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Melville v Body Corporate for Santorini by the Sea CTS 16829[2022] QCAT 119

Melville v Body Corporate for Santorini by the Sea CTS 16829[2022] QCAT 119

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Melville & Anor. v Body Corporate for Santorini by the Sea CTS 16829 [2022] QCAT 119

PARTIES:

DANIEL JOHN MELVILLE

(First Applicant)

BERNADETTE MARY MELVILLE

(Second Applicant)

v

BODY CORPORATE FOR SANTORINI BY THE SEA CTS 16829

(Respondent)

APPLICATION NO/S:

OCL065-19

MATTER TYPE:

Other civil dispute matters

DELIVERED ON:

31 March 2022

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Carrigan

ORDERS:

The Applicants’ Application for costs of the preliminary hearing and the final Hearing is dismissed.

CATCHWORDS:

ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where an application for costs was made for preliminary hearing and final hearing – whether body corporate caused delay – late retainer of solicitors for the body corporate – where body corporate claimed the Tribunal did not have jurisdiction – where preliminary hearing held to determine jurisdiction – whether the applicants were caused unnecessary disadvantage – where first hearing date vacated by the Tribunal for COVID-19 restrictions – reallocation of new hew hearing dates – whether award of costs is in the interests of justice

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102, s 107

Mathews v  Millington [2017] QCATA 76

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

CH v Queensland Police Service [2021] QCATA 137

Mazini v Health Ombudsman (No 4) [2020] QCAT 365

Cowen v Queensland Building and Construction Commission [2021] QCATA 103

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

Queensland Racing Integrity Commission v Vale [2017] QCATA 110

Kehl v Board of Professional Engineers of Queensland [2010] QCATA 77

Thompson v Body Corporate for Arila Lodge & Anor [2017] QCATA 152

Walden v Body Corporate for Seaquester Quays [2020] QCATA 77

APPEARANCES &

REPRESENTATION:

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 Applicants at trial[1] were successful in some of their claims, but not others. 
  2. [2]
    The Applicants now apply for costs of the proceedings, including reserved costs for an interlocutory hearing whether the Tribunal had jurisdiction to hear the dispute.[2]
  3. [3]
    The Respondent Body Corporate’s submission on costs assert the Applicants “did not have a resounding win in the proceedings” and rely on other grounds for resisting the Applicants’ cost application.
  4. [4]
    However, as stated in Mathew v Millington,[3] success in an application “is not sufficient to require that any costs be awarded.”
  5. [5]
    The Applicants rely on the exception[4] to the general rule[5] that each party to a proceeding must bear the party’s own costs for the proceeding.
  6. [6]
    Both the Applicants’ submission[6] and the Respondent’s submission[7] refer to the following statement by the then President of QCAT in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)[8] in respect of awarding costs under the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act):

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 contraindication against costs orders in s 100.

  1. [7]
    But Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) has been referred to subsequently and reviewed in a number of more recent Tribunal decisions.
  2. [8]
    In a recent decision Judge Allen QC, then Deputy President of QCAT, in CH v Queensland Police Service[9] referred to, and agreed with, a useful compilation and discussion of the authorities on the operation of s 100 and s 102 of the QCAT Act in the reasons of Judicial Member McGill SC in Mazini v Health Ombudsman (No 4)[10] that the correct approach to the operation of s 100 and s 102 of the QCAT Act was:

The ultimate question posed by the statutory provisions is whether in a particular case the interests of justice require the Tribunal to make a costs order. That is the effect of the terms of the statute. Because of the use in s 102(1) of the word “require”, the default position of no order as to costs should not be too readily departed from.

...

I do not consider that there is any justification in the words of the statute for any further constraint on the operation of the power to order costs under s 102, although the section directs attention to a number of matters which may in a particular case be usefully considered. The reference to “any other matter the Tribunal considers relevant” shows that this list is not to be read in a confining sense.

  1. [9]
    In CH v Queensland Police Service,[11] Judge Allen QC agreed with the further observations of Judicial Member McGill SC in Cowen v Queensland Building and Construction Commission[12] where it was stated:[13]

In so far as his Honour went further in Ralacom at [29], I consider that his statement cannot confine the discretion conferred on the Tribunal under s 102(1), or modify the test in that section.

...

I consider that to say that an order for costs will not be made unless the factors favouring an order are “compelling” does not accurately state the test for making an order for costs laid down by s 102(1) ... The test is whether the interests of justice “require” an order for costs, but I do not accept that the circumstances favouring an order for costs must be compelling before that test will be met.

  1. [10]
    In Magill v Queensland Law Society Inc (No 3), the various “interest of justice” exceptions were discussed by Justice Daubney, then President of QCAT in these terms:[14]

These factors, individually and collectively, are not determinative, and 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. The discretion to award costs will only be exercised when the interests of justice in a particular case outweigh the prima facie “no costs “position in s 100.

The Applicants’ Submission on Costs

  1. [11]
    In summary, the Applicants submitted that the interests of justice favoured an award of costs in their favour as:
    1. (a)
      Stage 2 of the proceedings (as the Applicants referred to them) from about 30 March 2020 to 21 January 2021, was a delay caused by the Respondent and was unnecessary;
    2. (b)
      the Respondent filed a Cross-application at the beginning of the proceedings, which was withdrawn at trial when the Applicants had completed their preparations for the hearing;
    3. (c)
      a consideration of relevant facts for matters in s 102(3)(a), (b), (c) and (e) of the QCAT Act favours an award of costs for the Applicants; and
    4. (d)
      the quantum of costs sought was $41,430.27 (incl. GST) on the standard basis.

Delay of “Stage 2” of the Proceedings

  1. [12]
    The Applicants submit that Stage 2 of the proceedings were delayed and was unnecessary because the Respondent:
    1. (a)
      engaged legal representation late;
    2. (b)
      filed a new set of witness statements at a late stage of the proceedings; and
    3. (c)
      required a preliminary determination of whether QCAT had jurisdiction to hear this dispute.
  2. [13]
    The Applicants commenced proceedings in the Tribunal on 27 July 2019.  The Respondent’s solicitors were not retained until about 27 March 2020.
  3. [14]
    In the period after the proceedings commenced the Tribunal made directions on 11 October 2019 at a Compulsory Conference for both parties to file evidence for a Hearing to be held on 7 April 2020.
  4. [15]
    The Respondent says that “there were not three stages” and submit that its material was filed within the time limits required by the Tribunal’s directions made at a Compulsory Conference.  The Respondent did file its material within time but then on 30 March 2020 (approximately twelve (12) days late) it filed a further two (2) witness affidavits.
  5. [16]
    The Respondent also asserts while it kept to the directions timetable, it is the Applicants who delayed proceedings as they were late in filing material required for the Hearing on 7 April 2020.  The Applicants did not file their statements in reply and submissions until 29 April 2020.  This, it is submitted, was twenty-eight (28) days after the date nominated in the directions.
  6. [17]
    The Respondent submits it was the Applicants who were not prepared for the scheduled Hearing for 7 April 2020.
  7. [18]
    However, on 31 March 2020 the Tribunal gave notice to the parties the scheduled hearing for 7 April 2020 was vacated because of COVID-19 restrictions.
  8. [19]
    Whether the proceedings consisted of three stages or otherwise does not matter.  What the Applicants called “Stage 2” of the proceedings, demonstrates that they were not ready for the scheduled Hearing on 7 April 2020.  Whether this was the result of the Tribunal giving notice on 31 March 2020 to vacate the hearing or whether they required additional time to respond the Respondent’s affidavits filed late on 30 March 2020 or whether the Applicants just could not comply with the directions is not known. 
  9. [20]
    The Respondent was compliant with the directions, apart from the filing of two affidavits 12 days late.  These affidavits exhibited documents which were, or should have been, already in the possession of the Applicants and also deposed to a search of the body corporate records for relevant correspondence said to have been sent by the Applicants to the body corporate manager.  The contents of both affidavits should not have caused any surprise to the Applicants.  In any event, the Applicants did not produce, nor did they rely on, any evidence filed subsequent to 30 march, 2020, to contradict the contents of both affidavits. 
  10. [21]
    The respondent retained solicitors approximately nine months after the proceedings commenced but there is no evidence that this caused any delay in the proceedings. 
  11. [22]
    Any delay was caused by the imposition of COVID-19 restrictions and the vacation of the hearing date of 7 April 2020.
  12. [23]
    The Tribunal rejects the Applicants’ submissions that these above matters in “Stage 2” (as the Applicants refer to) delayed the proceedings and were unnecessary. There is no evidence of what expense, if any, the Applicants incurred by these above matters.  The Tribunal accepts the submissions of the Respondent apart from those submissions relating to the late filing of its affidavits on 30 March 2020.
  13. [24]
    The Applicants also submit the Respondent caused further delay and expense by claiming the Tribunal lacked jurisdiction to hear this dispute on the basis the Applicants were “Service Contractors” and not “Caretaking Service Contractors”.  The Respondent claimed the relevant Deeds appointing the Applicants did not authorise them to be a “Letting Agent” for the body corporate scheme and they were a “Service Contractor”.
  14. [25]
    The Applicants contend that having been through a rigorous process of preparing for the Hearing scheduled in April 2020, they then had to resubmit new material for the jurisdictional issue determination.  They also contend that they had conducted the proceedings in accordance with the objects of the QCAT Act but the Respondent had not complied with those objects.  They further assert the Respondent “pressed” for the jurisdictional issue to be heard which could easily have been dealt with at the final hearing avoiding significant delay.
  15. [26]
    The Respondent submits it has always raised the jurisdictional issues whether the Applicants were a “Service Contractor” and not a “Caretaking Service Contractor”.  Both parties were given the opportunity by Tribunal’s directions to make submissions whether or not the jurisdictional issue should be heard as a “preliminary issue”.  The Respondent relies on the Direction of the Tribunal on 28 August 2020 to proceed by way of a preliminary hearing on the papers.  That issue was determined on 21 January 2021 when the Tribunal decided it had jurisdiction and reserved costs for the final hearing.
  16. [27]
    The Respondent submits that the preliminary determination was appropriate because:
    1. (a)
      no trial dates were available for at least another twelve (12) months after the original Hearing date of 7 April 2020 was vacated (Hearing dates were later allocated in May 2021).  It was an appropriate use of time available to have the preliminary issue determined before the lifting of COVID-19 restrictions in 2021;
    2. (b)
      if it had been determined that the Tribunal did not have jurisdiction, there would have been significant saving of time and costs to the parties and the Tribunal;
    3. (c)
      the preliminary determination involved questions of construction of a number of documents over a lengthy period and the application of legislative provisions;
    4. (d)
      the preliminary determination proceeded on the papers and without evidence and witnesses;
    5. (e)
      there was no wastage of time or costs;
    6. (f)
      without the preliminary determination, the final Hearing could have been “pushed” into a third day (whereas the Hearing was ultimately conducted over two (2) days);
    7. (g)
      it was in the interest of justice that the jurisdictional issue be decided at a preliminary hearing;
    8. (h)
      the Applicants have adduced no evidence as to the costs they incurred in relation to the preliminary determination apart from the possibility of fees paid to counsel.
  17. [28]
    As a Hearing date was not available from 7 April 2010 until early May 2021, the parties used the time to further the progress of the proceedings, notwithstanding the COVID-19 restrictions.  The Tribunal considers that the period for Stage 2 (as referred to by the Applicants) from 30 March 2020 was properly used by the parties and could not be regarded as an unnecessary stage of the proceedings as a result of conduct of the Respondent.
  18. [29]
    The Respondent’s arguments on the jurisdiction issue required a detailed examination and analysis of various caretaking agreements and documents over an extended period of time for their proper construction and their compliance, or their ineffectiveness, with a number of statutory provisions in the BCCM Act.
  19. [30]
    The preliminary issues were determined by the Tribunal during the interval brought about by COVID-19 restrictions, where a hearing with witnesses was not available to the parties.  The decision on the preliminary issues meant the Hearing allocated in May 2021 could proceed more expeditiously and efficiently, concentrating on the main dispute as to whether the options to extend the caretaking agreement had in fact been exercised, and, if so, was it a valid exercise of the options together with remuneration issues.
  20. [31]
    The Tribunal rejects the Applicants’ submission that the Respondent caused further unnecessary delay and expense by proceeding with its claim that the Tribunal lacked jurisdiction.  Rather, that issue was dealt with in a period where no Hearing had been allocated.  There is no evidence the parties would have had an earlier Hearing than May 2021, had the Respondent not pursued its jurisdiction claim.  Had the Applicants succeeded in having that issue put off to the final Hearing, then additional Hearing time would have been required as submitted by the Respondent.  The Tribunal accepts the Respondent’s submission on this part of the costs dispute.

The Respondent’s Cross-application

  1. [32]
    At the commencement of the Hearing the Respondent withdrew and did not proceed with several claims in its Cross-application including a claim for alleged lack of performance and compliance by the Applicants with duties required under the Caretaking Agreement.  A consequence of the withdrawal of a number of claims was to reduce the ambit of the dispute to its core essentials whether the Applicants had exercised any of the options in the Caretaking Agreement and if so, whether the exercise of those options was legal and binding on the parties.
  2. [33]
    The Applicants have not referred to, or identified, in their submissions and evidence what preparation, if any, had been completed by them for the hearing of those claims withdrawn in the Cross-application.  The affidavit relied upon in the costs Application did not traverse these withdrawn claims, except possibly to some minor extent.  It is not known exactly what was the extent and nature of the preparation undertaken by the Applicants relating to the withdrawn claims in the Cross- application.
  3. [34]
    The claims withdrawn by the Respondent would have taken up significant hearing time had they been pursued fully, especially the claim relating to the Applicants’ alleged lack of performance of duties under the Caretaking Agreement.  The Hearing would not have been completed in the allocated two (2) days in May 2021, had the claims had continued.
  4. [35]
    The Tribunal does not accept there are sufficient factors in the Applicants’ request for the withdrawn claims in the Cross-application to persuade it to exercise its discretion to award costs.  Rather, the interests of justice were more appropriately served with the dispute being reduced to its core controversy between the parties and permitting available hearing time to be devoted to the parties fully and completely presenting their case for the core controversy.
  5. [36]
    The Tribunal does not accept there was any identifiable prejudice caused to the Applicants by the withdrawal of those claims in the Cross-application and refuses costs.

Section 102(3)(a) – Whether the Respondent has unnecessarily disadvantaged the Applicants

  1. [37]
    The Applicants contend that the Respondent acted in a way that unnecessarily disadvantaged them in the proceedings.  The Applicants rely on several matters including:
    1. (a)
      the Respondent retaining solicitors late in the proceeding; and
    2. (b)
      the Respondent requiring a preliminary hearing on the jurisdictional issues.
  2. [38]
    The Applicants’ submissions are that the parties had already undertaken a “rigorous process of submissions” when the Respondent at a late stage of the proceedings retained solicitors and filed affidavits on 30 March 2020.  This, it is contended, required the re-submission of witness statements because of the re-making of the Respondent’s case for the determination of the jurisdictional issue.  They further submit that the Respondent prevented the proceedings from being dealt with economically, informally, quickly and in a manner to minimise costs, by pressing for an interlocutory hearing on jurisdiction rather than leaving the issue to be heard and determine at the final Hearing in May 2021.
  3. [39]
    The Respondent asserts the Applicants’ submission misstates the true background to the proceedings and wrongly claims the Respondent re-invented its case.  The Respondent relies on the Tribunal’s directions made on 28 August 2020, which, among other matters, made directions for the Tribunal to determine the preliminary issue on jurisdiction by a Hearing on the papers.
  4. [40]
    The Respondent asserts that they provided witness statements in compliance with Tribunal directions but then filed and delivered two further affidavits on 30 March 2020, which did not cause the hearing date of 7 April 2020 to be vacated.  The Respondent says it was otherwise compliant with directions made on 11 October 2019, and would have been ready for the hearing if the Tribunal had not vacated the hearing date due to COVID-19 restrictions. 
  5. [41]
    They further rely on the Applicants’ failure to file and serve their material on 1 April 2020 in readiness for the hearing.  They submit that the hearing set down for one (1) day on 7 April 2020, would not have finished in that time as was demonstrated by the final Hearing in May 2021 taking two (2) full days.  They submit that the Applicants were not ready for the April 2020 hearing as they filed material twenty-eight (28) days late on 29 April 2020. 
  6. [42]
    The Respondent asserts that the jurisdictional issue had always been raised and the Tribunal’s directions on 26 May 2020 made arrangements for the determination of the preliminary issue by the parties filing submissions.  They argue that the determination of the preliminary issue was appropriate and was not a waste of time and money in the circumstances of the COVID-19 restrictions.
  7. [43]
    The Applicants’ reliance on late filing of two (2) affidavits and the engagement of a solicitor by the Respondent overlooks the lack of evidence of, or any potential, prejudice to the Applicants.  The Applicants did not file any material in reply or opposition to any of the facts set out in the Respondent’s two (2) affidavits filed late.  The engagement of the Respondent’s solicitor two days before the filing of those affidavits did not cause any delay to the Hearing date of 7 April 2020.  There is no evidence to support the Applicants’ claim they had to resubmit witness statements for the Hearing dates in April 2020 or 2021.
  8. [44]
    It is the case that at a Compulsory Conference held on 26 May 2020 the Tribunal made directions for the parties to file submissions for the determination of the jurisdictional issue.  On 28 of August 2020 the Tribunal gave directions for a determination of the jurisdictional issue by a preliminary hearing on the papers.  The Applicants filed their submissions by about 7 October 2020.  The Tribunal determined the jurisdictional issue in January 2021.  Apart from filing submissions in October, 2020, there does not appear to be any evidence supporting the general tenor of the Applicants’ submissions referred to above.
  9. [45]
    The Applicants’ reliance on the jurisdictional issue being dealt with by a preliminary hearing overlaps with, or repeats substantially, that issue already dealt with earlier in these Reasons in the discussion of the Applicants’ reference to “Stage 2”. ‘There is nothing new in these submissions by the Applicants that the jurisdictional issue had the potential to cause a significant impact on the course of the Applicants’ Application.  The parties were directed to make submissions on how the issue should be dealt with and ultimately the Tribunal directed in August 2020, that the jurisdictional issue ought to be heard as a preliminary issue.  The Tribunal rejects the Applicants’ submission that the Respondent acted in a way that unnecessarily disadvantaged the Applicants in the proceedings.  The Tribunal accepts the Respondent’s submissions and finds that it has not established that the Applicants were unnecessarily disadvantaged in terms of s 102(3)(a) of the QCAT Act.

Section 102(3)(b) – Nature and Complexity of the Dispute

  1. [46]
    The Applicants submit that complex and novel issues were involved in these proceedings as:
    1. (a)
      there were limited precedents on the simultaneous exercise of successive options to extend the term of an agreement;
    2. (b)
      there were complex issues of fact extending back over ten (10) years relating to a “chain of title” relating to the jurisdictional issue raised by the Respondent.
  2. [47]
    The Respondent submits that whether legal precedents exist is not conclusive as to whether or not a dispute is complex.  It submits that the Applicants have not identified any legal or factual issue of particular or unusual complexity.  Events in the previous ten (10) years were well documented.  Legal issues were determined on the proper construction of specific relevant provisions of the caretaking agreements.
  3. [48]
    The issues identified by the parties for the Tribunal’s determination were factual and legal.  The factual issue was whether or not the Applicants had given notice to exercise any of the three (3) options to extend the term of the agreement.  The legal issue was whether or not the exercise of the options was valid and enforceable.  There was also a remuneration issue, but that depended largely on the proper construction of the Caretaking Agreement and what was the proper measure of damages.  The factual, legal and remuneration issues were not straightforward or simple matters for determination.  They each had difficult characteristics which involved significant dispute.  The resolution of the dispute involved complexity to a varying extent.  The Tribunal finds that in terms of s 102(3)(b), the proceedings did involve factual and legal issues of varying complexity.

Section 102(3)(c) – Relative Strengths of the Parties’ Claims

  1. [49]
    The Applicants submit the relative strength of claims in the dispute favours them as:
    1. (a)
      the decision on the jurisdictional issue was in favour of the Applicants;
    2. (b)
      the decision at the hearing held that the Applicants had validly exercised all three (3) options;
    3. (c)
      the Respondent withdrew most of its claims in the Cross-Application on the day of the Hearing in early May 2020;
    4. (d)
      while the Applicants lost their claim for payment of arrears of remuneration over a two (2) year period, there was no impact on costs of the proceedings in any significant way.
  2. [50]
    The Respondent’s submissions refer to both parties experiencing some success and some failure with their claims at the Hearing.  The Respondent contends that:
    1. (a)
      it succeeded on many of its arguments;
    2. (b)
      issues it lost involved the proper construction of the Caretaking Agreement but its arguments were reasonably open to it;
    3. (c)
      the jurisdictional issue decided at the preliminary hearing was a discrete issue and was decided on the proper construction of various Caretaking Agreements and legislative provisions;
    4. (d)
      the abandonment of several issues in the Cross-application at the commencement of the Hearing did not add any time or costs to the proceedings;
    5. (e)
      its case at the Hearing was not “highly untenable” (referring to Queensland Racing Integrity Commission v Vale);[15]
    6. (f)
      as it enjoyed success in some issues and lost the others because of the proper construction of relevant agreements.
  3. [51]
    The Respondent relied upon the following paragraph in Queensland Racing Integrity Commission v Vale:[16]

[50] The expression “relative strength” contemplates a “substantial disparity between the strength of one claim and the weakness of its competitor”.  A high level of un-tenability rather than mere tenuousness is envisaged.

[51] It is unlikely that this criterion alone would call for a costs order where there was a real issue to be tried and real justification for the claims made on either side, however the ultimate test is still whether justice requires the costs order or not.

  1. [52]
    Further, as to the discretion and relevant matters, in Kehl v Board of Professional Engineers of Queensland[17] Judge Kingham stated:

 The factors listed in s 102 are a guide to the considerations the Tribunal may take into account …  In any given case, the relative importance of each criterion will vary.  Further, their significance may relate to what stage the proceedings have reached.  For example, questions about the relative strengths of the parties’ cases may assume less significance upon an initial hearing, yet loom large when it comes to the costs of an application for leave to appeal.

  1. [53]
    At the Hearing the issues raised by the parties were essentially:
    1. (a)
      did the Applicants in fact exercise the three, or any, options to extend the term of the Caretaking Agreement;
    2. (b)
      did the Applicants lawfully exercise each of the options in the Caretaking Agreement; and
    3. (c)
      were the Applicants entitled to remuneration as provided in the Caretaking Agreement for the two (2) previous years.
  2. [54]
    On the factual exercise of the options, the Applicants had mixed results.  They failed to prove that by posting all three notices of exercise of those options that they had, in fact, exercised those options.  The Applicants did succeed on the factual issue of the subsequent hand delivery of all three options to the Body Corporate Manager, but had to overcome the complex issue whether or not that was in fact notice to the Respondent Body Corporate in accordance with the terms of the Caretaking Agreement or otherwise. 
  3. [55]
    These matters were contested by the Respondent.  This was a genuine dispute, about which both parties strongly disagreed, and could not be described as having a high level of untenability, as referred to in Queensland Racing Integrity Commission v Vale.
  4. [56]
    The legal issue regarding whether or not the three options had been validly exercised also attracted strong arguments from both parties and could not be described as having a “high level of untenability”.
  5. [57]
    The remuneration issue involved complex arguments which both parties forcefully argued.  The outcome of these arguments was dependent on the construction of the remuneration clause in the Caretaking Agreement and the appropriate measure of damages.  There was a genuine dispute between the parties as to the entitlement to remuneration or lack thereof.
  6. [58]
    In summary, while both parties had mixed success and failure in their arguments across all relevant issues, there was not a significant disparity between the strengths of arguments of one party and the weakness of the other party (see Queensland Racing Integrity Commission v Vale).[18]  In these proceedings, there was a genuine dispute supported by arguments justifying the continuation of the Hearing to a determination by the Tribunal.

Section 102(3)(e) – Financial Circumstances of the Parties

  1. [59]
    The Applicants rely on this provision and submit that they suffered severe financial consequences in these proceedings as:
    1. (a)
      the original Hearing date of 7 April 2020 being vacated due to COVID-19 restrictions;
    2. (b)
      the Respondent from 26 May 2020 did “effectively re-invent or re-plead their case at the Applicant’s expense”;
    3. (c)
      the Respondent’s resistance to the Hearing being conducted by “remote conferencing” caused delay in the Tribunal conducting a hearing.

This, the Applicants submit, resulted in a delay of eighteen (18) months, whereas the Applicants had anticipated in April 2020 after the Hearing was vacated, that the delay would be six (6) months.  The long delay caused them severe financial consequences.

  1. [60]
    The evidence of the financial consequences relied on by the Applicants was the refusal of the Respondent to pay any remuneration under the caretaking agreement and incurring additional legal costs meant the Applicants:
    1. (a)
      incurred a severe financial detriment;
    2. (b)
      incurred unanticipated legal expenses;
    3. (c)
      caused them to be deeply concerned about commercial legal payments;
    4. (d)
      caused them to move reserve savings into the business account to cover re-payments;
    5. (e)
      caused them to consider current business structure, given their current and ongoing financial obligations.
  2. [61]
    The Respondent submits that vacating the hearing date of 7 April 2020, was not its responsibility and further, they submit that the Applicants were not ready for that Hearing as witness statements were not filed until 29 April 2020.  The Respondent asserts that a hearing in person and allowing for cross examination, was essential because of factual, credibility and documentary issues.  They also assert that it is incorrect for the Applicants to claim they received no income for eighteen (18) months.  They assert that the Applicants received income from conducting the letting business under the Caretaking Agreement, and from a New Zealand pension.
  3. [62]
    The difficulty in assessing the financial circumstances relied on by the Applicants is that there is no evidence of their financial circumstances.  They inform the Tribunal of their “severe financial detriment”, “unanticipated legal expenses”, “commercial loan repayments” and their “business structure” but disclose no details or any particulars to support those matters.  They rely on general assertions without producing any evidence of those financial circumstances. The Respondent refers to the Applicant receiving income from the Letting Business as well as a New Zealand pension.  The Applicants do not dispute or confirm these assertions by the Respondent.  Neither have the Applicants disclosed any details of any remuneration, if any, they get from these sources.
  4. [63]
    The Respondent’s financial circumstances are not referred to by either party.  The Respondent’s financial circumstances are, in any event largely regulated by its ability to levy lot owners under The Body Corporate and Community Act 1997 (Qld).
  5. [64]
    In summary, the financial circumstances of the parties are not disclosed in the evidence before the Tribunal.  No proper or worthwhile assessment can be made on the available evidence of the relative financial circumstances of the parties save and except that the Respondent has the ability through numerous lot owners to raise funds by imposing levies on those owners.

Applicants’ Costs

  1. [65]
    The general rule is that, if the Tribunal makes an order for costs, it must fix the costs, if possible.[19]  Otherwise, it may make an order requiring the costs to be assessed under the rules.[20]
  2. [66]
    The Applicants submit it is appropriate for the Tribunal to fix costs.  They adopt what is said in Thompson v Body Corporate for Arila Lodge & Anor[21] that:

In all the tests, it is the principle that when fixing costs, only those costs which are reasonable, necessary or proper should be allowed.

  1. [67]
    The Applicants then submit that their costs are $76,360.54, under four (4) heads of claim, but do not apportion that amount between those various heads.  They claim, with regard to some of these heads at least, the costs were “reasonable, necessary and proper”.  It is noted that at no stage have the Applicants attempted to explain in what way the costs are reasonable, necessary or proper under any of the four heads relied upon.
  2. [68]
    The Applicants then submit that “it is in the interests of justice for costs to be awarded on the standard basis and on the District Court scale”.  In respect of this submission, Thompson v Body Corporate for Arila Lodge & Anor[22] stated the following:

When fixing costs, the tribunal is not bound by any particular scale of costs although the scales used by the mainstream courts can be a useful guide.  The tribunal is also not bound by any rules of assessment or usual practice as to the basis of assessment (standard or indemnity).  The aim is to make an award which is reasonable and appropriate in the circumstances of the case.

  1. [69]
    The Applicants submit that, in addition to the $76,360.54, there is a further $6,500.00 in estimated fees for work-in-progress, which includes fees for Counsel.  They submit that if costs are assessed on the standard basis of the District Court scale, a reasonable approach would be to award fifty per cent of the professional costs incurred.  Thus, they submit on the standard basis the Applicants’ costs should be fixed by the Tribunal at $41,430.27 (viz. $76,360.54 plus $6,500.00 totalling $82,860.54 of which fifty percent is $41,430.27).
  2. [70]
    The Respondent submits that the Applicants have failed to provide any itemised tax invoices for work performed and that the Tribunal cannot rely with any confidence on the tax invoices attached to the affidavit of Jodie Elizabeth Graham, solicitor for the Applicants.  If costs were to be awarded, the Respondent submits those costs should be assessed on the standard basis of the Magistrates Court.  In any event, the Respondent submits the Tribunal could not rely confidently on the Applicants’ solicitors affidavit as:
    1. (a)
      the Tribunal cannot know what work, if any, related to issues on these proceedings as no itemised tax invoices were produced;
    2. (b)
      most of the tax invoices provided calculated costs based on hourly rates, which is not the way scales of costs in the Magistrates Court and the District Court are calculated;
    3. (c)
      the hourly rates claimed are well in excess of the scales of costs in either of those Courts;
    4. (d)
      the tax invoices relied on are indemnity costs rather than standard costs;
    5. (e)
      without knowing what specific items of work were undertaken and what charge was made for each item, the Tribunal cannot accept the Applicants’ solicitor’s evidence that costs claimed were reasonable, necessary and proper; and
    6. (f)
      as the Applicants’ solicitor’s affidavit does not provide any details of the work-in-progress claim of $6,500.00, there is no evidence of what this amount is for or how it is calculated.
  3. [71]
    While the Applicants’ solicitor’s affidavit exhibit’s monthly fee invoices, those invoices contain fee charges with no description of what professional services or other work was undertaken to generate the invoiced costs.  While the solicitor’s retainer letters provide an outline of costs proposed to be charged, overall there is no provision of details for particular work or services provided to enable the Tribunal to make an informed decision whether costs were reasonably, or otherwise, incurred.  Details of Counsel’s fees have been provided to some extent, but in the overall context the claim for legal costs by the Applicants little information, if any, is provided as to the extent and identification of the professional services rendered.  The Tribunal accepts the submissions by the Respondent that the Applicants have not provided any, or any sufficient, details of their solicitor’s professional services undertaken to generate the monthly costs invoiced.  There is no, or no sufficient, evidence for the Tribunal to determine whether any of the invoiced costs were reasonable, necessary or proper (Thompson v Body Corporate for Arila Lodge & Anor).
  4. [72]
    On the available evidence, assuming the Tribunal were to make an order for costs, it is not possible to fix any amount of costs in these proceedings pursuant to s 107(1) of the QCAT Act.  If an award of costs were to be made then the Tribunal would make orders similar to those made by Member Richard Oliver in Walden v Body Corporate for Seaquester Quays[23] that the Applicants file and provide to the Respondent a short form of assessment and make such other ancillary orders to give effect to the carrying out of any award pursuant to that assessment.

Conclusion

  1. [73]
    The Applicants’ costs are governed by the general rule in s 100 of the QCAT Act that each party must bear their own costs of the proceedings except where the Tribunal’s discretion is enlivened in the interests of the injustice.[24]
  2. [74]
    The Applicants claim costs for the preliminary hearing of the jurisdictional issue.  Their submissions on the preliminary issue and taking into account the various factors relied upon in s 102(3) of the QCAT Act are discussed earlier in these Reasons.  Those matters relied on by the Applicants do not make out a case for the exercise of the discretion to award costs for the preliminary issue.  The Tribunal is not satisfied that the grounds relied upon by the Applicants have been sufficiently established to enliven the exercise of the discretion for an award of costs for the preliminary issue.  The Application for the costs of the preliminary issue is dismissed.
  3. [75]
    The Applicants’ claim for costs of the proceedings also relies on grounds which are the same, or very similar, to the preliminary hearing costs claim including the relevant factors under s 102(3) of the QCAT Act.  Those grounds have already been discussed above including the various factors relied upon in s 102(3) of the QCAT Act.  Having considered all of those factors raised by the Applicants, the Tribunal is not satisfied that it is in the interest of justice to exercise its discretion for an award of cost of the proceedings.  The Tribunal considers that these proceedings are an appropriate case for the general rule in s 100 of the QCAT Act to apply and each party will bear their own costs of the proceedings.  The Application for costs of the proceedings is dismissed.
  4. [76]
    The Applicants seek to have the Tribunal fix its award of costs at $41,430.27 on the standard basis.  For the reasons already discussed above it is not necessary for the Tribunal to award the costs sought or to consider further whether a short form of assessment is required.
  5. [77]
    The parties to the proceedings will bear their own costs and the Applicants’ Application for costs is dismissed.

Orders

  1. [78]
    The Applicants’ Application for costs of the preliminary hearing and the final hearing is dismissed.

Footnotes

[1]  [2021] QCAT 285.

[2]  [2021] QCAT 37.

[3]  [2017] QCATA 76 per Member Allen at [9].

[4]  Section 102 of QCAT Act 2009.

[5]  Section 100 of QCAT Act 2009.

[6]  At para 33.

[7]  At para 47.

[8]  [2010] QCAT 412.

[9]  [2021] QCATA 137.

[10]  [2020] QCAT 365.

[11]  Above note 9 at [7].

[12]  [2021] QCATA 103.

[13]  Above note 12 at [27] and [28].

[14]  [2020] QCAT 327 at (7).

[15]  [2017] QCATA 110 at [50].

[16]  [2017] QCATA 110 at [50] and [51].

[17]  [2010] QCATA 77 at [10].

[18]  Above note 16 at [50].

[19]  Section 107(1) of QCAT Act.

[20]  Section 107(2) of QCAT Act.

[21]  [2017] QCATA 152 at [26].

[22]  Above note 21 at [24].

[23]  [2020] QCATA 77.

[24]  Section 102 of QCAT Act.

Close

Editorial Notes

  • Published Case Name:

    Melville & Anor. v Body Corporate for Santorini by the Sea CTS 16829

  • Shortened Case Name:

    Melville v Body Corporate for Santorini by the Sea CTS 16829

  • MNC:

    [2022] QCAT 119

  • Court:

    QCAT

  • Judge(s):

    Member Carrigan

  • Date:

    31 Mar 2022

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
CH v Queensland Police Service [2021] QCATA 137
2 citations
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Cite 1 - [2021] QCATA 137
Cite 2 - [2021] QCATA 137
Cowen v Queensland Building and Construction Commission [2021] QCATA 103
2 citations
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Cite 1 - [2021] QCATA 103
Cite 2 - [2021] QCATA 103
Kehl v Board of Professional Engineers of Queensland [2010] QCATA 77
2 citations
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Cite 1 - [2010] QCATA 77
Cite 2 - [2010] QCATA 77
Magill v Queensland Law Society Inc (No 3) [2020] QCAT 327
2 citations
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Cite 1 - [2020] QCAT 327
Cite 2 - [2020] QCAT 327
Marzini v Health Ombudsman (No 4) [2020] QCAT 365
2 citations
Jump To
Cite 1 - [2020] QCAT 365
Cite 2 - [2020] QCAT 365
Mathew v Millington [2017] QCATA 76
2 citations
Jump To
Cite 1 - [2017] QCATA 76
Cite 2 - [2017] QCATA 76
Melville & Anor v Body Corporate For Santorini By The Sea CTS 16829 [2021] QCAT 37
1 citation
Jump To
Cite 1 - [2021] QCAT 37
Melville & Anor v Body Corporate for Santorini By The Sea CTS 16829 [2021] QCAT 285
1 citation
Jump To
Cite 1 - [2021] QCAT 285
Queensland Racing Integrity Commission v Vale [2017] QCATA 110
3 citations
Jump To
Cite 1 - [2017] QCATA 110
Cite 2 - [2017] QCATA 110
Cite 3 - [2017] QCATA 110
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
Thompson v Body Corporate for Arila Lodge [2017] QCATA 152
2 citations
Jump To
Cite 1 - [2017] QCATA 152
Cite 2 - [2017] QCATA 152
Walden v Body Corporate for Seaquester Quays [2020] QCATA 77
2 citations
Jump To
Cite 1 - [2020] QCATA 77
Cite 2 - [2020] QCATA 77

Cases Citing

Case NameFull CitationFrequency
Brisbane Marine Pilots Pty Ltd (in liquidation) v General Manager of Maritime Safety Queensland, Department of Transport and Main Roads and Ors (costs) [2022] QCAT 2252 citations
1

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