Brian Choi (also known as Hyung Seok Choi) v Kwangsu Choi as Trustee for the Choi Family Trust No. 2 [2021] QCATA 96

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Brian Choi (also known as Hyung Seok Choi) v Kwangsu Choi as Trustee for the Choi Family Trust No. 2 [2021] QCATA 96 PARTIES: BRIAN CHOI (ALSO KNOWN AS HYUNG SEOK CHOI) (appellant) v KWANGSU CHOI AS TRUSTEE FOR THE CHOI FAMILY TRUST (respondent) APPLICATION NO: APL349-19 ORIGINATING APPLICATION NO: BDL058-18 MATTER TYPE: Appeals DELIVERED ON: 30 July 2021 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Howard Member Lumb ORDERS: 1. There be no order as to costs. CATCHWORDS: PROCEDURE – COSTS – LEAVE GIVEN TO APPEAL – where appeal allowed – each party seeks a costs order in his favour – invitation to enter into informal settlement negotiations – whether appeal tribunal should make an order for costs Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 48(1), s 100, s 102 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86 Colagrande & Ors v D A Radic Pty Ltd trading as David Radic Prestige Homes [2020] QCATA 86 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) -- 1 of 6 -- REASONS FOR DECISION Introduction [1] By a Decision delivered on 29 January 2021, this Appeal Tribunal made the following orders: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. The application for leave to rely upon fresh evidence is refused. 4. Order number 3 of the decision of the Tribunal dated 4 April 2019 is set aside. 5. The matter be returned to a differently constituted Tribunal for reconsideration as between Brian Choi (also known as Hyung Seok Choi) and Kwangsu Choi as trustee for the Choi Family Trust. 6. (i) Either party may file in the Tribunal and serve on the other party any application for costs and written submissions in support, no longer than 5 pages, by: 4:00pm on 22 February 2021; (ii) If a party files an application for costs, the other party must file and serve any submissions in response of no more than 3 pages, by: 4:00pm on 15 March 2021; (iii) Any application for costs will be heard and determined on the papers, not before: 16 March 2021. [2] In these reasons, we shall adopt the definitions contained in the Reasons for the Decision (‘the primary reasons’). [3] By written submissions filed on 22 February 2021 (‘BC primary submissions’), Brian Choi seeks an order for costs be made against Kwangsu Choi. [4] By an application filed on 25 February 2021, Kwangsu Choi seeks an order that Brian Choi pay Kwangsu Choi’s costs as set out in his costs submissions filed on 22 February 2021 (‘KC primary submissions’). [5] The parties filed the following additional written submissions: (a) by Kwangsu Choi on 4 March 2021 (‘KC submissions in response’); and (b) by Brian Choi on 15 March 2021 (‘BC submissions in response’). Brian Choi’s submissions [6] Brian Choi seeks costs on two bases as set out in the BC primary submissions: (a) Kwangsu Choi’s failure to respond to correspondence dated 15 July 2020 (‘the July 2020 correspondence’) from Brian Choi’s lawyers inviting a resolution of the matter on an informal basis; and -- 2 of 6 -- (b) the reason for appealing the Original Decision had merit, that Brian Choi was the successful party in the appeal, and that it was not in the public interest that Brian Choi’s success on the appeal be eroded if he is not awarded costs. Kwangsu Choi’s submissions [7] Kwangsu Choi seeks costs on the following bases: (a) that, in reliance on ‘s 84(1)(g) (sic)’1 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’), Brian Choi conducted himself in a manner which was ‘unnecessarily disadvantageous’ to the proceeding which was said to be evident from his absence at the compulsory conference on 4 April 2019;2 (b) that, in reliance on ‘s 84(1)(f) (sic)’3 of the QCAT Act, Brian Choi engaged in behaviour that was ‘arguably vexatious’ given that he applied to reopen the matter after a decision was made unfavourably, as well as appealing the Original Decision, leading to further costs for Kwangsu Choi;4 (c) that the nature and complexity of the dispute the proceeding remained ‘a centre of contention’ and relied upon the ‘Fresh Evidence’ which was said to prove that Brian Choi had control over the company which performed work for Kwangsu Choi;5 and (d) that Kwangsu Choi’s financial circumstances have been ‘greatly affected’ due to the Original Decision being set aside and that the costs incurred during the proceedings have been ‘both mentally and financially detrimental’ to the overall well-being of Kwangsu Choi.6 Analysis [8] The dispute between the parties was a building dispute which the Tribunal had jurisdiction to decide pursuant to s 77(1) of the Queensland Building and Construction Commission Act 1991 (Qld) (‘the QBCC Act’). In resolving the dispute, the powers that the Tribunal may exercise include the power to award costs.7 [9] The relevant principles to awarding costs in building disputes are conveniently summarised in the decision of the appeal tribunal in Colagrande & Ors v D A Radic Pty Ltd trading as David Radic Prestige Homes:8 [40] The approach to the determination of costs in building disputes was stated by the QCAT appeal tribunal in Lyons v Dreamstarter Pty Ltd: Section 77 of the QBSA Act confers jurisdiction on the Tribunal to determine building disputes such as the one brought by Dreamstarter. Section 77(1)(h) provides that, in such proceedings, the Tribunal may award costs. The section does not provide further guidance or 1 There is no such provision of the QCAT Act but from the substance of the submission we assume this was intended to be a reference to s 48(1)(g). 2 KC Primary Submissions, [3](a). 3 Again, there is no such provision of the QCAT Act and we assume this was intended to be a reference to s 48(1)(f). 4 KC Primary Submissions, [3](b). 5 Ibid, [3](c). 6 Ibid, [3](d) & [6]. 7 Section 77(3)(h) of the QBCC Act. 8 [2020] QCATA 86 at [40]-[43]. -- 3 of 6 -- prescription about the occasions for or conditions of exercise of that power. A jurisdiction given in general terms allows the Tribunal to make an order as to costs that is justified in the circumstances. It is a broad general discretion which must be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation. Accordingly an enabling Act, the QBSA Act, does, provide otherwise. As a result, the usual position as to costs in the Tribunal is displaced. That result is reinforced by other provisions dealing with the relationship between the QCAT Act and enabling Acts. [41] In Partington v Urquhart (No 4) the QCAT appeal tribunal stated: We have a discretion under s 77(3)(h) of the QBCC Act to award costs and can make an order for the whole or any part of the costs of the appeal as we, in the circumstances, consider to be just. In exercising such a discretion, it is usual that the general costs of an appeal follow the event. (footnotes omitted) [42] The comments by the appeal tribunal in Partington reflect the general principle articulated by the Queensland Court of Appeal in Tamawood Ltd v Paans: In the absence of countervailing considerations, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome. [43] A successful party has a ‘reasonable expectation’ of being awarded costs against the unsuccessful party … (footnotes omitted) The July 2020 correspondence [10] The July 2020 correspondence was headed ‘Without prejudice save as to costs’ and was in the following terms: In an attempt to resolve the matter, and without prejudice to our client or acceptance of liability, we are instructed to settle the matter informally. Taking into account the previous decisions and reasons provided by the Tribunal, we consider that our client's appeal has merit and there is a prospect that an appeal will be allowed. Notwithstanding, our client is prepared to finalise the matter provided that your client is willing to engage in informal negotiations and settlement. Kindly advise our office should you [sic] client be inclined to engage in same. [11] That correspondence did nothing more than invite engagement in ‘informal negotiations and settlement’. It did not contain any offer to settle the matter (e.g. by way of a payment of a monetary amount). In those circumstances, we do not consider that the correspondence could be treated as an effective Calderbank offer or an offer under rule 86 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld). We further find that there is no basis for concluding that Kwangsu Choi should -- 4 of 6 -- reasonably have concluded that his prospects of successfully contesting the application (on appeal) were poor. The balance of the considerations [12] As submitted by Brian Choi, we accept that the reason for appealing the Original Decision had merit and, plainly, Brian Choi was the successful party in the appeal. However, having regard to the following circumstances, we consider that there are countervailing considerations which persuade us that it is in the interests of justice that there should be no order as to costs. [13] First, on the available material, we cannot conclude that the Original Decision, which has been set aside, was based on any positive submission by Kwangsu Choi that the decision should be given in his favour based on effective service of the Amended Application. The Member made the decision on the basis of the Member’s view that there was effective service of the Amended Application on Brian Choi. For the reasons set out in the primary appeal reasons, we have concluded that this was not correct. This error cannot be sheeted home to Kwangsu Choi. [14] Second, Kwangsu Choi points to the bringing of the reopening application (which was unsuccessful) and the October application (to set aside the Original Decision) (which application was in the wrong form but the Tribunal permitted the October application to proceed as an application for leave to appeal or appeal, subject to Brian Choi filing such an application in the correct form, paying the appropriate filing fee and filing an application to extend time). Brian Choi did those things and the Tribunal subsequently granted an extension of time. In our view, while these circumstances do not support a conclusion that Brian Choi was ‘deliberately and strategically delaying payment’ to Kwangsu Choi9 (or that he acted ‘vexatiously’), Brian Choi’s conduct did result in Kwangsu Choi incurring costs in responding to such applications. We consider that this factor should be brought into account in assessing whether Brian Choi should have his costs of the appeal. [15] Third, while Brian Choi successfully prosecuted his appeal, we consider that Kwangsu Choi had a reasonably arguable position and there was nothing unreasonable in seeking to defend the decision in his favour. As explained in our Reasons on the appeal, the Decision principally turned on the fact that there was evidence of ‘non-delivery’ of the Application as distinct from ‘non-receipt’ and that, in point of law, the former meant that there was not effective service. [16] Fourth, Brian Choi did succeed in the appeal and, absent the countervailing circumstances discussed above (particularly the first and second matters), he would have had a sound argument for an award of costs in his favour in respect of the appeal. [17] Finally, we have had regard to Kwangsu Choi’s submissions concerning his financial circumstances, as summarised in paragraph [7](d) above. We find that Kwangsu Choi has adduced no evidence that makes good his argument. In any event, we consider that the real question would have been whether the making of an order for costs in favour of Brian Choi would adversely affect Kwangsu Choi’s financial position or whether Kwangsu Choi’s financial position would be adversely affected if an order for costs were not made in his favour. As to the former, this matter does not arise given our view that, in all the circumstances, no order for costs should be made. As to the latter, as noted, there is no evidence led which would justify that conclusion. 9 As submitted in the KC Submissions in Response, [8](b). -- 5 of 6 -- [18] For the above reasons, we consider that there should be no order as to costs. -- 6 of 6 --