Lyons v Queensland Building and Construction Commission & Dreamstarter Pty Ltd [2016] QCAT 218 | Case summary

[1] The decision of the Queensland Building and Construction Commission, made on 19 April, 2010 be substituted with the following decision:-

Lyons v Queensland Building and Construction Commission & Dreamstarter Pty Ltd [2016] QCAT 218 | Case summary | Zoe

[5]

(a) has properly terminated the contract with Dreamstarter Pty Ltd dated 20 June, 2009, as varied;

(b) has properly terminated the agreement constituted or evidenced by Variation 1 dated 14 October, 2009 validly on 3 December, 2009 for Dreamstarter Pty Ltd's default;

(c) liability to Dreamstarter Pty Ltd under the Contract at the date of termination of the Contract was nil; and

(d) reasonable cost of completing the Contract following termination exceeds $435,000.00."

[2] It is declared that the Queensland Building and Construction Commission paid Mr Lyons the sum of $200,000.00 pursuant to the terms of the "BSA Home Warranty Insurance Policy" on 8 April, 2013.

[3] The Queensland Building and Construction Commission pay to Mr Lyons the following costs:

In addition to his costs fixed at $1,000.00 in APL299-10, all his costs of and incidental to GAR150-10, including:

(1) this application;

(2) all of his costs of BDL222-10 from 25 November, 2011 to the date of this order;

(3) his costs of registering two judgments in the Magistrates Court, being M7040/12 and M7041/12; assessed on the Magistrates Court scale on a standard basis;

(4) his costs of winding up Dreamstarter Pty Ltd in Federal Court of Australia proceedings QUD 322 of 2012; assessed on the Federal Court scale on a party and party basis;

(5) his costs of obtaining leave to proceed against Dreamstarter Pty Ltd (in liquidation), in Supreme Court Proceedings S8077/2012 assessed on the Supreme Court Scale on a standard basis;

(6) the costs of the liquidation of Dreamstarter Pty Ltd, in an amount of $17,500.00;

(7) the costs of obtaining the order made 14 September, 2012 in APL086-12, fixed at $30,660.60.

[4] Unless otherwise ordered, the costs to be assessed on the District Court Scale on a standard basis.

[5] Unless otherwise fixed, the costs be fixed in accordance with a costs report prepared by Mr Stephen Hartwell, costs assessor, or such other costs assessor as may be nominated by Mr Lyons.

[32]

[6] The respondent, Queensland Building and Construction Commission (QBCC) is the successor to the Queensland Building Services Authority. The previous entity was responsible for certain actions and decisions relevant to the proceedings. Throughout this decision I will refer to the entity as the QBCC and to its governing legislation as the Queensland Building and Construction Commission Act 1991 (Qld), intending to refer where relevant, to the earlier entity and previous legislation.

[7] In brief, these applications arise out of a domestic building dispute. In 2009, Mr Lyons engaged a builder, Dreamstarter Pty Ltd, to undertake a renovation of his residential property at Paddington, Queensland. The contract was terminated by Mr Lyons on 3 December, 2009 on the basis of a repudiation of the contract by the builder, in that reasonable progress of the works was not maintained so that there was no reasonable prospect of completion by the agreed completion date of 9 December 2009. Further, it was asserted that the builder provided no schedule setting out estimated costs of provisional cost and provisional sum items.

[8] On 16 December, 2009, Mr Lyons made a claim on the statutory insurance scheme administered by the QBCC. The claim was for rectification and/or completion of the contracted building works.

[9] On 9 March, 2010, the QBCC advised Mr Lyons that following review of all information provided by him and the builder, it concluded the contract was not validly terminated upon the builder's default. The claim was declined in full. The QBCC referred Mr Lyons to the Queensland Building Services Authority Insurance Policy Conditions, edition 7, which provides that it is only liable to pay for loss if a contract with a contractor is lawfully terminated.

[10] On 19 April, 2010, the QBCC revised its earlier decision to say that because a complicated contractual argument exists between Mr Lyons and the builder, the QBCC cannot finally determine whether or not Mr Lyons has validly terminated the contract. However, it expressed the opinion that because of negotiations over an extensive variation to the works, it could not be said that the builder was not progressing with reasonable diligence and given the amount of work performed, the builder was undertaking work at a reasonable rate. Further, the lack of detail in the schedule of costs for provisional cost and provisional sum items was not such as to amount to a substantial breach of contract, justifying termination of the contract. It concluded that the manner of termination by Mr Lyons was valid, however, the QBCC was of the opinion that the purported termination was not due to the contractor's default. The QBCC said that if a formal decision was obtained from the Queensland Civil and Administrative Tribunal (QCAT), stating that the contract was properly terminated at the contractors default, then depending on the reasons for the decision, Mr Lyons may be entitled to assistance from the insurance scheme in the future.

[11] On 17 May, 2010, Mr Lyons filed an application for review of the decision of the QBCC, made 19 April, 2010. Those proceedings are GAR150-10.

[12] On 16 July, 2010, Dreamstarter Pty Ltd commenced proceedings against Mr Lyons in the QCAT, asserting that Mr Lyons was in breach of the contract and had repudiated the contract. Dreamstarter Pty Ltd sought recovery of $35,110.00 lost profit and an unpaid progress claim in the sum of $98,435.70, together with interest. Those proceedings are BDL222-10.

[13] On 12 August, 2010, the QCAT directed that Dreamstarter Pty Ltd be joined as a respondent in the Review Proceeding and that the review application be stayed pending a resolution of BDL222-10.

[14] Mr Lyons draws my attention to the undertaking given by the QBCC on 8 December, 2010 at a Directions Hearing relevant to his application to terminate the stay order: "Both the parties - this is the application GAR 150-10 - are arguing the issue of who properly terminated the Contract and they're arguing quantum. They are the only two things that need to be determined. The Authority is offering to abide the outcome. It is undertaking now to abide the outcome."[1]

[15] On 13 April, 2011 the QCAT refused the application by Mr Lyons to terminate the stay order. That decision was appealed.

[16] The appeal decision was delivered in APL299-10 on 25 August, 2011. Although the appeal was successful, a further stay order was made pending resolution of the Builder's Proceeding.

[17] Other proceedings ensued in the Builder's Proceeding including an application for security for costs which was denied, a successful appeal against that decision (APL234-19), an application for leave to withdraw on the part of the builder; and a successful appeal against the order denying Mr Lyons' application to dismiss the Builder's Proceeding and granting the builder leave to withdraw (APL 86-12). Mr Lyons also registered two judgments in the Magistrates Court in relation to costs orders made by the QCAT against the builder in the security for costs application, in amounts of $59,635.35 and $30,660.60. Federal Court QUD 322/12 is Mr Lyons' successful application to wind up the builder. Supreme Court Application No. S8077/2012 is Mr Lyons successful application for leave to proceed in the Builder's Proceeding against the builder, a company then in liquidation.

[18] On 14 September, 2012 (revised on 26 November, 2012), the then President of the QCAT, Justice Wilson, made orders dismissing the builder's claim and declaring, by consent that Mr Lyons: "Terminated the Contract between Andrew Lyons and Dreamstarter dated 20 June, 2009 as varied ("the Contract") validly on 3 December 2009 for Dreamstarter Pty Ltd's default".

[19] On 20 September, 2012, the Tribunal ordered that the builder pay Mr Lyons $435,000.00 for the costs of completing the work and pay Mr Lyon's costs. The order as to costs was without prejudice to Mr Lyons' right to seek costs against the QBCC.

[20] By letter dated 11 March, 2013, the QBCC advised Mr Lyons that because the QCAT had declared that the building contract was validly terminated, its decision disallowing his claim is amended to allow the claim. The QBCC thereafter paid the statutory maximum for incomplete works under the Insurance Scheme, to Mr Lyons. That sum was $200,000. On 15 September, 2015, the QBCC paid Mr Lyons the sum of $173,724.41 under the insurance scheme, for rectification of defective work. The rectification claim was itself the subject of Review Proceeding, GAR379-14, which does not form part of these deliberations.

[33]

[21] Mr Lyons has filed 5 applications. Initially, all 5 came before me. It was determined that an appeal tribunal would be constituted to hear the appeals, following a decision in the 2 matters remaining to be dealt with by me. The 2 applications I heard relate to GAR150-10 and BDL222-10

[22] The relief sought by Mr Lyons is set out in a Consolidated Schedule of Orders Sought, filed 25 June, 2015 pursuant to Directions made on 18 June, 2015. The relief sought is set out below. Mr Lyons intends that this wording replaces the wording in the applications filed in the proceedings:

(a) GAR 150-10 filed 24 December, 2014, seeks:

(i) that the Tribunal declares to be incorrect and not the preferable decision, the decision of the QBCC to reject the applicant's "claim for assistance under the Statutory Insurance Scheme" conveyed by the QBCC's letter to the applicant dated 19.4.10.

(ii) That the Tribunal declares that the correct and preferable decision on the applicant's claim under clause 1 of the BSA Home Warranty Insurance Policy held by the applicant with the respondent QBCC ("the Policy") was to decide,:

to allow wholly the applicant's claim for payment under clause 1 of the Policy ("the Non completion Claim");

that the applicant terminated the contract between the applicant and Dreamstarter Pty Ltd (in liquidation) dated 20 June 2009 as varied ("the Contract") validly on 3 December 2009 ("the Termination");

that the Termination was upon the default of Dreamstarter Pty Ltd (in liquidation) within the meaning of cl 1.2 (b) of the Policy; and '

that the applicant was entitled to payment of $200,000 in respect of the Non-completion claim. For the avoidance of doubt, this sum is exclusive of any entitlement to costs or interest.

(iii) A declaration that the QBCC paid $200,000 to the applicant on or about 8.4.13.

(iv) An order that the respondent QBCC pay to the applicant interest:

of $81,005.15 in relation to the sum of $200,000 for the period from 16.12.09 to 8.4.13; or, alternatively,

on the $200,000 at such other rate or rates as the Tribunal may consider appropriate for the period from 16.12.09 to 8.4.13 or such other period/s as the Tribunal may consider appropriate; and

on such sums as may be awarded to the applicant for costs including expenses at the rate of 14.23% pa or such other rate or rates as the Tribunal may consider appropriate commencing on such date as the Tribunal may nominate and ending upon payment of the said costs including expenses.

(v) An order that the QBCC pay the applicant's costs of and incidental to GAR 150-10 fixed or assessed on the District Court scale on an indemnity basis.

(vi) An order or declaration that the applicant's costs of and incidental to GAR 150-10 include:

his costs of and incidental to BDL222-10 to 21.10.11 and the costs referred to in paragraphs 56 to 59 inclusive of Mr Winter's Fifth Affidavit sworn 3.4.12, all fixed at $146,411.25 or, alternatively, at such sum as may be fixed or assessed on the District Court Scale on an indemnity basis by the Tribunal, if not agreed;

his costs of and incidental to BDL 222-10 from 21.10.11 that are not within the preceding subparagraph at such sum as may be fixed or assessed on the District Court scale on an indemnity basis by the Tribunal, if not agreed;

his costs of and incidental to APL 234-10;

his costs of and incidental to APL 86-12;

his costs of and incidental to Magistrates' Court proceeding M7040/2012 and M7041/2012 fixed or assessed by the Tribunal on that Court's scale on an indemnity basis;

his costs of and incidental to Federal Court QUD 322/2012 fixed at $4,937.95 (or otherwise fixed or assessed by the Tribunal on that Court's scale on an indemnity basis)

his costs of and incidental to Supreme Court S8077/2012 fixed or assessed by the Tribunal on that Court's scale on an indemnity basis; and

$17,500, being the costs of and incidental to the liquidation of Dreamstarter Pty Ltd (in liquidation).

(vii) That the abovementioned costs of and incidental to APL234-10:

be fixed at $30,660.60 (which sum, for the avoidance of doubt, excludes any sum in relation to M7041/2012, that sum being payable separately);

In the alternative to the preceding subparagraph:

(i) include Mr Lyons' costs of Magistrates' Court proceeding M7041/2012 (Lyons v Dreamstarter Pty Ltd) fixed or assessed by the Tribunal on that Court's scale on an indemnity basis; and

(ii) otherwise be fixed or assessed by the Tribunal on the District Court scale on an indemnity basis.

(viii) That the abovementioned costs of and incidental to APL86-12:

include Mr Lyons' costs of and incidental to Magistrates' Court proceedings M7040/2012 and M7041/2012 fixed or assessed by the Tribunal on that court's scale on an indemnity basis;

include Mr Lyons' costs of and incidental to Federal Court QUD 322/2012 fixed at $4,937.95 (or fixed or assessed by the Tribunal on an indemnity basis at such other sum as the Tribunal considers appropriate);

include Mr Lyons' costs of and incidental to Supreme Court S8 077/2012 fixed or assessed by the Tribunal on that Court's scale on an indemnity basis;

include $17,500, being the costs of and incidental to the liquidation of Dreamstarter Pty Ltd (in liquidation);

include costs in addition to those addressed in the preceding four subparagraphs fixed at $30,660.60 (alternatively, be fixed or assessed by the Tribunal on the District Court scale on an indemnity basis); and

be fixed or assessed at such total sum as the Tribunal considers appropriate.

(ix) An order that the QBCC pay Mr Lyons' costs of and incidental to this application fixed or assessed on an indemnity basis on the District Court scale.

(x) Further, or in the alternative to the preceding five paragraphs, where at the substantive hearing of this application costs are not fixed at the specific sum nominated in the above paragraphs, or where no such sum is nominated, that at the substantive hearing of this application that the Tribunal make such directions and further or other orders as the Tribunal may consider appropriate for the subsequent fixing or assessing of those costs such as a direction that the costs be fixed in accordance with a costs assessment by a costs assessor nominated by the applicant.

(xi) If QCATA reserves the costs of and incidental to APL 299-10 to the Tribunal deciding the disposition of the costs of GAR 150-10, that the QBCC pay Mr Lyons' costs of and incidental to APL 299-10:

at $30,660.60; or, alternatively,

fixed or assessed on lthe District Court scale on an indemnity basis; or alternatively,

fixed or assessed as directed by the Tribunal, e.g. by a direction that the costs be fixed in accordance with a costs assessment by a costs assessor nominated by the applicant.

(xii) Interest on costs.

(xiii) Such further or other order as the Tribunal may consider appropriate.

[34]

(b) BDL222-10 filed 3 July, 2013 which seeks, in the alternative to the Orders sought in the Review Proceeding:

(i) an Order that QBCC be joined as a party to the proceeding.

(ii) An Order that QBCC pay to Mr Lyons his costs of and incidental to BDL222-310.

(iii) That the said costs be assessed on the District Court scale on an indemnity basis save where an alternative assessment or basis for assessment is expressed below.

(iv) That, subject to orders against the QBCC covering the same costs that may be made in cognate proceedings, Mr Lyons' said costs include his costs of:

BDL222-1- to 21.10.11 and the costs referred to in paragraphs 56 to 59 inclusive of Mr Winter's Fifth Affidavit sworn 3.4.12 all fixed at $146,411.25 or alternatively, at such sum as may be assessed or fixed by the Tribunal, if not agreed;

BDL222-10 from 21.10.11 that are not within the preceding clause "a" at such sum as may be assessed or fixed by the Tribunal, if not agreed;

Magistrates' Court proceeding M7040/2012 and 7041 /2012 on that Court's scale on an indemnity basis;

Federal Court QUD 322/2012 fixed at $4,937.95 (or such other sum as the Tribunal considers appropriate);

Supreme Court S8077/2012 assessed on that Court's scale on an indemnity basis; and

$17,500, being the costs of and incidental to the liquidation of Dreamstarter Pty Ltd (in liquidation).

(v) Further, or in the alternative to the preceding paragraph, such further or other orders as to costs, including the assessment or fixing of costs, as the Tribunal may consider appropriate.

(vi) Directions as to the fixing of costs, e.g. a direction that the costs be fixed in accordance with a costs assessment by a costs assessor nominated by the applicant.

(vii) Interest on costs.

(viii) Such further or other order as the Tribunal may consider appropriate; and

(ix) Costs of and incidental to this application fixed or assessed on the District Court scale on an indemnity basis.

[23] As part of Mr Lyons submissions I was handed an overview of costs, orders and evidence. That document totals the claim for costs at $613,022.15 and interest at $81,005.15. An alternative interest calculation was also handed up, claiming $67,101.37.

[24] The sums sought in the appeal proceedings currently on foot ( APL299-10; APL 234-10 and APL086-12) have been included in Mr Lyons total claim for costs made in the two applications before me.

[25] It was submitted by Counsel for Mr Lyons that if the present applications are successful it will not be necessary for Mr Lyons to seek orders in the appeal matters, to join the QBCC to the appeals and to seek orders for costs.

[36]

[27] Mr Lyons handed me a schedule of the material filed and relied upon by him. Apart from the applications, he relies upon the following material:

(a) Statement of A Lyons (No. 6) filed 18 May, 2015 and in particular the accompanying documents.

(b) Folder - affidavits of RJB Winter (Affidavits 1-6), filed 18 May, 2015.

(c) Folder - affidavits and statements of A Lyons (1-6).

(d) Applicant's bundle of documents - bundle 1 - documents filed in various Tribunal proceedings.

(e) Consolidated Schedule of Orders sought by the applicant homeowner pursuant to directions made on 18 June, 2015, filed 25 June, 2015.

(f) Statement of A Lyons (No.7) filed 3 July, 2015.

(g) Applicant's bundle of documents - bundle 2 - volumes 1-3, filed 20 August, 2015.

(h) Homeowner's Submissions - costs - Part 1 - costs Orders in the Review Proceeding.

(i) Homeowner's submissions -costs- Part 2 -costs orders in the Builder's Proceeding against the insurer and further interests of justice considerations - Lyons v QBCC -GAR 150-10 and cognate proceedings, filed 14 September, 2015.

(j) Homeowner's submissions - interest - GAR 150-10- V4 - Lyons v QBCC, GAR 150-10, filed 14 September, 2015.

(k) Homeowner's submissions - costs -quantum within particular proceedings -V6 - Lyons v QBCC, GAR 150-10 and other proceedings, filed 15 September, 2015.

(l) Statement of A Lyons (No.8), filed 28 September, 2015.

(m) Homeowner's submissions - costs - Part 3 - reopening the costs decision - Lyons v QBCC APL 299-10, filed 12 October, 2015. It was later said that these submissions are to be ignored for the purpose of this application.

[28] Mr Lyons tendered a core bundle of documents. That bundle was later updated by the addition of core documents relied upon by the respondent, photocopied on blue paper.

[29] Mr Lyons also relies upon his responses to the QBCC's objections to his material, set out in a consolidated schedule tendered at hearing of this application.

[30] Finally, Mr Lyons' provided me with a copy of his Submissions in Reply.

[40]

[34] The QBCC asserts that the Stay Appeal decision is a complete answer to all Mr Lyons' claims and that these applications are a collateral attack on the decision, in circumstances where the decision was not appealed.

[35] In particular, the QBCC says that the Appeal Tribunal:

(i) identified and found that the insurance scheme requires an applicant to establish the condition precedent to payment under the scheme. That is, that the contract was lawfully terminated by the homeowner;

(ii) found that the relevant parties to the determination of who lawfully terminated the contract are the homeowner and the builder;

(iii) determined that the QBCC should not be a party to that dispute; and

(iv) fully appreciated that Mr Lyons wanted to safeguard his costs, but found that it was not appropriate to expose the QBCC to costs orders in the building dispute.

[36] The QBCC submits that the Stay Appeal does not just decide which matter is heard first. The QBCC says that the Stay Appeal decided some fundamental issues.

[37] The QBCC submits that in light of the Stay Appeal decision, it is not appropriate to order costs against the QBCC in the Review Proceeding.

[38] Mr Lyons says the QBCC's reliance upon the decision in the Stay Appeal, in the present application is misplaced. Mr Lyons submits that the decision did not determine who, if anyone, should pay costs when the matters the subject of the two sets of proceedings were concluded. It simply decided the sequence in which those proceedings should be determined. I accept that submission. Mr Lyons also says that the QBCC appears to mis-state the findings of the Appeal Tribunal in critical respects. He says that there is no foundation for the submission that the Appeal Tribunal found it was not appropriate to expose the Commission to adverse costs orders in proceedings in which it largely had no interest. I agree that there is no finding by the appeal tribunal as submitted by the QBCC.

[39] The appeal tribunal considered a number of grounds of appeal from the decision of a Tribunal Member to stay the Review Proceeding pending resolution of the Builder's Proceeding. In his submissions to the Appeal Tribunal, Mr Lyons asserted the inappropriateness of ordering any stay in the Review Proceeding and urged the appropriateness of having the Review Proceeding and the Builder's Proceeding heard together.

[40] The Appeal Tribunal noted two arguments by Mr Lyons in favour of the matters being heard together. First, that he wished to safeguard his potential to recover costs from a financially sound litigant. The Appeal Tribunal recognised that if the matters were heard together there was potential to expose the QBCC to a costs order in Mr Lyon's favour, encompassing both proceedings. Second, Mr Lyons argued that it is cheaper, quicker and fairer for the 2 matters to be heard together.[2]

[41] The Appeal Tribunal noted the QBCC's argument that there is a condition preceding its accrual of liability under the contract of insurance, namely a default justifying termination resting with the builder and determination of the extent of Mr Lyons' remaining liability under the building contract. [3] It also noted the undertaking given by the QBCC to abide by the decision of the tribunal on the question of lawful termination of the building contract. The Appeal Tribunal found that the undertaking met Mr Lyons concern about a decision in the Builder's Proceeding not deciding any issue falling for decision in the Review Proceeding. The tribunal found that the undertaking was sufficiently wide.[4]The Appeal Tribunal accepted these arguments. They were the two key factors which resulted in the Appeal Tribunal's decision that the two Proceedings should not be joined and that the Review Proceeding should be stayed, pending prior resolution of the Builder's Proceeding.

[42] The Appeal Tribunal did not say that exposing the QBCC to a costs order was undesirable. It made no express finding that it was not appropriate to expose the QBCC to a cost order in the Builder's Proceeding. Nor did the Appeal Tribunal expressly proffer that as a reason why the matters should not be heard together. I interpret the Appeal Tribunal as saying that exposing the QBCC to a possible costs order, was not a sufficient reason for the matters to be heard together. The Appeal Tribunal said: "The relevant parties to determine the question who lawfully terminated the building contract at whose default are the Applicant and the builder. The relevant proceeding to do that in is the contract proceeding. Adopting Mr Lyons' proposal to draw the Authority into that argument cannot be readily understood to have any benefit other than expose the Authority to Mr Lyons as a pecunious party against whom he might pursue a claim for costs associated with the issue of liability, if the builder proves impecunious, as Mr Lyons asserts."[5]

[43] The Appeal Tribunal preferred the QBCC's arguments as to why the Builder's Proceeding should be heard first. The appeal tribunal placed weight on the need for Mr Lyons to establish the conditions preceding the Authority's liability, as required by the Policy. The Appeal Tribunal made it clear that by leaving the builder and Mr Lyons to litigate the question of who validly terminated the building contract, the QBCC could satisfy its statutory obligation to ensure good management of statutory funds; and ensure any claim on the funds is supported by responsible decision making in accordance with the terms of the policy and scheme generally.[6]

[44] For these reasons, I reject the submission by the QBCC that the Stay Appeal decision is a complete answer to the applications; or that Mr Lyons applications are a collateral attack on the decision.

[43]

[48] Mr Lyons submits that an order should be made pursuant to the QCAT Rules r86 that the QBCC pay his costs, including his costs in the Builder's Proceeding and other Proceedings, on the basis that offers of settlement made by him were more favourable to the QBCC than the ultimate outcome of the proceedings. Mr Lyons also seeks a formal decision to the effect that the Builder's Proceeding has entirely resolved the Review Proceeding, to avoid the raising of "false, technical issues" relevant to the claim to statutory interest and the operation of rule 86. Mr Lyons seeks formal orders, so as to amount to a "decision" for the purposes of rule 86.

[49] Mr Lyons contends that the orders made in the Builder's Proceeding on 14 September, 2012 entirely resolved the Review Proceeding. I accept that submission on the basis of the arguments made by Mr Lyons that:

(a) the Review Proceeding had been stayed;

(b) the QBCC had maintained, in the course of making submissions for the continuation of the stay, that it would abide the outcome in the Builder's Proceeding;

(c) the Review Proceeding was never compromised;

(d) instead, when a declaration was made in the Builder's Proceeding, the QBCC recognised, as it was compelled to do, that the declaration bound it, and it unilaterally made a payment.

[50] The object of a Review Proceeding is to produce the correct and preferable decision. By s20(2) of the QCAT Act, it must do so by way of a fresh hearing on the merits. Given the outcome of the Builder's Proceeding, the undertaking given by the QBCC and the action of the QBCC in meeting the claim, the requirement under s20(2) is met by reference to those matters.

[51] The Tribunal must be able to form an opinion, that in the terms of rule 86, "the decision of the tribunal in the proceeding is not more favourable to the other party than the offer". A decision is required. It is not the case as argued by the QBCC that there is no utility in making the orders sought by Mr Lyons. The utility lies in enabling Mr Lyons to have his claim for costs fully considered. I think it would be unjust for Mr Lyons to be denied an ability to argue for a costs order under rule 86, because there was no relevant "decision". A decision has been made in related proceedings - given precedence for the purpose of determining the very points at issue in the Review Proceeding. I am conscious of the potential unfairness in making a decision, in circumstances where I have been apprised of the offers of settlement. Accordingly, I intend to go no further than the terms of the declarations made by Justice Wilson in the Builder's Proceeding and to reflect the conduct of the QBCC in accepting the claim on the statutory insurance policy. On the basis of the declarations made by Justice Alan Wilson on 14 September, 2012 (corrected on 26 November, 2012), and in the terms of those declarations, I find that Andrew Lyons:

(a) terminated the contract between Andrew Lyons and Dreamstarter Pty Ltd dated 20 June, 2009 as varied ("the Contract") validly on 3 December, 2009 for Dreamstarter Pty Ltd's default;

(b) terminated the agreement constituted or evidenced by Variation 1 dated 14 October, 2009 validly on 3 December, 2009 for Dreamstarter Pty Ltd's default;

(c) liability to Dreamstarter Pty Ltd under the Contract at the date of termination of the Contract was nil; and

(d) reasonable cost of completing the Contract following termination exceeds $435,000.

[52] It is an uncontested fact that the QBCC ultimately accepted Mr Lyon's claim for assistance under the Statutory Home Warranty Insurance Scheme because of the declarations made by Justice Wilson. It is an uncontested fact that the QBCC paid Mr Lyons the sum of $200,000 for incomplete works on 8 April, 2013.

[53] On the basis of the findings I have made as a result of the declarations, and on the basis of the subsequent conduct of the QBCC, I am prepared to order in the Review Proceeding that the decision of the QBCC, made on 19 April, 2010 be substituted with another decision. The decision is that Mr Lyon's' claim for assistance under the Statutory Home Warranty Insurance Scheme be accepted on the basis that Mr Lyons:

(a) has properly terminated the contract with Dreamstarter Pty Ltd dated 20 June, 2009, as varied;

(b) has properly terminated the agreement constituted or evidenced by Variation 1 dated 14 October, 2009 validly on 3 December, 2009 for Dreamstarter Pty Ltd's default;

(c) liability to Dreamstarter Pty Ltd under the Contract at the date of termination of the Contract was nil; and

(d) reasonable cost of completing the Contract following termination exceeds $435,000.00

[54] This order largely reflects the orders sought by Mr Lyons. I am not prepared to make the orders in the exact terms sought by Mr Lyons, as they go further than the declarations made by Justice Wilson and what can be drawn from the acknowledged conduct of the QBCC.

[55] As requested by Mr Lyons I also declare that on 8 April, 2013, the QBCC paid Mr Lyons the sum of $200,000.00 pursuant to the terms of the BSA Home Warranty Insurance Policy for incomplete work.

[56] The QBCC made submissions objecting to the making of orders that attack the decision of the Appeal Tribunal in the Stay Appeal, which it says held, in effect, that based on what was known at that time, the Commission's decision to refuse the claim on the Statutory Insurance Scheme was correct.

[57] The order I have made substituting this Tribunal's decision for that of the QBCC is made taking into account different matters to those known at the time of the QBCC's decision to refuse the claim on the Statutory Insurance Scheme. The order I have made is not in terms that the original decision was incorrect. The order merely reflects satisfaction of the "condition preceding the QBCC's accrual of liability under the contract of insurance"[7] It is the preferable decision at this point in time taking into account the declarations made after the decision the subject of the Review was made.

[58] The QBCC suggests in its submissions that "it is easy with the benefit of hindsight" to now say what the decision ought to have been on 19 April, 2010, however it was not obvious at the time. I do not deny that is the case. I am not limited in the review to matters before the QBCC as at 19 April, 2010. I am entitled to look to evidence of the circumstances at the time I am called upon to make a fresh decision. I have had regard to the declarations made by Justice Wilson and the QBCC's payment of the claim.

[59] In furtherance of its objection to orders being made in the Review Proceeding, the QBCC submits that there has never been a determination of the building dispute on the merits nor an application to dismiss the Builder's claim under section 47 or 48 as lacking in substance or an abuse of process. The submission stands in contrast to the QBCC's own conduct in accepting the insurance claim based on the declarations made in the Builder's Proceeding. Obviously, the declarations have the force of law, whatever path was followed in their making. I reject the QBCC's submission as a reason not to make an order in these proceedings.

[60] With respect to the declaration in relation to a $200,000.00 payment for incomplete works, I reject the QBCC's submission that there is no utility in making the declaration. I accept Mr Lyons's submission that the purpose of the declaration is to show that the sum received by him was more than he offered to accept.

[61] Mr Lyons submits and it is not contested, that he made a series of offers to the QBCC. He says that he has beaten six offers that were generous to, and ought to have been accepted by the QBCC as insurer. By not doing so, the QBCC acted unreasonably. The offers included:

(a) that all his entitlements under the insurance policy be agreed at $170,000 with no order as to costs. This offer was made 20 September, 2010. A subsequent offer to agree his entitlements at $150,000 with no order as to costs was made 30 September, 2010;

(b) consent orders in relation to valid termination of the contract, with no order as to costs. This offer made on 20 September, 2010 and 30 September, 2010;

(c) both the Review Proceeding and the Builder's Proceeding be settled for $150,000 with no order as to costs. This offer was made on 30 September, 2010 to both the QBCC and the Builder jointly;

(d) quantum of his non-completion claim be agreed at $195,000 and 75% of his costs be met which relate exclusively to the quantum of his non-completion claim assessed on the District Court scale on a standard basis, without prejudice to the Insurer's liability under the policy. This offer was made on 17 September, 2012.

[62] Mr Lyons submits that the QBCC could have settled the proceedings in September 2010 for $150,000, but it was eventually compelled to pay $200,000. Further, by the offers of September 2010, he was offering to settle all his claims under the Home Warranty Scheme. That would have entailed a release for the QBCC in relation to both non-completion of works and defective works. The QBCC has now acknowledged that it has a liability for defective works in an amount of $173,724.41.

[63] Mr Lyons submits that the QBCC gave an undertaking on 8 December, 2010, to abide the outcome of the Builder's Proceeding in relation to the proper quantum of the claim. He argues that once it was declared that the costs of completion exceeded $435,000.00, the QBCC was bound by that declaration and accordingly his offers to settle can be measured against that declaration. In view of the substituted decision I have made, it is not necessary to consider this argument. I note however that the undertaking given to the Appeal Tribunal was limited to an undertaking to abide the decision of the Tribunal on the question of lawful termination of the building contract.

[64] The QBCC submits that:

(a) it could not accept an offer to settle the Review Proceeding, because of the terms of the insurance policy which requires it to conduct an assessment of the cost of completion and to deduct any remaining liability under the contract. They were matters unknown at the time, and to be determined in the Builder's Proceedings.

(b) It was concerned that if it paid an incorrect sum to the owner, it would be unable to recover that sum from the builder.[8]

(c) Making an offer that is not beaten, in itself is not sufficient nor does it compel an order for costs to be made.[9] The power to order costs is a discretionary one.

[65] I agree with Mr Lyons that the ultimate outcome in the Review Proceeding, is more favourable to him than the terms of the monetary offers. However, I agree with the QBCC that it could not accept those offers because of the risk of being unable to recover moneys paid out to Mr Lyons from the builder, particularly in circumstances where the QBCC could not make a determination of all the facts necessary to evaluate the offer. It is possible that the QBCC could calculate the costs of completion of the works by engaging assessors to make that calculation. However, until it had the benefit of tribunal findings, it could not calculate the amount which might be owing by Mr Lyons under the contract. Accordingly, I conclude that it was not unreasonable on the part of the QBCC to refuse to settle Mr Lyons' claim. I am supported in this conclusion by the fact that the QBCC must responsibly manage public moneys which comprise the insurance fund. That responsibility compels a conservative approach on the part of the QBCC.

[66] There remains to consider the offer made on 20 and 30 September, 2010 that consent orders be made that the contract was validly terminated, with no order as to costs. By the time those offers were made Dreamstarter Pty Ltd had been joined as respondent in the Review Proceeding and the Review Proceeding was the subject of a stay order to enable to the dispute between the builder and Mr Lyons to be determined in separate proceedings. Under Rule 86(3) of the QCAT Rules, the Rule only applies if the acceptance of the offer would have resulted in settlement of the matters in dispute between all the parties. That could not have been the case because the builder, Dreamstarter Pty Ltd was prosecuting its own claim for damages against Mr Lyons in the Builder's Proceeding. The offer made to the QBCC could not have resolved the matters in dispute between all the parties. I find that these offers do not engage Rule 86 of the QCAT Rules.

[44]

[67] As an alternative to his arguments in relation to Rule 86 of the QCAT Rules, Mr Lyons seeks an order for costs against the QBCC pursuant to s102 of the QCAT Act. Mr Lyons seeks an order that the QBCC pay his costs in the Review Proceeding and that those costs should include the costs incurred by him in the Builder's Proceeding. Mr Lyons addresses a number of grounds relevant to the question of whether it is in the interests of justice that a costs order should be made against the QBCC.

[68] Mr Lyon's primary submission is that he was not afforded natural justice in the QBCC's requirement that he obtain a finding from the QCAT that he had validly terminated the building contract. He submits that the issue should have been the subject of a full consideration as required in Fenwick-v- Queensland Building Services Authority (No 2)[10].

[69] Mr Lyons secondary submission is that if the QBCC is right and the insurer cannot decide the matter, such that it has to go to the QCAT for a decision, then one of the factors in s102 of the QCAT Act is engaged, namely the nature and complexity of the dispute.

[70] S102 of the QCAT Act provides that the tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order. The tribunal may have regard to a number of matters in deciding whether to award costs under s102, including:

(a) conduct of a party which unnecessarily disadvantages another party to the proceeding;

(b) the nature and complexity of the dispute the subject of the proceeding;

(c) the relative strengths of the claims made by each of the parties to the proceeding;

(d) for a proceeding for the review of a reviewable decision

(i) whether the applicant was afforded natural justice by the decision-maker for the decision; and

(ii) whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;

(e) the financial circumstances of the parties to the proceeding;

(f) anything else the tribunal considers relevant.

[71] It is relevant to note that s100 of the QCAT Act provides that other than as provided under the QCAT Act or an enabling Act, each party to a proceeding must bear the party's own costs for the proceeding.

[72] The QBCC submits that the usual order that each party bears their own costs ought to be made in the Review Proceeding.

[46]

[73] Mr Lyons says that the QBCC did not at any time put to him the evidence or reasoning which supported the rejection of his claim, so that he was denied the opportunity to resolve the claim. Mr Lyons points to the Fenwick decision. In that case a failure by the QBSA to objectively consider the strength of its case at the time the Review application was filed, was found to be one of the reasons for awarding costs of the application against it.

[74] It is not the case that the QBCC simply gave a blanket rejection of Mr Lyons' claim. There is evidence that the QBCC was provided with relevant information by Mr Lyons and that it sought the views of the builder, before making its decision. The QBCC addressed Mr Lyon's grounds for termination and expressed its view that there was no default. In my view, it rightly asserted that where there was complexity and dispute between the parties the question of valid termination must be determined by the QCAT. That fact coloured the extent of consideration required by the QBCC. I deal later in the decision with the question of whether Mr Lyons was accorded natural justice before the QBCC made its decision.

[75] I reject Mr Lyon's submission in this regard.

[76] Mr Lyons says the QBCC unnecessarily disadvantaged him by bringing an application to obtain a stay of the Review Proceeding at the first directions hearing, with the prior agreement of the Builder, but without notice to him. I reject that submission because, the Tribunal has dealt with that matter and made its orders in relation to costs, including the Appeal Tribunal which ordered costs of $1,000.00 in favour of Mr Lyons. A stay was in any event ordered by the Appeal Tribunal.

[77] Mr Lyons further pursues the effect on him of a stay being sought and obtained in the Review Proceeding as an example of the QBCC unnecessarily disadvantaging him. Mr Lyons had a full opportunity to raise all his concerns in his application to lift the stay and on the subsequent appeal. Despite that, the Appeal Tribunal thought there was merit in a stay and made an appropriate order. That being the case it would be inconsistent with the Appeal Tribunal's reasoning and order for there to be a finding in this application that the party seeking the stay had unnecessarily disadvantaged Mr Lyons. For these reasons I reject Mr Lyon's submissions in this regard.

[78] Mr Lyons has suggested that the QBCC has acted improperly. He says that the builder was impecunious, that the QBCC knew it was impecunious, but in order to avoid being unable to recover moneys paid to Mr Lyons under the insurance policy, encouraged the builder to commence proceedings against Mr Lyons and then stayed the Review Proceeding. Mr Lyons says that there was no commercial driver for the builder to start proceedings, except to stymie recovery proceedings against him and to hold up the insurance claim. I note the submissions of the QBCC denying any improper conduct on its part.

[79] I am not prepared to draw any adverse inference against the QBCC. There is a reasonable explanation for the conduct of the QBCC, including its statutory obligation to balance the interests of the builder and the homeowner; and the terms of the insurance policy which require a lawful termination of the contract to be demonstrated. The material reveals that the builder had the advantage of independent advice from solicitors and senior counsel. With the benefit of that advice he commenced proceedings against Mr Lyons for damages for breach of contract. Those are not circumstances which suggest a conspiracy between the builder and the QBCC to avoid a payment to Mr Lyons.

[80] To bolster his assertion that the Builder's Proceeding was contrived by the QBCC and the builder to avoid payment under the insurance policy to Mr Lyons, he asserts that the Builder's Proceeding had little prospect of success and there could be no commercial justification for the proceedings. The QBCC makes the point that Mr Lyons did not apply to strike out the proceedings under s47 of the QCAT Act as an unjustified proceeding.

[81] I cannot, in this application, determine whether the builder had prospects of success. I rely however on the fact that senior counsel settled the Builder's application and that he is obliged to plead arguable matters. Whatever Mr Lyons may think of the quantum of the builder's claim, there nevertheless remained the question of whether Mr Lyons had lawfully terminated the contract. The Appeal Tribunal found that this was best determined in separate proceedings between the builder and Mr Lyons.

[82] The Appeal Tribunal determined that the matter should proceed by separate proceedings to determine the issues between the builder and Mr Lyons. From that point the die was cast. Mr Lyons lost his argument that the matters should be heard together. He raised his concerns in relation to the impecuniosity of the builder with the Appeal Tribunal to no avail. I do not think those questions can now be revisited. Because of the decision of the Appeal Tribunal, I do not think it can be said that the QBCC had any improper involvement in the builder separately prosecuting his claim for damages against Mr Lyons.

[83] Mr Lyons also refers to copies of correspondence he later obtained from the builder's solicitors' file, which he says demonstrates that the builder's motivation in bringing proceedings was to delay or avoid any successful claim on the QBCC insurance fund.[11]Given that a successful claim on the insurance policy would result in recovery proceedings against the Builder, that may well have been a motivation. However, that does not detract from the fact that arguable issues were raised against Mr Lyons in the Builder's Proceeding.

[84] For these reasons, I am unable to find that any conduct of the QBCC in seeking and obtaining orders that the Review Proceeding be stayed, subject to resolution of the Builder's Proceeding, unnecessarily disadvantaged Mr Lyons.

[85] Mr Lyons asserts that by actively declining to enter into any settlement negotiations, the QBCC unnecessarily disadvantaged him because it denied him the possibility of an early end to the proceedings. I agree that Mr Lyons has been disadvantaged by an inability to resolve the matter through a commercial settlement. However, the QBCC is bound by its statutory obligations and the terms of the insurance policy which limits the scope for any settlement it may enter. First, the QBCC must be satisfied that the condition precedent to a payment under the policy has been met. I accept the submission of the QBCC that it was not clear whether the contract had been properly terminated. In fact, on the QBCC's analysis reflected in the decision under review, it had not been properly terminated. Second, in relation to the quantum of any claim, the QBCC is bound to assess the cost to complete, after the owner's remaining liability under the contract has been determined. I accept the QBCC's submission that it must protect the insurance fund by prudent management and that if it makes an insupportable payment to the homeowner, it will not be able to recover the sum from the builder.[12] I accept that prudence would require the outcome of the dispute between the Builder and Mr Lyons be known, so that the issues surrounding the quantum of the claim could be narrowed. Finally, clause 4.12 of the insurance policy provides that if the contractor is released from any liability in relation to the insured works, the QBCC is thereby released from liability under the policy to the same extent. That effectively compels the homeowner to prosecute its claim against a builder to a final decision before a claim can be made on the Policy, because a release of the builder will amount to a release of the QBCC.

[86] For these reasons I reject Mr Lyons' submission that he has been unnecessarily disadvantaged by the QBCC declining to enter into any settlement negotiations, so that he should be entitled to costs in the interests of justice.

[87] Mr Lyons submits that the QBCC disadvantaged him unnecessarily in that it declined to provide approval under clause 5.1 of the policy to rectify or complete the residential construction work, thereby leaving his house in an unsafe and barely habitable condition. Mr Lyons is particularly aggrieved that he was unable to care for his terminally ill mother in the house, because it was not habitable.

[88] The effect of Mr Lyons undertaking rectification work without QBCC approval would be to enable the QBCC to reject a claim for the value of the work, in the event that he was able to claim on the Policy. Given the significant cost of the work Mr Lyons was not prepared to act without the approval of the QBCC. Over the course of almost two years the parties argued in correspondence about the reasonableness of the QBCC's conduct in refusing consent for rectification and completion work. Ultimately the QBCC was prepared to offer consent on a range of conditions. Those conditions were unacceptable to Mr Lyons.[13] I have no doubt this aspect of the dispute was deeply frustrating and that Mr Lyons found himself in an invidious position given the intransigent attitude of the QBCC.

[89] Despite my sympathy for Mr Lyons position, I am not convinced that the attitude of the QBCC in relation to approval of rectification work and completion work is the sort of conduct to which s102(a) of the QCAT Act is directed in determining if a party has caused unnecessary disadvantage to another party. Because the section gives an example of the type of conduct it is directed to, by reference to s48(1)(a)-(g) of the QCAT Act, I think the section is directed to the parties' conduct of the proceedings.[14] That is to be compared to other conduct, which occurs outside the steps in a proceeding and which may form part of a claim for damages, if a cause of action can be established, rather than a claim for costs in the proceedings.

[90] For this reason I reject Mr Lyons submission that the refusal to approve rectification and completion work caused him unnecessary disadvantage, so as to justify a costs order.

[50]

[99] Mr Lyons says that the QBCC first rejected his claim in a letter, dated 9 March, 2010, which gave no reasons for the rejection. Subsequently the QBCC interviewed the Builder and gave a later decision which did purport to give reasons for its rejection. Mr Lyons submits that:

(a) he was not given notice of the intended grounds of rejection.

(b) None of the builder's representations were put to Mr Lyons for comment.

(c) The decision does not explain how Mr Lyons could validly terminate the contract for some reason other than the Builder's default. It does not deal with the common law ground of repudiation and acceptance for termination.

(d) If the letter is meant to be a statement of reasons under s157 QCAT Act, then it fails to comply with s27B of the Acts Interpretation Act 1954.

[100] S27 B of the _Acts Interpretation Act (_Qld) 1954 provides that if an Act requires a body making a decision to give written reasons for the decision, it must set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based.

[101] Although the 19 April, 2010 letter does not address these matters in a detailed way, it does set out findings of fact on the questions of diligent progression of the works and adequacy of details provided in relation to PC and PS items. The QBCC noted the material it referred to, including the variation document, emails between Mr Lyons and the Builder in relation to the specifics of the variation; information Mr Lyons requested in relation to the PC and PS items, the information provided and the opinion of a Building Inspector as to the industry standard in relation to provision of such information. The QBCC also referred to the amount of work carried out by the Builder in the relevant period.

[102] I am satisfied that the 19 April, 2010 letter does satisfy s157 of the QCAT Act and s27 B of the Acts Interpretation Act 1954. Given that the QBCC properly informed Mr Lyons that it is not a judicial body and cannot finally determine whether or not Mr Lyons validly terminated the contract, I do not think it was necessary for the QBCC to undertake an analysis of the legal principles of repudiation.

[103] However, Mr Lyons makes the point that he was given no opportunity to respond to the builder's claims or to comment on the information relied upon by the QBCC before it made its decision. In his seventh statement, filed 3 July, 2015, Mr Lyons refers at paragraph 374 to a meeting held on 25 March, 2010 between himself, his solicitor and 4 staff of the QBCC. Mr Lyons says that he asked for details of why each of the three notices of default delivered by him to the Builder were considered insufficient to set up a valid termination. He says that he was given general, not detailed answers. After that meeting, the revised decision, made 19 April, 2010 was issued.

[104] That paragraph suggests Mr Lyons was seeking reasons for the decision rather than being given an opportunity to respond to the facts and material relied upon by the QBCC. The QBCC objects to the paragraph on the basis that it is an abuse of process because it is part of a collateral attack on the decision in the Stay Appeal. I reject this submission. The Appeal Tribunal did not address the question of whether Mr Lyons was afforded natural justice in the process leading to the decision being made. The QBCC in its submissions referred to the costs order made against it by the Appeal Tribunal in relation to a breach of natural justice in not notifying Mr Lyons of its plan to seek a stay of the Review Proceeding. That is a different point to the one raised by Mr Lyons. I consider the paragraph in question is relevant and I have had regard to it in making a finding on this point.

[105] In the absence of any material from the QBCC to the effect that it did give Mr Lyons an opportunity to respond to facts and material relied upon by it in making its decision, I find that Mr Lyons was denied natural justice. That is a factor in favour of making a costs order to the benefit of Mr Lyons in the Review Proceeding. The QBCC has submitted that given the views of the builder it could not finally determine which party was in the right and the matter had to be decided by QCAT. Without giving Mr Lyons an opportunity to respond to reasons the QBCC intended to rely upon in making its decision, it will never be known if litigation could have been avoided.

[106] Mr Lyons makes a final point that not only was he forced to litigate against the builder, but he had further pressure applied to him by the QBCC declining to participate in or recognise a settlement of the claim and declining to allow him to complete his house. I have dealt with those last two issues previously.

[51]

[107] Mr Lyons submits that the QBCC has significant net assets. The builder is in liquidation with no prospect of any dividend being paid. Mr Lyons says that :

(a) he has suffered non completion losses that substantially exceed the maximum sum insured, now paid by the QBCC;

(b) he has suffered loss being the cost of rectifying defective building work undertaken by the Builder;

(c) he has had to carry enormous costs for more than 5 years. Such components of those costs as have been fixed, have been fixed at $212,670.40 and remain unpaid;

(d) he has suffered and continues to suffer, rental losses that to April, 2015 were at least $118,650. The QBCC refused to approve the completion of the renovation, or even works to make the house safe and habitable, without prejudice to the claim. That refusal caused rental losses;

(e) he has suffered the loss of now having to replace all the external cladding to the house as the cheapest way to have it repainted, given its deterioration in the period since 2010. Such replacement was not required in 2009 or 2010;

(f) he has no prospect of recovering any monies from the Builder, whether on account of damages, interest or costs or otherwise; and

(g) he is unable to recover any of the damage that was caused, or contributed to, by the injunctions under the usual undertaking as to damages as the QBCC and builder did not offer one, despite request by him.

[108] I accept that the cost of all the proceedings and the cost of completing and rectifying the contract works has taken a significant financial toll on Mr Lyons. I think that financial hardship has been demonstrated by the extent of those costs and the state of the property in question. The QBCC has raised objections to Mr Lyons sixth statement which refers to the state of the property. I intend to rely on Mr Lyons' evidence in this regard as evidence of impact on his financial circumstances, not for any broader point the subject of the objection.

[109] The QBCC has raised the fact that Mr Lyons is a barrister. The inference is that because of his presumed earning capacity he must not have suffered any financial hardship. I think it is immaterial whether Mr Lyons has a professional occupation. The costs are extraordinarily high for any person to bear. The QBCC says that costs are a consequence of becoming involved in litigation. In the exercise of my discretion I consider the impact of costs on a person's financial circumstances to be a relevant factor where those costs are very high. When those costs are considered together with the cost to Mr Lyons of completing and rectifying his house, I think that his financial circumstances weigh in favour of a costs order to prevent the unfairness of being far worse off for successfully pursuing his legal entitlements, than if he had done nothing.

[54]

[112] Mr Lyons makes the point that because so few steps were taken in the Review Proceeding before they were stayed, it would be a pyrrhic victory to be awarded only costs incurred in those proceedings when very substantial costs were incurred in the Builder's Proceeding.

[113] Mr Lyons submits that if it is held that the QBCC should pay all reasonable costs incurred in the Review Proceeding that should include the costs in the Builder's Proceeding. That is said to be because the resolution of the latter proceeding was a necessary step in obtaining relief in the former.

[114] Further, Mr Lyons points to an order made on 20 September, 2012 (varied on 26 February, 2013), whereby Senior Member Stilgoe ordered Dreamstarter Pty Ltd (in liquidation) to pay Mr Lyons damages, costs and interest. The Senior Member recorded that: "These orders are made without prejudice to Andrew Lyons right to apply for orders for costs against other parties including, without being limited to, the Queensland Building Services Authority and Paul Anthony Farmer."

[115] In support of his submissions, Mr Lyons argues that:

(a) the normal rule in relation to costs awarded on a standard basis is that the Court will "allow all costs necessary or proper for the attainment of justice"[17]. That criteria will sometimes require that the Court allow the costs in relation to related proceedings.

(b) Frizzo v Frizzo[18], White v Secretary to the Department of Justice[19] and Leong v JP Vesto[20] are examples of cases where the costs of other proceedings have been ordered to be paid as costs of the proceedings in hand.

(c) The effect of the QBCC's letter of 19 April, 2010 was to require an application to the QCAT or to make it clear that the QBCC would not revise its positions in the absence of a finding by the Tribunal.

(d) A consequence of commencement of the Review Proceeding was the commencement of the Builder's Proceeding. The QBCC facilitated those proceedings and the stay of the Review Proceeding.

(e) Costs were saved in the Review Proceeding for the QBCC because they were incurred by the parties in the Builder's Proceeding.

(f) Mr Lyons had no choice but to prosecute the Builder's Proceeding to its conclusion because the QBCC was fixed in its views; the stay in the Review Proceeding was absolute - subject only to the outcome of the Builder's Proceeding; the QBCC refused to attend any settlement conference and indicated that if the builder was released from any liability that would also release the insurer. An appeal to the President was necessary to make a determination. The QBCC took a keen interest in the Builder's Proceeding, appeared at one Directions Hearing, and made submissions in one appeal.

(g) It was necessary for Mr Lyons to resolve the Builder's Proceeding before the Review Proceeding could be finalised. On that basis, the costs of and incidental to the Review Proceeding should include the Builder's Proceeding.

(h) All the costs incurred were necessary and relevant.

(i) S102 of the QCAT Act provides that the Tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding. That is not qualified or limited provided the costs order is against a party to the proceeding. The construction of s102 supports that submission. It is broader than s100 in that it does not reference a party's own costs "for the proceeding". There are broad factors set out in s102 relevant to the exercise of the discretion, including the conduct of the parties in related proceedings.

[116] The QBCC argues that:

(a) the Tribunal does not have any power to make cost orders in the Proceeding in other jurisdictions or for the liquidation costs.

(b) The QBCC was not a party to any of the proceedings in other jurisdictions. There is no authority to the effect that there is power to award costs against a non-party in proceedings from other jurisdictions.

(c) Properly understood, any claim for costs incurred by Mr Lyons in other proceedings in other jurisdictions or for the liquidation costs would need to be claimed as damages pursuant to some cause of action. The Tribunal has no jurisdiction to hear and determine such a dispute.

(d) The Supreme Court of Queensland decision of Frizzo v Frizzo (No 2) was about costs orders being made in respect of other Supreme Court proceedings involving the same parties. That is not the circumstances in this application where costs are being sought of proceedings in different jurisdictions in which the QBCC was not a party;

(e) White v The Secretary to the Department of Justice is different to the present circumstances because the proceedings were to recover "actual pecuniary loss". There was no determination that Supreme Court costs were recoverable as part of the costs order in the Tribunal matter.

(f) In Leong v JP Sesto & Co & Ors the Tribunal appointed the special referee, whose costs were ordered to be paid, to give an opinion as to costs properly chargeable by a solicitor.

(g) The decision is a collateral attack on the decision in the Stay Appeal and should not be made.

(h) Alternatively, if this Tribunal does have power to make such an order or declaration, it should not do so for the arguments previously discussed in relation to the effect of the Stay Appeal and why the QBCC should not be ordered to pay costs in the Review Proceeding

[117] In his submissions in reply, Mr Lyons says that the QBCC does not address the central point for Mr Lyons; that those costs were necessarily and properly incurred in the prosecution of the Review Proceeding.

[118] He says that an assessor will allow all costs "necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed." Mr Lyons argues that the costs of resolving the Builder's Proceeding were necessary or proper given the injunction staying the Review Proceeding.

[119] Mr Lyons refers to a further case of Deputy Commissioner of Taxation Platinum Builders [21] where the costs of Supreme Court proceedings were ordered to be paid in Federal Court proceedings.

[120] The jurisdiction of this Tribunal in relation to costs is drawn only from the terms of the QCAT Act or an enabling Act. As this application relates to a review, it is not a domestic building dispute to which the costs power in s77 of the QBCC Act applies. His Honour Justice Wilson in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)[22] has said that s102 of the QCAT Act confers a broad discretion in relation to costs. The discretion must be exercised judicially, that is, in a way that is fair and just between the parties, by reference to the conduct of the litigation. Professor Dal Pont his book "Law of Costs", makes the point that courts will read down even a broad discretion in a Tribunal if it is inconsistent with the purposes of the Tribunal in question.[23]

[121] Section 3 of the QCAT Act sets out the objects of the Act, including:

to have the tribunal deal with matters in a way that is accessible, fair, just, economical, informal and quick;

to enhance the quality and consistency of decisions made by decision-makers; and

to enhance the openness and accountability of public administration.

[122] There are no express limits placed on the Tribunal's discretion in relation to costs under s102 of the QCAT Act. Further, the QBCC Act in conferring jurisdiction on the Tribunal to review certain decisions, does not limit or otherwise modify the Tribunal's powers under the QCAT Act in relation to costs.

[123] I am satisfied that the Tribunal has the power to make the order sought, however, it is an unusual order. I am satisfied that in this case it is consistent with the objects of the QCAT Act in ensuring fairness between the parties and accountability in public administration.

[124] I agree with the QBCC that this Tribunal does not have any power to make costs orders in proceedings in other jurisdictions. That is, apart from possibly making a non-party costs order in the Builder's Proceeding, I cannot enter into proceedings in other Courts and matters and order costs against the QBCC. However, Mr Lyons is not asking the Tribunal to do so. He is asking the Tribunal in the Review Proceeding to order the QBCC to pay the costs of other proceedings, by treating those costs as necessary and proper costs in the Review Proceeding. The order sought by Mr Lyons does nevertheless bear a resemblance to a non-party costs order and I will draw some assistance from the principles, which have been developed in relation to that type of order.

[125] In relation to the QBCC's submission that the claim for costs of related proceedings is really a claim for damages pursuant to some unspecified cause of action, it is possible that Mr Lyons' costs could be recovered in this way. However, I do not think just because his costs expenditure might be recovered as damages, that his costs are precluded from being characterised as necessary and proper costs in the Review Proceeding, in this particular set of circumstances.

[126] There are few decided cases in relation to the award of costs incurred in other proceedings. In Frizzo v Frizzo[24] the costs in caveat proceedings conducted as part of a broader opposition to a will were found to be incidental to proceedings in relation to validity of the will and the costs of the caveat proceedings were ordered to be paid out of the estate. I agree that the case demonstrates it is possible for an order such as the one sought by Mr Lyons to be made. The QBCC says that the case is distinguishable because the two proceedings involved the same parties. I agree that fact may have made it more likely the costs of the caveat proceedings would be characterised as incidental, but nevertheless costs of related proceedings were treated as incidental to other proceedings.

[127] White v The Secretary to the Department of Justice[25], is less helpful to Mr Lyons, because the Member preferred to characterise the costs of other proceedings as pecuniary loss rather than costs incidental to the proceedings in which the order was sought. Pecuniary loss was recoverable because of a statutory entitlement to pecuniary loss of that type. The case is not an example of costs in other proceedings being recoverable in the absence of a statutory entitlement.

[128] In _Leong v JP Sesto & Co & Ors (Legal Practise)[26]_the costs order included the costs of a specialist costs assessor ordered to undertake work as part of the proceedings. I agree with the QBCC that the case is distinguishable because the costs were not costs in other proceedings.

[129] The most apposite case Mr Lyons has been able to refer to is the decision of Deputy Commissioner of Taxation v Platinum Builders[27]. In that case the Workers Compensation Nominal Insurer was a supporting creditor in an application for a winding up order in the Federal Court of Australia. It had previously applied for a winding up order in the Supreme Court of New South Wales. Jacobsen J ordered that the costs of the Workers Compensation Nominal Insurer be paid out of the assets of the Defendant, and in particular that those costs include the costs of the proceedings in the Supreme court. His Honour satisfied himself that he had the power to award those costs under s43 of the Federal Court of Australia Act 1976, which is cast in broad terms. The section provides that the Court or a Judge has jurisdiction to award costs in all proceedings before the Court. The award of costs is in the discretion of the Court or Judge. His Honour said:

[62]

[132] I have found that there is a real connection between the QBCC, as the respondent to the Review Proceeding and the Builder's Proceeding, including incidental proceedings in other jurisdictions. As to the causal connection between the non-party and the costs, I find that the QBCC stood to benefit from the Builder's Proceeding by avoiding the costs of a fully litigated review of its decision and being able to apply the decision made in the Builder's Proceeding, as to whether the contract was properly terminated by Mr Lyons. The QBCC also had an indirect financial interest in the outcome of the Builder's Proceeding because of the potential claim on the insurance fund.

[133] The QBCC was given many notices by Mr Lyons of his intention to seek costs of the Builder's Proceeding from the QBCC. His letters making settlement offers, dated 20 September, 2010 and 30 September, 2010 informed the QBCC that he would seek from it his costs of establishing his claim. [31]

[134] By letter dated 14 September, 2011 from Mr Lyons' solicitors to the QBCC, Mr Lyons asked the QBCC if it accepts that QCAT is empowered to award costs in the Review Proceeding, which are costs of and incidental to establishing his rights in accordance with the undertaking of the QBCC, given in support of its endeavour to support the stay order made by QCAT. The QBCC did not address the question, but in its letter in reply dated 14 September, 2011 set out the terms of its undertaking to abide the decision of the Tribunal on the question of whether or not Mr Lyons has "properly" terminated the contract with the contractor. It added: "To avoid confusion, on the hearing of case number BDL222-10, please seek an order squarely answering that question." [32]

[135] Letters from Mr Lyons solicitors to the QBCC dated, 13 February, 2012; 14 February, 2012; 20 February, 2012; 23 February, 2012 and 27 February, 2012 informed the QBCC that Mr Lyons would seek all its costs from the QBCC.[33]

[136] The letter dated 23 February, 2012 bears analysis. It says, inter alia:

[68]

[137] From my search of the material, the QBCC did not respond to that letter.

[138] The QBCC has been given a full opportunity to be heard in relation to the claim for costs against it.

[139] In principle I think the connection is sufficient to warrant an order that the QBCC pay at least some of Mr Lyon's costs of the Builder's Proceeding and related proceedings.

[140] I have not made any findings that the Builder's Proceeding were a sham, intended merely to stall the Review Proceeding as urged by Mr Lyons. I have found that they were properly commenced, on advice. The Appeal Tribunal found that those proceedings should be heard first, particularly in light of the QBCC's undertaking to be bound by the decision on termination of the contract. For these reasons, I do not think the QBCC should be responsible for costs of the proceedings whilst the builder was engaged in its proceedings. However, once the builder indicated his intention to withdraw from the proceedings on 25 November, 2011, there was no opposition to Mr Lyons' contentions in relation to his having lawfully terminated the contract and as to the quantum of his loss and damage.

[141] From that point onwards, Mr Lyons was not defending a claim by the builder. Mr Lyons was engaged in a series of legal steps directed solely to satisfying the condition precedent to an entitlement under the statutory home warranty insurance policy, as required by the QBCC.

[142] The following steps were taken in the Builder's Proceeding:

(a) Mr Lyons made an application for security of costs against the builder on 27 August, 2010. That application was dismissed on the papers on 14 September, 2010. Mr Lyons successfully appealed in APL234-10, filed 27 August, 2010. The builder filed no material in the appeal. The appeal was upheld on 23 June, 2011. The builder was ordered to pay costs of the appeal. The underlying application for security of costs was not determined. That was returned to first instance.

(b) Mr Lyons filed and served evidence and written submissions in the remitted application for security for costs. The builder did not file any material. It filed an application to withdraw its claim in the Builder's Proceeding on 25 November, 2011.

(c) The QBCC took two steps at this time to make its position clear in relation to future conduct of the matter. It reconsidered the decision under review and on 5 March, 2012 expressed the view that the contract was not terminated upon the contractor's default and was therefore not properly terminated for the purposes of the Home Warranty Insurance scheme.[34] On 12 March, 2012 the QBCC wrote to the QCAT asking that the Review Proceeding be listed for directions with the Builder's Proceeding so that it might seek orders that the Review Proceeding be heard before any other proceedings in view of the withdrawal of the builder. On 16 March, 2012 the QBCC filed an application to lift the stay.

(d) In the meantime, an interlocutory hearing was held in the Builder's Proceeding. Mr Lyons argued that the builder's claim should be dismissed, not withdrawn, so that amongst other things, the builder would not be free to sue him again later. On 15 February, 2012, the Member declined to dismiss the builder's claim. It was ordered that the Builder be granted leave to withdraw. The builder was ordered to pay Mr Lyons' costs of the security for costs application and Mr Lyons costs of the matter. No decision was entered in the counterclaim.

(e) On 15 March, 2012 Mr Lyons filed an appeal against the decision to give the builder leave to withdraw, seeking orders that its claim be dismissed and seeking a declaration as to the validity of his termination of the contract. That is APL 086-12. In his sixth statement, Mr Lyons says, at paragraph 267, that the matter was of great importance to him because, if the builder simply withdrew and he did not get a declaration in the Builder's Proceeding, then he would be compelled in 2012 to start all over again against the Insurer, having wasted two years and substantial time and expense in proceedings against the builder.

(f) On 23 March, 2012 the QBCC amended its application to lift the stay to seek an order that APL086-12 not be determined before the Review Proceeding.

(g) In a letter from Mr Lyons' solicitors to the QBCC dated 21 March, 2012, the outcome of the Directions Hearing in BDL222-10 was described. It was said that Senior Member Oliver made his position abundantly clear; namely, that there should be no further progress in GAR150-10 or BDL222-10 until Mr Lyons' appeal in APL086 is finalised. There does not appear to be any response to this point. In any event, the QBCC took no further step to press its application. Ultimately, its application was dismissed by consent on 18 April, 2013.

[143] Given the QBCC's application to lift the stay and to proceed with the Review Proceeding, that was obviously its preferred course of action.

[144] Mr Lyons' strategy appears in a letter his solicitors wrote to the lawyers for the builder, dated 23 December, 2011.[35] In that letter, Mr Lyons was attempting to settle the proceedings by consent orders in relation to dismissal of the application and a declaration that would establish an issue estoppel on the proper termination point. He referred to the costs of the proceedings and the security for costs appeal which would have to be met by the builder. The letter provides: "A significance of such costs orders is that they will put our client in a position to apply for the winding up of the applicant and the appointment of a liquidator. A liquidator can investigate the affairs of the company, including the conduct of Mr and Mrs Farmer as directors, and agree to terms such as those proposed in the enclosed draft."

[145] Mr Lyons also swears to that strategy at paragraph 413 of his seventh affidavit, filed 3 July, 2015.

[146] As matters unfolded that is the course which was adopted.

[147] The following orders were made:

(a) 2 May, 2012 - APL234-10, builder ordered to pay Mr Lyons $30,660.60 for costs of the appeal from the order dismissing the security for costs application;

(b) 20 June, 2012 - BDL222-10, builder ordered to pay Mr Lyons $59,635.35 for costs of the remitted security for costs application;

(c) 4 July, 2012 - M7040/12, order for payment of $59,635.35 costs registered in the Magistrates Court at Brisbane;

(d) 4 July, 2012 - M7041/12, order for payment of $30,660.60 costs registered in the Magistrates Court at Brisbane;

(e) 3 August, 2012 - QUD 322 of 2012, Federal Court of Australia order that Dreamstarter Pty Ltd ACN 113 035 108 be wound up in insolvency;

(f) 5 September, 2012 - No. S8077/2012, Supreme Court of Queensland, order by consent, granting leave to proceed under section 471B of the Corporations Act against Dreamstarter Pty Ltd (In liquidation) ACN 113 035 108 in APL86 -12 and BDL 222-10 in the QCAT;

(g) 14 September, 2012 - APL086-12, Decision by consent, ordering that the claim brought by Dreamstarter Pty Ltd in application BDL222-10 is dismissed; declaring Mr Lyons validly terminated the contract on 3 December, 2009, terminated Variation 1 on 3 December, 2009; Lyons liability to the Builder at the date of termination was nil; the reasonable cost of completing the Contract exceeds $435,000.00; and Dreamstarter pay Lyons cost of the appeal;

(h) 20 September, 2012 - BDL222-10, order by consent that:

Dreamstarter Pty Ltd (in liquidation) pay Mr Lyons damages of $235,000 for the costs of completing the work to be done under the contract together with interest assessed at $66,444 and interest on outstanding balances;

Dreamstarter Pty Ltd (in liquidation) pay Mr Lyons costs of and incidental to the application and counter application, including directions hearings, the application heard 14 March, 2012 and the orders made 20 July, 2012 and 1 August, 2012 on the District Court scale on an indemnity basis together with interest;

the orders are made without prejudice to Mr Lyons right to apply for orders for costs against other parties including the QBCC and Paul Farmer.

(i) 26 February, 2013 - APL086-12, order by consent that the costs of the appeal payable by Dreamstarter Pty Ltd (in liquidation) be fixed at $30,660.60.

(j) 26 February, 2013 - BDL222-10, order by consent that the Order made 20 September, 2012 be varied to fix at $207,732.45, the costs for the application and counter application incurred before 21 October, 2011, the costs of $30,660.60, $59,635.35 and $40,660.60 awarded to Mr Lyons in APL234-10 and BDL222-10.

[148] Mr Lyons swears in his sixth affidavit that in addition he had to pay the costs of the liquidation of the builder, in order to ensure the liquidators were able to take steps in the liquidation as there was otherwise no money in the liquidation. He swears that he paid the liquidators $17,500 which reflected $15,000.00 liquidation expenses and $2,500 for legal advice procured by the liquidators in relation to whether Mr Lyons had terminated the contract validly for the builder's default.

[69]

[149] I conclude, pursuant to s102 of the QCAT Act that it is in the interests of justice that the QBCC pay to Mr Lyons the following costs:

(a) all of his costs of GAR150-10, including this application, assessed on the District Court Scale on a standard basis. (I do not intend to include the costs of and incidental to the stay application and appeal. In this regard I note the order of the Appeal Tribunal that the QBCC pay Mr Lyons' costs fixed at $1,000.00. That costs order stands separate to this decision, unless it is altered as a consequence of Mr Lyons' application to re-open the issue);

(b) all of his costs of BDL222-10 from 25 November, 2011 to the date of this order; assessed on the District Court Scale on a standard basis;

(c) his costs of registering two judgments in the Magistrates Court, being M7040/12 and M7041/12; assessed on the Magistrates Court scale on a standard basis;

(d) his costs of winding up Dreamstarter Pty Ltd in Federal Court of Australia proceedings QUD 322 of 2012; assessed on the Federal Court scale on a party and party basis;

(e) his costs of obtaining leave to proceed against Dreamstarter Pty Ltd (in liquidation), in Supreme Court Proceedings S8077/2012 assessed on the Supreme Court Scale on a standard basis;

(f) the costs of the liquidation of Dreamstarter Pty Ltd, in an amount of $17,500.00;

(g) the costs of obtaining the order made 14 September, 2012 in APL086-12, fixed at $30,660.60.

[150] I find, as submitted by Mr Lyons, that the costs set out above were necessary and properly incurred in the prosecution of the Review Proceeding. I accept his submissions that when assessing costs on the standard basis, an assessor in Queensland will normally allow all costs "necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed."[36]

[151] Professor Dal Pont in his text, "Law of Costs" discusses the meaning of "necessary and proper to attain justice in the case": "This may equate to an inquiry as to whether that party is able to establish that the costs have been 'reasonably and necessarily incurred' or 'reasonable in all the circumstances'. This inquiry can alternatively be expressed as follows; 'Would it be necessary or proper for a reasonably prudent man, endeavouring to get justice, but endeavouring to get it without undue expenditure of money to incur the expense in question?"[37]

[152] Mr Lyons submits that "proper" includes items not strictly "necessary" but reasonably incurred for the purpose of the proceedings. The test as to whether an item is proper is that "of a sensible solicitor sitting in his chair and considering what in the light of his then knowledge is reasonable in the interests of his lay client."[38]

[153] I accept Mr Lyons submission that his costs of and incidental to the other proceedings are within the standard costs of the Review Proceeding because they were necessarily and properly incurred to "attain justice" in the Review Proceeding. I accept that it is reasonable that given the injunction staying the Review Proceeding, if he wished to proceed with that proceeding then he would have to resolve the Builder's Proceeding and that required him to incur the costs set out above.

[154] I intend that the costs be paid on a standard basis, not an indemnity basis. I do not think that the QBCC's conduct of the Review Proceeding has been so unreasonable as to warrant a costs order made on an indemnity basis.[39]In my analysis of the conduct of the QBCC for the purpose of considering an order for costs in the interests of justice, I did not find any conduct which was so unreasonable as to amount to an abuse of process, as submitted by Mr Lyons.

[70]

[155] Mr Lyons seeks an order that the QBCC pay interest on such sums as may be awarded to him for costs including expenses at the rate of 14.23% pa or such other rate or rates as the Tribunal may consider appropriate commencing on such date as the Tribunal may nominate and ending upon payment of the said costs including expenses.

[156] Mr Lyons relies on a power to award interest under s 58 Civil Proceedings Act, 2011, whereby a Court may award interest in any proceedings in which a claim for money is made. Alternatively, under s47 of the now repealed Supreme Court Act 1995, which at the time the Review Proceeding was commenced, gave a Court the power to award interest in causes of action for the recovery of money. Additionally, Mr Lyons claims a power to award interest is conferred by s77(2)(h) of the QBSA Act which confers a power on the Tribunal in building disputes to award costs.

[157] Mr Lyons argues that the power to award costs includes power to award interest on costs. He cites McWilliams Wines Pty Ltd v Liaweena (NSW) Pty Ltd[40] as authority. He argues that powers to award costs are given a wide construction and the power to award interest is within the power to award costs because the need for both arise from the same foundation: the obligation to indemnify or compensate the wronged party against loss.

[158] The QBCC submits that the relief should not be ordered because:

(i) there is no legislative provision that expressly states that the Tribunal or the Appeal Tribunal have power to award interest on costs.

(ii) S77(2)(h) of the QBCC Act does not apply, because that power is only in respect of a building dispute. That is not the character of this Review Proceeding. Further, the QBCC is neither a builder nor a homeowner, being the necessary parties to a building dispute.

(iii) The New South Wales decision of McWilliams Wines has been the subject of criticism in Queensland.[41]

(iv) Even if the Tribunal does have the requisite power, this is not a matter, consistent with the New South Wales authorities, which provide that it is appropriate to compensate a litigant for being wrongly required to spend money on litigation to enforce established rights. In this case Mr Lyons was obliged to satisfy the condition precedent in the Policy by pursing his remedy against the builder;

(v) The application is a collateral attack on the decision of the Appeal Tribunal in the Stay Appeal.

(vi) There has been a considerable delay on the part of Mr Lyons in pursing this application, so much that a guillotine order was made against him.

[71]

[159] For the reasons given earlier, I do not think this application is a collateral attack on the Appeal Tribunal in the Stay Appeal. That is not a reason to reject Mr Lyons claim for interest on costs, as submitted by the QBCC. I also do not think there has been such a period of delay in bringing this application that it should not be considered.

[160] Otherwise, I agree with all the QBCC's submissions.

[161] A very recent decision of this Tribunal has concluded that there is no general power in the Tribunal to award interest. The Member noted that his view accords with that of the former President of the Tribunal Alan Wilson J, who has said that, unlike the courts, the Tribunal does not have a wide statutory discretion to award costs.[42]I agree with that conclusion for the reasons set out in those decisions. However, neither decision dealt with the arguments raised by Mr Lyons in relation to s58 Civil Proceedings Act 2011 and s47 Supreme Court Act 1995.

[162] I do not think s58 of the Civil Proceedings Act 2011 applies to this Tribunal.S 3 of the Act says that unless otherwise expressly provided, the Act applies to civil proceedings in the Supreme, District and Magistrates Courts. There is no express provision in relation to the Tribunal in relation to the power to award interest. I reject Mr Lyons argument that the definition of "court" in the Act is capable of a wider interpretation in the absence of an express provision.

[163] I agree with Mr Lyons that the Tribunal is a Court of Record and that the now repealed Supreme Court Act 1995 may enable this Tribunal to order payment of interest. In view of the repeal of the Act, exercise of the power relies on s20 of the Acts Interpretation Act 1954. S48 of the Supreme Court Act 1995, deals expressly with interest on costs. Where an order for the payment of costs has been made, and it remains unpaid for a period of 21 days after the ascertainment of the costs, interest is payable unless the Court makes a different order. Mr Lyons is seeking a different order. He relies on s47 of the Supreme Court Act 1995 as the relevant source of power in this case. That section enables an order for interest on a sum for which judgment is given in proceedings for recovery of money, including debt, damages or the value of goods.

[164] Although Mr Lyons has sought an order that the QBCC pay him "such sum as the Tribunal assesses as the sum due under the policy", I do not agree that this prayer for relief makes the Review Proceeding a proceeding for recovery of money. A review proceeding is intended to review an administrative decision and to ensure the correct and preferable decision. In this case there has been no order for the payment of money, nor could there be given the steps the QBCC was obliged to take in assessing any money payable under the policy, once it was determined that the contract had been properly terminated by Mr Lyons.

[165] Further, I do not think the costs of a proceeding, constitutes money the subject of recovery proceedings, which attracts an award of interest, because in this case costs are in the discretion of the Tribunal.

[166] For these reasons, I reject Mr Lyons claim for interest on any award of costs in his favour.

[72]

[167] It is convenient at this point, whilst the power to award interest is being analysed, to consider Mr Lyons claim for interest on the sum of $200,000 paid by the QBCC upon notification of the declarations made by Justice Wilson. Mr Lyons seeks an order that the QBCC pay interest:

(a) of $81,005.15 in relation to the $200,000 for the period from 16.12.09 to 8.4.13; or alternatively,

(b) on the $200,000 at such other rate or rates as the Tribunal may consider appropriate.

[168] Mr Lyons relies on the powers discussed in relation to the question of interest on costs. Mr Lyons says that the Review Proceeding is one for the payment of money, because the relief sought included "an order that the BSA pay the applicant such sum as the Tribunal assesses as the sum due under the policy."

[169] He argues that interest should be calculated from the date of his claim on 16 December, 2009 to the date of payment on 8 April, 2013. The interest he seeks is the Commonwealth Bank of Australia Standard Variable Rate applicable to home loans at the time the payment becomes due plus 5% per annum. That rate is chosen because Mr Lyons says it is the rate that the QBCC recommends to homeowners and builders as the default rate for non-payment of monies under contracts of the kind that gave rise to this dispute.

[170] The QBCC says that it paid the money as soon as it was notified of the declarations and that it is not appropriate to order the payment of interest, even if there were power to do so, which it denies.

[171] For all the reasons set out in the discussion in relation to interest on a costs award, I do not think there is power to award interest on the sum paid by the QBCC upon notification of the declaration by Justice Wilson.

[172] The declaration I have made in these proceedings is not a declaration that the sum of $200,000.00 was payable. The declaration is not in the nature of a judgment on which interest could be ordered to be paid. It is merely a statement of the sum which was in fact paid without further order of the Tribunal, upon notice of the declarations made by Justice Wilson. This Tribunal has not given judgment for the sum of $200,000.

[173] For these reasons, I decline to order the payment of interest on the sum of $200,000.00.

[73]

[174] Mr Lyons submits as an alternative that if it is found that the QCAT does not have power to award costs against the QBCC, that include his costs of other proceedings, then it is in the interests of justice that orders for costs be made against the QBCC in the Builder's Proceeding and other proceedings.

[175] As noted above, when orders were made against Dreamstarter Pty Ltd (in liquidation) for damages, costs and interest, the order specifically reserved the right of Mr Lyons to seek a costs order against the QBCC.

[176] It is submitted that can be achieved in 2 ways. First by joinder of the QBCC under s42 of the QCAT Act and to then make a costs order against the QBCC as a party, under s106 of the QCAT Act.

[177] Second, by making an order against the QBCC as a non-party, relying on the broad discretion conferred by s77(2) of the QBCC Act.

[178] Mr Lyons submits that the Tribunal is not functus officio because of s106 of the QCAT Act, the general law[43], and the express reservation in the orders made in the Builder's Proceeding.

[179] Because I have made orders for the payment of costs, including the costs of other proceedings in the Review Proceeding, it is not necessary to make orders in the ways suggested by Mr Lyons.

[180] For completeness, I will consider the submissions of the parties in relation to these issues.

[181] The QBCC argues that as it is neither a homeowner nor a building contractor, the Tribunal has no power to deal with the QBCC as part of the Builder's Proceeding, which is a domestic building dispute. The Tribunal's jurisdiction is limited by s77(1) of the QBCC Act. The QBCC concedes that there is sufficient power to join the QBCC as a party to the proceedings under s42 of the QCAT Act, but that discretion should not be exercised.

[182] I agree that the discretion to join the QBCC to the Builder's Proceeding should not be exercised in circumstances where the QBCC could never have participated in the proceedings.

[183] It is a different matter however to determine whether the QBCC should bear those costs as a non-party upon the application of established principles. I consider that this tribunal does have jurisdiction to make such an order.[44]

[184] The QBCC argues that for it to be responsible for costs as a non-party, it must have been the "real litigant". It argues that this was recognized by the Appeal Tribunal in the Stay Appeal, when it refused to order that the Review and Builder's Proceeding be heard together. Further, a range of issues relevant only to the dispute between the Builder and Mr Lyons were not relevant to the QBCC. I accept that is the case in relation to the Builder's Proceeding, up to the point where the Builder indicated he would withdraw. However, from that point the only live issues were those necessary to be established to successfully claim on the insurance policy. The QBCC undertook to be bound by the determination of those issues.

[185] I have found that under s102 of the QCAT Act it is in the interests of justice for the QBCC to pay certain of Mr Lyons costs. That analysis stands in relation to the Builder's Proceeding. I have found that the Magistrates Court, Federal Court and Supreme Court proceedings and the costs of the liquidation were necessary and properly incurred in achieving a resolution of the Review Proceeding, which rested on a resolution of the Builder's Proceeding. Accordingly, I find that those costs form part of the costs of the Builder's Proceeding.

[186] In discussing this issue earlier, I found that the QBCC had a real connection with the Builder's Proceeding because of the undertaking it gave in the Stay Appeal. I found that the connection was material to the issue of costs, in that it stood to benefit from the litigation or has an indirect financial interest in it. I have found that the QBCC was warned of Mr Lyon's intention to seek non-party costs and has been given the opportunity for a proper hearing into the proposed order.

[187] For these reasons I consider there are grounds, apart from the orders made in the Review Proceeding to make non-party orders in the Builder's Proceeding, if it were necessary to do so.

[76]

(e) has properly terminated the contract with Dreamstarter Pty Ltd dated 20 June, 2009, as varied;

(f) has properly terminated the agreement constituted or evidenced by Variation 1 dated 14 October, 2009 validly on 3 December, 2009 for Dreamstarter Pty Ltd's default;

(g) liability to Dreamstarter Pty Ltd under the Contract at the date of termination of the Contract was nil; and

(h) reasonable cost of completing the Contract following termination exceeds $435,000.00."

[190] It is declared that the Queensland Building and Construction Commission paid Mr Lyons the sum of $200,000.00 pursuant to the terms of the "BSA Home Warranty Insurance Policy" on 8 April, 2013.

[191] The Queensland Building and Construction Commission pay to Mr Lyons the following costs:

In addition to his costs fixed at $1,000.00 in APL299-10, all his costs of and incidental to GAR150-10, including:

(1) this application;

(2) all of his costs of BDL222-10 from 25 November, 2011 to the date of this order;

(3) his costs of registering two judgments in the Magistrates Court, being M7040/12 and M7041/12; assessed on the Magistrates Court scale on a standard basis;

(4) his costs of winding up Dreamstarter Pty Ltd in Federal Court of Australia proceedings QUD 322 of 2012; assessed on the Federal Court scale on a party and party basis;

(5) his costs of obtaining leave to proceed against Dreamstarter Pty Ltd (in liquidation), in Supreme Court Proceedings S8077/2012 assessed on the Supreme Court Scale on a standard basis;

(6) the costs of the liquidation of Dreamstarter Pty Ltd, in an amount of $17,500.00;

(7) the costs of obtaining the order made 14 September, 2012 in APL086-12, fixed at $30,660.60.

[192] Unless otherwise ordered, the costs to be assessed on the District Court Scale on a standard basis.

[193] Unless otherwise fixed, the costs be fixed in accordance with a costs report prepared by Mr Stephen Hartwell, costs assessor, or such other costs assessor as may be nominated by Mr Lyons.

Lyons v Queensland Building and Construction Commission & Dreamstarter Pty Ltd

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (114 paragraphs)

Lyons v Queensland Building and Construction Commission & Dreamstarter Pty Ltd (in liquidation) [2016] QCAT 218 (9 June 2016)

Parties

Legislation Cited (3)

Cases Cited (6)