Pivovarova v Michelsen[2016] QCATA 45

REASONS FOR DECISION

1. [1]
   Ms Pivovarova was successful in her appeal to set aside the decision of 24 July 2013.  By order dated 10 June 2015, the matter was remitted to the Tribunal for determination according to law.  
2. [2]
   Ms Pivovarova seeks an order that Mr Michelsen pay the following costs:

   1. Appeal Application filing fees $285.00
   2. Transcript costs $2,360.16
   3. Postage fee to serve transcript $13.50
3. [3]
   Ms Pivovarova has provided some evidence of this and it is accepted, that these amounts were incurred. 
4. [4]
   The Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘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 proceedings.’^[1] 
5. [5]
   The then President, Justice Wilson in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)^[2] stated at [4]:

This presumption may, however, be displaced if the Tribunal considers it is in the interests of justice to order a party to pay all or part of the costs of another party: s 102(1).  The phrase “in the interests of justice” is not defined in the Act but is to be construed according to its ordinary and plain meaning, which obviously confers a broad discretionary power on the decision-maker.

6. [6]
   The then Deputy President, Judge Kingham in Ascot v Nursing & Midwifery Board of Australia^[3] stated at [9]:

The public policy intent of the provisions in the QCAT Act is plain.  The tribunal was established as a no costs jurisdiction.  That may be departed from where the interests of justice require it.  The considerations identified in s 102(3) are not grounds for awarding costs.  They are factors that may be taken into account in determining whether, in a particular case, the interests of justice require the tribunal to make a costs order.

7. [7]
   Those considerations are largely in the nature of what may be regarded as ‘entitling’ or ‘disentitling’ factors and in particular, mostly relate to conduct by the parties.
8. [8]
   Ms Pivovarova contends that it is in the interests of justice to award her the out of pocket expenses claimed. She points to the conduct of Mr Michelsen,^[4] the Member,^[5] the Tribunal,^[6] and the Appeal Tribunal,^[7] which she contends caused her to incur these costs. She contends there is no counter-balancing disentitling conduct on her behalf. In those circumstances, she submits that either, the costs are to be paid from the Appeal Costs Fund, if a right exists, or Mr Michelsen should be ordered to pay the costs.^[8]
9. [9]
   Mr Michelsen contends that:^[9]

   1. the Appeal Tribunal should grant an indemnity certificate under the Appeal Costs Fund Act 1973 (Qld) (‘ACF Act’);
   2. in the absence of such a grant it would not be in the interests of justice to order costs. 
10. [10]
    Alternatively, Mr Michelsen contends that as the matter has been remitted to the Tribunal for determination according to law, that the issue of costs should also be returned to the Tribunal to be determined when the ultimate outcome is known.
11. [11]
    Further, in the alternative, Mr Michelsen contends that he should only be required to pay half the cost of the transcript and there should be no other order as to costs.

Should an indemnity certificate under the Appeal Costs Fund Act 1973 (Qld) be granted?

12. [12]
    The ACF Act provides for reimbursement of legal costs under prescribed circumstances from a fund specifically established to meet those costs. The primary purpose of the fund is to ensure that parties are not financially disadvantaged by the illness of a judge or magistrate or by certain judicial errors of law. 
13. [13]
    During the oral hearings, Mr Michelsen was invited to expand upon his written submission that an indemnity certificate should be granted and in particular, to direct the Appeal Tribunal to which section he submitted was applicable.  Mr Michelsen was not in a position to do so. On 16 December 2015, Ms Pivovarova was also invited to inform the Appeal Tribunal of any specific sections, which she regarded as relevant.  She was not in a position to do so at the hearing on 16 December 2015.  However, she indicated that she would review the legislation and within a week, send to the Appeal Tribunal and to Mr Michelsen a list of any sections of the ACF Act, which she believed should be considered. To date we have not received such a list.    
14. [14]
    The Appeal Tribunal finds that there are no grounds to grant an indemnity certificate under the ACF Act.
15. [15]
    Section 15 of the ACF Act permits a grant to a respondent where there is a successful appeal on a question of law. It is restricted to certain appeals to the Supreme Court,^[10] to the High Court of Australia,^[11] or to the District Court.^[12]    
16. [16]
    Section 17 of the ACF Act permits a grant to an appellant where there is a successful appeal on a question of law.  It is restricted to appeals to the Supreme Court or to the District Court against a decision of a Magistrates Court.^[13]
17. [17]
    Neither section 15 nor section 17 provides for a grant where there is a successful appeal on a question of law to the Appeal Tribunal.
18. [18]
    Section 22(1)(c) of the ACF Act most relevantly permits a grant where the hearing of any civil proceeding is discontinued, and a new trial is ordered for reasons not attributable in any way to the act, neglect or default of any of the parties, or their legal representatives.^[14]
19. [19]
    The Tribunal, constituted by the then Deputy President, Judge Horneman-Wren has previously accepted that tribunal proceedings could be regarded as ‘civil proceedings’ and considered whether proceedings were ‘discontinued’ in Nursing and Midwifery Board of Australia v Clydesdale.^[15] The Tribunal stated at [78]: 

The word ‘discontinued‘ is not defined in the Appeals Cost Fund Act. Discontinuous is defined in the Concise Oxford Dictionary, Eleventh Edition, to mean ‘having intervals or gaps‘. It is therefore unlikely the vacated hearing on 7 and 8 November 2012 was ‘discontinued’ within the meaning of the Appeals Cost Fund Act.^[16]

20. [20]
    The section has previously been found to be applicable where on the second day of hearing the presiding judge disqualified himself upon identifying his association with a witness and ordered a new trial before a different judge.^[17]
21. [21]
    The Appeal Tribunal finds that on a proper construction of section 22(1)(c) of the ACF Act the hearing of this proceeding was not ‘discontinued’. The decision of the learned Member was set aside upon a successful appeal and the matter was remitted for a determination according to law.
22. [22]
    In view of these findings, it is not necessary to consider whether the remittal is a new trial ordered for reasons not attributable in any way to the act, neglect or default of any of the parties or their legal representatives.        

Is it in the interests of justice to exercise the discretion to award costs?

23. [23]
    Mr Michelsen contends that it would not be in the interests of justice to order he pay costs having regard to section 102(3) of the QCAT Act.   He submits that not all of the grounds of appeal raised were successful, those that did succeed, generally related to the learned Member not providing adequate reasons and there is nothing in his conduct in the appeal, which would require an award of costs.
24. [24]
    The Tribunal’s discretion to award costs in a building dispute^[18] is a broader and more general discretion than the one conferred by the QCAT Act^[19] because there is an express power to award costs conferred by the Queensland Building and Construction Commission Act 1991 (Qld)^[20] (‘QBCC Act’), the relevant enabling Act. Unlike in the QCAT Act, there is no strong contra-indication in section 77 of the QBCC Act against a costs order.  Neither party addressed us on the implications of the power to award costs under the QBCC Act. 
25. [25]
    This appeal arises from a building dispute. The Appeal Tribunal has recently expressly considered whether the power to award costs conferred by the QBCC Act extends to an appeal or whether it is confined to the originating proceeding.^[21] We agree with the Appeal Tribunal’s finding that the Appeal Tribunal’s power to award costs arises under section 77 of the QBCC Act.   It remains necessary to consider whether an award of costs is justified in the circumstances.
26. [26]
    We consider that the factors in favour of the award of an order for costs in Ms Pivovarova’s favour in respect of the appeal and the factors against any award of costs are finely balanced. 
27. [27]
    In Lyons v Dreamstarter Pty Ltd^[22] the then President, Justice Wilson stated at [11]:

The discretion to award costs 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 them.^[23] Otherwise, the factors affecting the discretion will vary in each case^[24].

28. [28]
    The Tribunal, in exercising its general discretion to award costs, may consider the matters referred to in s 102(3) of the QCAT Act.
29. [29]
    Ms Pivovarova contended that Mr Michelsen’s conduct in failing to ensure the proceedings were commenced with the correct name acted in a way that unnecessarily disadvantaged her.^[25] She gave a hypothetical example of the disadvantage she might have suffered had she complied with the Member’s order, which required payment to an incorrectly named party.
30. [30]
    We, the Appeal Tribunal, are not satisfied that Ms Pivovarova was actually, rather than hypothetically, unnecessarily disadvantaged. This is not a factor in favour of an award of costs.
31. [31]
    Ms Pivovarova contends that because of the error in the name of the party it would have been necessary for Mr Michelsen to appeal and to incur the same costs^[26] so that he could enforce the order. Mr Michelsen contends that the incorrect name was an error by his then lawyers as distinct from his error alone.  We accept that as between Ms Pivovarova and Mr Michelsen, the consequences of an error by his lawyers should be borne by him rather borne than Ms Pivovarova.  
32. [32]
    While Ms Pivovarova relied upon the incorrect name as a ground of appeal, it was not strictly necessary to bring an appeal to correct this error. As stated in the reasons of 10 June 2015,^[27] the Tribunal has power to correct a decision if it contains an error arising from an accidental slip or omission.^[28] It would have been open to Mr Michelsen to apply under section 135 of the QCAT Act to have the decision corrected. The Appeal Tribunal in Rattan v Gunathilake,^[29] stated at [20]:

The Tribunal forms often lead parties into error about the proper identity of a party.  It is an error that the tribunal is minded to correct and can do so on its own initiative.

33. [33]
    As identified in the Appeal Tribunal’s reasons^[30] there were a series of errors by Mr Michelsen’s lawyers and then by the Tribunal. We are not satisfied that this is a factor in favour of an award of costs.
34. [34]
    Having regard to the legal issues raised by the Appeal, the Appeal Tribunal finds that it was a matter of some complexity,^[31] which is a factor in favour of an award of costs.  
35. [35]
    Ms Pivovarova relies upon her success in setting aside the decision and contends that there was no disentitling conduct on her behalf. In this regard, in particular, she contends that it was not her decision to incur the costs of obtaining a transcript. The relative strength of Ms Pivovarova’s claims in the appeal, upon which she succeeded, is a factor in favour of an award of costs.^[32] Ms Pivovarova had strong grounds for overturning a number of findings at first instance because of the inadequacy of the Member’s reasons. Her success in setting aside the decision is a factor in favour of an award, but is not determinative.
36. [36]
    Mr Michelsen contends that a factor against an award of costs is that Ms Pivovarova did not succeed on all grounds. Ms Pivovarova contends that the Appeal Tribunal was in error in not allowing all her grounds but that such errors are not currently appealable by her to the Court of Appeal.  She also contends that the Appeal Tribunal was in breach of section 4(d) QCAT Act, because the Appeal Tribunal did not treat her case and Mr Michelsen’s case alike.  With respect, this submission is misconceived. 
37. [37]
    Section 4 of the QCAT Act sets out the functions of the Tribunal to achieve the objects of the QCAT Act, which are set out in section 3. The objects of the Act include to promote the quality and consistency of tribunal decisions.^[33] Accordingly, when reading section 4(d) in the context of the objects, the preferable construction is that it is directed at the concept of legal precedent and comity,^[34] which promotes consistency in decision making in like circumstances. 
38. [38]
    Ms Pivovarova also contends the Appeal Tribunal was in breach of section 4(f) of the QCAT Act, because it did not have specialist knowledge in relation to the difference between bamboo and timber flooring, which it is alleged would have supported Ms Pivovarova’s contention that the learned Member erred. This submission is also misconceived. When reading section 4(f) in the context of the objects the preferable construction does not require tribunal members to be factual specialists. As identified in our reasons of 10 June 2015, an Appeal Tribunal will not usually disturb findings of fact if the finding was open on the evidence.^[35]   
39. [39]
    This is not a factor in favour of an award of costs. 
40. [40]
    Whether Ms Pivovarova is entitled to costs of this appeal is to be determined on the basis of our findings and not on hypothetical grounds of appeals to the Court of Appeal.      
41. [41]
    Ultimately, Ms Pivovarova succeeded in establishing a number of errors of law because of the inadequacy of the learned Member’s reasons. The inadequacy of reasons was not a matter over which Mr Michelsen had any influence. 
42. [42]
    The Appeal Tribunal, constituted by the then President, Justice Wilson and Member Suthers, in an appeal from a building dispute, previously found that no order for costs was appropriate where the appellant was largely unsuccessful but was successful in establishing that in some respects the reasons were inadequate.^[36] The Appeal Tribunal stated at [93] to [95]:

The Browns have been partially successful in the appeal largely because the learned Member at first instance did not give adequate reasons.  In the absence of countervailing considerations, the costs of having that omission remedied should not fall upon Noosa Constructions, nor should the cost of pursuing the appeal be seen to have partially robbed the Browns of its efficacy.  It is appropriate to consider the application for these costs in light of the overall result of the Appeal, and the conduct of the parties.

43. [43]
    As the matter has been remitted for determination, the Appeal Tribunal is not currently in a position to assess whether Ms Pivovarova’s ultimate success will be eroded through these costs because the outcome is not yet known.^[37]   This is a factor in favour of deferring determination.
44. [44]
    Ms Pivovarova points to section 102(3)(d) of the QCAT Act and submits that a factor in favour of an award of costs was that she did an enormous amount of work to assist the Tribunal and Appeal Tribunal to make the correct decision.  With respect, this submission is misconceived.  Section 102(3)(d) is only relevant to a ‘proceeding for the review of a reviewable decision’.  This is a reference to proceedings in the Tribunal’s review jurisdiction.  The Tribunal has three jurisdictions conferred upon it; original, review and appeal.^[38] The Appeal Tribunal exercises the appeal jurisdiction not the review jurisdiction. This was an appeal from a decision in the Tribunal’s original rather than review jurisdiction.  The matter set out in section 102(3)(d) of the QCAT Act is not a relevant consideration in these circumstances.
45. [45]
    On 5 November 2015, both parties raised their financial circumstances as a relevant factor. The Appeal Tribunal made directions to allow the parties to place before us further evidence and submissions followed by a further short hearing.^[39]  Neither party pursued submissions in relation to this factor.  The Appeal Tribunal will not consider it further. 
46. [46]
    A factor, which is sometimes relevant, is whether or not either party sought to protect itself through the making of offers to settle.^[40] As the ultimate outcome is not yet known, any such offers could not be assessed in our consideration of relevant factors.  This is a factor in favour of deferring the determination.
47. [47]
    Ms Pivovarova contends, and we accept, that due to the complexities of the appeal we are better placed to decide the issue of costs of the appeal than to allow the issue to be decided on the redetermination.
48. [48]
    The factors in favour of an award of costs and against any order for costs are finely balanced. In these circumstances, and to ensure we deal with this matter in a way that is fair and just^[41] and to ensure all relevant material is disclosed,^[42] the Appeal Tribunal finds that the determination of the question of costs should be adjourned until after the matters remitted are decided, so that the ultimate outcome can be considered in the weighing of the factors as to whether it is in the interests of justice to award costs. 
49. [49]
    It is appropriate to make directions for additional submissions on this remaining factor alone, once the final decision is known. This course is consistent with the course adopted recently by the Appeal Tribunal, constituted by Judicial Member Dodds, where he allowed an appeal, set aside the decision, returned it to the Tribunal for determination and adjourned the question of costs of the appeal until the matters remitted have been determined.^[43]