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Owltown Pty Ltd v Norwinn Commercial[2020] QCATA 145

Owltown Pty Ltd v Norwinn Commercial[2020] QCATA 145

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Owltown Pty Ltd v Norwinn Commercial (costs) [2020] QCATA 145

PARTIES:

owltown pty ltd

(appellant)

v

the body corporate for the norwinn commercial community titles scheme cts 38094

(first respondent)

and

jm family holdings pty ltd as trustee

and berridge enterprises pty ltd as trustee

(second respondents)

APPLICATION NO/S:

APL005-17

ORIGINATING APPLICATION NO/S:

Application No. 0582-2016

Decision citation: Norwinn Commercial [2016] QBCCMCmr 537

MATTER TYPE:

Appeals

DELIVERED ON:

14 October 2020

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Gordon

ORDERS:

  1. Owltown Pty Ltd shall pay to JM Family Holdings Pty Ltd as trustee and Berridge Enterprises Pty Ltd as trustee their reasonable costs in conducting the proceeding APL005-17 which were incurred after 3 August 2017.
  2. The aforesaid costs are fixed at $30,500.  This does not include GST.

CATCHWORDS:

APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – POWERS OF COURT – COSTS – where appeal from departmental Adjudicator – whether it is in the interests of justice to award any costs relating to a period before an offer to settle had been made

APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – POWERS OF COURT – COSTS – where appeal from departmental Adjudicator – where a Calderbank offer was made not to seek costs if the appeal were withdrawn – whether this was an offer to settle within section 105 of the QCAT Act and rule 86 – whether costs should be awarded because the offer was not accepted

APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – POWERS OF COURT – COSTS – where costs are awarded – where under section 107(1) of the QCAT Act the Appeal Tribunal must fix the costs if possible – where there is incomplete evidence to support the application for costs – what evidence is required

Body Corporate and Community Management Act 1997 (Qld), s 4(i), s 290

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102, s 105, s 107

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

Arcon Constructions Pty Ltd v Queensland Building Services Authority [2013] QCAT 573

Hyndman v Queensland Building Services Authority [2010] QCAT 338

JM Family Holdings Pty Ltd & Anor v Owltown Pty Ltd & Anor [2018] QCA 260

Legal Services Commissioner v McQuaid [2019] QCA 136

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

Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98

Neverfail Pty Ltd as Trustee for The Harris Siksna Family Trust & Anor v Radford (No. 2) [2017] QCATA 73

Owltown Pty Ltd v Norwinn Commercial [2018] QCATA 2

Owltown Pty Ltd v Norwinn Commercial (No 3) [2018] QCATA 94

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

Tamawood Limited v Paans [2005] QCA 111

REPRESENTATION:

Appellant:

Zande Law

First respondent:

Did not participate

Second respondents:

Stratum Legal

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

  1. [1]
    This is an application for costs in an appeal before the Appeal Tribunal from a decision made by a departmental Adjudicator of the Office of the Commissioner for Body Corporate and Community Management. 
  2. [2]
    The issue between the parties was whether the maintenance costs for a lift which served lot 8 in the Norwinn Commercial CTS should be paid by all lot owners in accordance with their contribution entitlements, or whether those costs should be borne solely by the owners of lot 8.  On 20 July 2015 the body corporate resolved that the costs should be shared by all lot owners.  This was challenged by Owltown Pty Ltd, who owned lots 2 and 4.  Owltown applied to the departmental Adjudicator arguing that the resolution was void.  The departmental Adjudicator dismissed the application.[1] 
  3. [3]
    Owltown appealed against that decision on a point of law.  Such appeals come to the Queensland Civil and Administrative Tribunal’s (QCAT’s) Appeal Tribunal.  After a hearing, on 4 January 2018 the Appeal Tribunal constituted by Member Barlow QC allowed the appeal and made various orders accordingly.[2]  On 7 February 2018 Owltown applied for costs to be paid by JM Family Holdings Pty Ltd as trustee and Berridge Enterprises Pty Ltd as trustee (the second respondents).  The application was dealt with by Member Barlow QC on the papers on 6 July 2018.[3]  Owltown was successful in its application for costs and the second respondents were ordered to pay Owltown’s costs on the standard basis on the District Court scale.
  4. [4]
    Meanwhile however, the second respondents had appealed to the Court of Appeal against the decision made on 4 January 2018.  That appeal was successful and the order made on 4 January 2018 was set aside.[4]  The costs order made on 6 July 2018 was also set aside.  When dealing with costs, the Court of Appeal ordered Owltown to pay the costs of the second respondents incurred in the Court of Appeal itself, but remitted the question of costs before the Appeal Tribunal to the Appeal Tribunal for determination.
  5. [5]
    Although that remittal back was a general one on the question of costs, the only costs issue to be determined by the Appeal Tribunal is whether Owltown should pay the costs of the second respondents.  Neither Owltown nor the Body Corporate for Norwinn Commercial CTS 38094 (the first respondents) seek an order for costs.
  6. [6]
    The question before me is therefore whether Owltown should pay the costs of the second respondents which the second respondents incurred in the appeal before the Appeal Tribunal, and if so how much those costs should be, or if the Appeal Tribunal cannot fix the costs, how they should be assessed.
  7. [7]
    The amount of costs sought by the second respondents and the grounds for seeking costs appear in the application filed on 3 October 2019 and updated on 22 July 2020.    The sum originally claimed was either $47,240.56 fixed on the indemnity basis, or costs wholly or partially assessed on the District Court scale.  As updated, the claim is for $62,257.01 net of GST.[5]
  8. [8]
    Because there was an offer to settle on 3 August 2017, the claimed costs are separated into the periods before and after the offer:[6]
    1. (a)
      incurred before the offer to settle $17,209.01
    2. (b)
      incurred after the offer to settle $45,048.00
  9. [9]
    When considering both these periods, it is necessary to consider what costs regime applies to appeals from the departmental Adjudicator. 
  10. [10]
    The Appeal Tribunal’s starting point for costs is that each side shall pay their own costs.[7]  However the Appeal Tribunal may award costs if the interests of justice require it to make the order.[8]  In deciding whether to award costs, the Appeal Tribunal may consider the various matters set out in the QCAT Act and anything else it considers relevant.[9]  The question for me to decide is whether the circumstances relevant to the discretion to award costs point sufficiently compellingly to overcome the strong contraindication against a costs order.[10] 
  11. [11]
    When considering how compelling the circumstances must be before it is right to make a costs order in these appeals, it is useful to recite that one of the objects of the Community Titles Scheme legislation is ‘to provide an efficient and effective dispute resolution process’.[11]  This is achieved by comprehensive and sophisticated conciliation and mediation processes administered by the Commissioner and officers.[12]  Those disputes which cannot be settled in this way may be decided by a departmental Adjudicator.
  12. [12]
    A party is able to appeal to QCAT’s Appeal Tribunal from a departmental Adjudicator’s decision but only on a point of law.[13]  A review of the reported Appeal Tribunal cases reveals that some of the appeals are of considerable complexity – and parties are sometimes at risk of spending enormous amount of time and expense litigating them.  Despite this, it is notable that the legislature has made no special provision for the costs of such appeals.  Nor has the legislature provided that parties have a right to legal representation in such appeals.  This means that the Appeal Tribunal’s usual starting point, that parties are not to be legally represented without leave of the Appeal Tribunal, and that even if legally represented each side shall pay their own costs, still applies. 
  13. [13]
    This is no accident, as shown by the costs regime in other types of cases.  For example in the tribunal’s building jurisdiction, costs are at large and usually will follow the event.[14]  There are also special costs provisions for the tribunal in a number of different areas, for example in legal profession disciplinary proceedings,[15] guardianship,[16] in declarations about powers of attorney,[17] in professional engineers’ disciplinary proceedings,[18] and in teachers’ disciplinary proceedings.[19] 
  14. [14]
    The tribunal’s starting point was examined and explained in McGee v Queensland Building and Construction Commission & Anor [2018] QCATA 124 where Senior Member Brown and Member Traves, at [30] said that the costs regime was consistent with the objects of the QCAT Act which include providing a way for parties to settle disputes that is economical, informal and quick. 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.  The starting point was also consistent with one of the key principles underpinning the operation of the tribunal, with the emphasis on self-representation.  The starting point of 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.
  15. [15]
    Appeals from a departmental Adjudicator therefore come under the same rules as in any other case before the tribunal where there is no specific provision for costs.  In an appropriate case however, costs will be awarded in these appeals.[20]
  16. [16]
    This appeal, like many others, raise the question of proportionality. 
  17. [17]
    If a party seeking costs has allowed its costs to enlarge out of proportion to the amount at stake, then this could be relevant to the question whether it the interests of justice to make an order for costs.  It is also something relevant to the quantum of costs allowed when fixed by the tribunal. 
  18. [18]
    Little information about the amount at stake in this matter has been provided to me, but I can see that the maintenance costs of the lift serving lot 8 were about $7,500 per annum.[21]  It appears that by reason of the resolution of the body corporate which Owltown sought to have set aside therefore, as owners of lots 2 and 4 it faced additional bills of about $2,300 per annum.  Yet Owltown’s costs in the Appeal Tribunal incurred prior to the decision of the Court of Appeal, were some $46,147.[22]
  19. [19]
    As the owners of lot 8, the amount at stake for the second respondents was the whole of the $7,500 per annum.  Yet their costs in the Appeal Tribunal are $62,257.
  20. [20]
    For both parties, the costs before the departmental Adjudicator and in the Court of Appeal would be in addition to these amounts.  The costs are obviously out of proportion to the amount at stake.  The Community Titles Scheme legislation is however, complex, and it is often difficult to avoid having to instruct lawyers to fight disputes.  And matters such as this dispute tend to develop their own momentum.

Pre-offer costs

  1. [21]
    One of the submissions made in support of the application for costs is that the issue before the Appeal Tribunal was legally complex and both sides were justified in being legally represented.[23]  The second respondents say Member Barlow QC had the correct approach on 6 July 2018 when he ordered the second respondents to pay Owltown’s costs in the Appeal Tribunal.  One of his reasons was that the appeal was legally complex and the submissions made by the lawyer were of ‘immense assistance to the tribunal’ and would not have been argued so helpfully if the parties had not been legally represented.[24]
  2. [22]
    The fact is however, that this would apply to most Community Title Scheme appeals.  This is because the only appeal from a departmental Adjudicator is on a point of law and there are many fine arguments to make in Community Title Scheme matters.  Yet as can be seen from the analysis above, the legislature has applied the tribunal’s usual costs regime to these appeals.  Although the comments of Justice Keane in Tamawood Limited v Paans [2005] QCA 111 suggest that where parties are legally represented because of the complexity of the issue, this may be sufficient for the tribunal to award costs in the interests of justice, the usual view of the tribunal and the Appeal Tribunal is that this will not itself be conclusive.[25]  This point by itself is insufficient for the tribunal to make a costs order. 
  3. [23]
    The second respondents make the obvious points that they have won the case and that their decision to litigate has been vindicated.[26]  But this could be said in every case.
  4. [24]
    The second respondents rely on their offer to settle, but on any basis this could only affect the post-offer costs and not the pre-offer costs.
  5. [25]
    The second respondents submit that Owltown wasted costs by insisting on proceeding with its own application for costs, when it should have waited until after the decision of the Court of Appeal.[27]  Valid points about this are made, but cannot affect pre-offer costs.
  6. [26]
    There is very little here capable of supporting an application for pre-offer costs, given the tribunal’s costs regime.  In the circumstances I do not make a costs order in respect of the pre-offer costs.

Post-offer costs

  1. [27]
    The second respondents’ offer was made on 3 August 2017.[28]  It was made ‘without prejudice save as to costs’.[29]  As such, it is admissible in this application for costs.
  2. [28]
    The offer simply suggested that Owltown should withdraw the appeal to the Appeal Tribunal within seven days and each side would bear their own costs of the appeal.  The hearing date for the appeal was set for 21 August 2017 only 18 days later.
  3. [29]
    Offers to settle are governed by section 105 of the QCAT Act and rule 86 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld).  Section 105 allows rules to be made which permit 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’.  Rule 86 was made under this provision.  The rule describes what offers come within it.  It requires that the offer must be in writing and must be made by a party to a proceeding to another party to the proceeding, and it must offer to settle the dispute the subject of the proceeding.
  4. [30]
    One requirement is that the acceptance of the offer would have resulted in settlement of all matters in dispute between all the parties.[30]  This would have happened if the appeal had been withdrawn because although the body corporate was not a party to the offer, it would have no longer faced a potential reversal of its resolution if the appeal had been withdrawn.
  5. [31]
    Another requirement of the rule is that, in the opinion of the tribunal, the decision of the tribunal in the proceeding is not more favourable to the party receiving the offer than the offer.  Here the ultimate outcome of the appeal was exactly as suggested in the offer.  If the offer had been accepted, the appeal would have been withdrawn; as it turned out, the appeal wholly failed.  In the circumstances, the decision of the tribunal in the proceedings was ‘not more favourable to (Owltown) than the offer’.

Is a suggestion that the other side capitulate an ‘offer to settle’?

  1. [32]
    In their submissions, the second respondents deal with the possibility that the offer of 3 August 2017 does not come within section 105 and rule 86.  If this is the case, they submit that they can rely on an offer to show that the interests of justice require the Appeal Tribunal to make an order for costs.  Citing Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98, [36] they submit that even if the offer is insufficient for rule 86, it can still be taken into account by the Appeal Tribunal when exercising general discretion as to costs.[31]
  2. [33]
    That submission foresees the possibility that section 105 and rule 86 are not engaged by the offer because it was not an ‘offer to settle the dispute the subject of the proceeding’.  In that respect it is notable that both section 105 and rule 86 use those words.  The question arises whether a suggestion that the other side capitulates, even if this includes an offer to waive costs, can be an offer to settle.
  3. [34]
    There have been tribunal decisions where a suggestion by one side that the other side should capitulate has been regarded as an offer to settle under the rules.  In Hyndman v Queensland Building Services Authority [2010] QCAT 338, the respondent offered to waive costs if the application was withdrawn.  Upon the application being dismissed it was held that the offer engaged the predecessor of rule 86 [under the Commercial and Consumer Tribunal Act 2003 (Qld)] and the respondent was entitled to costs.  A similar view was taken in Urban v Queensland Building and Construction Commission [2016] QCAT 433, [16] but possibly not in Coming Home Pty Ltd ATF The Coming Home Trust v Body Corporate for Sunnybank Close [2014] QCAT 110.
  4. [35]
    On the other hand, in McGee v Queensland Building and Construction Commission & Anor [2018] QCATA 124, [58] the Appeal Tribunal constituted by Senior Member Brown and Member Traves were quite clear that for an offer to come within rule 86 it must contain some element of genuine compromise.  An offer in review proceedings that the QBCC capitulate with each side bearing their own costs, was not an offer to settle, the compromise on costs contained in the offer being ‘illusory in circumstances where there was a presumption against an award of costs in the proceeding’.
  5. [36]
    In that case the QBCC had decided that Mr McGee was an excluded individual under the QBBC Act.  On review by the tribunal, this decision was set aside and Mr McGee was categorised as a permitted individual.  The offer was made relatively early in the proceedings, and before the QBCC had received submissions and important evidence filed on behalf of Mr McGee.[32]  The QBCC rejected the offer principally on the basis that at the time of the offer the QBCC did not have sufficient material to satisfy itself that Mr McGee should be a permitted individual.[33]
  6. [37]
    It is in that context that we can understand what was said in McGee about the compromise on costs being illusory.  Clearly, if the QBCC had accepted that Mr McGee was a permitted individual as it was being asked to do, the chances of Mr McGee obtaining costs against the QBCC at that time would have been extremely slim.  This was because Mr McGee’s case had not yet fully developed.  In that respect the offered compromise on costs was certainly an illusory benefit as the Appeal Tribunal said.
  7. [38]
    It cannot be said that the prospects of a costs order against the QBCC in review cases is always illusory, because costs have been awarded against the QBCC in a number of cases where it has stood its ground in the face of a persuasive case or where it has acted unreasonably.[34]
  8. [39]
    The reason for section 105 and rule 86 is to encourage parties to try to settle their disputes.  This accords with one of the objects of the QCAT Act.[35]  In this respect, it would seem odd that an offer which merely suggested that the other side should capitulate should come within the rule.  If that were so, it would mean that every respondent would be advised to write to an applicant suggesting that they withdraw the application.  Then if the application is dismissed, the respondent could claim that they are entitled to an order for costs because the offer should have been accepted.  Equally every applicant would be advised to write to a respondent inviting them wholly to accede to the application.  Then if the application wholly succeeds, the applicant can claim an entitlement to costs because the offer should have been accepted. 
  9. [40]
    This is unlikely to be the intention of the provisions, and so as stated in McGee, it is clear that in order for an offer to come within rule 86 it must be a genuine offer to settle.  Where a suggestion is made that the other side simply capitulate, this will not by itself be an offer to settle.  If it is combined however, with an offer by a legally represented party not to seek costs and acceptance of that suggestion would relieve the other party from a real risk of an adverse costs order, then this is a genuine offer to settle and can come within rule 86.  Hence in some cases it will be necessary to consider the risk of a costs order being made at the time such an offer is made to decide whether rule 86 is engaged.
  10. [41]
    In this respect, I note that the offer made by the second respondents in the application before me was made some way into the proceedings.  The appeal was first filed on 3 January 2017.  On 8 February 2017 all parties were given leave to be legally represented in the Appeal Tribunal.  The costs incurred by the second respondents in dealing with the appeal prior to the date of the letter of 3 August 2017 was $17,209.01 excluding GST.[36]  The nature of the work done up to that time can be seen from the unredacted copies of the bills.  In particular, it can be seen that the second respondents’ submissions in the appeal had been prepared and filed.[37]  The offer therefore was to give up the chance of seeking those costs from Owltown.
  11. [42]
    For this reason, I do not agree with submissions made on behalf of Owltown that if the offer had been accepted, ultimately Owltown would not have been in a more favourable position.[38] 
  12. [43]
    In my view, in the particular circumstances of this matter, the letter of 3 August 2017 was a genuine offer to settle.  This was because when the offer was made, the risk of a costs order against Owltown was slim but was not illusory as it was in McGee.  This was because there was a real possibility that the presumption against costs could have been rebutted if the appeal had been withdrawn at the time of the offer.

Should post-offer costs be awarded?

  1. [44]
    It is clear from the wording of rule 86(2) that if the rule is engaged it merely empowers the tribunal to make a costs award.  The decision whether or not to do so remains discretionary, having regard to the applicable and relevant circumstances.  As was said in Neverfail Pty Ltd as Trustee for The Harris Siksna Family Trust & Anor v Radford (No. 2) [2017] QCATA 73, (Justice Carmody and Senior Member Brown) if rule 86 is engaged, ‘It is not the most important consideration but part of the matrix of circumstances to be weighed in exercising the discretion to award costs’.[39]  It was relevant to consider: (a) the stage of the proceeding at which the offer was received; (b) the time allowed to the offeree to consider the offer; (c) the extent of the compromise offered; (d) the offeree’s prospects of success, assessed as at the date of the offer; and (e) the clarity with which the terms of the offer were expressed.
  2. [45]
    It seems to me that because of the provisions of section 105 and rule 86, the offer of 3 August 2017 put Owltown on notice that should the appeal fail, the second respondents would be seeking costs against Owltown.  This had the effect of displacing the usual expectation of a party before the Appeal Tribunal that generally they would not be at risk in costs.  Although the offer gave only seven days for acceptance, which is less than the 14 days required for such offers under the Uniform Civil Procedure Rules 1999 (Qld),[40] in my view it was sufficient time for Owltown to make a reasoned decision bearing in mind that the arguments in the appeal had been fully canvassed before the departmental Adjudicator and the second respondents’ submissions in the appeal had been received over six weeks before.  It means that in failing to accept the offer, Owltown made an informed decision to fight on regardless. 
  3. [46]
    Accordingly Owltown was at risk in costs from that point and although the merits of the appeal were obviously very balanced, as demonstrated by the decision made by Member Barlow QC and the contrary view taken by the Court of Appeal, the risk taken by Owltown included losing the appeal on such fine points.
  4. [47]
    It is submitted on behalf of Owltown that it was not unreasonable to reject the offer of 3 August 2017, because under the applicable legislation there was no middle ground available to compromise the dispute.[41]  This is a valid point on the question of reasonableness, and this could be of influence in some cases because of the tribunal’s residual discretion whether or not to award costs even if rule 86 is engaged.  In this particular case however, the offer provided Owltown with an opportunity to end the litigation without further risk in costs – an offer which in hindsight, should have been accepted.
  5. [48]
    I do not agree with submissions on behalf of Owltown that delay in the pursuit of costs by the second respondents affects the matter.[42]  Although I agree that delay could be a relevant circumstance, in this particular case it was not lengthy enough to affect matters.
  6. [49]
    In the circumstances, it seems to me that it is right to order Owltown to pay the second respondents’ ‘reasonable costs incurred ... in conducting the proceedings after the offer was made’.[43] 

Fixing costs – applicable principles and evidence

  1. [50]
    Under section 107(1) of the QCAT Act the tribunal must fix the costs if possible. 
  2. [51]
    In a case of this sort, it ought to be possible to fix the costs.  But in the first instance the parties did not file sufficient evidence for the Appeal Tribunal to achieve this.  This was partly because the evidence submitted on behalf of the second respondents included solicitors’ bills with parts redacted and counsel’s fee notes showing the fee but which had the work done redacted.  There was no explanation why these redactions had been made.  As a general principle, where a party gives evidence to any court or tribunal and any part of it is redacted, then there should be an explanation why this is so.
  3. [52]
    This meant that directions had to be given for further evidence to be filed.
  4. [53]
    Ultimately I was able to fix the costs because the second respondents filed unredacted copies of the bills, which showed the date the work was done, brief details of the work and the units and amount claimed for each item.  From this I could see which fee earner did each item of work and the hourly rate charged.  I was able to compare that against the costs agreement.  I was also provided with unredacted copies of counsel’s fee notes. 
  5. [54]
    Despite the relaxed rule of evidence in the tribunal there must be some evidential basis for the fixing of costs, and a mere assertion that the costs should be a stated amount will be insufficient: Legal Services Commissioner v McQuaid [2019] QCA 136.  Therefore I was assisted by Mr Kleinschmidt’s confirmation in his affidavit that the costs had been charged to the clients and were reasonable and appropriate.[44]
  6. [55]
    One issue between the parties is the ‘basis’ on which any costs should be fixed.  Rule 86 uses the expression ‘all reasonable costs’ and this has been construed to mean costs on an ‘indemnity basis’.[45] That might be appropriate if the costs are to be assessed by the Court, but fixing the costs under section 107(1) is a summary procedure and so the usual bases of assessment do not apply.  It has been said that when rule 86 applies, ultimately the costs order to be made is at the discretion of the tribunal.[46]
  7. [56]
    The aim is to make an award which is reasonable and appropriate in the circumstances of the case: Arcon Constructions Pty Ltd v Queensland Building Services Authority [2013] QCAT 573.  This means that the tribunal is not bound by any particular scale of costs, although the scales used by the mainstream courts are sometimes used as a guide.  
  8. [57]
    Much material was filed in response to my directions.  In summary, Owltown’s initial position was that it would need unredacted documentation from the second respondents before being able to make proper submissions about the reasonableness of the claimed costs.[47]  Having received this, Owltown submits that the tribunal should not fix the costs ‘given the nature of the proceedings and the material before the tribunal’, the complexity of the matter, the extent of the costs claimed and the lack of particularity in the second respondents’ filed material.[48]  Alternatively, if the tribunal is minded to fix the costs, it argues that any costs order should exclude GST,[49] the costs it applied for in its own previously successful costs application should not be used to show the reasonableness of the second respondents’ costs,[50] that costs fixed to match an assessment on a full indemnity or solicitor-client basis are not appropriate in this particular case,[51] but that effectively the Appeal Tribunal should assess the costs having regard to what would be allowed if costs were assessed on a particular scale.[52]
  9. [58]
    The second respondents’ position is that it is appropriate for the Appeal Tribunal to fix the costs, and that indemnity costs should be ordered.  In effect it is submitted that Owltown should be ordered to pay all the legal costs billed to the second respondents.[53]
  10. [59]
    Some material filed by the parties was unnecessary in this particular case.
  11. [60]
    The second respondents engaged a costs assessor to give a brief endorsement of the reasonableness of the costs incurred.  This was unnecessary because Mr Kleinschmidt had already done this.
  12. [61]
    Owltown went a step further, and instructed costs lawyers to prepare a ‘report summarising the methodology and outcome of applying the District Court Scale of Costs on an indemnity basis to the tax invoices of Stratum Legal’.  In other words, the costs lawyers provided an opinion as to what would have happened had the second respondents’ costs been assessed by the Court.  That opinion is presented to me as part of a submission as to what I should do when fixing costs.  However this seems to me to be a misunderstanding of the tribunal’s process when fixing costs.  The tribunal does not mirror the approach taken on a costs assessment at all.  The tribunal’s approach is summary only and is aimed at producing a reasonably fair result for the parties without incurring the expense of a formal assessment.

Fixing costs - considerations

  1. [62]
    I am satisfied that having regard to the material now filed, it is possible for the Appeal Tribunal to fix the costs.  Hence under section 107(1) of the QCAT Act, I must do so.
  2. [63]
    The costs award is for costs incurred in conducting the proceeding after the offer of 3 August 2017 was made.  In the light of the clear words of rule 86, I do not agree with submissions made on behalf of Owltown that costs should start a few days afterwards.[54] 
  3. [64]
    In its earlier submissions, Owltown questioned some parts of the costs claimed by the second respondents and I have taken this into account.[55]
  4. [65]
    Despite certain references in the submissions to attempts to compromise the costs now applied for,[56] I have seen no compromise offers which influence me one way or the other on the quantum of costs.
  5. [66]
    Owltown submits that I should go through the work item by item, and not allow some items or greatly reduce others, as the costs lawyers have done in their report.  They say that this would happen on an assessment of costs by the District Court, having regard to the scale of costs.  This may well be correct, but that is not the process that I am undertaking.
  6. [67]
    Instead, it is right to consider whether there are any areas of costs which should be deducted.  I think there are three such areas:
    1. (a)
      It seems to me that some of the work claimed as having been done after the offer of 3 August 2017 was in fact done before that date, and therefore should be deducted having regard to the terms of rule 86(2).  This comes to $1,035. 
    2. (b)
      It seems to me that the work done as a result of winning the appeal from the Appeal Tribunal to the Court of Appeal, for example unwinding the effect of the previous orders of the Appeal Tribunal, cannot be said to be ‘incurred .. in conducting the proceeding’ in the terms of rule 86(2).  The ‘proceeding’ being the appeal from the departmental Adjudicator to the Appeal Tribunal.  This comes to about $1,900.
    3. (c)
      Some costs were incurred by the second respondents engaging a costs assessor, but as referred to above this was unnecessary.  It would be unreasonable to require Owltown to pay for this.  The costs were not just the cost assessor’s bill but also the cost of engaging him and dealing with his report.  It would appear that the overall costs of this was about $1,000.
  7. [68]
    By reason of the above, the costs after 3 August 2017 claimed in the sum of $45,048 should be reduced to $41,113.  All figures are net of GST.
  8. [69]
    I have not deducted the second respondents’ costs of dealing with Owltown’s application for costs after the Appeal Tribunal gave its decision of 4 January 2018.  In this respect the second respondents point out that they did try to avoid those costs by trying to persuade Owltown, and the tribunal, not to deal with Owltown’s application for costs until the Court of Appeal had heard their appeal.[57]  From the evidence I can see that they did everything possible to save these costs being wasted.
  9. [70]
    Counsel’s fees of $5,625 are included in the amount of $41,113.  These fees appear to be reasonable. 
  10. [71]
    The remaining amount is $35,488.  I note that most of this was work done by Mr Kleinschmidt at an hourly rate of $450 as per the costs agreement with his clients.  However some work was done by other fee earners charging less than this and there were also some disbursements which were fixed.
  11. [72]
    The question arises whether it would be reasonable to require Owltown to pay the second respondents’ costs based on this hourly rate.  It is significant that had the costs been assessed by the District Court the hourly rate would be more like $240 per hour before 24 August 2018 and $300 per hour after that date both being net of GST.[58]  Having regard to the fact that a somewhat greater amount of costs are claimed as having been incurred after this date it seems reasonable to take an overall rate of $280 per hour. 
  12. [73]
    This is however, without any uplift for general care and conduct.  Owltown submit that any such uplift should be limited to 15% instead of 25% which might be claimed.[59]  I need to take an overall view of the bills.  Although most of the work which was done appears to be reasonable, it cannot be said that costs were kept to a minimum.  In the circumstances, and taking into account that there were some fixed disbursements which will be affected by the calculation I am about to make, I think it is reasonable to take an overall hourly rate of $315 instead of $450 as charged.  This means that the solicitors’ costs of $35,488 should be reduced to $24,842.
  13. [74]
    Adding back counsel’s fees of $5,625 means that the reasonable and appropriate costs after the offer of 3 August 2017 are fixed at $30,467 which I shall round to $30,500.  Both sides seem to agree that GST should not be added to this amount.

Conclusion

  1. [75]
    Owltown Pty Ltd shall pay to JM Family Holdings Pty Ltd as trustee and Berridge Enterprises Pty Ltd as trustee their reasonable costs in conducting the proceeding APL005-17 which were incurred after 3 August 2017.
  2. [76]
    The aforesaid costs are fixed at $30,500 net of GST.

Footnotes

[1]Norwinn Commercial [2016] QBCCMCmr 537.

[2]Owltown Pty Ltd v Norwinn Commercial [2018] QCATA 2.

[3]Owltown Pty Ltd v Norwinn Commercial (No 3) [2018] QCATA 94.

[4]JM Family Holdings Pty Ltd & Anor v Owltown Pty Ltd & Anor [2018] QCA 260, delivered on 9 October 2018.

[5]Exhibit 57 to the affidavit of Michael Kleinschmidt made on 22 July 2020.

[6]Exhibit 58 to the affidavit of Michael Kleinschmidt made on 22 July 2020.

[7]Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), section 100.

[8]Section 102.

[9]Section 102(3).

[10]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 (Justice Alan Wilson).

[11]Body Corporate and Community Management Act 1997 (Qld), section 4(i).

[12]Chapter 6 of the Act.

[13]Section 289 of the Act.

[14]Section 77(3)(h) of the Queensland Building and Construction Commission Act 1991 (Qld) (QBBC Act) provides that the tribunal ‘may award costs’ in such cases, which means that the approach will be similar to that in the mainstream courts: Lyons v Dreamstarter Pty Ltd [2012] QCATA 71 (Justice Alan Wilson, President).

[15]Where the tribunal must make a costs order against a person who has engaged in certain prescribed conduct unless exceptional circumstances exist: section 462 of the Legal Profession Act 2007 (Qld).

[16]Where each party is to bear their own costs unless there are exceptional circumstances: section 127(1) of the Guardianship and Administration Act 2000 (Qld).

[17]Where costs will normally follow the event: section 125 of the Powers of Attorney Act 1998 (Qld).

[18]Where the tribunal may order the engineer to pay the reasonable costs of the investigation and preparing for the proceeding: section 131 of the Professional Engineers Act 2002 (Qld).

[19]Where the tribunal may order the teacher to pay the costs of the investigation and in the proceedings: section 160(2)(f) of the Education (Queensland College of Teachers) Act 2005 (Qld).

[20]Williams v Body Corporate for Circle on Cavill CTS 39918 [2013] QCATA 39; Toivanen & Anor v Body Corporate for Aspect Caloundra CTS 35499 [2014] QCATA 283; Thompson v Body Corporate for Arila Lodge (No 2) [2018] QCATA 133 and Campbell v The Body Corporate for 70 Bowen St CTS 15330 & Ors (costs) [2020] QCATA 26.

[21]Exhibit MGZ-2 to the affidavit of Michael Zande made on 13 February 2020.

[22]This was the amount claimed on the standard basis after Owltown originally won the appeal – exhibit MJK 25 to the affidavit of Michael Kleinschmidt made on 26 September 2019.

[23]Paragraph 27 of submissions filed on 3 October 2019.

[24]Owltown Pty Ltd v Norwinn Commercial (No 3) [2018] QCATA 94, [18].

[25]Body Corporate for ‘Padstow Place CTS 46532’ & Anor v AJHJ Property Nominee Pty Ltd [2016] QCAT 481 (Member Deane); McGee v Queensland Building and Construction Commission & Anor [2018] QCATA 124 (Senior Member Brown and Member Traves); Annandale Pharmacies (NQ) Pty Ltd v The Angliss Estate (Annandale) Pty Ltd (No. 2) [2019] QCAT 62 (Senior Member Brown and Members Judge and McBryde); Samimi v Queensland Building Services Authority [2012] QCAT 133 (Member Fitzpatrick), approved in Turner v Macrossan & Amiet Pty Ltd (No 2) [2016] QCAT 255 (Justice Carmody).

[26]Paragraphs 28 and 29 of the submissions filed on 3 October 2019.

[27]Paragraph 32 of the submissions filed on 3 October 2019.

[28]Exhibit MJK2 to the affidavit of Michael John Kleinschmidt made on 26 September 2019.

[29]A ‘Calderbank’ offer.

[30]Rule 86(3).

[31]Paragraph 31 of the submissions filed on 3 October 2019.

[32]McGee, [41].

[33]McGee, [42].

[34]See for example, Northpine (Aust) Pty Ltd v Queensland Building and Construction Commission [2014] QCAT 579; Taouk v Queensland Building and Construction Commission [No.2] [2014] QCAT 16; Arcon Constructions Pty Ltd v Queensland Building Services Authority [2013] QCAT 573; Whalley v Queensland Building and Construction Commission (No 2) [2017] QCAT 188; CMG Homes Pty Ltd v Queensland Building and Construction Commission [2019] QCAT 294; and Richards & Anor v Queensland Building and Construction Commission & Anor (No 2) [2019] QCAT 372.

[35]Section 4(b).

[36]Affidavit of Michael John Kleinschmidt made on 26 September 2019, paragraph 53.

[37]Filed on 13 June 2017.

[38]Paragraphs 24 and 25 of submissions received on 14 February 2020.

[39][43].

[40]UCPR rule 355.  The UCPR does not directly apply to the tribunal, however.

[41]Paragraph 28 of submissions received on 14 February 2020.

[42]Paragraph 47(a) to (c) of submissions received on 14 February 2020.

[43]Rule 86(2).  The subrule empowers the tribunal to award all reasonable costs incurred by the party making the offer after the offer was made.

[44]Paragraph 26 of his affidavit made on 22 July 2020.

[45]Lyons v Dreamstarter Pty Ltd [2012] QCATA 71, [24].

[46]McGee v Queensland Building and Construction Commission & Anor [2018] QCATA 124, [64] (Senior Member Brown and Member Traves).  

[47]Email of 13 July 2020 and submissions of 21 July 2020. 

[48]Paragraph 3 and 11 of submissions of 21 August 2020.

[49]Paragraph 3 of submissions of 21 July 2020.

[50]Paragraph 4 of submissions of 21 July 2020.

[51]Paragraph 5 of submissions of 21 July 2020.

[52]Paragraph 13 of submissions of 21 August 2020.

[53]Paragraphs 35 and 67 of submissions filed on 26 September 2019; paragraph 8 of submissions filed on 24 July 2020.

[54]Paragraph 23 of submissions received on 14 February 2020.

[55]Paragraph 47(m) to (o) of submissions filed on 14 February 2020.

[56]For example, paragraphs 50 to 54 of submissions filed on 14 February 2020.

[57]Paragraph 32 of submissions.

[58]The same rate applies in respect of the costs incurred in 2020.  It should be noted that the hourly rate in the scales includes GST and that the hourly rate for perusal of documents and preparing documents is less than attendance at court.

[59]I take into account Practice Direction 22 of 2018 which has been referred to by the parties.

Close

Editorial Notes

  • Published Case Name:

    Owltown Pty Ltd v Norwinn Commercial (costs)

  • Shortened Case Name:

    Owltown Pty Ltd v Norwinn Commercial

  • MNC:

    [2020] QCATA 145

  • Court:

    QCATA

  • Judge(s):

    Member Gordon

  • Date:

    14 Oct 2020

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
Annandale Pharmacies (NQ) Pty Ltd v The Angliss Estate (Annandale) Pty Ltd (No. 2) [2019] QCAT 62
1 citation
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Cite 1 - [2019] QCAT 62
Arcon Constructions Pty Ltd v Queensland Building Services Authority [2013] QCAT 573
3 citations
Jump To
Cite 1 - [2013] QCAT 573
Cite 2 - [2013] QCAT 573
Cite 3 - [2013] QCAT 573
Body Corporate for ‘Padstow Place CTS 46532' v AJHJ Property Nominee Pty Ltd [2016] QCAT 481
1 citation
Jump To
Cite 1 - [2016] QCAT 481
Campbell v The Body Corporate for 70 Bowen St CTS 15330 (costs) [2020] QCATA 26
1 citation
Jump To
Cite 1 - [2020] QCATA 26
CMG Homes Pty Ltd v Queensland Building and Construction Commission [2019] QCAT 294
1 citation
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Cite 1 - [2019] QCAT 294
Coming Home Pty Ltd ATF The Coming Home Trust v Body Corporate for Sunnybank Close [2014] QCAT 110
1 citation
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Cite 1 - [2014] QCAT 110
Hyndman v Queensland Building Services Authority [2010] QCAT 338
2 citations
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Cite 1 - [2010] QCAT 338
Cite 2 - [2010] QCAT 338
JM Family Holdings Pty Ltd v Owltown Pty Ltd[2019] 3 Qd R 18; [2018] QCA 260
2 citations
Jump To
Cite 1 - [2018] QCA 260
Cite 2 - [2018] QCA 260
Legal Services Commissioner v McQuaid(2019) 1 QR 499; [2019] QCA 136
2 citations
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Cite 1 - [2019] QCA 136
Cite 2 - [2019] QCA 136
Lyons v Dreamstarter Pty Ltd [2012] QCATA 71
2 citations
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Cite 1 - [2012] QCATA 71
Cite 2 - [2012] QCATA 71
McGee v Queensland Building and Construction Commission [2018] QCATA 124
7 citations
Jump To
Cite 1 - [2018] QCATA 124
Cite 2 - [2018] QCATA 124
Cite 3 - [2018] QCATA 124
Cite 4 - [2018] QCATA 124
Cite 5 - [2018] QCATA 124
Cite 6 - [2018] QCATA 124
Cite 7 - [2018] QCATA 124
Mt Cotton Constructions Pty Ltd v Greer (No 2) [2017] QCAT 98
2 citations
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Cite 1 - [2017] QCAT 98
Cite 2 - [2017] QCAT 98
Neverfail Pty Ltd as Trustee for The Harris Siksna Family Trust v Radford (No. 2) [2017] QCATA 73
2 citations
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Cite 1 - [2017] QCATA 73
Cite 2 - [2017] QCATA 73
Northpine (Aust) Pty Ltd v Queensland Building and Construction Commission [2014] QCAT 579
1 citation
Jump To
Cite 1 - [2014] QCAT 579
Owltown Pty Ltd v Norwinn Commercial [2016] QBCCMCmr 537
2 citations
Jump To
Cite 1 - [2016] QBCCMCmr 537
Cite 2 - [2016] QBCCMCmr 537
Owltown Pty Ltd v Norwinn Commercial (No 3) [2018] QCATA 94
3 citations
Jump To
Cite 1 - [2018] QCATA 94
Cite 2 - [2018] QCATA 94
Cite 3 - [2018] QCATA 94
Owltown Pty Ltd v Norwinn Commercial CTS38094 [2018] QCATA 2
2 citations
Jump To
Cite 1 - [2018] QCATA 2
Cite 2 - [2018] QCATA 2
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
Richards v Queensland Building and Construction Commission (No 2) [2019] QCAT 372
1 citation
Jump To
Cite 1 - [2019] QCAT 372
Samimi v Queensland Building Services Authority [2012] QCAT 133
1 citation
Jump To
Cite 1 - [2012] QCAT 133
Tamawood Ltd v Paans[2005] 2 Qd R 101; [2005] QCA 111
2 citations
Jump To
Cite 1 - [2005] QCA 111
Cite 2 - [2005] QCA 111
Taouk v Queensland Building and Construction Commission [No.2] [2014] QCAT 16
1 citation
Jump To
Cite 1 - [2014] QCAT 16
Thompson v Body Corporate for Arila Lodge [2018] QCATA 133
1 citation
Jump To
Cite 1 - [2018] QCATA 133
Toivanen & Anor v Body Corporate for Aspect Caloundra CTS 35499 [2014] QCATA 283
1 citation
Jump To
Cite 1 - [2014] QCATA 283
Turner v Macrossan & Amiet Pty Ltd (No 2) [2016] QCAT 255
1 citation
Jump To
Cite 1 - [2016] QCAT 255
Urban Homes Pty Ltd v Queensland Building and Construction Commission [2016] QCAT 433
1 citation
Jump To
Cite 1 - [2016] QCAT 433
Whalley v Queensland Building and Construction Commission (No 2) [2017] QCAT 188
1 citation
Jump To
Cite 1 - [2017] QCAT 188
Williams v Body Corporate for Circle on Cavill CTS 39918 [2013] QCATA 39
1 citation
Jump To
Cite 1 - [2013] QCATA 39

Cases Citing

Case NameFull CitationFrequency
Holgar v Chief Executive, Department of Justice and Attorney-General [2022] QCATA 272 citations
Miles v Queensland Building and Construction Commission [2025] QCATA 602 citations
Monsour v C & R Darvill Pty Ltd [2023] QCAT 622 citations
1

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