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Lyons v Dreamstarter Pty Ltd[2016] QCATA 43

Lyons v Dreamstarter Pty Ltd[2016] QCATA 43

CITATION:

Lyons v Dreamstarter Pty Ltd & Anor [2016] QCATA 43

PARTIES:

Andrew Lyons

(Applicant)

V

Dreamstarter Pty Ltd (in liquidation) t/a Protec Builders

(First Respondent)

Queensland Building and Construction Commission

(Second Respondent)

APPLICATION NUMBER:

APL086-12

MATTER TYPE:

Appeals

HEARING DATE:

17 February 2016

HEARD AT:

Brisbane

DECISION OF:

Justice DG Thomas, President

DELIVERED ON:

10 June 2016

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The application of the QBCC is dismissed
  2. The QBCC pay Mr Lyons reasonable costs assessed on an indemnity basis
  3. The QBCC is to make any submissions in relation to methodology for agreement or assessment of costs by:

4:00pm on 1 July 2016

  1. Mr Lyons is to make any submissions in reply by:

4:00pm on 22 July 2016

  1. Unless either party requires an oral hearing the orders as to costs will be determined on the papers after 22 July 2016

CATCHWORDS:

PROCEDURE – MISCELLANEOUS PROCEDURAL MATTERS – OTHER MATTERS – where the second respondent brought an application to clarify the constitution of the Appeal Tribunal due to discussions that took place at a Directions Hearing – where the second respondent alleged apprehended bias if the original Member were to hear the appeals  – where the Appeal Tribunal was not yet constituted – whether the application should be dismissed

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS  – COSTS  – INDEMNITY COSTS  – POWER TO ORDER  – where application made pre – emptively –  whether costs should be awarded on an indemnity basis

Queensland Building and Construction Commission Act 1991 (Qld) SS 77

Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 32, 100, 102

Queensland Civil and Administrative Rules 2009 (Qld) r 86

Uniform Civil Procedure Rules 1999 r 430(2)

Battenberg v Union Club [2007] NSWSC 265

Lyons v Building Services Authority & Dreamstarter Pty Ltd [2011] QCATA 240

Lyons v Dreamstarter Pty Ltd t/a Protec Builders [2012] QCATA 71

Michael Wilson and Partners Limited v Nicholls & Ors (2011) 244 CLR 427

Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507

Nickelseekers Pty Ltd v Vance [1985] 1 Qd R 266

Re Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100

Re Finance Sector Union of Australia; Ex parte Illaton Pty Ltd & Anor [1992] HCA 30

Re Mr Justice Keely; Ex parte Ansett Transport Industries (Operations Pty Ltd [1990] HCA 27

Ricchetti and Ors v Lanbuilt Pty Ltd [2012] QCATA 111

R v Commonwealth Conciliation and Arbitration

Commission; Ex parte Angliss Group (1969) 122 CLR 456

Stathooles v Mt Isa Mines Ltd [1997] 2 Qd R 106

Smits & Anor v Roach & Ors (2006) 227 CLR 423

Vakauta v Kelly (1989) 167 CLR 568

APPEARANCES and REPRESENTATION:

APPLICANT:

M.P Amerena of Burns & Associates solicitors for the Applicant

RESPONDENT:

N. Anreatis for the Queensland for the Building and Construction Commission

REASONS FOR DECISION

Preliminary

  1. [1]
    In this interlocutory application against Mr Lyons, the Queensland Building and Construction Commission (“QBCC”) seeks to clarify the composition of an Appeal Tribunal that may be required to hear three appeals.[1] The present position in those matters is as follows.
  2. [2]
    In Lyons v Building Services Authority & Dreamstarter Pty Ltd APL299-10, Deputy President Kingham upheld the appeal and awarded Mr Lyons costs of $1,000.00 against the Authority (now the QBCC). That decision is reported as [2011] QCATA 240.
  3. [3]
    In Lyons v Dreamstarter Pty Ltd t/a Protec Builders APL234-10, Protec (the applicant) withdrew its appeal. Mr Lyons then sought costs, and on 2 May 2012, Alan Wilson J awarded him $30,660.60. That decision is reported as [2012] QCATA 71.
  4. [4]
    Mr Lyons was also successful in APL086-12 (Lyons v Dreamstarter Pty Ltd t/a Protec Builders). By a consent order dated 26 February 2013, costs of $30,660.60 were awarded against Dreamstarter. 
  5. [5]
    However, the insolvency of Dreamstarter means that the orders against it have not resulted in any payment to Mr Lyons. Mr Lyons now proposes to ask the Tribunal to declare that the QBCC is subject to those orders.[2] It is suggested that a “common law costs power” will be relied on for that purpose.[3] For convenience, I shall refer to those proposed proceedings as “the appeals”.
  6. [6]
    Whilst a number of issues will, no doubt, arise in relation to the appeals, as will the question whether the new indemnity costs orders, if any, are governed by section 77 of the Queensland Building and Construction Commission Act 1991 (Qld), or section 100 and 102 of the QCAT Act, the only present question to be decided in the context of this application, is whether this interlocutory application should be dismissed and, if so,[4] whether Mr Lyons should be awarded costs of this application on an indemnity basis, or at all.

How this application arose

  1. [7]
    The starting point is a Directions Hearing conducted by Senior Member O'Callaghan on 30 October 2015, concerning Mr Lyons’s application to extend the burdens of the costs orders in the appeals (or some of them) to the QBCC.
  2. [8]
    No transcript of that hearing is available, but it is common ground that the Senior Member raised the possibility of Member Fitzpatrick’s appointment to the Appeals Tribunal. It is also common ground that Ms Fitzpatrick dealt with issues very similar to those that would be involved in the appeals.
  3. [9]
    The initial responses of the parties to the possible appointment were positive. Mr Lyons remains enthusiastic in relation this:

“[B]ecause Ms Fitzpatrick [has] that special knowledge [she] could assist the tribunal in the efficient use of its resources to get a just and consistent result. ... [The appeals are] all part of the one controversy between the same interested parties and the issues are almost identical. ... [T]he same issues will be rehashed in front of the appeal tribunal if ... [Ms Fitzpatrick] doesn’t decide to give costs of the three appeals in the matter she’s just heard”.[5]

  1. [10]
    At first blush, the proposal seemed “sensible and appropriate” to counsel for the QBCC as well.[6]
  2. [11]
    In fact, no Direction or Order was made as to Ms Fitzpatrick sitting on an Appeal Tribunal. The Senior Member did not, and could not appoint Ms Fitzpatrick to sit on the appeals. That is the prerogative of the President.[7] But a measure of bipartisan confusion remained.[8]
  3. [12]
    As Mr Lyons sees it, a de facto arrangement has been made:

“Senior Member O'Callaghan ... said that there was a possibility of the appeal matters being heard ... by a Judge and Member Fitzpatrick and requested the parties reaction ... My counsel agreed [and] counsel for the QBCC likewise gave a favourable response ... [My solicitor] informs me, and I believe, that the Senior Member said that the appeals would be heard ... with Member Fitzpatrick being a member of the [relevant] Tribunal”.[9]

  1. [13]
    Counsel for Mr Lyons sought to discount that statement as hearsay.[10] Even in the Courts, however, hearsay is admissible on interlocutory applications, as in this Tribunal,[11] and no reason was given for treating that evidence “with caution”.
  2. [14]
    A few days after the Directions Hearing it occurred to the QBCC that, if Ms Fitzpatrick were appointed, and agreed to sit, a reasonable apprehension of bias could arise, provoking further skirmishes in already litigious circumstances.
  3. [15]
    On 4 November 2015, the QBCC wrote to Mr Lyons’s solicitors suggesting that the proposal mooted at the Directions Hearing be unequivocally abandoned, without the need to resort to a formal application and the attendant costs.
  4. [16]
    That proposal was rejected by Mr Lyons.
  5. [17]
    The QBCC, its informal approach rebuffed, then sought “to have that cloud  and the doubt that it created removed”[12] by applying for an order that “the direction that Member Fitzpatrick constitute part of the Appeal Tribunal that hears the applications made by Mr Lyons be set aside”.[13]
  6. [18]
    As no direction had been made by the Senior Member, there would have been other ways of achieving this, for example, at a subsequent Directions Hearing. The Application was misconceived.

Apprehended bias?

  1. [19]
    Initially neither party seems to have considered that the proposal might place Ms Fitzpatrick virtually, if not formally, in the position of hearing an appeal from herself.[14]
  2. [20]
    Formally, of course, that could not occur. It became impermissible in Queensland in 1892, and persists in the Supreme Court of Queensland Act 1991 (Qld)[15] and the constitution of this Tribunal.[16]
  3. [21]
    Mr Lyons contends that this concern is groundless, citing Re Finance Sector Union of Australia; Ex parte Illaton Pty Ltd & Anor (“Illaton”)[17], Michael Wilson and Partners Limited v Nicholls & Ors (“Wilson”)[18] and Smits & Anor v Roach & Ors (“Smits”).[19]
  4. [22]
    In Illaton, the Court recognised that decisions on pleas of apprehended bias “will be influenced by the nature, function, and composition of the particular Tribunal.”[20] Following that observation, and a reference to the “Australian industrial environment”, in half of the brief judgment, the Court discussed the special character of industrial adjudication, and the corresponding position of the Industrial Relations Commission.[21]
  5. [23]
    In Wilson, the issues in the trial were not related to those in interlocutory proceedings previously dealt with by the trial judge. Accordingly, there was no basis for an apprehension of bias.
  6. [24]
    The facts in Smits, are remote from the present case. Alleged bias arose from a familial relationship between the trial judge and chairman of the defendant firm. The Judge disclosed a “personal connection” when the hearing opened, but no challenge to his impartiality was made until several months after it concluded, and shortly before reserved judgment was delivered. He refused to recuse himself, and that decision was upheld. In accordance with other rulings on belated objections,[22] it was held that a waiver occurred.
  7. [25]
    In any event, no real or ‘live’ question of apprehended biased arises.

Waiver?

  1. [26]
    Mr Lyons submits that the QBCC has waived any right to object to the suggested appointment.
  2. [27]
    That is an ambitious construction to place upon exchanges at a “confused” meeting, long before the appeal panel (if any) is appointed. At present, there is nothing to object to, and nothing to waive.
  3. [28]
    As indicated in Smits, the proper time for any waiver of bias is as soon as possible after the Court or Tribunal has been constituted and proceeds to hear the case.[23] In Wilson, the Judge had heard preliminary applications in the case, and had been appointed to conduct the trial before the recusal application was made. However, there can be no reasonably perceived bias in a Tribunal not yet appointed, and therefore no reasonable suspicion to waive.
  4. [29]
    Mr Lyons’s submissions are rejected.

Matters for determination

  1. [30]
    The present question is not whether apprehended bias is established or whether rights were waived.
  2. [31]
    The immediate question is to determine the outcome of the Application and any order, which might be made as to costs.
  3. [32]
    In circumstances where no direction was made by the Senior Member, a miscellaneous application seeking that “the direction that Member Fitzpatrick constitute part of the Appeal Tribunal that hears the applications made by Mr Lyons be set aside” was misconceived.
  4. [33]
    The application must be dismissed.

Costs

  1. [34]
    Mr Lyons seeks an order for costs on the following basis:
  1. Section 77 (3) (h) QBCC Act – costs should follow the event.
  2. Factors under section 102 (3) (b) QCAT Act.
  3. Rule 86 QCAT Rules - Calderbank offer to settle.
  1. [35]
    Mr Lyons asserts that the costs order should be on an indemnity basis.
  2. [36]
    Mr Lyons submits that the result of this application is less favourable to the QBCC than an offer in writing made by him on 10 November 2015, “to consent to the dismissal of the application with no order as to costs of and incidental to it”. That offer was not accepted.
  3. [37]
    It has previously been accepted by the Tribunal that Calderbank offers are relevant to the exercise of the discretion concerning costs. Rule 86 (2) of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) provides that the Tribunal may award the party who made the offer “all reasonable costs incurred by that party in conducting the proceedings after the offer was made”.
  4. [38]
    Rule 86 was considered by Alan Wilson J in the case of Lyons v Dreamstarter[24] where it was identified that the offer was a reasonable one, which ought to have been accepted in circumstances where it was not open to the recipient to assert that the matter should properly be left to adjudication. Referring to several cases in the Commercial and Consumer Tribunal, Alan Wilson J held that the awarding of “reasonable costs” should be construed to mean indemnity, rather than standard, costs. Alan Wilson J concluded that plainly, the rule is intended to encourage parties to be realistic about prospects in QCAT proceedings, and to carry appropriate sanctions if that does not occur.[25]
  5. [39]
    In Ricchetti and Ors v Lanbuilt Pty Ltd[26], the Tribunal also considered the application of Rule 86 in circumstances where an offer to settle had been made. In the context of the basis upon which the costs should be awarded, the tribunal referred to authorities relevant to the exercise of the discretion to award costs on an indemnity basis. It was noted that the offer made would have been capable of bringing the proceedings to a complete conclusion, and was made at a time when all relevant facts were known to the recipient who could make an informed decision. It was found that the offer was more advantageous than the eventual outcome and should have been accepted. Costs were awarded on an indemnity basis.
  6. [40]
    Whilst rule 86 (2) is relevant to the decision to award costs, not all cases will lead to an award on an indemnity basis. Whether such an order is made will depend upon the circumstances of each case.
  7. [41]
    In cases where the offer is that proceedings be dismissed, and the offer is not accepted, a feature relevant to whether an order for costs is made on an indemnity basis will be the merits of the proceedings to which the offer relates. If the proceedings are groundless or with no prospects, the failure to accept the offer will more likely result in an order for costs on an indemnity basis. This is consistent with the aim to encourage parties to be realistic about prospects and to carry appropriate sanction if this does not happen.
  8. [42]
    In the circumstances the Tribunal finds the following, which are relevant to the order as to costs:
  1. A written offer was made by Mr Lyons to the Commissioner;
  2. The date for acceptance was clear from the face of the offer;
  3. The offer was not unreasonable and would have disposed of the matter had it been accepted;
  4. The offer was made at a time when sufficient facts were known to enable the Commissioner to have evaluated the offer;
  5. From the text of the offer it was made clear that the offer would be relied on to claim costs on an indemnity basis.
  6. The Commissioner did not accept the offer within the time it was open for acceptance;
  7. The fact that the Commissioner did not accept the offer meant that Mr Lyons was put to the expense (he would not otherwise have incurred) of responding to the application; and
  8. The decision of the Tribunal is not more favourable to the Commissioner than the offer.
  1. [43]
    The Application to which the offer related could not have been successful as the direction which was sought to be set aside in the application had never been made. The application had no merits and it was unreasonable not to accept the offer made by Mr Lyons.
  2. [44]
    It is therefore ordered that the Commissioner pay Mr Lyons reasonable costs assessed on an indemnity basis.
  3. [45]
    In the circumstances, it is not necessary to consider the other bases upon which Mr Lyons asserts an entitlement to costs.
  4. [46]
    Mr Lyons has made submissions in relation to the methodology for agreement or assessment of the costs.
  5. [47]
    QBCC will be allowed 21 days to make submissions in reply and then Mr Lyons will be allowed a further 21 days to respond.
  6. [48]
    Unless either party requires an oral hearing the orders as to costs will be determined on the papers. 

Orders

  1. The application of the QBCC is dismissed.
  2. The QBCC pay Mr Lyons reasonable costs assessed on an indemnity basis.
  3. The QBCC is to make any submissions in relation to methodology for agreement or assessment of costs by:

4:00pm on 1 July 2016.

  1. Mr Lyons is to make any submissions in reply by:

4:00pm on 22 July 2016.

  1. Unless either party requires an oral hearing the orders as to costs will be determined on the papers after 20 July 2016.

Footnotes

[1] Lyons v Building Services Authority & Dreamstarter Pty Ltd APL299-10, Lyons v Dreamstarter Pty Ltd t/a Protec Builders APL234-10 and Lyons v Dreamstarter Pty Ltd t/a Protec Builders APL086-12, as noted in the application for miscellaneous matters, filed 10 November 2015.

[2]  Transcript of hearing of QBCC’s interlocutory application, 17 February 2016 (”Transcript”) page 1-63 lines 21-24; page 1-65 lines 1-3.

[3]  Ibid, page 1-66 lines 13-18.

[4]  As Mr Lyons submits at Transcript page 1-16 lines 14-15.

[5]  Transcript page 1-34, lines 18-39 (counsel for Lyons).

[6]  Ibid, page 1-4 lines 15-16 (counsel for QBCC).

[7]  QCAT Act ss 165, 166(2), 167.

[8]  Transcript page 1-20 lines 26-27, page 1-55 lines 6-7(President); page 1-60 line 7 (counsel for QBCC – “certainly confusion”); page 1-67 lines 44-46 (counsel for QBCC – “shared by both sides”).

[9]  Submissions on behalf of Andrew Lyons, filed 21 December 2015, paragraphs 429-431.

[10]  Transcript page 1-23 lines 19-44.

[11] Deputy Commissioner of Taxation v Ahern (No 2) [1988] 2 Qd R 158; Uniform Civil Procedure Rules 1999 r 430(2); QCAT Act s 28(3)(b).

[12]  Transcript page 1-67 line 47 (counsel for QBCC).

[13]  Application for miscellaneous matters, filed on behalf of the QBCC 10 November 2015, Part C2-1.

[14]  See: Transcript page 1-55 lines 1-2.

[15]  Section 40. See also; Supreme Court Act 1970 (NSW) s 110; Supreme Court Act 1986 (Vic) s 13.

[16]  QCAT Act s 167(3).

[17] [1992] HCA 30; (1992) 107 ALR 581.

[18]  (2011) 244 CLR 427.

[19]  (2006) 227 CLR 423.

[20]  (1992) 42 IR at 352; see also Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 563 per Hayne J.

[21]  Other cases in which the position of industrial tribunals is sympathetically considered are R v Commonwealth Conciliation and  Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 456 and Re Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100; Re Mr Justice Keely; Ex parte Ansett Transport Industries (Operations Pty Ltd [1990] HCA 27.

[22]  For example, Vakauta v Kelly (1989) 167 CLR 568 at 572, 577; Nickelseekers Pty Ltd v

Vance [1985] 1 Qd R 266 at 272; Stathooles v Mt Isa Mines Ltd [1997] 2 Qd R 106.

[23] Vakauta v Kelly (1989) 167 CLR 568 at 577 (“no objection was taken to the continuation of the trial”); 579 (“allows the case to continue”); 587 (“waving the right ... to object to the judge continuing to hear and dispose of the case”) (emphases added); Battenberg v Union Club [2007] NSWSC 265 at [24] (“when they were first before me”).

[24]  [2012] QCATA 71.

[25] Lyons v Dreamstarter [2012] QCATA 71 [24].

[26]  [2012] QCATA 111.

Close

Editorial Notes

  • Published Case Name:

    Lyons v Dreamstarter Pty Ltd & Anor

  • Shortened Case Name:

    Lyons v Dreamstarter Pty Ltd

  • MNC:

    [2016] QCATA 43

  • Court:

    QCATA

  • Judge(s):

    Thomas J

  • Date:

    10 Jun 2016

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
Battenberg v Union Club [2007] NSWSC 265
2 citations
Jump To
Cite 1 - [2007] NSWSC 265
Cite 2 - [2007] NSWSC 265
Deputy Commissioner of Taxation v Ahern (No 2) [1988] 2 Qd R 158
1 citation
Jump To
Cite 1 - [1988] 2 Qd R 158
Lyons v Building Services Authority & Anor [2011] QCATA 240
2 citations
Jump To
Cite 1 - [2011] QCATA 240
Cite 2 - [2011] QCATA 240
Lyons v Dreamstarter Pty Ltd [2012] QCATA 71
4 citations
Jump To
Cite 1 - [2012] QCATA 71
Cite 2 - [2012] QCATA 71
Cite 3 - [2012] QCATA 71
Cite 4 - [2012] QCATA 71
Michael Wilson & Partners Pty Ltd v Nicholls (2011) 244 CLR 427
2 citations
Jump To
Cite 1 - (2011) 244 CLR 427
Cite 2 - (2011) 244 CLR 427
Minister for Immigration v Jia Legeng (2001) 205 CLR 507
2 citations
Jump To
Cite 1 - (2001) 205 CLR 507
Cite 2 - (2001) 205 CLR 507
Nickelseekers Ltd v Vance [1985] 1 Qd R 266
2 citations
Jump To
Cite 1 - [1985] 1 Qd R 266
Cite 2 - [1985] 1 Qd R 266
R v Commonwealth Conciliation and Arbitration Commission (1969) 122 CLR 456
2 citations
Jump To
Cite 1 - (1969) 122 CLR 456
Cite 2 - (1969) 122 CLR 456
R. v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co. Pty Ltd (1953) 88 CLR 100
2 citations
Jump To
Cite 1 - (1953) 88 CLR 100
Cite 2 - (1953) 88 CLR 100
Re Finance Sector Union of Australia; Ex parte Illaton Pty Ltd & Anor [1992] HCA 30
2 citations
Jump To
Cite 1 - [1992] HCA 30
Cite 2 - [1992] HCA 30
Re Keely; Ex Parte Ansett Transport Industries (Operations) Pty Ltd [1990] HCA 27
2 citations
Jump To
Cite 1 - [1990] HCA 27
Cite 2 - [1990] HCA 27
Ricchetti and Ors v Lanbuilt Pty Ltd [2012] QCATA 111
2 citations
Jump To
Cite 1 - [2012] QCATA 111
Cite 2 - [2012] QCATA 111
Smits v Roach (2006) 227 CLR 423
2 citations
Jump To
Cite 1 - (2006) 227 CLR 423
Cite 2 - (2006) 227 CLR 423
Stathooles v Mount Isa Mines Limited[1997] 2 Qd R 106; [1996] QCA 323
2 citations
Jump To
Cite 1 - [1997] 2 Qd R 106
Cite 2 - [1997] 2 Qd R 106
Stephens v Stephens (Disqualification) (1992) 107 ALR 581
1 citation
Jump To
Cite 1 - (1992) 107 ALR 581
Vakuata v Kelly (1989) 167 CLR 568
3 citations
Jump To
Cite 1 - (1989) 167 CLR 568
Cite 2 - (1989) 167 CLR 568
Cite 3 - (1989) 167 CLR 568

Cases Citing

Case NameFull CitationFrequency
Gedoun Constructions Pty Ltd v Agius [2024] QCATA 431 citation
Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 982 citations
Oaks Hotels & Resorts Ltd v Knauer [2020] QCATA 903 citations
Owltown Pty Ltd v Norwinn Commercial (No 3) [2018] QCATA 941 citation
Silastone Trading Pty Ltd v Body Corporate for Q1 (No 2) [2018] QCAT 472 citations
1

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