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- Newnham Constructions Pty Ltd v Bernie (No. 2)[2022] QCAT 320
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Newnham Constructions Pty Ltd v Bernie (No. 2)[2022] QCAT 320
Newnham Constructions Pty Ltd v Bernie (No. 2)[2022] QCAT 320
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Newnham Constructions Pty Ltd v Bernie (No. 2) [2022] QCAT 320 |
PARTIES: | NEWNHAM CONSTRUCTIONS PTY LTD (applicant) v PHILLIP BERNIE (respondent) |
APPLICATION NO/S: | BDL161-20 |
MATTER TYPE: | Building matters |
DELIVERED ON: | 5 September 2022 |
HEARING DATE: | 9 December 2021 |
HEARD AT: | Brisbane |
DECISION OF: | Member Sammon |
ORDERS: | Mr Bernie must pay Newnham Construction Pty Ltd’s costs in this matter in the total of $2,035.43 by 11 November 2022. |
CATCHWORDS: | PROCEDURE – COSTS – DISCRETION TO ORDER COSTS – application that representative for an unsuccessful party pay a portion of costs – quantification of costs ordered against the unsuccessful party Domestic Building Contracts Act 2000 (Qld) (repealed), s 67 Federal Court Rules 1979 (Cth) Legal Profession Act 2007 (Qld), s 319, schedule 2 Public Service Act 2008 (Qld) Queensland Building and Construction Commission Act 1991 (Qld), s 77 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 48, s 97, s 100, s 102, s 103, s 107 Queensland Civil and Administrative Tribunal Regulation 2019 (Qld), s 8, s 15, s 18, s 19 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), s 85 Uniform Civil Procedure Rules 1999 (Qld), r 691, schedule 1 and schedule 2 Victorian Civil and Administrative Tribunal Act 1998 (Vic), s 62 Australian Competition and Consumer Commission v The IMB Group Pty Ltd (in Liquidation) [2004] FCA 1592 Aussie Invest Corporation Pty Ltd v Hobsons Bay City Council (2004) VAR 212; [2004] VCAT 2188 Cachia v Hanes (1991) 23 NSWLR 304 Cachia v Hanes (1994) 179 CLR 403 Coral Homes Qld Pty Ltd v QBCC [2014] QCAT 093 Lyons v Dreamstarter Pty Ltd [2012] QCATA 071 Polywell Pty Ltd v Brisbane City Council, Environmental Health/Compliance & Regulatory Services [2017] QCAT 42 Relacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Stuart v Queensland Building and Construction Commission [2016] QCATA 135 Taylor t/as Solar Water Pumping v Cameron & Anor [2014] QCATA 010 Thompson v Body Corporate for Arila Lodge & Anor [2017] QCATA 152 Tracey v Olinderidge Pty Ltd & Wagner [2015] QCAT 7. |
APPEARANCES & REPRESENTATION: |
|
Applicant: | Ms J Babington, ALLegal QLD |
Respondent: | Mr W Jamieson, Accountant |
REASONS FOR DECISION
Introduction
- [1]This is a decision on costs matters arising from my decision made on 23 May 2022 in a building dispute between Newnham Constructions Pty Ltd (Newnham) as builder, and Mr Bernie as the homeowner, for whom the relevant building work was done.
- [2]In my earlier decision, I ordered that Mr Bernie must pay Newnham’s costs in this proceeding. However, in its submissions to that stage, Newnham had not particularised details of its claim for costs. Also, Newnham had sought an order that the representative for Bernie, Mr Jamieson, pay a portion of the costs that the Tribunal ultimately orders be paid in favour of Newnham. Mr Jamieson had not had the opportunity to make submissions specifically about that application by Newnham.
- [3]Accordingly, on 23 May 2022, I made directions that the parties and Mr Jamieson have the opportunity to make submissions about those matters. The parties have now made those submissions, as has Mr Jamieson on the matters that potentially affect him.
- [4]The structure of this decision is that I will first consider Newnham’s application that Mr Jamieson pay a portion of the costs awarded to Newnham, then secondly, I will set out my decision on the amount of costs that Mr Bernie must pay Newnham.
Application that Mr Jamieson pay a portion of costs
The applicable law
- [5]In my earlier decision,[1] I set out the established law that in domestic building matters decided under the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act), the starting position is not the usual position under s 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act), that each party to a proceeding must bear the party’s own costs for the proceeding. Instead, the discretion to be exercised under what is now s 77(3)(h) of the QBCC Act starts with the proposition that it is just and reasonable that a party who causes another to incur costs should reimburse the other party for those costs.[2]
- [6]Nonetheless, the jurisdiction for the Tribunal to award costs is contained in the provisions of the QCAT Act itself. Indeed, it is s 100 of the QCAT Act itself which recognises the different basis to award costs other than a party bearing its own costs, may be contained in an ‘enabling Act’ of which the QBCC Act is an example.
- [7]Section 103(1) of the QCAT Act confers on the Tribunal the discretion to make a costs order against the representative of a party in the following terms:
If the tribunal considers that a representative of a party to a proceeding, rather than the party, is responsible for unnecessarily disadvantaging another party in the proceeding as mentioned in section 102(3)(a), the tribunal may make a costs order requiring the representative to pay a stated amount to the other party as compensation for the unnecessary costs.
- [8]As I noted in my earlier decision in this matter,[3] the criterion contained in s 103(1) for a costs order against a representative of a party, is that the Tribunal must be satisfied that it is the representative of a party, rather than the party itself, who is responsible for unnecessarily disadvantaging another party in the proceeding. In other words, the focus of s 103 is the personal conduct of a representative of a party being the cause of disadvantage, rather than the factual situation of conduct of the party leading to the dispute and the conduct of the dispute in the Tribunal.
- [9]The reference to s 102(3)(a) is a reference to that provision as the criterion to which the Tribunal must have regard in deciding to award costs against a representative of a party. The criterion in that provision is whether a party to a proceeding has acted in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in s 48(1)(a) to (g). The reference to s 48(1) of ‘including as mentioned’ in that provision means that the matters contained in s 48(1)(a) to (g) are relevant factors, but not exhaustive of the factors to which the Tribunal may have regard in applying the test of ‘unnecessarily disadvantaging another party’ under s 103(1).
- [10]The factors contained in s 48(1)(a) to (g) are factors that allow the Tribunal to order a proceeding to be dismissed or struck out, or to make other remedial orders in the conduct of a proceeding. However, those factors have also been selected by s 102(3)(a) as factors relevant to a determination by the Tribunal that a party has unnecessarily disadvantaged another party to the proceeding for the purpose of costs orders. Those factors are:
(a) not complying with a tribunal order or direction without reasonable excuse; or
(b) not complying with this Act, an enabling Act or the rules; or
(c) asking for an adjournment as a result of conduct mentioned in paragraph (a) or (b); or
(d) causing an adjournment; or
(e) attempting to deceive another party or the tribunal; or
(f) vexatiously conducting the proceeding; or
(g) failing to attend conciliation, mediation or the hearing of the proceeding without reasonable excuse
- [11]In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2),[4] the then President of the Tribunal, Wilson J, considered an application for a costs order against the representative of a party. Interestingly, the representative in that case was also Mr Jamieson who is the subject of an application of the same kind in this case. Wilson J noted that Mr Jamieson was not a lawyer, but an accountant.[5]
- [12]In considering whether an order should be made against Mr Jamieson as an accountant representative of a party, and that he was not a lawyer, Wilson J decided that s 103 of the QCAT Act does not discriminate between persons with, or without, legal qualifications.[6] He considered that it was appropriate to apply the same principles governing costs orders against lawyers to the circumstances of that case, where Mr Jamieson, not a lawyer, was a representative of a party.
- [13]His Honour examined the authorities where costs orders had been made against representatives of a party, and noted that the discretion to do so will usually be exercised sparingly, having regard to all the circumstances of the particular case. He noted that costs had been awarded where lawyers acted without proper authority in commencing proceedings, and where they should have known the proceedings were hopeless and their continuation was akin to an abuse of process.[7]
- [14]In Relacom, Wilson J made an order that Mr Jamieson pay costs on the basis that he should have known that he did not have authority to continue with the proceeding on behalf of the company that he represented. I would add that Mr Jamieson continuing with a proceeding that he should have known he did not have authority to continue was a factual matter in the knowledge of Mr Jamieson, rather than a matter of law which he knew.
- [15]The principles when an award of costs against a representative of a party are set out in Tracey v Olinderidge Pty Ltd & Wagner,[8] followed and applied by the Tribunal in Polywell Pty Ltd v Brisbane City Council, Environmental Health/Compliance & Regulatory Services.[9] They are that error by a representative is not sufficient to establish unnecessary disadvantage to another party; that there must usually be evidence of bad faith, misconduct or an improper purpose by the representative; and that examples are representatives acting without proper authority in commencing proceedings or continuing with a manifestly untenable action.[10]
- [16]In Tracey, Member Hughes commented that any disadvantage for the application of s 103(1) and s 102(3)(a) must be ‘unnecessary’ as distinct from a disadvantage experienced in the usual course of litigation.[11] He held that mere error by a representative is not sufficient to establish unnecessary disadvantage to another party.[12] He referred to previous decisions of the Tribunal where it has determined procedural irregularities and deficiencies to be disadvantages experienced in the usual course of litigation. These include a failure to comply with directions, applications made out of time and late amendment of an application, amongst other things.[13] Late filing is a disadvantage experienced in the usual course of litigation and does not justify ordering costs, as is including an incorrect ground of appeal.[14]
Submissions by the parties
- [17]In my earlier decision,[15] I briefly summarised the submissions made by Newnham in seeking an order that Mr Jamieson pay part of Newnham’s costs. I will repeat those submissions and elaborate on them for the purposes of this decision on costs. Newnham contends that Mr Bernie did not notify Newnham of any dispute Mr Bernie had with either the work done by Newnham or money owed, until Mr Jamieson became involved. The Newnham submissions note that Mr Jamieson is an accountant and appears to have advised on the matter from an accounting perspective.[16]
- [18]Pausing there, if Newnham are contending that Mr Bernie’s response to the claim made by Newnham in this proceeding, and Mr Bernie’s counterclaim was solely the product of Mr Jamieson’s involvement, and initiated by him, then I find that is not the case. Mr Bernie’s oral evidence given before the Tribunal on 9 December 2021, which I accept on this point, is that during the course of the work done by Newnham, he complained about the work to Daniel Rollison, then complained to Mr Price. He gave evidence that when problems started with the work done by Newnham, Mr Bernie went to see Mr Jamieson about the matter.
- [19]In my earlier decision, I decided that Practical Completion for the contract concerned did not occur until 17 April 2020.[17] Attached to Mr Bernie’s Response and/or counter- application document dated 30 July 2020, and filed with the Tribunal on 5 August 2020, Mr Bernie was a document dated 14 April 2020 which is his authority authorising Mr Jamieson as his agent regarding matters involved with Newnham. Newnham’s Originating application in this proceeding was filed in the Tribunal on 6 July 2020. Putting all of this evidence together, I think it is reasonable to infer that Mr Bernie made a decision to oppose at least some elements of the claim as it was eventually made by Newnham, on or about 14 April 2020.
- [20]Newnham’s main submissions on costs[18] contended that throughout the proceeding, it was clear that Mr Jamieson had advised Mr Bernie in respect of:
- (a)disputing calculations, amounts and costs which form part of the contract;
- (b)amounts for delay referring to a different contract;[19]
- (c)attempting to seek security of costs and joinder of other parties, apart from Newnham;[20]
- (d)making an (unsuccessful) application for all invoices relating to the contract to be produced; and
- (e)disputing the variations for the garage ceiling and power pole.
- (a)
- [21]Newnham’s main submissions on costs contend that the matter would not have been so protracted if Mr Jamieson had a ‘proper understand [sic] of QCAT matters dealing in the building industry and building contracts.’[21] Newnham contends that this proposition is evidenced by the way Mr Bernie conducted the matter, introducing new claims and allegations and without producing any supporting evidence.[22] It submits that the quote for alleged rectification work was not filed or provided to Newnham prior to 13 July 2021.
- [22]Newnham then referred to a number of dates for completion of procedural matters made through directions hearings before the Tribunal in this matter. Newnham submits that on 16 April 2021, Mr Bernie introduced new claims and the Tribunal granted leave to Newnham to respond by 6 May 2021 and this was to be the last document to be submitted before a hearing.
- [23]Newnham then submits that Mr Bernie after 6 May, and on 13 July 2021 filed a quote for rectification work which had never been produced or claimed previously.[23] Newnham submits that evidence on the question to rectification work was discussed at a directions hearing on 10 December 2020 when the Tribunal advised Mr Jamieson that a claim for rectification work was to be produced within the Amended Counter Application, but it was not.
- [24]Mr Jamieson filed a submission on the application that he pay a share of costs, in his written submission filed 31 May 2022. He referred to the principles set out above from Traecy v Olinderidge Pty Ltd & Wagner and further discussion in that case of the other case I have referred to in discussion of Tracey, where the Tribunal has previously determined procedural irregularities and deficiencies to be disadvantages experienced in the usual course of litigation and including, relevantly, a failure to comply with directions, applications made out of time and late filing of documents as disadvantages experienced in the usual course of litigation which does not justify an order of costs against a party’s representative.
- [25]In his submissions,[24] Mr Jamieson refers to attempts by Mr Bernie, through Mr Jamieson to conciliate and resolve the dispute without the need for legal action so as to save costs to both parties. He refers to ‘numerous attempts’ made to resolve the matter including offers to settle, requesting a representative of Newnham to attend Mr Bernie’s home to discuss his queries about pricing and to view work Mr Bernie was not happy with. Mr Jamieson submits that all attempts were rejected by Mr Price of Newnham and describes this as a ‘lack of cooperation by Newhams’. He refers to a further offer to conciliate and attempt to reach a resolution of the matter in December 2020 but that no response was received.
- [26]In Newnham’s submissions on costs in reply,[25] it responded to Mr Jamieson’s submissions about attempts made to resolve the matter. Newnham submitted that there was no genuine or reasonable attempt to conciliate the matter, by Mr Bernie, by offering a specified amount of money to finalise the matter which was less than half the debt owed by Mr Bernie to Newnham. For its part, Newnham submits that it was Newnham who made attempts to resolve the dispute and Mr Jamieson who continually stated that the matter will go to the Tribunal for determination.
- [27]In the final analysis, I do not think that there is any substance in Mr Jamieson’s submissions that mean that Newnham was in any way unreasonable in rejecting the offer to settle the matter or attempts to negotiate the matter were in any way unreasonable so as to disentitle Newnham from any award of costs against Mr Jamieson that Newnham would otherwise be entitled to.
- [27]However, a failure of negotiations or offers to settle a proceeding do not amount to a criterion on which costs should be ordered to be paid by a party’s representative, absent specific legislation which links a costs order to a less advantageous offer to settle. Unsuccessful offers to settle and negotiations are a very common part of litigation and failure of a matter to settle does not amount to an unnecessary disadvantage caused by a party’s representative to the other side, sufficient to justify an order for costs against a representative.
- [28]Mr Jamieson was clearly incorrect in contending that the contract in this case was a ‘Tier 2’ Queensland Building and Construction Commission contract entitling Mr Bernie to delay costs in completing the contract. However, I am satisfied that this was an honest error of law on the part of Mr Jamieson, rather than a counter claim in bad faith that Mr Jamieson knew was wrong or lacked merit. It was only at the hearing of this matter when I queried Mr Jamieson whether the contract was indeed a Tier 2 contract, that Mr Jamieson realised the error. That error of law does not reach the threshold for an award of costs against Mr Jamieson as a representative of a party.
- [29]The same may also be said for Mr Jamieson’s error in thinking that the (repealed) Domestic Building Contracts Act 2000 (Qld) applied to the contract in this case.
- [30]Material was filed late on behalf of Mr Bernie. However, as the previous decisions of the Tribunal analysed above show, that is not in itself to unnecessarily disadvantage Newnham. It knew about all the material relied upon by Mr Bernie several months before the hearing. I am satisfied that no new material or evidence was sought to be relied on by Mr Bernie at the hearing, which came as a surprise to Newnham’s side of the matter.
- [31]This matter was always going to proceed to a hearing, even if Mr Jamieson had realised the errors of law he was labouring under, prior to the hearing. The counter claim items contended for were genuinely pressed by Mr Jamieson on behalf of Mr Bernie, even if some of them were mistaken. I have found in favour of Mr Bernie on some of the counter claim items for defective work.
- [32]I am satisfied that Mr Jamieson’s conduct of the case does not reach the threshold to award costs against him, and I will not make an order of that kind against Mr Jamieson.
Amount of costs to be awarded against Mr Bernie
Summary of costs claimed
- [33]The amount of costs sought by Newnham pursuant to the order that I made on 23 May 2022 that Mr Bernie pay Newnham’s cost in this matter are contained in the written submissions made by Newnham filed on 31 May 2022.
- [34]The costs sought by Newnham are structured around the key landmark dates in the progress of the proceeding, commencing with the initiating process, and ending with the hearing. In total, Newnham seeks the amount of $6,543.20.
- [35]In summary, the costs sought by Newnham fall into three categories:
- (a)filing fees;
- (b)costs of employees of Newnham in attending to procedural steps directed by the Tribunal, including appearing as witnesses at the hearing of the matter;
- (c)Costs of ALLegal Qld in representing Newnham during the proceeding through Ms Judy Babington.
- (a)
- [36]By way of introduction, I will elaborate on category (c) in a little more detail. Newnham filed an application for leave to be represented by Ms Babington of ALLegal Qld on 8 April 2021. Despite the name of that firm, it appears that the firm is not a firm of lawyers nor is Ms Babington an Australian legal practitioner. On the application for representation, a box after the question asking whether Newnham’s proposed representative was an Australian legal practitioner or government legal officer was ticked ‘no’.
- [37]The application for leave to be represented does not describe Ms Babington as a lawyer. Also, Newnham completed part E of the application form which gives the applicant an opportunity to provide ‘reasons why proposed non-legal representative is appropriate’. The submission made there was that Ms Babington has assisted Newnham during the entire process and was fully informed of the matter and that she was familiar with Tribunal procedures.
- [38]In an Application for waiver of compliance with a procedural requirement filed by Newnham on 24 July 2020, an attachment to that application comprises an email from Ms Babington to Mr Jamieson dated 20 May 2020. In the signature block of that email, Ms Babington describes ALLegal Qld as ‘consultants’. I will therefore proceed on the basis that Ms Babington and ALLegal Qld did not represent Newnham as a lawyer, but instead a consultant.
- [39]On 15 April 2021, the Tribunal gave Newnham leave to be legally represented in the proceeding. Although leave was given to be legally represented, in fact, Newnham continued to be represented by Ms Babington and ALLegal Qld, who was not a lawyer or a legal firm respectively.
- [40]The submission by Newnham filed on 31 May 2022 to substantiate the amount of costs sought by Newnham attaches invoices issued by ALLegal Qld to Newnham. The invoices record claims for work done at all stages of the proceeding, including assistance to prepare and file the initiating Application for domestic building disputes filed on 6 July 2020, preparation of other documents including statements, attendances at directions hearings and the final hearing, and preparation of written submissions to the Tribunal. The invoices for the different stages of work do not record a rate (hourly or otherwise) for which the work was charged, although the first invoice in chronological order dated 2 July 2020 refers to a quote dated 10 June 2020. No further details of the quote appear in the material filed to substantiate the claim for costs by Newnham.
The law on the quantum of costs
- [41]The QCAT Act, the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (the QCAT Rules) and the Queensland Civil and Administrative Tribunal Regulation 2019 (Qld) (the QCAT Regulation) make provision about the amount of costs to be awarded in a proceeding.
- [42]Firstly, as to filing fees, s 85 of the QCAT Rules provides that if the Tribunal makes an order against a respondent in a proceeding, other than a proceeding for a minor civil dispute,[26] the Tribunal may order the respondent to pay to the applicant the amount of any prescribed fee paid by the applicant on filing the relevant application for the proceeding.
- [43]Section 8 of the QCAT Regulation prescribes the fee for filing an application to be $358. Newnham claims that amount for the filing fee for the initiating application to the Tribunal. However, review of the Application for domestic building disputes filed in the Tribunal on 6 July 2020 reveals that the fee paid (no doubt, under the QCAT Regulation as it was at that time) was $345.80.
- [44]The submissions on behalf of Mr Bernie as to the amount of costs that should be awarded, filed on 14 June 2022[27] appear to accept that the prescribed filing fee of $345.80 should be awarded to Newnham.
- [45]I award the amount of $345.80 to Newnham for filing fees for the initiating application.
- [46]The QCAT Act and the QCAT Regulation make provision for the costs to be awarded for witness fees and allowances. Section 97(4) of the QCAT Act provides that a person who is given a notice under s 97(1) is entitled to be paid the fees and allowances prescribed under a regulation. Section 97(1) of the Act provides that the Tribunal or the Principal Registrar may, by written notice, require a person to attend at a stated hearing of a proceeding to give evidence.
- [47]Section 15(1) of the QCAT Regulation provides that for s 97(4) of the QCAT Act, the relevant allowance payable to a non-professional witness who was given a notice under s 97(1)(a) of the Act is the amount of $89.25 for a witness aged over 16 for each day or part of a day of necessary absence from the witness’s place of employment.
- [48]The submissions on the quantum of costs filed on behalf of Mr Bernie rightly refer to a decision of the then Deputy President of the Tribunal, Judge Horneman-Wren in Taylor t/as Solar Water Pumping v Cameron & Anor[28] that the entitlement of a witness to be paid fees and allowances created by s 97(3) of the QCAT Act is conferred upon persons given a written notice by the Tribunal under s 97(1) requiring that person to attend the hearing. In other words, there is no entitlement to payment of costs for a witness not given any such notice.
- [49]For professional costs, s 107(3) of the QCAT states that the QCAT Rules may provide that costs must be assessed by reference to a scale under the rules applying to a court. Although the Uniform Civil Procedure Rules 1999 (Qld) (the UCPR) contain scales of costs for civil proceedings in the Supreme, District and Magistrates Courts in schedules 1 and 2, currently the QCAT Rules do not adopt any of those scales of costs.
- [50]However, the Tribunal has been prepared to award payment of professional costs against a party despite the lack of an approved scale of costs. In Relacom, referred to the parties for their submissions on costs, Wilson J ordered that Mr Jamieson and another person pay the respondent’s costs in that matter fixed in an amount for costs and outlays, including counsel’s fees. Wilson J relied on an affidavit by the respondent’s solicitors assessing costs for those amounts. His Honour held that the solicitor’s affidavit was persuasive that the sums claimed reflected the work necessary to address the application against his client and the degree of complexity involved.[29]
- [51]Although currently the QCAT Rules do not adopt any of the scales of costs of other courts, the Tribunal has had regard to the scales of costs for those courts as a useful guide in assessing costs.[30]
- [52]The jurisdiction to award professional costs can be found in s 102(1) of the QCAT Act, which allows the Tribunal to order a party to a proceeding to pay all or a stated part of the costs of another party, if the Tribunal considers the interests of justice require it to make the order. The complexity of the matter, as referred to by Wilson J in Relacom is a criterion for the award of costs under s 102(3).
- [53]Rule 691 of the UCPR provides that the scales of costs contained in schedules 1 and 2 to the UCPR are the costs that an Australian lawyer is entitled to charge and be allowed for work done or in a proceeding in the courts to which the scales apply. They therefore do not apply to work performed for a litigant by a non-lawyer representative such as Ms Babington or ALLegal Qld.
- [54]Section 319(1) of the Legal Profession Act 2007 (Qld) provides that ‘legal costs’ are recoverable in only three situations:
- (a)under a costs agreement;
- (b)if not (a), then under the applicable scale of costs (which only applies to work done by a lawyer, as I have analysed above);
- (c)if neither (a) nor (b), then according to the fair and reasonable value of the ‘legal services’ provided.
- (a)
- [55]The term ‘legal services’ is defined in the Dictionary (schedule 2) to the Legal Profession Act to mean ‘work done, or business transacted, in the usual course of legal practice’. Section 24 (1) of the Act provides that only an Australian legal practitioner may engage in legal practice.
- [56]In terms of the claims made for the costs of the employees of Newnham involved in the proceeding, Professor Del Pont in ‘Law of Costs’[31] refers to the principle that the ‘costs indemnity rule’[32] does not operate to recompense a successful litigant who is not represented by a lawyer for work done in preparing his or her case. Instead, a successful unrepresented (or ‘lay’) litigant can recover only out-of-pocket expenses, which do not include the value of time spent in preparing the case, without clear evidence of a service contracted and charged for on a commercial or quasi- commercial basis.
- [57]Professor Del Pont refers to the High Court decision in Cachia v Hanes[33] as the leading Australian case on the principle. In that case, the successful party was self- represented and claimed for costs for the loss of time spent in preparation and conduct of his case and for associated out-of-pocket expenses (namely travelling expenses).
- [58]The High Court held in Cachia that when the term ‘costs’ was used in the rules of court concerned in that case, the term does not include time spent by a litigant in preparing and conducting his or her case, but is confined to money paid or liabilities incurred for professional legal services. Compensation for loss of time and a litigant in person could therefore not constitute costs within the meaning of those rules.
- [59]The law on costs recognises that a lay litigant can recover out-of-pocket expenses. The NSW Court of Appeal decision[34] which preceded the High Court’s decision in Cachia recognised that there is no principle that requires a lay litigant’s out of pocket expenses to be restricted to out-of-pocket expenses recoverable by lawyers. A lay litigant may therefore employ agents to perform necessary work (for example serving another party with court documents) and recover out-of-pocket expenses incurred as a result. Del Pont refers to authority that ‘out-of-pocket’ expenses can include court fees, expenses for serving documents and incidental expenses for photocopying, postage and telephone.[35] However, he emphasises that a lay litigant is not entitled to compensation for time spent in collating material in preparation for giving instructions or evidence, refreshing recollection or making notes for the purpose, preparing the litigant’s own affidavit or attendance in court for other witnesses’ evidence.
- [60]There is authority for that proposition in the decision of the Federal Court of Australia in Australian Competition and Consumer Commission v The IMB Group Pty Ltd (in Liquidation).[36] There, Kiefel J[37] considered a claim for costs by unrepresented parties for costs incurred by some of the parties to others on the same side of the litigation who had been awarded costs ‘for acting as their agents in defence of the matter’.[38]
- [61]In the context of the Federal Court Rules 1979 (Cth), Kiefel J dismissed the relevant claim for costs saying:[39]
… [the relevant parties] would not be entitled to recover monies for their own work in preparation of and presentation of their defence or their appeal. They are not legal professional costs. It was never intended that litigants be compensated for time they spend in preparation of their claim. The rule in Cochia v Hanes is not avoided by a respondent employing someone else to do the same work, if they too are unqualified. Nor does labelling the alleged liability ‘out of pocket’ expenses convert them to something other than the preparation and conduct of a case by a non-lawyer. Moreover they do not seem to me to come within the meaning of ‘out of pocket’ expenses which, in the context of claims for costs, refer to those expenses paid or incurred other than those for the actual preparation and presentation of the case. Out of pocket expenses may extend to an agent performing some functions, for example attending to file documents in court, but they could not extend to the performance of professional functions for which a fee is then required to be paid.
(added emphasis)
- [62]Although companies (such as Newnham) are legal entities in their own right and must act through individual people, there is no reason in legal logic why this principle should not apply to companies as well as litigants who are individual people. Otherwise, companies would gain a legal advantage in costs over litigants who are individuals.
- [63]The scope of the term ‘costs’ as distinct from ‘professional legal costs’ (which I hold may only be paid in respect of an Australian legal practitioner) depends on the context of the legislation which creates an entitlement to an award of costs. In Aussie Invest Corporation Pty Ltd v Hobsons Bay City Council,[40] the Victorian Civil and Administrative Tribunal (VCAT) held that the power of that Tribunal to award costs empowered it to indemnify an unrepresented party for lost wages and travelling expenses incurred in attending a hearing. The relevant legislation allowed a party to appear in person or be represented by a professional non-lawyer advocate in certain circumstances under s 62 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
- [64]In Aussie Invest, Morris J said:
Further, there is no power for the tribunal to make an order as to costs in favour of an unrepresented person based upon the time spent by that person in relation to the proceeding. However where an unrepresented person loses wages or incurs travelling expenses in order to attend the hearing of the proceeding, this is an outgoing directly related to the preceding which can be indemnified.[41]
- [65]In other words, the combined effect of Cachia and Aussie Invest is that in a tribunal such as VCAT or QCAT, there is no power to award costs for a party’s preparation for and appearance at a hearing, for services provided by a non-lawyer. However, a tribunal such as VCAT or QCAT may order that a party not represented by a lawyer may claim lost wages and travelling costs for a party to attend a tribunal proceeding.
- [66]The context of the claim for costs considered by Morris J was the claim for an unrepresented objector in a town planning appeal incurring unnecessary costs associated with lost wages and travelling to a hearing that had to be adjourned because of the procedural conduct of another party. The effect of the ruling is that the claim would be allowed.
- [67]Whether Aussie Invest applies in the context of the QCAT Act depends on whether the comparative provision under the QCAT Act is sufficiently similar to the Victorian provision. Section 62(1)(c) of the Victorian Act allows a person to be represented by ‘any person (including a professional advocate) permitted or specified by the tribunal’. Section 43(4)(b) of the QCAT Act is in effectively the same terms. It relevantly provides that a party ‘can not be represented in a proceeding by a person ‘… who is not an Australian legal practitioner … unless the tribunal is satisfied the person is an appropriate person to represent the party.’
- [68]An order allowing a party to be represented is no guarantee that the party will receive in order for costs for that representative although the grant of legal representation is a factor in favour of the Tribunal exercising its discretion to make an order for the payment of legal costs.[42] Even more so, a grant of representation in which a non-lawyer representative appears for a party is no guarantee that the costs of representation by the non-legal representative will be claimable under an order for costs, given the considerations analysed above. A grant of representation by a non-lawyer does not overcome the principles described in Cachia as set out above.
- [69]However, I do think that the principle described in Aussie Invest, that a party may claim lost wages to attend a proceeding of a tribunal such as VCAT or QCAT does apply to a party who is unrepresented by a lawyer although represented by a non-lawyer, by order of the Tribunal. That is, a party may claim lost wages and travelling costs in attending a proceeding requiring an attendance on behalf of a party, even where represented, but not by a lawyer. I will describe this basis as the ‘Not Legally Represented Attendance basis.’ That basis would, of course, not apply to a party which is legally represented at the proceeding. This seems to me to be a fair balance of the principles described above, and the exercise of the Tribunal’s discretion.
- [70]Newnham was represented in the proceeding by leave of the Tribunal from 15 April 2021 onwards, albeit not by a lawyer. I will therefore not allow Newnham to claim the costs of employees in preparing documents or other preparation in the proceeding except insofar as:
- (a)a representative was required to attend a proceeding of the Tribunal by an order made by the Tribunal; or
- (b)as a witness by a notice issued under the Tribunal’s powers requiring the employee to attend at a hearing of the Tribunal to give evidence as a witness.
- (a)
Application of principles to Newnham’s claim for costs
- [71]That leaves the question of whether Newnham may claim for the invoices presented by ALLegal for work undertaken by Ms Babington, as a consultant, albeit that those costs would not in any event be allowed on the same basis as for a legal practitioner (for example, by reference to, or guidance from, the scales of costs for other courts).
- [72]I will describe the claim for costs made in respect of ALLegal by summarising the invoices issued by it to Newnham attached to new Newnham’s written submission on costs filed 31 May 2022. Those invoices are directed to particular stages of the proceeding. I will then examine the invoices in detail, together with other claims for costs relating to those stages.
- [73]The invoices issued by ALLegal to Newnham are as follows:
- (a)invoice 677 issued 2 July 2020 for a total of $1,147.80;
- (b)invoice 699 issued 9 October 2020 for a total of $300;
- (c)invoice 707 issued 23 November 2020 for a total of $200;
- (d)invoice 725 issued 16 February 2021 for a total of $640;
- (e)invoice 743 issued 20 April 2021 for a total of $580;
- (f)invoice 810 issued 22 December 2021 for a total of $700;
- (g)invoice 817 issued 20 January 2022 for a total of $650.
- (a)
Invoice 677
- [74]This invoice includes the filing fee for the original application filed in the Tribunal by Newnham of $345, which I have already allowed. Otherwise, it includes a claim for $650 ‘to assist in preparing and filing QCAT building application as per quote’. A claim for work of that kind would be allowed if it was performed by a legal practitioner. However, ALLegal is not a legal firm. Accordingly, no allowance may be made for work of that kind on the basis of professional costs. Further, work of that kind is not out of pocket expenses of the kind contemplated by Cachia and Aussie Invest. I will therefore not allow that claim. To avoid repetition, I will describe that reasoning as ‘Non-allowable Professional Costs and Outlays’. Similarly, there is in the invoice of $100 for ‘Attempted debt collection - correspondence with debtor & client etc.’ That is also Non-allowable Professional Costs and Outlays and I refuse that claim.
- [75]However, in invoice 677, there is a claim for ‘service fee’ of $52. That amount is claimable, as recognised in Aussie Invest as a legitimate out of pocket outlay on behalf of Newnham and I allow that amount.
- [76]For the same stage, of preparing the initiating process for this proceeding[43], Newnham also makes a claim for the time of Mr Gary Price, the Office and Accounts Manager for Newnham. That claim is for eight hours at $40.70 per hour, a total of $325.60. That claim is for Newnham’s own costs of preparation, separate from a requirement by the Tribunal to attend at the Tribunal, which is not allowable on the principles I have set out above.[44] I will describe this reason as the ‘Internal Cost Basis’.
Invoice 699
- [77]This invoice also relates to the initiating stages of the proceeding and the description of the work done for the invoice is ‘Preparation, filing and serving Response & Affidavit to Respondent’s Counterclaim’. I reject the claim for the Non-allowable Professional Costs and Outlays reasons.
Invoice 707
- [78]This invoice relates to the stage of the proceeding which was a compulsory conference held on 16 October 2020.[45] The description of work for this invoice is ‘Preparation, filing & serving of Submission (Respondent’s Misc Matters) and Statement of Evidence’. I reject the claim for the Non-allowable Professional Costs and Outlays reasons.
- [79]There is also a claim made by Newnham for this stage of the proceeding, of eight hours of Mr Price’s time, also at the rate of $40.70, at a total of $325.60. I reject totality of the claim for the Internal Cost Basis, since the claim of eight hours of Mr Price’s time must relate, not only to his attendance at the compulsory conference by telephone at Newnham’s office, but also preparation for the compulsory conference, and attending to directions orders made as a result of the compulsory conference. The directions order made for the compulsory conference[46] did not require any specific witness to attend the conference. Therefore, the provisions of the QCAT Regulation I have described above for witnesses do not apply.
- [80]However, the submissions made by Newnham were that Mr Price had to leave a job site to attend the compulsory conference.[47] I will therefore allow a total of two hours at the rate of Mr Price’s wages, at $40.70 per hour, under the Not Legally Represented Attendance basis. That is, a total of $81.40. As at the date of the compulsory conference, the Tribunal had not made an order that Newnham be represented, which was only made on 15 April 2021.
Invoice 725
- [81]This invoice relates to the directions hearing held on 10 December 2020. The description of the work done by ALLegal was to attend the directions hearing on 10 December 2020, then on 12 February 2021, preparation and filing a statement of evidence in reply to Mr Bernie’s Response & Amended Counter Application, and on 29 January 2021, preparation and filing of witness statements by Mr Shane Newnham and Mr Daniel Rollinson. The Tribunal’s order that Newnham be represented had not been made as at the date of the invoice. For that reason, and also the Non-allowable Professional Costs and Outlays reasons, I reject the claim for this invoice.
- [82]There is also a claim made by Newnham for wages incurred for implementing directions of the Tribunal in preparing affidavits or statements for Mr Price, Mr Newnham and Mr Rollison, and eight hours for Mr Price to prepare replies and a Response to the Amended Counter Application filed by Mr Bernie. I reject those claims on the Internal Cost Basis.
- [83]However, the submissions on quantum of costs made by Newnham state that Mr Price attended the directions hearing on 10 December 2020.[48] I allow one hour of Mr Price’s wages to attend the directions hearing at his stated rate, that is, $40.70.
Invoice 743
- [84]This invoice relates to work done preparatory to, and for the directions hearing held on 15 April 2021. The work described in the ALLegal invoice is for work done on 12 March 2021, in preparation and filing statements of evidence and a submission, preparing the application to be represented, a submission by Newnham, inquiries in relation to a QBCC licence, the invoice by TXT Electrical, reading the filed documents on behalf of Mr Bernie, and finally attendance at the directions hearing on 15 April 2021.
- [85]The Tribunal made an order that Newnham be represented, on 15 April 2021, but for the Non-allowable Professional Costs and Outlays reasons, I do not allow a claim for the invoice by ALLegal.
- [86]Newnham also make a claim concerning the directions hearing for two hours attendance by Mr Price at his stated rate, a total of $81.40. I allow that claim on the Non-legally Represented Attendance basis.
- [87]Newnham make a claim for preparation by Mr Price of a submission for two hours of his stated rate. I reject this claim on the Internal Cost Basis.
Invoice 810
- [88]This invoice concerns the hearing of this matter before the Tribunal on 9 December 2021. The ALLegal invoice describes the work done by it as attendance at the hearing including preparation of the case and incidental costs. I reject this claim for the Non- allowable Professional Costs and Outlays reasons.
- [89]Newnham also makes a claim for the witnesses who gave evidence at the hearing, namely Mr Newnham, Mr Price and Mr Rollison. The claim is made on the basis of their hourly wages, for the time involved for the hearing including travelling time.
- [90]The submissions on quantum of costs filed on behalf of Mr Bernie on 17 June 2022[49] acknowledge that Mr Rollison (as one witness), was instructed by the Tribunal to attend the hearing, on the Notice of hearing. More completely, the Notice of hearing dated 17 November 2021 directed each party to attend the hearing in person. The notice also required that each party’s witnesses must attend the hearing unless the other party advises they are not required for cross-examination.
- [91]That Notice is, in my opinion, enough to amount to a notice given to a person under s 97(1) of the QCAT Act, to require the person to attend at the hearing to give evidence, such as to trigger the entitlement, under s 97(4) of the Act, for the witnesses at the hearing to be paid the fees and allowances prescribed by ss 15, 18 and 19 of the QCAT Regulation.
- [92]Section 15(1) of the QCAT Regulation allows for an amount of $89.25 to be paid to a witness for each day ‘or part of a day’ of necessary absence from the witness’s place of employment. The submissions on quantum of costs filed on behalf of Mr Bernie state that it was not necessary for the witnesses Mr Price, Mr Newnham or Mr Rollison to stay at the hearing once their evidence and cross-examination was finished, which, the submissions concede, amounted to approximately two hours each.
- [93]However, s 15(1) allows the payment to be made for each day ’or part of the day’ of necessary absence on the part of the witness. That is, the amount of the allowance is not to be divided proportionately to the fraction of a day that the witness spent giving evidence at the Tribunal. I therefore allow the amount of $89.25 for each of the three witnesses, who gave evidence on behalf of Newnham, a total of $267.75.
- [94]Section 18(1) of the QCAT Regulation allows a claim to be made for a person who is given a notice under s 97(1) to be paid an allowance in an amount ‘sufficient to meet the reasonable expenses of complying with the notice (conduct money).’ I have mentioned above how a claim is made by Newnham for each of its employee witnesses on the basis of their hourly wages.
- [95]In the case of Mr Newnham and Mr Price, a claim is made for 10 hours of their hourly wage rate, specifically stated in the case of Mr Newnham to include preparation and travelling, but it appears to me to also include preparation, for the reason that both Mr Newnham and Mr Price were present at the Tribunal for the same time, which was the duration of the hearing. There is no basis on which to distinguish between the two because of time spent at the Tribunal. For Mr Rollinson, the claim made is for four hours including travel.
- [96]The question is then whether the scope of conduct money in s 18(1) of loss of productivity to Newnham for the time of its employee witnesses giving evidence falls within ‘an amount sufficient to meet the reasonable expenses of complying with the notice’. In my opinion it is, and that view is consistent with the principle stated by VCAT in Aussie Assist. It is also consistent with the view of conduct money taken by Member Ryan in Coral Homes Qld Pty Ltd v QBCC,[50] that the implication in the QCAT Act is that conduct money is an amount to allow physical compliance with a notice requiring attendance at the Tribunal. If physical compliance requires personal attendance, then that may entail loss of productivity and/or wages.
- [97]I would therefore allow the claim for loss of productive hours for each of Newnham’s employee witnesses at their hourly wage rate. However, in the case of Mr Newnham and Mr Price, I would exclude preparation for giving evidence, since that falls within the scope of the Internal Cost Basis. Both Mr Newnham and Mr Price attended all of the full day for hearing at the Tribunal and it was also necessary for them to travel from the Gold Coast to Brisbane return to do so. I would allow a total of eight hours at the hourly wages rate for each and exclude two hours in each case for preparation time under the Internal Cost Basis.
- [98]I would therefore allow a claim for conduct money for each of Newnham’s employee witnesses on the following basis:
- (a)Mr Newnham – eight hours at $66.50 per hour = $532.00
- (b)Mr Price – eight hours at $40.70 per hours = $325.60
- (c)Mr Rollison – four hours at $60.50 = $242.00.
- (a)
I would allow this claim for a total of $1,099.60.
- [99]In my opinion, there is no reason to deduct from conduct money allowed under s 18, the amount allowed for witness attendance under s 15. Section 18(4) specifically provides that payment of conduct money is in addition to payment of witness attendance allowances under s 15.
- [100]Newnham also make a claim for the hearing, for parking expenses in the amount of $92.20. Section 19 of the QCAT Regulation allows travel expenses on the basis of either the amount payable for fares on public transport for return travel between the person’s place of employment and the hearing place, or if no public transport is available, then the amount calculated at the rate per kilometre payable under the Public Service Act 2008 (Qld) to a public service employee required to use their private motor vehicle for official purposes. Therefore, although Newnham may well have incurred parking expenses in the amount claimed, there is a specific requirement limiting the amount that may be claimed for travel expenses, that will in this case exclude parking fees.
- [101]According to the Translink journey planner website, there is a system of bus and train travel available from Molendinar at the Gold Coast where Newnham’s offices are located, to Central Station close to the Tribunal in Brisbane city. The cost of the fare for the journey is $11.13 one way. Allowing for a return journey for each of those witnesses, the cost of the public transport fares for a total of the three Newnham witnesses is $66.78 and I allow that sum.
Invoice 817
- [102]Finally, Newnham makes a claim for ALLegal invoice 817 stated to be to prepare the written submissions and reply after the hearing in the amount of $650. I reject that claim for the Non-allowable Professional Costs and Outlays reasons.
Conclusion
- [103]Adding together all the claims for costs I have allowed as described in these reasons, I award costs to Newnham in the amount of $2,035.43. Consistently with my earlier decision on the substantive claim by Newnham, this will be a significant amount of money for Mr Bernie to pay. It may be necessary for him to borrow that amount and to arrange a loan to do so. I therefore allow him until 31 October 2022 to pay that amount to Newnham.
Footnotes
[1]At paragraphs [210]-[212].
[2]Lyons v Dreamstarter Pty Ltd [2012] QCATA 071.
[3][226].
[4][2010] QCAT 412.
[5][46].
[6][47] and [54].
[7][48].
[8][2015] QCAT 7 at [16].
[9][2017] QCAT 42.
[10]Polywell at [34].
[11][16].
[12][17].
[13][18].
[14][21] and [22].
[15][222].
[16]Newnham’s written submissions filed on 10 January 2022 (Newnham’s main submissions).
[17][132].
[18]Paragraph 115.
[19]Which I take to mean the reliance, in Mr Bernie’s case as initially presented, that the Contract was a ’Tier 2’ QBCC contract.
[20]Made in Mr Bernie’s Amended Counter Application dated 29 January 2021, seeking an order for security of costs for $40,000 and for Mr Price, Mr Rollison and Ms Babington to be joined as parties to the proceeding.
[21]Paragraph 117.
[22]Paragraph 118.
[23]Paragraph 120.
[24]Page 4.
[25]Filed 21 June 2022, at paragraphs 5-6.
[26]This proceeding is a proceeding other than for a minor civil dispute.
[27]At page 9.
[28][2014] QCATA 010 at [26].
[29][63] and [64].
[30]Thompson v Body Corporate for Arila Lodge & Anor [2017] QCATA 152 at [24].
[31]Dal Pont GE, Law of Costs, (3RD edn, 2013), LexisNexis, Butterworths, Sydney, 171.
[32]That in litigation, a successful party should be indemnified by the unsuccessful party for the costs attributable to the litigation.
[33](1994) 179 CLR 403.
[34](1991) 23 NSWLR 304 at 321 per Handley JA.
[35]Del Pont at 175.
[36][2004] FCA 1592.
[37]As Her Honour then was. She is now Chief Justice of the High Court of Australia.
[38][5].
[39][11].
[40](2004) 22 VAR 212; [2004] VCAT 2188.
[41][18].
[42]Stuart v Queensland Building and Construction Commission [2016] QCATA 135 at [37].
[43]Page 1 of Newnham’s submissions on costs filed 31 May 2022.
[44]See the references above to the decision of the High Court in Cachia.
[45]Page 2 of Newnham’s submissions on costs filed 31 May 2022.
[46]Made on 9 September 2020.
[47]Page 2 of Newnham’s submissions on costs filed 31 May 2022.
[48]Page 3 of Newnham’s submissions on costs filed 31 May 2022.
[49]Paragraph 5(A)(xi), on page 9.
[50][2014] QCAT 093 at [18].