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AK Group Qld Pty Ltd v Queensland Building and Construction Commission No 2[2021] QCAT 126

AK Group Qld Pty Ltd v Queensland Building and Construction Commission No 2[2021] QCAT 126

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

AK Group Qld Pty Ltd and Anor v Queensland Building and Construction Commission No 2 [2021] QCAT 126

PARTIES:

AK GROUP QLD PTY LTD AND ANDREW KENNETH BINNIE LEIPER

(Applicants)

 

v

 

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(Respondent)

APPLICATION NO/S:

OCR082-19

OCR087-19

MATTER TYPE:

General administrative review matters

DELIVERED ON:

15 February 2021

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Lumb

ORDERS:

  1. The Respondent is ordered to pay to the Applicants costs in the amount of $704.00.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – POWER TO AWARD GENERALLY – STATUTORY BASIS GENERALLY – where original decision by decision-maker set aside on review – whether an order for costs should be made in favour of the applicants – whether in the interests of justice to make a costs order in favour of applicants – whether costs order ought to be made based on an offer of compromise – whether applicants entitled to payment of filing fees

Queensland Civil and Administrative Tribunal Act 2009 (Qld), ss 21, 100, 102, 105

Queensland Civil and Administrative Tribunal Rules 2009 (Qld), rr 85, 86

Brown and Anor v Noosa Constructions Pty Ltd [2012] QCATA 194

Emmetlow Pty Ltd t/as Colonial Village v Pomroy [2015] QCATA 131

Magill v Queensland Law Society Inc (No 3) [2020] QCATA 327

Oaks Hotels & Resorts Limited v Knauer [2020] QCATA 90

Perkins & Anor v Queensland Building and Construction Commission & Anor [2018] QCAT 15

Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412

Stuart v Queensland Building and Construction Commission [2016] QCATA 135

The Licensee Pty Ltd v Queensland Building and Construction Commission [2021] QCATA 7

REPRESENTATION:

 

Applicants:

Sajen Legal

Respondent:

Robinson Locke Litigation Lawyers

REASONS FOR DECISION

Introduction

  1. [1]
    By a Decision in this matter dated 14 December 2020, the Tribunal set aside two decisions of the Respondent (‘the QBCC’) made on 3 August 2018.
  2. [2]
    The parties were directed (‘the Direction’) to file with the Tribunal, and serve on the other party, within 14 days of the date of the orders, written submissions on the question of costs of the (two) Applications brought respectively by AK Group Qld Pty Ltd and Andrew Kenneth Binnie Leiper (collectively ‘the Applicants’).
  3. [3]
    On 16 December 2020, the QBCC filed written submissions entitled ‘Preliminary Submissions’ (‘the Preliminary Submissions’).
  4. [4]
    On 24 December 2020, the Applicants filed written submissions entitled ‘Applicants’ Submissions on Costs’ (‘the Applicants’ Submissions’).
  5. [5]
    On 15 January 2021, the QBCC filed further written submissions entitled ‘Submissions regarding costs’ (‘QBCC’s Costs Submissions’).

A preliminary issue

  1. [6]
    The Applicants submitted that they wished it to be recorded that the QBCC did not seek their permission before sending the Preliminary Submissions to the Tribunal and that such conduct was a breach of rule 22.5 of the Australian Solicitors Conduct Rules 2012 (‘the Conduct Rules’).[1]
  2. [7]
    The substance of the Preliminary Submissions was to ‘object’ to the making of the Direction and request that such direction be ‘withdrawn’.  In my view, the Preliminary Submissions were not submissions contemplated by the Direction as is evident from the content of the Preliminary Submissions.[2]
  3. [8]
    However, I do not consider that this is the appropriate forum to determine whether the conduct of the QBCC’s solicitor constituted a breach of rule 22.5 of the Conduct Rules and I decline to do so.

The submissions in relation to costs

  1. [9]
    The Applicants submitted that they have incurred legal fees (both solicitor and counsel) totalling $107,612.70 (including GST) together with disbursements of $10,565.64 (including GST).[3]  In support of their costs application, the Applicants filed affidavits of Shayne Thomas Calendar sworn 24 December 2020 and Kyle James Kimball sworn 2 February 2021.
  2. [10]
    The Applicants sought costs in the following alternative amounts:
    1. (a)
      $85,565.64 (including GST) comprising $75,000.00 for legal fees (being approximately 75% of the total fees incurred) and the full amount of the disbursements;
    2. (b)
      $22,249.12 for costs from 19 October 2019 comprising $20,000.00 as a proportion of the total legal fees from that date of $27,699.82 (excluding the Applicants’ solicitors’ invoice of October 2019) plus disbursements incurred after 9 October 2019 of $2,249.12[4];
    3. (c)
      $704.00 comprising two filing fees of $352.00 each for the respective applications (sought pursuant to rule 85 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘QCAT Rules’)).
  3. [11]
    The QBCC submits that there should be no order as to costs.

Whether the interests of justice justify an order for costs

  1. [12]
    The question of costs in this matter is governed by the provisions of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’).
  2. [13]
    Section 100 of the QCAT Act provides:

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.

  1. [14]
    Section 102 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. (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.
  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. [15]
    Each of the parties referred to the observations of Alan Wilson J, President in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2):[5]

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. [16]
    The factors in s 102 are not determinative of whether a costs order should be made but go only to informing the exercise of a broad discretion, the touchstone of which remains the Tribunal’s assessment of the interests of justice in a particular case and a discretion to award costs will only be exercised when the interests of justice in such case outweigh the prima facie ‘no costs’ position under s 100.[6]
  2. [17]
    The Applicants referred to a number (but not all) of the factors enumerated in s 102.  I consider that a consideration of whether a costs order should be made in favour of the Applicants requires a consideration of each of the factors in s 102.

Whether the QBCC acted in a way that unnecessarily disadvantaged the Applicants

  1. [18]
    The Applicants do not contend that the QBCC had acted in such a manner and, in my view, the QBCC did not act in such a way.

The nature and complexity of the dispute the subject of the proceeding

  1. [19]
    The Applicants contend that: [7]
    1. (a)
      the proceedings were not complicated and although expert evidence was required this went to the narrow issue of solvency;
    2. (b)
      the QBCC got the decision ‘wrong’ and the Applicants have been put to significant time and expense because of this ‘mistake’.
  2. [20]
    The QBCC contended that the matter involved predominantly a factual inquiry around a relatively narrow issue, being the assessment of solvency and that the experts were in general agreement save as to whether Mr Leiper was ready, willing and able to support the company financially at the relevant time. [8]
  3. [21]
    I accept that the issues raised by the Applications largely involved factual issues and that the proceeding was not overly complex.  In my view, the lack of complexity tends to tell against the making of an order for costs in favour of the Applicants.
  4. [22]
    As to the Applicants’ submission that the QBCC got the decision wrong, I will address this under the following factor.

The relative strengths of the claims made by each of the parties to the proceeding

  1. [23]
    The Applicants contend that they always had the ‘stronger case’ and that the QBCC did not directly challenge Mr Leiper’s evidence that he was not an influential person in AK Group (and that it failed to call rebuttal evidence from the subsequent director, Ms Shaw).[9]
  2. [24]
    The QBCC points out that this was a review proceeding and that it owed a statutory duty, pursuant to s 21 of the QCAT Act, to assist the Tribunal to make the correct and preferable decision.[10]  In Perkins & Anor v Queensland Building and Construction Commission & Anor,[11] it was said[12] that the role of the QBCC as regulator is a relevant factor to be taken into account in the context of s 102 of the QCAT Act.  Another relevant factor is whether the position of the QBCC was ‘unreasonable’ in some way.[13]
  3. [25]
    In my view, notwithstanding that the original decisions were set aside, there was nothing unreasonable in the conduct adopted by the QBCC during the course of the proceeding, including the cross-examination of Mr Leiper.  As accepted by both parties, the proceeding largely involved issues of fact (and, I would add, an element of credit).  In this respect, I reject the Applicants’ contention that it was necessary for the QBCC to put on evidence from Ms Shaw in order to rebut Mr Leiper’s evidence, particularly where there is no suggestion that the QBCC could have done so but declined to do so.
  4. [26]
    For the above reasons, I do not consider that the original decisions can be characterised as ‘wrong’.  The Tribunal reached a different conclusion based on an assessment of all the evidence presented including the evidence of Mr Leiper.

Whether the Applicants were afforded natural justice by the QBCC

  1. [27]
    Subsection 102(3)(d) of the QCAT Act addresses factors relevant only to review proceedings.
  2. [28]
    The first of those is whether an applicant has been afforded natural justice by the decision-maker for the decision.
  3. [29]
    The Applicants do not suggest that they were not afforded natural justice.  I accept the QBCC’s contention that the Applicants were afforded natural justice.

Whether the Applicants genuinely attempted to enable and help the QBCC to make the decision on the merits

  1. [30]
    This is the second of the factors set out in s 102(3)(d).
  2. [31]
    The Applicants submit that they have genuinely attempted to assist the QBCC to make the correct decision.[14]
  3. [32]
    The QBCC submits that, while Mr Leiper did not lack a ‘genuine approach’ when providing evidence, prior to the hearing his evidence did not justify clearly the decision which was made by the Tribunal.[15]  The QBCC was critical of the clarity of some of the affidavit evidence filed by the Applicants.[16]
  4. [33]
    In my view, the Applicants’ affidavit evidence clearly addressed the factual matters concerning whether or not Mr Leiper was an ‘influential person’ when he ceased to be a director of AK Group.  With respect to the issue of solvency, I am satisfied that the Applicants made a genuine attempt to put the relevant evidence before the Tribunal.  Nevertheless, I consider that it was reasonable for the QBCC to test that evidence by cross-examination of Mr Leiper and that the QBCC’s conduct to and including the hearing was undertaken consistently with its obligation under s 21 of the QCAT Act.

The financial circumstances of the parties to the proceeding

  1. [34]
    The Applicants submit that the Tribunal can take notice that the QBCC would be better funded to run litigation than the Applicants, particularly as its function is to administer the QBCC Act, including responding to review applications by licensees.[17]
  2. [35]
    The QBCC submits that:[18]
    1. (a)
      Mr Leiper has not provided details as to his financial position and it would be speculation to make a conclusion about it in the absence of such evidence;
    2. (b)
      the QBCC is a government instrumentality which is accountable for its expenditure; it does not have liberty to spend public money without accountability; and it is not correct to characterise the QBCC as having ‘endless amounts of money’ available to spend.
  3. [36]
    I respectfully adopt the following observations of the Appeal Tribunal in Stuart v Queensland Building and Construction Commission[19] as apposite to the arguments made in relation to this factor:

[55]  The Commission is a statutory body funded from fees paid by licensees. It has a number of statutory obligations including to achieve a reasonable balance between building contractors and building owners.

[56]  There is no specific evidence before the Tribunal of the Commission’s financial position. We accept that the Commission may have a better net asset position than Mr Stuart but it does not have unlimited funds, has budgetary constraints and many demands on its resources.

[57]  The Appeal Tribunal has previously accepted that the relative financial position should not be ‘the sole determinant’ of a costs application.

[58]  In view of the Commission’s statutory role the Tribunal has previously accepted that it must not be reticent in discharging its obligations for fear of adverse costs orders against it if it is unsuccessful in responding to an application for review of its decisions unless it can be demonstrated, there is some specific conduct on the part of the Commission, that would ‘so compellingly’ overcome the strong contra-indication against costs orders in s 100 of the QCAT Act.

(footnotes omitted)

  1. [37]
    Even if it is accepted that the QBCC has a better net asset than Mr Leiper (or the Applicants), in the context of a review providing, in my view, this would not justify the making of an order for costs against the QBCC in the absence of additional factors demonstrating that it is in the interests of justice to make such an order.

Anything else the Tribunal considers relevant

  1. [38]
    The Applicants submit that the QBCC took into account irrelevant information when making its decision as is said to be apparent from the QBCC’s complaint about the absence of certain information, in particular, information and evidence to verify why the company went into liquidation and information and evidence to clarify why the company restructured and why the accountant made this recommendation (and that s 56AC of the QBCC Act did not require consideration of these factors) and that this puts the proceeding in a different category to those where the Tribunal simply takes a different view of the facts.[20]
  2. [39]
    The QBCC contends that those factual matters were in fact relevant including that the reason for the restructuring was relevant to whether or not Mr Leiper was ready and willing to support the company financially at the time he resigned.
  3. [40]
    Whilst I consider that unfortunately such evidence was only of peripheral relevance, I do not consider that the QBCC’s decision turned on such matters.  Further, in my view, such matters did not involve a substantial amount of evidence or time spent addressing them.  I consider that it is not a factor justifying a costs order in favour of the Applicants.

Summary

  1. [41]
    For the above reasons, I do not consider that it is in the interests of justice to make an order requiring the QBCC to pay all or a stated part of the Applicants’ costs of the proceeding.  In particular, this was a review proceeding and I find that the QBCC did not act unreasonably in its approach to the original decision or the manner of its conduct in the proceeding including the hearing.  The factors relevant to s 102(3) of the QCAT Act in the present case do not provide any ‘strong contra-indication’ against the costs order contemplated by s 100.[21]
  2. [42]
    That leaves the alternative bases upon which the Applicants seek a costs order.

The ‘offer to settle’

  1. [43]
    The Applicants submit that they made an offer to settle, by letter from their solicitors to the QBCC’s solicitors dated 15 October 2019 (‘the Letter’),[22] and that the Applicants have received a decision that is more favourable than this offer and, by virtue of s 86(2) of the QCAT Rules, the Tribunal has the discretion to award the Applicants all reasonable costs incurred after they made the offer.[23]
  2. [44]
    The Letter stated, relevantly:

In light of the above and the liquidation of the Company now having been settled as between our client, the liquidator and the creditors, our client proposes:

  1. our client and his company's licence be reinstated; with
  2. our client and his company’s submission to extra conditions to the satisfaction of the QBCC of current and/or future licences; and
  3. our client thereby agreeing to withdraw his current QCAT application to review the QBCC decisions.

Alternatively, should the QBCC be of the view that it is unable to change its decision to cancel our client's licence and his company's licence, please confirm whether as an alternative course the QBCC will consider observing our client's review of the decisions in QCAT and permitting it to take its course without the additional expense to both parties of QBCC acting as contradictor.

  1. [45]
    Section 105 of the QCAT Act 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.

  1. [46]
    Rule 86 of the QCAT Rules provides:
  1. (1)
    This rule applies if—
  1. (a)
    a party to a proceeding, other than a proceeding for a minor civil dispute, makes another party to the proceeding a written offer to settle the dispute the subject of the proceeding; and
  1. (b)
    the other party does not accept the offer within the time the offer is open; and
  1. (c)
    in the opinion of the tribunal, the decision of the tribunal in the proceeding is not more favourable to the other party than the offer.
  1. (2)
    The tribunal may award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made.
  1. (3)
    If a proceeding involves more than 2 parties, this rule applies only if the acceptance of the offer would have resulted in the settlement of the matters in dispute between all the parties.
  1. (4)
    In deciding whether a decision is or is not more favourable to a party than an offer, the tribunal must—
  1. (a)
    take into account any costs it would have awarded on the date the offer was given to the other party; and
  1. (b)
    disregard any interest or costs it awarded relating to any period after the date the offer was given to the other party.
  1. [47]
    The combined operation of s 105 and rule 86 stands independently of the operation of s 102, such that it is unnecessary to establish that it is in the interests of justice to order costs in favour of one of the parties if an operative offer to settle was made falling within the scope of rule 86.[24]
  2. [48]
    Dealing first with the ‘alternative course’ referred to in the Letter, I accept the QBCC’s contention that it does not act as a ‘contradictor’ in a review proceeding.  As noted above, the QBCC has a statutory obligation to assist the Tribunal pursuant to s 21 of the QCAT Act.  In my view, for the QBCC to only take a ‘passive role’ in the proceeding would be contrary to such obligation.  In any event, it is unclear what, if any, costs would have been saved by the Applicants if the QBCC had taken such a passive role, particularly given that the hearing was dealt with in one day.
  3. [49]
    As to the primary proposal, I accept the QBCC’s contention that it cannot compromise its statutory role by ‘bartering’ (I would prefer the term ‘negotiating’) with licensees.[25]  In any event, I consider that there are two additional obstacles to the Applicants’ reliance on the ‘offer to settle’.  First, I consider it necessarily implicit in the requirement set out in rule 86(1)(b) that an effective offer to settle be left open for acceptance for a specified period of time.  The Letter did not do this.  Secondly, with respect to the second of the proposed terms, I consider that it lacked certainty.  It provided for the Applicants’ ‘submission’ to extra conditions to the satisfaction of the QBCC in respect of ‘current and/or future licences’.  No particular conditions were proposed nor even the parameters for the imposition of such conditions.  On one reading of the term, the Applicants were agreeing to be bound by any condition imposed by the QBCC for existing and all future licences regardless of how onerous the conditions were (e.g. daily reporting of, and the provision of documentation in respect of, the financial position of the Applicants).  It would be surprising if that is what the Applicants intended.  Regardless, I consider that it was not an offer capable of acceptance because of the lack of certainty in relation to the Applicants’ proposal.
  4. [50]
    In any event, had I found that rule 86 was applicable, I would not have exercised the discretion to order costs in favour of the Applicants for the reasons addressed in relation to rule 86 and the additional reasons addressed in relation to s 102 of the QCAT Act.
  5. [51]
    The further alternative concerns the application fees.

Rule 85 of the Rules

  1. [52]
    Rule 85 provides:

If the tribunal makes an order against a respondent in a proceeding, other than a proceeding for a minor civil dispute, the tribunal may order the respondent to pay to the applicant the amount of any prescribed fee paid by the applicant on filing the application or referral for the proceeding.

  1. [53]
    Rule 85 is separate from s 100 and s 102 of the QCAT Act and so does not come under the principles set out in those sections nor the case law which considers those sections.[26]
  2. [54]
    Allowance of a claim for a filing fee is discretionary.[27]
  3. [55]
    However, in Emmetlow it was said by the Appeal Tribunal:[28]

The normal practice of the Tribunal where a request is made by a successful applicant, is to award the filing fee. Usually this is done without giving any reason in a case where it is obvious that the applicant has been successful, because it would clearly be unfair to deprive the applicant of the filing fee in such circumstances …

  1. [56]
    I see no reason in principle why this practice should not apply to a review proceeding although the question of whether to award costs in the form of the filing fee remains one in the discretion of the Tribunal.
  2. [57]
    In circumstances where both of the Applicants were successful (in setting aside the respective decisions) and have sought the amount of the respective filing fees (which were necessary to initiate the ultimately successful contested applications), I consider that the Tribunal’s discretion under rule 85 should be exercised in favour of awarding such costs.  There is no dispute as to the quantum of those fees, being $352.00 each for a total of $704.00.

Order

  1. [58]
    For the reasons set out above, pursuant to rule 85 of the Rules, the QBCC is ordered to pay to the Applicants the amount of $704.00.

Footnotes

[1]The Applicants' Submissions, paragraph 2.

[2]Cf QBCC's Costs Submissions, paragraphs 4 and 5.

[3]The Applicants' Submissions, paragraph 19.

[4]It was not stated whether this was inclusive or exclusive of GST

[5][2010] QCAT 412 at [29].

[6] Magill v Queensland Law Society Inc (No 3) [2020] QCATA 327 at [7] per Daubney J, President.

[7]The Applicants' Submissions, paragraph 10.

[8]QBCC's Costs Submissions, paragraphs 18-19.

[9]The Applicants' Submissions, paragraph 11.

[10]QBCC's Costs Submissions, paragraph 24.

[11][2018] QCAT 15.

[12]At [31].

[13] The Licensee Pty Ltd v Queensland Building and Construction Commission [2021] QCATA 7 at [39]-[40] per Senior Member Howard and Member Traves.

[14]The Applicants' Submissions, paragraph 12.

[15]QBCC's Costs Submissions, paragraph 35.

[16]QBCC's Costs Submissions, paragraphs 33-34.

[17]The Applicants' Submissions, paragraph 13.

[18]QBCC's Costs Submissions, paragraphs 36-37.

[19][2016] QCATA 135 at [55]–[58] per Senior Member O'Callaghan and Member Deane.

[20]The Applicants' Submissions, paragraphs 14-16.

[21]It is unnecessary to address the QBCC's additional arguments at paragraphs 43 and 44 of its Costs Submissions.

[22]Affidavit of Mr Callander, exhibit STC 5.

[23]The Applicants' Submissions, paragraphs 17-18.

[24] Oaks Hotels & Resorts Limited v Knauer [2020] QCATA 90 at [76].

[25]QBCC's Costs Submissions, paragraph 51.

[26] Emmetlow Pty Ltd t/as Colonial Village v Pomroy (‘Emmetlow’) [2015] QCATA 131 at [101].

[27] Brown and Anor v Noosa Constructions Pty Ltd [2012] QCATA 194 at [92].

[28]At [102].

Close

Editorial Notes

  • Published Case Name:

    AK Group Qld Pty Ltd and Anor v Queensland Building and Construction Commission No 2

  • Shortened Case Name:

    AK Group Qld Pty Ltd v Queensland Building and Construction Commission No 2

  • MNC:

    [2021] QCAT 126

  • Court:

    QCAT

  • Judge(s):

    Member Lumb

  • Date:

    15 Feb 2021

Appeal Status

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

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