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Simons & Ors v Dowd Lawyers Pty Ltd[2020] QCAT 348

Simons & Ors v Dowd Lawyers Pty Ltd[2020] QCAT 348

 

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

 

CITATION:

Simons & Ors v Dowd Lawyers Pty Ltd [2020] QCAT 348

PARTIES:

ADAM Mark Simons

(first applicant)

 

FIX CONSULTANTS Pty Ltd

(second applicant)

 

SPIEL GROUP PTY LTD

(third applicant)

 

v

 

Dowd Lawyers Pty Ltd

(respondent)

APPLICATION NO/S:

OCL047-19

MATTER TYPE:

Occupational regulation matters

DELIVERED ON:

24 September 2020

HEARING DATE:

10 August 2020

HEARD AT:

Brisbane

DECISION OF:

Hon Peter Lyons QC, Judicial Member

ORDERS:

  1. The respondent’s application to strike out the proceeding under s 47 of the QCAT Act is dismissed.
  2. The respondent’s application, so far as it seeks to strike out the proceeding under s 48 of the QCAT Act, is dismissed.
  3. The respondent is to file and serve its submissions on its application for costs within 7 days of the publication of these reasons to the parties.
  4. The applicants are to file and serve their submissions in response within 14 days of the publication of these reasons to the parties.
  5. The respondent is to file and serve any submissions in reply within 21 days of the publication of these reasons to the parties.
  6. There is liberty to apply.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS – where the applicants brought an application to set aside a costs agreement under s 328 of the Legal Profession Act 2007 (Qld) – where the applicants have sought several extensions of time to file submissions and material, and have sought a number of adjournments of the final hearing of the matter – where the applicants have also demonstrated continued non-compliance with directions of the Tribunal – where the explanations given include the first applicant being affected by a family tragedy, receiving a positive COVID-19 diagnosis, and being affected by mental health issues – where the respondent has applied to strike out the application under ss 47 and 48 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) – whether the application is frivolous, vexatious or misconceived, or lacking in substance, such as to strike it out under s 47 – whether the applicants’ conduct has unnecessarily disadvantaged the respondent – whether there is a reasonable excuse for such conduct – whether an order should be made striking out the application under s 48

Legal Profession Act 2007 (Qld) s 315, s 316, s 328, s 337, s 340

Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 47, s 48, s 60

Uniform Civil Procedure Rules 1999 (Qld) r 292, r 293

Agar v Hyde (2000) 201 CLR 552

Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232

Irvine and Porter v Mermaids Café and Bar Pty Ltd [2010] QCAT 393

McNamara Business & Property Law v Kasmeridis & Anor [2007] SASC 90

Re Stuart, ex parte Cathcart [1893] 2 QB 201

APPEARANCES & REPRESENTATION:

 

First and Second Applicants:

J Ireland QC, instructed by McGirr Lawyers

Respondent:

H Clift, instructed by Dowd Lawyers Pty Ltd

REASONS FOR DECISION

  1. [1]
    The applicants brought proceedings under s 328 of the Legal Profession Act 2007 (Qld) (“LP Act”), so far as remains relevant, to set aside a costs agreement between Mr Simons and the respondent, recorded in a document dated 28 September 2017.  The respondent has applied to strike out that application, under ss 47 and 48 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”), and for a costs order under the latter section.
  2. [2]
    The applicants’ application also sought to strike out two other documents described as costs agreements.  However, those documents did not record any agreement between the parties, and a declaration has been made under s 60 of the QCAT Act to that effect.
  3. [3]
    The third applicant, Spiel Group Pty Ltd, has been in liquidation since March 2020 (a liquidator having been appointed on 4 March 2020), and has not participated in the proceedings since then.  Henceforth, a reference in these reasons to the applicants will, unless otherwise indicated, be a reference to Mr Simons and Fix Consultants Pty Ltd.
  4. [4]
    The nature of the respondent’s application and submissions make it necessary to refer to the history of the matter in some detail.

Background

  1. [5]
    Mr Simons engaged the respondent to represent him in a dispute with the Australian Taxation Office (“ATO”).  The amount claimed by the ATO was $634,464.  Mr Simons was provided with a costs estimate of between $15,000 and $30,000.  He was also provided with the costs agreement, including a costs disclosure.  Fees were to be charged on a time basis.  After receipt of these documents, Mr Simons continued to instruct the respondent in relation to this dispute.  The applicants accept that Mr Simons was bound by the costs agreement.
  2. [6]
    The respondent issued an invoice to Mr Simons, dated 20 November 2017, for work up to 10 November 2017.  The amount claimed under the invoice was $37,952.42, plus GST.
  3. [7]
    Another invoice was issued on 11 January 2018.  The amount claimed was $8,370, plus GST.  Of this amount, $2,069 related to work said to have been carried out prior to 10 November 2017.
  4. [8]
    On 5 February 2018, Mr Simons instructed the respondent in relation to matters involving the other applicants.  There is no written costs agreement for these matters.
  5. [9]
    The respondent continued to issue tax invoices for the dispute with the ATO, and for the other matters.  The last invoice for the ATO dispute issued on 7 August 2018.  The total of the amounts invoiced for this dispute was $78,865.42, plus GST.
  6. [10]
    Mr David Dowd, the Managing Partner of the respondent, had had carriage of the ATO dispute for the respondent.  On 10 September 2018, Mr Simons sent him an email in relation to the remaining unpaid amount of fees.  He stated, “I never had any intention of not paying….In my world if you did the work you get paid.  I’m not disputing it…”.
  7. [11]
    On 2 May 2019, the respondent commenced proceedings in the Magistrates Court against all three applicants, for unpaid fees.  The three applicants commenced their proceedings in this Tribunal on 2 June 2019.  At some point, the proceedings in the Magistrates Court were stayed, pending the determination of the proceedings in the Tribunal.
  8. [12]
    On 20 August 2019, Daubney J, as President of the Tribunal, made directions in these proceedings, including a direction that the applicants file and serve their material by 3 September 2019.  The applicants’ then solicitor requested an extension of the time to comply, on the basis that Mr Simons was unwell.  The direction was not complied with until 6 September 2019.
  9. [13]
    On 21 November, the Tribunal sent a Notice of Hearing for the determination of the applicants’ application.  The date for the hearing was 3 March 2020.
  10. [14]
    On 2 March 2020, at 11:31am, an acting senior case manager in the Tribunal’s Registry sent an email to Mr Simons.  It referred to an email to the parties dated 21 February 2020, directing the parties to file further submissions by 26 February 2020.  When Mr Simons had not complied, the case manager called his mobile telephone, requesting an urgent call back.  That did not occur.  The email of 2 March asked Mr Simons to contact the Tribunal urgently.
  11. [15]
    At 1:02 pm on that day, Mr Simons sent an email to the case manager.  He sought an adjournment of the hearing for six weeks.  He stated that he had been “dealing with a family tragedy that has rendered my ability to act on any matters”.  He described the tragedy, which occurred at some time in the week before Christmas Day, 2019; and another similar tragedy which occurred on New Year’s Eve.  He stated that he was in Sydney, and that all members of his family were receiving counselling.  He had only started back at work that week.
  12. [16]
    Later that afternoon, a directions hearing was held by telephone, with the participation of Mr Simons and the legal representative of the respondent.  Mr Simons stated that he had (or would have) solicitors acting for him in the matter for the adjourned hearing, and the solicitor would be filing material for him.  The hearing scheduled for the following day was adjourned to 1 April 2020.  Given the short notice of the application and the basis indicated in the email, directions were made that costs relating to the adjournment were to be considered at the adjourned hearing; and the applicants were directed to file and serve further material, both on the substantive application and in relation to the costs occasioned by the adjournment, by 23 March 2020.  Both parties were given leave to be legally represented in the matter.
  13. [17]
    At 3:03 pm on 20 March 2020, not yet having filed material pursuant to the direction, Mr Simons sent an email to the Tribunal.  He stated that he had received a positive diagnosis for Coronavirus and had been “very ill all week”.  He requested an extension of time for the filing of the applicants’ material.  He stated that he could provide evidence of his health if required.
  14. [18]
    On 23 March 2020, a case manager for the Tribunal sent an email to Mr Simons, copying in the respondent, asking him to provide medical evidence of his diagnosis.  Mr Simons replied the following day, including an email from a Nurse Unit Manager from the Randwick Hospitals Campus in New South Wales.  That email did not directly identify Mr Simons’ diagnosis; but it included information likely to be provided to people diagnosed with the virus.  Mr Simons requested “a few more weeks” (beyond a deadline of 14 April 2020 suggested by the respondent in correspondence with the Tribunal and Mr Simons) to file further material, which he said “should give me adequate time to heal and brief my legal team further”.
  15. [19]
    On 24 March 2020, the solicitor with the conduct of the matter for the respondent sent an email to the case manager, stating that Mr Simons’ email of the previous day did not include any definitive statement that Mr Simons had tested positive for COVID-19.  He referred to the fact that Mr Simons had identified his solicitor in the course of the directions hearing on 2 March, and had said that the solicitor would be filing material for him.  Mr Simons’ conduct was a continuation of his failure to comply with the Tribunal’s directions.  The statements made by Mr Simons in his email of the previous day were not supported by independent evidence.  The time for the filing of the applicants’ material should not be extended beyond 14 April 2020.
  16. [20]
    In light of this correspondence, directions were made on 26 March 2020.  They included an extension of time for the filing of the applicants’ material to 15 April 2020; a direction that Mr Simons send an email to the respondent and to the Tribunal by 8 April 2020 advising of the steps he had taken to comply with the direction relating to the applicants’ material; and a direction that, if a further adjournment were sought, based on Mr Simons’ health, it was to be supported by detailed evidence, including evidence from a medical practitioner.
  17. [21]
    There being no indication of compliance by the applicants with these directions, on 8 May 2020 notice was given to the parties of a directions hearing to be held by telephone at 1:30 pm on 13 May 2020.  At 6:40 pm on 12 May 2020, Mr Simons sent an email to the Tribunal and the respondent.  He stated that he had been unable to provide the material (no doubt a reference to the material which the applicants had been directed to provide) by the due date, and requested a later date for doing so.  He said that his mental health had let him down, which had left him unable to deal with the most basic tasks for day-to-day life.  He was happy to provide a statutory declaration from one of his doctors.  He was under the care of various medical professionals, including a counsellor, psychologist and psychiatrist, and had been for many weeks, mostly on a daily basis.  He was “awaiting a position in an inpatient facility to have intensive treatment”, later identified in the email as treatment for a period of six weeks, expected to start in eight weeks’ time.  He estimated that his recovery could take some months.  He had been “unable to even properly brief my lawyer”; and as he became mentally stronger (apparently during his period of treatment in hospital) he intended to meet with his lawyer and seek his assistance in “preparing all required documents”.  No independent medical evidence was provided with the email.
  18. [22]
    At the directions hearing on 13 May, Mr Simons told the Tribunal that his admission to hospital would be in about seven weeks; and would be for a period of three to four weeks.  The respondent indicated an intention to bring an application to strike out the applicants’ application.  A timetable was fixed for that application, including a hearing date of 26 June 2020, which shortly after was changed to 8 July.  A direction required the applicants to file material by 12 June; and, by 5 June, to send an email advising of the steps by then taken to comply.
  19. [23]
    No email was sent in accordance with the directions.  On 15 June 2020, the applicants filed submissions in opposition to the respondent’s application, and an affidavit from Mr Simons.  These documents were prepared by the applicants’ solicitors.
  20. [24]
    On 7 July, the solicitor for the applicants sought an order that he and Counsel be permitted to participate in the hearing set down for 8 July by telephone.  Mr Simons attended the hearing in person, with his legal representatives attending by telephone.  It emerged that both representatives had recently visited Coronavirus “hotspots” in the Sydney area, with consequences if they were to travel to Queensland.  Because of difficulties in conducting cross-examination in those circumstances, the hearing was adjourned to 10 August 2020.  When further restrictions were imposed on residents of New South Wales entering Queensland, it was decided to conduct the hearing with Mr Simons and his legal representatives attending by audio-visual link.

Further evidence from Mr Simons

  1. [25]
    Mr Simons’ affidavit filed on 15 June 2020 deposed to his explanation for the late delivery of material in September 2019.  It also deposed to matters dealt with in his emails of 2 March and 23 March, discussed earlier. It said that his brother had contracted Coronavirus in early April 2020; and after Mr Simons was discharged from Gold Coast Hospital (on 11 April 2020), he remained on the Gold Coast to be by his brother’s side while he was in an intensive care unit.  It also deposed to his experiencing mental health issues since February 2020, and that he had been attending Dr Lidbury, a psychiatrist in Sydney, since 4 May.  He had requested a report from Dr Lidbury, but had not received it.  Mr Simons said that he had instructed his solicitors to prepare “reply evidence and submissions” in support of the applicants’ application as soon as possible, and prior to 8 July 2020.
  2. [26]
    Mr Simons’ affidavit exhibited a letter from St Vincents Hospital in Sydney, recording that Mr Simons attended the Emergency Department on 3 September 2019, with symptoms of possible pneumonia and asthma.  A letter from Prince of Wales Hospital in Sydney recorded that Mr Simons had tested positive for COVID-19 on 17 March 2020; he had been required to be in home isolation from 15 March to 28 March; and he was pronounced clear of the virus on the latter date.  A discharge summary from the Gold Coast Hospital recorded that Mr Simons was admitted to the hospital on 10 April with asthma and suspected Coronavirus infection, and discharged the following day after a negative swab.  A note from Dr Lidbury confirmed that he was Mr Simons’ treating psychiatrist, had been seeing him since 4 May, and that he planned to continue to see him on a regular basis.
  3. [27]
    Mr Simons was cross-examined.  He had lengthy experience in business; and he (or his companies) had at times employed more than 50 people.  He was uncertain when the lawyers who had earlier represented the applicants ceased to act, but it may have been in 2019.  He spoke to Mr McGirr about representing them in late February or early March 2019.  When asked about an email from the Tribunal dated 21 February, calling for submissions in support of the applicants’ application, he said he did not recall it.  He recalled a phone message from the Tribunal relating to the hearing, apparently left on 26 February.  He knew from the orders of 26 March that there was an issue about his conduct of the proceedings; and that he needed to provide medical evidence in support of his explanations.  His memory was blurred, and he suffered a relapse of his mental health.  In re-examination, he said that his memory was still blurred.

Legislative basis for application

  1. [28]
    The application was based on the provisions of ss 47 and 48 of the QCAT Act.  They are as follows:

47 Dismissing, striking out or deciding if unjustified proceeding or part

  1. (1)
    This section applies if the tribunal considers a proceeding or a part of a proceeding is–
  1. (a)
    frivolous, vexatious or misconceived; or
  1. (b)
    lacking in substance; or
  1. (c)
    otherwise an abuse of process.
  1. (2)
    The tribunal may–
  1. (a)
    if the party who brought the proceeding or part before the tribunal is the applicant for the proceeding, order the proceeding or part be dismissed or struck out; or
  1. (b)
    for a part of a proceeding brought before the tribunal by a party other than the applicant for the proceeding–
  1. (i)
    make its final decision in the proceeding in the applicant’s favour; or
  1. (ii)
    order that the party who brought the part before the tribunal be removed from the proceeding; or
  1. (c)
    make a costs order against the party who brought the proceeding or part before the tribunal to compensate another party for any reasonable costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding or party.

Note–

See section 108 for the tribunal’s power to order that the costs be paid before it continues with the proceeding.

  1. (3)
    The tribunal may act under subsection (2) on the application of a party to the proceeding or on the tribunal’s own initiative.
  1. (4)
    The tribunal’s power to act under subsection (2) is exercisable only by–
  1. (a)
    the tribunal as constituted for the proceeding; or
  1. (b)
    if the tribunal has not been constituted for the proceeding – a legally qualified member or an adjudicator.

48 Dismissing, striking out or deciding if party causing disadvantage

  1. (1)
    This section applies if the tribunal considers a party to a proceeding is acting in a way that unnecessary disadvantages another party to the proceeding, including by–
  1. (a)
    not complying with a tribunal order or direction without reasonable excuse; or
  1. (b)
    not complying with this Act, an enabling Act or the rules; or
  1. (c)
    asking for an adjournment as a result of conduct mentioned in paragraph (a) or (b); or
  1. (d)
    causing an adjournment; or
  1. (e)
    attempting to deceive another party or the tribunal; or
  1. (f)
    vexatiously conducting the proceeding; or
  1. (g)
    failing to attend conciliation, mediation, or the hearing of the proceeding without reasonable excuse.
  1. (2)
    The tribunal may–
  1. (a)
    if the party causing the disadvantage is the applicant for the proceeding, order the proceeding be dismissed or struck out; or
  1. (b)
    if the party causing the disadvantage is not the applicant for the proceeding–
  1. (i)
    make its final decision in the proceeding in the applicant’s favour; or
  1. (ii)
    order that the party causing the disadvantage be removed from the proceeding; or
  1. (c)
    make an order under section 102, against the party causing the disadvantage, to compensate another party for any reasonable costs incurred unnecessarily.

Note–

See section 108 for the tribunal’s power to order that the costs be paid before it continues with the proceeding.

  1. (3)
    In acting under subsection (2), the tribunal must have regard to the following–
  1. (a)
    the extent to which the party causing the disadvantage is familiar with the tribunal’s practices and procedures;
  1. (b)
    the capacity of the party causing the disadvantage to understand, and act on, the tribunal’s orders and directions;
  1. (c)
    whether the party causing the disadvantage is acting deliberately.
  1. (4)
    The tribunal may act under subsection (2) on the application of a party to the proceeding or on the tribunal’s own initiative.
  1. (5)
    The tribunal’s power to act under subsection (2) is exercisable only by–
  1. (a)
    the tribunal as constituted for the proceeding; or
  1. (b)
    if the tribunal has not been constituted for the proceeding – a legally qualified member or an adjudicator.

Submissions

  1. [29]
    In support of its application for orders under s 48, the respondent submitted that the applicants’ repeated dilatory conduct, failure to communicate, and non-compliance with the Tribunal’s directions had disadvantaged it and continued to disadvantage it, by unnecessarily extending the proceedings.  The respondent is unable to prosecute its claim in the Magistrates Court; and in the period of delay, the third applicant had gone into liquidation.  Mr Simons had repeatedly failed to comply with directions, come up with excuses for which no independent evidence was provided, and sought adjournments at every opportunity, including on the eve of the hearing of his application.  Reference was made to the email from Mr Simons of 2 March 2020 seeking further time, sent the day before the hearing which had been fixed on 21 November 2019.  Although the matter was adjourned to 1 April, there was no evidence that the applicants had taken any steps or made any attempt to prepare for that hearing, or to retain legal representation.  Emphasis was placed on the period between 2 March and 15 March.  It was submitted that no explanation was given for the failure to comply with Orders 2 and 4 made on 26 March, and there was non-compliance with Order 5.  Reference was made to the applicants’ request, made on 12 May, for further time to provide material; and to the further request for an adjournment on 8 July. It was submitted that this history demonstrated non-compliance with orders, with limited reasons for the non-compliance, and large unexplained gaps.  There was still no reply evidence in relation to the applicants’ application, notwithstanding what the respondent had said in his affidavit filed on 15 June.
  2. [30]
    In support of the respondent’s application under s 47, it was submitted that the matters raised by the applicants were insufficient to demonstrate that the costs agreement was not fair and reasonable.  While it was accepted that the respondent failed to make additional disclosure as required by s 315 of the LP Act, that did not mean that the agreement was not fair and reasonable.  Nor did the use of time-based billing, with the rates set out in the agreement.  Mr Simons was a commercially sophisticated businessman.  He continued to engage the respondent, both for the ATO dispute and for the matters involving the second and third applicants, after he received invoices, which he said he was shocked by.  Reliance was placed on his email of 10 September 2018.  The applicants’ application had no real prospect of success.  The material did not establish that the costs agreement was not fair and reasonable.  The costs agreement document informed Mr Simons that he could negotiate the terms of the agreement.  It recorded that fees were to be charged on a time basis, involving units of time, with two persons providing the services; and these provisions were all agreed to.
  3. [31]
    With regard to the application under s 47, it was submitted for the applicants that their application would only be struck out if there was no case sufficient to go to trial.  That had not been established.  The applicants intended to cross-examine Mr Dowd; and to call further evidence in support of their case.  The applicants’ written submissions raised a number of matters in support of the contention that the costs agreement was not fair and reasonable, set out in paragraph 50 of the outline dated 14 July 2020.
  4. [32]
    It was submitted that the application under s 48 was directed to Mr Simons’ “truancy”; which did not warrant the striking out of the applicants’ application, or make it appropriate to deny the applicants a hearing.  Nor was the degree of disadvantage suffered by the respondent a sufficient warrant to justify that course.  Since the commencement of proceedings in the Magistrates Court, Mr Simons had been through the liquidation of Spiel Group, distressing family events, infection with the Coronavirus, and a readmission to hospital on 10 April.  He had not been defiant of Tribunal directions.  The written submissions set out matters which were said to constitute good reason and a reasonable excuse for non-compliance with directions, or seeking an adjournment or an extension of time.  The respondent has not shown that it has been unnecessarily disadvantaged by the conduct of the applicants.  Although the respondent’s proceeding in the Magistrates Court has been delayed, those proceedings cannot be maintained by the respondent, until it has had its costs assessed, which has not occurred.

Consideration of the application under s 47 of QCAT Act

  1. [33]
    The focus of s 47 of the QCAT Act is (at least for the most part) the case put forward by a party to a proceeding, whereas the focus of s 48 is the conduct of a party to a proceeding.  The respondent particularly relied upon the provisions of s 47, which require the Tribunal to consider whether the applicants’ application is frivolous, vexatious, or misconceived; or lacking in substance.  The respondent, in essence, contended that the applicants’ case had too low a prospect of success to warrant its continuance.
  2. [34]
    Section 47 is found in Division 1 of Chapter 2, Part 5 of the QCAT Act.  That division is headed “Early End to Proceeding”.  Its purpose seems to me to be broadly similar to rr 292 and 293 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”), found in Chapter 9, which is entitled “Ending Proceedings Early”.  With respect to those rules, in Deputy Commissioner of Taxation v Salcedo McMurdo P said:[1]

Nothing in the UCPR … detracts from the well established principle that issues raised in proceedings will be determined summarily only in the clearest of cases.

  1. [35]
    In that context, her Honour quoted[2] the following passage from the judgment of Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde:[3]

Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes.  The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.

  1. [36]
    The language used in s 47 is not identical to the language used in the UCPR.  However, the expressions “frivolous, vexatious or misconceived” suggest a high threshold must be crossed before the Tribunal can exercise its powers under this section.  No doubt the expression “lacking in substance” is not to be confined in its operation to cases which are frivolous, vexatious or misconceived. However, it is to be read with the expression “otherwise an abuse of process” found in s 47(1)(c).  In my view, the language of s 47 of the QCAT Act indicates that a party who invokes it on the basis that the opponent’s case is weak, faces at least as high a hurdle as a party applying for summary judgment under rr 292 and 293 of the UCPR; and that the principles in the passages quoted above are accordingly relevant.
  2. [37]
    Put shortly, I do not have a high degree of certainty about the outcome of the applicants’ application if it were allowed to proceed to hearing in the ordinary way.  I am not satisfied to that degree of certainty that, after a full hearing, the application would be unsuccessful.
  3. [38]
    Whether a costs agreement is fair will turn upon the circumstances in which it was entered into; whether it is reasonable will require an objective consideration of its terms, in light of the surrounding circumstances.[4]  The applicants have raised a number of grounds on which they contend the costs agreement was not fair and reasonable.  I do not consider that I can reach the necessary degree of satisfaction that each will fail, without full argument, which has not occurred.  Moreover, the applicants have foreshadowed an intention to cross-examine Mr Dowd.  It seems to me that there is a real prospect that this may add some strength, not yet apparent, to some of the grounds.
  4. [39]
    The applicants have also stated that they intend to add to their evidence.  Whatever may be said about their failure to put that evidence before the Tribunal at this stage, it only adds to the difficulty in attaining the necessary level of confidence about the ultimate outcome of a full hearing.
  5. [40]
    Some submissions were made on behalf of the respondent, to the effect that the applicants bear an evidentiary onus on the question of whether the costs agreement was not fair and reasonable.  It is unnecessary to determine questions of onus to decide the respondent’s application.
  6. [41]
    I am accordingly not satisfied that an order should be made under s 47 that the applicants’ application should be struck out.

Consideration of the application under s 48 of QCAT Act

  1. [42]
    The matters raised by the respondent under this section are the failure of the applicants to prepare for the hearing listed for 3 March 2020, and the late notice of their position and their request for an adjournment; the failure of the applicants to comply with the directions of 2 March 2020; the relatively late and inadequately supported request by the applicants for an extension of time to file material, and for an adjournment of the hearing set down for 1 April 2020; the failure of the applicants to file their further material by 15 April 2020 in accordance with a direction made on 26 March 2020, and to provide what might be described as a “progress report” by 8 April (or at all) under another direction made that day; and the request made on 12 May for further time to file material, which would result in further delay of the hearing of the applicants’ application, without proper supporting evidence.
  2. [43]
    Before an order can be made under s 48, the Tribunal must be satisfied that a party to a proceeding is acting in a way that unnecessarily disadvantages another party to a proceeding.  Some examples of conduct which might unnecessarily disadvantage another party are given,[5] but they are plainly not exhaustive.  The proper conduct of its case by one party may well disadvantage another party, but that is obviously not the form of conduct that s 48 is directed at.  So much may be seen from the examples.  For some forms of conduct which disadvantage another party, the provision of a reasonable excuse by the other party may well show that the disadvantage was not “unnecessary”.[6]
  3. [44]
    The first matter for consideration is the failure of the applicants to prepare for the hearing set down for 3 March, together with Mr Simons’ late application for an adjournment.  The applicants contended that Mr Simons showed good reason and provided a reasonable excuse for seeking, on 2 March 2020, an adjournment of the hearing scheduled for the following day.  While the respondent did not take issue with Mr Simons’ account of events in December 2019, it pointed to the fact that some months had passed, and the lateness of the request for an adjournment.
  4. [45]
    It seems to me that the applicants’ failure to prepare for the hearing set down for 3 March can be characterised as conduct which caused the adjournment of that hearing.  The adjournment disadvantaged the respondent, delaying the determination of the application.  It seems to me that delay in the proceedings disadvantages the respondent, both because it leaves unresolved the question of whether the costs agreement is to be set aside; and because it inevitably results in further cost.  The question of whether the costs agreement is to be set aside is obviously one that the parties consider of sufficient importance to litigate in the current proceedings, perhaps because of its potential significance in any assessment of the costs payable in respect of the ATO matter, notwithstanding the admitted failure to make disclosure under s 315 of the LP Act.[7]  However, I would not be prepared to find that this conduct on the part of the applicants unnecessarily disadvantaged the respondent, if there were a reasonable excuse for it.
  5. [46]
    In his affidavit of 15 June 2020, Mr Simons said that “a family tragedy precluded me from focusing my energy towards a hearing date on 3 March 2020”; and that his reasons for seeking an adjournment were consistent with his email of 2 March 2020.  To assess his explanation, it seems to me appropriate to consider the events he referred to and their effect, in the context of what remained to be done for the hearing of the applicants’ application.
  6. [47]
    The applicants had been directed to file their material in support of their application by 3 September 2019, and they filed a substantial affidavit on 6 September.  At this time, they had legal representation.  That affidavit is relied upon, both in resisting the current application, and in support of the applicants’ application. The matter was given a hearing date on 21 November 2019.  There had been no suggestion at that time that the applicants needed to prepare more material.  At some point the applicants’ previous solicitors ceased to act for them. No doubt it would have been necessary to retain new solicitors, and provide them with the material which had been prepared for the conduct of the case.  It would have been necessary for them to become familiar with the case, and to prepare submissions.  I have been told that it is intended to adduce some further evidence, though I was left with the impression it was limited in scope, and not to come from Mr Simons.  So far as the evidence on the current application goes, the input required from Mr Simons in the period leading up to 3 March was rather limited.  No medical (or other health professional) evidence has been provided to show that Mr Simons’ capacity to give instructions or otherwise prepare for the hearing in that period was substantially impaired by the impact of the events in December.  It seems to me that, while it may be accepted that those events still had some ongoing consequences for Mr Simons after December, it has not been shown that there was a reasonable excuse for the applicants not being in a position to proceed with the hearing on 3 March.
  7. [48]
    I also consider that no reasonable explanation has been given for the failure to make the application for an adjournment until 2 March 2020.  Accepting that the events in December had a significant impact on him and his family at the time when they occurred, it is difficult to think that they precluded him, over the intervening period of two months, from giving reasonable notice of such difficulties as he was experiencing and his intention to seek an adjournment.
  8. [49]
    The respondent was left in the position of having to prepare for a hearing scheduled for 3 March, until the previous day.  Moreover, they were given no real opportunity to consider or investigate Mr Simons’ explanation.  I accept that the conduct of the applicants was likely to have caused delay.  For example, there is a real prospect that earlier directions may have led Mr Simons to take action to advance the proceedings before he contracted the Coronavirus.  While his conduct may not fit neatly within the examples found in s 48(1), nevertheless, it is similar in character to some of them, and had the capacity unnecessarily to disadvantage the respondent.  In my view, the late application for an adjournment, made on 2 March 2020, unnecessarily disadvantaged the respondent, for the purposes of s 48(1).
  9. [50]
    The directions of 2 March were made at a telephone hearing in which Mr Simons participated, and required the applicants to file and serve their further material by 23 March.  The applicants did not comply with this direction.  Mr Simons was not diagnosed as having Coronavirus until 17 March, apparently contracted on 15 March.  There is no evidence that he had taken any steps until then to prepare (or have prepared) the further material; and no explanation for this lack of action.  In my view, Mr Simons’ health provides no more than a partial explanation for the failure by the applicants to file and serve material in accordance with the direction.  His conduct was a partial cause of the resulting delay which, I accept, disadvantaged the respondent.
  10. [51]
    The adjournment on 26 March of the hearing scheduled for 1 April was undoubtedly related to what Mr Simons had by then communicated to the Tribunal and the respondent about his state of health.  He had been diagnosed with COVID-19, and was not pronounced clear of the virus until two days later.  There was a satisfactory reason for seeking this adjournment.
  11. [52]
    Mr Simons did not, by 8 April or at all, send the email which was the subject of a direction made on 26 March; nor did the applicants file their further material by 15 April as required by another direction.  The explanation proffered was that his mother and brother contracted Coronavirus in early April 2020, and he came to Queensland to support them; while in Queensland, he was again suspected of having Coronavirus.  These matters are said to provide good reason and a reasonable excuse for the non-compliance.  The respondent submitted that no explanation is given for the failure to send the email required by 8 April; and in light of one of the orders made on 26 March, the explanation should have been supported by other material.
  12. [53]
    Mr Simons failed to comply with the direction regarding the email.  There is no acceptable explanation for the failure.  There is no reason to think that his state of health was such that he could not send an email identifying any steps he had taken to prepare material required by Direction 2 of 26 March, and whether he expected to comply with that direction by the time specified.  Nor does the material provide a basis for concluding that matters concerning his brother’s health prevented him from complying with the direction.  While one purpose of the direction was to emphasise to the applicants the need to take steps to comply with the direction, and thus progress the proceedings, another was to enable the respondent to assess when a hearing of the applicants’ application might take place.  In my view, non-compliance with the direction unnecessarily disadvantaged the respondent.
  13. [54]
    Nor did the applicants comply with the requirement to file material by 15 April. There is no evidence that any step was taken to comply with this direction.  Mr Simons was found to be clear of Coronavirus on 28 March.  There is no real explanation of that failure for the period from 28 March until, perhaps, 10 April.  There is no evidence that his health prevented him from doing anything to progress the application in this period; and the fact that Mr Simons was able to travel from Sydney to Queensland, and to provide support for family members, suggests that his health at this point was not a factor.  While he was unwell on 10 April, he was discharged the following day as medically stable.  This does not indicate that he was so unwell that he could take no action to comply with the direction.  No detail is given about the nature of the support he provided to his mother and brother.  Indeed, his mother was in isolation for 21 days, so it seems unlikely that he spent much time with her.  It is difficult to find any substantial explanation for the non-compliance with orders, by reason of the health of his mother and brother.  This non-compliance contributed to the delay, thereby causing disadvantage to the respondent.  It also made it necessary to have the directions hearing on 13 May, occasioning cost to the respondent.  There being no adequate explanation for the non-compliance, I am satisfied that it unnecessarily caused disadvantage to the respondent.
  14. [55]
    Indeed, the direction of 26 March required the applicants to file and serve “any further material on which they seek to rely” in relation to their substantive application.  It was made against the background that the application had been set down for a final hearing on 3 March, presumably on the basis that the applicants had well before that date provided all the material on which they proposed to rely.  It was also a further indulgence granted to the applicants after their failure to comply with a direction made on 2 March.  At the hearing of the present application, I was told that the applicants intended to adduce further evidence.  The direction of 26 March remained un-complied with, at least at the date of the hearing.  It is apparent that the non-compliance has contributed to substantial delay in the progress of the applicants’ application.
  15. [56]
    Mr Simons’ request made on 12 May for an extension of time and a further adjournment of the matter was based on the state of his mental health.  He said he had been:

… in the care of various medical professionals, including councillor (sic), phycologist (sic), and psychiatrist, and have been for many weeks now.  This has mostly been on a daily basis as I am awaiting a position in an inpatient facility to have intensive treatment.

  1. [57]
    Contrary to one of the directions made on 26 March, the application was not supported by medical evidence.  The only medical evidence of any kind which has since been provided is that from Dr Lidbury, which shows that Mr Simons commenced treatment with him on 4 May.  It gives no indication of Mr Simons’ condition; and whether it impacted on his ability to comply with orders.
  2. [58]
    The late filing of material (on 15 June) and the failure by the applicants to send an email (on 5 June) did not cause any significant disadvantage to the respondent.  Subsequent delay has been the consequence of difficulties associated with the Coronavirus pandemic.
  3. [59]
    It seems to me that the conduct of the applicants comes within the description found in s 48(1) of the QCAT Act. It is necessary to consider whether an order should be made striking out their application.  To determine that question, it seems to me appropriate to assess the significance of the disadvantage caused to the respondent, and to consider circumstances relating to the conduct of the applicants.
  4. [60]
    The conduct of the applicants has unnecessarily delayed the progress of the principal application by a period of about three months.  It has also occasioned directions hearings which should not have been necessary.  Non-compliance with directions and the seeking of adjournments at a late stage, without proper supporting evidence, have caused delay, and have left the respondent in the position of having to prepare for hearings which were adjourned.  It is accepted that Mr Simons’ contraction of the Coronavirus provided, for about two weeks in March, a reasonable excuse for his failure to take steps to comply with directions; and occasioned the adjournment of the hearing scheduled for 1 April.  It is difficult to give weight to his statements about his mental health as an explanation for other delay.  He was aware from the directions of 26 March of the need for proper supporting medical evidence for such an explanation; but that has not been provided.  Although I have found that the evidence does not show a reasonable excuse for the failure of the applicants to be ready for the hearing scheduled for 3 March, I consider that the events of December provide some mitigation.  The applicants have been somewhat indifferent to the need to comply with directions, which is concerning.  So is the fact that, at least at the date of the hearing, they had not completed the preparation of their case and filed all the material on which they would seek to rely.  I should add that I do not think that any disadvantage to the respondent associated with the winding up of Spiel Group is of present relevance.  That disadvantage is not a consequence of the conduct of the applicants which has been relied on in relation to s 48.
  5. [61]
    There are some other matters which need to be considered under s 48(3).  For much of the period over which these proceedings have been conducted, the applicants have had legal representation.  It seems to me that, since September 2019, Mr Simons must have appreciated the need to comply with directions of the Tribunal. While Mr Simons may not have had any previous familiarity with the Tribunal’s practices and procedures, this was not a matter on which the applicants seemed to rely.  Nor does the evidence suggest it should be of significance in determining the outcome of this application.  Nor has there been any suggestion that the applicants and their representatives lacked capacity to understand the Tribunal’s directions.  The evidence is not sufficient to demonstrate that the applicants, in causing disadvantage to the respondent, have acted deliberately.
  6. [62]
    In Irvine and Porter v Mermaids Café and Bar Pty Ltd, Senior Member Endicott expressed the view that it is a very serious matter for a Tribunal to dismiss a claim without allowing a hearing of that claim to take place.[8]  I agree with that view.  I do not think that the conduct of the applicants, and its consequences for the respondent has, to date, and in light of the considerations which have been discussed, reached the stage where an order should be made to strike out their application.
  7. [63]
    The respondent also applied for an order for costs under s 48.  At the hearing, the parties were of the view that this question should be considered after reasons were published relating to the strike out application.  Since it seems to me that there is some likelihood that this question can be dealt with on written submissions, I propose to make directions to achieve that.  However, there will be liberty to apply, in case any party considers that a hearing is required.

Conclusion

  1. [64]
    The following orders are made:
  1. The respondent’s application to strike out the proceeding under s 47 of the QCAT Act is dismissed;
  2. The respondent’s application, so far as it seeks to strike out the proceeding under s 48 of the QCAT Act, is dismissed;
  3. The respondent is to file and serve its submissions on its application for costs within 7 days of the publication of these reasons to the parties;
  4. The applicants are to file and serve their submissions in response within 14 days of the publication of these reasons to the parties;
  5. The respondent is to file and serve any submissions in reply within 21 days of the publication of these reasons to the parties; and
  6. There is liberty to apply.

Footnotes

[1]  [2005] 2 Qd R 232, [3] (“Salcedo”).

[2] Salcedo, [3].

[3]  (2000) 201 CLR 552, [57], and omitting citations.

[4]  See Re Stuart, ex parte Cathcart [1893] 2 QB 201, 204–205; cited in McNamara Business & Property Law v Kasmeridis & Anor [2007] SASC 90, [22].  See also Gino E Dal Pont, Lawyers’ Professional Responsibility (Thomson Reuters, 6th ed, 2017) 491–492 [14.155].

[5]  See QCAT Act s 48(1).

[6]  See, eg, QCAT Act s 48(1)(a), (g).

[7]  See also LP Act ss 316, 337 and 340.

[8]  [2010] QCAT 393, [21].

Close

Editorial Notes

  • Published Case Name:

    Simons & Ors v Dowd Lawyers Pty Ltd

  • Shortened Case Name:

    Simons & Ors v Dowd Lawyers Pty Ltd

  • MNC:

    [2020] QCAT 348

  • Court:

    QCAT

  • Judge(s):

    Hon Peter Lyons QC

  • Date:

    24 Sep 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Agar v Hyde (2000) 201 CLR 552
2 citations
Jump To
Cite 1 - (2000) 201 CLR 552
Cite 2 - (2000) 201 CLR 552
Deputy Commissioner of Taxation v Salcedo[2005] 2 Qd R 232; [2005] QCA 227
3 citations
Jump To
Cite 1 - [2005] 2 Qd R 232
Cite 2 - [2005] 2 Qd R 232
Cite 3 - [2005] 2 Qd R 232
Irvine and Porter v Mermaids Cafe and Bar Pty Ltd and Ingall [2010] QCAT 393
2 citations
Jump To
Cite 1 - [2010] QCAT 393
Cite 2 - [2010] QCAT 393
McNamara Business & Property Law v Kasmeridis and Anor [2007] SASC 90
2 citations
Jump To
Cite 1 - [2007] SASC 90
Cite 2 - [2007] SASC 90
Re Stuart; Ex parte Cathcart [1893] 2 QB 201
2 citations
Jump To
Cite 1 - [1893] 2 QB 201
Cite 2 - [1893] 2 QB 201

Cases Citing

Case NameFull CitationFrequency
Eribo v Trinity Motors Pty Ltd t/a Trinity Ford Cairns [2024] QCAT 2322 citations
Gold Coast Property Expo v Rhodes [2022] QCATA 1202 citations
Hopkins v Department of Agriculture and Fisheries [2023] QCAT 4512 citations
Kruse v Sunland Homes Pty Ltd [2023] QCAT 3312 citations
Perry v Queensland Building and Construction Commission [2022] QCAT 2344 citations
Simons & Ors v Dowd Lawyers Pty Ltd (No 2) [2021] QCAT 13 citations
Simons v Dowd Lawyers Pty Ltd (No 4) [2021] QCAT 1342 citations
1

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