Airstrike Industrial Pty Ltd v Robertson & Anor [2014] QCATA 209

CITATION: Airstrike Industrial Pty Ltd v Robertson & Anor [2014] QCATA 209 PARTIES: Airstrike Industrial Pty Ltd (Applicant/Appellant) v Charles Robertson Janice Robertson (Respondents) APPLICATION NUMBER: APL144-13 MATTER TYPE: Appeals HEARING DATE: 22 July 2014 HEARD AT: Brisbane DECISION OF: Senior Member Oliver Member Deane DELIVERED ON: 7 August 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. Charles Robertson and Janice Robertson pay Airstrike Industrial Pty Ltd its costs of the appeal fixed in the sum of $36,160 by 4:00pm on 31 October 2014. CATCHWORDS: APPEALS – COSTS - where appeal allowed – whether in the interests of justice to award costs Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 48, s 100, s 102, s 106, s 107 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86 Property Agents and Motor Dealers Act 2000 (Qld), s 574 Civic Steel Homes v Mitra [2006] QDC 322 Leo v Paulsen [2010] QCAT 122 Tamawood Ltd V Paans [2005] 2 Qd R 101 Stuart Homes and Renovations v Denton [2012] QCAT 43 -- 1 of 6 -- 2 APPEARANCES and REPRESENTATION (if any): APPLICANT: Airstrike Industrial Pty Ltd represented by Mr BT Heath, solicitor of Carter Newell Lawyers RESPONDENT: Charles Robertson and Janice Robertson represented by Mr M Steele of Counsel instructed by McLaughlins, Solicitors REASONS FOR DECISION [1] Airstrike Industrial was successful in its appeal1 and now applies for an order for costs both in respect of the appeal proceedings and the original conduct of the matter before the Tribunal to be fixed in the sum of $150,000. [2] The Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) provides ‘Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceedings.’2 [3] It is well established that the principle applicable in the Courts that costs ‘follow the event’ is displaced by the provisions of the QCAT Act. However the Tribunal can award costs if it is satisfied that it is in the interests of justice to do so. [4] Section 102(3) sets out some factors which may be considered in the exercise of the Tribunal’s discretion to award costs. Whether a party is acting in a way that unnecessarily disadvantages another party3 [5] We are not satisfied that this is a factor in favour of an award of costs either in respect of the proceedings below or the appeal. [6] Airstrike brought three applications in the original proceeding to strike out the Robertsons’ claim due to the Robertsons’ failure to comply with directions in a timely manner or failure to prosecute the matter. Each of those applications did not succeed in bringing the application to an end. No costs order was made as part of the outcome of any of those applications. An order was made that the Robertsons pay Airstrike $300 in respect of a directions hearing held on 31 January 2011 at which directions were made to facilitate the determination on an application to strike out the Robertsons’ claim. [7] A matter which must be established is whether any disadvantage to Airstrike was ‘unnecessary’ as distinct from a disadvantage experienced in the usual course of a dispute proceeding. Despite the Tribunal’s best 1 21 March 2014. 2 QCAT Act s 100. 3 Ibid s 48(1)(a)-(g), s 102(3)(a). -- 2 of 6 -- 3 efforts to ensure there is compliance with procedural directions it is not unusual for parties to fail to comply for a variety of reasons. [8] We are not satisfied that the Robertsons’ failure to comply with directions and progress the application in a ‘timely’ manner caused unnecessary disadvantage to Airstrike. [9] Airstrike also contends that the Robertsons caused it a disadvantage by the way they claimed damages for the alleged misrepresentation. They in effect claimed damages for loss relating to the purchase of the industrial unit on two basis. Firstly what was termed the hypothetical loss case and secondly, a no transaction case. This necessitated Airstike having to get expert evidence from valuers to assess the hypothetical loss case. Airstrike unsuccessfully applied to strike out the alternative claim4 in the weeks before the original hearing. The Tribunal made orders designed to cause the Robertsons to elect which of the two damages cases they were going to rely on at the hearing. Because of some equivocation on their part, Airstrike says it had to prepare for both. [10] As it happened, the hypothetical loss case was not pursued at the original hearing. There was some agreement reached between the lawyers that if the possibility of the Robertsons buying the property at a reduced price was not raised in cross-examination then the Robertsons would not pursue the alternative claim. This alleviated the need for the valuers to attend the hearing. [11] Although the Robertsons’ conduct here was not altogether satisfactory, the agreement reached as to how the hearing was to progress on damages shortly before the hearing, was a genuine attempt to reduce the costs of the hearing. It is not unusual for parties to make agreements shortly before a hearing to reduce costs. We are not satisfied that the Robertsons’ conduct ‘unnecessarily’ disadvantaged Airstrike. [12] There are no such matters relied upon in respect of the conduct of the appeal. The nature and complexity of the dispute5 [13] This is a factor in favour of an award of costs of the appeal. [14] The dispute was essentially as to whether the statements made by Mr Salt constituted a contravention of s 574 of the Property Agents and Motor Dealers Act 2000 (Qld) giving rise to a claim against the statutory fund. The analysis of the statutory provisions required was not overly complex. There was little dispute as to the facts. [15] The Application for leave to appeal or appeal involved complex issues of law in assessing whether or not an error of law or mixed law and fact exist 4 Application dated 17 July 2012. 5 QCAT Act s 102(3)(b) -- 3 of 6 -- 4 and whether there are issues of general importance justifying leave being granted. Relative Strengths of the claims6 [16] This is a factor in favour of an award of costs. [17] Airstrike had strong grounds for overturning the finding at first instance. However a claim is not vexatious simply because it is not a strong case or the claim wholly fails7. The financial circumstances of the parties8 [18] This is not a factor in favour of an award of costs. [19] On the evidence the Robertsons’ have: a) limited means of earning an income through personal exertion due to their age and in respect of Mr Robertson also due to his health; b) a residence with a substantial mortgage. The debt secured is estimated at a little under two thirds of the estimated value of the property; c) the property the subject of the dispute which they are actively trying to sell although they have received little interest; d) the business operated from the property the subject of the dispute which is trading at a loss and from which no drawings, salary or wages are being paid to them; e) investments in shares directly and through a superannuation fund which they rely upon for an income in terms of dividends and proceeds from sale of shares; f) incurred legal costs in the order of $130,000 in these proceedings. [20] There is no evidence of the financial position of Airstrike although it is apparently a successful real estate agency and incurred legal costs in the order of $206,000 in these proceedings. Anything else the tribunal considers relevant9 [21] The parties were both legally represented at the original hearing and on appeal. [22] If a costs order is not made Airstrike’s success will be eroded through legal costs. This is a factor in favour of an award of costs but not determinative.10 6 Ibid s 102(3)(c). 7 Civic Steel Homes v Mitra [2006] QDC 322; Leo v Paulsen [2010] QCAT 122. 8 QCAT Act s 102(3)(e). 9 Ibid s 102(3)(f). -- 4 of 6 -- 5 [23] The evidence is that Airstrike has incurred legal costs in excess of $206,000 which is to be contrasted against the amount ordered to be paid at first instance in the sum of $200,000 and against the legal costs incurred by the Robertsons’ of about $130,000. Airstrike chose to engage Queens Counsel to assist it on the appeal. While the matter was significant to Airstrike not only in dollar terms but also because it had potential professional disciplinary and reputational implications we do not consider it appropriate for the Robertsons’ to bear the consequences of that choice. [24] We are not satisfied that there were any novel implications for the real estate industry as a whole arising out of the decision at first instance which in itself would constitute a matter in the ‘interests of justice’ that the appeal be prosecuted. [25] A factor which may be relevant is whether or not either party sought to protect itself through the making of offers to settle.11 During the course of the costs hearing we indicated that this was a factor which may be relevant to the exercise of our discretion. No submissions about settlement offers were made in the written submissions received prior to the costs hearing or made orally at the costs hearing and no party sought directions to facilitate any additional submissions in this regard. [26] On balance the factors are in favour of the award of an order for costs in respect of the appeal but not of the matter at first instance. [27] The Tribunal is to fix the costs if possible.12 [28] Airstrike’s solicitor has given evidence of the actual costs incurred including counsel’s fees.13 Actual costs incurred during the period after the decisions below were published were as follows: Professional Fees Inc GST $23,357.06 Disbursements Inc GST $ 1,182.50 Sub -Total $24,539.56 Counsel’s Fees $44,000.00 Total $68,539.56 [29] Airstrike submitted that we should fix costs within a range of 60% - 80% of its actual costs. The Robertsons’ solicitor gave evidence that he estimated that the District Court Scale would approximate two thirds of his clients’ actual costs. Having regard to these matters we accept that Professional 10 Tamawood Ltd v Paans [2005] 2 Qd R 101; Stuart Homes and Renovations v Denton [2012] QCAT 43. 11 QCAT Act s 105; Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘QCAT Rules’) r 86. 12 Ibid s 107. 13 Affidavit Brett John Heath filed 29 April 2014. -- 5 of 6 -- 6 Fees and Disbursements (except Counsel’s fees) should be fixed at two thirds of Airstrike’s actual costs. [30] In respect of counsel’s fees the evidence is that Mr Steele charged on average $3,300 per day. We accept that daily rate is a reasonable rate for counsel in a matter of this nature. [31] We fix the costs in the sum of $36,160 calculated as follows: Professional Fees and Disbursements Inc GST $16,36014 Counsel’s fees $19,80015 [32] Given the financial circumstances of the Robertsons’ it is appropriate to give an extended time for payment. 14 $24,539.56 x 2/3 = $16,359.71. 15 Mr Perry’s appears to have charged for 6 days (generally at a rate of $7,700) x $3,300. -- 6 of 6 --