and s 71 of the relevant repealed Act. Therefore, that adds nothing to my suggested Order. As to the additional aspect of there being further submissions by the parties, it might well be thought that that is up to the Tribunal which, in the normal course of events, might well be seen to be acting erroneously if it did not receive further submissions given the nature of the reasoning and outcome in this appeal. Consequently, I am not convinced that the terms of the suggested Order 5 should be any different from than that which I was originally inclined to make.

Costs

  1. [12]
    The approach by the parties as to costs could not be more different. The respondent submits that to deprive the respondent of 50% of its costs of the appeal gives too little weight to the respondent’s substantial success. It urges that a more appropriate costs order would be that the applicant/appellant pay 90% of the respondent’s costs.
  1. [13]
    At the other extreme, the applicant/appellant seeks that Order 4 should read:-

“The respondent pay half of the applicant’s costs of and incidental to the Appeal.”

  1. [14]
    The reasoning proffered by the applicant/appellant is primarily based upon the correct approach being that which was adopted by the Court of Appeal in Pertzel v Qld Paulownia Forests Ltd & Anor [2008] QCA 344.
  1. [15]
    That approach cannot be fully understood without reading the reasons for the decision in the substantive matter which is reported as Pertzel v Qld Paulownia Forests Ltd & Anor [2008] QCA 287.  I will turn to both those sets of reasons later.
  1. [16]
    The substance of what the applicant/appellant submits is that the reasons given by the Tribunal for its conclusions were both wrong in law and the approach of the Tribunal to all of the decisions was “erroneous”. Nevertheless, as is discussed in my reasons formerly given, what is being appealed is the “decision” alleged to be made in error. As to that, I have found that the only decision of the Tribunal which was made in error was the decision that, as a matter of law, under the relevant Act as it existed at the time of the first direction to rectify, the respondent did not have power to issue a direction to rectify the relevant building work to the applicant/appellant. On the second discrete issue, I have found that, as a matter of law, the “decision” of the Tribunal was correct (whatever the reasoning used).
  1. [17]
    It is true, as the applicant/appellant points out, that the appeal vindicated its legal rights in respect to one of the decisions made by the Tribunal, even though the order made was not disturbed. But it is not at all clear that the applicant/appellant would have faced a “potentially lengthy proceeding” before the Tribunal simply on the basis of that error of law. It is not open to the applicant/appellant to focus, on the one hand, on the actual issues in the appeal only while, on the other hand, pointing to events that may potentially have occurred if this interlocutory application had not been made. This is because the de novo hearing was not the proceeding on this appeal, only the “erroneous” at law decisions.
  1. [18]
    Prior to considering the relevant part of the authorities mentioned, it is noted that the applicant/appellant concedes that, at a practical level, it is correct to say that the applicant/appellant failed before the District Court in a substantial respect on the issues argued and the extent of relief. There was a significant amount of the time spent in the overall appeal upon the determination of the question upon which the applicant/appellant failed.

Consideration of Pertzel

  1. [19]
    Before considering exactly what Pertzel, on appeal, decided and what is the discernable ratio of that decision, it is worthwhile reflecting upon the particular provisions of the Uniform Civil Procedure Rules (“UCPR”) which are in play here.
  1. [20]
    The first is r 681. By r 681(2) r 681(1) applies “unless these rules provide otherwise”. Rule 681(1) states that the costs of a proceeding are in the discretion of the court “but follow the event, unless the court orders otherwise”.
  1. [21]
    The second rule that is brought into consideration is r 684. It states, first, by r 684(1) that the court may make an order for costs “in relation to a particular question in  a proceeding”.  Rule 684(2) states that, for r 684(1), the court may declare what percentage of the costs of the proceeding is attributable to the question to which the order relates. 
  1. [22]
    In Yara Nipro Pty Ltd v Interfert Australia Pty Ltd (No 2) [2010] QSC 19, McMurdo J considered both the above rules. His decision was delivered on 5 February 2010.  As he noted, ordinarily, a successful party is not denied its costs because it has succeeded on one argument and not on an alternative case (citing relevant authority): [5]. In specific reference to r 684, he took the view that it “may provide a wider discretion than previous rules in Queensland, but there must be still some basis for departing from the ordinary rule”: also [5]. Necessarily, the circumstances were different there because it was held that, as there was a complete defence to the plaintiff’s claim, the defendant should have its costs on the claim: again at [5].  It is unnecessary to consider the reasons further in so far as they dealt with the costs of the counterclaim.
  1. [23]
    In a case closer to the present circumstances, White J in Neumann Contractors P/L v Peet Beachton Syndicate Limited (No 2) [2009] QSC 383 made an order that the applicant pay 75% of the respondent’s costs of and incidental to the proceeding.  She, also, considered r 684.  After expressing a view that she would prefer not to employ the expression “exceptional” to the circumstances which might enliven a discretion in r 684 (see [6]), she noted that the presence of r 684 ought not discourage a defendant from raising all appropriate grounds of defence fearful that if unsuccessful on some but achieving success overall, there may not be a recovery of all costs: at [7].  She then noted that it was important to keep in mind the observation by Brereton J in Waterman v Girling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 at [10], where it was held that a successful plaintiff who has failed on certain issues may be deprived of costs on those issues, or even ordered to pay the defendant’s costs on them; but, while this course was open, it was one on which the court embarks with hesitancy because justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case, while acknowledging that it may be appropriate to award costs of a separate issue where a clearly definable and severable issue, in which the otherwise successful party failed, has occupied a significant part of the trial: at [7].
  1. [24]
    It was, in general, following that approach outlined in Neumann Contractors that inclined me to the view that I expressed, tentatively, in indicating that an appropriate order in this case might well be that the applicant/appellant pay 50% of the respondent’s costs of the appeal.  At a factual level, it was based upon the applicant/appellant, while succeeding on one question of law, being unsuccessful overall in the sense that the whole of the interlocutory proceeding begun in the Tribunal was remitted back to the Tribunal for its determination to be undertaken after a full de novo hearing which had not begun at the time that this interlocutory application was brought, and heard.  In particular, both parties agreed that Order 2 should be made in terms of the decision of the Tribunal being “confirmed”.
  1. [25]
    It is with that background in mind that it is necessary to consider the two decisions in Pertzel, and the reasons given.  What was decided in the substantive appeal was that two of the five questions – although the fifth depended on the answer to the fourth - that the court below had answered, on an application before the court below whereby the parties had agreed to seek the court’s decision on a number of questions separately from all other questions in the proceeding, were found to have been erroneously decided. As in that case, as here, if all questions had been answered, as the appellant contended on appeal, by the trial judge then the appellant would have succeeded in the proceeding.  But since two of the questions were answered legally incorrectly, the orders below were set aside but only to the extent that those two questions should be answered correctly.  In the conclusion with respect to the costs order that should be made, before the Court of Appeal allowed a re-agitation of the question of costs, it was held, that having regard to the relevant success enjoyed by the parties, the order would be that the respondent should pay one-quarter of the appellant’s costs of the appeal to be assessed on the standard basis: at [55].
  1. [26]
    With that understanding it is necessary to examine the second decision in Pertzel.  In this hearing, the respondent submitted that the existing order should be set aside and that, in its place, the appellant should be ordered to pay either three-quarters or one-half of the respondent’s costs of the appeal to be assessed on the standard basis.  These alternatives resonate with what I had considered ordering here. As characterised by the Court, the thrust of the argument put on behalf of the respondent was that the respondent was “substantially successful” on the appeal, and that this “substantial success” should be reflected in the Court’s disposition of the costs on the appeal: at [3].  But the Court of Appeal noted that the proceeding before the learned primary judge involved, not the trial of the action, but the determination of a number of issues which the parties prevailed upon the primary judge to determine as separate issues, and that the learned primary judge’s decision was reversed on one of those issues: at [4].  As the Court of Appeal wrote, the appellant “was obliged to appeal in order to achieve that success” and the “appeal was, therefore, successful even though that success, and its ultimate utility, was limited”: also at [4].  The reasoning continued by holding that the issue on which the appellant succeeded on appeal was an issue of public importance, with ramifications beyond the result in the action between the parties and was also an issue raised in the action by the respondent: at [5].  Thus, the correction of the erroneous determination of this issue in the respondent’s favour at first instance was a significant public service because that erroneous decision below would have remained uncorrected “had there been no appeal”: also at [5].  Most importantly for this proceeding, the Court of Appeal reasoned that it approached the disposition of the costs of the appeal on the basis that, although each party had enjoyed a measure of success on the appeal, the bringing of the appeal was justified by the need to correct an erroneous view of the law on an important issue “for which the respondent must bear responsibility”: at [6].  Finally, at [7] the court held that:
  • the order initially made in relation to costs was intended to acknowledge that the appellant had achieved important, albeit limited, success in the appeal “which it was obliged to pursue in order to achieve even that limited success”;
  • while it was true to say that, in the end, the success achieved by the appellant on the appeal may be of little utility between the parties, the appeal itself was not concerned with the ultimate result of the action; and
  • that that was so was a consequence of the choice of the parties to proceed to the determination of separate issues rather than proceed to a trial.
  1. [27]
    Hence, if I was uninstructed by a potentially binding authority, I would have been inclined to adhere to the preliminary conclusion that I had reached based on an adoption, although indirect, of the decision in Neumann Contractors, because it seemed to me that the logic of the approach to r 684 of the UCPR is that the Court, where separate and discrete issues such as the ones involved here arise, can make appropriate orders with respect to each of the two contested issues and then, by a process of balancing, determine what an appropriate final order for costs would be bearing in mind the outcome on each issue, and the outcome generally. For example, if the appellant should have 25% of its costs for the question on which it succeeded, if the respondent should have 75% of its costs for the successful outcome on the other issue, and the appeal, for which it contended and assuming (reasonably) that both assessed costs would be roughly equivalent, a balancing would lead to the outcome intimated.
  1. [28]
    But from what I divine to be the ratio of Pertzel, even bringing fully into account the terms of r 684, where, as here, it is concluded that the applicant/appellant was obliged to appeal in order to achieve the success it did, albeit limited, and where there was a correction of an erroneous determination of an issue which was a significant public service, the approach to costs, in the balancing exercise undertaken pursuant to the UCPR, requires, subject to general discretionary considerations, that, since the appeal itself was not concerned with the ultimate result of the underlying proceeding, the appellant should be the one that is the major beneficiary of the eventual costs order after such a balancing exercise has been undertaken. It must be observed, with respect, that this appears to give little meaning to the terms used in r 684 where, as here, it is determined that r 682 is not appropriate for the task undertaken -  although in public law terms the outcome is more understandable here.
  1. [29]
    Since the general circumstances of this appeal proceeding are so little different from those canvassed in Pertzel – including that the respondent must bear responsibility for the erroneous view of the law on an important issue - I conclude that the appropriate order, in the proper exercise of my discretion in this case, is that, given the limited success of the applicant/appellant, the only order to costs should be one in favour of the appellant and that it be limited to 25% of its costs.

Orders

  1. [30]
    The orders that will be made in this case are:
  1. (1)
    Leave to appeal and file a Notice of Appeal, and leave to file a Notice of Contention, are granted.
  1. (2)
    The decision of the Commercial and Consumer Tribunal of 26 August 2009, that the applicant’s Application in the proceeding filed 20 March 2009 be dismissed, is confirmed.
  1. (3)
    The proceeding is remitted to the Queensland Civil and Administrative Tribunal for further hearing to be dealt with under the Commercial and Consumer Tribunal Act 2003 as if it were still in force and in accordance with the law determined in this appeal.
  1. (4)
    The respondent pay 25% of the appellant’s costs of the appeal to be assessed on the standard basis.
  1. (5)
    The costs of the interlocutory Application heard in the Commercial and Consumer Tribunal be at the discretion of the Queensland Civil and Administrative Tribunal in accordance with the transitional provisions of the Queensland Civil and Administrative Tribunal Act 2009.
Close

Editorial Notes

  • Published Case Name:

    McNab Constructions Australia Pty Ltd v Queensland Building Services Authority (No 1)

  • Shortened Case Name:

    McNab Constructions Australia Pty Ltd v Queensland Building Services Authority (No 1)

  • MNC:

    [2010] QDC 132

  • Court:

    QDC

  • Judge(s):

    Dorney QC DCJ

  • Date:

    07 Apr 2010

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2009] QCCTB 18826 Aug 2009McNab applied for orders to set aside 15 Directions to Rectify certain building work; application dismissed: Mr P Lohrisch
Primary Judgment[2010] QDC 13124 Mar 2010McNab applied for leave to appeal against [2009] QCCTB 188; leave granted and proceeding remitted for further hearing according to law: Dorney QC DCJ
Primary Judgment[2010] QDC 13207 Apr 2010Orders in [2010] QDC 131 remade pursuant to commencement of Queensland Civil and Administrative Tribunal Act 2009 (Qld): Dorney QC DCJ
Appeal Determined (QCA)[2010] QCA 38023 Dec 2010McNab applied for leave to appeal against [2010] QDC 131 and QBSA applied for leave to cross-appeal; leave to appeal and cross-appeal granted, appeal dismissed and cross-appeal allowed, orders of the District Court set aside and proceeding remitted to QCAT: M McMurdo P, Holmes and Chesterman JJA
Appeal Determined (QCA)[2011] QCA 608 Feb 2011McNab applied for indemnity certificate per s 15 of the Appeal Costs Fund Act 1973(Qld); indemnity certificate granted: M McMurdo P, Holmes and Chesterman JJA
Special Leave Refused (HCA)[2011] HCATrans 20412 Aug 2011McNab applied for special leave to appeal against [2010] QCA 380; application refused: Hayne and Heydon JJ

Appeal Status

Appeal Determined - Special Leave Refused (HCA)

Cases Cited

Case NameFull CitationFrequency
Neumann Contractors Pty Ltd v Peet Beachton Syndicate Limited (No 2) [2009] QSC 383
2 citations
Jump To
Cite 1 - [2009] QSC 383
Cite 2 - [2009] QSC 383
Pertzel v Qld Paulownia Forests Ltd[2008] 2 Qd R 526; [2008] QCA 287
2 citations
Jump To
Cite 1 - [2008] QCA 287
Cite 2 - [2008] QCA 287
Pertzel v Queensland Paulownia Forests Ltd [2008] QCA 344
2 citations
Jump To
Cite 1 - [2008] QCA 344
Cite 2 - [2008] QCA 344
Waterman v Gerling Australia Insurance Co Pty Ltd (No.2) [2005] NSWSC 1111
2 citations
Jump To
Cite 1 - [2005] NSWSC 1111
Cite 2 - [2005] NSWSC 1111
Yara Nipro Pty Ltd v Interfert Australia Pty Ltd [No 2] [2010] QSC 19
2 citations
Jump To
Cite 1 - [2010] QSC 19
Cite 2 - [2010] QSC 19

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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