Chew v Queensland Building Services Authority [2011] QCAT 48

CITATION: Chew v Queensland Building Services Authority [2011] QCAT 48 PARTIES: Ms Aida Chew v Queensland Building Services Authority APPLICATION NUMBER: QR111-08 MATTER TYPE: General administrative review matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Mr Barry Cotterell, Member DELIVERED ON: 1 February 2011 DELIVERED AT: Brisbane ORDERS MADE: 1 The Applicant pay the Authority’s costs of these proceedings from 8 January 2010 on a standard basis to be assessed on the District Court scale of costs. 2 The Authority shall deliver to the Applicant an itemised claim for costs referring to the relevant items contained in the District Court scale of costs. 3 If within 14 days of that delivery, the parties have not agreed on an amount of costs, the costs shall be assessed by Hickey and Garrett, Legal Costs Assessors, Level 21, 141 Queen Street, Brisbane 4000. 4 The Applicant shall pay the Authority’s costs (as agreed or assessed) within 14 days of such agreement or assessment. CATCHWORDS : COSTS – application to QCAT for costs of proceedings started in former Commercial and Consumer Tribunal – ss 100 & 102 Queensland Civil and Administrative Tribunal Act 2009 and ss 70 & 71 of the Commercial and Consumer Tribunal Act 2003 – factors in awarding costs – interests of justice – Tamawood Limited v Paans [2005] QCA 111 applied COSTS – offer to settle under QCAT Act – offer rejected – final decision not more favourable to applicant than offer considered APPEARANCES and REPRESENTATION (if any): -- 1 of 9 -- QR111-08 / Page 2 of 9 Decision on the papers REASONS FOR DECISION Introduction 1 At the conclusion of the hearing on 18 July 2010 the Tribunal ordered that: The Queensland Building Services Authority’s (the Authority) decision not to direct rectification of building work is confirmed. It further ordered that the question of costs is to be determined on the papers after the filing of submissions. Background 2 The applicant sought a review of the Authority’s decision of 22 April 2008 not to direct rectification of building work. The Authority is empowered not to direct by section 72 of the Queensland Building Services Authority Act 1991 (“QBSA Act”). The Applicant did not attend the Tribunal hearing but was represented by Mr Maddugodda and, to a lesser extent, by her expert Mr de Costa. Mr Maddugodda represented the Applicant throughout much of the period that the building work was carried out and afterwards. The Authority was represented by Ms Farthing, a legal officer and it called evidence from Mr Vosper, an Authority Inspector, Mr Robert Hughes, an Engineer and Mr Rod Mehrtens, the contractor. Jurisdiction 3 The jurisdiction of QCAT to deal with applications made to former tribunals appears in Chapter 7 of the Queensland Civil and Administrative Tribunal Act 2009 (“QCAT Act”). Jurisdiction is given to QCAT to deal with a proceeding started before a former tribunal that is either a ‘pending proceeding’ (section 256) or an ‘other proceeding’ (section 257). 4 A ‘pending proceeding’ is defined in section 245 to be an existing proceeding in a court or former tribunal where, at the date of commencement of the QCAT Act, the former tribunal: a has not started to hear a matter the subject of the proceeding; or b has started to hear a matter the subject of the proceeding but has not started to consider evidence for the purpose of making its final decision in the proceeding. 5 The former tribunal (CCT) had not started to hear this matter at the date of commencement of QCAT and, therefore, it was a pending proceeding between the Applicant and Respondent. 6 The Application for Costs is therefore under section 256 of the QCAT Act which provides: (1) This section applies to an existing tribunal proceeding that is a pending proceeding. (2) At the commencement, the proceeding is taken to be a proceeding before QCAT. -- 2 of 9 -- QR111-08 / Page 3 of 9 (3) QCAT has jurisdiction to deal with the matter the subject of the proceeding under this Act. 7 The Tribunal’s jurisdiction in respect of costs is dealt with in Division 6, sections 100 to 109 inclusive of the QCAT Act. Sections 100 and 102 say as follows: 100 Each party usually bears own costs 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. 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); (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. However, section 271 provides: 271 Conduct of proceeding generally (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. Section 70 of the CCT Act stated as follows: “The main purpose of this division is to have parties pay their own costs unless the interests of justice require otherwise.” Section 71 of the CCT Act stated as follows: 71 Costs (1) In a proceeding, the tribunal may award the costs it considers appropriate on-- -- 3 of 9 -- QR111-08 / Page 4 of 9 (a) the application of a party to the proceeding; or (b) its own initiative. (2) The costs the tribunal may award may be awarded at any stage of the proceeding or after the proceeding has ended. (3) If the tribunal awards costs during a proceeding, the tribunal may order that the costs not be assessed until the proceeding ends. (4) In deciding whether to award costs, and the amount of the costs, the tribunal may have regard to the following-- (a) the outcome of the proceeding; (b) the conduct of the parties to the proceeding before and during the proceeding; (c) the nature and complexity of the proceeding; (d) the relative strengths of the claims made by each of the parties to the proceeding; (e) any contravention of an Act by a party to the proceeding; (f) for a proceeding to which a State agency is a party, whether the other party to the proceeding was afforded natural justice by the State agency; (g) anything else the tribunal considers relevant. Examples of paragraph (g)- The tribunal may consider whether a party to a proceeding is acting in a way that unreasonably disadvantages another party to the proceeding. The tribunal may consider whether the proceeding, or a part of the proceeding, has been frivolous or vexatious. (5) A party to a proceeding is not entitled to costs merely because-- (a) the party was the beneficiary of an order of the tribunal; or (b) the party was legally represented at the proceeding. (6) The power of the tribunal to award costs under this section is in addition to the tribunal's power to award costs under another provision of this or another Act. (7) The tribunal may direct that costs be assessed-- (a) in the way decided by a presiding case manager; or (b) by a person appointed by the tribunal. Outline of Submissions for the QBSA on Costs 8 The Authority has sought costs on the District Court Scale of Costs to 7 January 2010 and then on an indemnity basis (reasonable costs) from 8 January 2010. It provided the Tribunal with 13 pages of submissions plus attachments. The submissions addressed the law, the Background and then considerations under sections 70 and 71 of the CCT Act and the Scale of Costs. 9 The Authority Submissions referred to the outcome of the proceeding and considerations under sections 70 and 71 of the CCT Act. It referred the Tribunal to the decision of Keane JA (as he then was) in Tamawood Ltd & Anor v Paans [2005] QCA 111 (15 April 2005) 10 In Tamawood, Keane JA said: “[52] Properly understood, in my opinion s 70 is not a qualified prohibition on the making of orders for costs; rather it is a statement that the legislative purpose, in enacting a broad general discretion as to costs in s 71, was to permit the -- 4 of 9 -- QR111-08 / Page 5 of 9 Tribunal to make such orders as to costs as the interests of justice required, while recognising that there would be times when the interests of justice would not require any order as to costs. Read in this way, the terms of s 70 are unexceptionable, just and reasonable, and entirely consistent with the terms of s 71. In my opinion that is the correct approach. It is consistent with s 14A of the Acts Interpretation Act 1954. It is in my opinion consistent with the object stated in s 4(1)(b) 'to have the Tribunal deal with matters in a way that is just, fair, informal, cost efficient and speedy.' I will not quote the more detailed provisions in subsection (2), but it appears to me that it is entirely consistent with those provisions, particularly (in the context of the circumstances of this matter) the legislative endorsement of the proposition that it is fair that litigants have an equal opportunity regardless of resources to assert or defend their legal rights: s 4(2)(b)(i). [53] That objective is clearly assisted in circumstances where a private individual homeowner of perhaps modest means receives the benefit of an order for costs if a successful claim is brought in the Tribunal. It would plainly be unfair and unjust for a person who had a good claim to be unable to pursue it in the Tribunal, or for it not to be worthwhile for such a person to pursue it in the Tribunal, because the costs of pursuing the claim would be greater than the amount recovered, or would so diminish the amount recovered as not to make the hazard of litigation worthwhile. It seems to me that s 4(2)(b)(i) is a clear indication of a legislative intent that successful applicants of modest means should not ordinarily be denied their costs of proceedings in the Tribunal. To read s 70 in the way contended for by Tamawood and Martyn, and adopted by the member of the Tribunal in the present case, would in my opinion be to frustrate and deny the objects of the Act set out in s 4." 11 Keane JA went on to say (footnotes removed): “[23] As I have already said, in my view, the language of s 70 and s 71(5)(a) is sufficiently clear to negate the proposition that costs should, prima facie, follow the event unless the Tribunal considers that another order is more appropriate. In this regard, it is clear that the power of a court or tribunal to award costs to a party is now the creature of statute. The nature and extent of that power can only be discerned by close consideration of the terms of the statute which creates the power and prescribes the occasions for, and conditions of, its exercise. In the performance of this task, observations of the courts in relation to the operation of other statutory regimes relating to costs may afford general assistance but they cannot be allowed to distract attention from the terms of the particular statute in question. [24] The language of the provisions of the Act to which I have referred is sufficiently clear to negate the proposition that success in the proceedings is sufficient to establish a prima facie entitlement to the beneficial exercise of the discretion conferred by s 71(1) of the Act. [25] The Explanatory Memorandum to the Bill for the Act said that one of the key principles underpinning the operation of the Tribunal was to be an "emphasis on self-representation - provisions are made in the Bill for parties to represent themselves, thus ensuring that the [Tribunal] maintains informality". It went on to provide that: "Clause 70 establishes beyond doubt that the purpose of this Division is that parties pay their own costs unless the interest [sic] of justice require otherwise. This provision is in keeping with the objective of the Bill to establish an informal and cost effective tribunal."” -- 5 of 9 -- QR111-08 / Page 6 of 9 12 Keane JA went on to hold: “[30] First, the Tribunal found that each party was justified in engaging the services of legal representatives to assist them in the conduct and defence of what the Tribunal recognized to be complex proceedings. That finding alone could be, in my view, a sufficient basis to conclude that the interests of justice warranted the exercise of the discretion to award costs in favour of the successful party, at least in the absence of any countervailing consideration. The Tribunal erred in failing to appreciate the implication of this finding for an understanding of where the interests of justice lay in relation to the costs of the proceedings. [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.” 13 The Authority Submissions argue that in this case, there are no countervailing circumstancing (in the words of Keane JA) to suggest that the Authority's success in the proceeding will not justify a costs order and that further, the Authority's position as industry regulator does not count against it in these circumstances, rather, that fact favours the making of a costs order in an appropriate case. 14 The Authority Submissions referred to Horsburgh v Queensland Building Services Authority [2008] QCCTB 235 (13 November 2008), which involved a review proceeding concerning a decision by the Authority to refuse to categorise a licensee as a permitted individual for a relevant events. ln that case, CCT Member Mr Lohrisch held: “What is against, in this instance, any such countervailing circumstances prevailing over such an exercise of a discretion in favour of the Authority is that, in applications such as this, the Authority is fulfilling the role as a regulator of the building industry, in doing so, the Authority is charged with acting in the interests of the consumers and the building industry. If in fulfilling its obligations as a regulator, the Authority incurs costs towards upholding its decisions, it would appear to me, in a general sense, inappropriate and inequitable that such costs be borne by the Authority, and hence be a charge against the industry and the shareholders, rather than be borne by the person who unsuccessfully sought to review the Authority's decision.” -- 6 of 9 -- QR111-08 / Page 7 of 9 15 The Authority Submissions state that because the Authority has been completely successful in the proceedings and its original Decision has been entirely vindicated that should be a weighty consideration in favour of granting it a costs order. 16 The Authority Submissions do not address section 21 of the QCAT Act which states: 21 Decision-maker must help tribunal (1) In a proceeding for the review of a reviewable decision, the decision-maker for the reviewable decision must use his or her best endeavours to help the tribunal so that it can make its decision on the review. (2) … 17 In the view of the Tribunal, this section imposes a requirement on a decision-maker which is higher than that imposed on a normal party to litigation and could constitute a “countervailing circumstance”. 18 The Authority Submissions then addressed the conduct of the parties before the proceeding and state that on 13 August 2010, pursuant to the Order of the Tribunal dated 4 June 2010, the Authority filed in the Tribunal and served on the Applicant comprehensive submissions which clearly detailed the strength of the Authority's case and the weakness of the Applicant's case. 19 The Tribunal accepts that the Authority conducted itself appropriately and properly during the course of the proceeding and the compulsory Conference. 20 The Authority submits that the Applicant: • Was mistaken in her understanding of the relationship between the Authority and licensees generally and the role of the Authority generally; • Was mistaken as to the possible outcomes available from these proceedings; and • Was mistaken as to the legislation, regulations and policies that are relevant to this matter. 21 The Authority submits that the Applicant filed a statement of Mr De Costa which presented misconceived findings and did not present any information that challenged the findings of the Authority. The Tribunal in its reasons for decision in this matter has already commented on the conduct of Mr De Costa. Mr De Costa was appropriately qualified for the Applicant to engage him in the matter. The Applicant is entitled to rely on the expertise of an appropriately qualified expert in the way he conducts himself in preparing the matter for hearing and at the hearing. The Tribunal does not consider the inappropriate conduct of the expert engaged by the Applicant in this matter should be sheeted home to the Applicant by a costs order. 22 The Authority Submissions then addressed the nature and complexity of the proceeding. The Tribunal notes that the CCT gave leave on 3 March 2009 for the Authority to be represented, apparently on the basis that the matter was complex. The Authority was initially represented by one of its panel law firms but then subsequently, including at the hearing, by one of its in-house legal officers. 23 The matter was factually complex in the preparation stage, in part, because the Applicant was not legally represented and was mistaken as the Authority submitted above. It was legally complex for the Applicant at the hearing but not for the Authority’s in-house legal officer. This Tribunal has not had access to the reasons for -- 7 of 9 -- QR111-08 / Page 8 of 9 the CCT granting legal representation to the Authority in this matter and is aware that there can be reasons other than complexity which will justify the Authority having legal representation when the other party is opposed to legal representation. However, legal representation was granted and it is a consideration that this Tribunal should consider (See Keane JA in Tamawood). 24 In the mind of this Tribunal, the most significant factor in assessing this application is the fact that by letter dated 8 January 2010, the Authority made a formal Offer of Settlement to the Applicant under Part 8 Division 3 of the QCAT Rules 2009. That offer was for the application to be withdrawn and each party to bear its own costs. At that stage the matter had been prepared for hearing and an objective assessment could have been made by the Applicant of her prospects of success. The Applicant chose not to accept the Offer of Settlement and the decision of the Tribunal was that the application be dismissed. Therefore, the outcome of the application at the hearing was the same as that suggested by the Offer of Settlement. The Application for Indemnity Costs 25 The Authority has submitted that the Applicant should pay its costs on an indemnity basis from 8 January 2010. 26 In Colgate-Palmolive v Cussons [1993] FCA 536; (1993) 118 ALR 248, Sheppard J, in relation to the circumstances where orders for indemnity costs are appropriate, stated: “the court ought not usually make an order for the payment of costs on some basis other than the party and party basis unless the circumstances of a case warranted the court departing from the usual course. The tests for such departure include: (a) ‘as and when the justice of the case might so require’; and (b) Some special or unusual feature in the case to justify the court in departing from the ordinary practice.” (At 249) 27 His Honour went on to state: ƒ (a) the making of allegations of fraud knowing them to be false, and the making of irrelevant allegations of fraud; ƒ (b) evidence of particular misconduct that causes loss of time to the court and other parties; ƒ (c) the fact that the proceedings were commenced for some ulterior motive; ƒ (d) the fact that the proceedings were commenced in wilful disregard of known facts or clearly established law; ƒ (e) the making of allegations that ought never to have been made or the undue prolongation of a case by groundless contentions; ƒ (f) an imprudent refusal of an offer to compromise; ƒ (g) an aware of costs on an indemnity basis against a contemnor.” (At 249) 28 The Tribunal does not consider that this matter involved issues of such seriousness to warrant the imposition of indemnity costs on the applicant and dismisses this part of the Authority’s application for costs. Conclusions and Findings 29 The Tribunal does not consider that the applicant did anything prior to 8 January 2010 that would require an order for costs. In fact, the Tribunal considers that it is in the interests of justice that an applicant for a review of a decision of the Authority not be restricted in exercising this right by the fear of a costs order. As Keane JA has said -- 8 of 9 -- QR111-08 / Page 9 of 9 “the language of s 70 and s 71(5)(a) is sufficiently clear to negate the proposition that costs should, prima facie, follow the event unless the Tribunal considers that another order is more appropriate.” His Honour went on to say “it is fair that litigants have an equal opportunity regardless of resources to assert or defend their legal rights”. Self- represented parties frequently have difficulty assessing their prospects of success but there does come a time when they need to objectively do so and, in this case, it occurred when the Authority sent the applicant the Offer of Settlement. 30 At the hearing, the outcome of the application was the same as that suggested by the Offer of Settlement. For this reason, the Tribunal finds that the Applicant should pay the Authority’s costs from 8 January 2010 when the Offer of Settlement was made. 31 The Authority’s application for indemnity costs is dismissed. 32 Therefore, the Tribunal orders as follows: (a) The Applicant pay the Authority’s costs of these proceedings from 8 January 2010 on a standard basis to be assessed on the District Court scale of costs. (b) The Authority shall deliver to the Applicant an itemised claim for costs referring to the relevant items contained in the District Court scale of costs. (c) If within 14 days of that delivery, the parties have not agreed on an amount of costs, the costs shall be assessed by Hickey and Garrett, Legal Costs Assessors, Level 21, 141 Queen Street, Brisbane 4000. (d) The Applicant shall pay the Authority’s costs (as agreed or assessed) within 14 days of such agreement or assessment. -- 9 of 9 --