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Thompson v Body Corporate for Arila Lodge QCATA 152
Thompson v Body Corporate for Arila Lodge & Anor  QCATA 152
Body Corporate for Arila Lodge
On the papers
5 December 2017
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – where applicant ordered to pay costs thrown away at an interlocutory stage – meaning of “costs thrown away” – whether such costs must be reasonable and proper – fixing of such costs
Arcon Constructions Pty Ltd v Queensland Building Services Authority  QCAT 573
Andromeda v Holme (1923) 130 L.T. 329
Edelman v Badower  VSC 427
Fashion Warehouse Pty Ltd v Pola  1 Qd R 251
Laing O'Rourke (BMC) Ltd (formerly Barclay Mowlem Construction Ltd) v Dampier Port Authority  WASC 87
Body Corporate and Community Management Act 1997 (Qld), s 121(4), s 290
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 107
Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 39
Uniform Civil Procedure Rules 1999 (Qld), r 702, r 703
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
Spranklin McCartney Lawyers
REASONS FOR DECISION
- The tribunal is not obliged to give reasons for a costs decision including the fixing of such costs but since I have drastically reduced the claimed amount, I have exercised my discretion to give my reasons in this instance.
- The costs order made by the tribunal was made on 1 June 2017. The order was that Ms Thompson should pay the costs thrown away by her failure to comply with the tribunal’s order of 6 March 2017.
- The part of the order of 6 March 2017 with which she had failed to comply (and covered by the order for costs) was in paragraph 9 of the order. This required her to:
- provide a copy of the Appeal Book, at her own expense, to Lyn McClelland and Body Corporate for Arila Lodge …;
- file in the Tribunal three (3) copies and give to Lyn McClelland, Body Corporate for Arila Lodge … one (1) copy of all submissions as to the alleged error of law, including any cases relied upon in support of the application for appeal;
by 4.00pm on 24 April 2017
- The directions provided for submissions in reply to be served by Lyn McClelland and the Body Corporate by 4.00pm on 22 May 2017.
- Paragraph 7 of the directions explained that the appeal book was made up of any documents sent to the Appeal Tribunal pursuant to section 290 of the Body Corporate and Community Management Act 1997 (Qld) (BCCM Act). That is, the documents which would be sent to the tribunal by the Commissioner for Body Corporate and Community Management on an appeal of this sort on the tribunal’s request. The documents are those specified in section 290(2) of the BCCM Act, and are (a) the application for which the adjudicator’s order was made; (b) the adjudicator’s order; (c) the adjudicator’s reasons; and (d) other materials in the adjudicator’s possession relevant to the order.
- Paragraph 8 of the directions permitted any party to inspect and/or obtain copies (at their own cost) of those documents.
- The tribunal made a request of the Commissioner under section 290 on 16 January 2017. For reasons which are unclear, this request was only received by the Commissioner on 30 June 2017. The appeal book documents were received by the tribunal on 6 July 2017.
- At the time when Ms Thompson had to comply with the order of 6 March 2017 therefore, there was no appeal book as defined in the directions. Nevertheless it appears that Ms Thompson put together what she thought was an appeal book made up of the main relevant documents, marked it “appeal book” and filed those documents with the tribunal on 24 April 2017, together with the submissions as required by paragraph 9(b) of the directions. As far as the tribunal was aware therefore, it appeared that she had complied with the order.
- Ms Thompson also sent two emails on that day, one to the solicitors for the Body Corporate and one to Ms McClelland, with a scan of her appeal book, and of her submissions. What seems to have happened was that she scanned it using the wrong orientation, so that the top and bottom of each page was cut off. The net result as printed can be seen in Exhibit I of the respondents’ submissions received by the tribunal on 10 May 2017.
- On 26 April 2017 the solicitors for the Body Corporate emailed Ms Thompson pointing out the fact that the attachment to her email had not come through correctly. In that email the solicitors told Ms Thompson that she was obliged to provide them with a physical copy of the appeal book. The solicitors gave her a deadline of 27 April 2017 to provide a legible electronic copy of the appeal book and 28 April 2017 to provide a physical copy of the appeal book to their office.
- The solicitors’ demand for a physical copy of the appeal book may have overlooked rule 39(1)(d) of the tribunal rules which permits a party to serve documents on another party by email if that other party has an address for service which includes an email address. Certainly the solicitors were using email to correspond with the tribunal, as can be seen from the tribunal file. And there was nothing in the tribunal direction of 6 March 2017 requiring Ms Thompson to give a physical copy of the appeal book to the respondents.
- The email did not remind Ms Thompson that a legible copy of the submissions ought to be provided as well to comply with the order.
- On 2 May 2017, the solicitors emailed Ms Thompson again pointing out that they had not received a legible, electronic and physical copy of the appeal book and so they were going to “seek instructions to make an application to strike out your appeal on account of your continuing vexatious conduct and your refusal to comply with the directions of the Tribunal”.
- The solicitors then prepared an application to strike out the appeal and this was filed in the tribunal on 10 May 2017. The grounds on which it was made was said to be “due to the Applicant’s vexatious conduct of the proceedings and her failure to comply with the Tribunal’s directions that is unnecessarily disadvantaging the Respondent in this proceeding.”
- The application to strike out the appeal also relied on matters which had been the subject of a previous unsuccessful application to strike out the claim. That application had been filed in the tribunal on 2 February 2017. It was dismissed when it was heard at an oral hearing by a senior member on 6 March 2017.
- The application to strike out the appeal was heard in an oral hearing on 1 June 2017. No order was made on it. Instead, Ms Thompson was again ordered to provide Ms McClelland and the Body Corporate with the appeal book and the costs order referred to earlier was made.
- So that the tribunal could fix the costs ordered on 1 June 2017, the Body Corporate and Ms McClelland were directed to file and serve a short form estimate of their costs thrown away. The Body Corporate sought costs of $10,491.83 including GST. Although there are many elements of the claim for costs, a large element is the costs of the application to strike out the appeal filed on 10 May 2017.
- In reply to the claim for costs, solicitors for Ms Thompson submitted that it was unreasonable for the Body Corporate to apply to strike out the appeal.
- On 11 October 2017, the tribunal invited submissions from the Body Corporate and from Ms McClelland on the issue of reasonableness of applying to strike out the appeal “instead of for example asking the tribunal to direct that (Ms Thompson) provide them with a paper copy” of the appeal book and submissions.
- Both the Body Corporate and Ms McClelland have provided submissions in reply. The only part of the submissions from the Body Corporate which deals with the question asked by the tribunal is:
Respectfully, the Body Corporate is unsure as to what utility an application to the Tribunal seeking a direction that the Applicant comply with an already existing direction, would have had.
- The remainder of the submissions attempt to justify applying to strike out the appeal on various other grounds.
- The Body Corporate’s submissions included an update of the claim for costs, now increased to $12,939.33 including GST.
Meaning of “costs thrown away”
- As explained by Mukhtar AsJ of the Supreme Court in Victoria in Edelman v Badower  VSC 427, there is a distinction to be made between costs thrown away and “costs of” or “costs of and incidental to” or “costs of and occasioned by”. An order for costs thrown away is regarded as compensation for work already done but wasted as a result of the other party’s error or failure to comply with the procedure set by the rules. The other expressions refer to costs looking forward or consequential upon the event.
The tribunal’s task when fixing costs
- Second 107 of the QCAT Act contemplates that the tribunal will itself fix costs whenever possible. When fixing costs, the tribunal is not bound by any particular scale of costs although the scales used by the mainstream courts can be a useful guide. The tribunal is also not bound by any rules of assessment or usual practice as to the basis of assessment (standard or indemnity). The aim is to make an award which is reasonable and appropriate in the circumstances of the case.
- The tests to apply in the Uniform Civil Procedure Rules 1999 (Qld) are, for costs on the standard basis, “all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed”. For indemnity costs it is “all costs reasonably incurred and of a reasonable amount, having regard to (a) the scale of fees prescribed for the court (b) any costs agreement between the party to whom the costs are payable and the party’s solicitor (c) charges ordinarily payable by a client to a solicitor for the work”.
- In all the tests, it is the principle that when fixing costs, only those costs which are reasonable, necessary or proper should be allowed. This is of particular relevance to this matter and there is no doubt that the same test applies to costs thrown away. In Andromeda v Holme (1923) 130 L.T. 329 Bankes LJ said:
I do not propose to attempt a definition of what the words ‘all costs thrown away’ mean, but I certainly think that they would include the costs of the execution in this case and the cost of the garnishee proceedings. But, of course, those must be costs reasonably incurred and it would be for the Taxing Master to say whether in those circumstances the steps taken by the plaintiffs were steps reasonably taken.
- In Laing O'Rourke (BMC) Ltd (formerly Barclay Mowlem Construction Ltd) v Dampier Port Authority  WASC 87, Martin CJ said that to be recoverable, costs thrown away must be “properly and reasonably incurred”.
Was the response to the event reasonable?
- It seems to me that there will often be no single way to respond to events which would be reasonable to the exclusion of other ways of responding. Circumstances may require a more robust approach in some cases, which will incur additional costs; such an approach may be reasonable. Therefore there will often be a band of reasonable responses, so that when fixing costs, the costs which are allowable will be those arising from a response within that band.
- When considering here the possible reasonable responses to Ms Thompson’s email of 24 April 2017 I must take into account that the absence of the appeal book or its equivalent as then available from the tribunal file, would not have given the solicitors for Body Corporate much difficulty. These were formal documents which they had already.
- The absence of a full copy of Ms Thompson’s submissions is a different matter. It is right that without those, submissions in reply could not be prepared. This meant that if the submissions were not provided in legible form, Ms McClelland and the Body Corporate would be unable to comply with the requirement to file submissions in reply by 22 May 2017 as required by the order of 6 March 2017.
- The order of 6 March 2017 provided for a directions hearing following the sequence of directions, and this directions hearing was set for 1 June 2017. Notices about this went out to the parties on 23 May 2017.
- Bearing in mind that it was clear from Ms Thompson’s email of 24 April 2017 that she had put together documents for the appeal book, had prepared submissions and had attempted to send both of these by email to the solicitors for the Body Corporate and to Ms McClelland, but that as a result of some technical difficulty they were not complete, the response of the Body Corporate incurring costs of $10,491.83 including GST at that time was not proportionate. In my view it was outside the band of reasonable responses to what had happened.
- It is true that technically Ms Thompson’s failure may have entitled the Body Corporate to apply to the tribunal to strike out the appeal because it appeared that Ms Thompson had failed to comply with a tribunal direction without reasonable excuse, but in truth the application had no chance of success bearing in mind that it appeared that Ms Thompson’s failure to comply was as a result of technical problems. In so far as the application was supported by the other complaints made about the way she had handled the litigation, these had been aired in an earlier application to strike out, which had been dismissed.
- It is also true that the solicitors for the Body Corporate had pointed out to Ms Thompson that what she had sent in her email was incomplete, and had also warned her before applying to strike out. I agree her response to them was unsatisfactory.
- The proper and reasonable response to the incomplete material sent by Ms Thompson was to bring it to the attention of the tribunal and if thought appropriate, to apply for a direction that Ms Thompson provide a paper copy of the appeal book and the submissions, and that there be a corresponding adjustment to the date for filing submissions in reply. Such an application would only need to be very brief. It would merely have pointed out that what had been sent had been wrongly orientated, attaching a couple of pages to show what had happened, and explained that Ms Thompson had been asked for a better copy but that she had ignored that request. Instead, the Body Corporate’s application was supported by 7 pages of submissions (57 paragraphs), and attached 100 pages of exhibits.
- Since the response to what had happened was outside the band of reasonable responses, I think I am justified in allowing only the following work as costs thrown away by the Body Corporate:
- Receiving Ms Thompson’s email of 24 April 2017, looking at the attachment and realising there was something wrong with it.
- Sending an email to Ms Thompson pointing out the problem and sending a second email before applying to the tribunal.
- Applying to the tribunal for an order that Ms Thompson provide a paper copy of her attachment in proper form and for an enlargement of time to file submissions in reply.
- Assisted by the actual costs claimed for work of this type in the costs breakdown which has been provided, I shall allow $650 including GST for this work.
- Costs of attendance at the hearing on 1 June 2017 is claimed by the Body Corporate, seemingly in full. However, if the above course of action had been followed, it is highly likely that the application would have been referred to a senior member and dealt with by the tribunal on the papers well prior to the directions hearing of 1 June 2017. It would have been a very simple application, requiring only simple consideration. The order which in all probability would have been made would have been that Ms Thompson provide a complete paper copy of the appeal book and her submissions to the Body Corporate and to Ms McClelland by a certain date, failing which her appeal may be struck out. Therefore if there had been a proper and reasonable response to what had happened there would be no costs of attendance on 1 June 2017.
- Instead, the strike out application was listed for hearing with two other applications on 1 June 2017. The other applications were an application by Ms Thompson for an extension of time to bring an appeal against another decision by the adjudicator in APL075-17, and an application for an extension of time to comply with procedural requirements in APL441-16. The hearing was scheduled to last one hour and that is how long it lasted. Most of the hearing was used to deal with the first application in APL075-17, which the senior member ultimately decided should be dealt with on the papers after submissions had been filed.
- The application to strike out was dealt with in the last 15 minutes of the hearing together with the third application. The appeal was not struck out, with Ms Thompson being given a “further chance” subject to costs thrown away.
- If I am wrong that in all probability a proper application dealing with the appeal book and submissions would have been dealt with on the papers well prior to this directions hearing, I still do not think that any costs of attending the hearing were “costs thrown away” by reason of the failure to comply with the 6 March 2017 order. The issue about the appeal book and submissions could be stated in one sentence to the senior member at the directions hearing. Attendance at the directions hearing was required anyway so no costs of attendance were “wasted”.
- Had the costs order been “costs of the application made by reason of the failure to comply with the 6 March 2017 order” then of course such costs could have been recovered in proportion to the time spent on dealing with the application at the hearing. But this was not the order made. Instead, the strike out application was unsuccessful, which is no doubt why the “costs thrown away” order was made.
- For the same reasons I am not allowing any costs for Ms McClelland’s attendance at the hearing.
- I need to explain why I am not allowing some other parts of the claim made by the Body Corporate for costs thrown away. In doing so I will concentrate on the larger items.
- There is a claim for $867.90 for drafting and finalising submissions in reply to Ms Thompson’s “illegible submissions” filed. This was 46 pages filed in the tribunal on 23 May 2017. This work had no value because the submissions merely explained that no submissions could be made in reply because of what had happened. Had the Body Corporate applied for an extension of time to file these submissions as it should have done, this would almost certainly have been granted and this work would not have been needed anyway.
- There is a claim for $2,213.20 for the preparation and finalisation of an affidavit showing that Ms Thompson had changed legal representatives a number of times. This work had little probative value and in any case cannot be said to be costs thrown away by Ms Thompson’s failure to comply with the order of 6 March 2017.
- There is a claim for $988.90 for preparing the costs statement. In the light of the view I have taken on the claim for costs it is inappropriate for me to allow this.
- There is a claim for $1,930.50 for considering the submissions on costs filed by Ms Thompson’s solicitors and for making submissions in reply. These submissions were 7 pages long (41 paragraphs), with 60 pages of exhibits. Again, apart from the excerpt given above which itself is not persuasive, I do not think this material assisted.
 Such a decision is not a “final decision” under section 121(4) of the QCAT Act.
 At .
 Arcon Constructions Pty Ltd v Queensland Building Services Authority  QCAT 573.
 Rule 702(2).
 Rule 703(3).
 In a passage cited with approval by G N Williams J in Fashion Warehouse Pty Ltd v Pola  1 Qd R 251.
 By section 48(1)(a) of the QCAT Act.
- Published Case Name:
Emma Thompson v Body Corporate for Arila Lodge and Lyn McClelland
- Shortened Case Name:
Thompson v Body Corporate for Arila Lodge
 QCATA 152
05 Dec 2017