Sedl v Queensland Building Services Authority (No 2)
[2012] QCAT 342
| CITATION: | Sedl v Queensland Building Services Authority (No 2) [2012] QCAT 342 |
| PARTIES: | Patrick Sedl |
| v | |
| Queensland Building Services Authority |
| APPLICATION NUMBER: | GAR102-10 |
| MATTER TYPE: | General administrative review matters |
| HEARING DATE: | 14 June 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Paul Favell, Member |
| DELIVERED ON: | 3 August 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | There be no order as to costs. |
| CATCHWORDS: | Costs – building matter Queensland Civil and Administrative Tribunal Act 2009, ss 6-7, 100 Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Patrick Sedl represented by Mr C Watters of counsel (acting Pro Bono) |
| RESPONDENT: | Queensland Building Services Authority represented by Mr B N S Turnbull of HWL Ebsworth |
REASONS FOR DECISION
On 5 January 2012 the Tribunal published a finding that “the date of practical completion is 4 October 2003”. The practical effect of that finding was expressed in an order made on 16 January 2012 in conformity with section 24 of the QCAT Act as:
“1. The date of practical completion is 4 October 2003.
2. The Queensland Building Services Authority is released from liability in relation to the insured works.
3. The decision of the Queensland Building Services Authority of 12 March 2010 to reject the claims made by the Applicant under the BSA Statutory Insurance scheme is confirmed.”
The dispute between the Applicant and the Respondent related to a review of the Respondent’s decision to deny the Applicant coverage for certain claims made pursuant to the statutory insurance scheme.
The Respondent applied for a costs order against the Applicant.
The Respondent acknowledges that a tribunal’s power to order costs is a creation of statute.
In resisting the application for a costs order the Applicant seeks to rely upon section 100 of the Queensland Civil and Administrative Tribunal Act 2009 which states:
“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 proceeding” (emphasis added).
The Respondent submits that section 77(2)(h) of the QBSA Act displaces section 100 of the QCAT Act and relies on the decision in Lyons v. Dreamstarter Pty Ltd [2011] QCATA 142 at [34]-38].
The Respondent claims that the discretion in section 77(2)(h) is broad and that the Tribunal may make an order as to costs that is justified in the circumstances: see Lyons at [33] citing Oshlak v Richmond River Council (1998) 193 CLR 72 at 88.
Three reasons the Respondent says why a costs order is justified in the circumstances are as follows:
(i) The Applicants rejected an early offer of settlement;
(ii) The Applicant’s conduct was inappropriate; and
(iii) The Applicant’s evidence (though represented) was inappropriately drawn and not delivered in a timely way, thus increasing costs.
The Respondent submitted that it is appropriate to consider an offer of settlement made to the Applicant as part of the exercise of discretion under section 77(3)(h) of the QBSA Act. In that regard it relies upon Veterinary Surgeons Board of Queensland v McIntosh [2011] QCAT 417 at [34].
On 5 August 2012 the Respondent made an offer to settle the proceeding on the basis that:
“1. Your client (the applicant) withdraws the review;
2. There be no order as to costs;
3. The parties enter into consent orders reflecting the above.”
The offer to settle made was not accepted and it lapsed. The Applicant’s failure to accept, it is argued, led to the Respondent’s further expenditure with no tangible benefit to the Applicant. It has been accepted that a withdrawal is the same as a dismissal of a review: see Chew v QBSA [2011] QCAT 48 at [24]. The Respondent accepts that a dismissal is not more favourable to the Applicant than a withdrawal.
The Respondent argues that the Applicant’s failure to accept the offer lead to a “great deal of further expenses with no tangible benefit for the applicant”.
The Respondent submits that there should be a costs order, on two bases:
(A) The failure to provide a copy of the Deed of Settlement between the Applicant and Mr Bartlett until the date of the hearing.
i.The Respondent argues that failing to produce a copy, and denying the Respondent access to this document is contrary to the Applicant’s obligation of utmost good faith. This may have denied the Respondent the opportunity to obtain a preliminary ruling upon its terms, thus preventing the further litigation and costs. The Respondent states that the Applicant’s duty of utmost good faith, expressed in clauses 6.3(a) and 6.3(b) of the Statutory Insurance Policy, did displace the confidentiality clause in the private agreement: see Lange v QBSA [2011] QCA 058.
(B)The general conduct of the proceedings.
i.The Respondent cites failure to obtain evidence in a timely way and further a failure to properly articulate a basis for the opinions given in an affidavit.
ii.As to the delivery of timely advice, the Applicant took no steps to brief a private certifier until after the Compulsory Conference on 29 September 2010, despite originally being required to file his evidence by 9 July 2010.
iii.Furthermore, the Respondent also claimed the Applicant’s conduct in relation to the trial was inappropriate on account of the Applicant opposing Mr Bartlett taking evidence viva voce in the witnesses box; and in regard to Mr Gunter Lion’s evidence including an attempt to include contentious evidence without calling Mr Lion to give evidence, and reopening the Applicant’s case to allow Mr Lion to give evidence, to which Mr Lion failed to appear.
iv.The Respondent submits that the Applicant’s dealing with Mr Lion can be contrasted with the Respondent’s calling of Bartlett.
The Applicant resists the application for costs and submits that there are no circumstances which exist as to warrant an award of costs against the Applicant.
The Applicant submits that while the Tribunal upheld the Respondent’s original decision it ruled against the Respondent on a critical feature, namely the date of practical completion.
I accept that submission, a considerable part of the hearing was taken up by the contentions as to the date of practical completion. The majority of the evidence was taken up on that issue. t was an issue on which ultimately the Respondent lost.
The Applicant rejects the Respondent’s claim that the Applicant rejected a written offer to settle, on the basis that it was not a genuine offer to settle.
The Applicant claims that, contrary to the submissions of the Respondent, it was in fact the Respondent that demonstrated poor conduct.
The Applicant contends that the case could only be described as a “dead heat” or a draw, and in light of this, the general rule should apply and each part should bear its own costs.
The Respondent relies upon the decision in Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 to oppose the making of a costs order.
Lyons v Dreamstarter Pty Ltd is authority for the following propositions:
(i)Section 100 of the QCAT Act exhibits a strong intention that the usual position in the Tribunal is that parties will bear their own costs.
(ii)The Tribunal may make an order requiring a party to bear the costs of another if it considers the interests of justice require it to make the order.
(iii)Section 100 contemplates that there may be other provisions of the QCAT Act or an enabling Act which provide otherwise than the usual position.
(iv)The QBSA Act does provide otherwise and as a result the usual position as to costs in the Tribunal is displaced.
(v)To the extent of any inconsistency between them, a modifying position (section 7(1)(b) and section 6(7) QCAT Act) prevails over the provisions of the QCAT Act and the QCAT Act must be read with any necessary changes as if the modifying provisions were part of it (sections (2)(3)).
(vi)There is a clear inconsistency between a provision that confers on the Tribunal a broad and general discretion to award costs (QBSA Act, section 77(1)(h))and one which states that, unless otherwise provided each party must bear their own costs (QCAT Act, section 100).
Those propositions were considered in Lyons v Dreamstarter Pty Ltd [2012] QCATA 71. The President in his reasons summarised the position:
“[6] Under the QCAT Act the usual position is that parties will bear their own costs: s 100. That provision contains, however, an introductory phrase (‘Other than as provided under this Act or enabling Act…’) and, as the Deputy President identified in her decision in Mr Lyon’s appeal, there is a relevant enabling Act which applies to the dispute here and contains a provision about costs: s 77 of the Queensland Building Services Authority Act 1991 which, in s 77(2)(h) gives the Tribunal a power to award costs.
[7] As the learned Deputy President also identified, this is what ss 6 and 7 of the QCAT Act refer to as a ‘modifying provision’ and it prevails over the provision of the QCAT Act which must therefore be read, with any necessary changes, as if the modifying provision was part of the QCAT Act.
[8] The effect, as the learned Deputy President went on to say, is to give QCAT a board general power to award costs in cases caught by these engaging provisions which, in the case of s 77(2)(h), is to be exercised ‘judicially’[1].
[9] In building cases that have elements of complexity, the Queensland Court of Appeal has suggested that costs awards will not be surprising[2]. That case concerned, however, costs provisions in different legislation governing QCAT’s predecessor Tribunal.
[10] In any event, the power to award costs under the QBSA Act, while expressed in succinct terms, indicates that the question of costs is to be addressed in markedly different terms from s 100 of the QCAT Act.
[11] The High Court has said that there is no automatic rule that costs ‘follow the event’ (i.e. the outcome of the proceeding) or that the unsuccessful must compensate the successful one[3].
[14] Rule 86 of the QCAT Rules 2009 gives the Tribunal, in certain circumstances, the discretion to award a party making an offer ‘all reasonable costs incurred by that party in conducting a proceeding after that offer was made’: r 86(2). The Rule is called up when the offer is not accepted, but the eventual outcome is ‘not more favourable’ to the party refusing the offer, than the offer itself.
[1]Lyons v Dreamstarter Pty Ltd [2011] QCATA 142, at para [33]; Latoudis v Casey (1990) 170 CLR 534 at 557.
[2] Tamawood Ltd v Paans [2005] QCA 111, per Keane JA at [32].
[3] Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at [26].
[21] Under s107 of the QCAT Act the Tribunal must fix the costs, if that is possible.
[24] As to the basis upon which costs should be assessed, it was said in several decisions in this jurisdiction in QCAT’s predecessor, the Commercial and Consumer Tribunal, that the phrase ‘all reasonable costs’, which appeared in s 142 of the Commercial and Consumer Tribunal Act 2003 and how it appears in QCAT r 86(2) should be construed to mean indemnity, rather than standard costs[4]. That construction of the phrase can reasonably be applied to the same words, where they appear in QCAT r 86(2). Plainly, the rule is intended to encourage parties to be realistic about prospects in QCAT proceedings and to carry appropriate sanctions if that does not occur.”
[4]See the discussion of the CCT cases in Malay Industries Pty Ltd v Queensland Building Services Authority [2010] QCAT 310 at [26].
The Respondent contends that the relevant factor in the approach to costs is the overall success in the proceeding: see for example BHP Coal Pty Ltd v O & K Orenstein & Koppel AG and Ors (No2) [2009] QCS 64 at [8]. The Respondent submits on that basis of the above that the Tribunal ought to make a costs order against the Applicant.
Section 77 of the QBSA Act gives the Tribunal the power to award costs. That discretion must be exercised judicially upon facts connected with or leading up to the litigation.
In my view there is much to be said for concluding that the contest was a draw. The majority of the hearing time and evidence was taken up with an issue namely the date of practical completion. That was really an essential fact on which the Respondent relied to reject the claims made by the Applicant. Further I am not persuaded that it was the fault of the Applicant and only the Applicant, that the terms of the compromise on which the decision was eventually made came to light at a late stage of the hearing. I am not satisfied that the conduct of the Applicant and the Applicant alone caused the case to proceed and continue to hearing.
The offer which was made was made on the basis of the contentions relied on by the Respondent about the time limitations and the date of practical completion. I am not satisfied that the Applicant was not justified in rejecting the offer. He succeeded on the issue upon which the offer was based. I do not accept that the eventual outcome is not more favourable to the Applicant than the offer itself.
The issues on which the Respondent eventually succeeded was not the main issue at the commencement but rather developed as the case proceeded.
In all of the circumstances I am not satisfied that the discretion to award costs should be made in favour of the Respondent or at all. In my view it would not be just and reasonable to make a costs order.
I make no order as to costs.
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