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Scott Lawrence Russell v Queensland Building and Construction Commission No 2[2020] QCAT 390

Scott Lawrence Russell v Queensland Building and Construction Commission No 2[2020] QCAT 390

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Scott Lawrence Russell v Queensland Building and Construction Commission No2 [2020] QCAT 390

PARTIES:

Scott Lawrence Russell

(applicant)

v

Queensland Building and ConstrUCtion commission

(respondent)

APPLICATION NO/S:

OCR284-17

MATTER TYPE:

Occupational regulation matters

DELIVERED ON:

25 September 2020

HEARING DATE:

On the Papers

HEARD AT:

Brisbane

DECISION OF:

Member King-Scott

ORDERS:

The application is dismissed.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – POWER TO AWARD GENERALLY – GENERALLY – whether the presumption in s.100 of the QCAT Act that each party should bear its own costs should be displaced – where an accountant’s evidence said to be vital was not later relied upon as the witness made herself unavailable – whether that disadvantaged the Commission s.102 of the QCAT Act – whether that was a disadvantage as part of the usual course of litigation – where obligation to exercise the costs discretion judicially – where offers to settle – each party made the same offer within 3 month period – neither accepted s.105 of the QCAT Act

Queensland Building and Construction Commission Act 1991 (Qld)

Queensland Civil and Administrative Tribunal Act 2009 (Qld)

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

Ascot v Nursing & Midwifery Board of Australia [2010] QCAT 364

Campbell v Kerry M Ryan Pty Ltd [2014] QCATA 58

Crusty Devil Bakehouses Pty Ltd v W.A.W. Developments Pty Ltd [2013] QCAT 159

Herron v The Attorney General for New South Wales (1987) 8 NSWLR 601

Joanne Baxter and Fifties Food Pty Ltd atf The Ninja Bear Trust t/as Subway Wynnum Central v Subway Realty Pty Ltd & Anor [2013] QCAT 316

Queensland Building Services Authority v Alternate Dwellings Pty Ltd [2012] QCATA 49

Queensland Building Services Authority v Johnston [2011] QCATA 265

Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No2) [2010] QCAT 412

Tracey v Olinderidge Pty Ltd & Wagner [2015] QCAT 7

APPEARANCES:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)

REASONS FOR DECISION

  1. [1]
    The Queensland Building and Construction Commission (the Commission) seeks an order that the applicant, Scott Lawrence Russell, pay its costs of responding to his unsuccessful application to review its decision to cancel his licence pursuant to s. 56 AF of the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act). He was categorised as an "excluded individual" for a "relevant event" pursuant to s.56 AC of the the QBCC Act.
  2. [2]
    Mr Russell was a director of Scott Russell Constructions Pty Ltd between 21 July 2011 and 11 June 2015. Liquidators were appointed to that company on 17 October 2016 following an application for winding up, the relevant event. Mr Russell was a director of the company within a two-year period immediately before the relevant event.
  3. [3]
    A preliminary point, as to which version of the QBCC Act was applicable was determined by the Tribunal on 13 June 2019 and, subsequently confirmed on appeal. The versions differed as to the relevant period before the relevant event, the earlier version prescribed a one-year period, the latter, a two-year period. The tribunal determined that the latter version of the Act applied and that referred to a two-year period.
  1. [4]
    On 29 August 2017, the Commission decided that Mr Russell was an excluded individual as defined in s 56AC of the QBCC Act.
  2. [5]
    Following an unsuccessful internal review decision, he sought an external review of that decision on 12 December 2017.
  3. [6]
    The internal review decision was reconsidered by the Commission and on 6 February 2018 became the Review Decision.[1]
  1. [7]
    On 5 March 2019 the Mr Russell filed a solvency report by Leesa Bavell, the former accountant for the Company. (‘the Bavell Report’).
  2. [8]
    On 10 April 2019 the Commission filed an expert statement of Mr Ian McKinnon of Vincents (‘the Vincents Report’) reporting to the Bavell Report.
  3. [9]
    On 13 June 2019 the Tribunal heard the application to determine which version of the Act applied. That decision was delivered on 8 July 2019.
  4. [10]
    On 13 July 2019 the solicitor acting for Mr Russell informed the Commission’s solicitors that the witness Ms Bavell no longer wished to be part of the proceedings.
  5. [11]
    On 26 July 2019 the Commission made a without prejudice settlement offer that Mr Russell withdraw his application and bear his own costs. That offer was not accepted.
  6. [12]
    On 15 October 2019 Mr Russell made an offer in the same terms. The Commission rejected the offer and counter offered on 16 October 2019 that Mr Russell pay the Commission’s costs fixed at $9,000.00.
  7. [13]
    That offer was repeated on 20 May 2020. On 29 May 2020 Mr Russell counter offered that he would withdraw the application and the Commission could make a costs application. On 2 June 2020, that offer was accepted and Mr Russell withdrew his application.

Legislation

  1. [14]
    The relevant legislation is as follows:

56AC Excluded individuals and excluded companies

  1. (1)
    This section applies to an individual if —
  1. (a)
    the individual takes advantage of the laws of bankruptcy or becomes bankrupt (relevant bankruptcy event); and
  1. (b)
    3 years have not elapsed since the relevant bankruptcy event happened.
  1. (2)
    This section also applies to an individual if —
  1. (a)
    a construction company, for the benefit of a creditor —
  1. (i)
    has a provisional liquidator, liquidator, administrator or controller appointed; or
  1. (ii)
    is wound up, or is ordered to be wound up; and
  1. (b)
    3 years have not elapsed since the event mentioned in paragraph (a)(i) or (ii) (relevant company event) happened; and
  1. (c)
    the individual —
  1. (i)
    was, when the relevant company event happened, a director or secretary of, or an influential person for, the company; or
  1. (ii)
    was, at any time after the commencement of this section and within the period of 2 years immediately before the relevant company event happened, a director or secretary of, or an influential person for, the company.
  1. (3)
    If this section applies to an individual because of subsection (1), the individual is an excluded individual for the relevant bankruptcy event.
  1. (4)
    If this section applies to an individual because of subsection (2), the individual is an excluded individual for the relevant company event unless the individual can satisfy the commissioner that at the time the individual ceased to be an influential person, director or secretary for the construction company the company was solvent.
  1. (5)
    An excluded individual for a relevant event does not also become an excluded individual for another relevant event if the commission is satisfied that both events are consequences flowing from what is, in substance, the one set of circumstances.
  1. (6)
    A company is an excluded company if an individual who is a director, or secretary of, or an influential person for, the company is an excluded individual for a relevant event.
  1. (7)
     In this section —

‘construction company —

  1. (a)
    means a company that directly or indirectly carries out building work or building work services in this or another State; and
  1. (b)
     includes a company that, within 2 years immediately before a relevant company event for the company, directly or indirectly carries out building work or building work services in this or another State.

The rules relating to costs

  1. [15]
    The proceeding before the Tribunal was for a review jurisdiction as defined in Chapter 2 Division 3 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). The QBCC Act provides for the award of costs but only in relation to building disputes.
  2. [16]
    Other than provided under the QCAT Act or an enabling act, s.100 provides that parties should bear their own costs in proceedings.
  3. [17]
    Section 102 of the QCAT Act sets out the basis on which this Tribunal may award costs. It provides:
  1. (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.

…

  1. (3)
    In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following—
  1. (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);
  1. (b)
    the nature and complexity of the dispute the subject of the proceeding;
  1. (c)
    the relative strengths of the claims made by each of the parties to the proceeding;
  1. (d)
    for a proceeding for the review of a reviewable decision—
  1. (i)
    whether the applicant was afforded natural justice by the decisionmaker for the decision; and
  1. (ii)
    whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;
  1. (e)
    the financial circumstances of the parties to the proceeding;
  1. (f)
    anything else the tribunal considers relevant.
  1. [18]
    Section 105 provides:

The rules may authorise the tribunal to award costs in other circumstances, including, for example, the payment of costs in a proceeding if an offer to settle the dispute the subject of the proceeding has been made but not accepted.

The Commission’s claim for costs

  1. [19]
    The Commission claims that the Tribunal should awards costs under ss. 100 and 105 of the QCAT Act.
  2. [20]
    In relation to s.102 of the QCAT Act the Commission submits that it is in the interests of justice for Mr Russell to pay the Commission’s costs of and incidental to the proceeding fixed in the amount of $18,405.75.
  1. [21]
    In relation to s.105 of the QCAT Act the Commission submits that Mr Russell should pay the Commission’s costs of and incidental to the proceeding after the July offer was made in an amount to be agreed or assessed. It submits that there is no presumption that an employed solicitor’s costs cannot be sought.[2] However, the Commission concedes that the amount claimed takes no account of the internal resources expended by the Commission in the course of the proceeding. It says that it is in the interest of the objects of the QCAT Act and the duties of the parties to finalise the matter without expending further resources in assessing costs. In those circumstances, it submits that it would be in the interests of justice to fix the Commissions costs at $18,405.75. Nevertheless, it makes an alternative claim that the costs should be assessed.
  1. [22]
    I note that the amount of $18,405.75 comprises outlays being the costs of the Vincents’ report of $14,025.00, the cost of $2,310.00 for the attendance of Mr McKinnon of Vincents at the 13 June 2019 hearing and the liquidators’ costs of $2,070.75 providing documents.

Interests of Justice

  1. [23]
    In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No2)[3] then President Alan Wilson said at [4]:

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-maker.[4]

  1. [24]
    His Honour went on to say at [29] that:

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.

  1. [25]
    Speaking of s.102(3) Deputy President Kingham (as she then was) in Ascot v Nursing & Midwifery Board of Australia[5] said:

The public policy intent of the provisions in the QCAT Act is plain. The tribunal was established as a no costs jurisdiction. That may be departed from where the interests of justice require it. The considerations identified in s 102(3) are not grounds for awarding costs. They are factors that may be taken into account in determining whether, in a particular case, the interests of justice require the tribunal to make a costs order.

Did Mr Russell act in a way so as to disadvantage the commission?

  1. [26]
    The Commission submits that Mr Russell has acted in a way which has necessarily disadvantaged the Commission in that:
    1. (a)
      He caused the hearing of 14 December 2018 to be adjourned as he discharged his legal advisors the day before;[6]
    2. (b)
      On 16 January 2019 (11 months after the reconsidered IR decision) his solicitor applied to the Tribunal to file further evidence pursuant to s 56AC (4) QBCC Act regarding the insolvency of the Company. I interpolate here that the issue only arose after the correct version of the Act was determined. Mr Russell’s solicitor submitted that the evidence was vital as the Commission’s case was essentially a new one.
    3. (c)
      On 5 March 2019 the Bavell report was filed.
    4. (d)
      On 10 April 2019 the Vincents’ report was obtained.
    5. (e)
      On 30 July 2019 Mr Russell’s solicitor advised the Commission that Ms Bavell no longer wished to be involved in the proceeding.   No further evidence was submitted in relation to insolvency.
    6. (f)
      The Commission submits that the above conduct caused the Commission unnecessary disadvantage, and specifically caused it to unnecessarily obtain the Vincents’ Report.
  2. [27]
    Mr Russell submits that proof that the Company was solvent when he ceased as a director was a necessary matter that he had to prove under the latter version of s.56AC (4) of the QBCC Act as part of his defence.
  3. [28]
    It is necessary to refer to the two versions of s,56AC (4) of the QBCC Act. The earlier version did not contain the defence that is contained in the latter version being subsection (4) which is as follows:
  1. (4)
    If this section applies to an individual because of subsection (2), the individual is an excluded individual for the relevant company event unless the individual can satisfy the commissioner that at the time the individual ceased to be an influential person, director or secretary for the construction company the company was solvent.

The underlining is mine.

  1. [29]
    Under the earlier version of the Act insolvency of the Company was not a separate issue, the appointment of a liquidator or administrator was sufficient. If Mr Russell was not a director of the Company within the period of 1 year before the relevant event he escaped the sanctions of the section. Until it was determined which version of the Act applied the issue of insolvency as a separate issue did not arise to be determined. It was not necessary for Mr Russell to obtain the Bavell Report until that became an issue.
  2. [30]
    It appears from the material that Mr Russell’s defence, that the Company was solvent when he ceased as a director, depended upon Ms Bavell’s evidence. Ms Bavell was not available, Mr Russell says her unavailability was because she was taking a break from her practice for family reasons. Whatever the reason it would appear that the decision was made not to rely upon her evidence and not to compel her to give evidence. Without that evidence it seems Mr Russell ceased to have a defence to the Commission’s decision to have him categorised as an excluded individual.
  3. [31]
    Mr Russell’s actions and those of his solicitor, in my opinion, do not point so compellingly to a costs award such as to overcome the strong contra-indication against the making of a costs order. Indeed, Mr Russell was entitled to rely upon evidence that provided him with a potential defence to the claim. The fact that, subsequently, that evidence is unavailable because a witness withdraws does not alter the reasonableness of his conduct. The outlays claimed by the Commission all relate to the engagement of Ian McKinnon of Vincents to respond and report on the Bavell report. The Commission submits that it should have been apparent to Mr Russell and his legal advisers that the matter was one where there were limited issues for determination and that if Mr Russell could not evidence those matters the application was doomed to fail. If the Commission thought Mr Russell’s case was so weak then it would not have been necessary for the Commission to obtain a report from Mr McKinnon. Obviously, the Commission determined that such a report was necessary to respond to the Bavell report. That, in my opinion, was a disadvantage that was part of the usual course of litigation.[7]

Settlement Offers

  1. [32]
    The following settlement offers were made:
    1. (a)
      On 26 July 2019 the Commission made an offer to Mr Russell that he withdraw his application and bear his own costs. That offer was not accepted.
    2. (b)
      On 15 October 2019 Mr Russell made an offer in the same terms. The Commission rejected the offer.
    3. (c)
      On 16 October 2019 the Commission counter offered that Mr Russell pay the Commission’s costs fixed at $9,000.00.
    4. (d)
      That offer was repeated on 20 May 2020.
    5. (e)
      On 29 May 2020 Mr Russell counter offered that he withdraw the application and the Commission could make a costs application. On 2 June 2020, that offer was accepted and Mr Russell withdrew his application.
  2. [33]
    The costs claimed, being outlays associated with the Vincents’ Report, were already incurred before the offers were made. There is no evidence of any significant professional costs being incurred between the making of the first offer and the acceptance of the final offer. Indeed, there was only a period of approximately 3 months between the first offer and Mr Russell’s offer in the same terms.
  3. [34]
    In my opinion, the Commission’s position would not have changed by the failure of Mr Russell to accept the July offer, particularly when 3 months later he was prepared to do so and the Commission rejected his offer.
  4. [35]
    In my opinion there is no justification to make an award of costs in the Commission’s favour under s.102 or s.105 of the QCAT Act.
  5. [36]
    I dismiss the Application.

Footnotes

[1]Section 23(4)(a) Queensland Civil and Administrative Tribunal Act 2009 (Qld)

[2]Queensland Building Services Authority v Alternate Dwellings Pty Ltd [2012] QCATA 49

[3][2010] QCAT 412

[4]Herron v The Attorney General for New South Wales (1987) 8 NSWLR 601

[5][2010] QCAT 364

[6]I note that Mr Russell was ordered to pay the costs thrown away by the adjournment.

[7]Queensland Building Services Authority v Johnston [2011] QCATA 265 at [31]; Crusty Devil Bakehouses Pty Ltd v W.A.W. Developments Pty Ltd [2013] QCAT 159 at [14]; Joanne Baxter and Fifties Food Pty Ltd atf The Ninja Bear Trust t/as Subway Wynnum Central v Subway Realty Pty Ltd & Anor [2013] QCAT 316 at [12]; Campbell v Kerry M Ryan Pty Ltd [2014] QCATA 58 at [8]; Airstrike Industrial Pty Ltd v Robertson & Anor [2014] QCATA 209 at [7]; Tracey v Olinderidge Pty Ltd & Wagner [2015] QCAT 7.

Close

Editorial Notes

  • Published Case Name:

    Scott Lawrence Russell v Queensland Building and Construction Commission No2

  • Shortened Case Name:

    Scott Lawrence Russell v Queensland Building and Construction Commission No 2

  • MNC:

    [2020] QCAT 390

  • Court:

    QCAT

  • Judge(s):

    Member King-Scott

  • Date:

    25 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
Airstrike Industrial Pty Ltd v Robertson & Anor [2014] QCATA 209
2 citations
Jump To
Cite 1 - [2014] QCATA 209
Cite 2 - [2014] QCATA 209
Ascot v Nursing & Midwifery Board of Australia [2010] QCAT 364
2 citations
Jump To
Cite 1 - [2010] QCAT 364
Cite 2 - [2010] QCAT 364
Campbell v Kerry M Ryan Pty Ltd [2014] QCATA 58
2 citations
Jump To
Cite 1 - [2014] QCATA 58
Cite 2 - [2014] QCATA 58
Crusty Devil Bakehouses Pty Ltd v W.A.W. Developments Pty Ltd [2013] QCAT 159
2 citations
Jump To
Cite 1 - [2013] QCAT 159
Cite 2 - [2013] QCAT 159
Herron v Attorney-General for N.S.W. (1987) 8 NSWLR 601
2 citations
Jump To
Cite 1 - (1987) 8 NSWLR 601
Cite 2 - (1987) 8 NSWLR 601
Joanne Baxter and Fifties Food Pty Ltd atf The Ninja Bear Trust t/as Subway Wynnum Central v Subway Realty Pty Ltd & Anor [2013] QCAT 316
2 citations
Jump To
Cite 1 - [2013] QCAT 316
Cite 2 - [2013] QCAT 316
Queensland Building Services Authority v Alternate Dwellings Pty Ltd [2012] QCATA 49
2 citations
Jump To
Cite 1 - [2012] QCATA 49
Cite 2 - [2012] QCATA 49
Queensland Building Services Authority v Johnston [2011] QCATA 265
2 citations
Jump To
Cite 1 - [2011] QCATA 265
Cite 2 - [2011] QCATA 265
Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412
2 citations
Jump To
Cite 1 - [2010] QCAT 412
Cite 2 - [2010] QCAT 412
Tracey v Olinderidge Pty Ltd [2015] QCAT 7
2 citations
Jump To
Cite 1 - [2015] QCAT 7
Cite 2 - [2015] QCAT 7

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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