Aqualine Pty Ltd v Ponticello Properties Pty Ltd (No 2) [2023] QCAT 453

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Aqualine Pty Ltd v Ponticello Properties Pty Ltd (No 2) [2023] QCAT 453 PARTIES: AQUALINE PTY LTD (applicant) v PONTICELLO PROPERTIES PTY LTD (respondent) APPLICATION NO/S: RSL033-18 MATTER TYPE: Other civil dispute matters DELIVERED ON: 16 November 2023 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Cranwell ORDERS: 1. Aqualine Pty Ltd must pay the costs of and incidental to the proceedings on the standard basis fixed in the amount of $149,898.44 to Ponticello Properties Pty Ltd. 2. The amount referred to in order 1 must be paid within 28 days of the date of these orders. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW EVENT – GENERAL PRINCIPLES AND EXERCISE OF DISCRETION – where body corporate in substance unsuccessful in proceedings – whether costs order should be made against body corporate – whether costs should be fixed Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 3, s 16, s 100, s 102, s 107 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), rule 86 Retail Shop Leases Act 1994 (Qld), s 43 Ascot v Nursing and Midwifery Board of Australia [2010] QCAT 364 Cowen v Queensland Building and Construction Commission [2021] QCATA 103 Cruceru v Medical Board of Australia [2016] QCAT 111 Dream Suburbs Pty Ltd ACN 609 015 938 as trustee for the Sok and Amy Family Trust v The Body Corporate for -- 1 of 9 -- 2 Persse Palace CTS 48289 & Anor (No 2) [2023] QCAT 239 Lyons v Dreamstarter Pty Ltd [2021] QCAT 71 Ralacome Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 TLL Investment Pty Ltd v The Body Corporate for the Grange CTS 30993 (No 2) [2018] QCAT 444 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 Introduction [1] On 4 March 2022, the Tribunal dismissed an application by Aqualine Pty Ltd (Aqualine) against Ponticello Properties Pty Ltd (Ponticello). The proceedings arose out of two notices of dispute under the Retail Shop Leases Act 1994 (Qld) (‘the RSL Act’) lodged with the Tribunal on 27 September 2017. The Tribunal directed that any application for costs be lodged within 28 days. [2] On 14 April 2022, Ponticello lodged an application seeking its costs of the proceedings. [3] On 20 April 2022, Aqualine lodged an application for leave to appeal or appeal with the Appeal Tribunal. As this application was lodged out of time, Aqualine was required to seek an extension of time within which to file the application. This extension of time was granted. [4] On 1 July 2022, I stayed the costs application pending determination of the appeal. [5] On 6 November 2023, the Appeal Tribunal dismissed the application for leave to appeal or appeal. [6] Accordingly, the costs application has been returned to me for consideration. [7] Aqualine has raised as a preliminary issue that the costs application was made 13 days later than directed by the Tribunal. Given the time taken to resolve the appeal, I am unable to identify any prejudice to Aqualine arising out of the relatively brief delay in filing the costs application. [8] I also note that Aqualine has raised as a further issue that the Ponticello should not be awarded any costs in the period up to and including determination of the preliminary issue on 7 May 2019. No application for costs has been made in respect of the determination of the preliminary issue, and the Tribunal has made no orders in that regard. This is unremarkable, as the Tribunal does not routinely make costs orders after the determination of interlocutory matters. I am unable to identify any reason why the costs prior to the determination of the preliminary question should not be considered as part of the costs of the proceedings. -- 2 of 9 -- 3 [9] For completeness, I note that the costs of an expert conclave on 24 November 2020 were expressly reserved. I will deal with these costs separately. [10] Both parties have filed submissions on costs, and I will proceed to determine the costs application. Relevant principles [11] Section 100 of the Queensland Civil and Administrative Act 2009 (Qld) (‘the QCAT Act’) sets out the starting point in relation to 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. [12] Section 102 of the QCAT Act permits the Tribunal to depart from this position if the interests of justice require it to make a costs order: (1) The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order. … (3) In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following— (a) whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g); (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; (f) anything else the tribunal considers relevant. [13] In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 at [29], Justice Wilson stated: Under the QCAT Act the question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100’. -- 3 of 9 -- 4 [14] More recently, in Cowen v Queensland Building and Construction Commission [2021] QCATA 103 at [28], Judicial Member McGill SC stated: I consider that to say that an order for costs will not be made unless the factors favouring an order are ‘compelling’ does not accurately state the test for making an order for costs laid down by s 102(1). In my opinion, the Member in this way set the bar too high against the applicants when deciding whether to make an order for costs in this matter. The test is whether the interests of justice ‘require’ an order for costs, but I do not accept that the circumstances favouring an order for costs must be compelling before that test will be met. [15] Nevertheless, Judicial Member McGill SC conceded that the use of the word ‘require’ in s 102 means that the default position should not be ‘too readily’ departed from: ibid at [27]. [16] In Ascot v Nursing and Midwifery Board of Australia [2010] QCAT 364 at [9], Deputy President Kingham noted: The considerations identified in s102(3) are not grounds for awarding costs. They are factors that may be taken into account in determining whether, in a particular case, the interests of justice require the tribunal to make a costs order. [17] Section 107 of QCAT Act contains the following additional provisions in relation to costs: (1) If the tribunal makes a costs order under this Act or an enabling Act, the tribunal must fix the costs if possible. (2) If it is not possible to fix the costs having regard to the nature of the proceeding, the tribunal may make an order requiring that the costs be assessed under the rules. (3) The rules may provide that costs must be assessed by reference to a scale under the rules applying to a court. [18] In Cruceru v Medical Board of Australia [2016] QCAT 111, [49], the Hon J B Thomas stated that: [T]he discretion to fix costs under s 107 is an extremely wide one and is to be exercised robustly. The fixation of a round or approximate sum will often be a preferable option to increasing costs and wasting money and effort in the production of itemised assessments. Consideration [19] The parties in their submissions have addressed the factors set out in section 102(3) of the QCAT Act. I will proceed to do the same. Unnecessary disadvantage to another party [20] Aqualine has submitted that Ponticello acted in a way that unnecessarily disadvantaged it, including the following: -- 4 of 9 -- 5 (a) Ponticello requested a mediation scheduled for 23 January 2018 be rescheduled to 6 February 2018, and then refused to attend on the basis that it was outside the Tribunal’s timeframe for mediation. (b) The respondent’s lay evidence was due by 26 August 2019, but was not filed until 19 September 2019. (c) Ponticello’s traffic expert failed to attend a conclave on 21 January 2020, and subsequently delayed liaising with Aqualine’s traffic expert such that their joint report was not completed until 12 March 2020. The joint report had been due by 18 February 2020. (d) The matter was listed for a three day hearing starting on 23 March 2020. The hearing was to be conducted by videoconference due to the commencement of Covid-19 restrictions, but Ponticello’s counsel declined to proceed by videoconference. (e) Ponticello’s financial expert failed to attend a conclave on 24 November 2020. (f) The hearing was rescheduled to commence on 13 December 2021. Ponticello unsuccessfully sought an adjournment. (g) Ponticello’s closing submissions were not served until 10 January 2022, despite the Tribunal’s direction that they be served by 24 December 2021. [21] It appears from the Tribunal’s file that it was the Registry who contacted the parties on 2 February 2018, and advised that the mediation was unable to go ahead due to it being outside the timeframe. [22] Ponticello’s request that the three day hearing be conducted in person, rather than be videoconference, is consistent with the Tribunal’s approach to conducting multi-day hearings remotely at the time. [23] On 11 June 2021, the Tribunal directed the parties to inform the Tribunal in writing of any dates that they were not available to attend the final hearing. The hearing scheduled for 13 December 2021 fell on dates Ponticello had advised that its counsel was not available. It was not unreasonable for Ponticello to seek an adjournment in those circumstances. [24] The Tribunal’s directions record that a delegate of Ponticello’s traffic expert attended the conclave on 21 January 2020. The traffic experts were subsequently directed to confer directly with each other at a directions hearing on 24 January 2020. Aqualine’s traffic expert subsequently wrote to the Tribunal on 18 February 2020, noting that both experts had met. The correspondence stated: The traffic engineers have met and are in the process of preparing their report. However, additional time is required to complete. [25] Ponticello requested that the conclave on 24 November 2020 be adjourned because Aqualine served voluminous documents on 20 November 2020, and Ponticello’s financial expert did not have time to consider them before the conclave. -- 5 of 9 -- 6 [26] The other matters raised by Aqualine, involving relatively minor delays in the filing and serving of material, are not out of the ordinary for a dispute that ran for over four years. [27] I am not satisfied that Ponticello acted in a way that unnecessarily disadvantaged Aqualine. Nature and complexity of the proceeding [28] The hearing before the Tribunal was listed for three days. It concluded after two days, with the parties electing to file written submissions rather than to proceed to oral submissions on the third day. The hearing included the cross-examination of lay and expert witnesses by both parties. Both parties were represented by Counsel. [29] Accordingly, the level of complexity of the proceedings was at the higher end of the range dealt with by the Tribunal. Relative strengths of parties’ claims [30] Aqualine was wholly unsuccessful, except in relation to a technical breach in relation to the wasted outgoings claim for which it did not suffer any loss. [31] Further, I note that the Tribunal determined a preliminary question on 7 May 2019. The effect of this decision was that Aqualine was not entitled to compensation under section 43 of the RSL Act in respect of events that occurred prior to 25 November 2016. It should have been reasonably apparent to Aqualine at this point that its case was likely to fail. Financial circumstances of the parties to the proceeding [32] I have no information regarding the current financial circumstances of either party. [33] For completeness, I note that the proceedings relate to the operation of a newsagency business by Aqualine, in respect of which the profits decreased between 2007 and 2017. Any other relevant matters [34] The parties have not made any separate submissions in relation to this factor. [35] Having regard to all the circumstances of the case, including the matters identified in s 102(3) of the QCAT Act, I am satisfied that the interests of justice both require and point compellingly to a costs award being made in favour of Ponticello. Reserved costs [36] As note above, the costs of the conclave which was adjourned on 24 November 2020 were reserved. The reasons for the adjournment, as far as they can be discerned from the correspondence of the parties with the Tribunal, were that Aqualine served voluminous documents on 20 November 2020 and Ponticello’s financial expert did not have time to consider them before the conclave. -- 6 of 9 -- 7 [37] Having regard to the conduct of Aqualine which led to the conclave being adjourned, as well as the considerations identified in section 102(3) of the QCAT Act, I am of the view that it is appropriate to order the reserved costs be paid by Aqualine to Ponticello. The costs of the adjourned conclave will therefore be subsumed in my overall costs order. Offers to settle [38] Rule 86 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) authorises an award of costs in the following circumstances: (1) This rule applies if— (a) a party to a proceeding, other than a proceeding for a minor civil dispute, makes another party to the proceeding a written offer to settle the dispute the subject of the proceeding; and (b) the other party does not accept the offer within the time the offer is open; and (c) in the opinion of the tribunal, the decision of the tribunal in the proceeding is not more favourable to the other party than the offer. (2) The tribunal may award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made. [39] Ponticello made a number of written offers to settle: (a) On 3 July 2018, Ponticello offered to pay $20,000 to Aqualine, with each party to pay its own costs. Ponticello also offered to waive its right to recover $6,397 in make good costs. (b) On 20 August 2019, Ponticello offered to pay $10,000 to Aqualine, with each party to pay its own costs. Ponticello also offered to waive its right to recover $6,397 in make good costs. (c) On 9 December 2021, Ponticello offered to pay $75,000 to Aqualine with each party to pay its own costs. [40] Each of these offers would have represented a better outcome from Aqualine’s perspective than it achieved at the hearing. This provides an additional basis for an award of costs in favour of Ponticello from 3 July 2018. [41] While Ponticello has not sought its costs on an indemnity basis, I note that ‘reasonable costs’ for the purposes of rule 86(2) was construed by Justice Wilson in Lyons v Dreamstarter Pty Ltd [2021] QCAT 71 at [24] to mean indemnity costs. Fixing costs [42] Ponticello filed an affidavit of Marc Maskell, a partner of Thynne+Macartney. Mr Maskell deposed: I have been a solicitor practising in commercial litigation in Queensland for over 20 years. I cannot reliably say the number of matters I have been involved -- 7 of 9 -- 8 with in QCAT, the Queensland District and Supreme Courts, save I estimate it would be in the hundreds. I say I have litigated (on behalf of plaintiffs and defendants) many may matters and, within those matters, had clients awarded costs or had costs awarded against them. In my experience of court work, upon the making of an order for payment of costs on a standard basis, a party in the position of Ponticello with the benefit of an order could reasonably expect the assessed value of its costs actually spent to be 55% - 65% of costs paid on a solicitor client basis, plus disbursements properly and reasonably incurred. [43] Invoices from Thynne+Macartney from the commencement of the application to the completion of the trial totalled $134,734 for professional fees. Counsel’s fees total $53,550. The remaining disbursements, comprising of expert witness and transcript fees, total $42,328.99. [44] Aqualine submitted that it is not possible to reliably fix costs: The affidavit material, and particularly the exhibits, provide insufficient detail to enable the applicant to make any informed assessment as to whether the costs claimed were ‘necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed’ (see rule 702(2) of the Uniform Civil Procedure Rules 1999). [45] Perhaps because it was represented at the hearing by a barrister who was directly briefed, without the involvement of an instructing solicitor, Aqualine did not file any expert evidence in relation to costs. The force of Aqualine’s submissions is limited by the lack of supporting expert evidence. [46] It is trite to state that in fixing costs, I am not performing the role of a cost assessor and would not expect to have all of the material available to me that would be available to a cost assessor. The process of applying a discount to the costs claimed is intended to recognise that not all costs would be allowed on an assessment. In that context, it is not necessary for me to review each and every invoice as if I were a costs assessor, which appears to be the approach contended for in Aqualine’s submissions. [47] Given the preference expressed in section 107 of the QCAT Act, I am of the view that the appropriate course in the circumstances is to proceed to fix costs. This dispute commenced in 2017. It seems to me that the parties have already spent enough time and money on the dispute without embarking on the lengthy and expensive process of an assessment. Such an outcome would not be consistent with objects set out in s 3 of the QCAT Act, which include having the Tribunal deal with matters in a way that is ‘accessible, fair, just, economical, informal and quick’. [48] Ponticello has sought costs be fixed in the amount of $176,719.39, being 60% of solicitor costs and the full amount of the disbursements. [49] Ponticello’s approach in seeking the full amount of the disbursements would require me to proceed on the basis that the disbursements in their entirety have been ‘properly and reasonably incurred’. In my view, this is unrealistic. A more preferable approach is to apply a discount to the total costs, rather than to confining the discount only to the solicitor costs. This is consistent with the approach I have taken in other cases: -- 8 of 9 -- 9 see, eg, TLL Investment Pty Ltd v The Body Corporate for the Grange CTS 30993 (No 2) [2018] QCAT 444; Dream Suburbs Pty Ltd ACN 609 015 938 as trustee for the Sok and Amy Family Trust v The Body Corporate for Persse Palace CTS 48289 & Anor (No 2) [2023] QCAT 239. [50] I will fix costs on the amount of $149,898.44, being 65% of the total costs incurred. While 65% is the highest point of the range provided by Mr Maskell, I am offsetting this by applying it across disbursements as well as solicitor costs. [51] Finally, I note in passing that this amount is almost certainly considerably less than the indemnity costs from 3 July 2018 that Ponticello might otherwise have been entitled to under rule 86(2). Order [52] I order that the Aqualine pay Ponticello’s costs of and incidental to the proceeding on the standard basis fixed in the amount of $149,898.44. -- 9 of 9 --