Body Corporate for Infinity 1 Community Titles Scheme 45404 v Queensland Building and Construction Commission & Anor (costs) [2025] QCAT 193

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Body Corporate for Infinity 1 Community Titles Scheme 45404 v Queensland Building and Construction Commission & Anor (costs) [2025] QCAT 193 PARTIES: BODY CORPORATE FOR INFINITY 1 COMMUNITY TITLES SCHEME 45404 (applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (first respondent) KARIMBLA CONSTRUCTIONS SERVICES (QLD) PTY LTD (second respondent) APPLICATION NO: GAR327-20 MATTER TYPE: General administrative review matters DELIVERED ON: 16 May 2025 HEARING DATE: On the papers DECISION OF: Member McVeigh ORDER: Each party must bear its own costs. CATCHWORDS: ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – costs – statutory basis – where application to review administrative decision of first respondent – where second respondent made a Calderbank offer to the applicant – where applicant did not accept the offer – where the decision of the first respondent was confirmed – where second respondent applied for a costs order against the applicant – approach to costs orders in the Tribunal – whether order for costs should be made Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102, s 105 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), s 86 Body Corporate for Infinity 1 Community Titles Scheme 45404 v Queensland Building and Construction Commission [2025] QCAT 54 -- 1 of 8 -- 2 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) Applicant: S S Monks instructed by Hynes Legal Second Respondent: G A Sirtes SC with J Bridgett instructed by Meriton corporate counsel REASONS FOR DECISION What is this application about? [1] On 3 February 2025 I confirmed the decision of the Queensland Building and Construction Commission (Commission) not to direct the second respondent (Contractor) to rectify the aluminium composite panels which act as sunscreens on Meriton tower.1 [2] The Meriton tower is a very tall building in the Brisbane CBD. It was completed in April 2014. It features sunscreens attached to floor slabs. The horizontal sunscreens consist of a polyethylene core encapsulated in aluminium, commonly known as aluminium composite panels (ACPs). If the Meriton tower was constructed today it would not have ACPs attached as sunscreens as use of such material as part of, or attached to, the exterior of a building was essentially prohibited following the Lacrosse building fire in Melbourne in 2014 and the Grenfell tragedy in London 2017. [3] When the Meriton tower was constructed and certified the relevant building code permitted the use of sunscreens constructed, in part, of combustible material (polyethylene is combustible) if they did not constitute an undue risk of fire spread via the facade of the building. In the proceedings the applicant Body Corporate argued unsuccessfully that the ACPs constituted an undue risk of fire spread via the facade of the building and that as a consequence that the Commission’s decision should be reversed with the consequence that the Contractor be directed to rectify. [4] On 31 May 2023 the Contractor made a Calderbank offer to the applicant Body Corporate. Had the offer been accepted the application for review would have been withdrawn. [5] This decision relates to the Contractor’s application for costs of the proceedings including all reasonable costs from 31 May 2023. Relevant legislation [6] Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) provides: Each party usually bears own costs 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. 1 Body Corporate for Infinity 1 Community Titles Scheme 45404 v Queensland Building and Construction Commission [2025] QCAT 54. -- 2 of 8 -- 3 [7] However, if the tribunal considers the interests of justice require it, section 102 of the QCAT Act permits the making of an order requiring a party to a proceeding to pay all or a stated part of the costs of another party. Factors that may be taken into account include: (a) whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding including not complying with a tribunal order or direction without reasonable excuse; (b) the nature and complexity of the dispute the subject of the proceeding; (c) the relative strengths of the claims made by each of the parties to the proceeding; (d) for a proceeding for the review of a reviewable decision: (i) whether the applicant was afforded natural justice by the decision- maker for the decision; and (ii) whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits: (e) the financial circumstances of the parties to the proceeding; and (f) anything else the tribunal considers relevant. [8] The making of an offer to settle that was not accepted may be taken into account.2 [9] Rule 86 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (QCAT Rules) provides: 86 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 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 only applies if the acceptance of the offer would have resulted in the settlement of the matters in dispute between 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 2 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 105. -- 3 of 8 -- 4 (b) disregard any interest or costs it awarded relating to any period after the date the offer was given to the other party. Do the interests of justice require an order for costs to be made in favour of the Contractor? Nature and complexity of the dispute [10] The proceedings were administrative review proceedings arising from a decision of the Commission. Although the scope of the application to review the Commission’s decision had narrowed significantly by the time of the hearing, the issue remaining was complex. [11] All the parties were legally represented, leave having been given on 12 April 2021. [12] In order to reach a conclusion, it was necessary to consider all the evidence to decide whether the decision of the Commission should be confirmed or set aside. It was also necessary to interpret the Building Code of Australia (BCA), in particular General Requirement 2.4(iii), to decide whether the risk of retaining the ACPs was undue. This required assessment of expert evidence. The experts maintained differing views about the proper interpretation of the BCA, with the consequence that their views differed in relation to the balance of the likelihood of fire spread against the gravity of the consequences of fire spread. [13] This evidence included: (a) Mr Hofstetter’s affidavit. He is a senior building certifier and the person who certified the Meriton tower.3 (b) Mr Igoe’s report. He is a level 1 building certifier. He has 20 years of experience as a private certifier of commercial buildings.4 (c) A fire safety analysis and assessment of the ACPs on the Meriton tower by AED Fire Pty Ltd (AED) which had been commissioned by Meriton Group, but not prepared for these proceedings.5 (d) Mr Stratton’s reports. He is a fire engineer, who was called by the Body Corporate. He provided a number of reports, the first in September 2021,6 the second in June 2022.7 (e) Mr Alexander’s reports. He is qualified in both fire safety and building certification. He was called by the Contractor. He provided a number of reports, the first in March 2022.8 (f) A joint report by Mr Stratton and Mr Alexander.9 (g) Mr Alexander’s commentary on a report prepared by Ignis Labs Pty Ltd (Ignis) regarding large scale tests to evaluate fire spread risk if an external sprinkler 3 Body Corporate for Infinity 1 Community Titles Scheme 45404 v Queensland Building and Construction Commission [2025] QCAT 54, [59]. 4 Ibid [61]. 5 Ibid [68]. 6 Ibid [79]. 7 Ibid [90]. 8 Ibid [85]. 9 Ibid [93]. -- 4 of 8 -- 5 system (drenchers) were to be installed on the Meriton tower. The testing and subsequent report was prepared at the request of Meriton.10 [14] The Contractor submits that if an order for costs is not made in favour of a successful party in complex review proceedings, then parties would be disincentivised from engaging and obtaining multi-disciplinary expertise to assist the tribunal. I acknowledge that the experts provided considerable assistance. However, it was plain on the face of the reports from AED and Ignis that they had not been engaged for the primary purpose of assisting the tribunal. The authors of those reports did not give evidence. [15] The Contractor had a significant financial incentive in supporting the Commission’s original decision. I accepted the Contractor’s submission that the replacement of the sunshades over a major proportion of the floors of this building would impose a substantial cost (the only evidence of the cost of rectification came from a cost estimate prepared by Sedgwick Quantity Surveyors dated 17 August 2020 which estimated the cost of replacing the cladding to be $3,787,167 plus GST) and that the cost would be even greater more than four years after that estimate was given.11 [16] I accept the Body Corporate’s submissions that complexity and the need to deal with technical evidence are not sufficient on their own to justify the making of an order for costs. Those factors might well have influenced the Contractor’s decision to be joined and to be legally represented. Clearly its interests could have been affected by the outcome of the proceeding. Had the Commission’s decision been reversed the financial consequences for it would have been significant. [17] If the guidance provided by Keane JA in Tamawood Ltd v Paans,12 a case about costs orders in a domestic building dispute, applies in administrative review proceedings where the parties are not entitled to legal representation as of right, there are countervailing considerations to be taken into account. The Contractor had a significant commercial interest in supporting the decision of the Commission. It is better resourced than the Commission, enabling it to engage experts and senior counsel to support the decision the subject of the challenge. It could afford bespoke testing. It had reports from AED and Ignis that were not prepared solely for the purpose of the review proceedings but which it used to support its arguments. There are sound commercial reasons for it to have spent less than $400,000 when faced with a potential liability of considerably more than ten times that amount. The relative strengths of the claims made by each of the parties [18] The Body Corporate had a statutory right to seek a review of the decision of the Commission.13 I reject the submission from the Contractor that the Body Corporate’s position was, at all stages of the proceeding, without merit. [19] The Body Corporate relied on advice from a well-qualified expert. Mr Stratton’s interpretation of General Requirement 2.4(iii) of the 2009 BCA differed from the interpretation adopted by Mr Alexander. Unlike Mr Alexander, and other experts relied on by the Contractor, Mr Stratton did not think it acceptable to rely on certificates provided by suitably qualified professionals when undertaking a risk 10 Ibid [100]. 11 Ibid [145]. 12 [2005] 2 Qd R 101. 13 Queensland Building and Construction Commission Act 1991 (Qld) s 87. -- 5 of 8 -- 6 assessment. I found that Mr Stratton’s opinion that a qualitative assessment of the risk was required in order to comply with General Requirement 2.4(iii) of the 2009 BCA was correct.14 Although I had regard to Mr Alexander’s list of characteristics of the building that minimised the risk of fire spread,15 I did not adopt his approach to assessing the risk. When reaching the decision that the Commission’s decision under review should be confirmed, I concluded that it could not be said that there was no risk of fire spread, but that the risk of fire spread via the façade was not undue. I had regard to Mr Statton’s concerns about the gravity of a fire in the Meriton tower.16 Whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits [20] I reject the Contractor’s argument that the Body Corporate provided no meaningful support of its position. Its position was supported by the evidence of Mr Stratton, a well-qualified expert. I accepted his interpretation of General Requirement 2.4(iii) of the 2009 BCA. [21] The Commission made no complaint about a lack of assistance from the Body Corporate. I have no complaint about the conduct of the Body Corporate in the proceedings. Financial circumstances of the parties [22] The financial circumstances of either party is not a factor that has swayed me in the exercise of my discretion in this application for costs. [23] Neither the Body Corporate nor the Contractor is in a precarious financial position. There is common ground that the Body Corporate has both funds available to it and the ability to raise further funds via a special levy. The Contractor is part of the Meriton Group of companies, a very successful Australian business. Its senior corporate counsel affirmed that it had incurred costs in the amount of $357,309.98 (excl. GST) as at 3 March 2025.17 The Calderbank offer [24] On 31 May 2023, the Contractor made an offer to the Body Corporate, on a without prejudice save as to costs basis, proposing to resolve the application on a commercial basis, on the premises that the Body Corporate withdraw the proceedings, and in exchange for the withdrawal of the proceedings, that the parties agree that there be no order as to costs.18 [25] The Body Corporate’s failure to take up the offer was not unreasonable. [26] The offer was made on the day the report from Ignis was provided to the Body Corporate. Mr Alexander’s commentary on it was not provided until later. The report related to two bespoke tests carried out by Ignis. The second test related to the risk of fire spread from one level to another including lateral spread. Ignis summarised the test result as indicating that when an uncontrolled fire event occurred directly on the 14 Body Corporate for Infinity 1 Community Titles Scheme 45404 v Queensland Building and Construction Commission [2025] QCAT 54, [138]. 15 Ibid [128]. 16 Ibid [142]. 17 Affidavit of Lily Amelia McMillan made 3 March 2025. 18 Ibid [37]. -- 6 of 8 -- 7 panel without automatic fire sprinklers, limited fire spread was likely to occur.19 The report made no comment about the qualitative assessment of the risk which I found was required in order to comply with General Requirement 2.4(iii) of the 2009 BCA. [27] I reject the Contractor’s submission that the results of the Ignis testing coupled with the expert evidence relied on by the Contractor revealed that the application was bound to fail. The Ignis test results were only relevant to the possibility of fire spread eventuating. In considering whether there was an undue risk of fire spread I adopted a multi-factorial test. I considered the circumstances and context in which the ACPs were used. Factors considered included: (a) the objective of Section C of the 2009 BCA to ensure safety of people from fire; (b) location of the panels; (c) fire safety features of the building; (d) ignitability of the ACPs; (e) the possibility of fire spread eventuating; and (f) gravity of the risk.20 [28] Mr Stratton, the expert advising the Body Corporate, was always of the opinion that the gravity of the risk was undue. The Ignis report did not change his opinion. Contrary to the Contractor’s submissions, the Body Corporate with the benefit of informed legal advice could not have known that its application was unlikely to succeed. It certainly was not doomed to failure. Mr Stratton had always maintained his opinion, which was ultimately accepted, that a Deemed to Satisfy solution did not comply with General Requirement 2.4(iii) of the 2009 BCA. His qualitative assessment of the risk was not changed by the test results as the possibility of fire spread eventuating was but one of the factors he took into account when undertaking the risk assessment. [29] I reject the Contractor’s submission that the offer canvassed the Body Corporate’s prospects of success ‘in some detail’. Two of the four points addressed the proposal to install an automatic fire sprinkler system which had no relevance to the proceedings. Although the other points were relevant to matters in issue, no attempt was made to canvass all matters that needed to be considered when applying the multi- factorial test required to address the risk assessment issue. At its highest, one of the four points addressed in the offer provided additional factual support to opinions expressed by Mr Alexander. The final point was merely a repetition of the Contractor’s argument about the requirements of the BCA. It did not canvass the key issue of compliance with General Requirement 2.4(iii) of the 2009 BCA. Public interest [30] The Body Corporate submits that another relevant factor is that these proceedings were in the nature of public interest litigation. While there is no doubt that the use of combustible materials as an external cladding on high rise buildings is a nation-wide problem, these proceedings cannot be characterised as a test case. They are 19 Body Corporate for Infinity 1 Community Titles Scheme 45404 v Queensland Building and Construction Commission [2025] QCAT 54, [101]. 20 Ibid [140]. -- 7 of 8 -- 8 administrative review proceedings with a decision based on a qualitative assessment of the risk for the particular building in question. Decision [31] Having taken into account: (a) the nature and complexity of the dispute the subject of these proceedings; (b) the relative strengths of the claims made by the Body Corporate and the Contractor; (c) the Body Corporate’s attempts to enable and help the Commission and the tribunal standing in the shoes of the Commission to make the decision on the merits; (d) the financial circumstances of the parties to the proceeding; (e) the Calderbank offer; and (f) other submissions made by the Body Corporate and the Contractor; I have decided that the interests of justice do not require the making of an order requiring the Body Corporate to pay any of the costs of the Contractor. -- 8 of 8 --