Earth Spirit Homes Pty Ltd v Nichols [2014] QCATA 259

CITATION: Earth Spirit Homes Pty Ltd v Nichols [2014] QCATA 259 PARTIES: Earth Spirit Home Pty Ltd (Applicant/Appellant) v George Nichols (Respondent) APPLICATION NUMBER: APL235-13 MATTER TYPE: Appeals HEARING DATE: 9 December 2013 HEARD AT: Brisbane DECISION OF: Justice Thomas, President Member Roney DELIVERED ON: 17 September 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. The matter of costs is remitted to the tribunal for determination. CATCHWORDS: APPEAL – LEAVE TO APPEAL – COSTS – where tribunal made decision as to cost of proceeding below – where parties not given opportunity to make submissions on costs – where evidence of Calderbank offer – whether costs order sufficient – whether substantial injustice – whether grounds for leave to appeal Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142, s 146 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86 Chesterton as Administratrix of the estate of Southion Deceased v Smith & Anor [2011] QCAT 458, cited Pickering v McArthur [2005] QCA 294, applied Ricchetti v Lanbuilt Pty Ltd [2012] QCATA 111, cited -- 1 of 3 -- 2 APPEARANCES and REPRESENTATION (if any): APPLICANT: A B Wallace, instructed by Hemming+Hart Lawyers RESPONDENT: M Martin QC, instructed by Mills Oakley Lawyers REASONS FOR DECISION [1] APL235-13 is an appeal from the builder, Earth Spirit, (respondent in proceedings APL236-13) of the tribunal’s decision dated 8 May 2013. [2] In summary, the appellant appeals against order 7 of the decision of 8 May 2013, on the basis that the Member erred in making a determination as to costs without allowing the parties to make submissions as to the appropriate cost order to make. [3] Whether parties were afforded an opportunity to make submissions with regard to an issue upon which they should have been heard essentially raises the question whether the parties were afforded natural justice, and is a question of law. [4] Normally, a party who appeals a decision of the tribunal on a question of law would not require the appeal tribunal’s leave to appeal. However section 142(3)(a)(iii) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act) provides that an appeal against a cost order may only be made if the party has obtained the appeal tribunal’s leave to appeal. [5] Leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.1 [6] For the reasons which follow, we are satisfied that leave to appeal should be granted, and the appeal allowed. [7] Order 7 of the Tribunal’s decision reads: 7. George Nichols must pay to Earth Spirit Home Pty Ltd the costs of these proceedings to be agreed on the District Court Scale of Costs, or failing agreement: (i) Earth Spirit Home Pty Ltd must file in the Tribunal and give to George Nichols a short form assessment of costs together with any submissions on the amount of costs payable by 10 June 2013. 1 Pickering v McArthur [2005] QCA 294 at [3]. -- 2 of 3 -- 3 . (ii) George Nichols must file and give to Earth Spirit Home Pty Ltd any submissions in reply by 24 June 2013. (iii) The amount of the costs payable by George Nichols will be determined on the papers without an oral hearing. [8] Each party has filed detailed submissions as to the costs. [9] The controversy as to the costs order centres around an offer to settle, and whether the contents of that offer ought to have been considered, and would have impacted the learned Member’s exercise of discretion with respect to costs. [10] The appellant says that the offer should have been considered by the Member because such offers enliven the tribunal’s power to award indemnity costs. (The learned Member awarded costs only on a standard basis.) The appellant submits that rule 86 of the QCAT Rules is relevant. [11] The respondent’s position with respect to the offer is to say it was not one reasonably capable of acceptance and therefore it does not impact the costs order. [12] The tribunal has previously accepted that a Calderbank offer may be considered when exercising its discretion to award costs.2 [13] In view of the existence of the offer, and the fact that offer was relevant to the exercise of the discretion, the parties should have been allowed the opportunity to make submissions as to the costs issue, and the failure to do so was a failure to afford natural justice. [14] Under s 146 of the QCAT Act, the appeal tribunal may remit the matter back to be heard again by the original Member. [15] As the learned Member made the finding about the absence of intention to create legal relations, and in view of its centrality to the argument about the conditional offer, the issue ought be remitted back to the learned Member. [16] We grant leave to appeal, allow the appeal and remit the costs issue back to the learned Member for determination. 2 See, for example, Chesterton as Administratrix of the estate of Southion Deceased v Smith & Anor [2011] QCAT 458 at [ 25]. See also Ricchetti v Lanbuilt Pty Ltd [2012] QCATA 111 at [31]-[47] . -- 3 of 3 --