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McGee v Queensland Building and Construction Commission[2018] QCATA 124

McGee v Queensland Building and Construction Commission[2018] QCATA 124

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

McGee v Queensland Building and Construction Commission & Anor [2018] QCATA 124

PARTIES:

DANIEL MICHAEL MCGEE 

(applicant/appellant)

v

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION  

(respondent)

APPLICATION NO:

APL444-16

MATTER TYPE:

Appeals

DELIVERED ON:

27 August 2018

HEARING DATE:

5 September 2017

HEARD AT:

Brisbane

DECISION OF:

Senior Member Brown
Member Traves

ORDERS:

The application for leave to appeal is refused.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – APPEALS AS TO COSTS – RELEVANT PRINCIPLES – WHERE WRONG EXERCISE OF DISCRETION – construction of Queensland Civil and Administrative Tribunal Act 2009 ss 100, 102 and Rule 86 of the Queensland Civil and Administrative Tribunal Rules – where the Tribunal exercised its discretion not to award costs in an administrative review matter to a successful applicant – whether error in construction of s 100 and s 102 of the QCAT Act – whether error in the application of Calderbank offer principles – whether error in omitting to apply or give due consideration to s 105 of the QCAT Act and rule 86 of the QCAT Rules

Queensland Building and Construction Commission Act 1991 (Qld), s 71, s 72, s 77, s 86, s 87

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102, s 105, s 142(3)(a)(iii)

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

Australian Securities and Investments Commission v Jorgensen [2009] QCA 20

Comgroup Supplies Pty Ltd v Products for Industry Pty Ltd [2016] QCA 130

Country Endeavours Pty Ltd v Casacir Pty Ltd (2013) 194 LGERA 171

Leichardt Municipal Council v Green [2004] NSWCA 341

McEwen v Barker Builders Pty Ltd [2010] QCATA 49

Medical Board of Australia v Wong [2017] QCA 42

Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412

Smith v Wessling-Smith [2017] QSC 189

State of Queensland & Anor v Bell [2016] QCATA 176

Stewart v ATCO Controls Pty Ltd (in liq) (No 2) (2014) 252 CLR 331

Tamawood Ltd v Paans [2005] 2 Qd R 101

APPEARANCES & REPRESENTATION:

 

Applicant:

D Savage QC, with L Bowden, instructed by QBM Lawyers

Respondent:

S Moody, instructed by M Guiney, in-house solicitor of the Queensland Building and Construction Commission

REASONS FOR DECISION

Introduction

  1. [1]
    On 15 June 2016 the Tribunal set aside the decision of the Queensland Building and Construction Commission (“QBCC”) to refuse to categorise Daniel McGee as a “permitted individual” under s 56AD(8) of the Queensland Building and Construction Commission Act 1991 (Qld) (“QBCC Act”) and substituted a decision that he was a “permitted individual”. The decision by the QBCC had been made on 17 October 2014, nearly two years earlier.
  2. [2]
    Mr McGee then made an application for his costs of the proceeding. The application was dismissed by the Tribunal on 30 November 2016. Mr McGee now seeks leave to appeal that decision.
  3. [3]
    An appeal from a decision about costs, other than a decision about the amount of costs fixed or assessed under s 107,[1] requires leave.[2] The clear purpose of s 142(3)(a)(iii) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”) is to impose a filter on appeals regarding costs where such a decision is left by, s 102, at the discretion of the Tribunal. The evident intent of the provision requiring leave is to ensure that the Tribunal’s balancing of discretionary considerations is not to be reconsidered on appeal except where the Appeal Tribunal has first addressed the question whether there is good reason to permit the exercise of that discretion to be reviewed.[3]
  4. [4]
    It is not and should not be the case that a party dissatisfied with a costs decision can simply refer that decision to the Appeal Tribunal. The Appeal Tribunal will not readily interfere with the exercise of the discretion to award costs unless there are strong reasons to do so. This is because the decision-maker below is better placed to determine the question of costs as they have a greater familiarity with the facts, having heard all the evidence and observed the way the hearing was conducted.[4]
  5. [5]
    The role of the Appeal Tribunal is not to consider whether it would have exercised the discretion differently, but to discover either some error of principle, a failure to consider relevant matters, a consideration of irrelevant matters or some other manifest mistake.[5]
  6. [6]
    This is clearly a high threshold.[6] In State of Queensland & Anor v Bell[7] for example, it was said:

A major hurdle confronting the applicants is the strong presumption in favour of the legal correctness of a first instance costs order.[8]

  1. [7]
    Mr McGee has raised the following grounds of appeal:
    1. (a)
      There was an error of law as to the extent of the cost jurisdiction in the Tribunal;
    2. (b)
      There was an error of law in the failure to give proper reasons;
    3. (c)
      There was an error of law in failing to avert to a relevant consideration.[9]

Costs in QCAT proceedings - the statutory framework

  1. [8]
    Chapter 2, Division 6 of the QCAT Act is concerned with costs.
  2. [9]
    Sections 100 and 102 provide:

100 Each party usually bears own costs

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.

…

102 Costs against party in interests of justice

  1. (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. (2)
    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. (3)
    In deciding whether to award costs under subsection (1) or (2) the Tribunal may have regard to the following--

(a) 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);

(b) the nature and complexity of the dispute the subject of the proceeding;

(c) the relative strengths of the claims made by each of the parties to the proceeding;

(d) for a proceeding for the review of a reviewable decision--

(i) whether the applicant was afforded natural justice by the decision-maker for the decision; and

(ii) whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;

(e) the financial circumstances of the parties to the proceeding;

(f) anything else the Tribunal considers relevant.

  1. [10]
    Section 105 provides:

105 Other power to award costs

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. [11]
    Rule 86 of the QCAT Rules provides:

86 Additional power to award costs if particular offers to settle rejected

  1. (1)
    This rule applies if—
  1. (a)
    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. (b)
    the other party does not accept the offer within the time the offer is open; and
  1. (c)
    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. (2)
    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. (3)
    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. (4)
    In deciding whether a decision is or is not more favourable to a party than an offer, the tribunal must—
  1. (a)
    take into account any costs it would have awarded on the date the offer was given to the other party; and
  1. (b)
    disregard any interest or costs it awarded relating to any period after the date the offer was given to the other party.

Consideration

  1. [12]
    The grounds of appeal set out in the Application for leave to appeal or appeal are clarified (and narrowed somewhat) in the Applicant’s appeal submissions. We will address each of the grounds of appeal.

The learned Member limited consideration of matters relevant to costs to only those which appear in s 102(3):

  1. [13]
    Section 102(3) of the QCAT Act sets out factors that may be considered by the Tribunal in determining whether it is in the “interests of justice” to award costs. The applicant contends that at paragraph [5] and footnote 3 of the Reasons the Member has limited her consideration to the factors in s 102(3).
  2. [14]
    At paragraph [5] the Member says:

There are a number of matters to which the tribunal may have regard in deciding whether to award costs: QCAT, s 102(3). (footnote inserted).

  1. [15]
    There is no error in this statement. Section 102(3) includes (f) which is “anything else the tribunal considers relevant”. This is a “catch-all” consideration which is broad enough to permit any relevant consideration to be taken into account in the exercise of the discretion. In referring to s 102(3) the Member must be presumed to have known that other factors could, if relevant, be applied in determining whether the interests of justice required the making of a costs order.
  2. [16]
    The Member refers to the following considerations: the nature and complexity of the dispute; the strength of the claim; the offer to settle and/or Calderbank offer; the conduct of the QBCC including whether natural justice had been afforded to the applicant.[10] These considerations were, in our view, relevant to the exercise of the discretion.
  3. [17]
    The applicant has not identified any consideration which the Tribunal failed to consider, or wrongly considered. Indeed, the matters considered by the Tribunal were those raised by the applicant in his Submissions on Costs.
  4. [18]
    There is no error in applying some of a number of non-mandatory considerations to the exercise of a discretion.

Section 102 was misconstrued.

  1. [19]
    The applicant contends that the Member’s reliance on McEwen v Barker Builders Pty Ltd[11] and Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)[12] to support the proposition that parties must overcome a statutory hurdle in the form of the “no costs” provision in s 100, was wrong.
  2. [20]
    Both decisions were of then QCAT President, Justice Alan Wilson. In both cases Wilson J treats s 100 as a starting point or presumption which can be overcome where the “interests of justice” require it (s 102(3)). In McEwen his Honour said:

The question that will usually arise in each case in which costs are sought is, then, whether the circumstances relevant to the discretion inherent in the phrase “in the interests of justice” have arisen; and whether or not they point to a costs award in a sufficiently compelling way to overcome the statutory hurdle.[13] (emphasis added).

  1. [21]
    In Ralacom Wilson J expressed the position as:

The starting point concerning costs in QCAT is that each party must bear its own: QCAT Act, s 100. This presumption may, however, be displaced if the Tribunal considers it in the interests of justice to order a party to pay all or part of the costs of another party: s 102(1).[14]

  1. [22]
    The applicant takes issue with the view expressed in those cases, and applied by the Tribunal at first instance, that there is a “no costs” hurdle. They argue there is no “question of set off but rather whether the “interests of justice” require an order for costs”.[15]
  2. [23]
    It is a fundamental principle of statutory construction that the provisions of an Act must be construed as a whole and in a manner which is consistent with their purpose and with the objects of the Act.[16] It is important when construing s 102 to have regard to its statutory context. This approach is consistent with s 14A of the Acts Interpretation Act 1954 (Qld).
  3. [24]
    As has been observed, s 100 and s 102 are contained in Chapter 2, Division 6 of the QCAT Act.  In our view, when the statute is read as a whole, it is clear that the prima facie position is that parties are to bear their own costs unless the QCAT Act or an enabling Act provide otherwise. Indeed, the heading to s 100 expressly states that this is to be the “usual position”. This was the approach taken recently by the Queensland Court of Appeal in Medical Board of Australia v Wong[17] where it was held:

Absent any finding of unreasonableness, there could not have been a basis for departing from the default position, according to s 100, that each party bear its own costs.

  1. [25]
    This is consistent with the position adopted in other equivalent State tribunals and is in contrast to the case in most superior courts where costs generally follow the event.
  2. [26]
    Section 100 is the first section in a Division dedicated to costs. It is prefaced with “other than as provided under this Act or an enabling Act”. These words indicate that the section contains the primary rule but that exceptions exist.
  3. [27]
    The fact that s 102 is its own provision and has not been drafted as a proviso to s 100 is not, in our view, significant. The provisions must be read together and in their broader statutory context. In Tamawood a similar statutory argument was put in relation to ss 70 and 71 of the Commercial and Consumer Tribunal Act 2003 (Qld) which provided:

70 Purposes of div 7

The main purpose of this division is to have parties pay their own costs unless the interests of justice require otherwise.

71 Costs

  1. (1)
    In a proceeding, the tribunal may award the costs it considers appropriate on—

(a) the application of a party to the proceeding; or

(b) its own initiative.

  1. (2)
    The costs the tribunal may award may be awarded at any stage of the proceeding or after the proceeding has ended.
  1. (3)
    If the tribunal awards costs during a proceeding, the tribunal may order that the costs not be assessed until the proceeding ends.
  1. (4)
    In deciding whether to award costs, and the amount of the costs, the tribunal may have regard to the following—
  1. (a)
    the outcome of the proceeding;
  1. (b)
    the conduct of the parties to the proceeding before and during the proceeding;
  1. (c)
    the nature and complexity of the proceeding;
  1. (d)
    the relative strengths of the claims made by each of the parties to the proceeding;
  1. (e)
    any contravention of an Act by a party to the proceeding;
  1. (f)
    for a proceeding to which a State agency is a party, whether the other party to the proceeding was afforded natural justice by the State agency;
  1. (g)
    anything else the tribunal considers relevant.

Examples of paragraph (g)—

The tribunal may consider whether a party to a proceeding is acting in a way that unreasonably disadvantages another party to the proceeding. The tribunal may consider whether the proceeding, or a part of the proceeding, has been frivolous or vexatious.

  1. (5)
    A party to a proceeding is not entitled to costs merely because—
  1. (a)
    the party was the beneficiary of an order of the tribunal; or
  1. (b)
    the party was legally represented at the proceeding.
  1. (6)
    The power of the tribunal to award costs under this section is in addition to the tribunal’s power to award costs under another provision of this or another Act.
  1. (7)
    The tribunal may direct that costs be assessed—
  1. (a)
    in the way decided by a presiding case manager; or
  1. (b)
    by a person appointed by the tribunal.
  1. [28]
    In Tamawood it was argued that s 70 of the CCT Act added “no relevant instruction” to s 71. In other words, s 71, which set out when the discretion to award costs could be exercised, was to be read completely independently of s 70. The argument was dealt with by Williams JA:

…counsel for the respondent submitted that s 70 should be treated as analogous to a preamble to a statute. Relying on common law principles of statutory construction he then submitted that the meaning of s 71 was clear and free from doubt and in consequence the words of s 70, the preamble, could not be resorted to to qualify or cut down the meaning or the scope of operation of s 71. The submission is fallacious. Section 70, although it expresses the purposes of the division, cannot be equated with a preamble. It is part of the statute and has the same force and effect as s 71. It is made clear by s 70 that the starting point is that each party should “pay their own costs unless the interests of justice require otherwise”. Then s 71 deals with the considerations relevant to deciding whether some order for costs should be made and the situation where the Tribunal has determined that the interests of justice require that some order for costs be made. The sections can, and should, be read together as indicated by Keane JA in his reasons.[18]

  1. [29]
    A similar statutory construction argument was put to us. In effect it was argued that s 102 should be read on its own, and was not to be coloured by s 100. We reject this argument. In our view ss 100 and 102 must be read together. When read together, the simple construction is that, other than as provided under the QCAT Act or an enabling Act, each party bears their own costs unless the interests of justice require otherwise. If there was no starting point that each party bear their own costs, there would be no work for s 100 to do. This, in our view, is not what the legislature intended. The same conclusion was reached by Keane JA in Tamawood where his Honour held:

… s 70 and s 71(1) are intended to impose a general rule that good reason must be shown in terms of the interests of justice for making an award of costs in proceedings before the Tribunal.[19]

  1. [30]
    This interpretation of the costs provisions is also consistent with the objects of the QCAT Act which include to provide a way for parties to settle disputes that is economical, informal and quick.[20]  The practice of awarding costs has the potential to make proceedings more adversarial and, accordingly, increase the formality and technicality with which parties approach them. It is also consistent with one of the key principles underpinning the operation of the Tribunal, the emphasis on self-representation. The purpose of the Costs Division in having parties pay their own costs unless the interests of justice require otherwise, or for example s 105 of the QCAT Act is engaged, is clearly in keeping with the objective of establishing an informal and cost-effective tribunal.
  2. [31]
    We see no error in the approach applied by the Member.

The Member was wrong to distinguish Tamawood Ltd v Paans.[21]

  1. [32]
    The Member does not distinguish Tamawood but merely quotes a passage from the case which illustrates how the costs provisions in each statute differ. The case, in any event, concerned a different statute and differently worded cost provisions. In our view, there is no error in the Member’s application of Tamawood.
  2. [33]
    In Tamawood Keane JA said that there was a distinction between merely having representation and having reasonably obtained it due to the complexity of the case. His Honour held:

In the absence of countervailing considerations, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome.[22]

  1. [34]
    His Honour was careful not to make a blanket assertion but acknowledged that other considerations may mean that costs should not be awarded even where legal representation was reasonably obtained for a complex matter.
  2. [35]
    The Member referred to Tamawood and from the Reasons it is plain that she took it into account. Ultimately, each case depends upon its own facts and, in our view, there is no error in the manner in which she considered Tamawood in exercising her discretion regarding awarding costs. 

The Member applied the wrong principles to Calderbank offers.

  1. [36]
    The applicant argues that the Tribunal applied the wrong principles to Calderbank offers when it said:

The Tribunal is satisfied that QBCC was entitled to take the stand it did, based on its expert evidence, which could only then be tested at the hearing.[23]

  1. [37]
    The applicant argues that that this is not what is required when considering a Calderbank offer and its effect on costs and refers to Comgroup Supplies Pty Ltd v Products for Industry Pty Ltd[24] and Stewart v ATCO Controls Pty Ltd (in liq) (No 2).[25]
  2. [38]
    A Calderbank offer is an offer marked “without prejudice save as to costs”[26] and can be considered on the question of costs.[27] The party making a successful Calderbank offer usually, as here, makes an application for indemnity costs. The principles relating to Calderbank offers are based on the underlying presumption that, generally, costs follow the event. The relevant principles applying to a Calderbank offer are:
    1. (a)
      The onus is upon the offeree to persuade the court or tribunal that the offeree acted reasonably in not accepting the offer; and
    2. (b)
      The offeror must show that the offer involved some element of compromise.
  3. [39]
    The tribunal has previously held that Calderbank offers may be relevant to the exercise of the discretion to award costs.[28] In Comgroup the Queensland Court of Appeal considered that the fact a party made a Calderbank offer which was rejected was a “strong factor” in favour of their application for indemnity costs. The court held that “in all of the circumstances the applicant’s rejection of the offer was unreasonable”. Those circumstances included that the compromise offered was considerably more advantageous to the applicant than the court’s decision. Further, the court took note of the fact that in deciding the appeal the court had concluded the appeal was “bound to fail” and “did not raise any significant questions of law but rather the application of well-established principles of law to the facts of the case”.
  4. [40]
    The applicant argues that the respondent failed to point to any factor other than prospects of success for refusing to accept the offer. The applicant argues that this is not enough to establish that the respondent acted reasonably in rejecting the offer. In the applicant’s view:

The QBCC would have to point to a reason other than their usual prospects of being successful in the litigation to justify a finding that it acted reasonably in refusing the offer.

This is not an accurate statement of the test. If the test is to show that the rejection of the offer was not unreasonable, then the party that rejected the offer needs to have a reason beyond the usual prospects of being successful in litigation, for example, that the prospects were greater than usual.[29]

  1. [41]
    The offer was made by the applicant on 31 July 2015 inviting the QBCC to categorise him as a permitted individual and that each party bear their costs of and incidental to the proceedings.[30] The offer was made in the context of the review application which had been filed on 12 November 2014. The offer was therefore made relatively early in the proceeding and before the QBCC had received the submissions on behalf of the applicant.[31] It is also noted that a number of affidavits were filed by the applicant after the offer was made as well as a significant report by a forensic accountant.[32]
  2. [42]
    The offer was rejected on 5 August 2015 principally on the basis the QBCC did not have sufficient material to satisfy itself that the applicant should be a “permitted individual”. 
  3. [43]
    The applicant refers to the fact that when he made the offer he also responded in detail to issues raised by the QBCC in a letter dated 13 May 2015. The QBCC however subsequently filed two affidavits, one by Ms Natasha Dennis of the QBCC (a principal financial investigator) and one by Mr Peter Haley, a forensic accountant.[33] These affidavits both raised further issues of concern relevant to the categorisation of the applicant as a permitted individual.
  4. [44]
    The applicant states the issues still of concern to the QBCC included a failure to provide copies of legal advice in relation to the PMAA proceedings, suspected phoenix activity by the applicant’s company, and difficulties with the books and records maintained by the company as well as the business plan (in which an amount of $7.5 million was included as goodwill). The applicant engaged an expert, Mr David Williams of SV Partners, at a cost of over $10 000, to refute the allegations. The evidence of Mr Williams was ultimately accepted in preference to the evidence of the QBCC’s expert witness, Mr Haley.
  5. [45]
    The difficulty in a case such as this is that the principles relevant to Calderbank offers, and the statutory offer regime, do not sit easily with the nature of this proceeding and, in particular, with the statutory obligations of the QBCC.
  6. [46]
    The matter was significant in that it involved the issue of whether or not Mr McGee should hold a building licence. Under the QBCC Act a relevant event had occurred when the company of which Mr McGee was a director went into administration. At the time of this event the total amount owing to creditors was over $7 million, including a debt to the ATO of approximately $700,000. In order to be entitled to a licence Mr McGee had the evidential onus of establishing that he should be categorised as a “permitted individual”. Section 56AD(8) of the QBCC Act provided:

The commission may categorise the individual as a permitted individual for the relevant event only if the commission is satisfied, on the basis of the application, that the individual took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event.

  1. [47]
    In deciding whether all reasonable steps had been taken, the commission was required to take into account the action of the individual in relation to certain aspects of the conduct of a business, including, relevantly:
    1. (i)
      keeping proper books of account and financial records;
    2. (ii)
      seeking appropriate financial or legal advice before entering into financial or business arrangements or conducting business;
    3. (iii)
      putting in place appropriate credit management for amounts owing and taking reasonable steps for recovery of the amounts; and
    4. (iv)
      making appropriate provision for Commonwealth and State taxation debts.
  2. [48]
    These aspects were mandatory considerations for the QBCC and were all in question at the time the review proceedings commenced and, in the opinion of the QBCC, at the time the offer expired. In Medical Board of Australia v Wong the Queensland Court of Appeal, in the context of a regulatory matter concerning a medical practitioner, held that the mandatory nature of a referral by the Board to the Tribunal was relevant to the issue of whether the Board should pay costs:

In my respectful opinion, her Honour erred in law by not recognising the importance of that mandatory nature of the then s 193 to the question of whether this proceeding had been properly brought. If it was to be determined that the Board should pay costs because it had unnecessarily commenced the proceeding, a necessary consideration was whether the Board had been bound to do so.[34]

  1. [49]
    We accept that the circumstances in the present case differ from those in Wong. Here, by operation of s 56AC of the QBCC Act, the applicant was deemed an excluded individual. The applicant was entitled, by s 56AD of the QBCC Act, to apply to the QBCC to be categorised as a permitted individual. The QBCC could not categorise the applicant as a permitted individual unless it was satisfied that the applicant had taken all reasonable steps to avoid the coming into existence of the circumstances resulting in the happening of the relevant event. In this regard the QBCC was required to exercise its discretion in making the decision whether to categorise the applicant as a permitted individual.
  2. [50]
    It is necessary in a proceeding such as this in exercising the discretion to award costs, to consider the functions of the QBCC which include administering the QBCC Act and furthering its objects.[35] Those objects include the regulation of the building industry to ensure the maintenance of proper standards in the industry.[36]
  3. [51]
    In Fuge v Queensland Building and Construction Commission[37] the tribunal considered an application for costs by a successful applicant seeking review of a decision by the QBCC that he be categorised as an excluded individual. The tribunal observed:

Here, not only does the Commission have an obligation to assist the Tribunal, it also has to have regard to the objects of the QBCC Act. It has a statutory obligation to administer the Act, to ensure that industry standards are maintained, and achieve a reasonable balance between the interests of building contractors and consumers. This is particularly so in circumstances where registered builders are directors of companies that go into liquidation, or become bankrupt, which inevitably results in financial harm to financial institutions, trade creditors and homeowners. It also brings the industry into disrepute.

  1. [52]
    The QBCC stated that the complexity and volume of material filed by the applicant necessitated the engagement of an expert by them to decipher the conflicting sets of accounts, account balances, journal entries and Business Plan.[38]
  2. [53]
    The Tribunal, in refuting the applicant’s submission which suggested the Tribunal found that it should have been apparent to the QBCC at the time of the offer that he was a permitted individual, said:

[27] In fact, in its reasons for decision, the Tribunal accepted the applicant’s and his witnesses’ evidence in relation to the keeping of proper books of account. Importantly, the Tribunal stated (underlining added):

The Tribunal notes the evidence of Mr Haley and in particular the concessions made by him in relation to those matters with which QBCC had taken issue.

[28] The Tribunal is satisfied that QBCC was entitled to take the stand it did, based on its expert evidence, which only could then be tested at the hearing. Upon being tested, and upon Mr Haley making certain concessions under cross-examination, and the acceptance by the Tribunal of Mr McGee’s evidence, the Tribunal found in favour of Mr McGee.

  1. [54]
    Further, the Tribunal found that:

… although QBCC was not successful in the review application, Mr McGee’s case was not obviously stronger than QBCC’s case, as there were multiple issues to be determined.[39] (emphasis added)

  1. [55]
    The Tribunal did not err in applying the principles relevant to the consideration of a Calderbank offer. The learned member considered the reasonableness of the actions of the QBCC in not accepting the offer and found that the QBCC was entitled to rely upon its expert evidence.[40] Nor, in our view, did the Tribunal err in making the finding that it was not unreasonable at the time for the QBCC to reject the offer. Whilst ultimately unsuccessful in the proceeding, the position adopted by the QBCC as at August 2015 was not so unreasonable that it ought not to have been advanced by a body charged with duties to assist the Tribunal, ensure proper standards in the industry and to achieve a balance between the interests of builders and consumers.[41]  Further, it was not unreasonable for the QBCC to refuse to accept expert evidence which could not be conclusive on the ultimate question of whether Mr McGee should be categorised as a permitted individual. This was a question for the QBCC, and ultimately for the Tribunal, and required the decision-maker be satisfied of certain statutory factors. Any argument to the effect that the QBCC should have accepted the opinion of a certain expert attributes to the opinion a legal consequence which it did not have.[42]
  2. [56]
    It is not appropriate to conduct a forensic analysis of the evidence at the date of the offer to determine whether the QBCC should, at that time, have been satisfied that the applicant took all reasonable steps to avoid the company going into administration or to try to determine how much of the evidence relied upon by the Tribunal was available at the time the offer was made. What is relevant is whether the QBCC’s rejection of the offer was unreasonable.  This question is to be determined by reference to the circumstances which existed at the time the offer was made and rejected.[43]
  3. [57]
    The nature of the proceeding was such that the QBCC had to be satisfied on the basis of the strength of the case made out by the applicant. A regulatory authority, such as the QBCC, should not be discouraged from acting in the way they consider responsible and reasonable by exposing them to the possibility of an order as to costs. In other words, the QBCC should not be under pressure to accept an “offer” which involves a compromise of its statutory obligations. The QBCC must ensure the applicant meets the criteria set out in the “permitted individual” provisions which have a protective purpose.
  4. [58]
    Whether an offer involves a genuine compromise is a relevant matter when considering a Calderbank offer. Similarly, the nature of an offer and its context is a relevant consideration in the exercise of the discretion to award costs under the rules. An offer would ordinarily imply some element of compromise by the party making the offer. In this case there is no such aspect. The applicant simply required that the QBCC accept his position, in this case that he should be categorised as a permitted individual. The offer was, in effect, an invitation to the QBCC to capitulate completely in respect of the applicant’s claim. Such an offer does not involve a real element of compromise nor does it involve a compromise as envisaged by the words “offer to settle” in rule 86. The compromise on costs contained in the offer was illusory in circumstances where there was a presumption against an award of costs in the proceeding.
  5. [59]
    The applicant has failed to demonstrate any error of approach by the Member. The Member was justified in finding that the applicant had failed to demonstrate that the offer was, at the time it was made, so obviously the right outcome based on the evidence available then, that the Tribunal should have concluded that the respondent failed to act reasonably or acted imprudently in not accepting it.
  6. [60]
    We find that, in all the circumstances, this ground of appeal is not made out.

The Member did not consider s 105 of the QCAT Act or rule 86 of the QCAT Rules.

  1. [61]
    Section 105 of the QCAT Act provides for the QCAT Rules to authorise the tribunal to award costs if an offer to settle has been made and not accepted. In Tom Builder Pty Ltd v Quan Duong (No 2)[44] the tribunal held:

That said, s 105 specifically provides for the Rules to ‘authorise’ the Tribunal to award costs ‘in other circumstances, including’ if an offer to settle has been made and not accepted. Rule 86 does then provide that the Tribunal may award the party who made the offer all reasonable costs incurred after the offer was made. In my view, this constitutes a different basis than an award under section 102. It is expressed in discretionary terms. Once again, factors to be considered are not specified. However, I consider that, consistently with the Appeal Tribunal’s comments in Lyons v Dreamstarters (sic) that this is a broad general discretion which must be exercised judicially and having regard to the terms of s 105 and Rule 86, based upon facts connected with the litigation and the offer to settle.

  1. [62]
    In our view, in exercising the discretion to award costs, the relevant matters the tribunal must consider are the same irrespective of whether the written offer is expressed as a Calderbank offer or falls for consideration as an offer under rule 86. Both require a value judgment of the offer and the conduct of the parties in the context of the nature and circumstances of the proceedings. 
  2. [63]
    The costs consequences flowing from a successful offer made under rule 86 were considered in Lyons v Dreamstarter Pty Ltd[45] where Wilson J held:

As to the basis upon which costs should be assessed, it was said in several decisions in this jurisdiction in QCAT’s predecessor, the Commercial and Consumer Tribunal, that the phrase ‘all reasonable costs’, which appeared in s 142 of the Commercial and Consumer Tribunal Act 2003 and now it appears in QCAT r 86(2) should be construed to mean indemnity, rather than standard costs. That construction of the phrase can reasonably be applied to the same words, where they appear in QCAT r 86(2). 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. (footnotes omitted)[46]

  1. [64]
    In our view, the phrase “all reasonable costs” is capable of extending to indemnity costs but ultimately the costs order to be made is a matter at the discretion of the Tribunal.[47] Similarly, the non-acceptance of a Calderbank offer is a factor, in some cases a strong factor, to be taken into account on an application for indemnity costs, however such non acceptance does not give rise to a prima facie presumption of indemnity costs if the offer is not bettered.[48]
  2. [65]
    In our view the principles identified by the Court of Appeal in Comgroup relating to Calderbank offers are relevant in considering the costs consequences of an offer made pursuant to rule 86 including the reasonableness of the actions of the offeree in not accepting an offer.
  3. [66]
    The applicant says that the Tribunal failed to consider the offer under s 105 and rule 86. The Tribunal considered the offer under the heading “Mr McGee’s offer to settle and/or Calderbank offer”. While no specific provision or rule was mentioned, the offer was considered and the Member came to the view that it was not unreasonable for the offer to have been rejected. As we have observed, this finding was equally apposite to a consideration of the offer under rule 86. Accordingly, we find no error.
  4. [67]
    Even if there was an error in failing to consider the offer specifically under rule 86, we are of the view that consideration of the offer under the rule would not have changed the outcome.
  5. [68]
    The third general ground is that the Tribunal failed to avert to a relevant consideration. This refers to s 105 and rule 86 which we have dealt with above.
  6. [69]
    Finally, the second general ground was that the Tribunal did not give proper reasons. This was not pursued in the hearing and so we have not considered it.

Conclusion

  1. [70]
    The applicant has failed to establish error by the learned member in dismissing the applicant’s application for costs. Leave to appeal is refused.

Footnotes

[1]QCAT Act, s 149; Schedule 3 definition of “cost-amount decision”.

[2]QCAT Act, s 142(3)(a)(iii).

[3]Australian Securities and Investments Commission v Jorgensen [2009] QCA 20, [29], Keane JA in relation to an equivalent provision in the Supreme Court Act 1995 (Qld).

[4]State of Queensland & Anor v Bell [2016] QCATA 176, [10]; Country Endeavours Pty Ltd v Casacir Pty Ltd (2013) 194 LGERA 171, [36].

[5]Ibid at [13], citing Charles Osenton & Co v Johnston [1942] AC 130, 138; House v R (1936) 55 CLR 499.

[6]Country Endeavours Pty Ltd v Casacir Pty Ltd (2013) 194 LGERA 171, [34] citing Knight v Hastings [2012] VSCA 315, [15].

[7][2016] QCATA 176.

[8]Ibid, [11].

[9]Submissions of the Applicant filed 15 February 2017, [1].

[10]McGee v Queensland Building and Construction Commission [2016] QCAT 207, [11]-[33].

[11][2010] QCATA 49.

[12][2010] QCAT 412.

[13][2010] QCAT 49.

[14][2010] QCAT 412.

[15]Submissions of the Applicant, filed 15 February 2017, [19].

[16]Tamawood Ltd v Paans [2005] 2 Qd R 101, [2].

[17][2017] QCA 42, [35], Philip McMurdo JA, agreed by Morrison JA and Mullins J.

[18][2005] 2 Qd R 101, [2].

[19][2005] 2 Qd R 101, [28].

[20]QCAT Act, s 3.

[21][2005] 2 Qd R 101.

[22][2005] 2 Qd R 101, [33].

[23]McGee v Queensland Building and Construction Commission [2016] QCAT, [28].

[24][2016] QCA 130.

[25](2014) 252 CLR 331, [4].

[26]Calderbank v Calderbank [1975] 3 All ER 333.

[27]AMEV Finance Ltd v Artes Studios Thoroughbreds Pty Ltd (1988) 13 NSWLR 486; Johns Perry Industries Pty Ltd v International Rigging (Aust) Pty Ltd [1988] 2 Qd R 556.

[28]See for example Demac Homes (Qld) Pty Ltd v Queensland Building Services Authority & Others [2011] QCAT 331; Rix v Queensland Building Services Authority [2011] QCAT 333; Queensland Building Services Authority v Johnston [2011] QCATA 265.

[29]Amended Submissions in Reply of the Applicant, filed 4 September 2017, [7].

[30]Statement of Daniel Michael McGee, filed 30 August 2017, [7], exhibit “DM3”.

[31]Submissions of the Applicant, filed 23 December 2015.

[32]Exhibit 3, exhibit 6, exhibit 7, exhibit 8, exhibit 10 and exhibit 11 in OCR258-14.

[33]Exhibit 20 and exhibit 22 in OCR258-14.

[34][2017] QCA 42, [32].

[35]QBCC Act, s 7.

[36]QBCC Act, s 3(a)(i).

[37][2014] QCAT 383.

[38]Submissions of the Respondent on Costs, filed 19 August 2016, [42].

[39]McGee v Queensland Building and Construction Commission [2016] QCAT, [33].

[40]Ibid, [28]-[29].

[41]QBCC Act, s 3.

[42]Medical Board of Australia v Wong [2017] QCA 42, [34].

[43]Smith v Wessling-Smith [2017] QSC 189, [16].

[44][2013] QCAT 455.

[45][2012] QCATA 071.

[46]Ibid, [24].

[47]Malay Industries Pty Ltd v Queensland Building Services Authority [2010] QCAT 310, [28] relied upon by the Appeal Tribunal in Lyons at [24].

[48]Leichardt Municipal Council v Green [2004] NSWCA 341, [19].

Close

Editorial Notes

  • Published Case Name:

    McGee v Queensland Building and Construction Commission & Anor

  • Shortened Case Name:

    McGee v Queensland Building and Construction Commission

  • MNC:

    [2018] QCATA 124

  • Court:

    QCATA

  • Judge(s):

    Senior Member Brown, Member Traves

  • Date:

    27 Aug 2018

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
AMEV Finance Ltd v Artes Studios Thoroughbreds Pty Ltd (1988) 13 NSWLR 486
1 citation
Jump To
Cite 1 - (1988) 13 NSWLR 486
ASIC v Jorgensen [2009] QCA 20
2 citations
Jump To
Cite 1 - [2009] QCA 20
Cite 2 - [2009] QCA 20
Calderbank v Calderbank (1975) 3 All E.R. 333
1 citation
Jump To
Cite 1 - (1975) 3 All E.R. 333
Charles Osenton & Co. v Johnson (1942) AC 130
1 citation
Jump To
Cite 1 - (1942) AC 130
Comgroup Supplies Pty Ltd v Products for Industry Pty Ltd [2016] QCA 130
2 citations
Jump To
Cite 1 - [2016] QCA 130
Cite 2 - [2016] QCA 130
Country Endeavours Pty Ltd v Casacir Pty Ltd (2013) 194 LGERA 171
3 citations
Jump To
Cite 1 - (2013) 194 LGERA 171
Cite 2 - (2013) 194 LGERA 171
Cite 3 - (2013) 194 LGERA 171
CSY [2010] QCAT 49
1 citation
Jump To
Cite 1 - [2010] QCAT 49
Demac Homes (Qld) Pty Ltd v Queensland Building Services Authority & Ors [2011] QCAT 331
1 citation
Jump To
Cite 1 - [2011] QCAT 331
Fuge v Queensland Building and Construction Commission [2014] QCAT 383
1 citation
Jump To
Cite 1 - [2014] QCAT 383
House v The King (1936) 55 CLR 499
1 citation
Jump To
Cite 1 - (1936) 55 CLR 499
Johns Perry Industries Pty Ltd v International Rigging (Aust) Pty Ltd[1988] 2 Qd R 556; [1986] QSC 494
1 citation
Jump To
Cite 1 - [1988] 2 Qd R 556
Knight v Hastings [2012] VSCA 315
1 citation
Jump To
Cite 1 - [2012] VSCA 315
Leichhardt Municipal Council v Green (2004) NSWCA 341
2 citations
Jump To
Cite 1 - (2004) NSWCA 341
Cite 2 - (2004) NSWCA 341
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
Malay Industries Pty Ltd v Queensland Building Services Authority [2010] QCAT 310
1 citation
Jump To
Cite 1 - [2010] QCAT 310
McEwen v Barker Builders Pty Ltd [2010] QCATA 49
2 citations
Jump To
Cite 1 - [2010] QCATA 49
Cite 2 - [2010] QCATA 49
McGee v Queensland Building and Construction Commission [2016] QCAT 207
4 citations
Jump To
Cite 1 - [2016] QCAT 207
Cite 2 - [2016] QCAT 207
Cite 3 - [2016] QCAT 207
Cite 4 - [2016] QCAT 207
Medical Board of Australia v Wong [2017] QCA 42
4 citations
Jump To
Cite 1 - [2017] QCA 42
Cite 2 - [2017] QCA 42
Cite 3 - [2017] QCA 42
Cite 4 - [2017] QCA 42
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
3 citations
Jump To
Cite 1 - [2010] QCAT 412
Cite 2 - [2010] QCAT 412
Cite 3 - [2010] QCAT 412
Rix v Queensland Building Services Authority [2011] QCAT 333
1 citation
Jump To
Cite 1 - [2011] QCAT 333
Smith v Wessling-Smith [2017] QSC 189
2 citations
Jump To
Cite 1 - [2017] QSC 189
Cite 2 - [2017] QSC 189
State of Queensland v Bell [2016] QCATA 176
5 citations
Jump To
Cite 1 - [2016] QCATA 176
Cite 2 - [2016] QCATA 176
Cite 3 - [2016] QCATA 176
Cite 4 - [2016] QCATA 176
Cite 5 - [2016] QCATA 176
Stewart v Atco Controls Pty Ltd (2014) 252 CLR 331
2 citations
Jump To
Cite 1 - (2014) 252 CLR 331
Cite 2 - (2014) 252 CLR 331
Tamawood Ltd v Paans[2005] 2 Qd R 101; [2005] QCA 111
6 citations
Jump To
Cite 1 - [2005] 2 Qd R 101
Cite 2 - [2005] 2 Qd R 101
Cite 3 - [2005] 2 Qd R 101
Cite 4 - [2005] 2 Qd R 101
Cite 5 - [2005] 2 Qd R 101
Cite 6 - [2005] 2 Qd R 101
Tom Builder Pty Ltd v Quan Duong (No 2) [2013] QCAT 455
1 citation
Jump To
Cite 1 - [2013] QCAT 455

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Brisbane Marine Pilots Pty Ltd (in liquidation) v General Manager of Maritime Safety Queensland, Department of Transport and Main Roads and Ors (costs) [2022] QCAT 2254 citations
Campbell v Queensland Building and Construction Commission [2021] QCATA 342 citations
Commissioner of State Revenue v Telgrove Pty Ltd (No 2) [2023] QCATA 1133 citations
Cowen v Queensland Building and Construction Commission [2021] QCATA 1033 citations
Gedoun Constructions Pty Ltd v Agius [2024] QCATA 432 citations
Miles v Queensland Building and Construction Commission [2025] QCATA 602 citations
Monsour v C & R Darvill Pty Ltd [2023] QCAT 621 citation
Mt Cotton Constructions Pty Ltd v Greer [2020] QCATA 1572 citations
Oaks Hotels & Resorts Ltd v Knauer [2020] QCATA 905 citations
Owltown Pty Ltd v Norwinn Commercial [2020] QCATA 1457 citations
Pirrone & Anor v Barnett & Anor [2018] QCAT 3972 citations
Pound v Queensland Building and Construction Commission [2023] QCAT 2982 citations
Purnell v Manson t/as Manson Homes [2024] QCATA 482 citations
Queensland Building and Construction Commission v B&L Constructions Qld Pty Ltd (No 2) [2023] QCATA 1072 citations
Serene Star Pty Ltd v D A Radic Pty Ltd [2018] QCAT 3571 citation
Swimsmith Pty Ltd t/as Brisbane Prestige Plunge Pools v McMahon (No 2) [2021] QCAT 2441 citation
The Licensee Pty Ltd v Queensland Building and Construction Commission [2021] QCATA 73 citations
1

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