Body Corporate for Hilton Park CTS 27490 v Robertson (No 2) [2019] QCATA 59

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Body Corporate for Hilton Park CTS 27490 v Robertson (No 2) [2019] QCATA 59 PARTIES: BODY CORPORATE FOR HILTON PARK CTS 27490 (appellant) v COLIN ROBERTSON (respondent) APPLICATION NO/S: APL215 -17 MATTER TYPE: Appeals DELIVERED ON: 9 April 2019 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member King-Scott ORDERS: The Tribunal: 1. Orders the Appellant to pay the Respondent’s costs fixed at $23,000.00 by 4.00 pm on 10 May 2019. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS –POWER TO AWARD GENERALLY – STATUTORY BASIS GENERALLY – where party legally represented in appeal – consideration of whether ‘interests of justice’ require making of order for costs – consideration of s 102(3) of Queensland Civil and Administrative Tribunal Act 2009 (Qld) the complexity of the matter – the strength of the Respondent’s position and its ultimate success – the party’s conduct of the dispute Body Corporate and Community Management Act 1997 (Qld) Commercial and Consumer Tribunal Act 2003 (Qld) Queensland Civil and Administrative Tribunal Act 2009 (Qld) Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 Estens v Owners Corporation SP 11825 [2017] NSWCATCD 63 Malay Industries Pty Ltd v Queensland Building Services Authority [2010] QCAT 310 -- 1 of 7 -- 2 Maran Corporation v Body Corporate for Four Corners at Willow Brook Park [2013] QCAT 219 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Tamawood Limited v Paans [2005] 2 Qd R 101 Turner v Macrossan & Amiet [2016] QCAT 255 REPRESENTATION: Appellant: Cleary Hoare Solicitors Respondent: D D Keane, instructed by Sykes Pearson Miller 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 [1] On 8 November 2018, this Tribunal dismissed the Appeal from the Adjudicator’s decision of 26 May 2017 declaring Motion 14 of the Annual General Meeting held on 10 February 2017 invalid and of no effect. [2] The Respondent seeks payment of his costs fixed in the sum of $35,114.40. He seeks a further order pursuant to s 314 of the Body Corporate and Community Management Act 1997 (Qld) (‘BCCMA’) that he be excluded from any levy of the Appellant to meet the costs order, so that the costs are paid pro rata by the other Lot owners of the Appellant. [3] The Appellant has previously imposed a special levy, of $2,000, which the Respondent has paid, for the Appellant’s anticipated legal costs of conducting the appeal. I am advised that the $2,000 is included in the sum sought of $35,114.40. [4] Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) provides that ordinarily parties are to bear their own costs. That is modified by section 102 of the QCAT Act which is as follows: 102 Costs against party in interests of justice (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. (2) However, the only costs the tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section. (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); -- 2 of 7 -- 3 (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.” [5] Section 107 of the QCAT Act provides that costs should be fixed if at all possible. The Appellant’s submissions [6] The Appellant submits that the parties ought to bear their own costs in this proceeding pursuant to s 100 of the QCAT Act, as is the usual course. It further submits that Respondent's request for an order pursuant to s 314 of the BCCMA be rejected. [7] Having identified the principles to be applied under s 102(1) of the QCAT Act the Appellant submits: (a) It did not act in a way as to unnecessarily disadvantage the appellant; (b) The dispute was not unduly complex as the only complexity was the correct interpretation of ‘residential’, ‘residential purposes’, ‘residential use’ and ‘type’ as found in the BCCMA and whether previous authority was correct; (c) Under other relevant factors: (i) As 7 out of 10 lot owners desired to commence the proceeding, that demonstrates that the appellant was carrying out its statutory functions properly and in the interests of the majority of lot owners; (ii) Had the respondent produced documents including and advice on the impact of by-law 12.1.1 that he relied upon to purchase the Unit 7 the appellant might have taken a different stance; (d) There are no grounds upon which the respondent can be absolved or released from his liability for his share of the appellant’s expenses, particularly when such expenditure was approved by the majority of lot holders. The Respondent’s submissions [8] The Respondent submits that there a number of factors which dictate that an award of costs in favour of the Respondent is in the interests of justice, being: (a) the complexity of the matter; (b) the strength of the Respondent’s position and its ultimate success; and -- 3 of 7 -- 4 (c) the Appellant’s conduct of the dispute. [9] It is submitted that this was a complex case, which raised various issues of statutory construction and where the Appellant raised a number of extraneous but complicated legal quandaries. Both parties were legally represented. It is further argued that a failure to award costs would erode the success of the outcome for the Appellant. [10] In respect of the relative strengths of the case the Respondent makes the following observations. The decision of the Tribunal reflects both the letter of the Respondent’s solicitors to the Secretary of the Appellant dated 9 February 2017, the day prior to the AGM and confirmed the decision of the Adjudicator. Given this, it is argued that the Appellant was aware from before the Appeal was commenced that there were difficulties with the Appellant’s case. The Appellant did not respond by seeking a considered legal opinion but rather embarked on the proceedings. [11] It is submitted that the Appellant did not seek any considered independent legal advice about the basis for defending the motion, either before the adjudicator or prior to commencing the present appeal. The Respondent referred to Estens v Owners Corporation SP 118251 where General Member Ringrose, observed: … any motion to defend an order relating to a letting by-law should be considered on a legal basis after informed discussion rather than on the basis of a desire to have such a by-law enforced. [12] The Respondent makes the following submission on this point: The appellant did not commence the proceedings, or levy the legal fees to run the proceedings, in a regular manner. It did not engage or receive considered legal advice which could be discussed by the respective lot owners at the Extraordinary General Meeting necessary to commence proceedings. The Appellant failed to get considered legal advice despite the Respondent moving a motion in the following terms: Motion 1. That the Body Corporate obtain two (2) written quotes for the provision of independent legal advice from a legal firm not associated with any member of the Body Corporate, but which has demonstrated expertise in Body Corporate matters, in respect to future legal matters which may affect the Hilton Park Body Corporate and these quotes be presented at an EGM for members to vote on the choice of legal representation. Motion 2. That if the above motion is carried, all future legal issues will be presented to the selected legal firm, their services will be retained, and their advice will be presented to the Body Corporate before the Body Corporate takes any steps in the matter.” This motion was lost at the AGM of 15 December 2017. It was incumbent on the Appellant acting reasonably to obtain this independent legal advice. 1 [2017] NSWCATCD 63, [25]. -- 4 of 7 -- 5 Discussion [13] In Turner v Macrossan & Amiet2 Justice Carmody considered the nature of the power the Tribunal is to exercise in determining whether to award costs and said: [25] The QCAT Act provides that each of the parties should, as a general rule, bear their own costs. However, the Tribunal may make an order requiring a party to pay all or part of the stated costs of another party to a proceeding if the Tribunal considers the interests of justice require it to make such an order. [26] The prescribed condition precedent to ordering costs, the “interests of justice”, does not require the circumstances to be exceptional, special, or extraordinary. It is sufficient if the circumstances are such that it would not be just or equitable to the successful party to deny them costs. [27] This jurisdiction, of course, must be exercised judicially. Albeit vague, notions such as “interests of justice” are no excuse for the selective invocation of the idiosyncratic or personal values or beliefs of the decision-maker. The power to order costs proceeds from the fount of law; the source of that which is regular should not also be the source of that which is capricious. [28] Accordingly, the decision-maker must properly consider that the Parliament has prescribed that each party bears their own costs. There must be some aspect or feature of the case, which does not appear within the ordinary category of such matters, that justifies a departure from the common rule. [14] The comments of Wilson J the then President of QCAT in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)3 are apposite. He said: [33] The Tribunal is of the view that legal representation was required to ensure that the respondent secured a just result, having regard to the matters in dispute. Although this finding is not conclusive, it remains a significant factor in resolving the subject matter of the costs application. [34] On balance, the novelty and complexity of the proceedings, relative strength of the respondent’s case and weakness of the applicant’s claim, and the fact that legal representation was required to achieve a just result, militate strongly in favour of ordering costs in favour of the respondent.’ [15] Although, the issues to be determined involved statutory construction of the BCCM Act and preceding legislation it was of a degree of complexity to warrant legal representation. I note the comments of Keane JA (as he then was) in Tamawood Limited v Paans,4 a case which concerned the costs provisions of the Commercial and Consumer Tribunal Act 2003 (Qld) similar to those now contained in the QCAT Act. His Honour said: [31] There will inevitably be occasions when the aspirations of the legislature that parties before the Tribunal should not be legally represented cannot reasonably be met having regard to the nature of the issues involved. That this is so is recognized by the terms of s 73 which deals with the topic of representation. It provides: 2 [2016] QCAT 255. 3 [2010] QCAT 412. 4 [2005] 2 Qd R 101. -- 5 of 7 -- 6 73 Purposes of div 7 The main purpose of this division is to have parties represent themselves and save legal costs unless the interests of justice require otherwise. [32] If orders for costs were not to be made in favour of successful parties in complex cases, then just claims might not be prosecuted by persons who are unable to manage complex litigation by themselves. Such a state of affairs would truly be contrary to the interests of justice; and an intention to sanction such a state of affairs cannot be attributed to the legislature which established the Tribunal. [33] To say this is not to ignore s 71(5)(b) of the Act. 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. Finally, in this regard, it should also be borne in mind that s 71(4)(a) of the Act expressly recognizes that "the outcome of the proceeding" is a consideration which is relevant to the exercise of the discretion conferred by s 71(1) of the Act.’ [16] In the exercise of my discretion, I consider a cost order should be made in favour of the Respondent. It is in the interest of justice that an order should be made. Although, the Respondent and his wife purchased the Unit 7 with the knowledge of the by-law he was entitled to challenge it. He was successful in that challenge not only before the Adjudicator but also before this Tribunal. The Appellant was always minded to ‘protect its position’, irrespective of the Respondent’s suggestions and advices. They were entitled to do so, but in my opinion, they cannot now avoid the consequences of the path they chose to follow. Not to award costs would seriously erode the effect of the Respondent’s success in the case. [17] Although, I am also of the opinion that the Appellant should not be required to bear the costs of the levy and portion of costs awarded against him, I have no jurisdiction to make such an order. Section 314 of the BCCM Act allows only a court to make such an order. I am limited in the orders that I can make to orders that the adjudicator who made the order appealed from had jurisdiction to make.5 An adjudicator does not have jurisdiction to make the orders sought.6 The exception is that 294 (2) does not limit the power of the appeal tribunal to award costs for a proceeding under the QCAT Act.7 There is no jurisdiction under the QCAT Act that empowers me to make the orders sought, a fortiori where there is an express power in the BCCM Act for a court to do so. 5 Section 294 of the BCCM Act. 6 See Schedule 5 of the BCCM Act. 7 Section 294 (3) of the BCCM Act. -- 6 of 7 -- 7 Indemnity costs and what scale? [18] It remains to be determined on what scale costs should be awarded and whether costs should be awarded on an indemnity basis. [19] The Respondent refers to the decision of Colgate-Palmolive Co v Cussons Pty Ltd8 where various factors that might warrant an indemnity costs order were considered. Generally, those factors involved some irresponsible conduct on the part of the unsuccessful party. In my opinion, although the behaviour of the Appellant in ignoring the advices of the Respondent and his attempts to have the Appellant obtain an independent legal opinion, I do not think the Appellant’s conduct reaches that threshold. I decline to award costs on an indemnity basis. [20] The District Court Scale, generally, is considered appropriate to tribunal decisions.9 I propose to award costs on the District Court scale. [21] I accept the Respondent’s assessment and fix the costs at $23,000.00 which excludes the levy of $2,000.00 that the Respondent was required to contribute to the litigation fund. [22] I order the Appellant pay the Respondent costs fixed at $23,000.00 by 4.00 pm on 10 May 2019. 8 (1993) 118 ALR 248. 9 Malay Industries Pty Ltd v Queensland Building Services Authority [2010] QCAT 310, and more recently Maran Corporation v Body Corporate for Four Corners at Willow Brook Park [2013] QCAT 219, [43]. -- 7 of 7 --