Hope Island Resort Principal body Corporate v Berry
[2013] QCAT 300
•18 June 2013
| CITATION: | Hope Island Resort Principal body Corporate v Berry & Ors [2013] QCAT 300 |
| PARTIES: | Hope Island Resort Principal body Corporate (Applicant) |
| v | |
| Duncan De Berry and Jeanette De Berry (First Respondent) Riverleigh Gardens GTP 104105 (Second Respondent) |
| APPLICATION NUMBER: | OCL134-11 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Graham Quinlivan, Member |
| DELIVERED ON: | 18 June 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Mr and Mrs De Berry pay the Hope Island Resort Principal Body Corporate’s costs plus outlays fixed at $14,066.00. |
| CATCHWORDS: | COSTS – whether costs should be ordered Queensland Civil and Administrative Tribunal Act 2009 ss 100, 102, 107 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Mr and Mrs De Berry built a house which they describe as their “pride and joy” at 3142 Riverleigh Drive, Hope Island during 2007-08. As occasionally happens in situations like this, a number of issues arose regarding the approval for the house which culminated in an application by the Hope Island Resort Principal Body Corporate to the Queensland Civil and Administrative Tribunal against Mr and Mrs De Berry on 18 November 2011.
On 6 March 2013 the Tribunal granted the application brought by the Body Corporate to require Mr and Mrs De Berry to relocate their front masonry fence so that it is positioned in accordance with plan number WD-02 approved by the Hope Island Architectural Review Authority.
Further the Body Corporate was granted permission to enter the Property and cause the works to be completed, if Mr and Mrs De Berry did not comply with the Order within 60 days.
The decision resulted in all of the orders sought by Mr and Mrs De Berry being dismissed.
Subsequently the parties were granted leave to make submissions regarding any application for costs.
On 22 March 2013 the Tribunal received submissions from the Body Corporate seeking the following orders:
(a)Mr and Mrs De Berry pay the Body Corporate’s costs of this proceeding on the indemnity basis fixed at $25,789.50.
(b)If the Tribunal is not minded to grant indemnity costs then standard costs should be awarded, fixed in an amount of $13,801.00.
In support of their claim the Body Corporate submitted a chronology detailing the three stages that they say the proceedings went through. They submit that stage 1 was completed with the exchange of a draft list of “issues in agreement and dispute” with Mr and Mrs De Berry on 14 May 2012 “to assist the tribunal with its decision making process in what is a novel and complex area of law”.
In relation to stages 2 & 3 they contend that these stages were only necessary because Mr and Mrs De Berry:
a)Engaged legal representatives which resulted in a new set of submissions; and
b)Alleged that Riverleigh Gardens had approved the non-compliance with the Development Control By-laws when it had not.
On 25 March 2013 Mr and Mrs De Berry submitted that it is only appropriate that each party bear their own costs for the proceeding.
In the alternative they submitted that the Tribunal only has jurisdiction to order that a respondent pay an applicant’s application fee in proceedings other than minor civil disputes, pursuant to Rule 85 of the Queensland Civil and Administrative Tribunal Rules 2009. They argued that the only order that the Tribunal can make in relation to costs is an order that they pay the Body Corporate’s application fee.
On 25 March 2013 the Body Corporate filed a further submission relating to the jurisdictional issue raised by Mr and Mrs De Berry. They point out that Rule 85 provides as follows:
Additional power to award costs against respondent
i)If the tribunal makes an order against a respondent in a proceeding, other than a proceeding for a minor civil dispute, the tribunal may order the respondent to pay to the applicant the amount of any prescribed fee paid by the applicant on filing the application or referral for the proceeding.
They submit that Rule 85 is not to be read restrictively – “it gives the tribunal the power to order that Mr and Mrs De Berry pay the application fee if an order is made against it”. They argue that it is an additional power that can be exercised independently of section 102 of the QCAT Act.
Section 102 of the QCAT Act authorises the Tribunal to make an order requiring a party to a proceeding to pay all or a part of the costs of another party if the tribunal considers the interests of justice require it to make the order. In deciding whether to award costs the Tribunal may have regard to the following—
(a)Whether a party acts in a way that unnecessarily disadvantages another party;
(b)The nature and complexity of the dispute;
(c)The relative strengths of the claims made by each party;
(d)The financial circumstances of the parties to the proceeding;
(e)Anything else the tribunal considers relevant.
Did any party act in a way that unnecessarily disadvantaged another party?
The Body Corporate claim that submissions regarding the dispute had been effectively completed by 11 May 2012. The matter was ready to be determined by the Tribunal “on the papers” subject to completion of a list of agreed and disputed issues. It was at this point that Mr and Mrs De Berry engaged legal representation and on the Body Corporate’s version of events that is when the complications began. They argue that they were unnecessarily disadvantaged because Mr and Mrs De Berry sought to withdraw a previously admitted fact and also provide themselves with a third opportunity to make additional submissions not confined to issues raised by Riverleigh Gardens, who had been joined as second respondents.
The Body Corporate claims that the proceedings would not have been prolonged for almost 15 months, except for Mr and Mrs De Berry’s conduct.
Mr and Mrs De Berry say that when considering the provisions of section 102 (a), (b) and (c) the Tribunal should understand that the proceedings were only necessary as a result of the conduct of the Body Corporate in issuing a letter dated 7 June 2011. They claim that this letter led them to believe that the construction of the fence that is the subject of these proceedings was “allowable and lawful”.
In the decision dated 6 March 2013, the Tribunal found that the preferable interpretation of the letter dated 7 June 2011 is as follows:
i)The Body Corporate advised that it had not approved the non-compliance;
ii)The Body Corporate intended to refer the matter to the Tribunal;
iii)Before making that referral, the Body Corporate would provide the opportunity for Riverleigh Gardens to give its views on the non-compliance;
iv)If there was no action (i.e. if Riverleigh Gardens did not put forward its views), the matter would be referred to the Tribunal;
v)If Riverleigh Gardens put forward its views, the non-compliance would be reconsidered.
The Tribunal has already found that the claims by Mr and Mrs De Berry regarding the letter were without merit.
What was the nature and complexity of the dispute?
The Body Corporate submits that both the factual and legal issues were novel and complex. They argue that there were no precedents to guide the parties and the Tribunal as to how matters regarding contraventions of the development control by-laws should be dealt with. Mr and Mrs De Berry did not add to their submissions outlined above.
What were the relevant strengths of the parties’ claims?
The Body Corporate submits that it was completely successful in the proceedings and that Mr and Mrs De Berry’s submissions were misconceived, without substance or could not be reasonably made. Mr and Mrs De Berry made no further submissions regarding this factor. However the finding of the Tribunal was that they were unsuccessful on all grounds.
What were the financial circumstances of the parties?
Mr and Mrs De Berry submit that the applicants were able to utilize the financial power of one of the largest Body Corporates in the state, whereas they are two individuals who only had access to their own financial resources and therefore were much more limited than the applicants. The Body Corporate did not address this factor. There was no evidence to support the claims by Mr and Mrs De Berry.
Is there any other relevant factor?
Mr and Mrs De Berry submit that they understand and accept that the Tribunal’s decision of 5 March 2013 was not unreasonable but continue to assert that “the letter issued by the Applicant was poorly drafted, ambiguous and misleading and had it not been issued, these proceedings would not have been necessary”. In the light of the result of the matter the Tribunal finds this claim to be disingenuous.
Should there be a costs order?
Mr and Mrs De Berry have raised a jurisdictional issue claiming that “QCAT only has jurisdiction to order that a Respondent pay an Applicant’s application fee in proceedings other than minor civil disputes, pursuant to Rule 85 of the Queensland Civil and Administrative Tribunal Rules”. That is the extent of their argument.
The Body Corporate argues that such an interpretation is overly restrictive and contrary to the clear wording of the Rules. The Tribunal accepts the submission by the applicants and finds that QCAT does have jurisdiction to make costs orders where appropriate.
In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412, the President of the Tribunal identifies the process to be followed when considering an application for costs. In paragraphs 4 & 5 he states that:
[4]“The starting point concerning costs in QCAT is that each party must bear its own: QCAT Act, s 100. This presumption may, however, be displaced if the Tribunal considers it in the interests of justice to order a party to pay all or part of the costs of another party: s 102(1). 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.
[5] In determining whether it is in the interests of justice to award costs against another party the Tribunal may have regard to the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; and, whether a party has acted in a way that unnecessarily disadvantages another party: QCAT Act, s 102(3).”
Further in the same decision the President states at paragraph 29 that “(u)nder 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”.
The Tribunal is satisfied that this is a case where there should be an order for costs. As outlined earlier in these reasons the only basis that Mr and Mrs De Berry relied on to prolong this matter was a misconceived interpretation of the letter dated 7 June 2011. The history of the dispute reveals a willful determination on their part not to comply with the provisions of their Development Approval.
In the Tribunal’s view to continue with a case that had little or no hope of success based as it was on a totally untenable interpretation of a letter from a person who clearly did not have the authority to give the relief alleged was conduct that unnecessarily disadvantaged the applicant by forcing it to incur costs pointlessly.
The Tribunal is satisfied that this was a complex matter that was highlighted by the need to consider arguments regarding the earlier Referee’s decision that raised consideration of the principles of res judicata and estoppel and the voluminous material used by the first respondents to challenge other alleged non-compliances within the Resort.
The Tribunal accepts the submission of the Body Corporate that the relative strengths of the claims is best demonstrated by the failure of Mr and Mrs De Berry to achieve any findings in their favour.
The Tribunal is also conscious of the submission by Mr and Mrs De Berry that they are two individuals opposed to a major Body Corporate. However apart from their submission there is no evidence as to the impact that this had on them.
The Body Corporate seeking their costs on either a standard or an indemnity basis. They have provided evidence in the form of an affidavit by Warren Peter Jiear sworn on 22 March 2013. He is the solicitor who had the conduct of the matter. He was admitted to practice in 1996 and is an accredited specialist in Commercial Litigation. He has provided a table that identifies the costs incurred on both bases plus outlays. His initial figures identified legal costs on a standard basis at $13,801.00 and on an indemnity basis $25,789.00 plus outlays of $265.00. These figures included an estimate of work in progress of $1800 and $3,300.00 respectively. Subsequently on 2 May 2013 the Tribunal received another invoice indicating that the balance of the final account was for an amount of $3960.00. It is not clear if this final figure is provided on a standard or indemnity basis.
In any event the Tribunal has power to fix costs and the QCAT Act encourages it to do so, if possible: s 107(1). Mr Jiear’s affidavit is persuasive in that the details he has provided are indicative of the work necessary to address the application brought by his clients, and the degree of complexity involved.
The Tribunal is not however convinced that this is a matter where indemnity costs are appropriate. Mr and Mrs De Berry’s initial response and position were unsustainable. Their persistence with the proceedings was unreasonable and irresponsible. As a result the Tribunal finds that it is in the interests of justice to award costs because their behaviour qualifies as conduct warranting an order on a standard basis.
The Tribunal therefore orders that Mr and Mrs De Berry pay the Body Corporate’s costs plus outlays fixed at $14,066.00.
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