Campbell v The Body Corporate for 70 Bowen St & Ors [2020] QCATA 26

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Campbell v The Body Corporate for 70 Bowen St CTS 15330 & Ors (costs) [2020] QCATA 26 PARTIES: RACHEL LEIGH CAMPBELL (appellant) V THE BODY CORPORATE FOR 70 BOWEN ST CTS 15330 HENDRIK SCHOUTEN JANINE BERGIN (respondents) APPLICATION NO/S: APL349-17 MATTER TYPE: Appeals DELIVERED ON: 24 February 2020 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Gordon ORDERS: CATCHWORDS: Rachel Leigh Campbell shall pay to Hendrik Schouten the sum of $19,500 for his costs in this appeal. This includes GST. APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – POWERS OF COURT – COSTS – where appeal from departmental Adjudicator was hopeless, yet appellant was legally represented – where appeal was argued in such a way that respondent had little choice but to engage a lawyer – whether in the interest of justice to award costs – assessment of costs on the basis of material submitted Body Corporate and Community Management Act 1997 (Qld), s 290 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102, s 106, s 107 Airstrike Industrial Pty Ltd v Robertson & Anor [2014] QCATA 209 Arcon Constructions Pty Ltd v Queensland Building Services Authority [2013] QCAT 573 Campbell v The Body Corporate for 70 Bowen St CTS 15330 & Ors [2019] QCATA 69 -- 1 of 7 -- 2 Coles v Body Corporate for Evolution Apartments CTS 38033 [2014] QCATA 21 Di Carlo v Dubois & Ors [2002] QCA 225 Legal Services Commissioner v Bone [2014] QCA 179 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Richards & Anor v Queensland Building and Construction Commission & Anor (No 2) [2019] QCAT 372 Thompson v Body Corporate for Arila Lodge (No 2) [2018] QCATA 133 Toivanen & Anor v Body Corporate for Aspect Caloundra CTS 35499 [2014] QCATA 283 Williams v Body Corporate for Circle on Cavill CTS 39918 [2013] QCATA 39 REPRESENTATION: Appellant: William Cusack, principal, Lillas & Loel Lawyers Respondent: Bugden Allen Lawyers APPEARANCES: 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 Rachel Campbell brought an appeal to the Queensland Civil and Administrative Tribunal’s (QCAT) Appeal Tribunal from a decision made by a departmental Adjudicator of the Office of the Commissioner for Body Corporate and Community Management. On 24 May 2019, the Appeal Tribunal constituted by Justice Carmody dismissed the appeal.1 On 4 September 2019 one of the parties to the appeal, Hendrik Schouten, applied to the Appeal Tribunal for an order for costs and that falls to be determined now. In brief, there are two lots in the community title scheme concerned. Ms Campbell is the owner of lot 1 having purchased it in May 2014, and Mr Schouten perhaps with one other, is the owner of lot 2. The lots were developed in 2005 and because there was common property, a body corporate was established under the Body Corporate and Community Management Act 1997 (Qld) (the BCCM). The body corporate did not work well because of disagreements between the owners of the lots. Eventually in 2015, Ms Campbell asked the Commissioner to appoint an administrator to take over the running of the scheme. That application was successful. Then two years’ later, Mr Schouten asked for the administrator to be reappointed. In a decision made by the Adjudicator on 14 September 2017, that application was also successful. Ms Campbell appealed to QCAT’s Appeal Tribunal against that decision (the decision to reappoint the administrator). The appeal to the Appeal Tribunal followed a practised course. One direction often made in such appeals, and which was made in this one, was for Ms Campbell to provide the respondents to the appeal with the appeal book, that is any documents sent 1 Campbell v The Body Corporate for 70 Bowen St CTS 15330 & Ors [2019] QCAT 69. -- 2 of 7 -- 3 to the Appeal Tribunal by the Commissioner pursuant to section 290 of the BCCM, which Ms Campbell could copy upon attendance at the tribunal. Another direction was that the appeal would be dealt with on the papers unless one side asked for an oral hearing. Ms Campbell asked for an oral hearing.2 Mr Schouten’s solicitors tried to persuade the tribunal to hear the matter on the papers, explaining that this would save costs.3 At the same time Mr Schouten’s solicitors warned Ms Campbell’s solicitors that they would seek costs on the basis that an oral hearing was unnecessary and disproportional to the matter. In bringing the appeal, Ms Campbell received legal help from her solicitor, Mr Cusack, and this was formalised on 20 August 2018 when an order was made giving leave to both sides to be legally represented. She continued to be represented by Mr Cusack in the appeal. The application for costs against Ms Campbell is made by Mr Schouten on the basis that he was disadvantaged because the appeal book she prepared was in disarray, the request for an oral hearing was unnecessary and only resulted in increased costs, and that some submissions filed on her behalf were late and prolix. It is also said that the appeal was weak. It is suggested that it is in the interests of justice to award costs because what should have been a simple appeal became overly complex and that the voluminous material which was lodged caused Mr Schouten to instruct his own lawyers. Jurisdiction to deal with costs In this application for costs, on behalf of Ms Campbell it is submitted that:- (a) the Appeal Tribunal has no jurisdiction to consider costs because Justice Carmody did not make any order with respect to costs when he gave his decision on the appeal on 24 May 2019; and (b) there is no explanation for the delay in applying for costs and so the application for costs is ‘incompetent’. These submissions are misconceived. By section 106 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) costs may be awarded at any stage of a proceeding or after the proceeding has ended. There is no time limit for bringing a costs application, although in its final decision where a party has indicated that it might apply for costs, often there will be a direction about how and when a costs application should be made. Here there was no such direction and so Mr Schouten could apply for costs at any time without needing to explain any delay.4 Considerations on the application for costs The BCCM provides a dispute resolution procedure for lot owners which commonly results in a decision by an Adjudicator as here. In such cases, only where the Adjudicator has made an error of law can the Appeal Tribunal interfere. 2 Email of 14 November 2018 in terms drafted by her solicitors. 3 Letter of 16 November 2018. 4 A substantial delay however, might give rise to arguments about waiver or estoppel, or possibly abuse of process. -- 3 of 7 -- 4 The Appeal Tribunal’s starting point for costs is that each side shall pay their own costs.5 However the Appeal Tribunal may award costs if the interests of justice require it to make the order.6 In deciding whether to award costs, the Appeal Tribunal may consider the various matters set out in the Act and anything else it considers relevant.7 The Appeal Tribunal may also award costs in certain circumstances if an offer to settle the dispute has been made but not accepted.8 That did not happen here, so the question for me to decide is whether the circumstances relevant to the discretion to award costs point sufficiently compellingly to overcome the strong contra- indication against a costs order.9 Although in Coles v Body Corporate for Evolution Apartments CTS 38033 [2014] QCATA 21 at [45], Judicial Member Hon J B Thomas said that costs are rarely ordered in these matters, he was citing sections 100 and 102 of the QCAT Act and not making a general proposition that appeals from departmental Adjudicators are any different from other types of matters before the tribunal or Appeal Tribunal. This is also demonstrated by other cases where costs have been awarded in appeals from departmental Adjudicators on the same principles as apply to other matters.10 What stands out here is that this appeal from the Adjudicator to the Appeal Tribunal was misconceived. The decision appealed against was the decision to reappoint an administrator. However in the appeal, Ms Campbell did not seriously seek to have that decision reversed. Instead, the submissions made on appeal were about whether the Adjudicator investigated the application properly to decide whether it would be appropriate to make an order on the application,11 or otherwise had made an order which was just and equitable in the circumstances to resolve a dispute about certain matters as he was empowered to do.12 There were three authorities cited on Ms Campbell’s behalf in support of the submission that the Adjudicator should have done this. Two concerned the reasonableness of motions made at general meetings.13 The third was where the Adjudicator had to decide whether a lot owner had been granted exclusive use.14 But matters of this type was not before the Adjudicator at all. Instead, the Adjudicator was being asked by Mr Schouten to reappoint the administrator because the body corporate was dysfunctional. In response, Ms Campbell opposed this on various grounds, and she referred to disputes between herself and the other lot owner and with the body corporate. But the sole question before the Adjudicator was whether or not to reappoint the administrator. Resolution of the disputes mentioned by Ms Campbell was not the Adjudicator’s task because they were not before him. 5 QCAT Act section 100. 6 Section 102. 7 Section 102(3). 8 Section 105. 9 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Justice Alan Wilson. 10 Williams v Body Corporate for Circle on Cavill CTS 39918 [2013] QCATA 39; Toivanen & Anor v Body Corporate for Aspect Caloundra CTS 35499 [2014] QCATA 283; Thompson v Body Corporate for Arila Lodge (No 2) [2018] QCATA 133. 11 A requirement of section 269 of the BCCM. 12 As set out in section 276 of the BCCM. 13 Points North [2004] QBCCMCmr 423, an application to the Commissioner seeking an order under item 10 of Schedule 5; and Ainsworth v Albrecht [2016] HCA 40. 14 Parkview Lodge [2008] QBCCMCmr 88. -- 4 of 7 -- 5 At the oral appeal hearing, Justice Carmody examined this question with Ms Campbell’s solicitor closely. In response, there was not, and could not be, any sensible submission that what was being argued could succeed in the appeal.15 Instead, Ms Campbell’s solicitor seemed to say that the appeal was an opportunity to try to find a negotiated settlement of the underlying disputes.16 The inevitable result of the appeal was that the Appeal Tribunal would find that the Adjudicator did not make an error of law when he did not investigate or resolve the disputes mentioned by Ms Campbell.17 Faced with an obviously unmeritorious appeal, someone in Mr Schouten’s position might take advice and be advised that they could probably handle the matter without legal representation, bearing in mind QCAT’s attempts to ensure that non-represented parties are not at a disadvantage in such matters. Here however, Ms Campbell’s solicitors filed a submission in the appeal of such complexity and length that Mr Schouten decided to engage his own solicitors. He says in his affidavit filed on the question of costs:- On around 17 September 2018, I was served with a copy of the Respondent’s submissions for the Appeal. The submissions were prepared by the Respondent’s solicitor and were over 37 pages long with 171 pages of supporting material attached. A true copy of the submissions appears at pages 16 to 52 of HMS-1. I have (sic) been self-acting earlier in the proceedings, however, after receipt of the submissions, I could no longer handle managing the Appeal proceedings by myself while working at my job and I was required to engage Bugden Allen Lawyers (formerly trading as Bugden Legal) as my legal representatives. I accept this evidence. Mr Schouten’s decision to engage his own solicitors was not at all surprising and in my view having read the submissions, was entirely reasonable. The submissions made numerous references to the BCCM. Sometimes the citations were extracted and set out in the submissions and sometimes they were not. The submissions also cited the Building Units and Group Titles Act 1980 (Qld). There were 9 cases cited in the submissions and copied in full. A non-lawyer would find the submissions quite daunting. In the submissions made on behalf of Mr Schouten it is said that Ms Campbell should be ordered to pay costs because he was disadvantaged because of the way the appeal book was put together, because of material filed late and because of the request for an oral hearing. Whilst I agree that these matters could have been handled better by Ms Campbell or by her solicitors, by themselves they would be insufficient to lead to success in this costs application. The central issue here is the fact that the appeal had no merits whatsoever, and the way in which it was argued left Mr Schouten little choice but to instruct his own solicitors and incur his own legal costs. I have also taken into account Mr Schouten’s 15 In particular, transcript 1-25 line 34 to 1-27 line 32, 1-52 line 36 to 1-55 line 4. 16 Transcript 1-17 line 7, 1-21 line 35, 1-26 line 40, 1-27 line 9, 1-28 lines 17 and 30. 17 As found by Justice Carmody - the Adjudicator was not bound to inquire into or make findings about the cause of the body corporate’s dysfunction, how it arose or who is to blame for it: [37]. Hence if there was a failure to do so, this did not disclose an error of law on the part of the Adjudicator. -- 5 of 7 -- 6 means as stated in his affidavit in exercising my discretion. This is a clear case where it is in the interests of justice to make an award of costs. Assessment of costs Section 107 of the QCAT Act requires the tribunal to assess costs if possible. Here it is possible to do so because evidence has been filed proving the solicitor client costs charged to Mr Schouten and to the other co-owner of the lot.18 The costs are claimed on the indemnity basis. The total bill is $29,562.94 including GST. There is evidence that ‘costs on the indemnity basis usually equate to around 80% or 90% of the actual costs incurred’.19 On that basis a claim of $23,650.35 is made, being 80% of the actual costs. The submissions from Ms Campbell about the costs application are solely about whether an award should be made, not about the amount if an order is made. My task in assessing the costs is to find an amount which is reasonable and appropriate in all the circumstances of the case.20 On the question whether costs should be awarded on the indemnity basis, I am mindful of the Court of Appeal’s warning in Di Carlo v Dubois & Ors [2002] QCA 225 that awarding costs on the indemnity basis should not be seen as too readily available and requires some facts of the type set out in the authorities. I am looking for some special or unusual feature which would justify an award of costs in the indemnity basis. Simply instituting and maintaining proceedings which had no or substantially no prospect of success is insufficient.21 Although this application for costs comes close to satisfying the test, I do not think it quite does so, because although the appeal was unmeritorious and this should have been obvious to those presenting it, there is nothing showing that this was in fact understood. Instead, I think costs should be awarded on the standard basis. In the absence of evidence about the usual result of a standard basis assessment, so that this matter can be resolved without formality, I think it is right to apply a degree of judicial notice, supported by some tribunal decisions, enabling me to say that the reasonable solicitor-client costs should be reduced by a little more than one-third.22 I can see from the bills that work was done at $320 plus GST per hour for the fee earner who spent most time on the file, and $450 plus GST per hour for the principal solicitor who also attended the hearing. Another fee earner did some work at $250 plus GST. Although the costs agreement has not been put in evidence, I shall infer from the bills that the hourly rates accord with the costs agreement. The hourly rates seem to be reasonable. Comparing the time spent on each items of work as disclosed by the bills with my inspection of the file and the evidence about the work done which has been filed, I am satisfied that the time spent in dealing with the appeal was reasonable. From 11 June 2019 there were also costs incurred in preparing for the costs application. Costs applications in the tribunal and Appeal Tribunal inevitably require 18 Although no application for costs is made by the other co-owner of the lot, it is clear that the bill is addressed to them jointly (they each owe the total of the bill). 19 Affidavit of Yi-Chia (Stella) Lee of 4 September 2019 paragraph 20. 20 Arcon Constructions Pty Ltd v Queensland Building Services Authority [2013] QCAT 573. 21 Legal Services Commissioner v Bone [2014] QCA 179, [67]-[71]. 22 As in Airstrike Industrial Pty Ltd v Robertson & Anor [2014] QCATA 209; Thompson v Body Corporate for Arila Lodge (No 2) [2018] QCATA 133, [59]; Richards & Anor v Queensland Building and Construction Commission & Anor (No 2) [2019] QCAT 372, [64]. -- 6 of 7 -- 7 more work in the first instance then an application for costs in a forum where costs follow the event. The costs incurred seem reasonable. The reasonableness of the bill is supported by the fact that there is no uplift for care and conduct and very few disbursements. $29,562.94 reduced by a little more than one-third is $19,500. I order Ms Campbell to pay this amount to Mr Schouten for costs. This sum includes GST. -- 7 of 7 --