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Clark v Queensland Building and Construction Commission (No 2)[2024] QCAT 454

Clark v Queensland Building and Construction Commission (No 2)[2024] QCAT 454

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Clark v Queensland Building and Construction Commission & Anor (No 2) [2024] QCAT 454

PARTIES:

JONATHAN HARTLEY CLARK

(applicant)

v

QUEENSLAND BUILDING and CONSTRUCTION COMMISSION

(first respondent)

ON THE LEVEL (QLD) PTY LTD

(second respondent)

APPLICATION NO/S:

GAR652-21

MATTER TYPE:

General administrative review matters

DELIVERED ON:

23 October 2024

HEARING DATES:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Lumb

ORDERS:

The parties to the proceeding must bear their own costs for the proceeding.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – POWER TO AWARD GENERALLY – STATUTORY BASIS GENERALLY – where applicant applied to review a decision of the first respondent not to give a direction to rectify to the second respondent – where applicant joined second respondent to proceeding – where application dismissed after a final hearing for lack of jurisdiction – where jurisdictional ground based on a 2021 appeal tribunal decision – where neither respondent referred to decision prior to final hearing – where second respondent seeks costs of the proceeding including costs on an indemnity basis for part of proceeding – whether the interests of justice require a costs order to be made in favour of the second respondent – whether costs order justified by an offer to settle which was not accepted by the applicant

Queensland Building and Construction Commission Act 1991 (Qld), s 72A(4)

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102, s 105 and Schedule 3

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

Campbell v Queensland Building and Construction Commission (No 2) [2023] QCAT 54

JCN v James Cook University & Ors No 2 [2024] QCAT 257

Jorg v Queensland Building and Construction Commission [2021] QCATA 134

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

Pound v Queensland Building and Construction Commission [2023] QCAT 298

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

Introduction

  1. [1]
    This is a determination of the question of costs for the proceeding before the Tribunal.[1]
  2. [2]
    The Second Respondent (‘the Builder’) seeks an order that the Applicant (‘Mr Clark’) pay the Builder’s costs of and incidental to the Review Application proceeding, including the costs of the Builder’s legal representation, on the indemnity basis since the making of an offer to settle (and, implicitly, on the standard basis prior to that date).[2]
  3. [3]
    The Builder submits that an order for costs is warranted:
    1. pursuant to s 102 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’);
    2. pursuant to s 105 of the QCAT Act, having regard to Mr Clark’s failure to accept an offer of settlement.
  4. [4]
    Mr Clark submits that he should not be ordered to pay the Builder’s costs.
  5. [5]
    The First Respondent (‘the QBCC’) does not seek a costs order.

The relevant statutory provisions

  1. [6]
    Section 100 of the QCAT Act provides:

Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceeding.

  1. [7]
    Section 102 of the QCAT Act provides:
  1. The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order.
  1. However, the only costs the tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section.
  1. In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following—
  1. whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);
  1. the nature and complexity of the dispute the subject of the proceeding;
  1. the relative strengths of the claims made by each of the parties to the proceeding;
  1. for a proceeding for the review of a reviewable decision—
  1. whether the applicant was afforded natural justice by the decision-maker for the decision; and
  1. whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;
  1. the financial circumstances of the parties to the proceeding;
  1. anything else the tribunal considers relevant.
  1. [8]
    Section 105 of the QCAT Act provides:

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

  1. [9]
    Rule 86 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘the Rules’) provides:
  1. This rule applies if—
  1. a party to a proceeding, other than a proceeding for a minor civil dispute, makes another party to the proceeding a written offer to settle the dispute the subject of the proceeding; and
  1. the other party does not accept the offer within the time the offer is open; and
  1. in the opinion of the tribunal, the decision of the tribunal in the proceeding is not more favourable to the other party than the offer.
  1. The tribunal may award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made.
  1. If a proceeding involves more than 2 parties, this rule applies only if the acceptance of the offer would have resulted in the settlement of the matters in dispute between all the parties.
  1. In deciding whether a decision is or is not more favourable to a party than an offer, the tribunal must—
  1. take into account any costs it would have awarded on the date the offer was given to the other party; and
  1. disregard any interest or costs it awarded relating to any period after the date the offer was given to the other party.
  1. [10]
    I will address the respective grounds relied upon by the Builder commencing with s 102 of the QCAT Act.

Do the interests of justice require a costs order in favour of the Builder?

The interaction between s 100 and s 102 of the QCAT Act

  1. [11]
    In JCN v James Cook University & Ors No 2,[3] I set out the following observations in relation to the interaction between those two provisions and the competing views of the Tribunal in relation to their application:

[18]  The interaction between these two provisions, and the degree of satisfaction required for the Tribunal to make a costs order pursuant to s 102, have been the subject of a difference of opinion in the Tribunal over the past few years as summarised by Senior Member Aughterson in Pound v Queensland Building and Construction Commission (Pound).

[19]  The competing approaches were summarised by Senior Member Aughterson as involving, first, that the starting point is that each party must bear its own costs unless ‘the interests of justice’ point so compellingly to a costs award that they overcome the strong contra-indication against costs orders or, second, the relevant test is whether the interests of justice require an order for costs, with the proviso that the terms ‘require’ in s 102(1) and ‘usually’ (bears own costs) in the heading of s 100 show that an order for costs should not be too readily made.

[20]  Subject to the following paragraph, I adhere to the view I expressed in Campbell v Queensland Building and Construction Commission (No 2),[4] summarised as follows:

In my view, s 102 requires the Tribunal to undertake an evaluative assessment of all circumstances considered to be relevant in forming an opinion as to whether the interests of justice necessitate a costs order being made (in whole or in part) and the default position displaced. The only qualification I would place on the language of s 102 is that it is not sufficient for the Tribunal to conclude merely that it is in the interests of justice to make an order for costs, a stronger foundation is required. Nevertheless, sitting at first instance, I consider I am bound to follow one or other of the respective approaches to s 102. In that event, I prefer the conclusion that the interests of justice must point ‘so compellingly’ to the making of a costs order as to override the default position under s 100. However, in the absence of guidance as to what satisfies the requirement of ‘compellingly’, I consider that it is appropriate to proceed on the basis that the term should be equated with ‘convincingly’.

[21] I respectfully adopt the subsequent observations of Senior Member Aughterson in Pound in respect of the potential impact of the nature of the proceeding on whether the interests of justice ‘require’ the making of a costs order:

  1. … The interplay between s 100 and s 102(3) may well vary, depending on the impact a costs order in the case at hand might have on access to justice and the other objectives in s 3 of the QCAT Act;[5]
  1. For example, the prospect of an adverse costs order is likely to weigh heavily on any decision to seek review of certain administrative decisions, which will potentially have a significant impact on access to justice. On the other hand, in relation to body corporate disputes involving significant monetary or other considerations, the interests of justice in awarding costs, as alluded to by Keane JA in Tamawood, might weigh heavily in favour of a costs order. In those circumstances, the disincentive of a potential costs order in bringing a matter before the Tribunal is less likely to loom so large and, accordingly, considerations of access to justice might weigh relatively lightly in the balance against a costs order.

(citations omitted)

  1. [12]
    I will address each of the factors listed in s 102(3).

Subsection 102(3)(a) (acting in a way that unnecessarily disadvantages another party)

  1. [13]
    The Builder submits[6] that it has been unnecessarily disadvantaged by the conduct of Mr Clark by:
    1. filing the Review Application outside of time;
    2. applying to have the Builder joined to the proceeding in March 2023 despite:
  1. opposition from the Builder (which relied upon a defence that the proceeding was not commenced against it within the applicable limitation periods); and
  2. being put on notice that if the Builder were joined to the proceeding it would seek to recover all its legal costs against Mr Clark.
  1. [14]
    Mr Clark submits[7] that the Builder and the QBCC acted in a way that unnecessarily disadvantaged Mr Clark ‘by failing to raise the limitation point on which they were successful in resisting Mr Clark’s application until closing submissions on the last day of the hearing’ and by failing to refer, at an earlier time, to the Appeal Tribunal decision in Jorg v Queensland Building and Construction Commission (‘Jorg’).[8] Additionally, Mr Clark submits that in the internal review decision the QBCC wrongly determined that the building work was completed on 1 April 2015 (which was found to be incorrect by the Tribunal) and had the QBCC determined this fact correctly it was then within time to issue a direction to rectify (and had it issued a direction to rectify, the limitation point would not have arisen).[9] Mr Clark also points to a submission by the QBCC in relation to the joinder application that it ‘might’ bring an application for the time period to be extended.[10]
  2. [15]
    In my view, in the circumstances, neither the Builder or the QBCC acted in a way that unnecessarily disadvantaged Mr Clark nor did Mr Clark act in a way that unnecessarily disadvantaged the Builder.
  3. [16]
    First, whilst the Builder, in its outline of submissions in relation to the joinder application, did raise a limitation period argument, it was not one based on s 72A(4) of the Queensland Building and Construction Commission Act 1991 (Qld) (and no reference was made to Jorg).
  4. [17]
    Second, whilst the QBCC did not refer to Jorg in support of its application to summarily dismiss the Review Application in 2022, the submissions made by it in support of the application expressly raised s 72A, and the QBCC’s arguments were in line with the reasoning that had been adopted in Jorg. I accept that being forewarned of a decision of the Appeal Tribunal on the limitation period would have been a material consideration for Mr Clark. However, Mr Clark was put on notice of the limitation period point. Further, Mr Clark did have legal representation and the consequential ability to identify the decision in Jorg. With respect to the indication by the QBCC that it might seek an extension of time, I consider that this may have provided some encouragement to Mr Clark to press on with the Review Application. However, the point only goes so far. Not only did the statement reinforce the point that s 72A(4) presented as an obstacle to success in the Review Application, it was stated only as a possibility; and there is no evidence that Mr Clark pressed the QBCC on the question of applying for an extension at any subsequent time prior to the hearing. Further, there is ample authority that the Tribunal has no jurisdiction to extend time under s 72A(4) absent an application by the QBCC.[11]
  5. [18]
    Third, as submitted by the Builder, the QBCC relied not only on s 72A(4) but also a number of other matters in reaching the decision not to give a direction to rectify.[12]
  6. [19]
    Fourth,  the application for summary dismissal by the QBCC had been dismissed by the Tribunal. I consider that this also provides some justification for Mr Clark pressing on with the Review Application (although, as noted above, with the prospect that s 72A(4) may ultimately prove an impediment to his case).

Subsection 102(3)(b) (the nature and complexity of the dispute)

  1. [20]
    The Builder submits that the Review Application was complex because of the number of complaint items and the technical nature of the expert evidence and legal principles involved.[13] The Builder points to, in particular, the fact that there were multiple expert reports; that building disputes are inherently complex and necessitate interpretation of complex legislation; and the hearing took place over a three-day period.[14]
  2. [21]
    Mr Clark submits that whilst there was some complexity in relation to the cause of the damage and defective works to the house, there was no such complexity in relation to the limitation point on which the Respondents were successful and, accordingly, the complexity of the dispute did not justify any award of costs in favour of the Builder.[15] Mr Clark further submits that it was open to the Builder to bring an application for summary dismissal based on the limitation point, but it did not, and this weighs against any order for costs in favour of the Builder.
  3. [22]
    The Builder responds, amongst other matters, that the limitation issue was of sufficient legal complexity to warrant the Builder incurring legal costs by way of representation, particularly in circumstances where the QBCC’s summary application had been dismissed.
  4. [23]
    As to the nature of the dispute, the proceeding was a general administrative review proceeding brought under the QCAT Act pursuant to s 87 of the QBCC Act. Adopting the observations of Senior Member Aughterson in Pound,[16] an applicant in a review proceeding should not be dissuaded from pursuing a review by the spectre of an adverse costs order being made against the applicant. However, in the present case, I consider that this factor is of little significance in circumstances where Mr Clark was the party who joined the Builder (albeit that the QBCC supported the application). This factor would have been of greater significance if the Builder had been joined on the application of the QBCC.
  5. [24]
    Looking at the overall issues raised by the Review Application (including the disputed nature of the expert evidence), I consider it clear that the matter was a complex one and justified the engagement of lawyers (which in fact occurred). However, the Review Application was dismissed on the basis of jurisdiction (relying upon the decision in Jorg). In those circumstances, there was no determination of the factual issues including the dispute between experts.[17] Whilst I accept that the legal question was sufficiently complex to warrant engaging lawyers, had I been otherwise minded to award costs in favour of the Builder, I would have limited the costs to those incurred in relation to arguing the Jorg point (noting that neither the QBCC nor the Builder brought that decision to the notice of Mr Clark prior to the hearing).
  6. [25]
    However, this factor needs to be weighed against the other relevant factors set out in s 102(3).

Subsection 102(3)(c) (the relative strengths of the claims made by each of the parties)

  1. [26]
    The Builder submits that because the Review Application was dismissed, the Builder was successful, and this is a factor that weighs in favour of awarding costs to the Builder.[18] I consider that the observations made in paragraphs [16] to [19] above are apposite in this context.
  1. [27]
    Mr Clark submits that the Builder was successful on a limitation point, raised only on the last day of the hearing, in respect of which there were conflicting authorities; and but for the limitation point, and the QBCC not applying to extend time, the weight of the evidence showed that Mr Clark had ‘strong prospects’ of a direction to rectify being issued.[19]
  1. [28]
    In circumstances where Mr Clark has applied for leave to appeal or appeal the primary Decision, I consider that it is not appropriate to make observations about the ultimate strength of Mr Clark’s case, save to note that the merits of his case were reasonably arguable.
  2. [29]
    I consider that this factor tends neither one way nor the other in relation to whether an award of costs is justified under s 102.

Section 102(3)(d)(i) (whether the applicant was afforded natural justice by the decision-maker)

  1. [30]
    With respect to this factor and the related factor in s 102(3)(d), the Builder submits that it cannot speak to the conduct of the QBCC or to the interactions between it and Mr Clark. It submits that this factor should not adversely impact the Builder’s claim for costs.[20]
  2. [31]
    Mr Clark submits that he was not afforded natural justice by the QBCC and that it did not at any time prior to closing submissions, including in its application for summary dismissal, indicate it would rely upon Jorg (being the point upon which it was ultimately successful).[21] By reason of the matters set out at paragraph [17] above, I am not satisfied that the QBCC denied Mr Clark natural justice (or procedural fairness).

Section 102(3)(d)(ii) (whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits)

  1. [32]
    Mr Clark submits that he genuinely attempted to help the QBCC make a decision on the merits; he provided detailed submissions and expert evidence to identify the true cause of the defective building work and damage to Mr Clark’s house.[22]
  2. [33]
    I am satisfied that Mr Clark made a genuine attempt to enable and assist the QBCC to make a decision on the merits. There is no submission to the contrary.

Section 102(3)(e) (the financial circumstances of the parties)

  1. [34]
    The Builder submits that Mr Clark’s conduct has caused it to incur increased legal costs, significantly impacting the Builder’s financial circumstances, and that it was reasonable for the parties to be legally represented because of the nature and complexity of the dispute.[23]
  2. [35]
    Mr Clark submits that there is no evidence that the costs the Builder incurred had any impact on the Builder’s financial circumstances and that, in contrast, not only has Mr Clark incurred the legal costs of the proceeding, he has incurred the cost of remedying some of the defective work of the Builder, and is left with a significantly damaged house (including 45 cases of internal cracking, separation of the floor from the walls, doors jamming, and the driveway being cracked) that may have to be completely demolished.[24] Mr Clark also submits that the other countervailing considerations make this an appropriate case not to make an order for costs in favour of the Builder, that all parties were legally represented in the proceeding and that they were ‘fully aware that the Tribunal is a “no costs” jurisdiction’.[25]
  3. [36]
    In my view, it is not accurate to describe the Tribunal as a ‘no costs’ jurisdiction. The default position is as set out in s 100 of the QCAT Act, but that position may give way to the exercise of the Tribunal’s discretion under s 102, as well as a separate power to award costs by virtue of s 105 of the QCAT Act and r 86 of the Rules.
  4. [37]
    I accept that it was reasonable for each party to be legally represented given the nature and complexity of the matter. I consider this to be a relevant factor tending to favour the making of a costs order, but do not accord it great weight. Neither party descended into detail as to its or his financial circumstances. The submissions were directed to the incurring of legal costs as well as, in the case of Mr Clark, the damage to the house (without identifying the cost of rectification). There was no evidence which would enable me to conclude that there would be any financial hardship to the Builder if a costs order was not made in its favour, nor could I conclude that Mr Clark would suffer any material financial hardship were a costs order to be made in favour of the Builder.

Section 102(3)(f) (anything else the tribunal considers relevant)

  1. [38]
    I considered it of relevance that, although ultimately not decisive, Mr Clark was successful on the factual question of when the building work was completed, which issue was disputed both by the Builder and the QBCC. Otherwise, the relevant matters have been addressed in relation to the earlier factors.

Conclusion as to whether the interests of justice require a costs order

  1. [39]
    In all the circumstances, I consider that the interests of justice do not justify displacing the default position under s 102 of the QCAT Act. Regardless of which of the respective tests addressed above in relation to s 102 of the QCAT Act is applied, I am satisfied that it is appropriate to apply the default or starting position under s 100, and that an order for costs should not be made in favour of the Builder. Whilst there were factors which favoured the making of an award of costs, in particular, the success that the Builder enjoyed, that Mr Clark had joined the Builder to the proceeding, that the complexity of the matter justified the engagement of lawyers, and that the decision in Jorg could have been identified by Mr Clark, I consider that there are countervailing factors which support a conclusion that the interests of justice do not require the making of a costs order. These countervailing factors include the following: neither the QBCC nor the Builder brought the decision in Jorg to the attention of Mr Clark, the Tribunal had dismissed an application by the QBCC to summarily dismiss the Review Application, that Mr Clark had success on the factual question as to when the building work was completed, and that was no determination of the balance of the factual issues in dispute. As to the balance of the factors raised by the parties, I consider them to be unpersuasive one way or the other.
  2. [40]
    I now address the offer to settle.

The offer to settle

  1. [41]
    On 10 May 2024, the Builder’s solicitors sent to the then solicitors for Mr Clark a letter headed ‘Without Prejudice save as to costs’ in which the Builder offered to settle both this proceeding and also a separate proceeding brought by Mr Clark against the Builder in the Tribunal’s building list. The material terms of the offer were that in settlement of both proceedings (and any claims arising from the same facts or circumstances in the proceedings) the Builder would pay Mr Clark the sum of $20,000.00 within 14 days of acceptance of the offer, and each party shall bear their own costs. The offer was left open for acceptance for seven days. It was stated that if the offer was rejected or otherwise lapsed, the Builder would be relying upon the correspondence after the hearing in the building proceeding ‘and/or’ this proceeding in support of an application that Mr Clark pay the Builder’s legal costs in accordance with s 105 of the QCAT Act and rule 86 of the Rules.

The relevant principles

  1. [42]
    In assessing the impact of the offers to settle, the relevant principles are set out in Oaks Hotels & Resorts Limited v Knauer:[26]

[76] Rule 86 is made under the authority of ss 105 and 224 of the QCAT Act. The subject matter of the Rules may include costs generally, including ‘additional circumstances’ for which costs may be awarded. Section 105 is headed ‘Other power to award costs’. It provides that the Rules may authorise the Tribunal to award costs in other circumstances, including, for example, the payment of costs in a proceeding if an offer to settle the dispute the subject of the proceeding has been made but not accepted. The phrase ‘other circumstances’ is not defined. Reading Division 6 of Chapter 2 as a whole, we consider that the phrase refers to circumstances other than those identified in ss 102, 103 and 104 respectively, each of which provides for an exception to the presumption set out in s 100 that each party to a proceeding must bear the party’s own costs for the proceeding. In particular, we consider that the combined operation of s 105 and rule 86 stands independently of the operation s 102, such that it is unnecessary to establish that it is in the interests of justice to order costs in favour of one of the parties if an operative offer to settle was made falling within the scope of rule 86. If the operation of s 105 and rule 86 required a finding that it was in the interests of justice within the meaning of s 102 that costs be awarded, we consider that this would limit the operation of rule 86 in a manner not intended by the legislature.

[77] We make the following further observations about the operation of rule 86.

[78] First, it does not contain the same level of prescriptive provisions for offers to settle contained in Part 5 of Chapter 9 of the Uniform Civil Procedure Rules 1999 (Qld), particularly in relation to the costs ramifications of a failure to accept an offer under the Rules.

[79] Second, it provides, by subsection (1), three preconditions to its operation, there must be a written offer, by a party to a proceeding to another party to that proceeding, to settle the dispute the subject of the proceeding; the other party does not accept the offer within the time the offer is open; and in the opinion of the Tribunal, the decision of the Tribunal in the proceeding is not more favourable to the other party than the offer.

[80] Third, in deciding whether a decision is or is not more favourable to a party than an offer (as provided by sub-rule 86(1)(c)), sub-rule 86(4) prescribes two matters which the Tribunal must address; it must take into account any costs it would have awarded on the date the offer was given to the other party; and it must disregard any interest or costs it awarded relating to any period after the date the offer was given to the other party.

[81] Fourth, a written offer to settle made in accordance with the Calderbank principles (including an offer described as ‘Without prejudice save [or except] as to costs’) qualifies as an offer for the purposes of rule 86 regardless of whether it is expressed to be made under rule 86 and we reject Oaks’ submission that express reference to the rule is required. Rule 86 contains no such express requirement and there is nothing in its language that a statement of reliance on rule 86 is required.

[82] Fifth, if the Tribunal is satisfied that preconditions have been satisfied, a discretion arises as to whether costs should be awarded against the party failing to accept the offer. In our view, sub-rule 86(2) plays a dual role. In the first instance, it may provide a basis for ordering costs in favour of one party in circumstances where the usual order for costs under s 100 would apply, absent the offer to settle. That is, costs may be awarded under rule 86 (by virtue of s 105) even if the interests of justice do not other justify an award of costs under s 102. In the second instance, the Tribunal has a discretion whether to award such costs on the standard basis or on the indemnity basis. It is settled law in the Appeal Tribunal that the reference in rule 86(2) to ‘all reasonable costs incurred’ includes an order for costs on the indemnity basis. We are of the view that, if sub-rule 86(2) is engaged, the Tribunal is not required to award costs on the indemnity basis but may award costs on the standard basis. In the present case, the Offer was material to the question of indemnity costs only, the Member having found that it was in the interests of justice to award Ms Knauer the (standard) costs of the first and second hearings.

[83] Sixth, in exercising its discretion under sub-rule 86(2), we consider that the applicable test is whether the offeree acted unreasonably or imprudently in rejecting the offer and that the onus is on the offeror to demonstrate the unreasonableness of rejection by the other party (consistently with the principle applied to Calderbank offers). In determining this question under sub-rule 86(2), we also consider that, consistently with the approach adopted by the Queensland Court of Appeal in relation to Calderbank offers on appeal, account must be taken of all relevant considerations, including (without limitation):

  1. the stage of the proceeding at which the offer was received;
  1. the time allowed to the offeree to consider the offer;
  1. the extent of the compromise offered;
  1. the offeree’s prospects of success, assessed as at the date of the offer;
  1. the clarity with which the terms of the offer were expressed; and
  1. whether the offer foreshadowed an application for an indemnity costs in the event of the offeree rejecting it.

[84] The factor in subparagraph (f) above will only be material to rule 86 in circumstances where, as here, costs are sought on the indemnity basis.

…

[94] ... A failure to put the opposing party on notice may not, of itself, be necessarily fatal to an application for costs on the indemnity basis but we consider it an important consideration where an offer to settle is relied upon not only to displace the presumption that each party bear his or her own costs but that the costs be awarded on the indemnity basis.

[95] As was said by Kirby P (as he then was) in the context of an unsuccessful appeal in Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd:

The merit of the present motion is that it calls attention to the distinct possibility that, in some circumstances, a special costs order will be made, including for indemnity costs. If such an order is to be made, it would be preferable that it should follow due and timely warning by the successful party to the unsuccessful that indemnity costs will be sought: cf Insurers' Guarantee Fund NEM General Insurance Association Ltd (In Liq) v Baker (Court of Appeal, 10 February 1995, unreported).

[96] The failure to warn of an intent to seek indemnity costs tipped the scale against making such an order in Danidale Pty Ltd v Abigroup Contractors Pty Ltd (No 2).

(citations omitted)

The relevant circumstances

  1. [43]
    In my view, having regard to r 86(1) of the Rules:
    1. the proceeding is not a proceeding for a minor civil dispute;
    2. the offer qualified as a written offer for the purposes of rule 86;
    3. Mr Clark did not accept the offer during the period that the offer was left open.
  2. [44]
    However, given the manner in which the offer was framed (being integrally bound up with the building proceeding) I cannot conclude the decision of the Tribunal in the proceeding is not more favourable to Mr Clark than the offer and, in any event, I would not exercise my discretion under r 86(2) to award costs in favour of the Builder.
  3. [45]
    The only options open to Mr Clark in responding to the offer were first, to reject the offer or, second, to settle both proceedings in exchange for payment of $20,000.00. In my view, the favourability of such an offer in this proceeding would require an assessment of the value of the combined offer having regard to the prospects of, and potential (if not likely) financial outcome of, the building proceeding. As submitted on behalf of Mr Clark, the material before the Tribunal does not permit any such assessment to be made. I note that Mr Clark asserts that he has strong prospects in the building proceeding such that it was not unreasonable to reject the offer. I am unable to place any weight on that assertion because of the absence of material before me. However, the onus is on the Builder to demonstrate that the combined offer was such that, in the circumstances, it was reasonable for Mr Clark to accept the offer. The Builder has palpably failed to discharge that onus on the material.
  4. [46]
    In short, I find that the making of the offer to settle does not justify the making of an order for costs in favour of the Builder.
  5. [47]
    For completeness, I do not accept that Mr Clark’s submission in relation to r 86(3).[27] The offer to settle proposed the withdrawal of this proceeding (as well as the building proceeding). There is no evidence to support a conclusion that if Mr Clark had elected to settle the proceedings on that basis, it is more likely than not that the QBCC would have sought an order for costs against Mr Clark.

Order

  1. [48]
    For the reasons set out above, I order that the parties to the proceeding must bear their own costs for the proceeding.

Footnotes

[1]  The primary Decision of the Tribunal (‘the primary Decision’) was made on 17 July 2024. An Application for leave to appeal or appeal has been filed by the Applicant in respect of the primary Decision.

[2]  The Builder’s submissions addressing costs (‘Builder’s primary submissions’), [54]; the Builder’s submissions as to costs in reply (‘Builder’s reply submissions’), [11].

[3]  [2024] QCAT 257, [18]-[21].

[4]  [2023] QCAT 54, esp. [20]-[26].

[5]  At [41].

[6]  Builder’s primary submissions, [14]-[21].

[7]  Mr Clark’s costs submissions, [6]-[10]. See the Builder’s reply submissions, [3]-[6]

[8]  [2021] QCATA 134.

[9]  Mr Clark’s costs submissions, [11].

[10]  Mr Clark’s costs submissions, [6]-[10]. See the Builder’s reply submissions, [3]-[6]

[11]  See e.g., Oracle Building Corporation Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 69; Stephens & Anor v Queensland Building and Construction Commission [2018] QCAT 281; Doolan v Queensland Building and Construction Commission [2017] QCAT 58.

[12]  Builder’s reply submissions [6].

[13]  Builder’s primary submissions, [22].

[14]  Builder’s primary submissions, [25].

[15]  Mr Clark’s costs submissions, [13].

[16] Pound v Queensland Building and Construction Commission [2023] QCAT 298, [42].

[17]  Save for the issue of when the building work was completed.

[18]  Builder’s primary submissions, [25].

[19]  Mr Clark’s costs submissions, [15].

[20]  Builder’s primary submissions, [33].

[21]  Mr Clark’s costs submissions, [14].

[22]  Mr Clark’s costs submissions, [16].

[23]  Builder’s primary submissions, [31]-[36]. The Builder also relies on Tamawood Ltd & Anor v Paans [2005] QCA 111, [30].

[24]  Mr Clark’s costs submissions, [19].

[25]  Mr Clark’s costs submissions, [17]-[18].

[26]  [2020] QCATA 90, at [76]-[84], [94]-[96].

[27]  Mr Clark’s costs submissions, [28]-[30].

Close

Editorial Notes

  • Published Case Name:

    Clark v Queensland Building and Construction Commission & Anor (No 2)

  • Shortened Case Name:

    Clark v Queensland Building and Construction Commission (No 2)

  • MNC:

    [2024] QCAT 454

  • Court:

    QCAT

  • Judge(s):

    Member Lumb

  • Date:

    23 Oct 2024

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
Campbell v Queensland Building and Construction Commission (No 2) [2023] QCAT 54
2 citations
Jump To
Cite 1 - [2023] QCAT 54
Cite 2 - [2023] QCAT 54
Doolan v Queensland Building and Construction Commission [2017] QCAT 58
1 citation
Jump To
Cite 1 - [2017] QCAT 58
JCN v James Cook University No 2 [2024] QCAT 257
2 citations
Jump To
Cite 1 - [2024] QCAT 257
Cite 2 - [2024] QCAT 257
Jorg v Queensland Building and Construction Commission [2021] QCATA 134
2 citations
Jump To
Cite 1 - [2021] QCATA 134
Cite 2 - [2021] QCATA 134
Oaks Hotels & Resorts Ltd v Knauer [2020] QCATA 90
2 citations
Jump To
Cite 1 - [2020] QCATA 90
Cite 2 - [2020] QCATA 90
Oracle Building Corporation Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 69
1 citation
Jump To
Cite 1 - [2020] QCAT 69
Pound v Queensland Building and Construction Commission [2023] QCAT 298
2 citations
Jump To
Cite 1 - [2023] QCAT 298
Cite 2 - [2023] QCAT 298
Stephens v Queensland Building and Construction Commission [2018] QCAT 281
1 citation
Jump To
Cite 1 - [2018] QCAT 281
Tamawood Ltd v Paans[2005] 2 Qd R 101; [2005] QCA 111
1 citation
Jump To
Cite 1 - [2005] QCA 111

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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