Board of Professional Engineers of Queensland v Lennox [2011] QCAT 599

CITATION: Board of Professional Engineers of Queensland v Lennox [2011] QCAT 599 PARTIES: Board of Professional Engineers of Queensland v Peter Lennox APPLICATION NUMBER: ED002-09 MATTER TYPE: Occupational regulation matters HEARING DATE: On the papers DECISION OF: T Fantin, Member DELIVERED ON: 28 November 2011 DELIVERED AT: Brisbane ORDERS MADE: 1. The applicant is to pay the respondent’s costs of and incidental to the respondent’s application to stay the proceeding, on the standard basis in accordance with the District Court Scale of Costs, as agreed or if not agreed as assessed by a duly accredited costs assessor appointed by the tribunal. 2. The applicant is to pay the respondent’s costs within 28 days of such agreement or assessment. 3. Each party bear its own costs of the balance of the proceeding. CATCHWORDS: Disciplinary proceeding – costs – application to stay – s 102(3) factors Commercial and Consumer Tribunal Act 2003, ss 70, 71 Professional Engineers Act 2002 Queensland Civil and Administrative Tribunal Act 2009, ss 100, 102, 245, 256, 271 Lennox v The Board of Professional Engineers of Queensland (No 1) [2009] QDC 099 Queensland Building Services Authority v Johnston [2011] QCATA 265 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Kehl v Board of Professional Engineers of Queensland [2010] QCATA 77 -- 1 of 9 -- 2 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009. REASONS FOR DECISION Nature of the proceeding [1] This is an application for costs by the respondent, Mr Lennox, against the applicant, the Board of Professional Engineers of Queensland (“the Board”) arising from disciplinary proceedings brought by the Board. [2] On 27 September 2010 the tribunal made orders that the disciplinary proceedings brought by the Board against Mr Lennox be permanently stayed. The parties were directed to file written submissions on costs.1 [3] Mr Lennox seeks an order that the Board pay his costs of and incidental to the application for the permanent stay of the proceeding and the balance of the proceeding on the District Court scale, to be assessed if not agreed. [4] The Board seeks an order that each party bear its own costs in respect of the substantive proceeding and Mr Lennox’s application to stay the proceeding. Alternatively, if costs are awarded in Mr Lennox’s favour, the Board seeks the following order: a. Mr Lennox is entitled to his costs as assessed on the standard basis on the District Court scale; and b. If the costs are to be assessed: i. Mr Lennox will provide the Board with an itemised claim for costs referring to the relevant items contained in the District Court Scale; ii. within 21 days of receipt of the itemised claim for costs, the Board will provide Mr Lennox with a written notice of any objections it has to the costs claimed; iii. if within 14 days after the later of: 1. the Board providing its notice of objection; or 2. 21 days after Mr Lennox provides the Board with his claim for costs; the parties have not agreed to an amount for costs, then: 3. Mr Lennox will deliver to the Board a list of 3 legal costs assessors; 1 The parties’ submissions on costs were provided to the Registry on about 19 October 2010. Due to an administrative oversight, the submissions were not provided to the member until 27 July 2011. The delay is regrettable. The parties were advised by letter from the Registry dated 1 August 2011. -- 2 of 9 -- 3 4. within 7 days of the delivery of that list, the Board will select one of the legal costs assessors from the list; and 5. the costs shall be assessed by the legal costs assessor chosen by Mr Lennox; iv. the Board shall pay Mr Lennox’s costs (as agreed or assessed) within 28 days of such agreement or assessment. Background [5] This matter has a long and complex history. The events the subject of the disciplinary proceeding occurred in 2001. They relate to Mr Lennox’s design of domestic wastewater management (septic) systems for two house sites. [6] In 2005 the Board commenced disciplinary proceedings against Mr Lennox (arising from a complaint received in 2004) under the Commercial and Consumer Tribunal Act 2003 (the CCT Act). It alleged that Mr Lennox engaged in unsatisfactory professional conduct by failing to conduct adequate site inspections for the design of an onsite sewerage facility and failing to design an adequate facility. [7] In 2007 the proceedings were heard in the CCT over six days. [8] In 2008 the CCT found Mr Lennox guilty of unsatisfactory professional conduct2. [9] In 2009 Mr Lennox appealed successfully to the District Court3 against the CCT’s decision. The Court found that the CCT denied Mr Lennox natural justice (and had thereby fallen into an error of law) by finding against him based on a case which the Board had not made and which Mr Lennox had no occasion to meet. [10] The CCT decision was set aside and remitted for rehearing before a differently constituted tribunal. On 15 July 2009, the CCT ordered that by 5 August 2009 the Board file an amended application which consolidated the applications previously filed. [11] The Board sought two extensions of time within which to file an amended application, without providing any explanation of the delay. The CCT granted the extensions and on 9 September 2009, the Board filed an amended application. [12] On 15 September 2009, Mr Lennox’s solicitor took issue with various aspects of the amended application, saying it included new allegations for which leave had not been sought, and lacked particularity. The Board’s solicitors rejected the complaints. 2 Board of Professional Engineers of Queensland v Lennox [2008] QCCTE 4 and Board of Professional Engineers of Queensland v Lennox [2008] QCCTE 5. 3 Lennox v The Board of Professional Engineers of Queensland (No. 1) [2009] QDC 099 per Robin QC DCJ. -- 3 of 9 -- 4 [13] On 22 October 2009 Mr Lennox filed an application to permanently stay or dismiss the Board’s amended application. [14] On 1 December 2009 the CCT was amalgamated into this tribunal. In September 2010, the tribunal heard Mr Lennox’s application and ordered that the proceedings be stayed permanently. Mr Lennox now seeks costs both of his application to stay and of the substantive proceeding before the tribunal. Statutory framework [15] Both parties’ written submissions on costs proceeded on the basis that costs ought to be determined having regard to sections 70 and 71 of the CCT Act. The submissions did not address ss 100 and 102 of the QCAT Act. [16] The substantive proceeding was commenced in the CCT and was a “pending proceeding” pursuant to s 245 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). It was taken to be a proceeding before this tribunal, which has jurisdiction to deal with it under the QCAT Act: s 256. [17] Section 271 of the QCAT Act provides that: (1) QCAT must deal with the matter the subject of the existing proceeding under this Act or an enabling Act. (2) However, in relation to the matter— (a) QCAT has, and only has, the functions that the former entity had in relation to the matter under the former Act; and (b) QCAT can, and can only, make a decision the former entity could have made in relation to the matter under the former Act. [18] At the time the parties’ submissions were lodged, some decisions of the tribunal had determined that the above provisions meant that for a pending proceeding commenced in the CCT, the tribunal must determine a costs application pursuant to section 71 of the CCT Act. [19] However, this tribunal has recently held on appeal in Queensland Building Services Authority v Johnston [2011] QCATA 2654 that the preferred construction of s 271 of the QCAT Act in relation to an application for costs in a pending proceeding is that: a. section 271 of the QCAT Act requires the Tribunal to deal with the matter under the QCAT Act; b. the Tribunal only had the powers that the CCT had, which included the power to award costs; c. the awarding of costs ought to be determined by application of the QCAT Act provisions i.e. section 102. 4 A decision of the Deputy President and Member Deane on 23 September 2011. See [11]-[13]. -- 4 of 9 -- 5 [20] That construction must be adopted in this case. The starting point concerning costs in QCAT is that each party must bear its own: QCAT Act, s 100. This presumption may, however, be displaced if the tribunal considers it in the interests of justice to order a party to pay all or part of the costs of another party: s 102(1). The phrase “in the interests of justice” is not defined in the Act but is to be construed according to its ordinary and plain meaning, which obviously confers a broad discretionary power on the decision-maker5. [21] In determining whether it is in the interests of justice to award costs against another party the tribunal may have regard to the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; whether a party has acted in a way that unnecessarily disadvantages another party; the financial circumstances of the parties and anything else the tribunal considers relevant: QCAT Act, s 102(3). [22] The difference between the CCT Act and QCAT Act cost provisions and the applicability of the decision in Tamawood Limited & Anor v Paans was considered by the President in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 where it was said that: [21]… Although those provisions [of the CCT Act] are not analogous to the equivalent provisions under the QCAT Act, the principles found in Tamawood provide guidance about the circumstances in which it may be in the interests of justice for this tribunal to award costs against parties. … [24] The similar QCAT Act provision to s 70 [of the CCT Act] is, it might be said, in terms that more plainly indicate that the legislature had turned its face against awards of costs in this tribunal: s 100 says that ‘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 proceeding’. … [27] That conclusion must, here, be considered in the light of the difference between s 70 of the CCT Act and s 100 of the QCAT Act. Section 70 speaks of a ‘main purpose’, but s 100 mandates that parties shall bear their own costs. Section 70 contains, within itself, a reference to the condition or circumstance in which the main purpose may be subsumed to the interests of justice; s 100 has no such proviso, although it appears later, in s 102(1). … [29] Under the QCAT Act 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 costs orders in s 100. [23] There is no provision in the enabling Act, the Professional Engineers Act 2002, regarding costs which would modify the effect of s 100 of the QCAT Act, as contemplated by s 6(7) of the QCAT Act. 5 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 per Justice Alan Wilson, President at [4]. -- 5 of 9 -- 6 [24] It is necessary to have regard to the matters referred to in section 102(3) of the QCAT Act, to the extent they are relevant to this case to determine if the interests of justice point so compellingly to a costs award to overcome the starting position that each party bear their own costs. Costs of the application to stay [25] The costs of the application to stay the proceeding need to be considered separately from the costs of the balance of the proceeding. Whether a party acted in a way that unnecessarily disadvantaged the other party [26] The Board submits that it has not conducted the proceeding in a way that would justify an adverse costs order against it. However in ordering the stay, I rejected the Board’s submission that there had been no inordinate delay by it since the matter was remitted to the Tribunal for rehearing6. The Board was ordered to file an amended application by 5 August 2009. The Board sought two extensions of time within which to file its amended application, without providing any explanation for the delay. The Board defaulted in compliance with the extended deadline, and its amended application was filed on 9 September 2009. A week later, Mr Lennox’s solicitor wrote to the Board taking issue with various aspects of the amended application, including the inclusion of new allegations and a lack of particularity. The Board’s solicitors rejected these complaints. In October 2009 Mr Lennox filed an application to dismiss or stay permanently the amended application. Shortly before the hearing of the application, on 6 April 2010 the Board delivered a further amended application which sought to address some of Mr Lennox’s complaints. At the hearing of Mr Lennox’s application on 13 April 2010, the Board sought to make further changes to the further amended application.7 [27] In ordering the stay, I also found that the Board’s proposal to adduce additional expert evidence would cause significant delay to any hearing date, as well as additional costs, and that continuation of the proceeding as proposed by the Board was oppressive and would amount to an abuse of process. [28] In those circumstances, I am satisfied that the Board’s failure to articulate adequately its case (in an amended application) in a timely fashion unnecessarily disadvantaged Mr Lennox, causing him to incur additional legal costs. The nature and complexity of the dispute [29] The application brought by Mr Lennox to stay permanently or dismiss the disciplinary proceedings brought by the Board involved a complex history of disputes between the parties, which had been ventilated in a lengthy hearing before the CCT, an appeal to the District Court and were the subject of proceedings in this tribunal by way of rehearing. 6 Reasons at [90]. 7 Reasons at [21]-[28]. -- 6 of 9 -- 7 [30] Mr Lennox’s application to stay the proceeding was novel. It involved a consideration of the CCT’s power to grant a permanent stay, where the CCT Act contained no express power to do so. Counsel for the parties were unable to locate any decisions of the tribunal or a Court directly on point. [31] The issues in dispute clearly warranted the instruction of solicitors and counsel, and both parties were represented on the hearing of the application. I was assisted by written submissions from counsel on the application proper and in relation to costs. Statutory recognition that legal representation is appropriate in certain proceedings does not necessarily establish that those proceedings will always be complex8, but in this case was a relevant factor. [32] Mr Lennox challenged the Board’s amended application on the basis that it went beyond mere consolidation of the original application with three sets of further and better particulars and raised new allegations without leave, was confusing and was inadequately particularised. [33] Determination of the issues in Mr Lennox’s application required consideration of the previous decision of the CCT, the decision of District Court on appeal, previous versions of the Board’s application, three sets of further and better particulars of the Board’s application and the procedural history of the substantive proceeding9. [34] Taking those matters into account, I am satisfied that Mr Lennox’s application was complex. The relative strengths of the claims made by each party [35] The Board contends that it reasonably pursued disciplinary action against Mr Lennox as it considered necessary in order to give effect to the objects of the PEA to protect the public. I accept that that was the Board’s motive for bringing the proceeding. [36] However in the Reasons on the application to stay, I found that many of the complaints made by Mr Lennox about deficiencies in the Board’s amended application were well made10. At the hearing of Mr Lennox’s application, the Board sought leave to file a further amended application (six months after Mr Lennox’s application for a stay had been filed). Then, during oral argument the Board sought to make yet further changes to its amended application, abandoning some paragraphs and effectively conceding some of the points made by Mr Lennox11. [37] The merits of the application favoured Mr Lennox. Although it could not be said that the Board’s position was entirely lacking in merit, its arguments were not strong when analysed against all the material. The Board’s late 8 Kehl v Board of Professional Engineers of Queensland [2010] QCATA 77 at [6]. 9 Reasons at [55]-[85]. 10 Reasons at [85]. 11 Reasons at [25]-[28]. -- 7 of 9 -- 8 attempts to amend its application twice to deal with the points raised against it, effectively conceded this. The financial circumstances of the parties [38] There was no direct evidence about the parties’ financial circumstances. [39] However in the decision staying the application, I noted that Mr Lennox said that he had incurred costs of more than $180,000 relating to the Board’s investigation, the CCT proceeding, the District Court appeal, separate proceedings taken against him by the builder and two other disciplinary proceedings brought against him by the Board.12 It is unclear what portion of this amount is attributable to the CCT proceeding, the District Court appeal and the rehearing before QCAT. However, as Mr Lennox was represented by solicitors and counsel in all three proceedings, and the CCT hearing went for six days, it is conceivable that a considerable part of the costs incurred by Mr Lennox was attributable to the CCT proceedings, the District Court appeal and the current QCAT proceedings. [40] At the time of the hearing of the stay application, Mr Lennox was 65 years old and employed by a small business doing engineering and other work. [41] The Board is a regulatory body charged with maintaining professional standards. It is a relevant factor that the Board’s costs are funded from the registration fees paid by the members of its profession13. Anything else the tribunal considers relevant [42] In ordering the stay, I accepted that the costs incurred in the proceedings to date were disproportionate to the seriousness of the allegations and to the penalties sought to be imposed by the Board14. [43] In my view, the factors referred to above point compellingly to the conclusion that the interests of justice warrant a costs award here, despite the principle set out in s 100. I am satisfied that the Board should pay Mr Lennox’s costs of the application to stay, as agreed or assessed. Costs of the balance of the proceeding [44] In support of an order that the Board pay Mr Lennox’s costs of the balance of the proceeding before this tribunal, Mr Lennox contends that: a. The outcome of the proceedings is that they will not proceed to a determination on the merits; b. This result is the consequence of the manner in which the Board conducted itself in the proceeding; and 12 Reasons at [86] and [97]. 13 Kehl v Board of Professional Engineers of Queensland [2010] QCATA 77 at [9]. 14 Reasons at [94]. -- 8 of 9 -- 9 c. The result means Mr Lennox has gained no benefit from having paid for representation in the proceeding when the tribunal had allowed both parties to be legally represented. [45] These are matters that have already been taken into account in the costs of the application for a stay. In practice, there are unlikely to be any significant costs of the balance of the proceeding in this tribunal that are not covered by the costs order relating to the application to stay. This is because the proceeding had only progressed to the stage of the Board filing an amended application, before Mr Lennox filed the application for a stay. The majority of Mr Lennox’s costs of the proceeding in the tribunal would be costs of and incidental to the application for the stay, as no other steps had been taken by Mr Lennox in that proceeding save for objecting to the amended application. [46] The matters referred to in Mr Lennox’s submission above are not, in my view, matters that would warrant an additional costs order in “the interests of justice” contrary to s 100, for the balance of the proceeding. [47] Mr Lennox submitted during the application for a stay that he had the benefit of a costs order from the District Court but no costs had yet been paid. The costs order stated that the Board pay Mr Lennox’s costs of the application and appeal, but if the proceeding is pursued further in the Tribunal, the costs of the more expensive tribunal hearing are to be Mr Lennox’s costs against the Board and the costs of the other tribunal hearing are to be at the discretion of the tribunal15. The first tribunal hearing before the CCT is now the only hearing, and thus the most expensive. [48] In my view, the appropriate order is that each party should bear its own costs of the balance of the proceeding. 15 Reasons at [86(h)]. -- 9 of 9 --