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McDonald v Queensland Building and Construction Commission[2015] QCATA 110

McDonald v Queensland Building and Construction Commission[2015] QCATA 110

CITATION:

McDonald v Queensland Building and Construction Commission  [2015] QCATA 110

PARTIES:

Jaime Christopher Rory McDonald

(Applicant)

v

Queensland Building and Construction Commission

(Respondent)

APPLICATION NUMBER:

APL065-14

MATTER TYPE:

Appeals

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Favell (Presiding)

Member Kanowski

DELIVERED ON:

21 July 2015

DELIVERED AT:

BRISBANE

ORDERS MADE:

  1. The respondent pay the appellants costs of the appeal to be assessed on a standard basis on the District Court scale of costs and to be agreed and if not agreed within 14 days of this decision the costs be assessed by an approved assessor to be agreed or if not agreed by Hickey and Garrett Cost Assessors.
  2. The agreed or assessed costs be paid by the respondent within 14 days of such agreement or assessment.
  3. If there is an assessment of costs by an approved assessor the respondent pay the costs of the assessment.

CATCHWORDS:

Building matters – costs

Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 86, s 100, s 102, s 107 Commercial and Consumer Tribunal Act 2003 (Qld) s 70, s 71

Queensland Civil and Administrative Tribunal Rules 2009 s 87

Queensland Building Services Authority Act 1991 (Qld) s 77

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

Oshlack v Richmond River Council [1998] 193 CLR 72

Latoudis v Casey [1990] 170 CLR 534

Knight v FP Special Assets Ltd (1992) 174 CLR 178

Ralacom Pty Ltd v Body Corporate for Paradise Island CTS 17653 (no. 2) [2010] QCAT 412 Tamawood Ltd & Anor v Paans [2005] QCA 111 Queensland Building Services Authority v Johnston [2011] QCATA 265

Lyons v Dreamstarter Pty Ltd [2012] QCATA 071

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuit to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REASONS FOR DECISION

MEMBER FAVELL  

  1. [1]
    On 23 December 2014 the Appeal Tribunal of QCAT confirmed a decision of the Tribunal dated 12 December 2013 when the Tribunal ordered that the decision of the Queensland Building and Construction Commission (QBCC) of 10 September 2012 to categorise Mr McDonald as an ‘excluded individual’ pursuant to sections 56AC(ii) and 56AC(iv) of the Queensland Building and Construction Commission Act 1991 (Qld) is set aside.
  2. [2]
    The QBCC had determined that Jamie McDonald was an ‘excluded individual’ pursuant to section 56AC(iv) of the Queensland Building Services Authority Act 1991 (Qld). The Commission had considered McDonald to be ‘an influential person’ for Ozmack Concrete Construction Pty Ltd at the relevant time when the company went into liquidation. McDonald sought review of that decision in QCAT and argued that he was not an influential person for the company and on that basis was not an excluded individual under the Act. The Tribunal determined that McDonald was not an influential person for the company at the relevant time and a subsequent appeal against that review decision was dismissed.
  3. [3]
    Mr McDonald now seeks his costs of the appeal proceedings and the application for costs.
  4. [4]
    He submits that the Appeal Tribunal may order the Commission to pay his costs of the appeal proceedings if the Appeal Tribunal considers that it is in the interests of justice to do so. Mr McDonald submits that the appeal proceedings were complex in the sense referred to in Tamawood. Both parties were represented by Counsel and filed lengthy submissions.[1]
  5. [5]
    The applicant points out that the issues which were required to be canvassed included the need to obtain leave to appeal. He points out that the Respondent suggested that matters raised in the appeal proceedings were of “general importance” which by inference suggests the matters were complex in nature.
  6. [6]
    Both parties were granted leave to be legally represented at the outset of the review proceedings and at the appeal.
  7. [7]
    Mr McDonald submits that in the absence of any countervailing considerations the interests of justice require the successful applicant to be awarded his costs. Mr McDonald contends that he did not act in any way that unnecessarily disadvantaged the Commission. He says that the appeal proceedings involved a degree of complexity which warranted the Applicant being legally represented including by Counsel. He submits that the nature of the appeal proceedings meant that the outcome was critical for him. A failure to see the review decision upheld would effectively mean that he was excluded from operating his building business and potentially from earning a livelihood. For that reason he says he was advised to contest the appeal and thereby incur the associated legal costs.
  8. [8]
    Mr McDonald submits that his case was strong in comparison to the Commission’s case. In particular he refers to the following:
    1. (a)
      Of the five grounds of appeal put forward by the Commission, one was immediately withdrawn and the other four grounds were wholly unsuccessful.
    2. (b)
      The appeal decision included a finding that leave to appeal should not be given (paragraph [91]).
    3. (c)
      There was a finding in the appeal decision which indicated that a satisfactory explanation for the delay by the Commission in appealing was not shown.
    4. (d)
      The Appeal Tribunal indicated that the strength of the appeal was not strong, the delay was considerable and the interests of justice were not such that it was necessary to grant an extension to apply for leave to appeal.
    5. (e)
      There were no adverse findings with respect to Mr McDonald or the arguments put forward on his behalf.
    6. (f)
      The Applicant was wholly successful in the appeal proceedings.
  9. [9]
    Mr McDonald accepts that he was generally afforded natural justice by the Commission and says that he did act appropriately in terms of section 102(d)(ii) of the QCAT Act.
  10. [10]
    Mr McDonald asks the appeal tribunal on the evidence available to it to conclude that he is a man of modest means and that legal costs incurred by him in the appeal proceedings would have had significant impact on his financial circumstances.
  11. [11]
    He points to a letter dated 15 July 2014 wherein he offered to settle the appeal on the basis that the Respondent would immediately withdraw the appeal and the parties would pay their own costs of the appeal to date. The Respondent did not accept the offer within the time allowed or at all.
  12. [12]
    Mr McDonald relies on part of the decision in Tucker v Queensland Building and Construction Commission (No.2).[2] In that decision the learned Member said:

“[20] The effect of an offer is discretionary in the Tribunal as rule 86(2) says that the Tribunal “may” award costs to the party who made the offer so the Tribunal still retains an element of discretion.

[21] In considering a particular offer that was made in clear terms, if the matter and the circumstances were seen as appropriate for the awarding of costs, and it is clear that the decision of the Tribunal is not more favourable than the particular offer, there would be a strong imperative for the Tribunal to exercise its discretion to order costs.”

  1. [13]
    Mr McDonald says that the appeal decision was not more favourable to the Commission than the offer and on that basis the Appeal Tribunal should award costs to the Applicant in accordance with rule 86(2) of the Rules.
  2. [14]
    Mr McDonald submits that the interests of justice support the Appeal Tribunal making the following orders:
    1. (a)
      The Commission pay his reasonable costs of the appeal proceedings in accordance with rule 86(2) of the Rules;
    2. (b)
      Alternatively the Commission pay his costs on a standard basis to be assessed on the District Court scale of costs;
    3. (c)
      Mr McDonald shall deliver to the Commission an itemised claim for costs in accordance with any order for costs the Appeal Tribunal may make;
    4. (d)
      If within 14 days of the delivery of the itemised claim the parties have not agreed on an amount of costs, the costs shall be assessed by an approved assessor and the Commission shall pay the agreed or assessed costs within 14 days of such agreement or assessment.
  3. [15]
    In response to the application for costs, the Commission submits that on balance the factors set out in section 102(3) of the QCAT Act do not favour an award of costs. It submits that the circumstances of the matter are not such as to overcome the strong contra-indication against a costs award.
  4. [16]
    The Commission contends that the conclusion that because the parties had legal representation the proceedings were complex does not follow. It says that there were several grounds upon which the Tribunal may have granted leave for legal representation and it does not necessarily follow that because the Tribunal concluded that leave should be granted for legal representation the matter was complex.
  5. [17]
    The Commission submits that it has not acted unnecessarily to cause disadvantage. It contends that it did not cause disadvantage by failing to comply with Tribunal directions or the QCAT Act or unnecessarily asking for adjournments or misleading another party.
  6. [18]
    The Commission submits that the present proceeding fell well short of the level of complexity in a number of examples which it gave. It does not however make the submission that the matters considered on appeal or on the application for appeal were not complex.
  7. [19]
    The Commission however does submit that the application for leave to appeal and appeal was not a case in which one parties’ case was obviously stronger than the other.[3]
  8. [20]
    The Commission says that its arguments on appeal related to the test to be applied for determining whether a person is an ‘influential person’ under the QBCC Act. It says that although the Appeal Tribunal did not accept its arguments, the position in relation to the test for an influential person before the appeal should be kept in mind. It says that prior to the appeal, guidance on the interpretation of ‘influential person’ was sparse. It says that in essence there were two decisions.[4] It says prior to the appeal, Tribunal consideration of a ‘company shareholder as an influential person’ was bounded by decisions at the extremes and there was no previous decision which considered a nominee supervisor in relation to the test for an influential person. It says that after the appeal was filed, but prior to the appeal being heard the decision in Arthurs v QBCC[5] was handed down and whilst it was concerned with a 50% shareholder as an influential person it did not consider the question of a nominee supervisor nor whether issues related to insolvency and phoenix activity were relevant considerations with the result that there remained in the appeal real questions to be determined regarding the test for an ‘influential person’. The Commission says, this is not a case in which the outcome could not have been “predicted with any reasonable certainty”[6] and it is well short of being a “misconceived”[7] proceeding.
  9. [21]
    As to Mr McDonald’s submission concerning his financial circumstances the Commission contends that the evidence does not support the contention that Mr McDonald is a man of modest means. It says that it was entirely open to Mr McDonald to put on evidence as to his financial circumstances and the costs of the appeal, but he has not done so.
  10. [22]
    Rule 86 provides for an additional power to award costs if particular offers to settle are rejected. It allows the Tribunal to award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made.
  11. [23]
    Section 105 of the QCAT Act allows the Rules to authorise the Tribunal to award costs in other circumstances including the payment of costs in a proceeding if an offer to settle a dispute, the subject of the proceeding, has been made but not accepted.
  12. [24]
    The Commission submits that although “all reasonable costs” has been construed to mean indemnity rather than standard costs[8] an award for indemnity costs requires that the rejection of the offer was not reasonable.[9]
  13. [25]
    The Commission contends that the Tribunal may award costs and as such it is a discretionary power which requires due consideration of the circumstances of the offer in the context of the proceeding.
  14. [26]
    The Commission refers to the decision in Hazeldean’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No.2)[10] as providing the factors relevant to the question of whether an offer to settle was unreasonably refused. The factors include:
    1. (a)
      the stage of the proceeding at which the offer was received;
    2. (b)
      the extent of the compromise offered;
    3. (c)
      the offeree’s prospect of success assessed as at the date of the offer; and
    4. (d)
      whether the offer foreshadowed an application for an indemnity costs order in the event of the offerees rejecting it.
  15. [27]
    The timing of the offer came after the appeal submissions were filed and after the decision in Arthurs was handed down and after the appeal was listed for hearing but before the appeal was heard.
  16. [28]
    The Commission argues that the offer made no real offer of compromise and simply invited the Commission to withdraw the appeal in its entirety and for the parties to bear their own costs. It says that such an offer does not meet the intent of Rule 86 which is to promote the early resolution of disputes through the making of genuine offers of compromise. It says an offer which simply invites the other party to give up and walk away does meet that intent and therefore should not enliven the discretion under Rule 86(2).
  17. [29]
    Further the Commission argues that the Arthurs decision which seemed to be the basis of the offer only impacted on one of the grounds of appeal and the Commission had no reason to reconsider its prospects in relation to other grounds.
  18. [30]
    The Commission’s position on the letter of offer is that it ought not have any bearing on the question of costs, because it makes no real offer of compromise, does not make it clear that it was intended to be the basis for a costs application and does not invite the discretion intended by Rule 86(2).
  19. [31]
    In the event the Tribunal is minded to award costs based on the letter, the Commission submits that those costs only be assessed on the standard basis because at the time it was not unreasonable for the Commission to consider it had genuine prospects in relation to the remaining grounds and as such it was not unreasonable for the Commission not to accept the offer.
  20. [32]
    If the Tribunal were minded to award costs based on the letter, the Commission submits that it is reasonable that such costs should only run from the date the offer expired which is 5 August 2014.
  21. [33]
    It is notable that when Arthurs was considered by the Court of Appeal,[11] the Court, whilst it did not find there was an error of law such that the application for leave to appeal should be granted, it was said by McMeekin J with whom Holmes JA and Fraser JA agreed:

“As mentioned, I would not wish it to be assumed that I necessarily agree with the decision below, nor should the decision be seen as setting some form of precedent…the determination of the issue before the Appeal Tribunal depended on a close examination of both the facts of the case and the intricacies of the legislation. None of these issues were explored in argument before us. The facts were left largely unexplored before the Member who originally heard the matter. The resolution of these issues will need to await another day.”

  1. [34]
    The Commission, after referring to the decision in Vanderhoven v QBSA (No.2)[12] and the consideration in it of the consideration by Wilson J in Ralacom[13] of the impact of Tamawood, submits that at most Tamawood provides “guidance” or “general assistance” on interpretation of the costs provisions of the QCAT Act. The Commission submits that it does not bind QCAT nor stand for the proposition that if legal representation is appropriate a costs order must follow. It submits that the question of costs must be determined by the particular provisions of the legislation.
  2. [35]
    I accept that proposition to be correct.
  3. [36]
    In my view, the question here is whether the circumstances relevant to the discretion inherent in the phrase “the interests of justice” point to compellingly to a costs award that they overcome the strong contra-indications against costs orders in section 100.
  4. [37]
    In my view here the interests of justice do require an order which departs from the regime where each party to a proceeding must bear the parties’ own costs for the proceeding (the appeal). In my view there was some complexity to the case as indicated by the submissions made by the Commission about the lack of authority and uncertainty surrounding the interpretation of the role of the section.
  5. [38]
    At the hearing of the appeal, four grounds were left and argued. One was abandoned.
  6. [39]
    On balance, I do not regard the grounds of appeal or the arguments advanced on behalf of the Commission as strong. However, in my view they were not such that they were unarguable.
  7. [40]
    Further, in my view the Arthurs decision did not necessarily determine this appeal.
  8. [41]
    Although none of the grounds of appeal would have succeeded there was an issue as to whether leave should be granted to appeal. That issue and the way it was decided in my view, is sufficient to require an order other than each party bear its own costs.
  9. [42]
    Taking into account all of the issues that may be considered I am persuaded that the interests of justice require a costs order.
  10. [43]
    Whilst I am prepared to consider Mr McDonald as being of modest means, on the material before the Appeal Tribunal, I am not able to do anything other than reach such an uncertain view and I do not take it into account on this application.
  11. [44]
    On appeal the Appeal Tribunal found that the respondent required leave to appeal. It did not have such leave and the time for seeking such leave had passed. A delayed application for leave was not well supported and failed. In my view the respondent had caused disadvantage to Mr McDonald in that he was required to contest an appeal for which required leave had not been obtained.
  12. [45]
    I accept the submissions of the respondent with respect to the part of the application to which section 86 relates.
  13. [46]
    In my view the application for an order for costs of the appeal should be allowed. The order should be:
    1. (a)
      The respondent pay the appellants costs of the appeal to be assessed on a standard basis on the District Court scale of costs and to be agreed and if not agreed within 14 days of this decision the costs be assessed by an approved assessor to be agreed or if not agreed by Hickey and Garrett Cost Assessors.
    2. (b)
      The agreed or assessed costs be paid by the respondent within 14 days of such agreement or assessment.
    3. (c)
      If there is an assessment of costs by an approved assessor the respondent pay the costs of the assessment.

MEMBER KANOWSKI

  1. [47]
    I agree with the orders proposed, and the reasons given, by Member Favell. I would add that, in my view, the Commission’s expectation that an appeal could clarify the test for an influential person in cases of a similar type was misconceived. Each case will necessarily turn on its own constellation of facts. Even if there had been a reasonable prospect of obtaining general guidance, it would be unfair to expect the cost of that exercise to be borne by the individual who had achieved a successful result on the merits. There are compelling reasons for awarding costs in Mr McDonald’s favour, in the interests of justice.

Footnotes

[1] Tamawood Ltd & Anor v Paans [2005] QCA 111.

[2]  [2014] QCAT 23 at [20] and [21].

[3]  See Demac Homes (Qld) Pty Ltd v QBSA [2011] QCAT 331 at [18], [27] and [32].

[4] McClintok v QBSA [2011] QCATA 310 and Nation v QBSA [2006] QCTB 114. 

[5]  [2014] QCATA 115.

[6] Demac Homes (Qld) Pty Ltd v QBSA at [18]; we suspect that the Commission meant to submit that the outcome could not have been predicted with any reasonable certainty.

[7] Ralacom v Body Corporate for Paradise Island Apartments (No.2) at [31].

[8]  Lyons v Dreamstarter Pty Ltd [2012] QCATA 071 at [24].

[9] Lyons v Dreamstarter Pty Ltd [2012] QCATA 071 at [25].

[10]  (2005) 13 VR 435 at 442 [25]; Velvet Glove Holdings Pty Ltd v Mount Isa Ltd [2011] QCA 312 at [104] to [106]; Fick v Groves (No.2) [2010] QSC 182 at [31] and [32].

[11] Building and Construction Commission v Arthurs [2014] QCA 307.

[12]  [2012] QCAT unreported decision of 27 December 2012.

[13]  [2012] QCAT 412.

Close

Editorial Notes

  • Published Case Name:

    McDonald v Queensland Building and Construction Commission

  • Shortened Case Name:

    McDonald v Queensland Building and Construction Commission

  • MNC:

    [2015] QCATA 110

  • Court:

    QCATA

  • Judge(s):

    Presiding Member Favell, Member Kanowski

  • Date:

    21 Jul 2015

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
Ascot v Nursing & Midwifery Board of Australia [2010] QCAT 364
1 citation
Jump To
Cite 1 - [2010] QCAT 364
Demac Homes (Qld) Pty Ltd v Queensland Building Services Authority & Ors [2011] QCAT 331
1 citation
Jump To
Cite 1 - [2011] QCAT 331
Fick v Groves (No 2) [2010] QSC 182
1 citation
Jump To
Cite 1 - [2010] QSC 182
Hazeldene's Chicken Farm Pty Ltd v Victorian Work Cover Authority (2005) 13 VR 435
1 citation
Jump To
Cite 1 - (2005) 13 VR 435
Hearn v Assistant Commissioner Carroll [2012] QCAT 412
1 citation
Jump To
Cite 1 - [2012] QCAT 412
Knight v F. P. Special Assets Ltd (1992) 174 CLR 178
1 citation
Jump To
Cite 1 - (1992) 174 CLR 178
Ladhams v Australian Health Practitioner Regulation Agency [2014] QCAT 23
1 citation
Jump To
Cite 1 - [2014] QCAT 23
Latoudis v Casey (1990) 170 CLR 534
1 citation
Jump To
Cite 1 - (1990) 170 CLR 534
Lyons v Dreamstarter Pty Ltd [2012] QCATA 71
3 citations
Jump To
Cite 1 - [2012] QCATA 71
Cite 2 - [2012] QCATA 71
Cite 3 - [2012] QCATA 71
McClintock v Queensland Building Services Authority [2011] QCATA 310
1 citation
Jump To
Cite 1 - [2011] QCATA 310
Nation v QBSA [2006] QCTB 114
1 citation
Jump To
Cite 1 - [2006] QCTB 114
Oshlack v Richmond River Council (1998) 193 CLR 72
1 citation
Jump To
Cite 1 - (1998) 193 CLR 72
Queensland Building and Construction Commission v Arthurs [2014] QCA 307
1 citation
Jump To
Cite 1 - [2014] QCA 307
Queensland Building Services Authority v Johnston [2011] QCATA 265
1 citation
Jump To
Cite 1 - [2011] QCATA 265
Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412
2 citations
Jump To
Cite 1 - [2010] QCAT 412
Cite 2 - [2010] QCAT 412
Tamawood Ltd v Paans[2005] 2 Qd R 101; [2005] QCA 111
2 citations
Jump To
Cite 1 - [2005] QCA 111
Cite 2 - [2005] QCA 111
The Shack Fine Coffee and Fare v Goudie [2014] QCATA 115
1 citation
Jump To
Cite 1 - [2014] QCATA 115
Velvet Glove Holdings Pty Ltd v Mount Isa Mines Ltd [2011] QCA 312
1 citation
Jump To
Cite 1 - [2011] QCA 312

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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