Croft v Queensland Building and Construction Commission [2025] QCAT 329

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Croft v Queensland Building and Construction Commission [2025] QCAT 329 PARTIES: SCOTT CROFT (applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (respondent) APPLICATION NO/S: GAR390-20 & GAR391-20 MATTER TYPE: General administrative review matters DELIVERED ON: 1 September 2025 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Richard Oliver ORDERS: 1. The respondent pay the applicant’s cost of and incidental to these proceedings to be agreed or failing agreement to be assessed by way of a short form assessment on the Distrct Court scale by a Costs Assessor to be agreed between the parties and failing agreement as determined by the Tribunal. 2. The parties have liberty to apply on the giving of 5 days notice in writing to the other party. CATCHWORDS: ADMINISTRATIVE LAW – GENERAL ADMINISTRATIVE REVIEW – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – COSTS – where applicants achieved a positive outcome from their review applications without a tribunal determination – where the applicant incurred considerable costs and outlays in prosecuting the applications – where applicants have applied for costs – whether interests of justice require the respondent to pay costs – whether costs and outlays of applicant reasonable – whether exercise of discretion should favour the making of an order for costs. Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, ss 100, 102 and 107. Queensland Building and Construction Commission Act 1991. Cantamessa v Queensland Building and Construction Commission (No 2) [2021] QCAT 213 -- 1 of 15 -- 2 Cowen v Queensland Building and Construction Commission [2021] QCATA 103 Fuge v Queensland Building and Construction Commission [2014] QCAT 383 Marzini v Health Ombudsman (No 4) [2020] QCAT 365 Neller v Queensland Building and Construction Commission [2021] QCAT 426 Wardanski v Mawby (No 2) [2023] QSC 237 Pound v Queensland Building and Construction Commission [2023] QCAT 298 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No2) [2010] QCAT 412 Stuart v Queensland Building and Construction Commission [2016] QCATA 135 APPEARANCES & REPRESENTATION: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) REASONS FOR DECISION Background [1] Although the substantive issues in these two review applications have been resolved between the applicant and the Commission, they have not been dismissed or withdrawn because the applicant has applied for costs. His contention is that when regard is had to the history of his complaints to the Commission about defective building work in the construction of his house, and the outcome whereby he has substantially succeeded by bringing these review proceedings, it is in the interest of justice, pursuant to s 102(1) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”), that he should be awarded costs. [2] In considering the question of costs, I am mindful that the Commission is a regulatory authority and should not make decisions simply on the basis that it might be exposed to costs.1 The objects of the Queensland Building and Construction Commission Act 1991 (Qld) (“QBCC Act”), under s 3, is for the Commission to achieve a balance between the interests of building contractors and consumers. It is therefore necessary to consider carefully the conduct of the Commission, in its regulatory role, in the manner in which it has dealt with a legitimate complaint, and how it responds to any claim on the Home Warranty Insurance Scheme (“HWIS”). [3] As to the general approach to costs in the Tribunal I refer to and adopt what I said in Neller & Anor v Queensland Building and Construction Commission2 that is that generally when proceedings are commenced in the Tribunal they are done so on the 1 Fuge v Queensland Building and Construction Commission [2014] QCAT 383, [28]; Stuart v Queensland Building and Construction Commission [2016] QCATA 135, [58]; Cantamessa v Queensland Building and Construction Commission (No 2) [2021] QCAT 213, [20]–[21]. 2 [2024] QCATA 46, [12]. -- 2 of 15 -- 3 premise that each party will bear their own costs.3 Then as evidence is put on and issues crystalise, that basic premise may change. Therefore Senior Member Aughterson’s approach in Pound v Queensland Building and Construction Commission4 is a more practical way of addressing the question of costs under ss 100 and 102, rather than attempting to identify which of the two approaches considered in that case should be favoured, i.e. Ralacom or Marzini.5 As he said: [41] The objects of the QCAT Act, including the issues of access to the Tribunal and the minimisation of costs, provide an appropriate reference point for the operation of s 100 of the QCAT Act and, in that context, may be placed in the balance along with the s 102(3) interests of justice considerations. The interplay between s 100 and s 102(3) may well vary, depending on the impact a costs order in the case at hand might have on access to justice and the other objectives in s 3 of the QCAT Act. [42] For example, the prospect of an adverse costs order is likely to weigh heavily on any decision to seek review of certain administrative decisions, which will potentially have a significant impact on access to justice. On the other hand, in relation to body corporate disputes involving significant monetary or other considerations, the interests of justice in awarding costs, as alluded to by Keane JA in Tamawood, might weigh heavily in favour of a costs order. In those circumstances, the disincentive of a potential costs order in bringing a matter before the Tribunal is less likely to loom so large and, accordingly, considerations of access to justice might weigh relatively lightly in the balance against a costs order. [43] On that basis, the underlying concern of s 100, in particular of not impeding access to justice and maintaining a low cost jurisdiction, may simply be placed in the balance along with the s 102(3) considerations, with the weight accorded to it being largely dependent on the nature and scope of the proceedings. [4] The other relevant consideration is the claim on the HWIS. Although not strictly a money claim as such, it is akin to a claim for breach of the insurance contract entered into between a homeowner and the Commission when the mandatory premium is paid before the commencement of building work. Judicial Member McGill said in Cowen v Queensland Building and Construction Commission:6 The QBCC Act provides for the statutory insurance scheme in Part 5. Its purpose is “to provide assistance to consumers of residential construction work for loss associated with work that is defective or incomplete”: s 67X(2). The Scheme was explained by Morrison JA, with whom the other members of the Court agreed, in Schneider v Queensland Building and Construction Commission [2021] QCA 155, and I respectfully adopt what his Honour said. It is clear that, when cover under the scheme is provided to a consumer under the QBCC Act, the consumer is in a position analogous to that of an insured 3 QCAT Act s100 4 [2023] QCAT 298. 5 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412; Marzini v Health Ombudsman (No 4) [2020] QCAT 365. 6 [2021] QCATA 103, [31]. -- 3 of 15 -- 4 under a policy of insurance issued by the respondent as insurer.31 The terms of cover under the scheme are set out in the Regulation under the QBCC Act. The Regulation provides relevantly a limit in the amount of the cover available in various circumstances of $200,000. [5] The Judicial Member also went so far as to say that the insurance contract may well support a civil claim for damages which could be brought in a Court, where costs outcomes are more favourable. Although the statement does not have direct application here, what it does signify is that the Commission must consider carefully any claim made under the “policy” before rejecting it, as would any commercial insurer. [6] The application for costs is opposed by the Commission. Its primary position is that firstly, the applicant cannot claim he has been wholly successful in the review applications; and secondly, there was a fundamental disagreement between experts as to whether pier footings7 were failing and causing structural damage and it was therefore reasonable to decline to accept the complaint. Both the applicant and the Commission have filed extensive material, both submissions and affidavits, in support of their respective positions. [7] However, there is some general agreement between the parties about: (a) The general law with regard to costs (referred to above); (b) The relative financial circumstances of the parties as a question of fact, that is the applicant is in a parlous financial position compared to the Commission; and (c) The dispute is complex although it is disputed as to who is responsible for the complexity. [8] The costs sought are summarised in the submission of the applicant’s counsel dated 15 July 2024 at [4]: For the avoidance of any doubt, this application does not seek the total costs Mr. Croft has incurred across all matters before the Tribunal. He seeks only those costs incurred directly in connection with these proceedings. For example he does not seek the costs incurred for related proceedings GAR496- 22 and GAR347-23 (the related proceedings), or the legal costs incurred for the prior three complaints. All that is sought in this application are the costs incurred in these proceedings, and the discussion below and in the supporting material regarding other matters are merely to give context to a procedurally complex matter. Brief History [9] In June 2017 the applicant entered into a building contract with CMG Homes Pty Ltd8 to construct a new house at Ocean View.9 The block was on a steep hillside and the subject pier footings were on, or near, the downslope of the block. After the construction was completed and the applicant had moved into the new house with 7 The subject of a number of complaints. 8 The company went into liquidation in February 2024. 9 A residential development between Dayboro and Mt Mee. -- 4 of 15 -- 5 his partner, he observed a number of defects with the building work carried out by CMG Homes. This then led to a series of complaints to the Queensland Building and Construction Commission about defective building work. [10] The first complaint was in June 2018. This complaint included 78 items and relevantly for the purpose of this decision, a complaint (no 51) was made about a change in the footing design.10 There were further complaints made to the Commission in September 2018, March 2019, February 2020, and November 2021.11 Each of these complaints raised concerns about the potential failure of the footings, in particular the footings to posts 9 and 10.12 The footings for these posts were not founded into rock as required by the approved plans. [11] The significance of these posts for structural support can be seen by reference to photographs “A” and “B” to Mr Steele’s statement of 31 January 2025. These posts support the habitable area on the corner of the house to the left side (eastern) looking towards the deck side of the house. In addition the other posts found not to be founded in rock are also supporting the house structure. I make this point to avoid any confusion that the posts were supporting the deck, with presumably a lesser load, are the ones in question. [12] It is the complaint made on 18 February 2020 which is the genesis of these proceedings. This complaint specifically referred to movement in the building demonstrated by cracks, walls out of plumb, windows and doors not level and support posts being out of plumb. The defects were supported by expert reports prepared by Robert Steele RPEQ of Steele Consulting, the first of which was prepared in 2018. [13] In response to this complaint, investigations were undertaken by the Commission. It engaged NJA Consulting Engineers, Mr Van de Hoef, to provide a report about the potential movement. Critical to this decision on costs, NJA engaged Newsky Construction Pty Limited (“Newsky”) to excavate the footings to posts 9 and 10 on 27 April 2020. This investigation found that the piers for posts 9 and 10 were .9m and 1.4m deep and founded in fill. Whereas the design required them to be 2m deep and founded in rock. This was also confirmed by Core Consultants Geotechnical. It was plainly evident at this point in time the construction of the pier footings for these posts were structurally deficient. [14] After all of the investigations and a considerable exchange of correspondence between the applicant’s solicitor, Aitchison Reid, and the Commission, the applicant’s complaint was declined. Also the applicant’s complaint making a claim under the Home Warranty Insurance Scheme was declined. In other words the Commission did not intend to take any action, by issuing a Direction to Rectify to CMG, nor would the HWIS respond to the claim. As a consequence of this decision the applicant commenced these two review proceedings in the Tribunal on 20 October 2020. 10 Affidavit of Claire Aitchison Reid (“the Reid affidavit”) Exhibit “FR1”. 11 Ibid Exhibits ‘FR2”, “FR3”, “FR4” and “FR5”. 12 Also referred to RW8009 and RW0010 with the footing plan included in the Commissions costs submissions dated 6 November 2024 (“the Commissions submissions”) at [37] and [128]. -- 5 of 15 -- 6 [15] Following the filing of the proceedings and some delay because of the COVID-19 pandemic the Tribunal made directions for completion of procedural steps. A summary of the chronology of what then occurred is helpful.13 (a) 2 March 2021: Commission provided its statement of reasons; (b) 9 April 2021: The applications were listed for a compulsory conference; (c) 18 May 2021: Agreement that both applications be kept separate but be heard and decided together; (d) 27 August 2021: Mr Steele’s further report was filed and served; (e) 1 April 2022: The Commission filed and served statements from Mr Rebibou (Booth Engineering) and Mr Middleton with reports annexed; (f) 12 May 2022: CMG Homes was joined as a party; (g) 30 May 2022: Joint expert conclave with geotechnical engineers; (h) 13 June 2022: Geotechnical engineers provided joint expert report; (i) 25 July 2022: Joint expert conclave of engineers; (j) 24 August 2022: Engineers provided joint expert report; (k) 21 November 2022: CMG Homes seeks external review of the Direction to Rectify in relation to 5th complaint (GAR496-22); (l) 22 November 2021: Applicant’s further complaint to the Commission (the 5th complaint); (m) 31 January 2022: Compulsory conference; (n) 26 October 2023 CMG Homes seeks external review of scope of work in relation to 5th complaint (GAR347-23); (o) 6 February 2024: Parties notified that CMG Homes had gone into liquidation and its proceedings were withdrawn; (p) 12 June 2024: Directions for filing submissions on costs. [16] An important consideration in this application is the fact that there has not been final determination of the review applications. No findings have been made about the differences in the engineering evidence although the joint expert reports do provide some assistance. It is not the function of the Tribunal on this application to embark on a mini hearing to make any findings about which engineering, or other expert opinion should be preferred. However, the history of complaints about the footing system is relevant in considering the Commission’s response. In particular the unequivocal evidence from the Newsky investigations in April 2020. [17] In regard to the history of the matter, Ms Reid the applicant’s solicitor, has filed a very comprehensive affidavit setting out relevant factual events and interactions 13 Applicant’s primary submissions [10] settled by Ms McAuliffe-Lake of counsel (“applicant’s submissions”). -- 6 of 15 -- 7 with the Commission. Generally it is not argumentative nor opinionated but rather an historical chronology. It also includes a schedule of costs and outlays incurred by the applicant. [18] Subsequent to the Tribunal’s direction to determine the application for costs, the Commission, on 16 September 2024, instructed Mr Rebibou of Booth Engineering, to provide a “statement of evidence” addressing specific questions posed in an annexure to that correspondence. The statement was provided and is dated 5 November 2024. I don’t propose to canvass all questions asked and responses given but there is a consistent theme, that is that although Mr Rebibou identifies areas of disagreement with the Steele reports, he does concede that the pier footing to four (not two) posts were not founded in rock as required. He is of the view that the building structure had not moved or moved very little but accepted the conclusions in the joint expert reports that the pier foundations were not bearing on suitable material.14 Again consistent with the Newsky investigations. [19] I should record that the further statement and opinion of Mr Rebibou is objected to on the costs application. Also the report of Mr Van de Hoef. By the time the direction was made that the question of costs be determined on the papers on 9 December 202415 all the evidence, including expert evidence had been filed. There had been experts conclaves. There is notable difference of opinion as to whether the inadequate pier footings were resulting in structural damage, however that was ultimately accepted by the Commission after the 5th complaint. The applicant submits with respect to these latter statements as follows: The four experts – Mr Rebibou, Mr Steele, Mr Middleton and Mr Hurley – have all participated in joint expert processes and provided joint reports. None have been cross examined, as the proceeding finalised before hearing. It visits a great unfairness on those experts, whose participation is to assist the tribunal, to invite the tribunal to determine the costs application based on adverse credit findings of experts who have not been cross examined, and who have no opportunity to answer the allegations made against them without reopening the proceeding completely and at significant cost to both parties. It does a great prejudice to the applicant that he cannot test the allegations made against his expert.16 [20] As I said above, it is not the Tribunal’s function to now make findings as to the any disagreement between the experts, that is for a final hearing which will now not happen. I therefore adopt the observations of counsel for the applicant as set out above. Having said that, I have read Mr Rebibou’s statement, and can say it does not really add anything persuasive in deciding the question of costs. [21] I therefore now propose to address each of the criteria in s 102(3) of the QCAT Act, accepting of course that these are only guidelines to assist the Tribunal to make a decision about costs. 14 Reid affidavit “FR 10” & “FR 11”. 15 It seems by consent. 16 Applicant’s submissions in reply [16]. -- 7 of 15 -- 8 Nature and complexity of the dispute [22] It has already been accepted by both parties that the background to this dispute was complex, extending over many years. What was not complex was the fact that both sides accepted there was some movement in the building. The Commission says it was minimal and even though the footings did not comply with the specification and were not founded in rock, this did not impact the structural integrity of the building. That of course was disputed by Mr Steele who made observations that the building was showing signs of movement as early as 2018. [23] Mr Steele also observed that it did not require engineering expertise to realise there would be structural problems with the pier footing when informed, as Mr Hayman the Commission’s building inspector was at the first inspection, that loose waste and building debris was deposited in the post holes before the concrete was poured. Photographs of this were given to him. Also, in the face of this evidence reliance only on the Forms 15 and 16 (“the Forms”), engineering certification, should not have been adopted as conclusive. [24] The applicant, had good grounds for concern in 2018, and followed up with further complaints subsequently. It is reasonable to conclude in the circumstances that the Commission knew or ought to have known as early as 2018 there was a problem with the footings, and undertaken further investigation rather than simply rely on the Forms. [25] Given the early and ongoing persistent complaint by the applicant, supported by engineering evidence from Mr Steele, the complexity arose as a result of the position taken by the Commission that firstly, the Forms were enough to establish there was no defective building work; and secondly, failing to accept the obvious on receipt of the Newsky and Core Consultants reports; and thirdly, even with the ultimate knowledge that the posts were not founded in rock, contending there was no structural damage;. This last point is somewhat puzzling because once the six years has run post practical completion, and being aware that there was a latent structural defect, the applicant’s access to the HWIS would technically have lapsed.17 [26] I find that the complexity did arise because of the way the Commission dealt with the applicant’s complaint which ultimately proved to have substance. He had to commence review proceedings before there was any acknowledgment by the Commission of the applicant’s and Mr Steele’s concerns about the structural integrity of the footings. Relative strengths of the claims made by each party [27] I have already referred to the concerns raised about the footing in the first complaint. In the second complaint the issue of the footings was raised again in item 24. It stated: Footings have been changed from approved plans corner under block wall on eastern side of house. No re-inspection done or redrawing confirmed by engineer when Scott asked had planned being re-drawn. No change on footing certificate was noted either when provided at handover. 17 There may have been an estoppel argument raised given the earlier complaints, but the outcome of this would not provide the applicant with any guarantees. -- 8 of 15 -- 9 [28] The report from Mr Steele of November 2018 was relied upon. He was concerned of the potential failure of the post foundations and retaining wall foundations and bracing stability. He went so far as to say that the building should not be occupied because of those concerns. [29] A second report was provided by Mr Steele in February 2019 in which he noted that the Commission’s engineer agreed that the concern about the footings for these particular posts was a serious issue. [30] The third complaint was made in March 2019 where the Commission’s engineer noted that while there had been movement there was no significant impact on the building. Strangely, it also noted that “non-compliance with the design documents is not indicative of defective building work”. Also, there was a reference to the fact that if the condition worsened in the future, further investigations would be required. [31] That then leads to the fourth complaint which resulted in the Newsky investigations. This conclusively established that the footings were not in accordance with the specifications, not to the required depth, and not found in rock. Therefore, given the location of the posts on the side of a hill, slippage, or movement of the foundation could not be ruled out. [32] The applicant relies on this sequence of events that: Put simply, the commission's position was that a defect in the construction of a key structural component the house was not a structural defect as it had not yet failed enough. This is a misguided approach where there was expert evidence before the Commission that such a failure could be catastrophic. Mr Steele is very clear on how misguided this approach is as a question of engineering practise and the maintenance of proper standards of construction, and how dangerous. Mr Steele's view as to the ultimate risk of collapse has been consistent throughout his involvement.18 [33] It might be said that Mr Steele's concerns may well have been overstated. That is, the house was uninhabitable, was at risk of collapse, and the house was sliding down the hill, however even Mr Van de Hoff accepted that the pad footing “had been pushed downslope”.19 To be fair, even if it was an overstatement it was based on the fundamental concern that the footing system of the posts was failing. This is also consistent with not only the applicant’s evidence of debris being dropped into the excavated post holes, but also signs of movement in the house. [34] Global Testing, who provided the original site classification report, on 18 June 2020 in response to the applicant’s inquiry about the integrity of the footings said: We stated in our report that the foundations (the target stratum) of the structure was to be the Weathered Rock, at a depth of 1000mm below existing ground level in BH1, and the Weathered Rock at a depth of 1500mm below existing ground level in BH2. Based on what you have told me, this may not have happened, which would be a major issue considering what we recommended……… 18 Applicant’s submissions [25]. 19 Commissions submissions [146(d)]. -- 9 of 15 -- 10 You then said they had cut/filled the site (which may have changed the ‘H1’ classification to a ‘P’ classification, depending on fill depth), but in any case it would be Global Testing’s view that the foundations of the structure should have gone through any uncontrolled fill, founded down to Weathered Rock (original Target Stratum).20 [35] Then the following day on 19 June 2020, Core Consultants informed the Commission that: Core Comment No 2: Our findings are that at least two of the footings have not been constructed as designed and that this is causing distress to the building. It is likely that this distress will increase, possibly resulting in a catastrophic building failure. We have recommended to the owners that ongoing monitoring be undertaken by a licenced surveyor. Further advice will be provided once monitoring records are available. Core Comment No 3: The following comments relate to the NJA report. Firstly, the inference that because there are a lack of significant defects and that the floor was possibly built with a pre-existing full indicates that the footings are currently performing adequately is a little misleading because, in our opinion, the house is sliding down the hill. We do, however, note that NJA recommended monitoring (at the end of their report) because of the risk of ongoing movement. Core Comment No 4: The inspected piers are of inadequate depth and do not found in rock. The investigation works have proven this. Other footings might also be inadequate. The NJI report does not provide comment about the possible impacts of the constructed footings not being in accordance with the design. There is a sound technical reason for the footing being designed to found within the rock. It so they don't move down the hill. Core Comment No 5: it is presumptuous to assume that the fill has moved the footings. The movement of the footings may equally have caused the cracking in the fill. [36] This evidence, together with his own observations proved by the photographs, establishes that the applicant had a strong case that there was defective building work in relation to the pier footings. Ultimately at the joint expert conference of the engineers, the concerns of the applicant were made out not only in relation to the two posts [9 and 10] but also another two posts as well. [37] I accept the submission of the applicant’s counsel, that by reference to the history of consistent complaints about the same issue, the applicant’s concerns were vindicated and had the Commission properly investigated those concerns, or even after the Newsky report, the complaint should have been accepted. I find that the strength of the applicant’s claim far outweighs that of the Commission. Did the Commission act in a way that disadvantaged the applicant [38] The applicant refers to conduct of the Commission in the review application. This conduct is set out in paragraph 31 of counsel’s submission. Factually the chronology is correct and draw from Ms Reid’s comprehensive affidavit. These complaints include: failure to notify the applicant of the outcome of his complaints; holding 20 Reid affidavit [99]. -- 10 of 15 -- 11 expert reports (geotechnical) for months before handing them over which delayed his response; notices and decisions sent to the wrong address; requiring the applicant to seek clarification of comments in correspondence and email to avoid time limitations; interaction between the parties in relation to the fifth complaint; unnecessary extensions of time sought by the Commission; refusal to engage in the wording of an undertaking. [39] The above complaints of a regulatory authority with limited resources is not unusual. They are not, in my view, decisive of whether the applicant was disadvantaged, although I do accept there was delay. The real disadvantage to the applicant is the way the Commission approached the concerns expressed by both the applicant and Mr Steele about the structural integrity of the structural pier foundations. Even after it was apparent, despite Mr Steele’s concern the footings were not founded in rock supported by the above geotechnical evidence. [40] It took a fifth complaint, at the request of the Commission, before it acted and this was after the joint expert reports were to hand. All of this could have been done at a much earlier stage, certainly by mid 2020, avoiding the necessity to commence these review proceedings. [41] I find that the course of the Commission’s conduct with respect to the complaints as a whole disadvantaged the applicant and this included the need to file the review applications when the April 2020 Newsky geotechnical report, and the Core Consultants findings, supported the applicant’s complaint. Natural justice [42] The complaint here is that the Commission did not provide a copy of the Direction to Rectify decision to the applicant in a timely manner. Had it done so, it is submitted, this may have avoided the need to commence the review proceeding in relation to the insurance claim. Also, the matters relating to delay in providing the geotechnical reports are relied upon. [43] I cannot see that these complaints are a denial of natural justice. Even though there was some delay, the applicant was provided with all necessary material which ultimately resulted in a resolution of the substance of his review applications. Financial Circumstances [44] The applicant has gone to great expense to enforce his review rights under the QBCC Act and also contractual rights under the HWIS. As the applicant’s counsel submits, once in possession of the first Steele report and knowing what he did about the debris in the excavated footing post holes, he had no choice but to take such steps as necessary to ensure the structural stability of his house. If he had waited for further damage to the house so that the Commission could be satisfied that the movement in the footing was in fact causing structural damage, he may well have been out of time to make a claim on the HWIS. Also, even though I am not in a position to make any factual finding about whether the house was in fact uninhabitable, or in danger of sliding down the hill, there was enough evidence to cause serious concern for the applicant to about the structural integrity of his home. [45] Expenses incurred both for legal advice and expert reports was necessary given the attitude of the Commission to his complaints. His home was clearly at risk and the -- 11 of 15 -- 12 Commission ought to have appreciated this at an earlier stage or at least once the Newsky investigations were undertaken. [46] The applicant and his partner have limited income and have had to borrow money to prosecute his applications. Again this could not have been lost on the Commission given the communications between it and Aitchinson Reid and the production of the expert reports provided to it. [47] It is the Commission’s contention that the expert engineering evidence was so far apart in terms of their respective opinions that it had no choice but to take the position it did. As I have already said even if Mr Steele had overstated the seriousness of the situation involving the pier footings, there was enough objective evidence to indicate that there were serious concerns about the structural integrity of the footing system, again I refer to the Newsky investigations in April 2020 and the findings in the Core Consultants report referred to above. [48] The Commission was aware, not only that the applicant was being assisted by Ms Reid, but also knew that costs were being incurred with obtaining the engineering reports. In addition the Commission was aware that the limit of the payout under the HWIS was $200,000.00. [49] In my view the financial disparity is a relevant consideration in considering the costs application. Other discretionary factors [50] The concerns the applicant had about the structural integrity of the building were reasonable in the circumstances where he had first-hand knowledge of the change in the footing pad, and also the debris placed in the post holes. In addition, he had the engineering and geotechnical reports which indicated that there was movement in the house itself as well as the footings. Even the Commission’s engineer accepted that there was some movement but was not enough to warrant the issuing of a direction to rectify. [51] The applicant’s counsel has summarised the conduct of the Commission as follows: Despite having all the information necessary to properly investigate the footings and take the steps it has now taken, it declined to do so. It declined to do so on three occasions. It made errors and omissions in its dealings with Mr Croft in the proceedings which caused delay and expense. It took steps (such as with respect to the briefing of experts and provision of expert reports), which caused delay an expense. It did not participate effectively or meaningfully in attempts to resolve the proceedings early. These matters have directly caused Mr Croft being handed a hollow success.21 [52] Having undertaken an overview of the material, particularly the source material referred to in Ms Reid’s affidavit, I generally agree with this submission. Was the applicant successful [53] The Commission disputes that the applicant was successful in these applications. That is because there has been no final hearing and the ultimate decision to accept 21 Applicant’s submissions [48]. -- 12 of 15 -- 13 the complaints was as a result of lodging a fifth complaint which came out of the joint experts conclave. Factually that is correct in the sense that it was the fifth complaint to which the HWIS responded but this was more of a practical way to activate the access to insurance when the fourth complaint was rejected. [54] Although there has not been a final hearing, it was clearly open for the Tribunal to conclude that the correct and preferable decision in the reviews under consideration was that firstly, the subject footings were structurally defective and the direction to rectify should issue; and secondly given the builder was in liquidation the HWIS should respond. [55] Even though it was the fifth complaint which activated the insurance, I am of the view that when considering all of the evidence objectively, success for the applicant on the current proceedings was the most likely outcome. Conclusion on Costs [56] Despite reservations that may be applicable to allowing costs awards against regulatory authorities, I am of the opinion that: (a) having regard to the history of these applications; (b) the investigations by Newsky in April 2020 and the subsequent reports and comments from Core Consultants in the middle of 2020 clearly identifying non-compliance with the footing design; (c) the financial circumstances of the applicant, and (d) the purpose of the HWIS, that a costs order against the Commission is appropriate in the interests of justice. [57] In coming to this conclusion I respectfully adopt what Judicial Member McGill SC said in Cowen v Queensland Building and Construction Commission22 that in view of the probable success by the applicant in these proceedings any benefit will be significantly eroded without an order for costs. Fixing Costs or Assessment [58] The QCAT Act requires the Tribunal to fix the costs if possible.23 Ms Reid has provided a schedule of costs and outlays in her affidavit from [321]. The applicant is only asking for the costs of these proceedings which were filed on 20 October 2020. The Commission submits that if a costs order is to be made the order should be that costs be agreed or assessed on the District Court scale of costs. [59] Having regard to the sequence of events set out in Ms Reid’s affidavit, which is not really challenged, I could assess costs, because generally, reasonable outlays incurred are recoverable. That then leaves the solicitors costs. However, given the large amount of costs claimed it really should be left to an expert to make that assessment if the parties cannot agree. However, to assist the parties to come to an agreement on costs I propose to make some general observations about the costs 22 [2021] QCATA 103, [75]. 23 QCAT Act s 107. -- 13 of 15 -- 14 claimed. This, hopefully, will save the applicant further delay and costs in going to a formal costs assessment, which may ultimately end up back before me in any event if there is no agreement. [60] I am of the view that given the complexity of the matter it was reasonable to engage counsel at an early stage in these proceedings, which occurred in early October 2020. Both counsel and the solicitors have reduced the fees claimed in the schedule. Invoices have been attached. [61] Except for some outlays, I would propose that the solicitors costs be assessed from 1 October 2020 which would include the preparation of the applications and filing of same. I consider this is reasonable because by then, even before then in mid 2020, it was established that the footing system was defective in its construction contrary to the design. The debate about whether they were causing structural damage to the house is somewhat irrelevant when it knew, or ought to have been known, they were likely to fail in any event.24 [62] The basis for the solicitors reduced cost is to exclude the costs related to the review proceedings commenced by CMG Homes against the Commission, ultimately withdrawn. It would seem that the costs claimed are really claimed on an indemnity basis rather than the usual standard basis. I am satisfied that indemnity costs are not warranted here. Therefore there should be a reduction in the costs claimed to reflect this. [63] As a guide I note that in Wardanski v Mawby (No 2)25 Cooper J adopted the submission of the applicant that costs be reduced 40% to reflect the difference between actual or indemnity costs and standard costs. His Honour also considered that it was desirable to fix costs to “save the parties further delay, trouble and aggravation, which I think the parties would continue to encounter if costs were left to be assessed”. There are decided cases in the Tribunal where they were reduced by about one third.26 However, given the Commission has preferred an assessment, and has not made any submission with respect to the quantum. Considering procedural fairness issues here, and given the large amount involved, an assessment is ultimately preferable. [64] Counsel’s reduced fees as particularised in the Reid affidavit from 1 October 2020 are $32,126.97 which seem reasonable for this protracted matter. However, again a matter ultimately for the assessor. [65] As for the expert reports, the applicant claims all of these costs from the first complaint in 2018. The schedule of costs include (in summary) costs related to, building reports, concrete scanning, and the engineering and geotechnical reports. It is contended by the applicant that all of these reports were necessarily relevant to the negotiation and expert conclaves. [66] I am satisfied that the engineering reports from Steele Consulting and the geotechnical reports from Core Consulting were critical to the final outcome in these 24 The solicitors costs from 1 October 2020 are $134,602.38 including those referred to in [328] of the Reid affidavit. 25 [2023] QSC 237, [83]. 26 Ibid [86]. -- 14 of 15 -- 15 proceedings. Particularly those produced in early 2020 when the Newsky investigations were undertaken. As for the other, mainly building reports, I cannot be so satisfied because each of the complaints (the first four) included multiple items of complaint unrelated to the engineering and geotechnical issues. [67] I would consider it reasonable to allow the cost of these expert reports starting from 25 February 2020 in the Schedule,27 because they were necessary to respond to the Commission’s report. I am aware that the earlier reports were also relevant to the final outcome but I am also conscious of what I said above about when proceedings are commenced or when issues crystalise, as they clearly did in mid 2020.28 [68] With these observations in mind, one can only hope the parties can agree to costs so as to bring these proceedings to an end. I assume if an agreement can be reached all that will be necessary is for the applicant to file a Notice of Withdrawal. However, I propose to give the parties liberty to apply back before me if it is necessary for further orders. [69] Therefore there will be an order that the Commission pay the applicant’s costs to be agreed or failing agreement to be assessed by way of a short form assessment on the Distrct Court scale from a Costs Assessor to be agreed between the parties and failing agreement as determined by the Tribunal. 27 Reid affidavit [322]. 28 The outlays for Steele Consulting and Core Consultants from early 2020 are about $70,000. -- 15 of 15 --