Hatchy Investments Pty Ltd v Body Corporate for Parkside Apartments Toombul - [2011] QCAT 413

CITATION:

Hatchy Investments Pty Ltd v Body Corporate for Parkside Apartments Toombul [2011] QCAT 413

PARTIES:	Hatchy Investments Pty Ltd (Applicant)
v
Body Corporate for Parkside Apartments Toombul CTS 39237 (Respondent)

APPLICATION NUMBER:

OCL043-11

MATTER TYPE:

Other civil dispute matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Kenneth Barlow SC, Member

DELIVERED ON:

31 August 2011

DELIVERED AT:

Brisbane

ORDERS MADE:

Each party bear its own costs of the application determined on 26 July 2011.

CATCHWORDS:

PROCEDURE – COSTS – DISCRETION TO ORDER COSTS – whether in the interests of justice to order costs of interlocutory application

Queensland Civil and Administrative Tribunal Act 2009, ss 100, 102

APPEARANCES and REPRESENTATION (if any):

APPLICANT:	Mahoney Lawyers
RESPONDENT:	Nicholsons Solicitors

REASONS FOR DECISION

Background

On 26 July 2011, I dismissed an application by the respondent (“Parkside”), in which it sought to join another party to this proceeding. I reserved the question of costs. The applicant (“Hatchy”) now applies for an order that Parkside pay its costs of the application.

Parties’ submissions

In support of its application for costs, Hatchy submits that:
a)it invited Parkside to withdraw its application before it came to be heard and Parkside declined to do so;
b)Parkside’s application was misconceived and Hatchy pointed that out in its letter inviting withdrawal of the application and explained the reasons why it was misconceived, which were reasons adopted by the Tribunal in dismissing the application;
c)both parties had previously been given leave to be represented in this proceeding, and the issues on the application were complex and merited legal representation and costs being incurred;
d)Hatchy is a small family owned company, while the respondent is a large body corporate with 80 members and they therefore have considerably different financial resources.
Parkside submits that each party should bear its own costs, because:
a)the starting point for the Tribunal’s consideration is s 100 of the Queensland Civil and Administrative Tribunal Act 2009, which provides that each party must generally bear its own costs of a proceeding in the Tribunal;
b)its application was reasonably made and it did not conduct the application in a manner that unnecessarily disadvantaged Hatchy – in particular, Parkside made proper concessions and the application was not misconceived, having regard to those concessions;
c)Hatchy’s letter did not raise the issues on which the Tribunal decided the application, and it unnecessarily and incorrectly persisted with those issues that it did raise;
d)there is no evidence of the alleged disparate financial circumstances of the two parties.

Consideration

The starting point for consideration of an application for costs is, as Parkside submits, s 100. The presumption that each party must bear its own costs may be displaced, however, if the Tribunal considers that the interests of justice require it to make an order for costs: s 102(1). As the President has pointed out, the phrase “in the interests of justice” is not defined in the Act, but is to be construed according to its ordinary and plain meaning, which obviously confers a broad discretionary power on the decision maker.[1]
[1]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No. 2) [2010] QCAT 412, citing Herron v The Attorney General for New South Wales (1987) 8 NSWLR 601 at 613.
Each of the parties refers to, and makes submissions about, the specific criteria set out in subsection 102(3) to which the Tribunal may have regard in deciding whether or not to award costs. Those criteria are neither necessarily relevant, nor determinative of an application, and the Tribunal is not limited to consideration of those criteria. However, as they are the factors to which each party refers, I shall obviously have careful regard to each of them. I shall therefore address each of the matters raised by the parties in turn.
Hatchy places considerable weight upon the fact that, before it prepared its submissions in respect of Parkside’s application, its solicitors wrote to Parkside’s solicitors informing them that the application was misconceived and suggesting that it withdraw the application. Hatchy’s submission, in essence, is that that letter comprised an offer to settle which, having been refused, and Parkside nevertheless having lost the application, should result in Parkside being ordered to pay Hatchy’s costs of the application.
The letter from Hatchy’s solicitors relied upon some matters which were raised by Hatchy in its submissions on the hearing of the application. However, the bulk of its submissions were directed to other issues, namely the convenience and desirability of joining the third party in the circumstances of this case and at the stage which this proceeding had reached. There was no reference to those issues in the letter. Those issues were the determinative ones in my decision. Therefore, I consider the letter to have little weight in my consideration of the question before me.
Hatchy submits that, as the parties had already obtained leave to proceed and the issues in the application were complex, it was appropriate for legal representatives to be engaged to resist the application and it is appropriate in the circumstances for costs to be awarded in favour of the successful party. Hatchy relies in particular upon the following passage from the judgment of Keane JA in Tamawood Ltd v Paans [2005] QCA 111, at [30]:
“First, the Tribunal found that each party was justified in engaging the services of legal representatives to assist them in the conduct and defence of what the Tribunal recognised to be complex proceedings. That finding alone could be, in my view, a sufficient basis to conclude that the interests of justice warranted the exercise of the discretion to award costs in favour of the successful party, at least in the absence of any countervailing consideration. The Tribunal erred in failing to appreciate the implication of this finding for an understanding of where the interests of justice lay in relation to the costs of the proceedings.”
Hatchy also relied on another passage from his Honour’s judgment at [32].
The comments by Keane JA concerned ss 70 and 71 of the Commercial and Consumer Tribunal Act 2003. The principles expressed in Tamawood provide some guidance about the circumstances in which it may be in the interests of justice for this Tribunal to award costs against parties, but ss 70 and 71 of the CCT Act were in different terms to ss 100 to 102 of the QCAT Act.
As the President has pointed out, s 100 of the QCAT Act is in terms that more plainly indicate that the legislature has turned its face against awards of costs in this Tribunal than s 70 did in respect of the Commercial and Consumer Tribunal. 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.[2]
[2] Ralacom v Paradise Island Apartments (No. 2) at [24], [29].
To my mind, having regard to the differences between the QCAT Act and its predecessor, the fact that the parties have been given leave to be legally represented in the proceeding as a whole does not bear heavily on the question whether the costs of an interlocutory application ought be awarded to the successful party. It is certainly one matter to take into account, but the fact that the proceedings as a whole involve complex questions that merit legal representation does not mean that the proceedings ought be treated, in all respects, as meriting costs orders in respect of interlocutory applications within it. I do not consider that this application itself involved complex questions of law.
Hatchy contends that the application was misconceived and that Parkside ought to have recognised and therefore it should never have made the application. On that basis, Hatchy submits that the interests of justice require that it be paid its costs of successfully opposing the application.
The basis for the application to join the other party (who was the original owner of Parkside) was that, if Hatchy was successful in the relief it sought, or indeed if Parkside were successful in having the remuneration rate in the agreement reduced, the original owner of Parkside would be liable to compensate Parkside for any loss and damage suffered by it as a consequence of the original owner’s contravention of section 112(2) of the Body Corporate and Community Management Act 1997.
My reasons for rejecting the application were, in essence, that the issues in this proceeding are so distinct from the issues that would arise in a proceeding between Parkside and the original owner that there was no reason to join the original owner in the proceeding.
The application was not completely unarguable, but Parkside appeared not to have considered or appreciated the differences between the issues in this proceeding and in any later proceeding against the original owner. However, that was not raised, as a reason why the application should not be granted, until Hatchy dealt with it in its submissions. Parkside did not respond to those submissions, nor otherwise cause Hatchy to incur additional costs after it had filed the submissions.
The final basis for Hatchy’s application for costs is that it is a small family company, while the respondent is a body corporate with 80 members and therefore they have disparate financial resources. Parkside responds that there is no evidence to that effect.
In the absence of evidence as to the financial resources of each party, it is difficult for me to take this factor into account. But in any event, even if Hatchy’s assertions were proved, it would not significantly alter the balance in considering the interests of justice in respect of this particular application. The issue involves the costs of a single application that was determined on the papers and was not particularly complex, rather than the costs of an entire proceeding or substantial parts of such a proceeding, in which costs may have been incurred as a result of unreasonable behaviour on the part of one party.[3]
[3]I do not, by stating this, intend to be taken as meaning that I consider Parkside’s behavior in bringing the application to be unreasonable.

Conclusion

Taking all these factors into account, and having regard to the question which I must answer (referred to in paragraph 11 above), I am not satisfied that the interests of justice point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100.
I therefore decline to make an order for costs in favour of Hatchy in respect of the application made by Parkside. Each party ought bear its own costs of that application.