CITATION:	Wharton v. Duffy Constructions (QLD) Pty Ltd (No. 2) [2015] QCAT 234	

PARTIES:	Bev Wharton 
(Applicants)	
	v	
	Duffy Constructions (QLD) Pty Ltd
(Respondent)	

APPLICATION NUMBER:	BDL212-14	

MATTER TYPE:	Building matters	

HEARING DATE:	On the papers	

HEARD AT:	Brisbane	

DECISION OF:	A/Senior Member Hughes	

DELIVERED ON:	26 June 2015	

DELIVERED AT:	Brisbane	

ORDERS MADE:	1.	Bev Wharton is to pay to Duffy Constructions (QLD) Pty Ltd its costs fixed at $4,380.66 by 14 August 2015.
	
CATCHWORDS:	BUILDING DISPUTE – COSTS – where general rule that successful party is entitled to costs in building dispute – where competing expert evidence - where financial circumstances of unsuccessful party not sufficiently precarious to displace general rule that costs follow event – whether indemnity costs to be awarded – where decision to engage legal representation late in proceedings not unreasonable – where findings on expert evidence did not mean unsuccessful party did not have arguable case – whether costs to be fixed - where claimed costs reduced to standard basis – where costs reduced for issues without merit  

Queensland Building and Construction Commission Act 1991 (Qld) s 77
Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 3, 107

A L Builders Pty Ltd v. Fatseas (No. 2) [2014] QCATA 319
Ascot v. Nursing & Midwifery Board of Australia [2010] QCAT 364
Civic Steel Homes v. Mitra [2006] QDC 322
Colgate-Palmolive v. Cussons (1993) 46 FCR 225
Faulks v. New World Constructions Pty Ltd (No. 2) [2014] QCAT 329
Joanne Baxter and Fifities Food Pty Ltd atf The Ninja Bear Trust t/as Subway Wynum Central v. Subway Realty Pty Ltd and Kennion (Trustees) Pty Ltd [2013] QCAT 316
Leo v. Paulsen [2010] QCAT 122
Lowik v. Carl Linklater Pty Ltd [2010] QCAT 287
Lyons v. Dreamstarter Pty Ltd [2012] QCATA 71
P W Woods (Builders) Pty Ltd & Anor v. Hishon [2014] QCAT 318
S.H.I.F.T. Whitsunday Pty Ltd v. McLean Cooke Pty Ltd (No. 2) [2012] QCAT 396
Stuart Homes and Renovations v. Denton & Anor [2012] QCAT 43
Tamawood Ltd v. Paans [2005] 2 QdR 101
Wharton v. Duffy Constructions (QLD) Pty Ltd [2015] QCAT 180	

   APPEARANCES:		

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).

REASONS FOR DECISION

What is this Application about?

[1]	Bev Wharton unsuccessfully sought orders against Duffy Constructions (QLD) Pty Ltd in a building dispute.
[2]	Having received submissions from the parties, the remaining issue for me to decide is whether I should award costs.
Should Ms Wharton pay Duffy’s costs?
[3]	The Tribunal may award costs when deciding a building dispute. This confers a broad and general discretion on the Tribunal to award costs, displacing the usual ‘no costs position’.
[4]	Ms Wharton submitted that Duffy did not address the issue of articulation joints upon which it succeeded until the hearing. However, I am not persuaded that Ms Wharton would have conceded her case based on Duffy’s evidence, had it been disclosed earlier. This is because her application was not confined to this issue and she was relying on her own expert’s competing evidence.   
[5]	The general rule in building disputes is that a successful party is entitled to recover its costs from the other party. Duffy has successfully responded to Ms Wharton’s application. It has had to spend money to do that. It would not be fair that it should have to pay all those costs. 
[6]	Because of this, I do not accept that Ms Wharton’s financial circumstances are sufficiently precarious to displace the general rule that costs follow the event in building disputes. Ms Wharton must therefore pay Duffy’s costs.
What costs should Ms Wharton pay?
[7]	Duffy submits that costs should be awarded on an indemnity basis because had Ms Duffy engaged legal representation earlier, she would have been advised that she had “no chances of success”. Duffy contends that this is because the defects occurred so long after the work, the Commission had already decided not to issue a Direction to Rectify and Ms Wharton’s expert report was prepared without reference to relevant drawings and reports and therefore based on incorrect facts and assumptions.
[8]	The courts are loathe to orders costs on an indemnity basis in the absence of contumelious conduct by a party. Moreover, in a jurisdiction that contemplates self-representation, Ms Wharton’s decision to engage legal representation is to be made carefully and with a modicum of “legal costs economy”.It is therefore not unreasonable for Ms Wharton to have not engaged legal representation earlier. 
[9]	Regardless, I am not persuaded that earlier legal representation would have resulted in advice that Ms Wharton had no prospects of success. A claim is not vexatious simply because it may not have been strong or did not succeed. Although Ms Wharton did not succeed in her application, it was merely because in the face of competing expert evidence, the Tribunal did not accept her expert’s findings as sufficient to prove an absence of articulation to allow for any differential movement. 
[10]	This does not mean that Ms Wharton did not have an arguable case – the Tribunal was required to carefully consider the evidence of both experts before making its determination. Both experts were found to be honest and credible.
[11]	Equally, I am not satisfied that the proceedings “challenge the umpire’s decision” by not accepting the Commission’s decision not to issue a Direction to Rectify. I have already extensively canvassed the clear distinction between the Commission’s role and the Tribunal’s role in my original reasons for rejecting Duffy’s submissions about the Tribunal’s jurisdiction. Ms Wharton did not go outside a prescribed statutory process, but applied for separate and distinct relief in the Tribunal’s civil jurisdiction - as she was entitled.  
[12]	This means I am not satisfied that to award Duffy’s costs on an indemnity basis. Duffy’s costs are to be awarded on the standard basis and limited to those costs that were reasonably necessary to achieve the outcome. Duffy expended considerable resources on issues of jurisdiction and estoppel that were without merit, not reasonably necessary to dismiss the application and unnecessarily incurred upon the Tribunal’s limited resources. I therefore consider it would not be reasonable for Duffy to recover from Ms Wharton any costs incurred in pursuing those issues.  
What are the appropriate Orders?
[13]	Ms Wharton’s application was dismissed because she did not prove that Duffy’s work caused cracking in her home. However, Duffy’s submissions on jurisdiction and estoppel were also dismissed - the Tribunal did have jurisdiction and Ms Wharton was not estopped from bringing her application. 
[14]	Ms Wharton should therefore pay Duffy’s costs because it spent money to successfully respond to her application. However, Ms Wharton should not pay Duffy’s costs of its unsuccessful arguments relating to jurisdiction and estoppel.
[15]	The Tribunal must fix costs if possible. Duffy submitted that its costs were $9,856.50 and that a “Memorandum of Fees is available for scrutiny of the Tribunal on request”. Viewing the memorandum fees will not assist me unless in itemised from. Because Duffy’s submissions on costs are unclear about whether the memorandum is in itemised form, I will proceed to fix costs on the material before me, consistent with the Tribunal’s mandate to deal with matters in a way that is accessible, fair, just, economical, informal and quick.
[16]	As this was a complex building dispute involving contractual work to a value of approximately $150,000.00 with conflicting expert evidence, it was reasonable for Duffy to engage Counsel.
[17]	However, Duffy devoted initial hearing time and 12 of its 21 pages of submissions to unsuccessful and unnecessary arguments of jurisdiction and estoppel. This did not assist the Tribunal and required the Tribunal to allocate resources to address these issues. I therefore reduce the claimed costs of $9,856.60 by one-third to exclude work for those items, equating to $6,570.99. Because I have awarded Duffy its costs on a standard basis, I will reduce this amount by a further one-third, equating to $4,380.66.
[18]	Because Ms Wharton is on a single income and will need to pay for repairs to her home, I will allow her until 14 August 2015 to pay.
[19]	The appropriate Order is therefore that Bev Wharton is to pay Duffy Constructions (QLD) Pty Ltd its costs fixed at $4,380.66 by 14 August 2015.