Queensland Building Services Authority v Glorious Constructions Pty Ltd (No 2)
[2012] QCAT 484
•28 September 2012
| CITATION: | Queensland Building Services Authority v Glorious Constructions Pty Ltd (No 2) [2012] QCAT 484 |
| PARTIES: | Queensland Building Services Authority |
| v | |
| Glorious Constructions Pty Ltd |
| APPLICATION NUMBER: | OCR041-11 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Senior Member |
| DELIVERED ON: | 28 September 2012 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. Queensland Building Services Authority will pay Glorious Constructions Pty Ltd’s costs of and incidental to the proceeding to be agreed or assessed by way of a short form assessment from a cost assessor, on a standard basis in accordance with the District Court scale of costs. 2. If the Queensland Building Services Authority does not accept the short form assessment: a. Queensland Building Services Authority shall file a copy of the short form assessment and its objections to the short form assessment. b. The tribunal will fix the costs, having regard to the short form assessment and any objections. |
| CATCHWORDS: | COSTS – where disciplinary proceedings – where lawyers engaged – whether costs order in the interests of justice Queensland Civil and Administrative Tribunal Act 2009, ss 43(2)(b)(ii), 100, 102(3) Tamawood Ltd & Anor v Paans [2005] QCA 111 |
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 (QCAT Act).
REASONS FOR DECISION
On 19 June 2012[1], I dismissed the Authority’s application for disciplinary proceedings against Glorious Constructions Pty Ltd.
[1]Queensland Building Services Authority v Glorious Constructions Pty Ltd [2012] QCAT 246.
Glorious Constructions wants the Authority to pay its costs of the application on the District Court Scale. The Authority opposes the application but says that, if the tribunal does decide to award costs, it should be a “modest amount”.
The usual position is that each party bears its own costs.[2] The tribunal may make an order for costs if the interests of justice require it[3]. Section 102(3) sets out the matters the tribunal may have regard to when considering an application for costs. Justice Wilson has provided guidance for the application of the principles in s 102(3)[4]:
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] Section 100 Queensland Civil and Administrative Tribunal Act 2009.
[3] Section 102(1).
[4]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 at [29].
Glorious Constructions does not suggest that the Authority acted in a way that unnecessarily disadvantaged it in the proceeding[5]. However, both parties suggest that the behaviour of the other unnecessarily lengthened the proceeding. Glorious Constructions says that the Authority did not falter from its position that the company’s licence should be cancelled until the morning of the second day of the hearing. It says that, given the serious nature of the penalty sought, the company had no choice but to defend the proceedings. The Authority says that, on the morning of the hearing, Glorious Constructions reneged on a clear statement in 2011 that it was prepared to accept an appropriate penalty.
[5] Section 102(3)(a).
It is fair to say that neither party took a backward step in the proceeding. Glorious Constructions is entitled to protect its licence. Whether the Authority’s actions complied with its obligations as a model litigant is not so clear. The obligations include[6]:
• endeavouring to avoid, prevent and limit the scope of legal proceedings wherever possible, including by giving consideration in all cases to alternative dispute resolution before initiating legal proceedings and by participating in alternative dispute resolution processes where appropriate
• where it is not possible to avoid litigation, keeping the costs of litigation to a minimum
[6] not relying on purely technical defences where the State will suffer no prejudice by not doing so
I do not think that Glorious Constructions’ concession that a penalty was appropriate should ever have been construed as an acknowledgement that it would submit to a disqualification. The Authority could have imposed penalties for breaches of the Domestic Building Contracts Act 2000, and Glorious Constructions may have accepted those penalties without demur. That is a very different situation from asking a company to concede a period of disqualification.
To the extent that the parties’ conduct of the proceedings is a relevant consideration, I consider that the Authority’s late concession that it no longer sought disqualification tips the exercise of my discretion in favour of Glorious Constructions.
Both parties accept that the facts giving rise to this proceeding were not complex. The Authority submits that the legal issues were not complex. Glorious Constructions submits that the legal issues were somewhat complex in that there was no direct authority to assist the tribunal and both parties provided detailed submissions to assist the tribunal in its consideration of the issues.
There is little authority on contested disciplinary actions in the building jurisdiction. I obtained considerable assistance from the parties’ submissions. I am persuaded that the determination of the proceedings did involve sufficiently complex questions of law that an order for costs may be justified.
Glorious Constructions says that the Authority should have known about the difficulties in its case from an early date. It points to the fact that the Authority knew Mr and Mrs Eason were owner/builders, that the events happened many years ago and that Mr Nelson had not reoffended. The Authority says that it was appropriate to bring proceedings because it has no power to impose a penalty. The Authority also says that, until Mr Nelson was cross-examined, it did not have a clear explanation on some points.
I agree that proceedings were necessary to impose a penalty on Glorious Constructions. The parties did attend a compulsory conference in this matter but made no progress towards an agreement. Perhaps any attempt to agree a penalty, and shorten proceedings, was thwarted by the Authority’s insistence on a period of disqualification. Perhaps, too, Mr Nelson was coy in the extent of his disclosure during the compulsory conference. On balance, I am not persuaded that either party merits an order for costs on the grounds of the relative strengths of their claims[7].
[7] Section 102(3)(c).
Glorious Constructions says that it has incurred over $36,000 in legal costs in defending the application. It has provided a statement from its accountant who says that the defence of the application “has impacted on the bottom line.” I agree with the Authority’s submission that the accountant’s report is not very helpful. She records legal costs of over $100,000 and the reduction in turnover may be explained by general economic conditions, not just the impact of this dispute.
However, I also accept that the cost of litigation had a significant impact on Glorious Constructions’ cash flow and profitability.
I may also take into account anything else I consider relevant[8] when considering the question of costs.
[8] Section 102(3)(f).
A party to a proceeding which relates to disciplinary action does not need the tribunal’s leave for legal representation.[9] As Keane JA has observed[10]:
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.
[9] Section 43(2)(b)(ii).
[10] Tamawood Ltd & Anor v Paans [2005] QCA 111 at [33].
Glorious Constructions was protecting its right to trade as a licensee. It was necessary to it to defend that position right up until the second day of the hearing. It was entitled to legal representation and it was wholly successful in the proceeding. I am satisfied that the interests of justice in this case do overcome the strong contra-indication against costs contained in s 100.
The Authority has argued that, if I order costs, it should be a “modest amount” because that is the common approach to costs if the Authority is successful in disciplinary proceedings. The Authority also says that the nature of the proceeding does not warrant an order for costs on the District Court scale.
There are four reasons why the tribunal awards modest costs when the Authority is successful in disciplinary proceedings. Firstly, the Authority has a statutory obligation to bring disciplinary proceedings. Secondly, fees paid by licensees fund its activities. Thirdly, it commonly engages in-house lawyers to present its case. Lastly, that is what the Authority asks for. The tribunal will not award costs on the District Court scale if the Authority does not ask for it. The tribunal will award costs on a different basis if the regulatory authority requests it and there is good reason to do so[11].
[11]See, for example, Veterinary Surgeons Board of Queensland v McIntosh [2011] QCAT 417
By contrast, Glorious Constructions had no option but to respond to this proceeding. It is not in the habit of appearing before the tribunal. It does not have in-house lawyers. The District Court Scale is the appropriate scale.
Orders
Queensland Building Services Authority will pay Glorious Constructions Pty Ltd’s costs of and incidental to the proceeding to be agreed or assessed by way of a short form assessment from a cost assessor, on a standard basis in accordance with the District Court scale of costs.
If the Queensland Building Services Authority does not accept the short form assessment:
a. Queensland Building Services Authority shall file a copy of the short form assessment and its objections to the short form assessment.
b. The tribunal will fix the costs, having regard to the short form assessment and any objections.
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