Coral Homes QLD Pty Ltd t/as Coral Homes Pty Ltd v Queensland Building Services Authority
[2014] QCAT 93
•4 March 2014
| CITATION: | Coral Homes QLD Pty Ltd t/as Coral Homes Pty Ltd v Queensland Building Services Authority (now the Queensland Building and Construction Commission) [2014] QCAT 093 |
| PARTIES: | Coral Homes QLD Pty Ltd t/as Coral Homes Pty Ltd (Applicant) |
| v | |
| Queensland Building Services Authority (now the Queensland Building and Construction Commission) (Respondent) Lindsay Reid (Third Party) |
| APPLICATION NUMBER: | GAR 177-11; GAR230-11 |
| MATTER TYPE: | General Administrative Review |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Ryan |
| DELIVERED ON: | 4 March 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Application dismissed. |
| CATCHWORDS: | Application by third party for costs in application for miscellaneous matters – application was for order that an offence had been committed for failure to produce documents pursuant to a notice under s 97 QCAT Act – whether an application for costs of a miscellaneous matters application alleging contempt is required to be determined by judicial member – whether tribunal's costs jurisdiction 'unfettered' by virtue of UCPR rule 932. Whether costs inclusive of a witnesses legal costs can be awarded to a third party. Costs considerations under s 102 where no decision on the merits – whether circumstances point 'compellingly' to the awarding of costs as to overcome s 100. Queensland Civil and Administrative Tribunal Act 2009 ss 5, 21, 32, 40, 41, 42, 46, 47, 63, 97, 100, 102, 103, 104, 105, 107, 151, 214, 215, 218, 219 |
| McNab Constructions Australia Pty Ltd v Queensland Building Services Authority [2013] QSC 57 Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 542 to 543 |
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 (the QCAT Act).
REASONS FOR DECISION
Background to the original application
This is an application for costs by a third party in a miscellaneous matters application. The original proceedings were applications to the tribunal in its administrative review jurisdiction by Coral Homes Pty Ltd (‘Coral Homes’) seeking a review of decisions made by the respondent, Queensland Building Services Authority (now the Queensland Building and Construction Commission, or QBCC).
In early June 2011, the QBCC had issued directions to Coral Homes under s 72 of the Queensland Building Services Act 1991 (now the Queensland Building and Construction Commission Act 1991 - the QBCC Act) to rectify or complete building work with respect to a number of homes constructed by Coral Homes. The statement of reasons of the QBCC included a report by an engineer, Mr Reid of Reid Consulting Engineers Pty Ltd. He was not a party in that application.
The initial application for review of the QBCC decision was filed in June 2011. On 14 March 2013, the Queensland Supreme Court decision of McNab Constructions Australia Pty Ltd v Queensland Building Services Authority[1] held that certain directions made by the QBCC for rectification were void because they had not given 28 days to rectify as was required. The QBCC’s solicitors wrote to the applicant on 29 April 2013 indicating that the effect of the decision was to render void the majority of the directions under review, including those in the matters under consideration here, GAR177-11, concerning 32 Moore Road, Torrington, and GAR230-11, concerning 68 Gowrie Street, Kingsthorpe. The QBCC subsequently indicated it was prepared to withdraw the directions, and they were set aside by consent in July 2013. The tribunal is now considering Mr Reid’s application for costs associated with a miscellaneous matters application filed by the applicant, Coral Homes, and rendered redundant once the original proceeding was discontinued.
[1][2013] QSC 57.
Background to the application for costs
In about May 2012, the QBCC had filed and served a statement of evidence in the tribunal which included reports by Mr Reid. Coral Homes’ lawyers entered into correspondence with Mr Reid seeking disclosure of certain documents. Mr Reid provided certain material after invoicing Coral Homes for three hours of his time as a director at $230 per hour, plus GST, a total of $759, which Coral Homes paid. Coral Homes took the view that the disclosure made by Mr Reid was not complete. Mr Reid agreed to an inspection of the files by Coral Homes, provided he supervise the inspection at the rate of $230 per hour to do so. Coral Homes responded that a further payment should not be required.
On 22 November 2012, Coral Homes filed an application for miscellaneous matters seeking the tribunal make an order for third party production of documents by Mr Reid pursuant to section 63(1) of the QCAT Act, and seeking costs of the application. It did not seek Mr Reid’s attendance. Coral Homes had agreed to pay the reasonable costs of disclosure of further documents.
On 26 November 2012, the tribunal decided that a notice should issue under s 97 of the QCAT Act, in the terms requested by the applicant, to Mr Reid. Costs were not referred to in the tribunal's decision. The notice indicated that a hearing would be conducted on 17 December 2012, that the documents were to be produced on or before that date, but did not require Mr Reid’s attendance.
Mr Reid provided an electronic copy of further documents received by the tribunal on 17 December 2012 and indicated that Reid Consulting had no more information. On that date, the tribunal directed that the matters be listed for a directions hearing on 31 January 2013.
In correspondence to the tribunal on 31 January 2013, Coral Homes asserted that Mr Reid had not complied with the notice, having not disclosed all the documents requested, and sought that the tribunal should issue a warrant to compel him to attend the tribunal on a date directed by it to produce the documents and be cross-examined on them and/or that the tribunal impose a penalty of $11,000. The letter asserted that Mr Reid ‘may be in contempt of the tribunal’ under s 218 of the QCAT Act, having committed an offence under s 214. The tribunal responded that there was insufficient information in the letter to justify the orders sought and suggested the applicant consider filing an application with affidavits in support and submissions, ensuring Mr Reid was provided with a copy.
It appears that on 31 January 2013, the matters were listed for a further directions hearing on 11 April 2013. These directions were vacated on 27 February 2013 and the matters were listed for a compulsory conference on 16 April 2013.
On 11 April 2013 the applicant lodged an application for miscellaneous matters seeking an order that an offence had been committed by a witness and/or punishment for contempt. On that date the tribunal directed the QBCC and Mr Reid to file submissions in response to the application by 22 May 2013, and directed that the matter was to be determined on the papers after 23 May 2013. The QBCC responded that it did not represent Mr Reid’s interests and did not propose making any submissions. Mr Reid’s submissions in reply, prepared by lawyers, were filed on 22 May 2012. He sought leave to be legally represented, although ultimately that application became redundant.
Between 29 April and early July, the disposition of the original applications between Coral Homes and the QBCC was resolved. Coral Homes forwarded Consent Orders to Mr Reid on 11 July 2013, seeking that the application for an order that an offence had been committed be withdrawn. Mr Reid did not consent. He asserted an application for leave to withdraw was required under s 46 of the QCAT Act, and that his costs of answering the application were yet to be dealt with. On 19 August 2013 the tribunal directed Mr Reid and Coral Homes to provide written submissions on costs by 2 September and 16 September respectively.
Mr Reid’s submissions were prepared by counsel. He agreed to the withdrawal, providing ‘..costs of and incidental to the Application be assessed on the standard basis, in accordance with the District Court Scale of costs and certified as fit for counsel, by Hickey & Garrett, Legal Costs Assessors..’. Coral Homes sought that the parties bear their own costs, and failing that that costs be fixed pursuant to s 107(1) of the QCAT Act, or by agreement, or by a costs assessor on the District Court scale.
The Third Party's submissions
In summary Mr Reid submitted:
1) The applicant had brought a charge of “contempt” (described by the third party as an ‘expression of convenience’). The tribunal had an unfettered jurisdiction to award costs, because in dealing with a charge of contempt, the tribunal had the same powers as the Supreme Court pursuant to s 219(1) and s 219(2) of the QCAT Act, and rule 99 of the QCAT Rules, which provided that rule 932 of the Queensland Uniform Civil Procedure Rules 1999 (UCPR) applied unchanged: ‘The costs of a proceeding for punishment of contempt are within the court's discretion whether a specific punishment is imposed or not’. The position was the same as it was for domestic building disputes, citing Lyons v Dreamstarter Pty Ltd[2].
[2][2011] QCATA 142.
2) Even were this not so, the tribunal had a discretion to award costs in the interests of justice, pursuant to s102(1) of the QCAT Act, and it should do so because:
·the matter was serious and complex;
·the third party was a witness only;
·the applicant is a company of substance;
·in seeking leave to withdraw without costs, it has adopted the opposite position to its own where it was seeking costs from QBCC for its withdrawal;
·it sought costs against the third party in its contempt application;
·both sides were legally represented.
3) It would be a dangerous precedent not to award costs, as the bringing of a charge of contempt may not be treated with the gravity it deserves.
4)Coral Homes itself was seeking costs against the QBCC because it had conceded the notices/decisions the subject of the review applications were void. Coral Homes could not then deny the third party the same course of action.
5)Were it not for the statutory provision that parties bear their own costs, it would be ‘axiomatic’ that leave to withdraw would only be given on the basis of an order to pay the other party’s costs.
The Applicant's submissions in reply
1) It was the third party’s failure to comply with the s 97 notice which led to the miscellaneous application under s 214 of the QCAT Act. Neither section touched on costs, and the s 100 position was not displaced.
2)s 218(1)(g) of the QCAT Act provided any offence under Chapter 5 Part 1 can be 'contempt' but there was no provision in Chapter 5 Part 1 which displaced the s 100 position. The tribunal was not vested with the same power as the Supreme Court with respect to costs. UCPR rule 932 only allowed a discretion as to costs even if there was a specific punishment. The general power to award costs was in Chapter 17A of UCPR, which was not adopted under s 219 of the QCAT Act. This was different to the position of the tribunal with respect to costs in domestic building disputes, under QBCC Act s 77(2)(h): the wording there, 'award costs', did provide unfettered jurisdiction. In this instance, the usual s 100 position prevails.
3)These were not 'contempt proceedings'. They were concerned with a failure to comply with a s 97 notice and the consequent offence under s 214 of the QCAT Act. The applicant had proposed three alternative orders in its application; the issue of a warrant, the imposition of a penalty of up to $11,000, any punishment available to the tribunal pursuant to s 219 on the basis of contempt of the tribunal.
4)With respect to the ‘interests of justice’ argument:
·The matter was not complex;
·The matter was only serious to the extent of the third party's ‘blatant disregard’ of the notice. The powers under Chapter 5 Part 1 reflected the seriousness with which the legislature viewed the third party's failure. Making a costs order would ignore the gravity of the third party's failure;
·The third party was a witness, and a ‘dangerous precedent’ could be set if there was no expectation of being held accountable for flagrant disregard of an order of the tribunal.
5) The Applicant's costs application against the respondent was irrelevant.
Witnesses entitlements under the QCAT Act
Mr Reid was a witness for the QBCC. The QCAT Act and the Queensland Civil and Administrative Regulations 2009 (the Regulations) contain specific provisions for payments to witnesses. These relevantly include under s 97(3):
(3) A person who is given a notice under subsection (1) is entitled to be paid the fees and allowances prescribed under a regulation or, if no fees and allowances are prescribed, the fees and allowances decided by the tribunal.
(4) Fees and allowances payable to a person under subsection (3) must be paid—
(a) if the person was given the notice on the application of a party to the proceeding—by the party; or
(b) otherwise—by all of the parties in the proportions decided by the tribunal.
(5) The fees and allowances must be paid at the time prescribed under a regulation.
The regulations referred to in s 97(3) include regulations 12 and 14 of the Regulations. Regulation 12 provides a professional or expert witness who is given a notice under section 97(1)(a) of the QCAT Act is to receive $227.70 for a day of necessary absence from their employment or residence to attend a hearing. Travelling time is included. The s 97 notice required only the production of documents. The notice was described as an attendance notice, but it did not in fact require attendance. Rule 80 of the Queensland Civil and Administrative Rules 2009 (the Rules) provides that a person required to produce a document by a notice under s 97(1)(b) is not required to attend if the document is produced before the date in the notice unless required to by the notice or other order.
Regulation 14 refers to ‘conduct money’, which is ‘an allowance ...sufficient to meet the reasonable expenses of complying with the notice’. Travel and accommodation can be included.
Before the filing of the application for a notice to produce documents but after the filing of Mr Reid’s statements by QBCC, Mr Reid had rendered an invoice to the applicant for the costs of providing documents requested in correspondence. An amount of $759 was requested based on two and a half hours of his time, and was paid by the applicant. It was calculated at a higher rate than that provided for under the Regulations. Once the notice was issued, it appears no further payment was sought although the applicant indicated it would meet the reasonable costs of producing the documents. The notice contained a requirement that conduct money be paid as prescribed by the Regulations. The payment of $759 would seem to constitute conduct money.
The tribunal has considered whether witness expenses can encompass legal costs incurred by a witness. ‘Conduct money’ is not defined, but the implication in the QCAT Act, is that it is an amount to allow physical compliance with a notice, e.g. travel, photocopying etc. In Imobridge Pty Ltd (in liq)[3], Lee J referred to the observations of Sheppard J in Bank of New South Wales v Withers (1981) 35 ALR 21 at 25, saying:
...that “legal costs” are costs incurred by a party in respect of litigation expenses: Halsburys Laws of England 4th ed para. 1108 p.414, as distinct from traditional “conduct money” and expenses incurred by reason of the attendance as such...
[3][1998] QSC 109.
The tribunal finds there is little if any capacity for legal costs to be encompassed by the concept of conduct money or witness expenses.
Costs under the QCAT Act
The QCAT Act provides for a change to the general position that costs follow the event. A separate determination of the tribunal has been made that that no costs order was appropriate in the original application between Coral Homes and the QBCC[4]. The tribunal notes that generally, costs in an interlocutory application follow the cause unless, amongst other things, a third party is involved.
[4]Coral Homes Qld Pty Ltd v Queensland Building Services Authority [2013] QCAT 510.
Sections 100 and 102 of the QCAT Act relevantly provide:
100 Each party usually bears own costs
Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party's own costs for the proceeding.
102 Costs against party in interests of justice
(1) 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.
(2) ...
(3) In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following—
(a) whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);
(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.
In the case of Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments[5], the tribunal President (as he then was) Justice Wilson observed, in considering the relationship between the costs provisions of the repealed Commercial and Consumer Tribunal Act 2003 and those in the QCAT Act:
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.
[5][2010] QCAT 412 at [29].
The appeal tribunal in the Dreamstarter[6] decision considered whether a provision in an enabling Act did in fact, displace the provisions of s 100 as provided for in that section. Considering the relationship between that section and the costs power in the QBCC Act under s 77(2)(h), the tribunal held that (footnotes deleted):
A jurisdiction given in general terms allows the tribunal to make an order as to costs that is justified in the circumstances. It is a broad general discretion which must be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation.
Accordingly an enabling Act, the QBSA Act, does, provide otherwise. As a result, the usual position as to costs in the tribunal is displaced.
[6]Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 at [33]-[34].
That application arose in the building disputes jurisdiction of the tribunal. Coral Homes’ original application arose in the tribunal’s general administrative review jurisdiction. The QBCC Act in Division 3, s 81(e) provides for the tribunal to review a QBCC decision to direct or not to direct rectification or completion of tribunal work. There is no reference to costs. Accordingly the tribunal is satisfied that the usual position as to costs in review matters is unaffected by the enabling legislation.
Nature of the application before the tribunal
The application seeking production of documents was made under s 63 of the QCAT Act. That section provides that the tribunal will order documents to be produced by a third party, separate to an attendance, and also provides for orders to be made by the tribunal as to the costs of so doing.
The tribunal in fact issued a notice under s 97 of the QCAT Act. The application for miscellaneous matters asserted that the breach of s 97 not only gave rise to a right under s 215 for the issue of a warrant, but may have given rise to a charge of contempt. The parties submissions with respect to the application for the order that an offence had been committed were in the reverse to their submissions on costs of the discontinuation of that application: the third party had submitted emphatically that there was not a contempt, and the applicant had asserted that there had, amongst other offences, likely been a contempt.
The third party now urges upon the tribunal that its submissions relate to costs of a ‘contempt’ application, attracting contempt costs provisions. The applicant on the other hand now says this is a costs application relating to the withdrawal of an application for an order in respect of a failure to comply with a s 97 notice, and the consequent offence and relevant orders under s 214 and s 215 of the QCAT Act, and was not characterised as a contempt matter.
The QCAT Act provides that the punishment of contempt must be determined by a judicial member of the tribunal. S 219(1) provides that the tribunal has the powers of the Supreme Court ‘in relation to contempt’. The descriptor for the section is ‘Punishment of contempt’. The determination of the costs in regard to the withdrawal of an application alleging, amongst other things, contempt cannot be considered in the ordinary meaning of the word ‘punishment’. As Mason CJ said in Latoudis v Casey[7]:
If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.
[7][1990] HCA 59; (1990) 170 CLR 534 at 542.
The tribunal is not determining the issue of contempt in this application. An allegation of contempt is distinct from a finding. It is not appropriate for it to canvass or draw conclusions about the existence of contempt in the absence of a determination on the merits of the interlocutory application for the sake of a costs determination (see Re Minister for education and ethnic Affairs ex parte Lai Qin[8]). The tribunal is considering an application for costs with respect to the withdrawal of an application for an order that an offence has been committed as a result of an alleged breach of s 97 of the QCAT Act. Further, UCPR rule 932 refers to a ‘proceeding for contempt’ and the third party has submitted, and the tribunal finds, that this is not a ‘proceeding’ but an interlocutory (miscellaneous matters) application. The costs provisions relating to contempt do not apply, and the tribunal does not need to be constituted by a judicial member.
[8](1997) 186 CLR 622 at 624.
Who is eligible to be the subject of a costs order under the QCAT Act?
The references to ‘costs’ in the QCAT Act are to costs between ‘parties’ (eg s 47, s 100, s 102(1)). S 40 of the QCAT Act relevantly provides that a ‘party’ in the tribunal's review jurisdiction is the applicant, the decision-maker, an intervener by leave under s 41, a person joined as a party under s 42, or someone else an enabling Act states is a party to the proceeding.
Mr Reid is not a party to the original proceedings. He has not been granted leave to intervene, and he has not been joined as a party. The QBCC Act does not expand the category of parties in the review jurisdiction beyond that in the QCAT Act.
Mr Reid asserted (in applying to the tribunal for leave to be represented), that the application for an order that an offence had been committed was not ‘a proceeding’ in the sense canvassed by McMurdo J in Kambarbarkis v G & L Scaffold Contracting Pty Ltd [2008] QCA 262 (that is a matter commenced by an originating process), but was rather an ‘application in the cause’. This was not disputed by the applicant, and the tribunal agrees. Mr Reid is not then a ‘party’ to a ‘proceeding’.
The QCAT Act contains express provisions for ‘costs’ in relation to third parties. S 63 (obtaining a document or a thing from a person not a party to a proceeding) requires that the tribunal consider in s 63(4) (it would seem contemporaneously) whether it is appropriate to make an order requiring the party seeking the production to pay the “costs of producing the document or thing”. Ss 103 and 104 provide expressly for costs awards against specific classes of third parties: parties’ representatives, and interveners. S 105 of the QCAT Act provides that the Rules may authorise the tribunal to order costs in other circumstances. The Rules do not expand the award of costs to third parties. There is no express provision in the QCAT Act for the making of costs (inclusive of legal costs) orders in favour of third parties who are witnesses.
The relevant authorities are of modest guidance, as they are essentially concerned with costs orders against a third party. Wilson J considered the leading authority in Ralacom[9]:
33. There are circumstances when it is within a court’s discretion to order costs against parties not named on the record. The leading case is Knight v FP Special Assets Limited[1992] HCA 28; (1992) 174 CLR 178. Company liquidators commenced proceedings in the name of companies in liquidation, and were ultimately unsuccessful. Costs were ordered against the liquidators.
34. On appeal to the High Court Mason CJ and Deane J (with whom Gaudron J agreed) found that although, in principle, costs orders should only be made against parties to the litigation, there will be circumstances in which considerations of justice support an order for costs against third parties. They said:
That category of case consists of circumstances where... the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation.
His Honour went on to refer to the Full federal Court decision of Kebaro Pty Ltd v Saunder (2003) FCAFC 5 where it was said (at [103]):
Whilst such an order is extraordinary, the categories of case are not closed, although in order to warrant its exercise, a sufficiently close connection, or as Gobbo J expressed it, a “real and direct and ... material” connection with the principal litigation, must be demonstrated; in the words of Callinan J, the non-party can fairly be liable if adjudged by its conduct, to be a real party to the litigation, even if not the real party.
[9]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No. 2) [2010] QCAT 412 (at [33] - [37]).
Costs awards against third parties were considered also in the Commissioner of Stamp Duties v Westleigh Management Services Pty Ltd[10], where McKenzie J said in considering an application to join a third party for the purposes of costs:
The principle underlying awarding costs against a non-party is that where the non-party is the real party to the litigation costs may be awarded. The notion is that the non-party is effectively a litigant standing behind the actual party.
[10][2001] QSC 176.
As a witness in the review of an administrative decision by the QBCC, the tribunal cannot see that Mr Reid is ‘the real party’ behind the respondent in the sense it is meant in these authorities.
In Re Lutscher; Ex parte Waddell[11], the Court of Appeal in dicta found that during the examination of a bankrupt, litigation could arise between the trustee and the examinee and the usual costs orders would apply. However that seems to the tribunal to be a specialised case, where separate litigation occurs, and thus outside the parameters of the considerations here.
[11](1877) LR 6 Ch D 32. This was followed in the more recent case of Surpion Pty Ltd v M. R. Works Pty Ltd (Receivers and Managers Appointed) [2010] FCA 1262, and identified by Finkelstein J as the only authority found. That case also concerned costs awarded against an examinee.
The tribunal has also considered decisions in which parties have sought to resist the requirements of subpoenas/non-party disclosure. There are two main difficulties in finding some synchronicity between those and the one at hand. The UCPR specifically provides a process to object to a disclosure notice: under rule 247 an objection is lodged (the objector is the ‘respondent’), which stays the notice, and it is then for the applicant to apply to the court for a decision to overcome that objection. This procedure may minimise the costs incurred by the objector, but in any case, under UCPR rule 247(3), each party to an application to decide an objection must bear their own costs of the application, unless otherwise ordered: UCPR rule 247(4). The factors to be considered by the court are the merit of the objection, public interest in efficient and informed litigation, and the public interest in not discouraging objections in good faith.
Where a subpoena is issued to a third party, the court may order costs (in addition to conduct money) including legal costs, against the party on whose behalf the subpoena was issued if ‘substantial loss or expense’ is incurred by the third party: UCPR rule 418. The subpoena must contain a notice that the person has the right to have the subpoena set aside on enumerated grounds: UCPR rule 415.
The QCAT Act does not provide a specific objection procedure. The tribunal’s Practice Direction 1 of 2013 fills this hiatus to an extent:
A person or entity producing documents, although complying with the notice to produce, may indicate that he/she/it believes they are entitled to claim privilege or some other basis on which the documents should not be disclosed to the parties, or on which the notice to produce should be set aside. When this occurs, the principal registrar shall immediately refer the documents and notification to the tribunal member in charge of the list, for consideration to be given to making directions until further order that no party may have access to the documents, and establishing a process to determine the claim of privilege or other claimed basis for non-disclosure.
There is no reference to costs to displace the usual position under the QCAT Act.
The second point of distinction between this matter and the subpoena/disclosure cases is that there was invariably an adjudication on the merits, and there has been none here. The difficulties of any assessment of the prospects of the applicant or Mr Reid will be considered later in these reasons, and was canvassed in the Coral Homes’ costs decision[12] which was handed down after the receipt of submissions in this matter. The tribunal there found that the usual position under s 100 of the QCAT Act should prevail.
[12]Coral Homes Qld Pty Ltd v Queensland Building Services Authority [2013] QCAT 510.
The QCAT Act has specifically imported parts of the UCPR e.g. s 151(2) (appealing, or applications for leave to appeal); s 219(2) (punishment for contempt). The tribunal concludes that it is not the intention of the legislature that the UCPR provisions providing for legal costs to be awarded to a ‘respondent’ are to be relevant to the tribunal’s determinations. Even were it so, the standard position there is that applicant and objector/respondent to the notice should bear their own costs.
The tribunal concludes that ‘costs’ within the QCAT Act, including in s 100, concern ‘parties’, and that the reference to specific classes of third parties suggests the term ‘parties’ excludes those before the tribunal in some other capacity. Further, there is no specific power under the QCAT Act to make a costs decision which includes legal costs in favour of a third party in a miscellaneous matters application. However, in the event that the tribunal is wrong in this conclusion, and the determination as to costs in s 102 is not limited to 'parties' in that strict sense, the tribunal has considered whether a costs order would be appropriate under that section.
Section 102 and 'in the interests of justice'
S 102 relevantly provides:
(1) 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.
In determining whether to award costs on this basis, s 102(3) provides the tribunal may consider a number of factors.
Coral Homes sought indemnity costs against the QBCC in Coral Homes Qld Pty Ltd v Queensland Building Services Authority[13]. The basis of the tribunal's decision was that the matters under consideration could be distinguished from those canvassed by Wilson J in Ralacom[14] where the action was found to be '..misconceived futile and persisted in circumstances which were unreasonable and inexplicable'. The Member concluded that prior to McNab[15] there was no reason for the QBCC to be on notice that its directions were clearly invalid, and the 'interests of justice' were not served in the sense meant in s 102, by making a costs order of any kind and departing from the strong position established by s 100 that parties will bear their own costs. The Member made a number of observations relevant to the issues under consideration here. The s 100 position was summarised as follows:
[36] Section 100 presumes that ordinarily each party to a proceeding would bear that party’s own costs, irrespective of the result. On that basis there ought be no order for costs even if the Applicant were able to show that it would have almost certainly have succeeded on its application. That is, unless the interests of justice ought lead to a different result.
[13][2013] QCAT 510.
[14]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412.
[15]McNab Constructions Australia Pty Ltd v Queensland Building Services Authority [2013] QSC 57.
The Member goes on to examine the relevant s 102 factors in that case:
[42] Having regard to the policy in section 100 of the QCAT Act, even were I satisfied that the Respondent ought not in the circumstances have issued a direction to rectify, or issued scopes of works, that alone would not have been the basis for the making of a costs order against it.
[43] The issues both of fact and law which arose under the applications were not complex. ....it does not assist in this case in arriving at a conclusion about the level of complexity of the matter to note that Counsel was briefed for the Applicant. Indeed, the Respondent’s advocacy was handled by a solicitor.
[44] I have already dealt with the question of the relative strength of the claims. Whilst arguably the Applicant may have had better prospects, and certainly was likely to succeed on the basis of the decision in McNab, once it became aware of the argument it presented, I do not consider that it can be said that the decisions of the Respondent under review were demonstrably unreasonable or misconceived.
[45] There are no relevant considerations that relate to the financial circumstances of the parties.
…
[47] It may be accepted that the principal, even not the sole reason for the Authority’s change of position was that the decision in McNab invalidated the directions. Prior to McNab, there was no reason for the Authority to be on notice that those directions were clearly invalid on the basis eventually decided in McNab and the challenge to those decisions did not originally invoke the arguments which were successful in McNab.
[48] In those circumstances, it does not seem to me that this case bears any resemblance to the circumstances identified by the President in Ralacom, which his Honour found that the Applicant brought an application which was misconceived, futile and persisted in, in circumstances which were unreasonable and irresponsible. His Honour concluded that the conduct in question ‘bordered on the inexplicable’. This is not the case here.
[49] In my view, the interests of justice, in the sense referenced in section 102 of the QCAT Act, do not require the making of a costs order here.
Addressing the s 102 factors in the present matter, then:
(a) whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);
S 48(1)(a) to (g) is as follows:
(1) This section applies if the tribunal considers a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including by—
(a) not complying with a tribunal order or direction without reasonable excuse; or
(b) not complying with this Act, an enabling Act or the rules; or
(c) asking for an adjournment as a result of conduct mentioned in paragraph (a) or (b); or
(d) causing an adjournment; or
(e) attempting to deceive another party or the tribunal; or
(f) vexatiously conducting the proceeding; or
(g) failing to attend mediation or the hearing of the proceeding without reasonable excuse.
One might conjecture that Mr Reid may not have incurred the costs of legal assistance had the applicant notified him immediately of the concession by the respondent. However, the applicant and respondent were, it seems, were genuinely attempting to identify the appropriate disposition of their matters in the period between 29 April 2013 when Coral Homes was notified of the void directions, and the due date for Mr Reid's submissions, 22 May 2013. On the other hand, one might conjecture that had the third party notified the tribunal of his objection upon the receipt of the notice (which contains this recommendation, and also the fine for failure to comply), the matter may have been resolved by the tribunal and the application to enforce the production of the documents forestalled.
The question of reasonable excuse was never determined, and there was no allegation of deceit or vexatious conduct of a proceeding. Mr Reid expressly states in submissions that no allegation, or suggestion of impropriety is made in relation to the applicant[16]. Coral Homes and Mr Reid had options available to them under the QCAT Act and Practice Directions, and whether they have been availed of appropriately or in the most effective way would have been a matter for the determination of the tribunal.
[16]Mr Reid's submissions on costs, footnote 17.
(b) the nature and complexity of the dispute the subject of the proceeding;
The tribunal agrees with the Member deciding the Coral Homes’ costs application that the nature of the review proceeding was not complex, factually of in terms of the law. Neither was the miscellaneous matters application that an offence had been committed beset with complexity, as the QCAT Act itself, the practice directions and decided cases provide ample guidance. The third party points to ‘the spectacle’ that would have occurred had the relief been granted. The charge and punishment may have been serious, but the issues were neither factually or legally complex. The tribunal agrees with the assessment of the Member in the costs decision that: “...it does not assist in arriving at a conclusion about the level of complexity of the matter to note that Counsel was briefed....”.[17]
[17]Coral Homes Qld Pty Ltd v Queensland Building Services Authority [2013] QCAT 510 at [43]
(c) the relative strengths of the claims made by each of the parties to the proceeding;
In assessing costs, the tribunal is not required to in fact decide a matter which has not been decided (see Re Minister for Education and Ethnic Affairs, ex parte Lai Qin[1997] HCA 6; (1997) 186 CLR 622) and the question of success or failure is not persuasive of itself by virtue of s 100 of the QCAT Act. The fact there has been no adjudication does present difficulties for the adjudicator on costs.
The Member deciding the costs application[18] specifically considered this difficulty in the following way (footnotes deleted):
[18]Ibid, [27] – [35].
[29] The fact that there has been no determination of these issues on the merits presents difficulties for the Applicant in its arguments either in support for any kind of costs order, and even more so for an order that the costs be paid on an indemnity basis.
[30] In the context of administrative review, Pincus J, as he then was in South East Queensland Electricity Board v Australian Telecommunications Commission Qld [1989] FCA 15, was dealing with a case where there had not been a final hearing, but where the parties agreed that the Court should deal with the whole question of costs.
[31] His Honour was considering how the discretion should be exercised where there has been no trial. On the issue of the correct approach, His Honour said as follows:
19.Although the parties have agreed that I should determine it on the submissions made to me, there is in my view no certain basis on which to determine the question of liability for costs. One possible solution is simply to make no order as to costs, on the ground that it is not perfectly clear which side, if either, should pay them.
20.As a matter of legal policy, however, that appears to be an unsatisfactory way of disposing of the matter; the Queensland decisions mentioned above, also, tend against it. The parties’ submissions are at one in urging upon me the view that litigants should not be forced to go on, or discouraged from settling their differences, by an inability to resolve a dispute as to costs. I agree; if a piece of litigation has become academic, except as to the issue of costs, it appears that the Court should co-operate as far as it reasonably can, in disposing of the question of costs at the parties’ request, without requiring a trial to determine who would have won.
21.Here, although the parties have submitted that I should not attempt to say who would have won at a trial, the applicant has placed submissions before me relevant to its claim that it acted reasonably in bringing the proceedings, and I have taken them into account in assessing its case. Those submissions, which rely largely upon documents discovered, have persuaded me that the applicant had, on the face of it, a fairly strong case - one more promising than that of the respondent. I have also taken into account against the respondent that the cause of the litigation's not having culminated in a trial was that the respondent changed its mind, albeit in the circumstances outlined above. It will be ordered that the applicant's costs of the proceedings, including reserved costs, be taxed and that 80% of the sum so fixed be paid by the respondent to the applicant.
[34] In Re Minister for Education and Ethnic Affairs, ex parte Lai Qin[1997] HCA 6; (1997) 186 CLR 622 at p624, McHugh J was focused primarily upon the proper approach to be taken in administrative judicial review cases, where it appeared that the Defendant had acted unreasonably in exercising or refusing to exercise the relevant power, and the Plaintiff had no reasonable alternative but to commence the litigation. In the course of those reasons, his Honour also made reference to the decision of Pincus J to which I have just made reference. McHugh J’s judgment said as follows at pp624 to 625 (footnotes omitted):
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided.....
…
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases. (citing Australian Securities Commission[1993] FCA 585; (1993) 44 FCR 194; 116 ALR 523; Seventh Mingcourt Pty Ltd v Lawrence (Fed C, 1 August 1996, unreported) per Branson J; Coleman v City of Melville (SC(WA), 22 September 1994, unreported) per Scott J; Compadres Australia Pty Ltd v Waterfront Place No 2 Pty Ltd (SC(Qld), 15 August 1995, unreported) per MacKenzie J; Inprint Ltd v K & D Media Pty Ltd (administrator apptd) (Fed C, 22 December 1995, unreported) per Einfeld J; Australian Securities Commission v Berona Investments Pty Ltd18 ACSR 772.
[35] …
However, as I have said it is not the function of a court on a costs application — in most cases at all events — to make a prediction as to the outcome of a hypothetical case. It is enough that an applicant has acted reasonably. …
The tribunal adopts the member’s observations. The applicant and third party pursued the resolution of an issue, and as mentioned earlier, the third party expressly notes that no allegation of impropriety on the part of the applicant was being made. The tribunal makes no findings beyond that.
(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;
The tribunal expresses no view, as the miscellaneous matters application is not between the applicant and the decision-maker.
(e) the financial circumstances of the parties to the proceeding;
The only reference in the submissions of the third party is of the professional nature of the applicant, and its experience as a litigant. The third party is a member of a firm of engineers which bears his name and as a witness for QBCC, must also be cognizant that he will have a role in any ensuing disputes.
(f) anything else the tribunal considers relevant.
In the review jurisdiction, s 21 of the QCAT Act imposes a responsibility on the decision-maker, in this case, QBCC to 'use its best endeavours' to help the tribunal to make its decision on review, and this includes providing documents or things to the tribunal if required to do so by written notice. The QBCC declined to make submissions in the miscellaneous application, indicating it did not represent Mr Reid's interests. The third party is not the 'true party' behind the respondent, but as a witness, neither is it unrelated to the respondent.
Mr Reid submits, absent s 100, that permission to withdraw an application should invariably be accompanied by costs. The tribunal disagrees. The tribunal finds support for this view in the fact that s 46 of the QCAT Act has since been amended so that leave to withdraw in this case would no longer be required. Further, the applicant has withdrawn the application not because of any concession that it was misconceived or likely to be unsuccessful, but because its purpose was negatived by the concession by the QBCC that the original notice on which the original application was predicated is void.
Conclusions
The tribunal finds itself in the challenging position of considering a costs application by a third party where the substance of the costs claimed are legal costs; where there are no provisions in the QCAT Act for legal costs to be awarded to a third party in Mr Reid's circumstances; where the interlocutory application in respect of which the costs were incurred was never determined by the tribunal; where the third party submits that the applicant should have leave to withdraw, and agrees it in no way acted with impropriety; where the initiating applications were withdrawn with the consent of the respondent and so were not adjudicated; and where the costs application by the applicant against the respondent was dismissed.
These issues are being considered in a legislative environment which includes s 100, part of a suite of provisions in the QCAT Act which are directed at a different process of dispute determination to that prevailing in the courts. The provisions include the objects, in ss 5(b) and (d), that the tribunal deal with matters in a way that is accessible, fair, just, economical, informal and quick, and enhances the openness and accountability of public administration. Mr Reid submits that this is in essence commercial litigation. The tribunal disagrees. The jurisdiction is administrative review.
The tribunal has found that s 100 inhibits costs awards with respect to 'parties', but also that there is no other specific provision which applies to award costs in Mr Reid's circumstances. The tribunal has also found that, even were Mr Reid’s application encompassed by the costs provisions in the QCAT Act, there would not be a basis for awarding costs against the applicant as ‘the interests of justice' are not so compelling as to displace the 'strong contra-indication against costs orders in s 100'.[19]
[19]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments(No 2) [2010] QCAT 412 at [31].
The unfortunate fact at the base of these two matters, is that the applications for review commenced in the tribunal in 2011, there have been many applications and tribunal events between then and now, and witnesses statements filed, only to end in the discontinuation of all proceedings because the original directions to rectify made by the QBCC were void. All those involved will have expended monies, and would not have done so if the directions had never been made. They were made, and as canvassed by the Member in the tribunal's costs decision[20], each party has essentially availed itself of opportunities which it saw as relevant to the conduct of the matter. It is a similar situation to that decided by Pincus J[21], and referred to in the costs decision[22]:
16. While there can be no suggestion that the Minister's statement absolutely forced a reconsideration of the decision complained of in these proceedings, I think I should accept that, as a practical matter, the statement and the change in Government policy it reflected brought about the respondent's abandonment of its previous stance. This is to be distinguished both from the case in which a decision-maker just changes his mind, having reconsidered the facts, and the case where the decision-maker is obliged to reach a new and opposite conclusion by a change in external circumstances. In the former case, but not necessarily in the latter, I should think that the decision-maker would ordinarily pay the costs of incomplete proceedings of this kind; the present situation falls between the two categories just mentioned.
[20]Coral Homes Qld Pty Ltd v Queensland Building Services Authority [2013] QCAT 510.
[21]South East Queensland Electricity Board v Australian Telecommunications Commission Qld [1989] FCA 15 at [16].
[22]Coral Homes Qld Pty Ltd v Queensland Building Services Authority [2013] QCAT 510 at [32].
Pincus J felt able to assess prospects and award costs in the absence of an adjudication. He was not however inhibited by the costs parameters contained in the QCAT Act. The tribunal in the costs decision[23] found that neither an order for indemnity costs or costs was warranted. This tribunal finds the applicant and Mr Reid recognised that the abandonment of the miscellaneous application was the only appropriate course of action. The tribunal finds that, whichever way the issues are considered, the costs of application should lie where they fall. The application for costs by Mr Reid in the miscellaneous matters application for an order that an offence has been committed is dismissed.
[23]Ibid.
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