Queensland Building Services Authority v Samimi (No 2)
[2021] QDC 203
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- Unreported Judgment
- Queensland Building Services Authority v Samimi (No 2)[2021] QDC 203
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Queensland Building Services Authority v Samimi (No 2)[2021] QDC 203
Queensland Building Services Authority v Samimi (No 2)[2021] QDC 203
DISTRICT COURT OF QUEENSLAND
CITATION: | Queensland Building Services Authority v Samimi & Anor (No 2) [2021] QDC 203 |
PARTIES: | QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (plaintiff/respondent) v KAMRAN SAMIMI (first defendant/applicant) and MOJGAN SAMIMI (second defendant/applicant) |
FILE NO: | 1264/2012 |
DIVISION: | Civil |
PROCEEDING: | Application for costs |
ORIGINATING COURT: | District Court at Brisbane |
DELIVERED ON: | 27 August 2021 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 17 August 2021 |
JUDGE: | RS Jones DCJ |
ORDER: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – where substantive claim concerning recovery of statutory insurance monies against defendant dismissed – where Calderbank offer made early in proceeding rejected by plaintiff – whether plaintiff’s rejection of Calderbank offer unreasonable in the circumstances – where parties sought to recover costs on standard and indemnity basis against one another – whether defendant failed to properly articulate position in pleadings until late in the proceeding – where issues of credit and reliability – where indemnity costs not granted to defendant – where plaintiff’s application for costs dismissed |
LEGISLATION: | Queensland Building and Construction Act 1991 (Qld) ss 71, 111C Uniform Civil Procedure Rules 1999 (Qld) rr 292, 294 |
CASES: | Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 J & D Rigging Pty Ltd v Agripower Australia Limited & Ors [2014] QCA 23; [2014] 9 QLR Samimi & Anor v Queensland Building and Construction Commission [2015] QCA 106 Stewart v Atco Controls Pty Ltd (No 2) [2014] HCA 31; (2014) 252 CLR 331 Oversea Chinese Banking Corporation v Richfield Investments Pty Ltd [2004] VSC 351 Queensland Building Services Authority v Samimi & Anor [2021] QDC 112 Waterman v Gerling Australia Insurance Co P/L (No 2) [2005] NSWSC 1111 |
COUNSEL: | Mr M Williams for the plaintiff/respondent Mr S Monks for the defendants/applicants |
SOLICITORS: | Rostron Carlyle Rojas Lawyers for the plaintiff/respondent Peter Ryan Lawyers for the defendants/applicants |
- [1]This proceeding is concerned with an application for costs on behalf of the defendants and an application for costs on the part of the plaintiff. For the reasons set out below, the orders of the Court are:
- The plaintiff is to pay the costs of the first and second defendants on a standard basis from 29 May 2019.
- The plaintiff’s application for costs is dismissed.
Background
- [2]On 9 July 2021, after an eight day trial, this Court dismissed the plaintiff’s claims against both defendants.[1]
- [3]The action commenced by the plaintiff had been ongoing since 2012 and, as was observed in the substantive judgment, by the time the matter came on for trial, the plaintiff was relying on its sixth further amended statement of claim and the defendant on their sixth further amened defence. The substantive proceeding was concerned with an action commenced by the plaintiff against both defendants to recover statutory insurance monies in the amount of $324,301.17 as a debt pursuant to ss 71(1), 111C(3) and (6) of the Queensland Building and Construction Commission Act 1991 (Qld). For the actions against both defendants to be successful, it was necessary for the Court to be satisfied on the balance of probabilities that the defendants were at “fault” for the purposes of s 71(1) of that Act. Both defendants were directors of the building company Spectrum Home and Land Pty Ltd.
- [4]In the substantive proceeding, it was identified that there were a number of key issues being:
- (i)Was the suspension of preliminary works by the first defendant unlawful?
- (ii)Were the works carried out by the defendants so incomplete and defective that the principal was entitled to terminate the contract?
- (iii)In the event that the principal was entitled to terminate the contract, what was the appropriate level of damages to be awarded?
- (iv)In the event that the principal was not entitled to terminate the contract, what relief should be granted?[2]
- (i)
- [5]In the substantive reasons, the primary witness for the plaintiff was found to be lacking in respect of both credit and reliability.[3] Insofar as the credit of the first defendant was concerned, the Court found for various reasons that in comparison with the findings in respect of credit and reliability of the plaintiff’s principal witness, the first defendant was even worse.[4] The concerns in respect of those witnesses’ credit and reliability was such that the Court observed:[5]
“The end result is that, insofar as the evidence of the doctor and the first defendant is concerned, I will only accept their evidence when it is supported by documentary evidence or other evidence which I am able to accept.”
The respective submissions on behalf of the parties
- [6]On the behalf of the defendants, it was submitted that the plaintiff should be ordered to pay their costs on the standard basis up until 10 February 2016 and on an indemnity basis thereafter. On behalf the plaintiff, it was submitted that the defendants should pay its costs up until 6 October 2020 on the standard basis and, thereafter the plaintiff pay the defendants costs on the standard basis.
- [7]There were two fundamental limbs to the defendant’s application for costs. The first and primary reason was the plaintiff’s rejection of a Calderbank offer made on 10 February 2016. The second basis was that the plaintiff, contrary to what was required, failed to act in the manner of a model litigant. As far as I understand this submission, that unacceptable conduct included the failure to accept the Calderbank offer.
- [8]The offer was headed with the usual introduction “without prejudice save as to costs” and, after denying the plaintiff’s claims went on to say:
“Our clients have chosen to take a commercial approach towards resolving the matters between the parties in the circumstances of this matter where they are of the opinion that they will be ultimately successful.
Our clients’ offer to settle the proceedings on the basis that your client’s claim be dismissed and the proceedings discontinued and that, subject to an exclusion of the costs orders made in our clients’ favour by the Court of Appeal on 15 July 2015, each party bear their own costs.
….
Our client has considered this matter at length and considers that this is a genuine offer of compromise in the circumstances of this matter.”
- [9]In this context, it was submitted on behalf of the defendants that “the plaintiff could and should have determined that the defendant was correct in complaining that the owner/principal had no right to terminate the contract, and in attributing the blame for the delays on the site to Dr Djamshidi’s failure to provide necessary instructions.”[6]
- [10]The offer was said to be open for a period of 14 days from 10 February 2016. The proceeding in the Court of Appeal referred to in that correspondence was concerned with an appeal mounted by the defendants against a decision of this court to award summary judgment in favour of the plaintiff. That appeal was allowed. The orders made by this Court were set aside and the plaintiff’s application for summary judgment was dismissed. Boddice J, with McMurdo P and Morrison JA in agreement, observed that:[7]
“…. At issue is whether the primary judge erred in finding there was no factual dispute requiring a trial, and that the appellants’ grounds for defence of the claim, namely that the payment had been made in error and was not a payment properly made on a claim under the Insurance Scheme, was not justiciable under s 71(1) of the (Queensland Building and Construction Commission Act 1991).”
- [11]Insofar as the defendants might seek to rely on the reasons of the Court of Appeal to support their application in this proceeding, that reliance is misguided. The plaintiff’s case for summary judgment was essentially based on the proposition that once it had decided to pay out under the statutory insurance policy, a builder was required to indemnify it in any event (i.e. as a simple debt).[8]
- [12]As Boddice J recognised, r 292 of the Uniform Civil Procedure Rules (UCPR) contains two requirements when giving summary judgment. First, that there is no real prospect of success in any defence of the claim. Second, that there is no need for a trial. After stating those two limbs of the test, his Honour went on to say:[9]
“The appellant relied on a factual dispute raised in the respondent’s interest which was relevant to the respondent’s entitlement to succeed in the claim. The factual dispute was not sufficiently explained such as to allow the primary judge to conclude there was no need for a trial. A trial may well have resulted in a finding the respondent was not entitled to recover the amount claimed in the proceeding. That was a valid defence to the respondent’s claim for recovery under s 71(1) of the Act.”
The primary judge erred in concluding the matters raised by the appellants were not justiciable in respect of a claim for recovery of a debt under s 71(1) of the Act. The primary judge also erred in concluding that the requirements of r 292 UCPR were met such that it was appropriate to grant summary judgment on the respondent’s claim.”
- [13]The rejection of the plaintiff’s arguments in the Court of Appeal could not in any way be taken as an indication that the plaintiff was unlikely to succeed at trial. As was accepted on behalf of the defendants, the Court of Appeal “held that a builder was entitled to mount a defence if the terms of the policy had not in fact been enlivened (e.g. the owner had suffered no loss, or the contract had not been properly terminated due to the builder’s default)”.[10] The reasons of the Court of Appeal provide no insight as to what the Court thought about the strengths and weaknesses of the parties’ respective cases.
- [14]A number of matters were raised on behalf of the defendants to suggest that the plaintiff had failed to act in a manner consistent with that of a model litigant. I reject those submissions. Contrary to what seemed to be suggested on behalf of the defendants, the plaintiff had fully engaged with the merits of the defendants’ defence as and when amended. Second, there is no basis for inferring that the internal review of the prosecution of the defendants was anything other than a legitimate decision based on the material then available to the plaintiff.
- [15]During the course of submissions, I was also referred to a number of documents in the possession of the plaintiff that predated the commencement of legal proceedings. In a number of respects, these documents foreshadowed aspects of the defendants’ case which were ultimately successfully relied on at trial.
- [16]However, I am not persuaded that those documents are of any particular relevance here for at least two reasons. First, no doubt the plaintiff was at that time confronted with both the defendants’ and plaintiff’s version of events which, in all likelihood, were contradictory in character. Second, unlike the situation at trial, the plaintiff at that time did not have the benefit of pleadings, let alone the opportunity to hear the parties give evidence on oath (or affirmation) including being cross-examined, to discern where it was more likely than not the real truth lay.
The offer
- [17]Turning then to the Calderbank offer made on behalf of the defendants on 10 February 2016. In Stewart v Atco Controls Pty Ltd (No 2),[11] it was said:
“This Court has a general discretion as to costs. The non-acceptance of a Calderbank offer is a factor, in some cases a strong factor, to be taken into account on an application for indemnity costs. The respondent submits that its rejection of the offer was not unreasonable. If that be the test, it would appear to require at least that the respondent point to a reason for not accepting the offer beyond the usual prospects of being successful in litigation.”
- [18]In J & D Rigging Pty Ltd v Agripower Australia Ltd & Ors,[12] Holmes JA (as Her Honour then was) with Applegarth and Boddice JJ agreeing said:
“The failure to accept a Calderbank offer is a matter to which a court should have regard when considering whether to order indemnity costs. The refusal of an offer to compromise does not warrant the exercise of the discretion to award indemnity costs. The critical question is whether the rejection of the offer was unreasonable in the circumstances. The party seeking costs on an indemnity basis must show that the party acted ‘unreasonably or imprudently’ in not accept the Calderbank offer.
In Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2), the Victorian Court of Appeal stated that a court considering a submission that the rejection of a Calderbank offer was unreasonable should ordinarily have regard to at least the following matters:
- (a)the stage of the proceeding at which the offer was received;
- (b)the time allowed to the offeree to consider the offer;
- (c)the extent of the compromise offered;
- (d)the offeree’s prospects of success, assessed as at the date of the offer;
- (e)the clarity with which the terms of the offer were expressed;
- (f)whether the offer foreshadowed an application for an indemnity costs in the event of the offeree’s rejecting it.” (Footnotes deleted).
- [19]While the court in that case was concerned with costs of the appeal, I consider, with respect, that those observations offer useful guidance in the circumstances of this case.
- [20]
“Any attempt to prescribe the reasoning which must accompany [a Calderbank] offer should be resisted. Whether there is a need for the offeror to descend to specificity as to why the offer should be accepted must depend upon a consideration of all of the circumstances existing at the time of the offer. The extent to which the weakness of a party’s position is exposed through the pleadings, affidavits and the various communications between the parties during the course of the litigation may bear upon the significance of the absence of specificity in the informal offer.”
- [21]It can be accepted that the offer was made at a relatively early stage in the proceedings and that the terms of the offer were clear enough.
- [22]However, in all the circumstances, I have reached the conclusion that the decision on the part of the plaintiff to reject the offer was not an unreasonable one. That is so for a number of reasons. First, the offer gave no clear warning that rejection might result in an application for costs on an indemnity basis. Second, while a number of submissions were made which were to the effect that it ought to have been obvious to the plaintiff that it would fail, no attempt was made to point out those so-called obvious deficiencies in its case. In my opinion, this was not a case where at the time the offer was made, the state of the pleadings was such as to reveal an obvious and potentially fatal flaw in the plaintiff’s case. Without more, the offer is little more than a bold assertion to the effect that we think we will win and you will lose so let’s just all walk away.
- [23]Up until 4 February 2016, the plaintiff was confronted with an amended defence prepared by the defendants in person. The second of those defences made a number of unsustainable allegations, including that of equitable fraud. That defence also sought unachievable relief, including relief pursuant to the Judicial Review Act 1991 (Qld) and, for the first time raised largely unintelligible “cross claims” and “claims”, which were later abandoned. Up until then, the plaintiff had cause to have a reasonable degree of confidence about success.
- [24]At or about 4 February 2016, the plaintiff was confronted with the defendants’ further amended defence drafted by their solicitors.[15] A perusal of that document reveals a significant number of material amendments.
- [25]At the time the offer was made on 10 February 2016, the plaintiff was in possession of that amended pleading filed on behalf of the defendants. Further, this was not a case where the new defence involved only minor or technical amendments. There were a significant number of material amendments involved.
- [26]The timeframe of 14 days was not a reasonable one given the extent of the amendments pleaded in the defence filed 4 February 2016. Given the nature and extent of the amendments to the defence, a more generous timeframe ought to have been provided. In this context, I would also observe that the defence filed on 4 February 2016 was itself the subject of substantial amendment by a further amended defence filed 13 November 2017.[16] Indeed, in this regard, it could be reasonably said that the pleadings were a moving feast up until the second day of the hearing before Judge Porter QC. This was when, for the first time, clauses 3 and 11.12 of the contract and the defendants’ implied term to cooperate was sensibly pleaded. Notwithstanding the ongoing amendments to the pleadings, at no time was the offer reopened.
- [27]Given the personalities involved, as well as the lack of plans and specifications, this was a contract almost certainly doomed to fail from the start. Also, having regard to the Court’s findings about credit and reliability together with the overall state of the evidence, it was a difficult task for the Court to determine exactly where liability lay.
- [28]Finally in this context, it is relevant that this is not a case where the plaintiff failed at virtually every turn. The plaintiff was successful in rebutting all but two of the alleged failures to cooperate and, defeated the defendant’s allegation of a separate preliminary works contract.
- [29]For the reasons given, I am left unconvinced that the Calderbank offer warrants the plaintiff paying any part of the defendant’s costs on an indemnity basis.
- [30]Turning then to the plaintiff’s contention that it should only pay the defendants’ costs from 6 October 2020, it was on that date that, pursuant to orders made by Judge Porter QC on 18 September 2020, the defendants expressly pleaded the implied term to cooperate allegation in its final form and, for the first time expressly pleaded the terms of the contract relied on, particularly clauses 3 and 11.12.
- [31]It is true that after Judge Porter QC raised a number of concerns about the pleadings, yet further amendments were made resulting in the amendments made in the fifth further amended defence[17] to the fourth further amended defence.[18] The material difference, relevant to these applications, is that the matters pleaded in the fifth defence at paras 9C and 9D provide further particulars of the allegations made in paras 9C and D of the fourth amended defence.
- [32]However, as I understand it, the plaintiff and the defendants were both ready to litigate on the pleadings as they stood as at the fourth further amended statement of claim and defence. In my view, it would seem somewhat disingenuous for the plaintiff to now say that it was not sufficiently aware of the case it had to meet as pleaded in the fourth amended defence. Further, a comparison between the fourth and third amended defences reveals that, insofar as paras 9C to 9G are concerned, the relevant allegations remained unchanged. [19] The third amended defence was filed 29 May 2019.
- [33]It can be accepted that the defendant failed in respect of a number of substantial allegations made against the plaintiff in this case. That said, it has been observed that r 684 of the UCPR ought not:
“Discourage a defendant from raising all appropriate grounds of defence fearful that if he is unsuccessful on some but has success overall he may not recover all of his costs.”[20]
- [34]Relying on those observations, it is said that the defendants should not be denied their costs because the implied term to cooperate was only properly pleaded as at 6 October 2020. It is said that must follow because they would have succeeded in any event “simply by relying on the written clauses of the contract…”[21]
- [35]It is true that the defendants would have succeeded relying only on Clauses 3.1 and 11.12 of the contract. Those clauses are not expressly pleaded in the third further amended defence. However, in my view, that the defendants would be likely to be relying on those clauses (and others) in the contract were raised with sufficient clarity in that pleading.[22] That defence was filed on 29 May 2019, pursuant to an order made by Judge Andrews on 8 March 2019.
- [36]In all the circumstances, I consider it appropriate that the plaintiff should pay the defendant’s costs from 29 May 2019 but only on the standard basis.
The Plaintiff’s Costs
- [37]Based primarily on the fact that the defendants failed to succeed on a number of substantive aspects of their defence and, that the defendants had not fully articulated their defence until 6 October 2020, the plaintiff asserts that the defendants ought pay its costs up to that date.
- [38]That the defendants did not finalise their defence until 6 October 2020 is not sufficient to warrant the defendant’s having to pay the plaintiff’s costs up to that date. As has been already pointed out, at the end of the day, the defendants’ success was not dependent upon the allegation of there being an implied term to cooperate. The pleadings in this case were somewhat of a moving feast for both sides. In this regard, it is also relevant that the plaintiff itself sought a substantive amendment to its statement of claim on the eve of the trial, being 24 March 2021.
- [39]For the reasons given, the orders of the Court are:
- The plaintiff is to pay the costs of the first and second defendants on a standard basis from 29 May 2019.
- The plaintiff’s application for costs is dismissed.
Footnotes
[1] Queensland Building Services Authority v Samimi & Anor [2021] QDC 112.
[2]Queensland Building Services Authority v Samimi & Anor [2021] QDC 112 at [16].
[3] Ibid at paras 18-25.
[4] Ibid at paras 26-29.
[5] Ibid at para 33.
[6] Defendant’s Submissions on Costs at para 9.4.3.
[7] Samimi & Anor v Queensland Building and Construction Commission [2015] QCA 106 at [4].
[8] Defendant’s Submissions on Costs at para 6.
[9] Samimi & Anor v Queensland Building and Construction Commission [2015] QCA 106 at [39] – [40].
[10] Defendant’s Submissions on Costs at para 6.
[11] (2014) 252 CLR 331 at [4], as applied in Comgrup Supplies Pty Ltd v Products for Industry Pty Ltd [2016] QCA 130 at [1].
[12] [2014] 9 QLR at [5] – [6]
[13] (2005) 13 VR 435 at 27.
[14] [2004] VSC 351.
[15] See Court Document No. 23 – Further Amended Defence.
[16] See Court Document No. 35 – Second Further Amended Defence.
[17] Court Document No. 80 – Fifth Further Amended Defence.
[18] Court Document No. 62 – Fourth Further Amended Defence.
[19] Court Document No. 46 – Third Further Amended Defence.
[20] Waterman v Gerling Australia Insurance Co P/L (No 2) [2005] NSWSC 1111 at [10]. Cited with approval by White J in Neumann contractors P/L v Peet Beachton Syndicate Ltd (No 2) [2009] QSC 383 at [7].
[21] Defendant’s Reply Submissions at paras 3 – 4.
[22] Ibid at paras 9C and 9D.