Breeze MR Pty Ltd v Body Corporate for the Bay Village [2022] QCAT 336

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Breeze MR Pty Ltd v Body Corporate for the Bay Village CTS 33127 [2022] QCAT 336 PARTIES: BREEZE MR PTY LTD (applicant) v BODY CORPORATE FOR THE BAY VILLAGE CTS 33127 (respondent) APPLICATION NO/S: OCL028-21 MATTER TYPE: Other civil dispute matters DELIVERED ON: 16 September 2022 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Howe ORDERS: The applicant pay the respondent the costs of the proceedings as agreed or failing agreement to be assessed. The costs be assessed on the indemnity basis by a cost assessor agreed between the parties within 14 days of the parties’ receipt of this order and in default of agreement appointed by the principal registrar using the Supreme Court scale of costs. The applicant pay the respondent’s costs (as agreed or assessed) within 14 days of such agreement or assessment. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – POWER TO AWARD GENERALLY – where the applicant commenced proceedings in the Tribunal and sought interlocutory injunctive relief pending hearing – where the applicant was successful with interlocutory injunctive relief – where the applicant filed notice of withdrawal – where the applicant then commenced similar proceedings in the Supreme Court – where the respondent applied for the costs of the tribunal proceedings on an indemnity basis Body Corporate and Community Management Act 1997 (Qld), s 149B -- 1 of 5 -- 2 Breeze MR Pty Ltd v Body Corporate for Bay Village Community Titles Scheme 33127 [2021] QSC 263 Fairfield Services Pty Ltd (in liquidation) v Leggett [2020] QSC 183 Latoudis v Casey (1990) 170 CLR 534 LPD Holdings (Aust) Pty Ltd v Phillips, Hickey and Toigo [2013] QCA 305 ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548 Re Bryce [1996] 1 Qd R 15 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 [1] On 20 April 2021 the applicant (‘Breeze’) was served with notice of termination of a management agreement with the respondent (‘Bay Village’) on the basis of misappropriation of car parking fees said to total some $664,000. [2] On 23 April 2021 Breeze filed an application to resolve a complex dispute – Body Corporate and Community Management Act 1997 (Qld) (‘BCCM Act’) in the Tribunal on the basis it was a caretaking services contractor for Bay Village. On 14 May 2021 Breeze applied for interim orders pending determination of the complex dispute. [3] Interim orders were made, first in the form of a bridging order and then an interlocutory injunction staying the termination pending hearing. [4] On 5 August 2021 Breeze applied for the costs of the application for injunction. [5] Breeze claimed in its material that the dispute concerned the engagement of a person as a caretaking service contractor for a community titles scheme within the meaning and operation of s 149B of the BCCM Act and that the Tribunal had jurisdiction to determine the dispute. [6] In its material in response the respondent (‘Bay Village’) admitted the jurisdiction of the Tribunal. [7] On or about 20 August 2021 Bay Village filed statements of evidence in the proceeding. [8] Then on 27 August 2021 Breeze filed a notice of withdrawal of the application in the Tribunal and served a copy on Bay Village on 2 September 2021 under cover of correspondence stating the Tribunal did not have jurisdiction over the matter. [9] On 15 September 2021, given the withdrawal of the proceedings by Breeze, the parties were directed by the Tribunal to advise whether the application for costs associated with the interim orders was still being pursued. There was no response from either party. [10] The Tribunal then directed that if a party sought costs the party was to file a miscellaneous application claiming that relief by 16 November 2021, and gave directions that the other party file submissions in response by 14 December 2021. -- 2 of 5 -- 3 [11] On 15 December 2021 Bay Village made an application for the costs of the application including the costs associated with the proceedings for interim relief, on an indemnity basis or in the alternative fixed in an amount to be determined by the Tribunal on the Supreme Court scale. There was no response to that application from Breeze. [12] The solicitors for Bay Village say they were given notice of the withdrawal on 2 September 2021 under cover of correspondence on the basis the Tribunal had no jurisdiction in respect of the matter. [13] There is no clarification from either party how the Tribunal lacked jurisdiction. [14] In its submissions on costs dated 15 November 2021, Bay Village simply state “similar proceedings have subsequently been filed by the Applicant in the Supreme Court”. [15] The proceedings in the Supreme Court apparently came on for hearing before Daubney J in Breeze MR Pty Ltd v Body Corporate for Bay Village Community Titles Scheme 33127 [2021] QSC 263, handed down on 14 September 2021. Daubney J said that it was not in issue that Breeze was not a caretaking service contractor. That was a different position to the one adopted in the Tribunal. Daubney J found the Supreme Court had jurisdiction in the matter and found in favour of Breeze on the substantive issue of termination, that is, that the termination had been unlawful. He made an appropriate declaration concerning that. [16] It is clear that Breeze erred in commencing proceedings in the Tribunal. As explained by Bond J in Fairfield Services Pty Ltd (in liquidation) v Leggett [2020] QSC 183, discontinuance will often give strong reason to award costs against a party,1 regardless that there has been no hearing on the merits of the action. [17] Bond J referred with approval to a statement by Burchett J in ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548 concerning the possible different circumstances of surrender: 6 In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs.2 [18] The matter at hand falls within the first category, that of effective surrender. [19] What must also be considered here however, is the interim relief claimed by Breeze. Breeze succeeded in obtaining interlocutory relief from the Tribunal staying the termination of its management rights pending a final hearing in the Tribunal. [20] In Re Bryce [1996] 1 Qd R 15, a criminal matter, a restraining order had been obtained against a convicted person under the Crimes (Confiscation) Act 1989 (Qld) but 1 [8]. 2 [6]. -- 3 of 5 -- 4 subsequently the restraining order was set aside because the person was acquitted on a retrial. Ambrose J said the applicant for the restraining order, the police, should pay the costs associated with the making and discharge of the order. Ambrose J referred to and relied on the High Court authority of Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 where Mason CJ had observed: 13. It will be seen from what I have already said that, in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.3 [21] Ambrose J went on to say: The restraining order obtained by the Director in the present case was essentially of an interlocutory kind. Its object was to preserve the status quo so that in the event of the respondent’s convictions standing after time for appeal had expired or any appeal instituted had been dismissed, then a forfeiture order could be sought, obtained and enforced. Generally speaking, in civil litigation where an interim or interlocutory injunction designed to preserve the status quo between parties in conflict is obtained, an undertaking is required and the costs are reserved. The person obtaining the injunction will rarely and only in exceptional cases obtain the costs of obtaining it if he fails to vindicate in the action the right which the interim or interlocutory injunction has sought to preserve.4 [22] Whilst breeze was successful in obtaining an order for interlocutory relief, the interlocutory relief should never have been sought because the action should never have been started in the Tribunal. Based on the information to hand, Breeze erroneously claimed jurisdiction as a caretaking service contractor, when it was not such. [23] By surrendering the action to Bay Village with a withdrawal, Breeze has failed to vindicate its entitlement to the interlocutory relief obtained and the costs of such should appropriately be considered from the perspective of Bay Village as the successful party, in accordance with the comments of Mason CJ in Latoudis v Casey. [24] I find a cost order in the Tribunal proceedings appropriate. [25] By bringing the proceedings incorrectly in the Tribunal, Breeze has put Bay Village to unnecessary expense. Breeze had legal representation from commencement and jurisdiction should have been a factor addressed and considered from outset. [26] Complex matters appropriately brought in the Tribunal pursuant to the BCCM Act are usually just that, complex matters. Injunctive relief was sought and obtained, and coupled as usual with an undertaking as to damages. The injunctive relief and associated undertaking as to damages shows the seriousness of the matters at hand. 3 Latoudis v Casey [13]. 4 Page 16. -- 4 of 5 -- 5 [27] Bay Village is entitled to costs including the costs associated with the application for interim relief. [28] Bay Village seeks costs on an indemnity basis. Breeze makes no submissions about that, nor indeed about costs generally. [29] The application to the Tribunal should never have been made. That Breeze lacked jurisdiction to commence the proceedings in the Tribunal should have been obvious from outset when completing the initiating application, rather than after the making of interlocutory orders. That was irresponsible and blameworthy behaviour on the part of Breeze. Something more than an award of standard costs is called for.5 [30] I determine the appropriate order is that Breeze pay Bay Village’s costs of the proceedings on an indemnity basis on the Supreme Court scale, given the action brought in the Tribunal appears to mirror in essential terms that also presented in the Supreme Court. I have no information available to allow me to fix costs, and therefore they must be agreed or assessed. 5 LPD Holdings (Aust) Pty Ltd v Phillips, Hickey and Toigo [2013] QCA 305 [22]. -- 5 of 5 --