Queensland Building Services Authority v Johnston
[2011] QCATA 265
•23 September 2011
| CITATION: | Queensland Building Services Authority v Johnston [2011] QCATA 265 |
| PARTIES: | Queensland Building Services Authority (Applicant/Appellant) |
| v | |
| Mr Brian Johnston (Respondent) |
| APPLICATION NUMBER: | APL241-10 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Judge Fleur Kingham, Deputy President Ms Sandra G Deane, Member |
| DELIVERED ON: | 23 September 2011 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Leave to appeal granted. 2. Appeal allowed and the order dismissing the application for costs is set aside. 3. The application for costs is dismissed. |
| CATCHWORDS: | APPEAL – LEAVE TO APPEAL – Costs – leave granted – erroneous exercise of discretion – error of law – application for costs dismissed Commercial and Consumer Tribunal Act 2003, ss 70, 71, 142 Queensland Civil and Administrative Tribunal Rules 2009, r 86 Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 applied Adam’s Earthworks Pty Ltd v Empire Constructions Pty Ltd [2010] QCAT 228 cited American Express International v Commissioner of State Revenue [2003] VSC 32 followed Chancellor Park Retirement Village Pty Ltd v Squire [2004] QDC 172 followed Dellaway v QBSA [2007] QCCT B181 cited Hallett & Ors v Queensland Building Services Authority [2011] QCAT 355 cited Kilgour v Queensland Building Services Authority [2010] QCAT 87 cited Malay Industries Pty Ltd v Queensland Building Services Authority [2010] QCAT 310 cited Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 cited Rix v Queensland Building Services Authority [2011] QCAT 333 cited Tamawood Limited & Anor v Paans [2005] QCA 111 applied |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Judge Fleur Kingham, Deputy President
I have had the advantage of reading the reasons of Ms Deane in draft. I agree with them, and with the orders she proposes.
Ms Sandra Deane, Member
This is an application by the Queensland Building Services Authority (QBSA) to the Appeal Tribunal for leave to appeal the decision of a Member of QCAT dismissing its application for costs and if successful, to appeal it.
Leave is necessary.[1] Leave to appeal will ordinarily only be granted where there is some question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage; or, there is a reasonably arguable case of error in the primary decision and reasonable prospect that the applicant would obtain further substantive relief. Another question sometimes asked is: is leave necessary to correct a substantial injustice to the applicant, caused by some error?
[1] Queensland Civil and Administrative Tribunal Act 2009, s 142(3)(a)(iii).
By direction of the Appeal Tribunal the application for leave (and the appeal, if leave is granted) are to be heard and determined on the papers, with both parties filing submissions according to a timetable. Substantial submissions have been received from the QBSA. Mr Johnston has advised the Appeal Tribunal that he will not be making any submissions.
The application for leave to appeal alleges errors of law and errors of mixed fact and law. Such grounds, if they can be maintained, may justify leave being granted. If the QBSA is likely to suffer an injustice if the decision is allowed to stand, or if there is a general issue of principle involved about which an appeal decision would be of benefit,[2] leave should be granted.
[2] Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177.
The awarding of costs is a discretionary exercise. Generally an appellate body should not interfere with the exercise of discretion unless it is affected by an error of law.[3]
[3] American Express International v Commissioner of State Revenue [2003] VSC 32.
In this matter both the Member and the QBSA (before the Member and in this application for leave to appeal and appeal) proceeded on the basis that the QBSA’s application for costs ought to be determined having regard to sections 70, 71 and 142 of the Commercial and Consumer Tribunal Act2003 (CCT Act).
The matter had been commenced in the Commercial and Consumer Tribunal (CCT) and was a ‘pending proceeding.’[4] It was taken to be a proceeding before the Tribunal and the Tribunal has jurisdiction to deal with the matter under the QCAT Act.[5]
[4] Queensland Civil and Administrative Tribunal Act 2009, s 245.
[5] Queensland Civil and Administrative Tribunal Act 2009, s 256.
Section 271 of the QCAT Act states that the Tribunal must deal with an existing proceeding (which includes a pending proceeding) under the QCAT Act or an enabling Act and can only make a decision the CCT could have made in relation to the matter under the CCT Act.
[10] The Member on this occasion and other tribunal members have on some other occasions determined that this means that the Tribunal must determine the application for costs pursuant to the now repealed CCT Act.[6]
[6]Kilgour v Queensland Building Services Authority [2010] QCAT 87; Adam’s Earthworks Pty Ltd v Empire Constructions Pty Ltd [2010] QCAT 228.
[11] More recently the Tribunal has determined that the relevant provisions when considering whether to make an order for costs in such a pending proceeding are sections 100 and 102 of the QCAT Act.[7]
[7] Hallett & Ors v Queensland Building Services Authority [2011] QCAT 355.
[12] In the Hallett decision it was accepted that:
a)section 271 of the QCAT Act requires the Tribunal to deal with the matter under the QCAT Act;
b)the Tribunal only had the powers that the CCT had, which included the power to award costs;
c)the awarding of costs ought to be determined by application of the QCAT Act provisions i.e. section 102.
[13] I accept that reasoning as to the preferred construction of section 271 of the QCAT Act.
[14] This matter raises an error of law on a matter fundamental to the awarding of costs in pending proceedings and it is appropriate that leave be granted.
[15] Both the CCT Act and QCAT Act provide for the awarding of costs. However the starting point is different and the criteria to be considered are also expressed differently.
[16] Under the CCT ‘the main purpose of this division is to have parties pay their own costs unless the interests of justice require otherwise.’[8] The next consideration is whether, having regard to the interests of justice, in reliance on the factors set out in section 71(4) and the provisions of section 71(5) of the CCT Act, another order is warranted.
[8] Commercial and Consumer Tribunal Act 2003, s 70.
[17] The QCAT Act provides ‘Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceedings.’[9]
[9] Queensland Civil and Administrative Tribunal Act 2009, s 100.
[18] Section 102(1) states ‘The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order.’
[19] Section 102(3) sets out criteria to which the Tribunal may have regard.
[20] The difference between the CCT Act and QCAT Act cost provisions and the applicability of the decision in Tamawood Limited & Anor v Paans[10] was considered by the President in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2).[11]
[10] Tamawood Limited & Anor v Paans [2005] QCA 111.
[11]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412.
[21] The President commented as follows:
‘In considering subsections 70 and 71 Keane JA (as His Honour then was) referred, however, to two matters relevant here. First, His Honour felt that the CCT provisions negated the traditional position that costs should prima facie follow the event (unless of course that the Tribunal considers that another order is more appropriate) and that the nature and extent of the power to award costs could only be discerned by close consideration of the terms of the statute which created and prescribed the occasions and conditions for its exercise. Section 100 and 102 of the QCAT Act attract the operation of the same principals.
Second, Keane JA was of the view that where the complexity of the matter justified legal representation, it would not be in the interests of justice to bar the successful party from recovering costs that were reasonably necessary to achieve a satisfactory outcome.
That conclusion must, here, be considered in the light of the difference between section 70 of the CCT Act and section 100 of the QCAT Act. Section 70 speaks of a ‘main purpose’ but section 100 mandates that parties shall bear their own costs. Section 70 contains, within itself, a reference to the condition or circumstance in which the main purpose may be subsumed to the interests of justice; section 100 has no such proviso, although it appears later in section 102(1).’
[22] The President’s analysis demonstrates that the sections are relevantly different. He went on in that decision to say:
‘Under the QCAT Act the question that will usually arise in each case in which costs are sought is whether the circumstance is 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 – indicator against costs orders in section 100.’
[23] In deciding the appeal on a question of law only the Appeal Tribunal may confirm or amend the decision or set aside the decision and substitute its own decision or set aside the decision and return it for reconsideration.[12]
[12] Queensland Civil and Administrative Tribunal Act 2009, s 146.
[24] Given the differences in the provisions and the matters to be considered in the exercise of the Tribunal’s discretion the order must be set aside as an erroneous exercise of discretion.
[25] It is appropriate that the Appeal Tribunal determine the matter on the existing material.
Application for Costs
[26] It is necessary to consider the matters referred to in section 102(3) of the QCAT Act to the extent they are relevant to a particular case to determine if the interests of justice point so compellingly to a costs award to overcome the starting position that each party bear their own costs.
[27] The proceedings were review proceedings commenced in the CCT on 5 May 2009 by Mr Johnston to review the QBSA’s decision to refuse to categorise him as a ‘permitted individual” for the purposes of section 56AD of the Queensland Building Services Authority Act 1991 (QBSA Act).
[28] On 17 June 2010 the Tribunal ordered that the application is withdrawn by consent.
Whether a party is acting in a way that unnecessarily disadvantages another party[13]
[13] Queensland Civil and Administrative Tribunal Act 2009, ss 48(1)(a)-(g), 102(3)(a).
[29] The QBSA submits that it encountered problems dealing with the voluminous and unfocussed material filed by Mr Johnston:
a)initially consisting of 17 lever arch folders; and
b)even after the Chairperson of the CCT directed that he reconsider his material, his material was still prolix and lacked a proper explanation (consisting of 10 lever arch folders).
[30] The Tribunal must consider the extent to which the party causing disadvantage is familiar with its practices; the capacity of the party causing disadvantage to act on the tribunal’s orders and directions; and whether the party is acting deliberately.[14]
[14] Queensland Civil and Administrative Tribunal Act 2009, s 48.
[31] A matter which must be established is whether any disadvantage was ‘unnecessary’ as distinct from a disadvantage experienced in the usual course of a dispute proceeding.
[32] Mr Johnston was not legally represented. It is reasonably clear that Mr Johnston was dealing with a number of difficulties arising out of the insolvency of his company and his own solvency issues and more likely than not was doing the best he could to progress the resolution of this matter given his resources.
[33] Whilst Mr Johnston’s conduct in the proceedings put the QBSA to additional expense I am not satisfied that he acted in a way which unnecessarily disadvantaged the QBSA.
The nature and complexity of the dispute[15]
[15] Queensland Civil and Administrative Tribunal Act 2009, s 102(3)(b).
[34] The review application involved quite complex business dealings.
[35] The issues for determination in such a review application are reasonably well settled:
a)Identification of the relevant event;
b)Identification of the circumstances that resulted in the happening of the event;
c)An enquiry as to whether the applicant took all reasonable steps to avoid the coming into existence of those circumstances;
d)If the threshold issue is satisfied, should the discretion be exercised to classify the applicant as a permitted individual.[16]
[16] Delonga v QBSA [2004] QCCTB 26; Dellaway v QBSA [2007] QCCT B181.
[36] This approach was confirmed by Judge McGill in the District Court decision in Younan v QBSA (22 April 2010).
Relative Strengths of the claims[17]
[17] Queensland Civil and Administrative Tribunal Act 2009, s 102(3)(c).
[37] The QBSA submit that Mr Johnston faced serious difficulties in establishing that he took all reasonable steps to avoid the appointment of an administrator to his company.
[38] Each factual circumstance needs to be considered on its merits. In some circumstances it is possible to demonstrate the pre-requisites to being categorised as a ‘permitted individual’.
[39] It appears that Mr Johnston faced considerable difficulties in establishing those pre-requisites. He also observed that ‘it was just too hard for a lay person to comprehend all of the parts of the Act that one must comply with in order to hold a licence.’
Whether Mr Johnston was afforded natural justice
[40] There is no suggestion that Mr Johnston was not afforded natural justice by the QBSA.
Whether Mr Johnston genuinely attempted to enable and help the Decision-maker to make the decision on the merits
[41] Apart from the matters raised in [29] above there are no matters before this Appeal Tribunal to suggest that Mr Johnston did not make genuine attempts to assist.
The financial circumstances of the parties[18]
[18] Queensland Civil and Administrative Tribunal Act 2009, s 102(3)(e).
[42] Mr Johnston became bankrupt on or about 1 October 2009.
[43] The QBSA has been put to some expense in responding to the review application. It is a relevant factor that the QBSA’s costs are funded from the fees paid by licensees.
Anything else that the Tribunal considers relevant[19]
[19] Queensland Civil and Administrative Tribunal Act 2009, s 102(3)(f).
[44] The QBSA contend that it was effectively completely successful in that by Mr Johnston withdrawing the review application the QBSA’s decision stands. This is a factor in favour of an award of costs but not in itself sufficient.
[45] Mr Johnston sought leave to withdraw the application shortly after a compulsory conference and prior to the final hearing of the review application.
[46] The QBSA contend that the settlement offer made to ‘walk away’ to Mr Johnston on 7 August 2009 is a relevant consideration.
[47] The QBSA also contends that its offer to settle is required to be considered in light of section 142 of the CCT Act and requires an award of reasonable costs incurred in conducting the proceeding after the offer was made.
[48] Section 142 of the CCT Act provided that if a party serves a written offer to settle which complies with that Act which is not accepted 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 after the offer was made.
[49] For the reasons set out at [11]-[13] I find that section 142 of the CCT Act is not applicable.
[50] Rule 86 of the QCAT Rules 2009 provides
‘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.’
[51] The QBSA contends that the direction of the Tribunal of 17 June 2010 that the application is withdrawn by consent is a decision which is not more favourable than its offer because the QBSA offer did not require Mr Johnston to pay its costs.
[52] McGill DCJ considered the nature of the “decision” within the meaning of section 142 of the CCT Act in Chancellor Park Retirement Village Pty Ltd v Squire.[20] He stated ‘it contemplates a decision of the Tribunal on the matters in dispute, which one would think would be the substantive matters in dispute in the proceedings, which is different from a situation where the Tribunal decides it has no jurisdiction to give relief.’
[20] Chancellor Park Retirement Village Pty Ltd v Squire [2004] QDC 172, 3-4.
[53] The Tribunal has previously accepted that a “decision” within the meaning of section 142 of the CCT Act included a decision of the Tribunal to dismiss the application as a result of the failure by the applicant to file statements of evidence.[21]
[21] Malay Industries Pty Ltd v Queensland Building Services Authority [2010] QCAT 310.
[54] The District Court in considering the application of section 142 of the CCT Act stated that it ‘should, because of its inherent finality and its mandatory requirement for adverse costs orders, only be applied if all its provisions are strictly met.’[22]
[22] Nortask Pty Ltd v Rodriguez [2009] QDC 318, [33].
[55] These decisions are of assistance in interpreting the similar provisions of rule 86. It is important to note that the terms of rule 86 are “may award” rather than the mandatory language of section 142 of the CCT Act.
[56] The direction of the Tribunal of 17 June 2010 that the application is withdrawn by consent was not when considered strictly a determination by the Tribunal of the substantive matters in dispute.
[57] I find that there is no operative decision of the Tribunal for the Tribunal to compare with the offer. I therefore find that the provisions of rule 86 do not apply.
[58] It would have been open to the QBSA to press for a decision that the application be dismissed rather than consent to the application being withdrawn. This would have strengthened its claim that there was an operative decision with which to compare its offer.
[59] The Tribunal has previously accepted that Calderbank offers may be relevant to the exercise of its discretion to award costs.[23]
[23]Demac Homes (Qld) Pty Ltd v Queensland Building Services Authority & Ors [2011] QCAT 331; Rix v Queensland Building Services Authority [2011] QCAT 333.
[60] The making of the offer is a factor to be considered in the exercise of the discretion.
[61] The offer was made at a relatively early time in the review application. Mr Johnston was not represented and more than likely did not appreciate the possible consequences of failing to accept such an offer either when it was made or at the time when he applied for leave to withdraw his application.
[62] I am not satisfied that Mr Johnston’s refusal to accept the offer when made was unreasonable in the circumstances.
Conclusion
[63] In my view having regard to the above factors some of which are in favour of an award of costs and others which are not, the interests of justice do not point so compellingly to a costs award to overcome the starting position that each party bear their own costs.
[64] The application for costs is dismissed.
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