Johnston v Queensland Building Services Authority
[2010] QCAT 443
•6 September 2010
| CITATION: | Johnston v Queensland Building Services Authority [2010] QCAT 443 | |
| PARTIES: | Brian Henry Johnston | |
| v | ||
| Queensland Building Services Authority | ||
| APPLICATION NUMBER: | QR110-09 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | Decision on the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe |
| DELIVERED ON: | 6 September 2010 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | The respondent’s application for costs is dismissed. |
| CATCHWORDS : | Costs – where party wholly successful – whether vexatious – where offer to settle - Tamawood Homes & anor –v- Paans - Horsburgh –v- Queensland Building Services Authority - Civic Steel Homes –v- Mitra – ss 256, 271 QCAT Act – ss 71, 142 CCT Act |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers in accordance with section 32 of the
Queensland Civil and Administrative Tribunal Act 2009
REASONS FOR DECISION
On 5 May 2009, Mr Johnston filed an application for review of the Authority’s decision to refuse to categorise him as a permitted individual. On 26 May 2010, the day after a compulsory conference, Mr Johnston was given leave to withdraw his application. The Authority now seeks its costs of responding to Mr Johnston’s application.
The Authority says that the proceeding was a “pending proceeding” within the meaning of section 256 of the Queensland Civil and Administrative Tribunal Act (“QCAT Act”). “Pending proceeding is defined in section 245 of the QCAT Act as “an existing proceeding…if, at the commencement, the court of former tribunal has not started to hear a matter the subject of the proceeding”. The only steps taken in the Commercial and Consumer Tribunal were directions hearings. I am satisfied that the tribunal had not started to hear the matter and, therefore, that this is a pending proceeding.
Because it is a pending proceeding, section 271(2)(b) of the QCAT Act states that the tribunal can only make a decision the former entity could have made in relation to the matter under the former Act. This means that the tribunal must determine the application for costs pursuant to the now repealed Commercial and Consumer Tribunal Act (“CCT Act”).
In determining an application for costs, section 71 of the CCT Act directs the tribunal’s attention to these matters:
a)The outcome of the proceedings;
b)The conduct of the parties before and during the proceeding;
c)The nature and complexity of the proceedings;
d)The relative strengths of the claims by the parties;
e)Any contravention of an Act by a party to the proceeding;
f)Whether the party was afforded natural justice by the State agency;
g)Anything else the tribunal considers relevant.
Section 142 of the CCT Act provided that if a party serves a written offer to settle, that offer is not accepted, the offer complies with requirements of the Act and, in the opinion of the tribunal, the decision of the tribunal is not more favourable to the other party than the offer, then the tribunal must award the party who made the offer the reasonable costs incurred in conducting the proceeding after the offer was made.
Offer to settle
The Authority submits that “decision” “includes the disposition if the proceedings effected by [Mr Johnston’s] withdrawal (and any consequential orders). “Decision” was defined in Schedule 2 to the CCT Act so as to include “order” and “direction”.
I do not agree. The decision of the tribunal was to give Mr Johnston leave to withdraw. The tribunal did not make a decision about the disposition of the proceedings. It did not make any findings of fact, nor did it make any orders about the results of the proceedings. In that sense, therefore, as there is no decision of the tribunal, it cannot be “not more favourable” within the terms of section 142 of the CCT Act and the tribunal is not compelled to make an order for costs.
The outcome of the proceedings
The Authority has been completely successful in these proceedings. Therefore, it has referred the tribunal to the decision of Justice Keane in Tamawood Homes & anor –v- Paans[1], particularly His Honour’s statement at paragraph 33:
“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.”
[1] [2005] 2 QdR 101
As I have already pointed out,[2] in Tamawood both the Court of Appeal and the District Court were concerned that a successful applicant homeowner of modest means should not have a successful claim eroded by the costs of pursuing that claim. The injustice to which His Honour referred was that just claims might not be prosecuted by persons who are unable to manage complex litigation by themselves (my emphasis). The case is quite different here.
[2] Lienhart v Sunrise Homes Pty Ltd [2010] QCAT 156
10. The Authority has also referred the tribunal to Horsburgh –v- Queensland Building Services Authority[3]. Mr Lorisch ordered that the applicant pay the Authority’s costs, in part because “in applications such as this, the Authority is fulfilling its role as a regulator of the building industry. In so doing, the Authority is charged with acting in the interests of the consumers and the building industry. If, in fulfilling its obligation as regulator, the Authority incurs costs towards upholding its decisions, it would appear to me, in a general sense, inappropriate and inequitable that such costs be borne by the Authority, and hence be a charge against the industry and the stake holders, rather than be borne by the person who unsuccessfully sought to review the Authority’s decision.”[4]
[3] [2008] QCCTB 235
[4] Supra at [7]
11. That view is tenable only if Tamawood is authority for the proposition that successful parties are entitled to their costs in the absence of countervailing considerations. That is not what His Honour said, when read in context, and it is certainly not what section 71 of the CCT Act contemplated.
The conduct of the parties
12. The Authority submits that Mr Johnston:
a)Continued with his application in spite of an offer of settlement, a comprehensive advice package from the Authority and a lengthy and specific discussion with Ms Shafer in a directions hearing.
b)Did not take steps to prosecute his application in a timely way.
c)Submitted voluminous material in an unorganised, non-specific way that the Authority could only respond to by engaging specialist building and accounting expertise. Even when he was counselled by Ms Shafer to put his material in order, Mr Johnston delivered 10 level arch folders of material that did not have an accompanying explanation. Although the material was extensive, it was incomplete and the experts listed a number of documents that they needed to assist them in their deliberations.
13. I note Mr Johnston’s assertion that he could not comprehend “the parts of the Act I must comply with to retain my licence”. It appears that the financial stress that precipitated the Authority’s action against Mr Johnston contributed to his inability to obtain proper legal advice. There is no doubt, though, that Mr Johnston did receive assistance from the Authority and the tribunal as to the procedural requirements. What was required of Mr Johnston to organise his material needed time and concentrated effort; it appears that the preparation of his case received neither.
14. The Authority asserts that Mr Johnston’s conduct of the proceedings was vexatious in the sense that it was productive of serious and unjustified trouble and harassment[5].
[5] Per Deane J Oceanic Sun Line Special Shipping Company Inc –v- Fay (1988) 165 C.L.R. 197 at 247
15. A claim is not vexatious simply because it is not a strong case or the claim wholly fails, see the decision of Judge Robin QC in Civic Steel Homes –v- Mitra[6]. Mr Johnston’s conduct of the proceedings did put the Authority to expense. The Authority has provided no information about the actual expense incurred in briefing experts. Therefore, the tribunal is unable to gauge whether the trouble was “serious and unjustified”.
[6] [2006] QDC 322
Nature and complexity of the proceedings
16. As the Authority has indicated, the substantive issue in the proceeding was whether Mr Johnson took all reasonable steps to avoid the appointment of an administrator to his company (“the event”). Mr Johnston asserted that the event arose from a complicated series of business dealings.
17. I accept that the alleged complexity of the business dealings, coupled with the state of Mr Johnston’s material, justified the need for expert accounting and, perhaps, engineering evidence. I am not presently persuaded that the complexity of the proceeding justified legal representation beyond representation by in-house lawyers. I note that it is common for the Authority for in-house lawyers to represent it in tribunal proceedings.
The relative strengths of the claims
18. The Authority submits, and it is reasonably clear, that Mr Johnston faced serious difficulties in establishing the matters that would have enabled him to retain some form of licence.
Any contravention of an Act by a party to the proceeding
19. There is no suggestion that the Authority has contravened any Act in relation to these proceedings.
Whether Mr Johnston was afforded natural justice by the Authority
20. There is no suggestion that Mr Johnson was not afforded natural justice by the Authority. In fact, the contrary argument seems to be true; that the Authority went to some lengths to make sure that Mr Johnston understood the process in which he was engaged and what was required by the tribunal.
Anything else the tribunal considers relevant
21. The Authority has submitted that, in the event section 142 of the CCT Act is not triggered, the offer of settlement is relevant to the question of costs. It submits that its attempt to resolve the dispute at an early date, avoiding costs to all parties, should influence the tribunal to exercise its discretion to order costs.
22. Offers to settle can be made too early, particularly when made to a self-represented litigant who may not be aware of its importance. The offer to settle was made on 7 August 2009, after the Authority had filed and served its material but shortly before Mr Johnston filed and served his voluminous, but apparently confusing, material. The full extent of Mr Johnston’s procedural difficulties was probably not clear to him until the directions hearing on 28 September 2009. By that time, the Authority’s offer had expired. Mr Johnston could no longer accept the offer and, probably, did not appreciate the implications.
23. The specialist evidence was filed in the tribunal on 29 April 2010. It appears, therefore, that they were not engaged until Mr Johnston had an opportunity to improve his material. It was clear to the Authority that it was about to spend a considerable sum on experts yet there is no evidence that it renewed its offer to Mr Johnston beforehand. The Authority would have stronger grounds for an argument for costs if the offer to settle had been reissued after 28 September 2009, before it engaged experts to examine Mr Johnston’s material and gave Mr Johnston a clear explanation of the likely consequences of refusing the offer.
Conclusion
24. There is no doubt that Mr Johnston’s conduct in these proceedings put the Authority to additional and unwarranted expense. Although frustrating, Mr Johnston’s conduct fell short of vexatious. Had the Authority reissued its offer to settle after Mr Johnston’s attempts to improve his material and before it engaged experts, I would have no hesitation in ordering costs. In the present circumstances, however, even though the Authority was wholly successful, I am not persuaded that it is appropriate to order that Mr Johnston pay the Authority’s costs.
25. I also note Mr Johnston’s lack of funds. There seems little point in making an order for costs, requiring the Authority to engage an assessor, when there is little likelihood that it will recover those costs.
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