Glass v Queensland Building and Construction Commission
[2022] QCAT 387
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Glass & Anor v Queensland Building and Construction Commission & Anor [2022] QCAT 387
PARTIES:
TIM GLASS (applicant)
CATHERINE LEONIE POPE (applicant)
v
QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (respondent)
SPENCER CONSTRUCTIONS (QLD) PTY LTD (respondent)
APPLICATION NO/S:
GAR359-19
MATTER TYPE:
General administrative review matters
DELIVERED ON:
23 November 2022
HEARING DATE:
17 May 2021
HEARD AT:
Brisbane
DECISION OF:
Member Howe
ORDERS:
Application for costs refused.
CATCHWORDS:
ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – COSTS – where the applicants sought review of an internal review decision of the Queensland Building and Construction Commission – where the review failed – where the builder had been joined to the action by the Commission – where the builder sought costs from the applicants including indemnity costs – where a written offer of settlement was no true attempt to offer a compromise of the action – where the offer of compromise did not encompass all parties to the dispute – where the usual rule that each party bear their own costs should apply
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 77(3)(c), s100, s 102, s 105
Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86
Bailey v Director-General, Department of Natural Resources NSW [2015] NSWCA 318
Commissioner of Taxation v Crown Insurance Services Ltd (No 2) [2012] FCAFC 182
APPEARANCES & REPRESENTATION:
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
REASONS FOR DECISION
The applicants engaged the second respondent to build them a home. The scope of work included construction of a driveway with a steep slope.
After the driveway was constructed the applicants complained to the Queensland Building and Construction Commission (‘QBCC’) about it as defective building work. One of their cars could not enter the garage without scraping the undercarriage of the vehicle on the concrete floor of the garage.
QBCC investigated but refused to issue a direction to rectify the driveway. An internal review of that decision requested by the applicants confirmed the original decision.
The owners sought review of the review decision in the Tribunal in matter GAR359-19.
The builder company was joined as a party to the proceeding on or about 29 April 2020 on application by QBCC.
Following a hearing the internal review decision of QBCC not to issue a direction to rectify was confirmed.
The builder now seeks costs against the applicants pursuant to s 102 and s 105 of the QCAT Act as follows:
From 25 November 2019 to 11 May 2021 on the standard basis;
From 12 May 2021 to 8 November 2021 on an indemnity basis.
By letter dated 27 April 2021 marked “Without prejudice save as to costs” the builder suggested a compromise of the action as between the builder and the applicants on the basis that the applicants action be dismissed and there be no order as to costs.
Indemnity costs claimed
Dealing first with the claim to indemnity costs, that must fail on two bases.
First, s 105 of the QCAT Act provides:
Other power to award costs
The rules may authorise the tribunal to award costs in other circumstances, including, for example, the payment of costs in a proceeding if an offer to settle the dispute the subject of the proceeding has been made but not accepted.
The rules make provision for such by rule 86:
Additional power to award costs if particular offers to settle rejected
(1)This rule applies if—
(a) a party to a proceeding, other than a proceeding for a minor civil dispute, makes another party to the proceeding a written offer to settle the dispute the subject of the proceeding; and
(b) the other party does not accept the offer within the time the offer is open; and
(c) in the opinion of the tribunal, the decision of the tribunal in the proceeding is not more favourable to the other party than the offer.
(2)The tribunal may award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made.
(3)If a proceeding involves more than 2 parties, this rule applies only if the acceptance of the offer would have resulted in the settlement of the matters in dispute between all the parties.
(4)In deciding whether a decision is or is not more favourable to a party than an offer, the tribunal must—
(a) take into account any costs it would have awarded on the date the offer was given to the other party; and
(b) disregard any interest or costs it awarded relating to any period after the date the offer was given to the other party.
The offer of settlement did not extend to a compromise of the action between all parties. Had the offer been accepted the action would have continued between QBCC and the applicants.
The offer was therefore not made in accordance with rule 86(3) and therefore does not qualify as an offer made under the rules.
Second, the offer was no sufficient offer. It cannot be viewed as a genuine offer to settle. It was a token compromise engineering an advantage on costs rather than offering an actual compromise of the action.[1] In this context it should be noted that the subjective motivation of the builder in making the offer of compromise is not being queried, but rather the genuineness of the offer as a true compromise is challenged, as explained in Bailey v Director-General, Department of Natural Resources NSW:[2]
The appellants’ submissions characterised the offer as “not a genuine offer of compromise but rather a demand for capitulation.” While there is authority in this Court which uses the language of “genuine offer of compromise,” such language, which appears to introduce a test as to the subjective motivation of the offeror, is apt to mislead. The rule contains no such test: what it requires is the characterisation of the offer, in the circumstances in which it was made, as constituting an “offer of compromise”. To adopt the appellants’ rhetoric, if the offer required the other party to capitulate (that is abandon its claim entirely) with no benefit foregone by the offeror, it might not constitute an offer within the terms of the rule. However, as rejection of a claim would normally involve payment of the defendant’s costs, an offer to forego substantial costs in circumstances where it may reasonably be expected by the offeror that costs would follow the event, will generally involve an element of compromise: it did so in the present context, as the trial judge correctly held.[3]
[1]Commissioner of Taxation v Crown Insurance Services Ltd (No 2) [2012] FCAFC 182, [32].
[2][2015] NSWCA 318.
[3]Ibid [116].
Given the usual position in the Tribunal on costs is that each party should bear its own costs[4] unless the interests of justice dictate otherwise, not that costs follow the event, the compromise proposed offered nothing of real substance on the part of the builder in exchange for complete surrender by the applicants.
[4]s 100 QCAT Act.
The builder appears from its submissions to have thought the more robust approach to costs allowed the Tribunal in “building disputes” applied,[5] but the matter is not a building dispute between owner and contractor but a review of an administrative decision. As such costs are determined under Division 6 of Chapter 2 of the QCAT Act, and as stated, the usual rule here is that each party should bear their own costs, save where the interests of justice require otherwise.
[5]s 77(3)(c) Queensland Building and Construction Commission Act 1991 (Qld).
Standard costs claimed
By s 102 of the QCAT Act, the Tribunal may make a cost order requiring a party to pay costs of another if the Tribunal considers the interests of justice require that. In aid of deciding that, the QCAT Act sets out a number of matters that may be usefully considered.
Acting to disadvantage a party
The builder claims the applicants have pursued three attempts to have a direction to rectify issued to the builder, and failed. An original application for review of the Commission’s decision not to issue a Direction to Rectify; then an application for internal review of that decision; and then this external review to the Tribunal. The builder submits that the applicants’ pursuit of the same relief over three applications “is tantamount to an abuse of process”.
The builder is of course wrong. All the avenues of review pursued by the applicants are authorised and permitted by statute. They are not abuses of process. Rather, they follow due process. This submission does not qualify for meaningful consideration.
Indeed what is a relevant consideration is that the builder was joined to the action late by request of the QBCC, essentially to assist the QBCC make adequate response to the review application. At a directions hearing on 29 April 2020, which followed a reconsideration of the decision directed by QBCC at a compulsory conference, QBCC asked that the builder be joined. The applicants raised no objection to that joinder though it was late in the proceedings, save that it not cause delay.
Nature and complexity of the dispute
The builder submits the matter was complex and justified legal representation.
The matter was not without some complexity, but it was complexity largely associated with algebraic calculations of sag and summit of a sloping driveway.
The builder also submits the matter closely resembled a dispute which would otherwise be litigated before a court in which costs would generally be ordered in favour of a successful party.
The submission ignores the particular cost provisions applying to Tribunal matters as discussed above.
The Tribunal often deals with complex building and review matters, and this matter cannot be categorised as a matter of great legal complexity or involving a significant financial claim.
The builder makes no submissions about the other factors listed for consideration in s 102(3) QCAT Act, and I do not find them relevant to weigh the balance in favour of the builder for a cost order.
The applicants submit however that a cost order against them will have a crippling effect on their financial position. They have been left with a defective driveway and anticipate spending something in the order of $15,000 to $20,000 to rectify it. They submit a cost order against them on top of that will have a crippling effect on their finances. I accept that is a factor to be considered.
Conclusion
I am not persuaded that the interests of justice require an order other than the usual, that each party should bear their own costs.
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