De Berry v Principal Body Corporate for Hope Island Resort [2014] QCATA 19

CITATION: De Berry v Principal Body Corporate for Hope Island Resort [2014] QCATA 19 PARTIES: Jeanette De Berry and Duncan De Berry (Appellants) v Principal Body Corporate for Hope Island Resort (Respondent) APPLICATION NUMBER: APL306-13 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Judicial Member Dodds DELIVERED ON: 6 February 2014 DELIVERED AT: Brisbane ORDER MADE: Application refused. CATCHWORDS: APPEAL – LEAVE TO APPEAL – COSTS ORDER – BUILDING DISPUTE - where leave given to the parties to make submissions about costs - where applicants were ordered to pay the respondent‟s costs – whether Tribunal erred in law Building Units and Group Titles Act 1980 (Qld), Part 5 Integrated Resort Development Act 1987 (Qld), s 177 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 3, s 100, s 102, s 142 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 85 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Zachary Developments Pty Ltd v Turner & Anor [2012] QCATA 86. -- 1 of 10 -- 2 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). REASONS FOR DECISION [1] In these reasons I will refer to the Queensland Civil and Administrative Tribunal Act 2009 (Qld) as „the QCAT Act‟, a tribunal under the QCAT Act as „the Tribunal‟ and to the respondent Principal Body Corporate for Hope Island Resort as „PBC‟. [2] This is an application for leave to appeal a costs order made by the Tribunal on 18 June 2013. The applicants were ordered to pay the costs of the respondent PBC, plus outlays fixed at $14,066 from a proceeding commenced by PBC in the Tribunal arising out of a breach by the applicants of a development approval. [3] On 5 March 2013 orders had been made by the Tribunal in PBC‟s favour, on its application, including an order the parties have leave to make submissions regarding costs (the primary decision). PBC‟s application had sought, along with the principal relief which it obtained, an order the applicants pay its costs of and incidental to its application. [4] A costs order can only be appealed against if the applicant has obtained the Appeal Tribunal‟s leave.1 [5] When considering whether leave should be granted it is well established an Appeal Tribunal is guided by the following considerations: a) Is there a reasonably arguable case of error on the part of the Tribunal such that an appeal is necessary to correct a substantial injustice to the applicant; b) Is there a reasonable prospect the applicant will obtain substantive relief; c) Does the primary decision for which leave to appeal is sought expose a question of general importance upon which a decision of the Appeal Tribunal would be to the public advantage. [6] It will be necessary to consider the circumstances of the primary decision and the Tribunal‟s reasons for its costs order. The Application for Leave [7] Attached to the application for leave is an annexure containing submissions under the heading „Grounds of Appeal‟. These are repeated with some additions in written submissions of the applicants supplied to the Tribunal. 1 QCAT Act s 142(3)(a)(iii). -- 2 of 10 -- 3 [8] There appear to be three main themes to the „Grounds of Appeal‟ in the applicant‟s submissions: a) Sections 100 and 102 of the QCAT Act were not correctly applied by the Tribunal in awarding costs. This amounted to an error of law; b) The reasons of the Tribunal for awarding costs contain a number of inconsistencies which render the decision factually wrong; c) The Tribunal Member erred in granting leave to the parties to make submissions regarding costs in its decision of 5 March 2013. Background [9] Much of the background which follows is taken from the primary decision. [10] The applicants Jeanette and Duncan De Berry at all material times were residents of Riverleigh Gardens Resort, part of Hope Island Resort. [11] Their property had been the subject of a development approval in 2007. PBC‟s authority to regulate the development derived from the provisions of the Integrated Resort Development Act 1987 (Qld). PBC is the Principal Body Corporate for the Hope Island Resort. According to the applicants‟ development approval, a front masonry wall was to be positioned at an approximate 6 metre setback from the front boundary of the property in line with the front elevation of the house. [12] Construction of the applicants‟ property was completed in approximately November 2008. The front masonry wall was constructed past the front elevation of the house at a 2.1 metre setback from the boundary. The applicants were aware the location of the wall would not comply with the development approval and would contravene the Hope Island Development by-laws. [13] On 7 June 2011 Cambridge Management Services wrote to the applicants on behalf of PBC as follows: We have been instructed by the PBC for the purposes of advising that the relaxation sought to allow for the masonry fences in question to remain has not been approved by the PBC. Prior to the matter being taken to the Queensland Civil and Administrative Tribunal (QCAT) it is to be referred back to Riverleigh Gardens Body Corporate as its residents are the most affected, requesting that if Riverleigh Gardens Body Corporate Committee wishes for a relaxation to leave the non-compliant fencing in its current position, then a motion must be approved by ordinary resolution at a general meeting of the Riverleigh Gardens Body Corporate. ---- The PBC believes in the circumstances that a reasonable period in which to hold a committee meeting to review the matter and if felt appropriate the calling and holding of a general meeting can easily be achieved within 90 days. The PBC therefore provides you with a 90 day period to achieve the above noting that if confirmation of approval is not received by Riverleigh Gardens Body Corporate within the specified time frame the matter will be referred to QCAT for its determination. -- 3 of 10 -- 4 [14] On 15 August 2011 Riverleigh Gardens at its annual general meeting resolved: Moved that the residents of Riverleigh Gardens Body Corporate endorse a minor relaxation of the development control by-laws to allow the existing portion of masonry fence beyond the standard set-back to remain. Riverleigh Gardens Body Corporate has no reason to not support the principal body corporate to use its powers under Section 177 of the IRDA to allow a minor relaxation of the DCBL. [15] On 7 October 2011 a referee made an order under Part 5 of the Building Units and Group Titles Act 1980 (Qld) that the resolution of the Riverleigh Gardens Body Corporate was void and of no effect. [16] On 18 November 2011 PBC commenced the primary proceeding under the Integrated Resort Development Act 1987 (Qld) regarding the contravention by the applicants of its development control by-laws. It sought orders: a) for relocation of the front masonry fence so that it was positioned in accordance with the development approval; b) authority to enter the applicant‟s property and complete the work at the applicant‟s cost in the event the applicants did not comply with an order to relocate the fence; c) the applicants pay PBC‟s costs of and incidental to the application. [17] The applicants opposed this application. [18] On 6 March 2012 the Tribunal directed PBC file an agreed list of issues by 15 May 2012. On 17 May 2012 solicitors for PBC provided the Tribunal with a list of issues agreed between the parties. [19] On 18 May 2012 the Tribunal directed PBC give notice of the application, the response, reply and list of issues to Riverleigh Gardens Body Corporate. [20] On 25 May 2012 the applicants adopted and relied upon the agreed issues as contained in the list of issues as a suitable background to the matter. They made submissions about the issues. [21] On 8 June 2012 PBC filed its submissions in response to each of the issues addressed by the applicants. [22] On 10 August 2012 Riversleigh Gardens Body Corporate was joined as a second respondent. Written submissions were filed by Riverleigh dated 14 August 2012. The application was to be determined on the papers. [23] Following that further written submissions were filed by the applicants dated 30 August 2012 and by PBC in response dated 7 September 2012. [24] On 5 March 2013 the Tribunal determined the matter as set out above. -- 4 of 10 -- 5 [25] On 22 March 2013 PBC provided its submission on costs. It sought indemnity costs, alternatively standard costs. It provided a chronology of the proceeding before the Tribunal, commencing with the agreed list of issues in agreement or dispute followed by the prolongation and complication of the proceeding by the applicants. It submitted the prolongation and complication only occurred because the applicants engaged legal representatives resulting in a new set of submissions and alleged that Riverleigh Gardens Body Corporate had approved the non- compliance when it had not. [26] On 25 March 2013 the applicants provided submissions to the effect that an appropriate order was that each party to the proceeding bear their own costs, or, alternatively, that the Tribunal only had jurisdiction to order they pay PBC‟s application fee in the proceedings relying on r 85 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld). Costs in QCAT Proceedings [27] The position is clear. Other than as provided under the QCAT Act or an enabling act, each party to a proceeding must bear their own costs.2 The QCAT Act provides that the Tribunal may order a party to pay all or a stated part of another party‟s costs of a proceeding if it considers it is in the interests of justice to do so.3 It sets out particular circumstances the Tribunal may have regard to in considering whether the interests of justice require a costs order. They include that the Tribunal may have regard to anything else it considers relevant.4 [28] The discretion to award costs is constrained only by the legislative presumption that in Tribunal proceedings each party meet their own costs and the interests of justice. Alan Wilson J neatly summed it up when he said: the question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase ”the interests of justice” point so compellingly to a costs award that they overcome the strong contra-indication against cost orders in s 100.5 Discussion The Primary Decision [29] The essence of the decision may be stated briefly. The Tribunal found that the proceeding before it was unnecessarily prolonged by the actions of the applicants based on a misconceived interpretation of the letter of 7 June 2011. It concluded the history of the dispute revealed a wilful determination of the part of the applicants not to comply with the provisions of their development approval, that to continue with a case 2 QCAT Act, s 100. 3 Ibid, s 102(1). 4 Ibid, s 102(3)(a)-(f). 5 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 at [29]. -- 5 of 10 -- 6 based on a “totally untenable interpretation of a letter from a person who clearly did not have the authority to give the relief alleged was conduct that unnecessarily disadvantaged the (respondent) by forcing it to incur costs pointlessly”. [30] It noted a submission by PBC in its costs submissions that both the factual and legal issues were novel and complex. It later said it was satisfied the matter was complex, highlighted because of the need to consider arguments about the referee‟s decision that raised “principles of res judicata and estoppel and the voluminous material used by (the applicants) to challenge other alleged non-compliances within the resort”. [31] It accepted the submission of the respondent that the relative strengths of the claims of the parties was best demonstrated by the failure of the applicants to achieve any findings in their favour. [32] It recorded it was conscious of the applicants submission summarised in paragraph 21 of its reasons that they were two individuals whereas the respondent was a major body corporate. This was directed to the financial circumstances of the parties. It noted there was no evidence about this, simply the submission. [33] It noted the applicants‟ submission that they understood and accepted the primary decision but that they continued to assert that the letter of 7 June 2011 “was poorly drafted, ambiguous and misleading and had it not been issued these proceedings would not have been necessary”. It found that this claim was disingenuous. [34] In declining to order the indemnity costs sought and instead fixing costs on the standard basis, the Tribunal said “Mr and Mrs De Berry‟s initial response and position were unsustainable. Their persistence with the proceedings was unreasonable and irresponsible. As a result the Tribunal finds it is in the interests of justice to award costs because their behaviour qualifies as conduct warranting an order on the standard basis”. Errors of Law and Inconsistencies [1] The following general remark is apposite. It is not particularly helpful to base submissions around selected passages extracted from the Tribunal‟s reasons for its decision, which, taken alone, may be thought to source a submission. The reasons must also be read as a whole. That will almost inevitably add context and colour to select passages in the reasons. Errors of Law [2] The errors of law asserted focussed on ss 102(3)(a), 102(3)(b), 102(3)(c), 102(3)(e) and 102(3)(f) of the QCAT Act. [35] As to s 102(3)(a), it was submitted that the applicants had not proceeded in a way that unnecessarily disadvantaged the respondent. The Tribunal‟s finding to the contrary, that the applicants prolonged the matter on a -- 6 of 10 -- 7 misconceived interpretation of the letter of 7 June 2011, one that was totally untenable, thus continuing a case that had little or no hope of success forcing the respondent to incur cost pointlessly was in error. That was because the Tribunal found that its interpretation of the letter was the “preferable interpretation”. As the applicants had contended in the primary proceeding, there were other interpretations open, eg., the non-compliant fence could remain provided Riverleigh Gardens Body Corporate consented; they had reasonably believed from the content of the letter the respondent had delegated its powers to Riverleigh Gardens Body Corporate to authorise the non-compliant fence. These views were not unreasonable in light of the fact that Riverleigh was a subsidiary of PBC. The fact that the Tribunal preferred a different interpretation was not a basis to conclude their interpretation was completely wrong, unreasonable or untenable. [36] This submission is not persuasive. In the primary proceeding the applicants had advanced three interpretations of the letter each of which advanced that which they wished to achieve. The interpretation the Member found was the same as that submitted by PBC. That context explains the use of the phrase “preferable interpretation”. The Tribunal found the applicants‟ interpretation of the letter totally untenable, their claim that the primary proceedings would not have been necessary but for the 7 June 2011 letter being poorly drafted, ambiguous and misleading, disingenuous and that the history of the dispute revealed a wilful determination on their part not to comply with the development approval. [37] As to s 102(3)(b) it was submitted the factual and legal issues were novel and complex. The Tribunal had said the matter was complex but added that was “highlighted by the need to consider arguments regarding the earlier referee‟s decision that raised consideration of the principles of res judicata and estoppel and the voluminous material used by the (applicants) to challenge other alleged non-compliances within the resort”, all matters introduced by the applicants. [38] As to s 102(3)(c) the applicants‟ submission focussed on the Tribunal‟s remark in its reasons: “the Tribunal accepts the submission of the [respondent] that the relative strengths of the claims is best demonstrated by the failure of [the applicants] to achieve any findings in their favour”. It submitted that just because the applicants achieved no findings in their favour was not a reason to award costs against it. [39] As to this submission it may be remarked that what the Tribunal said is only a part of the whole of its reasons. Its decision to award the costs was not only based on this factor. A reading of the Tribunal‟s reasons makes it clear, rather, its decision was based upon the applicants‟ stance in the primary proceedings being misconceived and totally untenable; their claims about the letter being without merit, their argument about the letter being disingenuous; their case having little hope of success, and their wilful determination not to comply with the development approval. -- 7 of 10 -- 8 [40] As to s 102(3)(e) the submission repeated similar submissions made to the Tribunal in the costs proceedings, namely that the applicants were two individuals with their own limited resources whereas the respondent was the principal body corporate, one of the largest in Queensland. It therefore had access to a greater pool of financial resources. This made it unreasonable to require the applicants to pay its costs. It may be remarked in passing that the financial resources of the body corporate is that of its members, the property owners. [41] It was not suggested here there is any evidence to support the submission. [42] The financial circumstances of the parties is one of the circumstances a Tribunal may take into account in deciding whether and what order about costs may be made. It may be added into the mix of circumstances before a tribunal and any and what weight to be given to it, decided upon. The Tribunal referred to the applicants‟ unsubstantiated submission about relative financial worth in the process of looking at all the circumstances relevant to the interests of justice. [43] As to s 102(3)(f), the applicants submitted the Tribunal was in error in “automatically” granting the parties leave to make submissions about costs. Rather it was up to the parties to seek leave from the Tribunal. They referred to a comment made in a decision by Charles Brabazon QC,6 “The appellants should not be encouraged of allowed to make a submission for further costs in its favour. Any order would cause additional expense and delay --- the best course (of action) is one that brings litigation to an end.” It submitted the Tribunal had gone against the intention of the QCAT Act whereby each party bear their own costs and matters be dealt with quickly and efficiently. [44] It may be accepted that additional expense and delay in proceedings should be avoided so far as reasonably and fairly possible. But the submission overlooks the application which commenced the primary proceeding applied for an order for costs along with the primary relief. Having made orders about the primary relief it was necessary to deal with the costs application one way or another. Here it was dealt with by giving the parties leave to make submissions. That was entirely appropriate. A costs order may be made if the interests of justice requires. Inconsistencies [45] It was submitted a number of inconsistencies occur in the Tribunal‟s reasons for awarding costs. Five were set out. It was submitted these demonstrated errors of fact which supported leave to appeal. [46] The first focussed on paragraph 5 of the Tribunal‟s reasons where the Tribunal said “subsequently the parties were granted leave to make submissions regarding any application for costs”. I have already dealt with 6 Zachary Developments Pty Ltd v Turner & Anor [2012] QCATA 86. -- 8 of 10 -- 9 this in what I have said about the claimed errors of law. The submission is misconceived. It overlooks the fact that the application which commenced the primary proceeding sought both the primary relief granted by the Tribunal and an order the applicants pay PBC‟s costs of the proceeding. The Tribunal‟s order giving leave to the parties to make submissions about costs is not shown to be incorrect. [47] The second focussed on paragraph 22 of the reasons. I have already dealt with this also in what I have said about the claimed errors of law. When regard is had to the context surrounding the Tribunal‟s remarks about being satisfied the matter was a complex matter and that its interpretation of the letter of 7 June 2011 was the preferable interpretation, no inconsistency arises from its conclusion about the disingenuous nature of the applicants‟ claim that the letter was poorly drafted, ambiguous and misleading and had it not been issued the proceedings would not have been necessary. [48] The third submission focussed on paragraph 23 of the Tribunal‟s reasons. It contended it showed that the Tribunal regarded the applicant‟s submissions about costs as limited to r 85 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld). Examination of paragraph 23 and the reasons as a whole show that was not the case. Paragraph 23 of the reasons simply set out the submission of the applicants that the jurisdiction of the Tribunal to award costs was confined to r 85, a submission rejected by the Tribunal. A reading of the whole of the reasons reveals that was not the Tribunal‟s approach. The submission is misconceived. [49] The fourth and fifth claimed inconsistencies focussed on paragraphs 27 and 34 of the Tribunal‟s reasons where respectively, the Tribunal said “the only basis that [the applicant] relied on to prolong this matter was a misconceived interpretation of the letter dated 7 June 2011” and that the applicant‟s “persistence with the proceedings was unreasonable and irresponsible”. [50] Once again the submission was that these remarks demonstrated inconsistency with the Tribunal‟s remarks elsewhere in its reasons, that its interpretation of the letter of 7 June 2011 was the “preferable interpretation” and that it was “satisfied that this was a complex matter”. [51] I have already dealt at some length with these passages elsewhere. It is unnecessary to repeat what I have said. No inconsistency as claimed arises. The submission is misconceived. Decision [52] The Tribunal‟s reasons make it plain it was conscious of the provisions of the QCAT Act regarding costs. It will be apparent from what I have said above that I do not think it is shown that the Tribunal‟s reasons for its decision to award costs, nor its grant of leave to make submissions on -- 9 of 10 -- 10 costs expose any error of law. Nor am I persuaded the claimed inconsistencies in those reasons exist or demonstrate factual errors. [53] The Member who constituted the Tribunal in the costs proceeding was the Member who constituted the Tribunal in the primary proceeding. He was fully seized of the matter. There is nothing in his reasons or in the submissions which show the discretion he had regarding cost miscarried. There is no basis shown upon which to grant leave to appeal. [54] Leave to appeal is refused. -- 10 of 10 --