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Cowen v Queensland Building and Construction Commission[2021] QCATA 103

Cowen v Queensland Building and Construction Commission[2021] QCATA 103

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Cowen v Queensland Building and Construction Commission [2021] QCATA 103

PARTIES:

peter cowEn and jan cowEn

(applicants/appellants)

v

Queensland building and construction commission

(respondent)

APPLICATION NO/S:

APL340-18

ORIGINATING

APPLICATION NO/S:

GAR044-15, GAR113-16

MATTER TYPE:

Appeals

DELIVERED ON:

7 September 2021

HEARING DATE:

23 July 2021

HEARD AT:

Brisbane

DECISION OF:

Judicial Member D J McGill SC

ORDERS:

  1. Grant leave to appeal from the decision of the Tribunal of 7 November 2018 in these matters. 
  2. Refuse the appellants leave to rely on fresh evidence on the appeal.
  3. Order that the order in the proceeding GAR044-15, that each party bear its own costs, be set aside.
  4. Order that the respondent Queensland Building and Construction Commission pay the costs of the appellants Peter Cowen and Jan Cowen of and incidental to the proceeding GAR044-15, to include the costs of their application for costs, and of evidence, hearings, directions hearings, conferences and other matters which were in common with the proceeding GAR113-16.
  5. Order that the costs, if not agreed, be assessed under the Queensland Civil and Administrative Tribunal Rules 2009 r 87, on the standard basis on the District Court scale, by a costs assessor appointed by the Registrar of the Tribunal. 
  6. Order that the respondent pay the appellants’ filing fees for the application for leave to appeal. 

CATCHWORDS:

ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – costs – nature of proceedings – test for costs order – whether order in the interest of justice – costs order made.

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

Campbell v Queensland Building and Construction Commission [2021] QCATA 34

Chandra v Queensland Building and Construction Commission [2014] QCA 335

Crime and Corruption Commission v Lee [2019] QCATA 38

Lyons v Queensland Building and Construction Commission [2016] QCAT 218

Marzini v Health Ombudsman (No 4) [2020] QCAT 365

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

Perkins v Queensland Building and Construction Commission [2018] QCAT 15

Schneider v Queensland Building and Construction Commission [2021] QCA 155

Tamawood Ltd v Paans [2005] 2 Qd R 101

APPEARANCES &

REPRESENTATION:

 

Applicants:

Self-represented

Respondent:

R Ensby of Gadens Lawyers

REASONS FOR DECISION

  1. [1]
    This is an application for leave to appeal from a decision in relation to the costs of two proceedings in the Tribunal.  The appellants sought to review the decision of the respondent to disallow their claim on the statutory insurance in relation to certain building work, and, later, to review the decision of the respondent not to issue a direction to rectify to the builder.  Those matters were both decided by a Member on 27 November 2017.  The appellants subsequently sought their costs from the respondent.[1]  Following a further hearing before the same Member, on 7 November 2018 she ordered that each party bear its own costs in both proceedings. 
  2. [2]
    Under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“the QCAT Act”) s 142(3)(a)(iii), the appellants require leave of the Appeal Tribunal to appeal against an order for costs.  A decision on costs involves the exercise of a discretion, so that an appeal against a costs order needs to establish an error in the exercise of the discretion.  The effect of a requirement for leave is that it imposes a further filter on such appeals, so that the Appeal Tribunal will not readily interfere with such a decision, and requires strong reasons to do so.[2]  For convenience, the merits of the appeal were argued on the hearing of the application for leave. 

Background

  1. [3]
    The appellants entered into a contract with a builder, Hinterland Construction Pty Ltd, on 18 February 2013 to have some renovation work done at their home.[3]  Work started in January 2014.  In due course the relationship between the parties deteriorated, and on 1 October 2014 the builder suspended work, alleging that the appellants were interfering with workplace health and safety procedures.  On 13 November 2014, the appellants by their lawyers terminated the building contract. 
  2. [4]
    The appellants complained to the respondent, and claimed assistance under the statutory insurance scheme for defective and incomplete building work by the builder.[4]  On 22 December 2014, the respondent rejected the claim on the ground that the building contract had not been properly terminated.  This decision was the subject of the first review proceeding.[5]  The respondent also declined to issue any direction to the builder to rectify any defective or incomplete work.  This decision was the subject of the second review proceeding.  Each review was a full merits review, decided on all the material before the Tribunal.  The Tribunal was not bound by the rules of evidence, but was to observe the rules of natural justice.
  3. [5]
    It is relevant that on 13 April 2015, at the first directions hearing, both parties in the first review were given leave to be legally represented.[6]  The builder was joined as a party to the first review on 3 June 2015, in a direction by consent.[7]  A compulsory conference was held on 15 July 2015, but the matter was not resolved.  The first review came on for hearing on 8 February 2016.  After four days the hearing was adjourned by consent, to be resumed in a hearing together with the second review.  The direction that the proceedings be heard together was made on 14 September 2016, when the builder was joined as a respondent to the second review, and a direction was given for an on-site compulsory conference on 25 November 2016, when again the matters were not resolved.  On 3 February 2017 the parties were given leave to be legally represented in all proceedings,[8] and a further compulsory conference was set down for 6 February 2017.  This conference achieved some narrowing of the issues, since directions were given for an amended Scott Schedule, omitting a number of matters previously the subject of complaint. 
  4. [6]
    The hearing resumed on 13 February 2017, and ran for eight days.  The reserved decision was delivered on 27 November 2017.  The first decision was set aside, and the Tribunal substituted a decision that the claim be accepted, having found that the appellants had validly terminated the contract.  The reasons of the Member record that the parties agreed that the issue in the first review was whether the appellants lawfully terminated the contract.  That was resolved in favour of the appellants.  The Tribunal rejected the builder’s argument that the appellants were interfering with the conduct of the work and with the health and safety requirements, found that its suspension of the work was not valid and amounted to repudiation of the contract, and that the appellants were entitled to terminate, and had done so validly. 
  5. [7]
    The parties agreed that the issue in the second review was whether there was defective or incomplete work in any of the respects alleged, and if so, whether a direction to rectify should issue.  The power to issue a direction to rectify is discretionary.[9] In the second review, the Member considered only the 14 items of work the subject of submissions on behalf of the appellants, on the basis that these were the only ones pressed by them. In effect, the other 24 items were abandoned in submissions following the hearing, and the decision of the respondent was confirmed in relation to those items.  Of the 14 items, the Tribunal found 9 to be defective work, confirmed the decision not to issue a direction to rectify in respect of the other 5, and referred the 9 back to the respondent for reconsideration, because the builder had not been given a proper opportunity to rectify them previously. 

The decision on costs

  1. [8]
    The Member discussed the provisions of the QCAT Act s 100 and 102, and two authorities on their operation, Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 and Stuart v Queensland Building and Construction Commission [2016] QCATA 135; she also referred to and quoted from the judgment of Keane JA in Tamawood Ltd v Paans [2005] 2 Qd R 101.  She addressed the factors listed in s 102(3) of the QCAT Act, and rejected submissions that the respondent in the proceedings had unnecessarily disadvantaged the appellants, and been partisan in the proceedings in favour of the builder, noting that the builder was not legally represented.  She accepted that the proceedings were legally and factually complex, and that legal representation was appropriate.  She said something about the relative strength of the cases, and gave the respondent credit for raising jurisdictional issues which had narrowed the scope of the dispute.  She was critical of the attitude of the appellants in not allowing the builder onto the site in order to rectify defects. 
  2. [9]
    As to the financial circumstances of the parties, the Member said the appellants were retirees, but that in itself said little about their financial circumstances.  The respondent is a statutory body, funded by fees paid by licensees and by premiums, and the Member declined to find that there would be no hardship to it if ordered to pay the appellants’ costs: [34].  The review of the insurance claim decision depended on the resolution of disputed facts, and there was extensive expert evidence in the other review.  The Member considered and distinguished the decision in Lyons v Queensland Building and Construction Commission [2016] QCAT 218, although she accepted that the appellants’ costs would be significant, and that they had been put to significant inconvenience by reason of the failure to complete the work. 
  3. [10]
    The Member was not satisfied that the appellants were the successful party in the proceedings, presumably the proceedings overall.  She noted that other submissions of the appellants had been rejected, and said that she was not satisfied that in all the circumstances the interests of justice favoured the award of costs in their favour.  She ordered that each party bear their own costs. 

The appellants’ submissions

  1. [11]
    The grounds of appeal set out in the initial application for leave to appeal were three pages long, and give the appearance of having been prepared with some legal assistance.  The appellants later substituted more concise grounds, they say at the insistence of the Tribunal, in the following more general terms:
    1. (a)
      The Tribunal erred in not finding that the interests of justice require that the respondent pay the costs of the appellants.
    2. (b)
      The Tribunal erred in not finding that the respondent treated the appellants unfairly.
    3. (c)
      The Tribunal erred in not finding that the respondent should have determined that the insurance application was valid.
    4. (d)
      The Tribunal erred in finding that the appellants did not genuinely help the respondent to make a decision.
    5. (e)
      The Tribunal erred in finding that the appellants were not successful. 
  2. [12]
    In each case, the ground of appeal was particularised by reference to the earlier grounds of appeal, and certain parts of the submissions in writing filed by the appellants.   The appellants also applied to put before the Tribunal on the appeal additional evidence, identified in an application filed 1 October 2019, with submissions as to why it was not available to the Tribunal at the costs hearing, why it is important and why it should be accepted.  The respondent filed on 16 December 2020 submissions in response which ran to 76 pages, and the appellants on 13 May 2021 filed submissions in reply which ran to 170 pages.  The appeal was initially listed for hearing on 12 July 2021, but was adjourned to 23 July because the solicitor for the respondent became unavailable at short notice for personal reasons. 

Denial of natural justice?

  1. [13]
    One matter raised by the appellants should be dealt with as a preliminary matter.  They say they had been denied natural justice because a hearing occurred in relation to their application for costs on 4 June 2018, of which they had not received notice.  They had retained a solicitor who had briefed counsel to prepare written submissions on costs, and in April 2018 the appellants went overseas for about three months.  While overseas they were largely out of communication.  At the time they left, they did not know that there was to be an oral hearing, and they say they did not appear in person, or instruct lawyers to appear for them at the hearing. 
  2. [14]
    A direction on the file on 14 May 2018 listed the matter for an oral hearing on 4 June 2018, and notice of that oral hearing was sent to the solicitors for the appellants on 18 May 2018, that being their address for service.[10]  The solicitor in fact appeared at the oral hearing on 4 June, with the counsel who had been acting for the appellants, including at the substantive hearing, although the appellants say they knew nothing about this, and had not instructed them to appear.  They are unhappy with the way they argued the matter.  It is clear from the transcript of that hearing that they did make submissions, and subsequently filed short written submissions, and an affidavit by the solicitor. 
  3. [15]
    The principles of natural justice include the right to be heard, although there is not necessarily a breach just because a party has not in fact been heard.  The test is whether the party has been given a reasonable opportunity to be heard, and the issue is whether that was the situation with this hearing.  Although a solicitor and counsel appeared and sought to protect the appellants’ interest, if they had no instructions to appear, I consider that this would not count as an appearance by the appellants.  Ordinarily if notice of a hearing is given to the address for service the party has been given a reasonable opportunity to be heard, but it all depends on the circumstances. 
  4. [16]
    In this case, the hearing was set down for a date which was within the period where the appellants were overseas and essentially incommunicado, something known to both the Tribunal and the respondent.[11]  They say that at the time they left they had no reason to expect an oral hearing.  On 12 February 2018, a direction was made that, unless either party requested an oral hearing, the application for costs would be determined on the papers not before 4 pm on 3 April 2018, the day after the deadline for the appellants to file and serve any final written submissions in reply.  It appears that the respondent first sought an oral hearing by email to the Tribunal on 4 April 2018.[12]  This was advised to the solicitors for the appellants the same day.[13]  The solicitor who had been handling the substantive matter for the appellants had left the firm in December 2017, and the file had been passed to another solicitor not previously involved in the matter.  The email from the respondent’s solicitor was sent to the new solicitor. As at 4 April, the appellants were still at home. 
  5. [17]
    During the hearing of the appeal, the appellants waived legal professional privilege so as to enable the issue of their knowledge, and whether they had given instructions to the solicitor and barrister, to be investigated.  As a result, the solicitor provided copies of relevant communications, and his account of the sequence of events.[14]  In December 2018 the then solicitor for the appellants had asked whether they were to continue with an application for costs, and providing an estimate for the costs of drafting the submissions, and “a short appearance at QCAT if required.”[15]  The appellants said that there was a telephone call to say that the submissions should be prepared by the barrister,[16] and Mr Cowen sent an email to the solicitor saying that “we wish you to proceed with the costs submissions on our behalf.”[17]  Nothing was said about any appearance at a possible hearing.  An application for costs, and submissions in support, were prepared by the solicitor and barrister and filed. 
  6. [18]
    It appears from a note on the Tribunal file that the respondent did not file its written submissions on costs until 5 April 2018, some seventeen days late.  There was an exchange of emails between the solicitors and the appellants about the submissions, and the appellants provided detailed instructions about factual matters for the submissions in reply.[18]  There was also a phone call about the costs application on 24 April 2018.  The appellants left for overseas on 25 April.  The submissions in reply, prepared by the lawyers for the appellants, were filed on 8 May 2018.  The same day, the solicitor sent an email to the appellants, attaching a copy, and advising that the barrister had incorporated a number of their points, but that a lot of the appellants’ points were factual assertions which would have to be put on oath.[19]  He continued: “As previously discussed the QBCC are requesting an oral hearing so when you get back we will just need to do up a sworn statement from you addressing those points in your submissions … .”
  7. [19]
    The appellants dispute that they were advised that an oral hearing was requested before they left,[20] but this fairly contemporary email indicates that the solicitor had mentioned this, presumably in the phone call on 24 April.  His expectation appears to have been that any hearing would occur after they returned from overseas.  It does seem that the oral hearing on 4 June was brought on on unusually short notice.  Notice of the listing was sent to the solicitors on 18 May, but was directed to the former solicitor; it did not come to the attention of the new solicitor until about 29 May, when he sent an email to the appellants advising of the listing, and saying they would appear, as they did.[21]  Nothing more was said about the statement on oath. 
  8. [20]
    At the oral hearing on 4 June 2018, the appellants were given the opportunity to file further written submissions that day, with the respondent having two days to reply.  It appears that such further written submissions were filed as required, and an affidavit of the solicitor for the appellants dated 4 June 2018 was filed.  On 7 June 2018 the appellants were directed to file an application for leave to rely on that affidavit, or confirm in writing that it was not relied on, within seven days.  If such an application were filed, the matter was to be listed for a further oral hearing; otherwise the Tribunal would proceed to decide the application for costs. 
  9. [21]
    No such application was filed within that limited time, although the reasons indicate that one was filed on 13 July 2018, after the appellants had returned from overseas and discovered what had happened.[22]  The Member did proceed to decide the application for costs, on 7 November 2018.  Reference was made at [12] to the written submissions filed on 20 February 2018, on 8 May 2018, and on 4 June 2018, and to the affidavit of the solicitor,[23] and at [24] to the oral submissions at the hearing of counsel who had acted in the matter previously, and in general terms to the parties written submissions. 
  10. [22]
    I consider that the retainer of the solicitor in relation to the costs application was wide enough to include the appearance at the oral hearing.  The email of 7 December 2017 foreshadowed this as a possibility, and although the email from the appellants of that day made no express reference to such an appearance, there was no exclusion of any such appearance from the instructions to proceed, and no subsequent indication of any express exclusion of it from the retainer.  I consider that in effect the solicitors were retained generally in relation to the application for costs.  Hence their appearance at the oral hearing was within the retainer, and it follows that there was no breach of the rules of natural justice. 
  11. [23]
    I also consider that the appellants were told that an oral hearing had been requested by the respondent before they went overseas, because of the terms of the email from the solicitor of 8 May, but that, because of the solicitor’s expectation that any hearing would occur after they returned, no particular concern was expressed about this at the time, or emphasis placed on it.  The appellants would have had a lot on their mind at that time, and could easily have forgotten that part of the conversation. 

Leave to Appeal

  1. [24]
    An appeal against the exercise of a discretion will only succeed if there had been some error of principle, a failure to consider relevant matters, a consideration of irrelevant matters, or some other manifest mistake.[24]  As a general proposition, when leave to appeal to the Appeal Tribunal is required, it will be granted only where there is a reasonable argument that the decision was attended by error, and an appeal is necessary to correct a substantial injustice caused by that error, or where the appeal raises a question of general importance upon which further argument and a decision of the appellate court or tribunal would be to the public advantage.[25]  When leave is sought to appeal against a decision on costs, it is necessary to apply this to the limited basis on which an exercise of discretion can be challenged on appeal, and in a context which recognises the advantage the decision maker at first instance had in familiarity with the circumstances of the whole matter. 

Costs in QCAT

  1. [25]
    I have previously, in Marzini v Health Ombudsman (No 4) [2020] QCAT 365, set out my views on the interpretation and application of the QCAT Act s 100 and s 102. I adhere to those views.  There are two particular matters I should mention.  One is that in Marzini I did not particularly discuss the QCAT Act s 105, and Rule 86 of the QCAT Rules, which did not arise in that matter.  The other relates to my comment on the statement of A Wilson J, the then President of the Tribunal, in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 at [28] that the question when a costs order was sought was “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.”  I said that this was curious, as I did not consider that there was any such strong contra-indication in the words of s 100. 
  2. [26]
    In saying that I had overlooked that the heading to that section is part of the Act, and hence relevant to the interpretation of the Act.[26]  Presumably his Honour found the strong contra-indication in the wording of the heading: “Each party usually bears own costs”.  Even so, I consider that it goes a long way to draw that proposition from the expression of a legislative expectation that the application of the terms of the statute will “usually” mean that no order for costs will be made.  The expectation must have been directed to the operation of the Tribunal as a whole.  In any particular case, either there will be an order for costs or there will not, and it is meaningless to talk of the “usual” order in a particular case.[27]  To say that an order for costs will be unusual, in a context where parties are ordinarily not to be legally represented anyway,[28] is not a particularly strong statement.  It was not said, for example, that such an order is to be made only in exceptional circumstances.[29] 
  3. [27]
    Having considered that matter, I remain of the view that the relevant test is that in s 102(1): whether the interests of justice require that order.[30]  As I said in Marzini, the use of the term “require” shows that an order for costs should not be too readily made, and I accept that it may fairly be said that the wording of the heading to s 100 is another indication to the same effect.  In so far as his Honour went further in Ralacom at [29], I consider that his statement cannot confine the discretion conferred on the Tribunal under s 102(1), or modify the test in that section. 

Approach of the Member

  1. [28]
    In this matter the Member cited the passage from Ralacom quoted above, and a passage from Stuart (supra) at [18] which also used the term “compelling”, and said at [11]: “The relevant circumstances of the case before me must be compelling for the starting position [in s 100] to be overcome such that the interests of justice require a costs order to be made in the matter.”  I consider that to say that an order for costs will not be made unless the factors favouring an order are “compelling” does not accurately state the test for making an order for costs laid down by s 102(1).  In my opinion, the Member in this way set the bar too high against the applicants when deciding whether to make an order for costs in this matter.  The test is whether the interests of justice “require” an order for costs, but I do not accept that the circumstances favouring an order for costs must be compelling before that test will be met.  That amounted to an error of principle.  It is covered by the original ground 1 in the application for leave to appeal, and included in ground (a) of the amended grounds of appeal.  

Other matters in the reasons

  1. [29]
    I have some other concerns with the reasons of the Member.  An argument that the respondent was partisan against the appellants was rejected by the Member, who accepted a submission that the appellants had the protection of both their barrister and the Member during what was complained of as significant and lengthy cross-examination: [16].  But whether the respondent was behaving as a partisan depended on the behaviour of the respondent and its lawyers, not on the availability of protection for the appellants.  To focus on that is to focus on the wrong party. 
  2. [30]
    There is however a larger issue here, which was not considered by the Member, who approached the matter as an example of a review of an administrative decision of a regulator at the instance of an affected citizen.  There was another relationship between the appellants and the respondent, because of the existence of the statutory insurance scheme.  The respondent was not just a regulator whose decision was subject to merits review by the Tribunal; it was an insurer under a statutory obligation to the appellants to pay on a valid claim. 
  3. [31]
    The QBCC Act provides for the statutory insurance scheme in Part 5.  Its purpose is “to provide assistance to consumers of residential construction work for loss associated with work that is defective or incomplete”: s 67X(2).  The Scheme was explained by Morrison JA, with whom the other members of the Court agreed, in Schneider v Queensland Building and Construction Commission [2021] QCA 155, and I respectfully adopt what his Honour said.  It is clear that, when cover under the scheme is provided to a consumer under the QBCC Act, the consumer is in a position analogous to that of an insured under a policy of insurance issued by the respondent as insurer.[31]  The terms of cover under the scheme are set out in the Regulation under the QBCC Act.  The Regulation provides relevantly a limit in the amount of the cover available in various circumstances of $200,000. 
  4. [32]
    It follows that there is a relationship of insurer and insured between the appellants and the respondent which was the basis of the first review, which was prompted by the respondent’s decision to reject the claim.  The relevant part of the QBCC Act does not refer to a contract of insurance under the Scheme, possibly because the Scheme provides cover from a time prior to a point when a contract could come into existence, but it provides for a statutory insurance scheme very similar to contractual insurance.  So far as I know, there is nothing stopping owners whose claims are rejected by the Commission from suing the Commission in a court to enforce the statutory entitlement,[32] and if so, and if there is substance in the respondent’s submissions, such owners would be well advised to do so, rather than to seek to review the decision before the Tribunal, because of the more favourable position for costs in a court, if the owners are successful in their challenge. 
  5. [33]
    In these circumstances, I consider it was not appropriate to criticise the respondent for being partisan.  It was appropriate for it to be defending its decision, since failure to do so would result in its liability to the appellants under the scheme.  The builder had an interest in the outcome, because of the existence of a statutory indemnity provided by the QBCC Act s 71, and was therefore properly joined as a party, but in substance this was a fight between an insured and an insurer as to liability under the scheme.[33]  That the respondent was not in the position of an impartial adjudicator between the owners and the builder was confirmed by Morrison JA in Schneider (supra) at [40], where his Honour said that the legislature “cannot have been intended that the QBCC would be required to fill the role of an adjudicator between the owner and contractor when issues of the statutory insurance scheme and policy are concerned.”   To be fair, the statement was made in a different context, involving the state of mind of the parties, but it is consistent with my characterisation of the true nature of the dispute where a claim is rejected by the Commission.
  6. [34]
    It was argued for the respondent that the outcome was the result of the resolution of disputed questions of fact, and after consideration of difficult questions of law, but the respondent in this respect is in the same position as any insurer who decides to reject a claim by an insured under an insurance policy.  Since there is a contractual right to claim under a policy, the insurer knows that any rejection of a claim may have to be defended in a court.  No doubt all insurers take that into account when deciding whether to reject claims.  This is not a reason to excuse the respondent having in this matter made the wrong decision.  It was a matter for the respondent to decide to what extent to investigate the claim before deciding whether or not to accept it.  This also means that there was a significant commercial element in the first review. In this respect, it differed from the second review, which related to a decision of the respondent strictly as a regulator, standing as an adjudicator between the owner and the builder.  
  7. [35]
    The Member at [20] said that it was appropriate for the respondent, “in its duty to assist the Tribunal, to address in detail the relevant considerations that might be advanced by the second respondent builder in circumstances where the builder was self-represented … .”  Yet in the substantive decision the Member had correctly identified the position of the respondent as submitting that the contract had not been validly terminated, and had raised a number of arguments in favour of that submission.[34]  As I say, I consider the respondent was entitled to resist the claim, and cannot be criticised for defending its position, even though my impression is that its defence was positively Churchillian. 
  8. [36]
    This brings me to another aspect of the Member’s reasons which strikes me as unsatisfactory.  At [27], after noting that a number of the items remaining in the Scott Schedule were not the subject of submissions on behalf of the appellants, the Member said that there were “also a number of items of building work that were included in the [appellants’] final written submissions that the Tribunal found were items of building work that fell outside of the Scott Schedule and do not form part of the review proceedings because the parties have not been given an opportunity to present evidence and respond to the issue in relation to those items.”  This appears to be a reference to what was said in paragraph [253] of the reasons for the substantive decision, in similar terms, specifically in relation to the second review.  This misrepresented the effect of the written submissions on behalf of the appellants in the substantive proceedings, which I have looked at. 
  9. [37]
    The appellants’ case was that they had validly terminated the contract, either under clause 20 of the contract, or at common law.  In relation to both, one of the things the appellants relied on was the failure of the builder to complete the works in a workmanlike and diligent manner.  In relation to common law repudiation, the appellants relied on the considerable delay in carrying out the work, the suspension of the work, that the work had not been carried out in a diligent and workmanlike manner, and that the builder did not carry out the work in accordance with the contract, by not constructing the slab and footings to class 1 standard, not complying with the approved development conditions, and claiming payment not in accordance with the stages in the contract.  The argument about defective or incorrect work was developed in paragraphs 128 to 177 of the submissions.  Essentially the same matters were relied on in support of the argument for termination under clause 20.  Most of the matters relied on to show that the works were not completed in a workmanlike manner were covered by the Scott Schedule items argued, which included not constructing as required by the contract in some cases.  The matters raised in paragraphs 159 to 162, and in paragraphs 172 to 177, were not covered by the Scott Schedule, and were instances of failure to comply with the contract, not providing certification, and defects which had been rectified by the builder, such as exposed electrical wires, the defective design of the driveway, and defects in the workplace health and safety arrangements. 
  10. [38]
    The function of the Scott Schedule was (at least initially) to identify the scope of the alleged defects the subject of the second review.[35]  Further, as the Member noted at [28], there were jurisdictional issues which resulted in a cull of the items in the Scott Schedule shortly before the hearing, which I was told was on the basis that some alleged defects were not the subject of a decision by the respondent not to issue a direction to rectify.  But the Scott Schedule and this point were not relevant to the first review, because in view of the structure of the appellants’ case in that review, any and all inadequacy in the work of the builder was relevant to the issues of whether the conduct of the builder overall evinced an intention to repudiate the building contract, and whether it was reasonable for the appellants to terminate the contract under the terms of the contract. 
  11. [39]
    The matter was complicated however by a further direction given at a very late stage that the matters relied on as defective work for the purposes of both reviews were those set out in the Scott Schedule.[36]  That strikes me as an odd direction.  Logically, defects relevant to the second review were a much more limited category than all examples of unsatisfactory work by the builder, which could be properly relied on for the purposes of the first review.  For example, in submissions in relation to the first review, the appellants relied on example of unsatisfactory work which had subsequently been rectified by the builder.[37]   There is no obvious reason to narrow the scope of the first review in this way, and it appears that the appellants’ lawyers did not in fact heed it, but the Member referred to and relied on this limitation in the substantive decision: [16].  
  12. [40]
    The structure of the submissions for the appellants in the substantive matter was to address the various aspects of the unsatisfactory work which were relied on in support of the arguments that that the builder had repudiated the contract, and that it was reasonable to terminate, as part of the submissions in relation to the first review.  At the end, the submissions for the second review simply listed the items in the Scott Schedule on which submissions were made, and relied on what had been said about those matters earlier, in the submissions for the first review.  There were no submissions, in relation to the second review, which went outside the Scott Schedule.  In so far as the Member proceeded, for the purposes of costs, on the basis that the appellants had made submissions in relation to the second review which went outside the Scott Schedule, that was incorrect.  I am concerned that this error affected the costs decision. 
  13. [41]
    There is another aspect to this.  The respondent submitted that most of the time at the hearing of the substantive matter was concerned with issues about the defects, which were relevant to the second review.  If that was based on the notion that evidence about defects was relevant only to the second review, that was not correct.  It follows from the analysis of the appellants’ case I have set out that all of the evidence about defects was relevant to both reviews, except for evidence about those examples of defective work which were only relevant to the first review.  The hearing would have covered just as much ground, and taken just as long, if the second review had not been involved at all. 
  14. [42]
    There was a further matter.  The Member at [32] appears to have accepted the respondent’s submission that the appellants, by refusing to allow the builder to return to the site after the contract was terminated unless a direction to rectify had been given, had not genuinely attempted to enable and help the Commission decision maker to make a decision on the merits.  That does not make sense to me.  It may be that, if the appellants had allowed the builder to return to fix the defects, and if it had done so,[38] part of the case would have gone away, but the omission to do this did not interfere with the ability of the respondent to make a decision, indeed, in respect of some matters, to make the same decision as the Tribunal made.  This seems to have been treated by the Member as a factor against the making of an order for costs, and I do not consider that it can be.  Section 102(3)(d)(ii) talks about assistance to “the decision-maker”; it does not talk about assistance to the builder. 
  15. [43]
    The Member’s analysis also overlooked the fact that, after the substantive decision, when the builder was given an opportunity to rectify the matters found by the Tribunal to have been defective, it did not do so.  That follows from the fact that in  or before March 2018 the respondent did finally issue a direction to rectify, a matter which was before the Member.[39]   The builder responded to the direction by going into liquidation.[40]  In those circumstances, it can be seen that giving the builder the opportunity to rectify any defects was a waste of time.  Perhaps the Member was not willing to recognise that, with the benefit of hindsight, the substantive decision to allow the builder the opportunity itself to rectify the defects was wrong.  
  16. [44]
    Further, at [26] the Member rejected the submission that the respondent should have been able to determine that the contract had been properly terminated from the suspension issue alone.  Yet the Member in the substantive decision found that the builder’s continuation of the suspension after 11 November 2014 amounted to repudiation of the contract by the builder, and the appellants were entitled to accept the repudiation and terminate the contract: [133].  It is true that to some extent this conclusion was based on the rejection of the builder’s evidence about the various matters relied on by it to justify the suspension, but the main justification for continuing the suspension seems to have been that the builder had sought to have some dispute determined by the respondent: [131]. As the Member pointed out, there was no provision in the contract authorising suspension for this.  That should have been obvious to the respondent.  In view of the substantive decision, I consider there was some substance in this submission. 
  17. [45]
    My impression is that, by and large, in the substantive decision the Member accepted the evidence of the appellants, and rejected that of the representatives of the builder, where there was a conflict.  It seems that the respondent adopted the opposite approach, and generally chose to accept at face value statements by the builder in preference to those by the appellants.  Clearly, the respondent could have made the opposite choice, and accepted the claim.
  18. [46]
    The Member also rejected a submission, from the appellants, that there would be no financial hardship to the respondent should a costs order be made.  I find that curious also, since as a government agency it would necessarily not suffer “hardship”.  The submission was a statement of the obvious, but not in itself a reason to make a costs order, or even a consideration favouring one.  Of a little more significance was the statement that in effect any costs order would have to be satisfied out of fees paid by licensees: [34].  The QBCC Act s 26 provides for an Insurance Fund, from which the respondent is to pay claims and, by s 26(3)(a), “the costs of administering the statutory insurance scheme”.  It is funded from money received or recovered in connection with the scheme, like any other insurance business.[41]  The costs of administering the scheme would include the costs of processing and investigating claims, and the costs of litigating disputed claims.  It follows that any legal costs ordered to be paid are not to be paid out of fees paid by licensees, but by insurance premiums paid by owners in general. 
  19. [47]
    In this respect the respondent is in the same position as any other insurer, except that, not being exposed to competition, it is under no economic pressure to minimise its costs in order to minimise premiums.  Being a monopoly supplier of a product which consumers are in effect compelled to buy, it is as insulated from hardship as it is possible to get.  The attitude of the Member was not only curious, but based on a proposition which was wrong. 
  20. [48]
    The solicitor for the respondent sought to give evidence from the bar table that in fact the respondent pays any such legal costs out of its general fund.  There were two things wrong with that proposition.  First, it is hardly a justification for the position of the respondent that it is failing to comply with the financial management provisions of its own Act.  Second, given that the written submissions for the respondent on the appeal were replete with an objection, tiresomely and endlessly repeated, to the reliance by the appellants on any facts not proved by proper evidence before the hearing at first instance, to advance it without proper evidence was hypocrisy.  The respondent even objected to the appellants’ relying on a copy of an annual report of the respondent, to illustrate its funding. 
  21. [49]
    There were therefore a number of errors in the exercise of the discretion as to costs by the Member.  As well, it is difficult to see how the Member really took into account some of the matters mentioned by her.  She quoted the passage in Tamawood Ltd v Paans [2005] 2 Qd R 101 at [33] where Keane JA, as his Honour then was, with whom the other members of the Court agreed, said:

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

  1. [50]
    His Honour was not speaking of this Tribunal, but I adopt what I said about the significance of that judgment to the QCAT Act in Marzini (supra).  This passage is not a statement about the operation of a particular statutory formula, it is a statement about what is in the interests of justice.[42]  The Member accepted that it was appropriate for the parties to be legally represented in the proceedings, which  involved complex factual and legal issues: [25].  The Member was not satisfied that the appellants were the “successful party in the proceedings” [44], but they were undoubtedly successful in the first review, which was the significant one, because it was the one with the commercial element.  It was the one about the money, and therefore it was the one where there was the potential for the appellants’ success to be eroded by the cost of achieving that outcome.  The second review would at best get some defective work repaired unwillingly by the builder who caused the defects in the first place.  If the insurance claim were successful the defective and incomplete work would be covered by it anyway, subject to the limit of cover.  Indeed, the second review was really almost an alternative to the first, since it would be of real significance only if the appellants were unsuccessful on the first.  I consider that the Member has overlooked the fact that the first review was a much more significant matter for the parties, and ought to have been satisfied that the appellants had had substantial success in the proceedings overall.  
  2. [51]
    That the success of the appellants will be eroded is incontrovertible.  Given the length of the matter, thirteen days of hearings, a number of expert witnesses, several directions hearings and three compulsory conferences, it is obvious that the legal costs for the appellants will have run into six figures.  It is not necessary to be more precise about the amount.  The appellants sought to introduce copies of their solicitors’ bills into evidence on the appeal, to quantify the total amount they had paid, but the respondent objected to this as fresh evidence on the appeal.  I have not looked at them, and do not need to, as they are not really to the point.  They will not represent costs assessed on the standard basis, which is what matters. There has been no suggestion that costs are to be assessed on the indemnity basis.  I am content to act on my general knowledge of legal costs to know that the appellants’ success will be substantially eroded, if not completely exhausted, if they do not receive their legal costs as well.[43] 
  3. [52]
    The Member noted that the appellants are retirees, but does not appear to have had much regard to the limited financial circumstances that that description would ordinarily indicate.  Whether pensioners, superannuants or self-funded retirees, or some combination, such people will ordinarily find the sort of legal costs which such a proceeding would entail a very considerable imposition.  On the appeal the appellants have sought to put forward details of the financial imposition on them, and indeed details of the other financial, and non-financial, cost which they have borne, over the seven years that this dispute has run.[44]  The respondent has objected to all this evidence, and all of it could have been put before the Tribunal initially, but I do not think it was necessary to have so much detail to have a sufficient general understanding of the terrible consequences for the appellants of this dispute. 
  4. [53]
    It is clear to me, just from reading the decision in the substantive matter, and the quantity surverys’ report of 20 February 2018,[45] that there is substantial work required to complete this project, and that the appellants’ home must have been turned to some extent into a building site for some years as a result of this dispute.  I think it is obvious, even without further evidence, that they will have suffered considerably, and I have not identified anything in the material properly before me that the respondent did in relation to this dispute which was of any real benefit to the appellants.  Even without having the details of this fleshed out by additional evidence, these are by no means countervailing considerations; they may be factors supporting a costs order. 
  5. [54]
    The Member distinguished the decision of the Tribunal in Lyons v Queensland Building and Construction Commission [2016] QCAT 218, another case where a claim was rejected wrongly by the respondent, and where substantial costs were awarded.  There are certainly differences in detail, including some not mentioned by the Member which are if anything more significant.[46] The Tribunal at [94] noted that the costs of all the legal steps taken by Mr Lyons had far outweighed the value of the available payment on the policy, said to be “a factor which strongly influences me in the exercise of my discretion under s 102 of the QCAT Act, in favour of a costs order.”  Tamawood (supra) at [33] was referenced by the Tribunal.  That was clearly the major justification for the costs order in that case.  The Tribunal at [123], noting that a costs order was unusual, said that one was “consistent with the objects of the QCAT Act in ensuring fairness between the parties and accountability in public administration.”  These aspects apply equally here.
  6. [55]
    The respondent relied on the decision of the Tribunal in Perkins v Queensland Building and Construction Commission [2018] QCAT 15, where costs were refused after a successful challenge to a decision of the Commission to reject a claim on the insurance scheme.  In that matter the Tribunal approached the discretion on the basis that review proceedings were not adversarial, and fundamentally different from commercial litigation: [29].  For reasons I have explained, I do not agree with that analysis.  The Tribunal at [39] cited the passage from Tamawood (supra) at [33], but appears to have ignored it.  As well, the Tribunal rejected a submission that the Commission had not afforded natural justice before its decision to reject the claim, even though the owners were not given the opportunity to respond to the submissions of the builder, which were relied on by the Commission in rejecting the claim: [47].  This was regarded as not a breach, because the owners had already made the submissions they wanted to make, and because the Commission would not have decided differently anyway: [49].  With respect, I do not accept that that was a correct analysis of the requirements of natural justice, or of the consequences of breach.  In the circumstances, I do not regard Perkins as at all persuasive. 
  7. [56]
    An owner who had successfully challenged the rejection of a claim by the Commission was denied costs in Campbell v Queensland Building and Construction Commission [2021] QCATA 34.  After the review commenced, the Commission was invited at a compulsory conference to reconsider the rejection, and the claim was then accepted.  The decision seems to have been based on the fact that the matter had been resolved early in the proceedings, when presumably the costs were still relatively modest, and the characterisation of the proceeding as administrative review rather than in substance a money claim, which characterisation I reject.  The Tribunal also seems to have regarded the reconsidered decision as generous to the owner: [62], [63]. 
  8. [57]
    Overall therefore there were a number of errors in the reasoning of the Member in relation to costs.  In particular, I consider that the test for a costs order in s 102(1) was not correctly applied, there was a failure to recognise the significant commercial element in the first review, and its greater significance to the parties, so that the appellants had overall been substantially successful in the proceedings, and there was a failure to take proper account of the significance of success in the first review being eroded by the costs of the proceedings.  There were also a number of less significant aspects of the reasoning which I regard as erroneous, or potentially erroneous, adverse to the appellants.  In those circumstances, I consider that the test for granting leave to appeal has been satisfied, an appeal is necessary to correct an injustice, and leave to appeal is granted. 

Submissions for the Appellants

  1. [58]
    I need to say something about a number of the matters advanced, or sought to be advanced, in submissions by the appellants.  At one point they sought to rely on the QBCC Act s 77, a provision about costs in a “building dispute”, but that Act contains a specific definition of “building dispute” for its purposes, and a review of a decision of the respondent by the Tribunal is not within that definition.  Hence s 77 did not apply. 
  2. [59]
    Many of their submissions were based on factual matters not relied on before the Member, and for that purpose the appellants sought to introduce fresh evidence on the appeal.  In the ordinary case of an appeal by way of rehearing, additional evidence is not admissible unless it related to events at or subsequent to the proceeding at first instance, or unless it could not with reasonable diligence have been produced then.[47]  Unless an appeal is provided on the basis that it will be a fresh hearing on the merits, which this appeal is not, it has always been considered that there is no general right on the part of a party to rely on evidence additional to that relied on at the hearing for the decision under appeal.[48]  The appellants referred to the QCAT Act s 28(3)(e) and (4).  Those provisions have not been interpreted as modifying the approach to the receipt of fresh evidence on an appeal. 
  3. [60]
    One matter which they claim was known only after the hearing was that the respondent did not have some certificates in respect of the work done by the builder.  Whether parts of the work were properly certified was an issue in the substantive proceedings, and the appellants relied on certain matters in that proceeding to show that the respondent had in effect asserted that it had these certificates.  The appellants sought to rely on this as an example of the respondent behaving unfairly to them during the proceedings.  I was told that this issue was contentious.  In view of the reasons given later, I can resolve the appeal without the need to consider this point further. 
  4. [61]
    Another matter relied on on appeal was that the respondent had acted unfairly to the appellants by refusing the appellants permission to undertake urgent remedial work.  The Terms of Cover in the Regulation provide that the right to assistance is excluded if the owners undertake remedial work without the consent of the respondent.  Presumably this is to enable the respondent to have the opportunity to investigate the alleged defects, although one would expect that a point would be reached where there would be no longer any legitimate reason for the respondent to withhold its consent.  Again, in view of the reasons given later I can resolve the appeal without the need to consider this point further.  
  5. [62]
    In the written submissions the appellants contended that the second review was really concerned only with an issue of rectification of short bolts for the steel posts, and that they were successful on that issue.  I do not accept this characterisation of the second review.  The original application for the second review was unclear about what decision was being reviewed.  The later directions make it clear that the function of the Scott Schedule in the second review was to identify the defective work the appellants were relying on in the second review.  That was the document which defined the parameters of the second review, and it went well beyond the issue of the short bolts. 
  6. [63]
    It is correct that the appellants had only limited success in the second review, and a number of the items were not pressed in submissions in the substantive proceeding.  But they had some success.  There were 8 items (or part items) where there was a finding that, contrary to the position of the respondent, the relevant work was defective, and there were two matters where the respondent accepted in the Scott Schedule that the relevant work was defective but the decision of the respondent was confirmed, on the basis that the defective items had been removed: [234].  For item 18(d), the decision of the respondent was confirmed on the basis that the Brisbane City Council was already pursuing the plumber to rectify any defect, and it was therefore inappropriate to issue a direction to the builder.  Of the matters addressed by the appellants’ submissions, items 4 (b) and (c) were the only items where the respondent’s position that there was no defect was upheld.  Of the matters addressed in submissions, the appellants were substantially successful, but the fact that other items in the Scott Schedule were not addressed cannot be disregarded.[49] 
  7. [64]
    Some other matters raised in submissions by the appellants related back to the substantive dispute, and made a range of complaints against the respondent in relation to its behaviour towards the appellants in relation to the dispute.  Although a complaint was made in costs submissions to the Member that the respondent had acted unfairly in the proceedings, this was on the basis that it was partisan in favour of the builder, and had taken the initiative in joining the builder, which had extended the hearing.  As discussed earlier, I do not regard these as matters supporting an order for costs.  The other matters sought to be raised by the appellants were not raised before the Member, and I do not propose to rely on them on the appeal. 

Submissions for the respondent

  1. [65]
    Most of the submissions of the respondent are covered by the matters I have discussed earlier.  For example, the respondent relied on the statement in Ralacom (supra).  It was submitted that most of the evidence and hearing time was related to the allegations about the defects, but these were relevant to both reviews, as I have explained.  It was submitted that the Tribunal had decided the first review with the benefit of a good deal more evidence than what was before the respondent, although no decisive, or even important, material which emerged for the first time at the hearing was identified.  It also relied on the appellants’ lack of success in the second review, and submitted that the appellants’ uncooperative attitude in not allowing the builder access to the site was a factor relevant to costs.  As to that, I consider that, given the builder’s behaviour for some time prior to the termination of the contract, the attitude of the appellants was understandable, and not a significant factor in relation to costs. 
  2. [66]
    The respondent’s solicitor maintained an objection to new factual issues being raised on appeal, and said that all the new issues the appellants sought to raise were factually contentious.  The respondent would now have difficulties in answering them in a factual way, and the appellants should be bound by the conduct of the application for costs before the Member.  There is some force in these submissions, and since I can resolve the appeal without investigating any of these issues more carefully to see if any ought to be taken further, I do not propose to do so. 

Conclusion

  1. [67]
    For the reasons given, I consider that there were errors made by the Member in exercising the discretion as to costs, and accordingly it is appropriate that the discretion be exercised afresh.  The question is whether the interests of justice require that an order for costs, and what order, be made.  In my opinion the starting point as to the identification of the interests of justice is the passage from Tamawood cited earlier: that it would be unjust for the appellants’ success to be substantially eroded by having to pay their own costs incurred in achieving their success in the first review.  This was a case where the appellants’ legal expenses were reasonably incurred.  It is then a question of whether there are any other relevant countervailing considerations, and what comes from a consideration of the specific matters in the QCAT Act s 102(3). 
  2. [68]
    As I have indicated, although this was in form a review of an administrative decision, I regard it as in substance a commercial matter, namely a claim for assistance under the statutory insurance scheme.  Although the quantum of the assistance was not in issue, so that the outcome was not a decision that the appellants be paid a specific sum, their success established an entitlement to receive the amount of assistance properly payable under the terms of the scheme.  That gives the matter a commercial element. 
  3. [69]
    The appellants were successful in the first review.  Although their success was limited in the second, the first was of much greater importance to them, and to some extent rendered the outcome of the second review irrelevant.  Further, it appears that the second review was just tacked on to the first because the first review raised all the factual issues of the second review anyway, so that the additional work specifically related to the second review would be minimal.  This is illustrated by the submissions in writing of the appellants in the substantive matter, where the submissions covered the second review in less than one page, simply by reference to what had been submitted already in relation to the first review.  In substance, the dispute and the hearing were really about the first review. 
  4. [70]
    There was no reliance on any relevant offers to resolve the matter, and generally no relevant unnecessary disadvantage to either party[50] in the conduct of the proceeding, either within s 48(1)(a)-(g) or otherwise; I will not have regard to the new matters raised by the appellants, and I have already dealt with the matters relied on before the Member, apart from one matter, that the respondent was acting unreasonably in calling for the oral hearing on costs, which was raised at the oral hearing.  I have looked at the transcript of the oral hearing, and the matters raised by the solicitor for the respondent were all responses to the written submissions in reply for the appellants, which were filed and served on 8 May 2018, well after the oral hearing was requested on 4 April. 
  5. [71]
    In written submissions for the appeal the respondent said at [228] that the oral hearing was sought to ensure the Tribunal had an opportunity to raise issues with the parties or seek clarification of any issues raised in the parties written submissions.  I expect the Member was capable of deciding whether an oral hearing was necessary for these reasons without prompting from the respondent.  So far as I could see, the only issue raised by the Member at the hearing was to ask counsel for the appellants exactly what orders for costs were sought, something that could easily have been dealt with by email.  Accordingly I find the reasons of the Member at [24] curious.   
  6. [72]
    The respondent relied on the decision of the Court of Appeal in Chandra v Queensland Building and Construction Commission [2014] QCA 335 at [60] – [73].  That was a matter where an application for an extension of time within which to appeal was refused by the Tribunal on the papers, and it was held that an oral hearing should have been afforded the appellant.  This however was because the decision had drawn certain inferences against the applicant in circumstances where the applicant had not had the opportunity to respond to such issues, so that the process was unfair to him.  The decision turned on the particular circumstances of that case, and P Lyons J at [61] said that often it will be appropriate to determine such applications without an oral hearing.  McMurdo P, who agreed with P Lyons J, added that an opportunity for the applicant to comment could have been provided by inviting further submissions in writing on the point: [4].  I also note that in that matter the Court invited submissions in writing as to costs, a practice often followed by the Court of Appeal. 
  7. [73]
    I cannot see that the respondent had any good reason to request an oral hearing.  In terms of the directions in place it was entitled to do so, but I consider that this was an example of conduct which unnecessarily disadvantaged the appellants, by putting them to additional legal expense. 
  8. [74]
    The Member recognised that the dispute was complex, and that it was reasonable for the appellants to have legal representation, for which they had leave.  I agree; this is not a countervailing consideration.  I do not consider that, viewed prospectively, there was such a preponderance of strength on the part of either party for s 102(3)(c) to be relevant.  I am not in a position to decide whether there is force in the submission that the respondent made the first review unnecessarily complicated by raising issues other than the effect of the suspension, and cannot disagree with the Member’s rejection of that proposition.  As to s 102(3)(d), breach of natural justice was not relied on before the Member, and for reasons given earlier I do not accept that there was any failure on the part of the appellants to enable and help the decision maker to make a decision on the merits in either review.  The appellants, as retirees, were in an inherently vulnerable financial position, particularly in the context of such a substantial matter.  This factor provides some support for an order for costs; it is certainly not a countervailing consideration. 
  9. [75]
    No additional matters were relied on as relevant by the appellants or by the respondent before the Member.  I have not identified any additional matters not already referred to.  Overall there are no countervailing considerations, the only other relevant considerations favouring the making of a costs order in the first review in favour of the appellants.   In view of the extent to which their success in that matter will be substantially eroded without an order for costs, I consider that the interests of justice require that the respondent pay the appellants’ costs of and incidental to the first review. 
  10. [76]
    So far as I can see, all the issues relevant to the second review were also relevant to the first review, and my intention is that the appellants have all the costs of the evidence, hearings, directions hearings, conferences and other matters common to both reviews.  For some time the appellants did not have leave to be legally represented in the second review, although that changed when they were to be heard together.  Because of that, and because the second review was a conventional administrative review, I will not order costs of the second review.  Such success as the appellants had in the second review is adequately accommodated by the costs of common matters being attributed to the first review.  To some extent the structure of my orders follows a broad brush approach, appropriate for issues of costs. 
  11. [77]
    Given the complexity of the matters, and because I was not the Member hearing the matter, I am in no position to fix the costs.  Because of the complexity I consider that the costs should be assessed on the District Court scale, if not agreed, under the Queensland Civil and Administrative Tribunal Rules 2009 r 87, by a costs assessor appointed by the Registrar of the Tribunal.  The respondent should also pay the costs of the appellants’ filing fees for the application for leave to appeal, since the appeal was necessary to correct an injustice to the appellants.  
  12. [78]
    Accordingly the orders on the application for leave to appeal are as follows:
    1. Grant leave to appeal from the decision of the Tribunal of 7 November 2018 in these matters. 
    2. Refuse the appellants leave to rely on fresh evidence on the appeal. 
    3. Order that the order in the proceeding GAR044-15, that each party bear its own costs, be set aside.
    4. Order that the respondent Queensland Building and Construction Commission pay the costs of the appellants Peter Cowen and Jan Cowen of and incidental to the proceeding GAR044-15, to include the costs of their application for costs, and of evidence, hearings, directions hearings, conferences and other matters which were in common with the proceeding GAR113-16.
    5. Order that the costs, if not agreed, be assessed under the Queensland Civil and Administrative Tribunal Rules 2009 r 87, on the standard basis on the District Court scale, by a costs assessor appointed by the Registrar of the Tribunal. 
    6. Order that the respondent pay the appellants’ filing fees for the application for leave to appeal. 

Footnotes

[1]The application filed on 21 December 2017 was originally against both the present respondent and the respondent builder, but the latter went into liquidation on 20 March 2018: Email to Tribunal 12 July 2018 on behalf of the builder.  The matter proceeded as an application against the Commission, and it is convenient to refer to it as the respondent. 

[2]McGee v Queensland Building and Construction Commission [2018] QCATA 124 at [3] – [5]. 

[3]The background facts are generally taken from the substantive decision of the Member, of 27 November 2017: [2017] QCAT 416. 

[4]Under the statutory insurance scheme in the Queensland Building and Construction Commission Act 1991 (Qld) (“the QBCC Act”) Part 5. 

[5]It was a reviewable decision under the QBCC Act s 86(1)(h). 

[6]Under the QCAT Act s 43(2)(b)(iv).  The reason for this leave was not disclosed.  I assume that the QBCC Act s 93A did not exclude this power to grant leave. 

[7]There was then a further direction that the parties have leave to be legally represented, presumably to include the added respondent. 

[8]In the second referral, the respondent had been given leave to be legally represented on 22 June 2016.

[9]The QBCC Act s 72. 

[10]The file records that a copy was also sent by post to the appellants, but by then they were away. 

[11]The appellants and the respondent are parties to another Tribunal proceeding, and the advice that they would be away was communicated specifically in relation to that matter.  That was because that was the only matter where the appellants anticipated a hearing might occur.  The Tribunal registry might not make the connection, but the respondent had the same solicitor handling that matter also. 

[12]Respondent’s appeal book p 291.

[13]Respondent’s appeal book p 292.  The email also referred to a request for particulars. 

[14]By email to the Tribunal, 4 August 2021.  The barrister confirmed that he did not have any communications directly with the appellants in the relevant period.  The appellants provided written submissions in response on 12 August 2021. 

[15]Email 7 December 2017, attachment A to solicitor’s email to Tribunal. 

[16]Email appellants to Tribunal 12 August 2021, re Item 3. 

[17]Email 7 December 2017, attachment A to solicitor’s email to Tribunal. 

[18]Email appellants to solicitor 25 April 2018, attachment F to solicitor’s email to Tribunal. 

[19]Email solicitor to appellants 8 May 2018, attachment E to solicitor’s email to Tribunal.  The appellants say this email was not in fact received by them.  It was apparently not sent to the email address they provided to the solicitor on 23 April 2018 for use while they were overseas: Email 23 April 2018, attachment D to solicitor’s email to Tribunal.  For my purposes, that does not matter. 

[20]Email appellants to Tribunal 12 August 2021, re Items 10 and 11. 

[21]Email solicitor to appellants 29 May 2018, attachment H to solicitor’s email to Tribunal.  I take it the appellants say they did not receive this email either. 

[22]On 11 July 2018, the time for filing the application was extended to 25 July 2018.  The foreshadowed further oral hearing did not occur. 

[23]The reasons do not disclose how, if at all, the affidavit was taken into account, although the Member did say it had been carefully considered: [12]. 

[24]House v R (1936) 55 CLR 499; McGee v Queensland Building and Construction Commission [2018] QCATA 124 at [5]. 

[25]Crime and Corruption Commission v Lee [2019] QCATA 38 at [12], citing appellate authority.  See also Campbell v Queensland Building and Construction Commission [2021] QCATA 34 at [17]. 

[26]Acts Interpretation Act 1954 (Qld) s 14(2).  It is not much mitigation to point out that this only applies to post-1991 statutes. 

[27]Unless of course it is used as a shorthand expression to describe the particular order being made. 

[28]The QCAT Act s 43. 

[29]Cf Penalties and Sentences Act 1992 (Qld) s 9(4)(c).  Even so, plenty of such sentences are passed, although only a minority of sentences within subsection (4). 

[30]This is the test identified by Wilson J in Ralacom at [4], and quoted in McGee at [21]. 

[31]The relevant Regulation considered in Schneider provided for something described as a Policy; the current Regulation speaks instead of the Terms of Cover under the statutory insurance scheme.  I do not think that changes the analysis; the Court did not refer expressly to a contract of insurance under the Scheme. 

[32]The QBCC Act s 67Y speaks of an entitlement to assistance in accordance with the terms of cover prescribed by the Regulation. 

[33]Of course, because it was in form a review under the QCAT Act Chapter 2 Part 1 Division 3, the respondent was still under the statutory obligation to assist the Tribunal in the QCAT Act s 21. 

[34][2017] QCAT 416 at [40], [41]. 

[35]Direction of 14 September 2016, to file a Scott Schedule setting out the defects the subject of the second review. 

[36]Direction of 13 February 2017 in each review, paragraph 1. 

[37]Driveway steeper than provided in plans; defective electrical wiring; site left unsafe during suspension of work.  The latter two were rectified at the direction of safety officials. 

[38]Given the attitude of the builder, as it emerged from the reasons for the substantive decisions, and its subsequent behavior, this was a very big “if”. 

[39]This follows from an exhibit to the affidavit of Slasberg sworn 4 June 2018, which was said by the Member to be something relied on: [12] n 16.  How she relied on it was not stated. 

[40]As of 20 March 2018: Email to Tribunal 12 July 2018 on behalf of the builder. 

[41]The QBCC Act s 25(4), (4A) contemplates that a regulation may provide for a single payment from the General Fund to the Insurance Fund, but I can find no such current Regulation. 

[42]See also Campbell v Kerry M Ryan Pty Ltd [2014] QCATA 58 at [18]. 

[43]This point is valid whether or not the legal costs actually exceed the amount recoverable on the policy, although the fact that (at least in theory) they might exceed it points to the seriousness of the injustice to the appellants if they do not receive their costs. 

[44]It is not yet over; the respondent is now arguing about the amount payable on the claim, and there are other proceedings before the Tribunal. 

[45]Affidavit of Slasberg filed 4 June 2018 Exhibit SRS-1, which was before the Member.  The appellants challenged the accuracy of this report, and claimed that the costs of rectification and completion were much higher than allowed in it, but it at least provides some indication that quite of lot of work remains to be done on the project. 

[46]In particular, that the issue of termination of the contract was resolved in separate proceedings between the owner and the builder, with the Commission undertaking to abide by the outcome of that proceeding.  The Commission did not in that matter itself resist the claim before the Tribunal. 

[47]B Cairns, Australian Civil Procedure (Thomson Reuters, 11th ed, 2016) [18.330]. This is subject to any applicable statutory provision, which is not the case here.  There are two additional requirements, that the evidence be material, and that it be credible.  This approach was followed, in the case of an internal appeal, by the first President of the Tribunal, A Wilson J, in Ellis v Queensland Building Services Authority [2010] QCATA 93 at [7], and is still applied: Wilkins v Gunter (No 2) [2021] QCATA 42 at [95].  

[48]Coulton v Holcombe (1986) 97 CLR 1. 

[49]The appellants explained this on the basis that by the end of the hearing they were very short of funds, and could not afford the cost of having full submissions covering all items in the Scott Schedule prepared. 

[50]No unnecessary disadvantage by the appellants was relied on by the respondent before the Member.

Close

Editorial Notes

  • Published Case Name:

    Cowen v Queensland Building and Construction Commission

  • Shortened Case Name:

    Cowen v Queensland Building and Construction Commission

  • MNC:

    [2021] QCATA 103

  • Court:

    QCATA

  • Judge(s):

    D J McGill SC

  • Date:

    07 Sep 2021

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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