Campbell v Queensland Building and Construction Commission [2021] QCATA 34

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Campbell v Queensland Building and Construction Commission [2021] QCATA 34 PARTIES: GLEN CAMPBELL (applicant/appellant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (respondent) APPLICATION NO/S: APL358-19 ORIGINATING APPLICATION NO/S: GAR244-18 MATTER TYPE: Appeals DELIVERED ON: 12 March 2021 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Brown Member Traves ORDERS: Leave to appeal is granted. The appeal is refused. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – RECOVERY OF COSTS – ENTITLEMENT – where the applicant sought a review of a decision to deny his claim under the statutory home warranty scheme – where, to avoid commencing litigation, the applicant had written to the respondent requesting a review of the decision and to allow his claim – where the applicant instituted proceedings – where the respondent reconsidered its decision and overturned its original decision – where the new decision was not for the reasons put forward by the applicant – where the applicant withdrew their application before the tribunal made a final decision –where the circumstances were not so clear as to make the respondent’s original decision unreasonable – where s 100 Queensland Civil and Administrative Tribunal Act 2009 (Qld) establishes a presumption against awarding costs – whether the Tribunal Member at first instance erred in not awarding costs to the applicant -- 1 of 15 -- 2 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 23, s142 Ascot v Nursing and Midwifery Board of Australia [2010] QCAT 364 Australian Securities Commission v Aust-Home Investments Ltd (1993) 116 ALR 523 Cachia v Grech [2009] NSWCA 232 Demac Homes (Qld) Pty Ltd v Queensland Building Services Authority & Others [2011] QCAT 331 Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 3) [2012] VSC 99 Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388 House v The King (1936) 55 CLR 499 Lyons v Queensland Building and Construction Commission & Dreamstarter Pty Ltd (in liquidation) [2016] QCAT 218 McGee v Queensland Building and Construction Commission [2018] QCATA 124 McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577 ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548 Queensland Building Services Authority v Johnston [2011] QCATA 265. QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin (1997) 186 CLR 622 Rix v Queensland Building Services Authority [2011] QCAT 333 Schneider & Anor v Queensland Building and Construction Commission [2018] QCAT 412 Shellharbour City Council v Minister for Local Government [2017] NSWCA 256 Shepherd v Felt & Textiles of Australia Ltd (1937) 45 CLR 359 Tamawood Pty Ltd & Anor v Paans [2005] 2 Qd R 101 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 What is this appeal about? [1] Mr Campbell contracted with AB Hill Constructions to have two villas constructed. The building works became protracted. Mr Campbell terminated the contract and made a non-completion claim under the statutory home warranty scheme. On 26 June -- 2 of 15 -- 3 2018 the QBCC made a decision disallowing Mr Campbell’s claim (the original decision) on the basis that he had not validly terminated the building contract. [2] Mr Campbell applied to the tribunal to review the original decision. [3] Following a compulsory conference, the tribunal directed the QBCC to reconsider the original decision. The QBCC made a further decision that Mr Campbell had properly terminated the contract (the reconsidered decision). Mr Campbell then withdrew the review application and applied for costs. The tribunal dismissed Mr Campbell’s application. [4] Mr Campbell appeals the tribunal’s decision to refuse his costs application. The review proceedings [5] In November 2015 Mr Campbell entered into a contract with AB Hill Constructions Pty Ltd to build two villas. The contract required the building works to reach practical completion within 240 days after commencement, subject to delays and extensions of time. The anticipated start date under the contract was 1 March 2016. [6] On 17 October 2017 AB Hill Constructions’ building licence was suspended by the QBCC. [7] On 18 October 2017 Mr Campbell’s solicitors gave to AB Hill Constructions a notice to remedy breach. The notice asserted that the building works had not reached practical completion as required by the contract, that the contract works commenced on or about 1 March 2016 and that the date for practical completion was 26 November 2016. The notice required the breach to be remedied within 10 working days. [8] On 31 October 2017 the QBCC lifted the suspension of AB Hill Constructions’ licence. [9] On 21 November 2017 Mr Campbell’s solicitors gave notice to AB Hill Constructions terminating the contract. [10] Mr Campbell lodged a claim for non-completion under the statutory insurance scheme on 23 November 2017. [11] On 16 May 2018 a liquidator was appointed to AB Hill Constructions. [12] On 26 June 2018 the QBCC made the original decision on two bases: (a) The QBCC was unable to confirm or ascertain whether Mr Campbell had a contractual right to terminate on the basis that a commencement notice had not been given by the builder nor was there evidence confirming the date of commencement of the building work; (b) The contract had not been validly terminated at common law on the basis that the time stipulation was not an essential term of the contract and was therefore not breached by the builder. The QBCC also stated that it was not satisfied there was sufficient evidence as to a reasonable time for the rectification of the breach identified in the notice with the result that the notice was rendered invalid. The QBCC was also not satisfied that the builder had repudiated the contract. [13] On 5 July 2018 Mr Campbell’s solicitors wrote to the QBCC making further submissions in support of the non-completion claim. The letter also contained an offer to resolve the proceedings in the following terms: -- 3 of 15 -- 4 However, in one final attempt to resolve this matter without incurring legal costs, our client will allow you seven (7) days …. within which to confirm that you accept our client’s claim for non-completion and will indemnify him to the extent of the policy in order to enable him to complete the works under the contract. … This letter is written prior to the commencement of the litigation and our client will rely upon the principles set out in the matter of Calderbank v Calderbank…. [14] On 18 July 2018 Mr Campbell filed the application to review the original decision. On 29 November 2018 the parties attended a compulsory conference following which the QBCC was directed to reconsider the original decision.1 [15] On 21 December 2018 the QBCC made the reconsidered decision. The decision stated: 14. The Applicant’s solicitor provided submissions with respect to the Contractor’s licence suspension at the time of the Notice of Intention to Terminate to support their assertion that the Contract was properly terminated at the default of the Contractor. 15. On the material before me, I am satisfied that during the 10 days following the Notice of Intention to Terminate provided by the Applicant, the Contractor did not attempt to remedy or commence remedying pursuant to the Notice of Intention [to] Terminate. 16. Further as the Contractor was not licenced during that period between 17 October 2017 and 31 October 2017, he was unable to carry out the contractual obligations. [16] On 20 February 2019 the review application was withdrawn by Mr Campbell. Appeals against costs decisions [17] An appeal against a costs order may only be made with the leave of the appeal tribunal.2 The relevant principles to be applied in determining whether to grant leave to appeal are well established: is there a reasonably arguable case of error in the primary decision; is there a reasonable prospect that the applicant will obtain substantive relief; is leave necessary to correct a substantial injustice to the applicant caused by some error; is there a question of general importance upon which further argument, and a decision of the appellate court or Tribunal, would be to the public advantage.3 1 QCAT Act, s 23(1). 2 QCAT Act, s 142(3)(a)(iii). 3 QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41; Cachia v Grech [2009] NSWCA 232; Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577, 578, 580. -- 4 of 15 -- 5 Consideration [18] In dismissing Mr Campbell’s application for costs, the learned member: (a) Accepted that there was a level of complexity to the proceedings;4 (b) Noted that upon being invited to do so, the QBCC reconsidered its decision and that the strength of Mr Campbell’s claim was relevant consideration;5 (c) Found that the ‘offer to resolve’ made by Mr Campbell on 5 July 2018 was no more than a letter expressing disagreement with the original decision of the QBCC and advising that proceedings would be commenced in the tribunal if the decision was not changed;6 (d) Found that notwithstanding Mr Campbell may have suffered some financial disadvantage as a result of the original decision of the QBCC, the QBCC had not acted in a way that unnecessarily disadvantaged Mr Campbell;7 (e) Considered that a ‘powerful’ factor against awarding costs was the QBCC reconsidering its decision at an early stage of the proceedings;8 (f) Found that the circumstances of the case fell well short of the level required to overcome the strong contra-indication against awarding costs found in s 100 of the QCAT Act.9 [19] Mr Campbell relies upon four grounds of appeal: (a) The learned member failed to take into consideration the principles enunciated in Tamawood Pty Ltd & Anor v Paans10 in making his decision; (b) The learned member failed to find that it was appropriate to make a costs order in favour of Mr Campbell; (c) The learned member failed to have due regard to Mr Campbell’s offer to settle dated 5 July 2018. [20] Mr Campbell relies upon a further appeal ground being the failure by the QBCC to obtain proper legal advice in order to properly assess his claim. It is not clear from either the grounds of appeal or the appeal submissions whether Mr Campbell asserts that this failure was a relevant consideration the learned member failed to take into account. Assuming that this is in fact Mr Campbell’s contention, we will address this 4 Campbell v Queensland Building and Construction Commission (unreported, QCAT, Member Cranwell, 18 November 2019) [14]. 5 Ibid [15]. 6 Ibid [16]. 7 Ibid [17]. 8 Ibid. 9 Ibid [18]. 10 [2005] 2 Qd R 101 (‘Tamawood’). -- 5 of 15 -- 6 when considering the question of the reasonableness of the actions of the QBCC in making the original decision. [21] Mr Campbell says that his case was always a strong one and should have been accepted by the QBCC. Mr Campbell says that even after the original decision was made, he provided further submissions and evidence to the QBCC and that the QBCC should have reconsidered its decision without Mr Campbell being put to the expense and delay of the proceedings below. Central to Mr Campbell’s claim for costs, both below and in this appeal, is the contention that his case was so strong that it was unreasonable for the QBCC to have made the original decision. [22] Other than as provided under the QCAT Act or an enabling Act, each party to a proceeding in the tribunal must bear their own costs.11 The tribunal may make a costs order if the tribunal considers the interests of justice require it to make such an order.12 In deciding whether to award costs, the tribunal may have regard to a number of stated matters including: (a) Whether a party is acting in a way that unnecessarily disadvantages another party; (b) The nature and complexity of the dispute; (c) The relative strengths of each of the parties claims; (d) For a reviewable decision: i. Whether the applicant was afforded natural justice by the decision maker; ii. Whether the applicant genuinely attempted to help the decision maker to make a decision on the merits; (e) The financial circumstances of the parties; (f) Anything else the tribunal considers relevant.13 [23] The matters referred to at s 102(3) of the QCAT Act are not grounds for awarding costs. Rather they are factors which may be taken into consideration in determining whether the interests of justice require an order for costs.14 [24] Where, as here, a proceeding is brought to an early end without a final determination on the merits, other considerations may also be relevant. The principles relevant to awarding costs when a party elects not to pursue an action because he or she has achieved the relief sought in the action either by settlement or by extra-curial means have application for present purposes. [25] In Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin15 McHugh J stated: 11 QCAT Act, s 100. 12 QCAT Act, s 102(1). 13 QCAT Act, s 102(3). 14 Ascot v Nursing and Midwifery Board of Australia [2010] QCAT 364. 15 (1997) 186 CLR 622, 624-625. -- 6 of 15 -- 7 In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent Council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans. Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in The South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases. (emphasis added; footnotes omitted) [26] In Australian Securities Commission v Aust-Home Investments Ltd16 Hill J set out the following propositions regarding costs where proceedings are brought to an early end: a. Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a cost order; b. It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue; c. In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them; 16 (1993) 116 ALR 523. -- 7 of 15 -- 8 d. In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation; e. Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that that interlocutory relief has been granted. [27] In ONE.TEL Ltd v Deputy Commissioner of Taxation17 Burchett J drew a distinction between the case where one party surrenders to another and the case where a supervening event changes the subject matter of the dispute between the parties: ...[I]t 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.... [28] In Shellharbour City Council v Minister for Local Government18 the New South Wales Court of Appeal held: [6] ... The appellant described the Minister’s abandonment of the proposed amalgamation as ‘a complete capitulation.’ It contended that if the appeal had proceeded it would ‘almost certainly’ have succeeded. That was because the appeal which was listed for hearing on the same days, brought by Ku-ring-gai Council on identical grounds, was upheld. Further, it submitted that the Minister had been unreasonable in her conduct of the proceedings. [7] It should be accepted that both these characterisations, if made good, may provide a basis for awarding costs against a party who has capitulated, as was recognised by Burchett J in One Tel Ltd v Commissioner of Taxation, in a passage cited with approval by Davies AJA (Mason P and Meagher JA agreeing) in Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack. If the appellant made good its claim that, without addressing the merits, this Court could be satisfied that it would have succeeded in any event, it would also be appropriate to set aside the costs order made in the Land and Environment Court and allow the appellant its costs of the trial ... ... [11] The second basis upon which the appellant relied was the ‘unreasonable conduct’ of the Minister ... ... [14] In short, while the appellant obtained the result it sought in the litigation as a result of a political decision by the Government, the resistance by the Minister to the proceedings in the Land and Environment Court was not shown to be 17 (2000) 101 FCR 548, [6]. 18 [2017] NSWCA 256. -- 8 of 15 -- 9 unreasonable. It follows that the bases upon which the appellant sought to have its costs, in the absence of a determination of the appeal on the merits, must be rejected. (footnotes omitted) [29] It follows from the above that relevant considerations in determining costs in a proceeding which has been brought to an early end include: (a) Whether one of the parties has acted so unreasonably that the other party should obtain the costs of the proceedings; (b) Whether the respondent has acted so unreasonably in exercising or refusing to exercise a power that an applicant is left with no reasonable alternative but to commence proceedings; (c) Where both parties have acted reasonably, whether one party was almost certain to have succeeded if the matter had been determined on the merits. [30] To some extent these considerations overlap with the matters set out at s 102(3)(a) and s 102(3)(c) of the QCAT Act. [31] With these considerations in mind we now turn to the appeal before us. Did the learned member fail to take into consideration the principles enunciated in Tamawood Pty Ltd v Paans in making his decision? [32] Mr Campbell says that the learned member failed to take into account the principles enunciated by the Court of Appeal in Tamawood Ltd v Paans. [33] Mr Campbell refers to the following passage from Tamawood Ltd v Paans: There is a clear distinction, in terms of the interest of achieving justice, between the mere fact of having representation and the fact of having reasonably obtained that representation because of the complexity of the case. 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. [34] Mr Campbell’s submissions are somewhat brief and do not make entirely clear what ‘relevant principles’ from Tamawood he refers to. We understand Mr Campbell’s submission to be that the learned member should have taken into consideration the costs incurred by Mr Campbell before the QBCC made the reconsidered decision. [35] Although the learned member did not specifically refer to Tamawood it is clear from the reasons that he had considered the parties’ submissions. Mr Campbell’s submissions referred to Tamawood. [36] Tamawood Pty Ltd v Paans involved a claim by a building owner against two building contractors in respect of defective building work and was therefore quite different to the present case. Ms Paans was successful at first instance in her claim for damages against the building contractors although no order for costs was made. On appeal, the Court of Appeal awarded Ms Paans her costs. It is against this background that the passage cited by Mr Campbell must be considered. In particular, in referring to Ms Paan’s ‘success’ being eroded by having to pay her own legal costs, Keane JA was referring to the damages awarded to Ms Paans. If Ms Paans was required to pay her own costs, her victory might have been somewhat Pyrrhic. -- 9 of 15 -- 10 [37] Caution must be applied when considering the application of the principles espoused in Tamawood to the present case. Firstly, unlike in Tamawood, there was no final hearing and determination of the review proceedings. Secondly, review proceedings are of an entirely different character to civil claims for damages. ‘Success’ in a review proceeding is not measured by reference to an award of damages but rather to whether a particular administrative decision is made. [38] The learned member referred to s 100 of the QCAT Act and the decision in Ralacom.19 The learned member accepted that Mr Campbell may have suffered some financial detriment as a result of the original decision. However, the learned member also referred to relevant countervailing considerations, specifically finding that the QBCC had not acted in a way that unnecessarily disadvantaged Mr Campbell and observing that the QBCC had acted at an early stage of the proceedings to reconsider the decision. In adopting this approach, the learned member gave broad consideration to the principles in Tamawood. [39] We are not persuaded there was error by the learned member. Did the learned member err in failing to find that it was appropriate to make a costs order in favour of Mr Campbell? [40] It is not unreasonable to observe that this ground of appeal is expressed in the broadest possible way. Mr Campbell’s submissions do not greatly assist in clarifying the ground. We will proceed on the basis that the error relied upon by Mr Campbell was in the exercise by the learned member of the discretion not to award costs. [41] The interference with a discretionary judgment is governed by the principles stated in House v The King:20 (a) The decision maker acted upon wrong principle; (b) The decision maker took into account irrelevant considerations; (c) The facts were mistaken by the decision maker; (d) The decision maker failed to take into account material considerations; (e) In the absence of identified error, the result is unreasonable or plainly unjust. [42] Mr Campbell’s submissions do not address the House v The King principles, nor do they identify any specific error by the learned member. [43] Mr Campbell says that his case was ‘very strong’ and that ‘(a)ll factual and contractual issues were painstakingly explained to the Commission through numerous emails and submissions’. Mr Campbell says that his claim should have been accepted by the QBCC particularly when each of the reasons for declination were comprehensively answered by his solicitors’ correspondence to the QBCC of 5 July 2018. Mr Campbell 19 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412. 20 (1936) 55 CLR 499. -- 10 of 15 -- 11 submits that ‘(q)uite simply, by that time there was no need for Review Proceedings, further delays, nor a Compulsory Conference in November 2018.’ [44] Mr Campbell relies upon two decisions of the tribunal, Schneider & Anor v Queensland Building and Construction Commission21 and Lyons v Queensland Building and Construction Commission & Dreamstarter Pty Ltd (in liquidation).22 [45] Unlike the present case, in both Schneider and Lyons the tribunal finally decided the proceedings, on the merits, and after a hearing. In Schneider the tribunal stated: The Applicants have succeeded in their application, and costs will normally follow the event. There is no reason not to apply that rule here. [46] We respectfully disagree with the statement in Schneider. Costs do not normally follow the event in review proceedings. The tribunal in Schneider made no reference to the clear contraindication against costs contained in s 100 of the QCAT Act. We do not consider Schneider assists Mr Campbell. [47] We will address Lyons later in these reasons. [48] As we have observed, relevant to the determination of costs in the proceedings below were the following considerations: (a) Did the QBCC act unreasonably in making the original decision leaving Mr Campbell with no reasonable alternative but to commence the review proceedings? (b) Notwithstanding that the QBCC might have acted reasonably in making the original decision, was Mr Campbell’s case was so strong that he was almost certain to succeed in the review proceedings? [49] The learned member did not accept that the QBCC had acted in a way that unnecessarily disadvantaged Mr Campbell although it is not immediately apparent from the reasons whether the learned member reached this conclusion based upon a consideration of the entirety of the conduct of the QBCC from the time Mr Campbell lodged the non-completion claim or whether he confined his consideration to the period after the filing of the review application. Importantly, it is not clear whether the learned member turned his mind to whether the QBCC acted reasonably in making the original decision. As the authorities to which we have referred make clear, conduct by a party before the commencement of a proceeding may be a relevant consideration in awarding costs particularly if that conduct results in the proceedings being brought. [50] It is not apparent from the reasons that the learned member took into account the matters for consideration relevant to awarding costs in circumstances where a proceeding has been brought to an early end. We conclude that the learned member 21 [2018] QCAT 412. 22 [2016] QCAT 218. -- 11 of 15 -- 12 failed to take into account relevant matters in the exercise of his discretion. The learned member thereby erred in law. [51] It follows that leave to appeal should be granted. Re-exercising the costs discretion [52] In deciding the appeal, we may set aside the decision below and substitute our own decision.23 This requires us to re-exercise the discretion to award costs. [53] We proceed from the basis that both parties acted reasonably, Mr Campbell in commencing the application and the QBCC in responding. The QBCC reversed the original decision but in making the reconsidered decision relied upon a different basis to that relied upon by Mr Campbell in the non-completion claim and that relied upon by the QBCC in the original decision. [54] There was, between the time of the original decision and the reconsidered decision, no change in circumstances. The essential facts remained the same including the facts known to the QBCC regarding the licence status of the builder. [55] As we have observed, the reconsidered decision appears to have been made on two bases: firstly, that AB Hill Constructions was not licenced at the time the Notice of Intention to Terminate was given; and secondly, that AB Hill Constructions took no steps to remedy the breach identified in the Notice in the period after the Notice was given. [56] In giving the breach notice Mr Campbell did not rely upon the licence status of AB Hill Constructions. In the reconsidered decision, although not expressly stated thus, the QBCC appears to have relied upon the application of the principle in Shepherd v Felt & Textiles of Australia Ltd.24 That principle was articulated by the Court of Appeal in Minion v Greystone25 as follows: (an) action taken must be capable of being justified at law, but that the grounds of justification, although they must have existed, need not have been known or relied upon at the time the action was taken.26 [57] AB Hill Constructions’ licence was suspended between 17 October 2017 and 31 October 2017. During this period the company was unlicensed and not permitted to perform building work. The home warranty insurance policy in effect at the relevant time was activated if a fixed price contract was properly terminated by the building owner.27 The policy provided that ‘properly terminated’ meant lawfully under the contract or at law upon the contractor’s default, which extended to the cancellation or suspension of the contractor’s licence. The subject building contract defined ‘substantial breach’ as including the cancellation or suspension of AB Hill Constructions’ licence. 23 QCAT Act, s 146(b). 24 (1937) 45 CLR 359. 25 [1990] 1 Qd R 157. 26 Ibid at 164. 27 Insurance Policy Edition 8. -- 12 of 15 -- 13 [58] As a consequence of the suspension of its licence, it seems apparent that AB Hill Constructions was in substantial breach of the contract when Mr Campbell gave the Notice of Intention to Terminate on 18 October 2017. [59] The contract provided that if, after being a Notice of Intention to Terminate, AB Hill Constructions did not rectify the breach or commence to substantially rectify the breach within 10 working days after the notice was given, Mr Campbell was entitled to terminate the contract. ‘Working days’ was defined in the contract as meaning days other than non-working days. ‘Non-working days’ was defined as meaning, inter alia, weekends. [60] The licence suspension was lifted on 31 October 2017. On 6 November 2017 Mr Campbell gave notice terminating the contract. At the time Mr Campbell terminated the contract AB Hill Constructions licence suspension had been lifted. It therefore seems that at the date of termination AB Hill Constructions was not in substantial breach of the contract, at least insofar as any such breach related to the suspension of its licence. [61] In the reconsidered decision the QBCC stated that it was satisfied that during the 10 days following the Notice of Intention to Terminate, AB Hill Constructions did not attempt to remedy or commence remedying pursuant to the Notice of Intention to Terminate. Presumably the ‘remedy’ referred to was the continuation of the building works. The reconsidered decision goes on to state that as AB Hill Constructions was not licenced during the period of the licence suspension, it was unable to carry out its contractual obligations. The reasons for the reconsidered decision state ‘I have considered the submissions (by Mr Campbell) in conjunction with the Notice of Intention to Terminate, Notice of Termination, and the Commission’s licence search of the Contractor, that there were sufficient grounds to justify (Mr Campbell’s) termination of the contract.’ [62] The reasons for the reconsidered decision do not address the fact that the period of licence suspension ended before the contract was terminated. Nor do the reasons address one of the central issues raised by the QBCC in the original decision, that is, whether the failure by AB Hill Constructions to progress the works was, of itself, a substantial breach of the contract. [63] In the notice to remedy breach, Mr Campbell relied upon the failure by the builder to bring the works to practical completion within the time stipulated by the contract and the failure by the builder to proceed with the works with due diligence. Neither of these grounds were stipulated by the contract as constituting a substantial breach. In addition to the contractual stipulations as to the circumstances constituting a substantial breach, the contract permitted a breach notice to be given by the owner if the builder was otherwise in ‘substantial breach’. The contract did not define ‘substantial breach’. For a breach to be substantial it must be of real or actual significance with respect to the important qualities of the bargain between the parties. The consequences of the conduct must be material, or important, to the substance of the contract.28 Time is generally not of the essence in a building contract. The contract between Mr Campbell and AB Hill Constructions did not stipulate that time was of 28 Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 3) [2012] VSC 99. -- 13 of 15 -- 14 the essence nor was there any evidence that, prior to giving notice terminating the contract, Mr Campbell had made time of the essence. [64] It follows from the above analysis that we are not persuaded the QBCC acted unreasonably in making the original decision. It certainly appears arguable that the failure by AB Hill Constructions to progress the building works was not a substantial breach of the contract and that, in the absence of time being made of the essence, that it was not open to Mr Campbell to terminate the contract under the general law, nor are we persuaded that Mr Campbell’s case was so strong that he was almost certain to have succeeded if the review proceeding had it proceeded to a full hearing on the merits. [65] Turning then to the matters at s 102(3) of the QCAT Act: (a) Section 102(3)(a) – we are not satisfied that the QBCC acted in a way that unnecessarily disadvantaged Mr Campbell; (b) Section 102(3)(b) – the nature and complexity of the dispute were relevant to the extent we have identified in these reasons. Otherwise, this is not a factor that compels an order for costs in favour of Mr Campbell; (c) Section 102(3)(c) – the relative strengths of the claims by the parties has been referred to in these reasons; (d) Section 102(3)(d) – there is no suggestion that the QBCC failed to afford Mr Campbell natural justice nor that Mr Campbell did not genuinely attempt to enable and help the QBCC to make the original decision; (e) Section 102(3)(e) – the financial circumstances of the parties is not a factor to which either party has referred. [66] Mr Campbell made an offer to settle before commencing the review proceedings. The terms of the offer were that the QBCC accept Mr Campbell’s claim for non- completion and indemnify him to the extent of the policy to enable the completion of the works. In addition, Mr Campbell would forego his costs. [67] As there was no decision in the review proceedings, rule 86(1) of the QCAT Rules is not engaged.29 The offer was expressed as a Calderbank offer. Calderbank offers may be considered by the tribunal in exercising the discretion to award costs.30 [68] The offer by Mr Campbell involved no element of compromise. It required the QBCC to completely capitulate. Furthermore, the offer to forego costs was illusory in the context of review proceedings where the presumption is against an order for costs. In McGee v Queensland Building and Construction Commission the Appeal Tribunal stated: Whether an offer involves a genuine compromise is a relevant matter when considering a Calderbank offer. Similarly, the nature of an offer and its context is a relevant consideration in the exercise of the discretion to award costs under 29 Queensland Building Services Authority v Johnston [2011] QCATA 265. 30 Demac Homes (Qld) Pty Ltd v Queensland Building Services Authority & Others [2011] QCAT 331; Rix v Queensland Building Services Authority [2011] QCAT 333; Queensland Building Services Authority v Johnston [2011] QCATA 265. -- 14 of 15 -- 15 the rules. An offer would ordinarily imply some element of compromise by the party making the offer. In this case there is no such aspect. The applicant simply required that the QBCC accept his position, in this case that he should be categorised as a permitted individual. The offer was, in effect, an invitation to the QBCC to capitulate completely in respect of the applicant’s claim. Such an offer does not involve a real element of compromise nor does it involve a compromise as envisaged by the words “offer to settle” in rule 86. The compromise on costs contained in the offer was illusory in circumstances where there was a presumption against an award of costs in the proceeding.31 [69] We do not consider Mr Campbell’s offer to be a factor favouring an award of costs. Conclusion and orders [70] We are not persuaded that the interests of justice require an order for costs. The appeal is refused. 31 [2018] QCATA 124. -- 15 of 15 --