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Thompson v Body Corporate for Arila Lodge[2018] QCATA 133

Thompson v Body Corporate for Arila Lodge[2018] QCATA 133

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Thompson v Body Corporate for Arila Lodge & Anor; Thompson v Body Corporate for Arila Lodge & Anor (No 2) [2018] QCATA 133

PARTIES:

In APL441-16:

 

EMMA THOMPSON

(applicant)

 

v

 

BODY CORPORATE FOR ARILA LODGE

(first respondent)

LYN McCLELLAND

(second respondent)

 

In APL075-17:

 

EMMA THOMPSON

(applicant) 

 

v

 

BODY CORPORATE FOR ARILA LODGE

(first respondent)

SGR PROP INVEST 01 PTY LTD

(second respondent)

APPLICATION NO/S:

APL441-16; APL075-17

ORIGINATING
APPLICATION NO/S:

BCCMCmr 0683-2016

MATTER TYPE:

Appeals

DELIVERED ON:

6 September 2018

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member P Roney QC

ORDERS:

  1. The Appellant pay the First Respondent’s costs on a standard basis, to be assessed pursuant to the District Court Scale set out in Schedule 2 of the Uniform Civil Procedure Rules 1999 or as agreed.
  2. The Applicant pay the Second Respondent Lyn McClelland’s costs fixed in the amount of $7,653.80.
  3. The Applicant pay the Second Respondent SGR Prop Invest 01 Pty Ltd costs fixed in the amount of $468.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INDEMNITY COSTS – RELEVANT CONSIDERATIONS GENERALLY – Body Corporate and Community Management appeals – discretion to order costs – whether in the interests of justice to order costs of appeal – indemnity costs

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

Di Carlo v Dubois & Ors [2002] QCA 225

Botany Municipal Council v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories (1992) 34 FCR 412

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

Todrell Pty Ltd v Finch & Ors (No 2) [2007] QSC 386

Williams v Body Corporate for Circle on Cavill CTS 39918 [2013] QCATA 39

APPEARANCES:

 

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

REASONS FOR DECISION

Introduction...........................................................................................................................................................................2

The Grounds of Appeal.......................................................................................................................................................3

The current statutory position – ss.100 and 102 of the QCAT Act..................................................................................5

The Body Corporate’s submissions..................................................................................................................................11

The quantum of the Body Corporate’s costs..................................................................................................................13

The Second Respondent Lyn McClelland’s costs.............................................................................................................14

The submissions of SGR Prop Invest 01 Pty Ltd..............................................................................................................15

The Applicant’s submissions on costs..............................................................................................................................16

Disposition and orders.......................................................................................................................................................17

Introduction

  1. [1]
    These were two appeals before this Tribunal. Each sought to appeal decisions by a Body Corporate Adjudicator dated 8 December 2016 which arose out of water damage caused to Lots 1 and 2 of the premises known as Arila Lodge. The water damage started as long ago as April or May 2016. An Adjudicator held that this damage had been caused by a water leak emanating from the bathroom of the Applicant’s lot in April or May 2016 and which had penetrated areas of the two lots below it. Three of the Respondents now seek their costs of the unsuccessful appeal.
  2. [2]
    The Body Corporate and Respondent lot owners had contended and it was found that water had leaked from an improperly fitted washing machine connection from the bathroom of the Applicant’s Lot 3 to Lot 2 below, and eventually to Lot 1. These leaks had occurred when the Applicant started renovations to the bathroom in her unit. The consequences have been felt for several years without being remedied.
  3. [3]
    The Respondents had asserted before the Adjudicator that the Applicant had breached s 60 of the Body Corporate and Community Management (Standard Module) Regulation 2008 (Qld) by failing to maintain her lot in good condition, including utility infrastructure, within the boundaries of the lot, and bylaw 7(a), by failing to use utility infrastructure for the purpose intended. That contention was upheld by the Adjudicator and not overturned on appeal.

The Grounds of Appeal

  1. [4]
    Four of the grounds of appeal in both appeals sought orders that:
  1. Pursuant to s 281 of the BCCM Act the Adjudicator did not have power to make the Order to which the Decision relates.
  2. Further and alternatively, the Adjudicator failed to take into account that:
  1. The relevant Quotation dated 29 August 2016 to which the order referred had expired by the time the Orders were made;
  2. The quote contained contingency items without a mechanism for adjustment if those items were not required; and
  3. The quote was an offer from Advanced Buildings (Queensland) Pty Ltd to Lyn McClelland, and not to the Applicant, to enter into an agreement to perform services.
  1. Further and alternatively, there was no probative evidence that the builder quoting would enter an agreement with the applicant pursuant to the quote.
  2. In circumstances where s.281 applies to the decision, the Adjudicator took into account an irrelevant consideration at [12], namely the powers in s.276 and 284(1) of the BCCM Act.
  1. [5]
    Ground 6 in the first appeal was materially the same as Ground 10 in the second appeal, and contended that the Adjudicator erred in applying the duty on a lot owner under s 170 of the Standard Module.
  2. [6]
    Ground 7 in the first appeal, and which was materially identical to Ground 6 in the second appeal contended that there was no probative evidence to support a finding that the applicant caused all of the damage referred to in paragraph 12 of the Honkanen report dated 29 August 2016, and accordingly there was no probative evidence to support the conclusion that the applicant caused all of the damage (in the form of necessity for repairs) set out in the quote.
  3. [7]
    Ground 8 in the first appeal, which was materially identical to Ground 7 in the second appeal, contended that the Adjudicator did not provide adequate reasons to explain why the particular damage referred to in paragraph 12 of the Honkanen report, or in the quote, was caused by the Applicant.
  4. [8]
    Ground 9 in the first appeal, which was materially identical to Ground 8 in the second appeal, contended that there was no probative evidence to support a finding that the replacement of wall tiling and charges for plasterboard/sheeting as set out in the quote were a form of damage caused by the Applicant.
  5. [9]
    Ground 10(b) in the first appeal, which was materially identical to Ground 9(b) in the second appeal had as the only remnant ground in that paragraph of the grounds of appeal still pressed, contended that the Applicant was denied natural justice by being unable to enter and inspect the property of the respondent.
  6. [10]
    Ground 11 in the second appeal contended that the adjudicator erred in:
    1. (a)
      interpreting the relevant bylaw;
    2. (b)
      applying the relevant bylaw to the facts; and
    3. (c)
      placing an onus on the applicant to prove that the washing machine was adequately connected.
  7. [11]
    I dismissed the appeals in reasons published in April 2018.[1] The Appellant was entitled to appeal an Adjudicator’s order, but only on a question of law.[2] I held that the assertion was confidently made in written submissions for the Applicant in both appeals that all the grounds of appeal related to questions of law. I considered however that little, if any consideration had been given to the question of whether in fact the grounds, as articulated, did in fact raise any question of law, or raised an issue which demonstrated an error of law by the Adjudicator.
  8. [12]
    I also held that broadly speaking, a further difficulty with some of the appeal points was that they were not issues which were raised in evidence or in submissions made on the basis of that evidence before the Adjudicator. Three of the grounds of appeal which were in corresponding terms in each of the grounds of appeal, namely those in paragraphs 1, 2 and 3 of the grounds of appeal fell into that category.
  9. [13]
    The third difficulty that I noted was that the second appeal was commenced out of time, and an application was required for an extension of time in which to file the appeal.
  10. [14]
    This was a clear case in which there was no basis to contend that the Applicant herself was prepared to engage a contractor to perform the work that was required to be performed, and where the performance of that work was necessary to overcome the effect of what the Adjudicator had held to have been damage suffered in consequence of a contravention by the Applicant of the Act. I concluded that there could have been no doubt that making an order that the offending party engage the particular contractor who had provided a quote and had shown willingness to perform the work in a timely way, was appropriate to ensure that the work proceeded, and proceeded in a timely way, in accordance with what were recognised to be the necessary works.
  11. [15]
    The particular contractor that the Applicant was required to engage was the preferred contractor for the lot holders, and the content of those quotations was the subject of evidence before the Adjudicator. One of the less meritorious arguments the Applicant made in the appeal concerned her contention that through the passage of time, and delay in arriving at a result both before the Adjudicator and in this Tribunal, the original price estimate and willingness to perform by that contractor could not be assured. The passage of time that was the basis of that argument had occurred because of the conduct of the Applicant herself.
  12. [16]
    There were a number of arguments which I held that the Applicant had ample opportunity to make below, and which, if they had any validity they could have been appropriately answered. I found that there was no explanation put forward for the failure by the Applicant to raise these complaints below.
  13. [17]
    I found that this was given particular significance in this case because of the fact that the Applicant herself is a person of some considerable sophistication. The evidence before the Adjudicator, and also before me, was that she was the holder of a number of undergraduate degrees from tertiary institutions in Queensland, was in the course of undertaking a Bachelor of Laws at the time of the adjudication, and was herself the holder of an open builder’s licence with then Building Services Authority. She set out her professional experience as including activities in construction project management. She contended that she was the holder of a Queensland Construction Management award.
  14. [18]
    I found that against that background, it could be scarcely imagined that the Applicant was not fully cognisant of the significance of what was contained in the quotations to which she took issue, and notwithstanding that fact, elected not to take the kinds of objections that were raised for example under Ground 2 when the matter was before the Adjudicator.

The current statutory position – ss 100 and 102 of the QCAT Act

  1. [19]
    The statutory position is that set out in ss 100 and 102 of the Queensland Civil and Administrative Tribunal 2009 (Qld) (‘QCAT Act’). They provide as follows;

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. 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.
  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.
  3. In deciding whether to award costs under subsection (1) or (2) the Tribunal may have regard to the following--
  1. 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);
  2. the nature and complexity of the dispute the subject of the proceeding;
  3. the relative strengths of the claims made by each of the parties to the proceeding;
  4. for a proceeding for the review of a reviewable decision--
  1. whether the applicant was afforded natural justice by the decision-maker for the decision; and
  2. whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;
  1. the financial circumstances of the parties to the proceeding;
  2. anything else the Tribunal considers relevant.
  1. [20]
    In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 the then President Justice Wilson was considering the costs question where the proceeding had been commenced when a different statutory costs regime applied, but concluded under the QCAT Act. He said:
  1. [21]The respondent relies on the decision of the Court of Appeal in Tamawood Ltd & Anor v Paans [[2005] QCA 111], a case decided under the costs provision of the now repealed Commercial and Consumer Tribunal Act 2003 (CCT Act). Although those provisions are not analogous to the equivalent provisions under the QCAT Act, the principles found in Tamawood provide guidance about the circumstances in which it may be in the interests of justice for this Tribunal to award costs against parties.
  2. [22]In Tamawood, Ms Paans commenced proceedings in the CCT for damages against Tamawood Ltd and another party. The two matters were heard together and Ms Paans was awarded monetary damages. The CCT, however, refused to order costs in her favour.
  3. [23] All parties then sought leave to appeal to the District Court, where the appeals from the respondents were refused, but Ms Paans was awarded her costs in the proceedings. The respondents than sought leave to appeal that costs decision to the Court of Appeal, contending that the decision of the District Court was based on an erroneous construction of ss 70 and 71 of the CCT Act. Those provisions state:

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. In deciding whether to award costs, and the amount of the costs, the Tribunal may have regard to the following—
  1. the outcome of the proceeding;
  2. the conduct of the parties to the proceeding before and during the proceeding;
  3. the nature and complexity of the proceeding;
  4. the relative strengths of the claims made by each of the parties to the proceeding;
  5. any contravention of an Act by a party to the proceeding;
  6. 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;
  7. 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.

(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. [24]The similar QCAT Act provision to s 70 is, it might be said, in terms that more plainly indicate that the legislature had turned its face against awards of costs in this Tribunal: s 100 says that ‘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’.
  2. [25]In considering ss 70 and 71 Keane JA (as his Honour then was) referred, however, to two matters relevant here. First, his Honour held that the CCT provisions negated the traditional proposition that costs should prima facie follow the event (unless of course that the Tribunal considers that another order is more appropriate) and that the nature and extent of the power to award costs could only be discerned by close consideration of the terms of the statute which created and prescribed the occasions and conditions for its exercise 7. Sections 100 and 102 of the QCAT Act attract the operation of the same principles.
  3. [26]Second, Keane JA was of the view that where the complexity of the matter justified legal representation, it would not be in the interests of justice to bar the successful party from recovering costs that were reasonably necessary to achieve a satisfactory outcome.
  4. [27]That conclusion must, here, be considered in the light of the difference between s 70 of the CCT Act and s 100 of the QCAT Act. Section 70 speaks of a ‘main purpose’, but s 100 mandates that parties shall bear their own costs. Section 70 contains, within itself, a reference to the condition or circumstance in which the main purpose may be subsumed to the interests of justice; s 100 has no such proviso, although it appears later, in s 102(1).
  5. [28]Under that subsection QCAT has a discretion to make a costs order ‘…if the Tribunal considers the interests of justice require it…’. Section 102(3) says that, in deciding whether to award costs, the Tribunal may have regard to matters not dissimilar to those set out in s 71 of the CCT Act including, in particular for present purposes, the nature and complexity of the dispute and the relative strength of each party’s claims.
  6. [29]Under the QCAT Act the question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100.
  7. [30]I am satisfied that is the case here. As the voluminous supporting material indicated, the application brought in Ralacom’s name involved a complex history of disputes between it, and the body corporate. Urgent injunctive relief was sought, as was relief under the BCCMA, which on any view involved some complexity, and urgency, and warranted the instruction of solicitors and counsel by the body corporate. The standing of the company was unclear, and confused by the applicant’s failure to inform this Tribunal about the real outcome of the Supreme Court Proceedings. (citations omitted)
  1. [21]
    Later, in McEwen v Barker Builders Pty Ltd [2010] QCATA 49, the then President Justice Wilson further said in an Appeal heard on the papers:
  1. [13]As to costs, the starting point in this Tribunal is that each party must bear its own: QCAT Act, s 100. The statutory presumption may 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). 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, conferring a broad discretionary power on the decision-maker.
  2. [14]In determining whether it is in the interests of justice to award costs against another party, the Tribunal may have regard to the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; and, whether a party has acted in a way that unnecessarily disadvantages another party: QCAT Act, s 102(3).

…

  1. [17]The language of s 100 plainly indicates that the legislature has turned its face against awards of costs in this Tribunal. The question that will usually arise in each case in which costs are sought is, then, whether circumstances relevant to the discretion inherent in the phrase ‘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. (citations omitted) (emphasis added)
  1. [22]
    The starting point for consideration of an application for costs is s 100 of the QCAT Act, which is in terms that plainly indicate that the legislature has turned its face against awards of costs in this Tribunal. However, the presumption that each party must bear its own costs may be displaced if the Tribunal considers that the interests of justice require it to make an order for costs: 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. The question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100.
  2. [23]
    In Williams v Body Corporate for Circle on Cavill CTS 39918 [2013] QCATA 39, Member Barlow QC found as follows:
  1. [16]As I said in paragraph [16] of my principal reasons, there were essentially 4 real issues raised in the appeal. Ms Williams succeeded on 2 of those issues and the body corporate succeeded on the other 2. The degree of success of the parties on the issues raised in the appeal is clearly a relevant consideration. Given that Ms Williams succeeded on 2 of the 4 issues, it would not be appropriate to order that she pay all of the body corporate’s costs of the appeal.
  2. [17]In considering whether the Tribunal should order that Ms Williams pay any part of the body corporate’s costs of the appeal, I have taken into account the following factors:

a. Ms Williams succeeded on 2 of the 4 real issues, despite the body corporate’s strong opposition;

b. the body corporate refused to concede that Mr Urquhart was Ms Williams’ spouse and was not engaged in a letting business, despite having offered to appoint him to the committee (apparently on the basis that he was not in fact disqualified from being a member) – a refusal which I consider to have been wholly unreasonable (having regard to the apparent basis of the offers) and which has necessitated referring the matter back to the adjudicator to determine those facts;

c. a large part of the material and submissions put before the Tribunal on behalf of Ms Williams was irrelevant to the issues and orders which the Tribunal could consider;

d. most of that material was directed to the issues on which Ms Williams did not succeed;

e. it ought to have been obvious to a reasonable appellant that her case in those respects in which she failed could not succeed; and

f. it ought also to have been obvious that the application for the Tribunal to disqualify itself from making a decision could not succeed.

  1. [18]The costs claimed are on the indemnity basis. Because of the matters referred to in paragraphs [17]c) to [17]f), I consider that, on the issues on which Ms Williams failed, it is appropriate in the interests of justice to order that she pay the body corporate’s costs, and on the indemnity basis…
  1. [24]
    I respectfully agree with the approach that the President has taken in Ralacom and the McEwen decisions. That means that the relevant task is to proceed on the basis that there is a statutory presumption that parties will bear their own costs in a proceeding for the Tribunal, including those in the Human Rights jurisdiction of the Tribunal but that presumption may be displaced if the Tribunal considers it in the interests of justice to order a party to pay some or all of the costs of another.
  2. [25]
    More recently the Court of Appeal has reinforced that approach and the necessity to show unreasonableness as a foundation for the making of such orders. In Medical Board of Australia v Wong [2017] QCA 42, Philip McMurdo JA, with whom the other members of the Court (Morrison and Mullins JJ) agreed, set aside costs orders made on an indemnity basis in a disciplinary matter.
  3. [26]
    Philip McMurdo JA said at [32]-[35]:
  1. [32]Her Honour made no finding as to whether the Board, when referring the matter to QCAT, held a reasonable belief that Dr Wong’s sexual misconduct had constituted professional misconduct. And as already noted, there had been no finding about that matter by Horneman-Wren SC DCJ. Absent a finding that the Board had commenced the proceeding without such a belief, there could be no criticism of the Board’s doing so. Moreover if the Board held that reasonable belief, it was bound to bring the proceeding which it did. 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.
  2. [33]That same matter should also have been considered in assessing the relevance, on the question of costs, of the correspondence in December 2014. The response by the Board could not be described as perfunctory without a consideration of the reasonableness of the Board’s view that there had been professional misconduct. And the same may be said of her Honour’s criticism of the Board’s dismissal “out of hand [of] a reasonable course of action proposed on behalf of a practitioner”. At that point of the judgment, her Honour said that the Board had then ignored expert opinion. That expert opinion was not identified but it could not have been that of Dr Harden, whose report was requested subsequently and which was provided in June of the following year.
  3. [34]In my respectful opinion, there was also an error in attributing to Dr Harden’s opinion a legal consequence which it did not have. Dr Harden’s opinion was important evidence of the nature and extent of the risk that Dr Wong would relapse. That was highly relevant to QCAT in its consideration of a different question, namely whether the public could be adequately protected by the conditional registration which Dr Wong was proposing. It required a value judgment by QCAT which was not simply a question of psychiatric opinion. Similarly, it must be said that one comment by Horneman-Wren SC DCJ may have suggested that Dr Harden’s opinion was conclusive on the ultimate question of whether Dr Wong’s registration should remain. But as Dr Harden’s opinion was not conclusive on the ultimate question, the Board could not be fairly criticised for continuing to prosecute a case for deregistration after receipt of that opinion.
  4. [35]As to the Board’s conduct after the 2015 decision, her Honour found that the position taken by the Board was not “wholly unreasonable”. There was no respect in which the Board’s position was identified as unreasonable, in pressing for the conditions which it proposed. 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. (citations omitted) (emphasis added)
  1. [27]
    Unlike the position in Medical Board of Australia v Wong, the Applicant here was not of course bound to bring or maintain the proceeding which she did and was not acting in pursuance of any function to protect the public interest.

The Body Corporate’s submissions

  1. [28]
    The Body Corporate submits that there has been unnecessary disadvantage caused by the Applicant’s conduct. In that regard, it refers to a chronology which it has prepared which identifies that although the application to appeal the Adjudicator’s orders was filed on 9 March 2017, she did not serve it for six weeks. Nor did she file an application for an extension of time to bring the appeal outside of time, and it was a necessary for the Body Corporate to make application to the Tribunal seeking the directions be vacated until the extension of time issue was determined. As a result, submissions had to be filed, and in due course directions were made that the Applicant file an application for an extension of time. Even then the application, even after it was filed, was not served for 9 days. I accept that these events occurred as described.
  2. [29]
    Otherwise, the Applicant had more than one attempt at filing Grounds of Appeal. Initially they involved the claim that the Adjudicator had erred in finding that she failed to keep the apartment in good condition and as to how the water leak had caused the damage. Eventually she filed a more comprehensive list of 11 or more separate Grounds of Appeal which are dealt with in my primary reasons.
  3. [30]
    Although it may be seen that some disadvantage was caused as a result of the Applicant’s conduct in the respects mentioned, it does not seem to me that these matters caused any significant disadvantage to the First Respondent, apart from increasing the costs to some degree. Nor has it been identified precisely how that delay and other conduct caused this disadvantage in a significant way which, by itself, ought justify a costs order. That is not to say that her conduct in this regard ought be taken into account.
  4. [31]
    Secondly, the Body Corporate contends that the appeal was a matter of considerable complexity.
  5. [32]
    The generalised proposition advanced for the Body Corporate that the very nature of an appeal proceeding in this jurisdiction means there are complex questions of law and the need for legal expertise in order to adequately defend the application, grossly overstates the position. There is no doubt that there were some complexities associated with the grounds of appeal in this case. This is demonstrated by the length of the judgment that was required to address each of these grounds. Of course as I have mentioned earlier, to the extent that there were complexities, they were made more complex by the failure to properly articulate how the complaints which were raised in the appeal, raised issues of law.
  6. [33]
    The Body Corporate points to the fact that the Complainant herself engaged numerous law firms to act for her in the appeal, and had at least two Counsel acting for her at different times. She was represented in the appeal by Counsel as was the Body Corporate, and one of the other Respondents. That is a relevant consideration.
  7. [34]
    Whilst it may be said that there were some complexities to the matter, overall the matter was not particularly complex, or manifestly more complex than most other appeals from Body Corporate Adjudicators that come before this Tribunal.
  8. [35]
    The third aspect pointed to other relative strengths of the claims made by each of the parties. It seems to me that all the points made in support of there being an award for costs, the fact that the Applicant’s claims had little merit, in large part failed to focus upon the matters that were required to be established to succeed, and in particular failed to demonstrate errors of law and in some respects manifestly misstated the conclusions reached by the Adjudicator in appealing them is critical.
  9. [36]
    In my view the Applicant acted unreasonably in bringing, and in maintaining the very substantial majority of the grounds of appeal, which demonstrably had no merit, or were incompetent because they did not raise questions of law. She has been legally advised by competent solicitors and Counsel for a substantial part of the proceeding. In those circumstances, it may be inferred that she received appropriate advice which reflected the weaknesses in her grounds of appeal. She nevertheless maintained the appeal, the consequence of which is that the Second and Third Respondents, the lot holders of the properties below hers, which were water affected, were placed in the invariable position of having to defend the Adjudicator’s orders, and in one case engage solicitors and Counsel to protect their position, to ensure that the works necessary to rectify that damage were carried out.
  10. [37]
    The Applicant was clearly unprepared to act reasonably to ensure that the affected properties were able to be restored to a habitable condition, but instead appealed a considered and well reasoned Adjudicator’s decision in part for a collateral purpose, namely in part to seek to thwart the enforcement proceedings which had been brought elsewhere to make her comply with the orders of the Adjudicator.
  11. [38]
    The Body Corporate submits, having regard to the financial circumstances of the parties, that Arila Lodge is a small eight lot community titles scheme, and each of the lot owners (and proportionately, the Applicant herself), have been put to significant financial cost in defending the appeal.
  12. [39]
    Notwithstanding that I handed down my reasons in April, the inevitable consequence that the orders which had been made by the Adjudicator two years ago stood, and had not been set aside although they had been stayed until the appeal was disposed of. As at the date of filing submissions in relation to costs in June of this year, and I infer even now, the Applicant had failed to engage the nominated builder to perform the rectification works which had been the subject of the Adjudicator’s orders.
  13. [40]
    The Body Corporate contends that it has been unable to make the claim to have the rectification work carried out on insurance because it had reached the limit of its legal defence costs under insurance. Even had it been in a position to rely upon insurance, there still would have been a question of whether the insurer would be liable to be indemnified by the Applicant in any event.

The quantum of the Body Corporate’s costs

  1. [41]
    For the Body Corporate it is submitted that costs should be awarded on an indemnity basis in an amount of $47,615.18 on grounds set out in an affidavit of Mr Jason Carlson.
  2. [42]
    The circumstances in which indemnity costs may be ordered are well known.
  3. [43]
    In Di Carlo v Dubois & Ors,[3] White J, with whom the other members of the Court agreed, made some comments on what Her Honour said seemed to be a ‘growing practice of seeking costs on an indemnity basis’. Her Honour identified the circumstances in which a court will be justified in making an order for indemnity costs (albeit not a closed list):
    1. (a)
      there needs to be some special or unusual feature in the case to justify a court departing from the ordinary practice, e.g. the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;
    2. (b)
      misconduct that causes loss of time to the court and the other parties;
    3. (c)
      the fact that the proceedings were commenced or continued for some ulterior motive; or in wilful disregard of known facts, or clearly established law;
    4. (d)
      the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; the imprudent refusal of an offer to compromise; and costs against a contemnor;
    5. (e)
      ethically or morally delinquent conduct by a party in Botany Municipal Council v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories;[4] and
    6. (f)
      some evidence of unreasonable conduct, albeit that it need not rise as high as vexation.
  4. [44]
    Chesterman J again dealt with the issue in Todrell Pty Ltd v Finch & Ors,[5] where he again identified the issue as concerning whether the losing party had conducted itself irresponsibly in a way which exposed its opponent to costs which in fairness should be ordered on an indemnity basis:
  1. [4]The defendants in action 1308 of 2007… seek their costs of the trial which lasted four days on the indemnity basis. They do so on reliance upon the authorities which establish that, other things being equal, commencing proceedings in wilful disregard of clear law will result in an order for costs on the indemnity basis. The authorities include Colgate Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 and Di Carlo Dubois [2002] QCA 225. Rosniac v Government Insurance Office (1997) 41 NSW R 608 at 616 decided that it was not necessary for a party seeking indemnity costs to establish ethical or moral delinquency by its opponent. It was enough that the opponent conducted itself unreasonably in some way. In Emmanuel Management Pty Ltd (In liquidation) v Fosters Brewing Group Ltd & Ors [2003] QSC 299 I pointed out that that test is inexact. The test which I myself adopted in that case, and others, was whether there was something irresponsible about the conduct of the losing party which exposed its opponent to costs but should, in fairness, be ordered on the indemnity basis. It is, of course, irresponsible to commence proceedings which cannot succeed because of a known legal impediment.
  1. [45]
    I am not persuaded that the circumstances here justify an indemnity costs order, because notwithstanding what I have said above about the Respondent’s conduct, I do not consider that her conduct has been so irresponsible as to justify such an order.
  2. [46]
    The content of the affidavit material before me does not permit me to fix the costs except to the extent that I might be willing to order them on an indemnity basis. I am not prepared to order them on an indemnity basis.
  3. [47]
    In my view this is an appropriate case for an order that the Appellant pay the First Respondent Body Corporate’s costs on a standard basis, to be assessed pursuant to the District Court Scale set out in Schedule 2 of the Uniform Civil Procedure Rules 1999 (Qld) or as agreed. There has been a costs assessor nominated for the purpose of conducting that exercise.
  4. [48]
    The Applicant would be well advised to cooperate in the process involved in assessing the costs, whether by use of that assessor or another, however I will not be making an order that she specifically agree to engage that assessor.

The Second Respondent Lyn McClelland’s costs

  1. [49]
    The Second Respondent Lyn McClelland in appeal APL441-16 was also represented in the appeal by a firm of solicitors, and by Counsel. She too makes the argument, which I accept, that there was some proliferation of costs associated with the Applicant filing amended Grounds of Appeal and a failure to act efficiently in the preparation of Appeal Books.
  2. [50]
    After January 2018, when Ms McClelland was given leave to be legally represented, there was communication about deficiencies in relation to the Appeal Book until finally a compliant copy of the Appeal Book was filed.
  3. [51]
    For Ms McClelland, it is submitted that under s 49 of the QCAT Act, examples are provided of conduct which may enliven the Tribunal’s powers to make an order under s 102 if there were unnecessarily occurred costs. Those matters included the extent to which a party causing disadvantage was familiar with the Tribunal’s practices and procedures, the party’s capacity to understand and act on the Tribunal’s orders and directions, and whether the party causing disadvantage was acting deliberately. There is insufficient material before me to find that the Applicant was acting deliberately in her recalcitrant conduct, however there is no doubt that she was both legally advised, and sufficiently cognitively capable of, and actually did understand the Tribunal’s processes.
  4. [52]
    Ms McClelland makes similar arguments in relation to the complexity of the matter as have been made on behalf of the Body Corporate and the same conclusions may be reached about them as have been expressed above. I accept that it was reasonable, if not necessary, for Ms McClelland to engage a solicitor and Counsel to argue the appeal.
  5. [53]
    The submissions on behalf of Ms McClelland also concern the relative strengths of the claims. For Ms McClelland it is submitted that the Applicant largely sought to challenge findings of fact made by the Adjudicator, and that it was not appropriate for the appeal to focus so heavily on the Adjudicator’s findings of fact as occurred. I have made that finding.
  6. [54]
    The submission is made that a number of the arguments raised in the appeal were not raised before the Adjudicator. I have also dealt with those issues elsewhere in these reasons, and also my primary reasons. That submission is well made. I do not accept her submission that the entire appeal was misconceived and not an ‘unauthorised’ proceeding of the kind which was under discussion in the Ralacom decision referred to above.
  7. [55]
    Under the heading ‘The financial circumstances of the parties to the proceeding’, Ms McClelland points to the fact that the orders which required the engagement of a contractor, if complied with, would have required the Applicant to spend approximately $15,000 to undertake the repairs to Ms McClelland’s unit and seeks that an inference be drawn that her own legal costs would have exceeded the value of those works. There is insufficient evidence before me to engage with that proposition, and to do so would amount to speculation. No reference is made to the specific financial circumstances of Ms McClelland herself.
  8. [56]
    Section 107 of the QCAT Act provides that if the Tribunal makes an order under the Act, the Tribunal must fix the costs if possible.
  9. [57]
    It may be accepted that the claim is to make an award which is reasonable and appropriate in the circumstances of the case, and that the Tribunal is not bound by any rules of assessment or usual practice as to the basis of an assessment, standard or indemnity.[6]
  10. [58]
    For Ms McClelland it is submitted that there ought be an order for indemnity costs. The totality of the Second Respondent’s legal costs is $11,480.70 including GST. It asks that 85% of these costs be awarded on an ‘indemnity basis’.
  11. [59]
    For the reasons I have expressed above, I am not prepared to make an order for her costs in their entirety, but consider an appropriate award would be to allow two thirds of the costs she incurred, including GST. That reflects a global view of what reasonable standard costs would be if the District Court’s lowest scale applied. In the result, I find that the Applicant ought pay the Respondent McClelland’s costs fixed in the amount of $7,653.80.

The submissions of SGR Prop Invest 01 Pty Ltd

  1. [60]
    The Second Respondent in appeal APL075-17, SGR Prop Invest 01 Pty Ltd, has also filed an application with supporting submissions, in relation to the recovery of its costs.
  2. [61]
    Mr Reid, who appeared on the appeal on behalf of SGR sought the recovery of costs totalling $4,627.84, $4,160 of which comprised a claim for Mr Reid’s time in preparing appeal submissions, notionally at a rate of $260 per hour for 16 hours.
  3. [62]
    Apart from outlays incurred by parties who are not legally represented, unrepresented parties cannot recover the costs of their time for representation in the Courts, nor for that matter in this Tribunal. That means that I have no power to make an order that the Applicant pay Mr Reid an amount to reflect what he regards as a reasonable rate for his time preparing the appeal submissions.
  4. [63]
    Even if I had such a power, I would not make an order that they paid here, because there is no evidence that that sum or any other sum has been expended, or loss sustained reflecting that sum in the preparation of appeal submissions.
  5. [64]
    I am otherwise prepared to allow proven outlays, as set out in Mr Reid’s affidavit. They comprise an amount of $468. I therefore order that the Applicant pay the costs of SGR Prop Invest 01 Pty Ltd in the amount of $468.

The Applicant’s submissions on costs

  1. [65]
    The Applicant filed a lengthy written submission in which she contended, on various bases, that there ought not be a costs order. She:
    1. (a)
      contends that both the original application, and the appeals succeeded because some or all of the Respondents made ‘false and misleading statements’;
    2. (b)
      contends that to make an order that she pay the Respondents’ costs of the appeals, would be a denial of natural justice;
    3. (c)
      again seeks to take issue with factual findings which stood behind the Adjudicator’s original orders;
    4. (d)
      seeks to otherwise reargue or re-agitate the merits of various grounds of the appeal;
    5. (e)
      contends that she had been willing, at different times, to participate in mediation whereas otherwise were not, or were only willing to do so on certain conditions; and
    6. (f)
      believed, based on communications when the Adjudicator’s reasons were handed down, that there were provisions in the law that permitted a party to appeal such decisions. That belief was well held. It says nothing about the merits of the appeal.
  2. [66]
    She otherwise takes issue with whether this was a case in which:
    1. (a)
      her conduct had caused disadvantage;
    2. (b)
      the matter was of any complexity; and
    3. (c)
      the work to be done by the builder to rectify the units was complex work.
  3. [67]
    She contends that:
    1. (a)
      she had legal advice that there was a legal basis for making the appeal;
    2. (b)
      she herself had incurred legal costs in this and other proceedings;
    3. (c)
      the applications, and the appeal were ‘wholly avoidable’ if the lot owners had made an insurance claim or engaged in mediation or ADR, but that they did not.
  4. [68]
    I do not consider these matters as persuasive, and in some respects even relevant to a consideration of what should occur in relation to costs.

Disposition and orders

  1. [69]
    In the result, I order that:
    1. (a)
      the Appellant pay the First Respondent’s costs on a standard basis, to be assessed pursuant to the District Court Scale set out in Schedule 2 of the Uniform Civil Procedure Rules 1999 (Qld) or as agreed;
    2. (b)
      the Applicant pay the Second Respondent Lyn McClelland’s costs fixed in the amount of $7,653.80; and
    3. (c)
      the Applicant pay the Second Respondent SGR Prop Invest 01 Pty Ltd costs fixed in the amount of $468.

Footnotes

[1] Thompson v Body Corporate for Arila Lodge & Anor; Thompson v Body Corporate for Arila Lodge [2018] QCATA 56 (APL441-16); https://www.sclqld.org.au/caselaw/QCATA/2018/56.

[2] Body Corporate and Community Management Act 1997 (Qld) (‘the Act’), s 289(2).

[3]  [2002] QCA 225.

[4]  (1992) 34 FCR 412, 415.

[5]  [2007] QSC 386, [4].

[6] Thompson v Body Corporate for Arila Lodge & Anor [2017] QCATA 152; Arcon Constructions Pty Ltd v Queensland Building Services Authority [2013] QCAT 573.

Close

Editorial Notes

  • Published Case Name:

    Thompson v Body Corporate for Arila Lodge & Anor; Thompson v Body Corporate for Arila Lodge & Anor (No 2)

  • Shortened Case Name:

    Thompson v Body Corporate for Arila Lodge

  • MNC:

    [2018] QCATA 133

  • Court:

    QCATA

  • Judge(s):

    Member Roney

  • Date:

    06 Sep 2018

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2018] QCATA 5626 Apr 2018Appeals from decision of an Adjudicator dated 8 December 2016 which arose out of water damage caused to Lots 1 and 2 of the premises known as Arila Lodge; appeals dismissed: Member Roney QC.
Primary Judgment[2018] QCATA 13306 Sep 2018Costs judgment of [2018] QCATA 56: appellant ordered to pay the first and second respondent's costs: Roney QC DCJ.
Primary JudgmentQCATA441/16; QCATA75/17 (No Citation)26 Jul 2019Orders made as a consequence of the process of costs assessment: Member Roney QC.
Notice of Appeal FiledFile Number: Appeal 9215/1928 Aug 2019Application from decision of Member Roney QC made on 26 July 2019 and the Orders made on 6 September 2018 and 26 November 2018.
Appeal Determined (QCA)[2019] QCA 26722 Nov 2019Applications for an extension of time within which to apply for leave to appeal; applications dismissed: Sofronoff P.
Appeal Determined (QCA)[2019] QCA 29613 Dec 2019Appeal costs judgment: Sofronoff P.
Special Leave Refused (HCA)[2020] HCASL 9116 Apr 2020Special leave refused: Keane and Edelman JJ.

Appeal Status

Appeal Determined - Special Leave Refused (HCA)

Cases Cited

Case NameFull CitationFrequency
Arcon Constructions Pty Ltd v Queensland Building Services Authority [2013] QCAT 573
1 citation
Jump To
Cite 1 - [2013] QCAT 573
Botany Municipal Council v Secretary, Department of the Arts (1992) 34 FCR 412
2 citations
Jump To
Cite 1 - (1992) 34 FCR 412
Cite 2 - (1992) 34 FCR 412
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 F.C.R 225
1 citation
Jump To
Cite 1 - (1993) 46 F.C.R 225
Di Carlo v Dubois [2002] QCA 225
3 citations
Jump To
Cite 1 - [2002] QCA 225
Cite 2 - [2002] QCA 225
Cite 3 - [2002] QCA 225
Emanuel Management Pty Ltd (in liquidation) v Foster's Brewing Group Ltd [2003] QSC 299
1 citation
Jump To
Cite 1 - [2003] QSC 299
McEwen v Barker Builders Pty Ltd [2010] QCATA 49
2 citations
Jump To
Cite 1 - [2010] QCATA 49
Cite 2 - [2010] QCATA 49
Medical Board of Australia v Wong [2017] QCA 42
3 citations
Jump To
Cite 1 - [2017] QCA 42
Cite 2 - [2017] QCA 42
Cite 3 - [2017] QCA 42
Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412
2 citations
Jump To
Cite 1 - [2010] QCAT 412
Cite 2 - [2010] QCAT 412
Rosniac v Government Insurance Office (1997) 41 NSW LR 608
1 citation
Jump To
Cite 1 - (1997) 41 NSW LR 608
Tamawood Ltd v Paans[2005] 2 Qd R 101; [2005] QCA 111
1 citation
Jump To
Cite 1 - [2005] QCA 111
Thompson v Body Corporate for Arila Lodge [2017] QCATA 152
1 citation
Jump To
Cite 1 - [2017] QCATA 152
Thompson v Body Corporate for Arila Lodge [2018] QCATA 56
1 citation
Jump To
Cite 1 - [2018] QCATA 56
Todrell Pty Ltd v Finch[2008] 2 Qd R 95; [2007] QSC 386
2 citations
Jump To
Cite 1 - [2007] QSC 386
Cite 2 - [2007] QSC 386
Williams v Body Corporate for Circle on Cavill CTS 39918 [2013] QCATA 39
2 citations
Jump To
Cite 1 - [2013] QCATA 39
Cite 2 - [2013] QCATA 39

Cases Citing

Case NameFull CitationFrequency
Campbell v The Body Corporate for 70 Bowen St CTS 15330 (costs) [2020] QCATA 263 citations
Commissioner of State Revenue v Sandgate Road Property Pty Ltd (No 2) [2023] QCATA 1202 citations
Commissioner of State Revenue v Telgrove Pty Ltd (No 2) [2023] QCATA 1132 citations
Dansur v Body Corporate for Cairns Aquarius CTS 1439 [2023] QCATA 141 citation
Habul v Limbada [2023] QCAT 2092 citations
Mojo Constructions Australia Pty Ltd v Smith [2024] QCAT 492 citations
Monsour v C & R Darvill Pty Ltd [2023] QCAT 622 citations
Owen & Coastal Keys Pty Ltd v Chief Executive, Office of Fair Trading, Department of Justice and Attorney-General & Anor No 2 [2023] QCAT 1721 citation
Owen & Coastal Keys Pty Ltd v Chief Executive, Office of Fair Trading, Department of Justice and Attorney-General No 2 [2023] QCAT 2071 citation
Owltown Pty Ltd v Norwinn Commercial [2020] QCATA 1451 citation
TAJ (costs) [2023] QCAT 1331 citation
Thompson v Body Corporate for Arila Lodge [2019] QCA 2672 citations
Thompson v Body Corporate for Arila Lodge [2019] QCA 2961 citation
1

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