Armstrong v Kawana Island Retirement Village
[2014] QCAT 51
| CITATION: | Armstrong v Kawana Island Retirement Village [2014] QCAT 51 |
| PARTIES: | Les Armstrong (Applicant) |
| v | |
| Kawana Island Retirement Village (Respondent) |
| APPLICATION NUMBER: | OCL106-12 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | 6 February 2014 |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Hughes |
| DELIVERED ON: | 7 February 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | Les Armstrong pay to Kawana Island Retirement Village its costs fixed at $2,000.00 by 21 February 2014. |
| CATCHWORDS: | COSTS – interests of justice – dismissal for lack of jurisdiction – persisting with application after notice – need for legal representation – dismissal at early stage – no evidence of financial circumstances – jurisdiction to order costs after dismissal – failure to give notice substantive non-compliance – test case – characterisation of dispute – retirement village – immunity under Civil Liability Act 2003 – indemnity costs – costs reasonably incurred Civil Liability Act 2003 ss 4, 38, 39 Schedule 2 A. Goninan & Co. Ltd v Gill [2001] NSWCA 77 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
What is this Application about?
Kawana Island Retirement Village wants Mr Les Armstrong to pay its costs of $24,658.00. Kawana incurred these costs in responding to an application brought by Mr Armstrong about retirement village budget issues. The Tribunal ultimately dismissed Mr Armstrong’s application for want of jurisdiction.
What is the Tribunal’s jurisdiction to award costs?
Costs in the Tribunal are not awarded as a matter of course. Each party must bear their own costs[1], unless the interests of justice require the Tribunal to order a party to pay the costs of another party.[2]
[1]Queensland Civil and Administrative Tribunal Act 2009, section 100.
[2]Queensland Civil and Administrative Tribunal Act 2009, section 102.
There is therefore a strong indicator against awarding costs:
Under the QCAT Act the question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s.100.[3]
[3]Ralacom Pty Ltd v. Body Corporate for Paradise Island Apartments (No. 2) [2010] QCAT 412 at [29].
In deciding this, I may regard prescribed circumstances[4]. I will address each seriatim.
[4]Queensland Civil and Administrative Tribunal Act 2009, section 102(3).
Whether a party is acting in a way that unnecessarily disadvantages another party
Mr Armstrong’s application was dismissed. The Tribunal lacked jurisdiction because Mr Armstrong did not give Kawana the prescribed notice.[5]
[5]Retirement Villages Act 1999, section 154(2).
Mr Armstrong filed his application on 3 October 2012. Kawana’s solicitors raised the issue of jurisdiction with Mr Armstrong at an early state:
The absence of a Section 154 Notice and Meeting means that the Tribunal does not have the jurisdiction or the power to hear and determine this matter.[6]
And again:
The matter that is of concern is the possible defect in the Tribunal’s jurisdiction. The possibility of that defect can be removed by you starting the process properly.[7]
Kawana then pleaded this lack of jurisdiction in its response filed on 10 December 2012.
[6]Email Peter Porcellini dated 29 November 2012.
[7]Email Peter Porcellini dated 30 November 2012.
Despite this portent, Mr Armstrong persisted with his application. However, Mr Armstrong refutes any ‘deliberately disadvantageous conduct’:
The fact that the Applicant was aware that he was not specifically named in the s154 Notice does not imply that the Applicant knew (or ought to have known) that the proceedings would ultimately be dismissed.[8]
[8]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [12].
Mr Armstrong maintains his view that there was sufficient compliance to enliven the Tribunal’s jurisdiction:
The Applicant believes, and has always believed, that there was sufficient compliance with s154 of the RV Act to enliven the Tribunal’s jurisdiction. The Applicant has even considered an appeal against the Tribunal’s decision to dismiss the proceedings, for the following reasons…[9]
[9]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [13].
Mr Armstrong then descends into setting out grounds of appeal against the original decision, despite this being an application for costs.
Mr Armstrong’s Application was flawed from its inception. He was never a party to the dispute because he never gave Kawana the prescribed Notice. Kawana notified him of this. Moreover, he has a duty to properly prepare his application:
The statutory regime under which QCAT operates places obligations upon parties themselves to take care in their dealings with Tribunal matters, and to act in their own best interests. QCAT’s resources for the resolution of disputes are in high demand and serve, as the High Court has recently observed in relation to court resources, ‘…the public as a whole, not merely the parties to the proceedings’. Finality in litigation is highly desirable, because any further action beyond the hearing can be costly and unnecessarily burdensome upon the parties.[10]
[10]Creek v Raine & Horne Real Estate Mossman [2011] QCATA 226 at paragraph 13, citing Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 and Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Kirby and Gummow JJ.
Mr Armstrong failed to properly prepare his Application. He aggravated his failure by persisting even when notified of its flaw. He thereby failed to act in his own interests. His failure did not simply compromise his own interests. It incurred upon the Tribunal’s resources and required Kawana to commit time and resources to respond to the application:
…Parties must assume a responsibility to take care in preparing material upon which they seek to rely, and to lodge the correct application. The forms are not difficult to understand, and may even be fairly described as intuitive.[11]
[11]Rayner & Anor v Trabme Pty Ltd t/as Elders Redcliffe [2013] QCATA 212 at [46].
Mr Armstrong chose to pursue a claim in circumstances where he did not comply with prerequisites to the Tribunal’s jurisdiction. He thereby attempted to circumvent due process. He therefore acted in a way that was unreasonable and unnecessarily disadvantaged Kawana.
Mr Armstrong’s failure to comply with proper processes suggests it is in the interests of justice that he pay costs arising from that failure:
Where a party seeks to go outside the normal process which was laid down by the Act this is a major factor from a justice interest’s perspective when the Applicant fails.[12]
[12]S.H.I.F.T. Whitsunday Pty Ltd v McLean Cooke Pty Ltd (No. 2) [2012] QCAT 396 at [36].
The nature and complexity of the dispute
Mr Armstrong’s original Application sought orders that Kawana exclude certain items from the budget, recalculate the levy payable by residents and refund any overpayments.
Kawana contends the dispute is complex:
The issues that would have been litigated had the Tribunal’s jurisdiction been properly enlivened were complex and it was reasonable for the Respondent to seek to obtain significant assistance from its Lawyers and to seek to be legally represented in the proceedings.[13]
[13]Attachment A to Application for Costs at [41].
There is a distinction between the mere fact of having legal representation and reasonably obtaining representation because of the complexity of the proceedings.[14] Kawana did not have a right to legal representation in these proceedings. Accordingly, it applied for leave to be represented prior to filing its Response. The Tribunal did not make any orders granting leave. Rather, the Tribunal dismissed the Application at its own behest after considering submissions by the parties.
[14]Tamawood Ltd v Paans [2005] QCA 111.
Therefore, the operative words in Kawana’s submission are “would have”. The issues referred to by Kawana were not determined by the Tribunal. The application was dismissed simply because of Mr Armstrong’s failure to comply with the pre-requisites to jurisdiction. The issue was merely whether Mr Armstrong gave the prescribed notice – he did not.
Kawana could have, and should have, applied to strike out Mr Armstrong’s application. This would have forestalled further steps and costs pending the determination of that application. This would have obviated incurring many of its costs.
Even if the issues “that would have been litigated” were considered part of the dispute, they are not sufficiently complex to warrant the awarding of costs. Similar issues with the same parties have previously been considered by the Tribunal:
The remaining issue in this dispute is restricted to the dispute between the parties as to the refund due to residents from based on unapproved budget items, and in particular to the offset amount. This matter is neither legally nor factually complex.[15]
[15]Armstrong v Kawana Island Retirement Village [2011] QCAT 613 at [21].
The requirement to give the Notice is not a complex question of law. Whether Mr Armstrong gave the Notice is not a complex question of fact.
Despite this, Mr Armstrong is a self-described ’volunteer lay litigant’.[16] Given this, his professed familiarity with the dispute resolution process under the Retirement Villages Act 1999[17] and his persistence with the Application, I am satisfied that it was reasonable for Kawana to engage legal representation.
[16]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [19].
[17]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [19].
However, that representation was only reasonable to the extent that it would have been necessary to receive Mr Armstrong’s original Application, procure initial advice and apply to the Tribunal to strike out or dismiss Mr Armstrong’s application for want of jurisdiction.
The relative strengths of the claims made by each of the parties
Although Mr Armstrong’s Application was misconceived, within the context of awarding costs its lack of strength is countered by its summary dismissal:
The factors listed in s 102 are a guide to the considerations the Tribunal may take into account… In any given case, the relative importance of each criterion will vary. Further, their significance may relate to what stage the proceedings have reached. For example, questions about the relative strengths of the parties’ cases may assume less significance upon an initial hearing, yet loom large when it comes to the costs of an application for leave to appeal.[18]
[18]Kehl v Board of Professional Engineers of Queensland [2010] QCATA 77 at [10].
The Application was dismissed at an early stage of the proceedings – after the filing of the Response and without the need for a hearing. The dispute is therefore more akin to being dismissed at an interlocutory stage. Because of Mr Armstrong’s Application, Kawana was necessarily put to some expense in responding. However, much of Kawana’s response addresses issues that were not necessary to determine the Application – Mr Armstrong’s failure to give the prescribed Notice.
The financial circumstances of the parties
Mr Armstrong claims to be a self-funded retiree with a gross income of $50,000.00 per year and a disposable income of $13,000.00.[19] However, Mr Armstrong failed to provide any documents to support his claimed income and expenses.
[19]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [38].
Mr Armstrong also contended that Kawana ‘is a member of a large and well-funded corporate group headed by a public company known as Living Choice Australia Ltd’.[20] However, Mr Armstrong failed to provide any company searches or financial records to support this.
[20]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [37].
There is therefore no evidence of either party’s financial circumstances.
Anything else the Tribunal considers relevant
Mr Armstrong raised additional issues that he considered to be relevant.
No jurisdiction to make costs order
Mr Armstrong argues that the Application for costs must be dismissed because:
The Tribunal has determined that it lacks jurisdiction in these proceedings. This inevitably means that the Tribunal lacks jurisdiction to entertain the Respondent’s application for costs, and has no jurisdictional basis to make the costs orders sought by the Respondent.[21]
And further:
There is no provision in the QCAT Act or the Retirement Villages Act 1999 (Qld)… that empowers the Tribunal to make an order for costs in circumstances where its jurisdiction has not otherwise been enlivened. Without such a power the Tribunal is simply unable to make the orders sought by the Respondent.[22]
[21]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [1A].
[22]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [5].
The argument is spurious. Although the original Application has been dismissed for want of jurisdiction, the Tribunal may still make a costs order against the party who brought the proceeding to compensate another party for any reasonable costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding.[23]
[23]Queensland Civil and Administrative Tribunal Act 2009, section 47(2)(c).
Non-compliance with notice provisions substantive or procedural
Mr Armstrong argues that:
The omission of the Applicant’s name from the s154 notice was merely a procedural technicality that caused no prejudice to the Respondent whatsoever and was capable of being corrected by the Tribunal in accordance with s61(1)(c) of the QCAT Act.[24]
[24]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [13(f)].
A party to a retirement village dispute may only apply to the Tribunal in circumstances where mediation or negotiation has not resolved the dispute.[25] A party to the dispute must give the other party to the dispute the prescribed notice before mediation or negotiation.[26]
[25]Retirement Villages Act 1999, section 167.
[26]Retirement Villages Act 1999, section 154.
Mr Armstrong did not give the prescribed Notice. This is not a mere procedural deficiency. The legislature has expressed the clear intent that parties in retirement village disputes attempt to resolve their issues before applying to the Tribunal. The Notice facilitates this by containing prescribed information including the parties and the matters in dispute.[27] Mr Armstrong’s attempt to rely upon a Notice issued by another party circumvents due process. It is a precondition to jurisdiction that a party give the Notice. The provision is therefore substantive and defines the limits of jurisdiction.[28]
[27]Retirement Villages Act 1999, section 154(2).
[28]Watkins v. Queensland Building Services Authority [2013] QCAT 535 at [20].
This means that the Tribunal cannot waive compliance:
… section 61 of the QCAT Act is not a solvent for… exclusions of jurisdiction…[29]
… a discretion to relax procedural rules cannot avoid an inflexible, prescriptive statutory limitation. An unauthorised or prohibited act is a nullity, not a mere irregularity.[30]
[29] Watkins v Queensland Building Services Authority [2013] QCAT 535 at [15].
[30] Bergin v Department of Housing and Public Works [2013] QCAT 190 at [15]
Mr Armstrong further argues that:
The QCAT Act specifically empowers the Tribunal to make interim orders in a proceeding to secure the effectiveness of its jurisdiction (s58(1)(b)).[31]
[31]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [13(i)].
Mr Armstrong’s original Application was based on a statutory cause of action:
The general principle is that a cause of action must be complete before it can support a valid writ or equivalent initiating process.[32]
[32]Face 2 Face Foundation Pty Ltd Ltd & Ors v Brisbane City Council [2013] QCATA 252 at [20].
The cause of action was not complete until the prescribed Notice was given and mediation or negotiation did not succeed. Mr Armstrong’s Application was premature. The giving of the prescribed Notice is a mandatory precondition to jurisdiction and the Tribunal had no jurisdiction to proceed:
The Tribunal’s jurisdiction is derived from various “enabling Acts”… An enabling Act may vary or exclude provisions of the QCAT Act… any such provision, or one mentioned in subsection 6(7), prevails over inconsistent provisions of the QCAT Act, and that Act must be read accordingly.[33]
[33] Watkins v Queensland Building Services Authority [2013] QCAT 535 at [9].
This means that the general section 58(1)(b) of the Queensland Civil and Administrative Tribunal Act 2009 is read subject to the specific sections 154 and 167 of the Retirement Villages Act 1999:
When the legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised, and the conditions and restrictions which must be observed… it excludes the operation of general expressions… which might otherwise have been relied on for the same power.[34]
[34] Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of
Australia (1932) 47 CLR 1 at 2.
Mr Armstrong therefore cannot rely upon the general power in section 58 of the Queensland Civil and Administrative Tribunal Act 2009 to cure his failure to comply with the specific jurisdictional requirements of sections 154 and 167 of the Retirement Villages Act 1999.
Test case
Mr Armstrong claims that he brought his Application as ‘a test case with importance beyond the parties to the dispute’.[35] He then asserts:
It is well established that the usual costs rules do not apply in test case litigation, and costs will not necessarily follow the event: for example see A Goninan & Co. Ltd [2001] NSWCA 77.[36]
[35]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [41].
[36]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [42].
In that case, the New South Wales Court of Appeal ordered the appellant company to pay the worker’s costs despite the failure of the worker’s argument. Relevantly, the appellant company was granted leave to appeal and the appeal was considered to
…test the correctness of the line of authority in the Compensation Court. It was thus of general importance to the insurer behind the company, and to other insurers behind employers in the position of the company, but of no significance whatever to the worker. The costs of the appeal must far exceed the $542.50 in dispute. The proceedings were thus of considerable benefit to the company and its insurer, but of no benefit, and much potential detriment, to the worker. Further… there was a degree of vacillation and wavering on the company’s part in relation to what orders it sought… for which the worker was not responsible.[37]
[37]A. Goninan & Co. Ltd v Gill [2001] NSWCA 77 at [60].
The worker was compelled to respond to an appeal in which it had little, if any, interest. There was dilatory conduct by the appellant company. Here, the Application was entirely at the behest of Mr Armstrong. Kawana had no choice but to respond. Kawana’s position is therefore analogous to the worker’s position in Gill, fortified by its argument here actually succeeding.[38]
[38]A. Goninan & Co. Ltd v Gill [2001] NSWCA 77.
While the issues canvassed by Mr Armstrong’s application could have affected many operators and residents, it ultimately did not. The issues were never “tested”. The application was flawed from the outset. Mr Armstrong did not withdraw his Application, even when notified of its fundamental flaw. He pursued it defiantly, without any apparent regard for the incursion upon the resources of the Tribunal and Kawana.
I therefore do not consider Gill qualifies this as a “test case”, preventing an award of costs against Mr Armstrong. If Gill does apply, it supports an award of costs against Mr Armstrong.
Characterisation of dispute – retirement village
Mr Armstrong also argues that because of the unique characteristics of a retirement village dispute, it is rarely in the interests of justice to award costs against a resident applicant:
The District Court has previously emphasised the importance of refraining from awarding costs in a retirement village before the Tribunal: see Saunders v Paragon Property Investments Pty Ltd [2009] QDC 19.[39]
[39]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [48].
The Tribunal is not required to follow decisions of the District Court:
The District Court is not in the line of authority that governs the Tribunal. Decisions of the Tribunal at first instance (excepting any made by a judicial member) are subject to an internal appeal, and thereafter to the Court of Appeal and the High Court.[40]
[40]Watkins v Queensland Building Services Authority [2013] QCAT 535 at [17].
Despite this, the District Court’s reasoning deserves consideration. The learned Judge ordered costs of the appeal but not the Tribunal proceedings, with this qualifier:
I do not doubt that there may arise in the Tribunal circumstances in which a party might properly be required to pay costs following rejection of an offer to settle. One can imagine circumstances in which it might be assessed as mischievous to continue a proceeding in the Tribunal which was clearly pointless, because an offer made regarding the subject matter could not possibly be bettered.[41]
[41]Saunders v Paragon Property Investments Pty Ltd [2009] QDC 19 at [13].
Although there were no offers to settle here, Mr Armstrong was put on notice at an early stage of the futility of his Application. He continued regardless. He effectively rejected an opportunity not to proceed with his Application and thereby minimise costs to the Tribunal and the parties.
The characterisation of a dispute as a retirement village dispute does not mean a party can proceed carte blanche without regard to fundamental jurisdictional prerequisites. This would be tantamount to immunising parties from any repercussions from their own conduct in unnecessarily incurring upon the limited time and resources of other parties and moreover, the Tribunal. This is not to be encouraged.
The characterisation of the dispute as a retirement village dispute is countervailed by Mr Armstrong’s choice to file the Application without complying with the jurisdictional prerequisites and then persisting even after being put on notice.
Possible application of Civil Liability Act 2003
Mr Armstrong also claims that he is immune from liability:
… the Applicant brought these proceedings as part of the voluntary work he does for the ARQRV. That Association is a community organisation for the purposes of the Civil Liability Act 2003 (Qld) and therefore, under section 39(1) of that Act the Applicant is immune from any personal civil liability, such as the Respondent’s application for costs.[42]
[42]Applicant’s Response to Respondent’s Application for Costs filed 8 November 2013 at [50].
The argument is specious. The Civil Liability Act 2003 applies to any civil claim for damages for harm.[43] ‘Claim’ means a claim for damages based on a liability for personal injury, damage to property or economic loss. This is an application for costs. ‘Costs’ are a separate concept from ‘damages’ and not a form of compensation giving rise to a separate liability distinct from the primary action. An application for costs is not a claim for damages.
[43]Civil Liability Act 2003, section 4(1).
Further, to attract the immunity, the provision requires a volunteer to perform ‘community work’ for a ‘community organisation’.[44] Mr Armstrong brought the application in his own name. Nowhere in his Application or in its 17 pages of attachments does he claim to be representing any ‘community organisation’.[45] Rather, he sought an order that Kawana recalculate the levy payable by residents and a refund of alleged levy overpayments. He therefore stood to derive direct private financial gain from his application. This is not ‘community work’.[46]
[44]Civil Liability Act 2003, section 39.
[45]Civil Liability Act 2003, section 38.
[46]Civil Liability Act 2003, section 38.
I therefore do not consider this to be a relevant consideration in deciding whether to award costs.
Weighing of the circumstances
Had Mr Armstrong not defiantly pursued an inherently and patently flawed application, costs would not have been incurred. I therefore consider that it is in the interests of justice to require Mr Armstrong to pay at least part of Kawana’s costs.
The Tribunal is mandated to fix these costs if possible.[47] Kawana claims it incurred costs of $24,658.00.[48] This is the amount Kawana paid to its solicitors and it is therefore effectively seeking costs on an indemnity basis.
[47]Queensland Civil and Administrative Tribunal Act 2009, section 107(1).
[48]Affidavit of David Andrew Netherton sworn 24 October 2013 at [3].
The Courts are loathe to make orders for indemnity costs in the absence of some contumelious conduct by a party.[49] Although Mr Armstrong’s application lacked any jurisdictional basis, his conduct was not sufficiently serious to warrant paying Kawana’s costs on an indemnity basis. A claim is not vexatious simply because it is not strong or wholly fails.[50] Moreover, in a jurisdiction that contemplates self-representation and that parties bear their own costs, Kawana’s decision to engage legal representation is to be made carefully and with a modicum of “legal costs economy”.[51]
[49]Colgate-Palmolive v Cussons (1993) 46 FCR 225.
[50]Civic Steel Homes v Mitra [2006] QDC 322 and Leo v Paulsen [2010] QCAT 122 cited with approval in Joanne Baxter and Fifties Food Pty Ltd atf The Ninja Bear Trust t/as Subway Wynum Central v Subway Realty Pty Ltd and Kennion (Trustees) Pty Ltd [2013] QCAT 316 at [22].
[51] Lowik v Carl Linklater Pty Ltd [2010] QCAT 287 at [21].
Had Kawana applied to strike out Mr Armstrong’s application, many of its costs would not have been incurred. Further, as an operator within the industry, Kawana could have competently conducted much of the process itself. Kawana’s costs are limited to those that were reasonably necessary to achieve the outcome:
In the absence of countervailing considerations, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome.[52]
[52] Tamawood Ltd v Paans [2005] QCA 111 at [33].
I therefore consider that it would have been reasonable for Kawana to incur costs to receive the original Application, procure initial advice and prepare a Response commensurate with applying to the Tribunal to strike out or dismiss for want of jurisdiction. The remaining costs would not have been necessary had Kawana applied to strike out the Application.
Kawana has not provided any separate itemisation of its costs. In the absence of this material and with a view to finalising these issues without putting the parties to further expense and delay, I fix these costs at $2,000.00.
Orders
For these reasons, the Tribunal orders that Les Armstrong pay to Kawana Island Retirement Village its costs fixed at $2,000.00 by 21 February 2014.
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