Rix v Queensland Building Services Authority
[2011] QCAT 333
•19 July 2011
| CITATION: | Rix v Queensland Building Services Authority [2011] QCAT 333 |
| PARTIES: | Clifford Arthur Rix (Applicant) v Queensland Building Services Authority (Respondent) |
| APPLICATION NUMBER: | CR011-08 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Alexander Crawford, Member |
| DELIVERED ON: | 19 July 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | [1] Applicant’s Application for Costs dismissed. [2] Respondent’s Application for Costs dismissed. [3] Each party pay its own costs. |
| CATCHWORDS : | Costs - whether the parties compromised the proceedings - whether costs orders should be made in the interests of justice. Commercial and Consumer Tribunal Act 2003 Sections 70 and 71; Tamawood Ltd & Phil Martyn Constructions P/L -v- Elizabeth Paans [2005] QCA 111; Calderbank -v- Calderbank (1975) 3 WLR 586. |
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
These proceedings are Review Proceedings initially brought pursuant to Section 25 of the Building Act 1975 and Section 101 of the Commercial and Consumer Act 2003. On the commencement of the Queensland Civil and Administrative Tribunal Act 2009 this Tribunal became seized of the proceedings.
The Applicant is Mr. Clifford Rix, a registered building surveyor and certifier. He sought to review a decision of the Authority made under Section 204 of the Building Act 1975 whereby he was held to have engaged in “unsatisfactory conduct” in his practice as a certifier, within the meaning of that term in the Building Act 1975.
The Tribunal delivered ex tempore reasons for decision in the proceedings on 13 April 2011. The Applicant was unsuccessful in the proceedings. The Tribunal held he had engaged in unsatisfactory conduct.
The Respondent seeks its costs to the proceedings and relies on an Affidavit of the Solicitor Ms. M. Campbell, affirmed on 27 April 2011.
Both parties have provided written submissions.
I accept the Respondent’s submission at paragraph 8 that the proceedings continue to be governed by the cost provisions in the repealed Commercial and Consumer Tribunal Act 2003, and it appears from the Applicant’s submissions that the Applicant agrees with that submission.
Section 71 of the Commercial and Consumer Tribunal Act provides:
71 Costs
“(1) In a proceeding, the tribunal may award the costs it considers appropriate on—
(a) the application of a party to the proceeding; or
(b) its own initiative.
(2) The costs the tribunal may award may be awarded at any stage of the proceeding or after the proceeding has ended.
(3) If the tribunal awards costs during a proceeding, the tribunal may order that the costs not be assessed until the proceeding ends.
(4) In deciding whether to award costs, and the amount of the costs, the tribunal may have regard to the following—
(a) the outcome of the proceeding;
(b) the conduct of the parties to the proceeding before and during the proceeding;
(c) the nature and complexity of the proceeding;
(d) the relative strengths of the claims made by each of the parties to the proceeding;
(e) any contravention of an Act by a party to the proceeding;
(f) for a proceeding to which a State agency is a party, whether the other party to the proceeding was afforded natural justice by the State agency;
(g) anything else the tribunal considers relevant.
Examples of paragraph (g)—
The tribunal may consider whether a party to a proceeding is acting in a way that unreasonably disadvantages another party to the proceeding.
The tribunal may consider whether the proceeding, or a part of the
proceeding, has been frivolous or vexatious.(5) A party to a proceeding is not entitled to costs merely because—
(a) the party was the beneficiary of an order of the tribunal; or
(b) the party was legally represented at the proceeding.
(6) The power of the tribunal to award costs under this section is in addition to the tribunal’s power to award costs under another provision of this or another Act.
(7) The tribunal may direct that costs be assessed—
(a) in the way decided by a presiding case manager; or
(b) by a person appointed by the tribunal.”
The Respondent at paragraph 11 in its submissions refers to the well know authority of Tamawood Ltd v Paans & Anor[1] and also to Senior Member Oliver’s observations in Rainbow -v-Nelson.[2]
[1] [2005] 2 Qd R 101.
[2] [2010] QCAT 388.
The Respondent also submits that offers to settle in the nature of Calderbank letters (that is, offers able to be referred to on the question of costs, but not complying with a system of “formal offers” under the statute) were regarded as relevant and significant in the former Commercial and Consumer Tribunal.
I set out below the submissions contained in paragraphs 16 to 29 of the Respondent’s submissions:
“16. The primary factor favouring an award of costs to the Respondent in this case is that the parties in effect “compromised” the proceedings in March 2010, or at least reached a form of “agreement in principle” which was subject only to the parties entering into a formal deed.
17. The Applicant refused to honour that “agreement in principle”, and this is the primary reason for the need to litigate the matter after March 2010. In a review proceeding such as this it is doubtful that a “compromise” between the parties could truly have bound the Tribunal, but nonetheless it seems highly likely that if the parties had made joint agreed submissions pursuant to such a “compromise”, perhaps based on a brief agreed statement of facts, the matter could have been disposed of without a full hearing, and much expense could have been avoided on both sides.
18. It is apparent from Ms Campbell’s affidavit that the Respondent made two offers of settlement, one of 14 January 2010 and one of 15 March 2010. (The Respondent does not assert that these offers satisfied the “formal offer” provisions of part 7, division 7 of the former CCT Act - one reason for this is that the times for acceptance stated in the offers were less than the 14 days provided by section 140(2)).
19. The effect of the latter offer was that the review application would be withdrawn, there would be an agreed finding of unsatisfactory conduct together with a reprimand, and each party would bear their own costs of the proceedings. As is apparent from the letter of 15 March 2010 exhibited to Ms Campbell’s affidavit, this offer was made on an “open” basis.
20. By a letter of 16 March 2010, the solicitor who represented the Applicant at all material times up to and including the hearing replied “Mr Rix has now returned to work. He instructs me that he will agree to settle the dispute on the basis proposed in your letter. We note that you will prepare and forward to us a draft deed of settlement.”
21. In terms of Maters v Cameron,[3] it would seem that at this point the parties had entered into a binding agreement (subject perhaps to the discretion of the Tribunal) which was merely intended to be restated more fully in a formal deed.
[3] (1954) 91 CLR 353.
22. During a telephone conversation on 12 April 2010, the Applicant’s solicitor told Ms Campbell on behalf of the Respondent that the matter was “as good as settled”.
23. Subsequently though, for reasons which are not entirely clear, the Applicant refused to sign the Deed proposed by the Respondent and the matter proceeded to a hearing. The draft Deed was in straightforward and uncontroversial terms; a copy is exhibited to Ms Campbell’s affidavit.
24. It will be noted that the Respondent’s offer was in similar terms to the ultimate outcome of the case, and more favourable to the Applicant in the sense that he would not have been at risk in relation to the costs of the proceedings, because the deal provided that the parties were to bear their own costs.
25. Had the Applicant complied with the terms of the agreement, the proceedings would in effect have been resolved and the parties would have saved much time, trouble and expense. Even if the view is taken that there was no binding agreement, the Applicant’s failure to accept the Respondent’s entirely reasonable offer has been the primary cause of all the costs incurred to date on both sides of the proceedings since March 2010.
26. This is a powerful consideration in favour of awarding the Respondent its costs, at least from March 2010 on.
27. Turning then to the individual sub-sections of section 71(4) of the CCT Act:
(a)The outcome of the proceeding favours the Respondent. The Respondent was entirely successful on every point which it agitated at the hearing.
(b)As to the conduct of the parties, the Respondent has acted entirely reasonably, and at the hearing of the proceedings pressed only for a finding of “unsatisfactory conduct” in the circumstances in which the original complaint had sought a finding of “professional misconduct”. The conduct of the Applicant however left something to be desired. There were periods of inactivity, and delays in filing material. Ms Campbell’s affidavit reveals that directions hearings of 13 May 2010, 10 June 2010 and 12 October 2010 were largely concerned with delays and inactivity on the part of the Applicant. Member Stilgoe noted on 12 October 2010 that it was necessary to make orders for the Applicant to deliver his material, something which according to the Member “should have happened months ago”. Another central aspect of the Applicant’s conduct of course is the failure to honour the “Compromise”.
(c)As to the nature and complexity of the proceeding, there were points of law involved concerning the construction of the statute, and expert evidence was called on each side. The proceeding had a degree of complexity to it.
(d)As to the relative strengths of the claims in the proceedings, the Respondent’s success reflects the strength of its position.
(e)As to any contraventions of legislation by the parties, Mr Rix has been found to have contravened the BA in a number of respects.
(f)As to whether Mr Rix was afforded natural justice by the Respondent, most of the first day of the final hearing up until about 3pm in the afternoon was taken up with an unsuccessful application by the Applicant to strike out the proceedings based upon an alleged denial of natural justice. This application failed. In every respect relevant to the matters agitated at the final hearing (leaving aside some matters which were abandoned) the Applicant was afforded natural justice, and detailed submissions were made about this on the first day of the hearing in response to the “strike out” application.
(g)Under the heading “anything else the Tribunal considers relevant” (section 71(4)(g)) the Tribunal ought to take into account the Applicant’s failure to honour the “compromise” - it is submitted that this is a decisive consideration.
28. In all the circumstances, and particularly in view of the circumstances attending the “compromise” of the proceedings, the Respondent should have its costs of the proceedings on the standard basis. Alternatively, the Respondent should have its costs of the proceedings on the standard basis from 16 March 2010, being the date of the letter from the Applicant’s solicitors by which acceptance of the Respondent’s offer to compromise the proceedings was seemingly conveyed.
29. Given the nature and complexity of the proceedings, and the seriousness of the fire and safety matters involved, costs should be assessed as if the matter had been heard in the District Court.”
The submissions of the Applicant
The Applicant submits that the Tribunal needs to consider not just Section 71 but also Section 70 which is in the following terms:
70 Purposes of div 7
“The main purpose of this division is to have parties pay their own costs unless the interests of justice require otherwise.”
The Applicant says these two Sections need to be read together. I agree with this submission.
The Applicant says as Keane JA said in Tamawood Ltd v Paans & Anor at paragraph 28 “Section 70 and 71(1) are intended to impose a general rule that good reason must be shown in terms of interest of justice in making an award of costs in proceedings before the Tribunal”. Accordingly the question is whether or not that “good reason” has been shown in this case “in the interests of justice”. I agree that is the appropriate question to ask.
For convenience I set out below the balance of paragraphs 7 to 22 of the Applicant’s submissions:
“7. The primary argument put forward on behalf of the respondent depends upon the “compromise” argument.
8. It is submitted that there is nothing in this argument. Either the proceedings were compromised or they were not. If they were in fact compromised then the applicant lost his right to prosecute his application before the tribunal. That was never suggested before the tribunal and no action was ever taken to suggest that the proceedings had been compromised.
9. So what is left as a result?
10. The consequence is that the respondent has wrongly placed before this tribunal letters which were plainly of a without prejudice nature.
11. Furthermore, they were not Calderbank letters at all. See Calberbank v Calderbank (1975) 3 WLR 586. What is required is a clear reservation of the right to tender the letter to the court on the question of costs, should the need arise.
12. Accordingly, the applicant objects to those parts of the respondent’s material which deposes to or exhibits correspondence in relation to, the alleged agreement.
13. As made clear in Rodgers v Rodgers [1964] 114 CLR 608 at 614, parties should be at liberty to negotiate their dispute ”freely and without fear that, failing agreement, what is said or done by them may later be used in evidence”.
14. That such evidence is now before the court is a good reason, per se, for dismissing the application for costs. To do otherwise would reward the respondent for wrongfully placing such material before the court.
15. Section 71(4) sets out various matters that the tribunal may have regard to. It is supposed to deal with each of those matters individually.
Outcome of the proceedings
16. As a result of the making of the relevant application, the applicant has improved his position. The court should have simple regard to that fact and, for the reasons previously submitted, should not have regard to the without prejudice communications previously referred to. The “outcome of the proceedings” factor is consistent with the applicant being awarded his costs.
The conduct of the parties to the proceedings, before and during the proceedings
17. This is a neutral factor in this case. Reference in this regard is made to the affidavit of Mr Provest, dealing with any assertion of delay.
The nature and complexity of the proceedings
18. The respondent is a specialist authority. As such, it has its own internal legal advisors. Unlike the applicant, there was no need for it to seek outside legal advice. Moreover, despite the complex nature of the reasons given for disciplining of Mr Rix, when the matter was actually argued it came down to about 3 fairly simple points. In short, it was the respondent which made the matter appear more complex than it was. Again, this is a factor in favour of the applicant getting his costs.
The relevant strengths of the claims made by each of the parties to the proceedings
19. Although the matter was determined in the respondent’s favour, the points made on behalf of Mr Rix were all strongly arguable. This is not a case where the applicant wasted the tribunal’s time with silly or hopeless arguments which were never going to succeed.
Any contravention of an act by a party to the proceeding
20. It is submitted that this factor has no application here.
Natural justice
21. This was a preliminary point taken by the applicant in this very case. Again, had the respondent behaved differently at the start, the need for Mr Rix to make this application may have been avoided.
Other matters
22. It is submitted that costs are intended to be an indemnity for costs actually incurred by the successful party. Here, the costs incurred by the authority were internal costs, save for counsel’s fees in respect of which counsel appears to have been only recently instructed. It will be noted also that there was no order permitting legal representation until 29 January 2011.”
The Applicant also relies upon the Affidavit of G.W. Provest solicitor for the Applicant sworn 13 May 2011.
Observations and Findings
Having read the submissions of both parties together with the two affidavits referred to the Tribunal makes the following observations and findings.
The Tribunal agrees with the Applicant’s submission that the primary argument put forward on behalf of the Respondent depends upon the compromise argument that is that the parties in effect compromised the proceedings in March 2010 or at least reached a form of agreement in principle which was subject only to the parties entering into a formal deed.
Regarding the submission that the parties in effect compromised proceedings in March 2010 it is clear that they did not compromise the proceedings as the proceedings continued to a hearing.
The Respondent agrees with the fact that the matter proceeded to a hearing but says at paragraph 23 of its submissions that for reasons which are not entirely clear the Applicant refused to sign the deed proposed by the Respondent.
To the Tribunal’s mind this is answered by the contents of paragraph 36 of the Affidavit by Geoffrey William Provest in which Mr. Provest swears that “Counsel subsequently advised the Respondent not to enter into the settlement proposed by the draft deed and the matter thereafter proceeded to hearing.” Accordingly, there is clear evidence, which the Tribunal accepts, that the Respondent was advised by Counsel not to enter into the settlement proposed by the draft deed and subsequently the matter proceeded to hearing.
The Applicant in paragraph 10 of his submissions says that the consequence of not compromising the matter is that the Respondent in respect of the costs application has wrongly placed before the Tribunal letters which were plainly of a without prejudice nature.
The Tribunal does not accept this proposition as it appears from the letters of 14 January 2010 and 15 March 2010 exhibited to Ms. Campbell’s Affidavit that the offers were made on an “open” basis.
The second submission on behalf of the Respondent was that the parties at least reached a form of “agreement in principle” which was subject only to the parties entering into a formal deed.
Again the Tribunal rejects this submission on the basis that the Tribunal has accepted that Counsel has clearly advised the Applicant not to accept the settlement offer.
Regarding the submission that the offers to settle were in the nature of Calderbank letters the Tribunal does not accept that submission, and prefers and accepts the submission of the Applicant that the letters were not Calderbank letters at all.
A Calderbank case is one whereby the law recognises that a settlement offer, although made “without prejudice” but subject to a clearly expressed reservation of a right to refer to it on the issue as to costs (the usual phraseology being “without prejudice except as to costs”) is admissible for that purpose.[4]
[4] See Law of Costs by GE Dal Pont 2009 Lexis Nexus 2nd edition paragraph 13.43 and Calderbank -v- Calderbank (1975) 3 WLR 586.
The letters dated 14 January 2010 and 15 March 2010 do not contain such phraseology.
The Tribunal accepts that the letters referred to by the Respondent were in fact not Calderbank letters at all and that what is required is the clear reservation of the right to tender the letter to the Tribunal on the question of costs as mentioned above.
The Tribunal also rejects the Respondent’s submission in paragraph 25 that even if there was no binding agreement, the Applicant’s failure to accept the Respondent’s entirely reasonable offer has been the primary cause of the costs incurred to date on both sides of the proceedings since March 2010. In the Tribunal’s view, the Applicant was entitled to seek independent advice from Counsel, which he did, in respect of his carriage of the proceedings and rely upon that advice not to settle the proceedings.
As regards the individual subsections of Section 71(4) of the CCT Act the Tribunal finds as follows:
(a) As to subparagraph (a), the Tribunal accepts the Respondent’s submission in relation to subparagraph (a) and rejects the submission of the Applicant. Accordingly, the Tribunal does not consider the outcome of the proceedings factor is consistent with the Applicant being awarded his costs.
(b) As to subparagraph (b), the Tribunal does regard this factor as a neutral factor in the case particularly bearing in mind the explanation set out in the Affidavit of Mr. Provest dealing with any assertion of delay. Given the finding the Tribunal has made in relation to the alleged failure to honour the compromise the Tribunal rejects that aspect of the submission on behalf of the Respondent.
(c) As to subparagraph (c), the Tribunal accepts that the proceeding had a degree of complexity to it. The Tribunal rejects the submission that the Respondent made the matter appear more complex than it was and accordingly rejects the Applicant’s submission that this is a factor in favour of the Applicant being awarded his costs.
(d) As to subparagraph (d), the Tribunal accepts that the Respondent’s success reflects the strength of its position. The Tribunal considers that the points made on behalf of Mr. Rix were at least arguable.
(e) As to subparagraph (e) the Tribunal accepts that Mr. Rix has been found to have contravened the Building Act in a number of respects.
(f) As to subparagraph (f) the Tribunal accepts the Respondent’s submission that the Applicant was afforded natural justice by the Respondent.
(g) As to subparagraph (g) the Tribunal does not accept the Respondent’s submission that the alleged failure by the Applicant to honour the compromise is a decisive consideration bearing in mind that the Tribunal has found that such an alleged failure did not occur.
Because of the observations and findings made by the Tribunal above, the Tribunal dismisses the Respondent’s Application for Costs. The Tribunal also rejects the submission for costs to be awarded in favour of the Applicant, on the same basis.
Accordingly, the Tribunal finds that good reason has not been shown in terms of the interests of justice for making an award of costs in these proceedings in favour of either party.
The Orders of the Tribunal are:
1. The Respondent’s Application for Costs is dismissed;
2. The Applicant’s Application for Costs is dismissed;
3. Each party pay its own costs.
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