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- Jodlowska v The Body Corporate for River View Terraces (No 2)[2021] QCATA 26
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Jodlowska v The Body Corporate for River View Terraces (No 2)[2021] QCATA 26
Jodlowska v The Body Corporate for River View Terraces (No 2)[2021] QCATA 26
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Jodlowska v The Body Corporate for River View Terraces (No 2) [2021] QCATA 26 |
PARTIES: | Katarzyna Jodlowska (applicant/ appellant) v THE BODY CORPORATE FOR RIVER VIEW TERRACES CTS 23176 (respondent) |
APPLICATION NO: | APL186-19 |
ORIGINATING APPLICATION NO: | BCCM1027-18 |
MATTER TYPE: | Appeals |
DELIVERED ON: | 18 February 2021 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member Roney QC |
ORDERS: | The Applicant shall pay the Respondent’s costs of the application fixed in the amount of $10,968.25 |
CATCHWORDS: | APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – costs – where s 289(2) of the Body Corporate and Community Management Act 1997 (Qld) allows a person aggrieved by an Adjudicator’s order to appeal on a question of law to the Queensland Civil and Administrative Tribunal – whether application was frivolous, vexatious, misconceived and without substance – where applicant no longer owner in scheme – whether costs should be awarded against applicant Body Corporate and Community Management Act 1997 (Qld), s 242, s 270 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 47, s 100, s 102 Aspar Autobarn Co-operative Society v Dovala Pty Ltd (1987) 74 ALR 550 Cocks Macnish v Biundo [2004] WASCA 194 Di Carlo v Dubois and others [2002] QCA 225 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] 81 ALR 397 McEwen v Barker Builders Pty Ltd [2010] QCATA 49 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 Sandown [2019] QBCCMCmr 400 Sierra Grand [2016] QBCCMCmr 516 State Electricity Commission of Victoria v Rabel [1998] 1 VR 102 TV Rocks Resorts [2016] QBCCMCmr 281 Walden v Broadwater Tower Body Corporate [2015] QCATA 28 |
REPRESENTATION: | |
Applicant: | Self-represented |
Respondent: | Self-represented |
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]The Applicant is a former owner of Lot 31 in the River View Terraces development which comprised 52, two-storey townhouses situated in Upper Coomera near the Gold Coast. She disposed of her interest in the unit approximately one and a half years before the Appeal came before this Tribunal and has not been a unit holder since. That is a significant factor in terms of the issues that arise for determination in relation to the costs of the application.
- [2]She appealed the decision of an Adjudicator appointed under the Body Corporate and Community Management Act 1997 (Qld) (‘the Act’) which, in a decision of 11 June 2019, refused to allow applications she had made for orders that an AGM held on 17 October 2017 and an EGM held on 17 February 2018 to be declared invalid. The Reasons of the Adjudicator also refused her application to declare invalid the nomination of four committee members, who nominated and became committee members in 2017. In May 2020 I dismissed an appeal from that decision. The Respondent Body Corporate submitted that there ought be an order for costs in favour of the Body Corporate under s 47(2) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) on the basis that the proceeding in this Tribunal is itself frivolous, vexatious, misconceived and/or lacking in substance. Alternatively it submits that it is appropriate to make a costs order under s 102 of the QCAT Act.
- [3]I directed the Respondent to file an outline of submissions of no greater length than three pages on the issue of costs, including identifying the quantum of any costs sought to be recovered. I also directed that the Applicant file any responsive submissions. Both parties have since filed submissions in relation to what should occur to the costs of the Appeal. The Respondent seeks an order that the Applicant pay its costs.
- [4]The statutory position is that set out in s 100 and s 102 of the QCAT Act. They provide as follows:
100 Each party usually bears own costs
Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party's own costs for the proceeding.
102 Costs against party in interests of justice
- The Tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the Tribunal considers the interests of justice require it to make the order.
- However, the only costs the Tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section.
- In deciding whether to award costs under subsection (1) or (2) the Tribunal may have regard to the following--
- whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);
- the nature and complexity of the dispute the subject of the proceeding;
- the relative strengths of the claims made by each of the parties to the proceeding;
- for a proceeding for the review of a reviewable decision--
- whether the applicant was afforded natural justice by the decision-maker for the decision; and
- whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;
- the financial circumstances of the parties to the proceeding;
- anything else the Tribunal considers relevant.
- [5]In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 the President, Justice Wilson was considering the costs question where the proceeding had been commenced when one statutory costs regime applied, but which concluded under the current scheme under the QCAT Act. He said:
- The respondent relies on the decision of the Court of Appeal in Tamawood Ltd & Anor v Paans [2005] QCA 111, a case decided under the costs provision of the now repealed Commercial and Consumer Tribunal Act 2003 (CCT Act). Although those provisions are not analogous to the equivalent provisions under the QCAT Act, the principles found in Tamawood provide guidance about the circumstances in which it may be in the interests of justice for this Tribunal to award costs against parties.
- In Tamawood, Ms Paans commenced proceedings in the CCT for damages against Tamawood Ltd and another party. The two matters were heard together and Ms Paans was awarded monetary damages. The CCT, however, refused to order costs in her favour.
- All parties then sought leave to appeal to the District Court, where the appeals from the respondents were refused, but Ms Paans was awarded her costs in the proceedings. The respondents than sought leave to appeal that costs decision to the Court of Appeal, contending that the decision of the District Court was based on an erroneous construction of ss 70 and 71 of the CCT Act. Those provisions state:
70 Purposes of div 7
The main purpose of this division is to have parties pay their own costs unless the interests of justice require otherwise.
71 Costs
…
(4) In deciding whether to award costs, and the amount of the costs, the Tribunal may have regard to the following—
- the outcome of the proceeding;
- the conduct of the parties to the proceeding before and during the proceeding;
- the nature and complexity of the proceeding;
- the relative strengths of the claims made by each of the parties to the proceeding;
- any contravention of an Act by a party to the proceeding;
- for a proceeding to which a State agency is a party, whether the other party to the proceeding was afforded natural justice by the State agency;
- anything else the Tribunal considers relevant.
Examples of paragraph (g)—
The Tribunal may consider whether a party to a proceeding is acting in a way that unreasonably disadvantages another party to the proceeding.
The Tribunal may consider whether the proceeding, or a part of the proceeding, has been frivolous or vexatious.
(5) A party to a proceeding is not entitled to costs merely because—
- the party was the beneficiary of an order of the Tribunal; or
- the party was legally represented at the proceeding.
- The similar QCAT Act provision to s 70 is, it might be said, in terms that more plainly indicate that the legislature had turned its face against awards of costs in this Tribunal: s 100 says that ‘Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceeding’.
- In considering ss 70 and 71 Keane JA (as his Honour then was) referred, however, to two matters relevant here. First, his Honour held that the CCT provisions negated the traditional proposition that costs should prima facie follow the event (unless of course that the Tribunal considers that another order is more appropriate) and that the nature and extent of the power to award costs could only be discerned by close consideration of the terms of the statute which created and prescribed the occasions and conditions for its exercise 7. Sections 100 and 102 of the QCAT Act attract the operation of the same principles.
- Second, Keane JA was of the view that where the complexity of the matter justified legal representation, it would not be in the interests of justice to bar the successful party from recovering costs that were reasonably necessary to achieve a satisfactory outcome.
- That conclusion must, here, be considered in the light of the difference between s 70 of the CCT Act and s 100 of the QCAT Act. Section 70 speaks of a ‘main purpose’, but s 100 mandates that parties shall bear their own costs. Section 70 contains, within itself, a reference to the condition or circumstance in which the main purpose may be subsumed to the interests of justice; s 100 has no such proviso, although it appears later, in s 102(1).
- Under that subsection QCAT has a discretion to make a costs order ‘…if the Tribunal considers the interests of justice require it…’. Section 102(3) says that, in deciding whether to award costs, the Tribunal may have regard to matters not dissimilar to those set out in s 71 of the CCT Act including, in particular for present purposes, the nature and complexity of the dispute and the relative strength of each party’s claims.
- Under the QCAT Act the question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100.
- I am satisfied that is the case here. As the voluminous supporting material indicated, the application brought in Ralacom’s name involved a complex history of disputes between it, and the body corporate. Urgent injunctive relief was sought, as was relief under the BCCMA, which on any view involved some complexity, and urgency, and warranted the instruction of solicitors and counsel by the body corporate. The standing of the company was unclear, and confused by the applicant’s failure to inform this Tribunal about the real outcome of the Supreme Court Proceedings.
- [6]Later, in McEwen v Barker Builders Pty Ltd [2010] QCATA 49 the President, Justice Wilson said in an Appeal heard on the papers:
[13] As to costs, the starting point in this Tribunal is that each party must bear its own: QCAT Act, s 100. The statutory presumption may be displaced if the Tribunal considers it in the interests of justice to order a party to pay all or part of the costs of another party: s 102(1). The phrase “in the interests of justice” is not defined in the Act but is to be construed according to its ordinary and plain meaning, conferring a broad discretionary power on the decision-maker.
[14] In determining whether it is in the interests of justice to award costs against another party, the Tribunal may have regard to the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; and, whether a party has acted in a way that unnecessarily disadvantages another party: QCAT Act, s 102(3).
…
[17] The language of s 100 plainly indicates that the legislature has turned its face against awards of costs in this Tribunal. The question that will usually arise in each case in which costs are sought is, then, whether circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ have arisen; and, whether or not they point to a costs award in a sufficiently compelling way to overcome the statutory hurdle.
- [7]I respectfully agree with the approach that the President has taken in the Ralacom and the McEwen decisions. That means that the relevant task is to proceed on the basis that there is a statutory presumption that parties will bear their own costs in a proceeding for the Tribunal, including those in the review jurisdiction of the Tribunal, but that presumption may be displaced if the Tribunal considers it in the interests of justice to order a party to pay some or all of the costs of another.
- [8]The Applicant had made application to the Adjudicator for some 20 orders to be made, each and every one of which was refused. Only parts of the decision refusing those orders were appealed to this Tribunal. As I found in my reasons, she had also brought applications below for other orders she did not appeal.
- [9]In relation to the matters which were the subject of this appeal, the Adjudicator decided to refuse the relief sought, inter alia on the basis that the original applications in relation to those matters were brought out of time, in the sense that they were brought later than the three months permitted for them to be brought under s 242 of the Act. She argues that the Adjudicator made an error of law in refusing to waive that time limit pursuant to s 242(4)(b) of the Act.
- [10]In that regard, she contended here that the Adjudicator made an error of law in dismissing the application that she had made under s 242(3) of the Act, the error of law being that the Adjudicator “disregarded a material fact in exercising his discretion to extend the time limit”. In substance the Applicant had contended that the central reason for refusing to waive non-compliance with the time limit for the bringing of the application was that there was no merit to the application itself. In that regard the Applicant contends that that in itself was an erroneous finding because the application was not without substance, and therefore the Adjudicator applied an incorrect test.
- [11]After an examination of the Adjudicator’s reasons I concluded that whilst the Adjudicator’s findings as to the absence of merit were one of the considerations which founded the discretionary decision to decline to waive non-compliance, it was only one of numerous factors that were taken into consideration.
- [12]As I found in my reasons, the primary reasons for the Adjudicator refusing to waive the non-compliance concerned the fact that the application was not lodged until 24 September 2018, more than 11 months after the 2017 AGM which was under challenge had been held and the decisions under it implemented, and more than seven months after the 2018 EGM which was under challenge had been held, and the decisions made under it implemented.
- [13]As I found in my reasons, of even greater significance than the actual duration of delay was the fact that the resolutions in question had already been implemented before the application was brought and furthermore, there had been an AGM held in 2018 at which other resolutions had been passed which in effect rendered the resolutions passed at the two meetings under challenge as having been superseded or overtaken by events. I found that the Adjudicator had quite properly concluded that waiving non-compliance would cause significant uncertainty and disruption for the Body Corporate.
- [14]As I found in my reasons, it was relevant for the Adjudicator to have regard to what the consequences would be for a Body Corporate to permit an application to be brought challenging meetings so long after the decisions made under them had been passed and implemented. It was open to the Adjudicator even had he been satisfied that there was any merit to the application, independently of any other issue, to decide that in the exercise of discretion it was not appropriate to waive non-compliance with the requirements of s 242.
- [15]As I also found in my reasons, the Adjudicator did not fail to take into consideration the relevant consideration because the Adjudicator did have regard to the merits of the application. In my view, even had the Adjudicator concluded that there was some merit to the applications, as distinct from finding that there was no merit to them, the Applicant has been unable to demonstrate that any different outcome would have been arrived at.
- [16]I also found in my reasons that it is clearly not in the interests of a Body Corporate to be open to having decisions made at properly convened general meetings challenged long after the decisions have been made and implemented, particularly in circumstances where there is no clear explanation for the delay in bringing the application, and insofar as explanations exist, they excuse the delay. There was no explanation for the delay in this case, and no other matters which excused it. I found that it was not consistent with the objects of the Act, that parties should be permitted to sit on their hands and not bring applications to challenge the outcomes of those meetings for extensive periods.
- [17]I considered that particularly so where those bringing the challenge, by the time decisions are being made about whether to invalidate meetings, no longer even own a unit in the relevant scheme, and therefore have no direct ongoing interest in the outcome of those decisions except to the extent that they affect her pecuniary interests
- [18]The Applicant had also challenged orders by the Adjudicator dismissing the proceeding on the basis that it was frivolous, vexatious, misconceived and without substance, and an ancillary decision to order her to pay the Body Corporate the amount of $2,000.00 to partially compensate the Body Corporate for its costs in responding to the application, the foundation in the finding in Reasons [88] that s 270(3) of the Act permits an Adjudicator who dismisses an application for being frivolous, vexatious, misconceived or without substance, to also order costs.
- [19]In relation to the determination to order that the Applicant pay the Body Corporate’s costs, the Adjudicator held as follows:
[93] In exercising my discretion to award costs of $2,000 against the applicant, I have taken the following factors into account:
- A previous application lodged by the applicant[1] against the body corporate which was dismissed. It was noted in the statement of reasons for that decision that:
[55] It appears to me that the applicant has a limited understanding of her rights and obligations as an owner of a lot in a community titles scheme. There is no basis in law for any of the orders sought by the applicant to be made against the body corporate.
[56] Aspects of the application were misconceived and without substance. Further, the volume of material submitted and number of occasions on which the applicant submitted further material could be regarded as vexatious, as there is support for the notion that an excessive or oppressive volume in itself could render an application to be of a vexatious nature. This may be taken into account in deciding whether to award costs against the applicant in the event that she makes further applications, which are deemed by an Adjudicator to be frivolous, vexatious, misconceived or without substance.
- That there was no basis in law for any of the orders sought in this application to be made. The application was misconceived and without substance in this regard.
- Certain aspects of the application were frivolous and vexatious, for example, the delay in bringing the application and amending the application to seek numerous additional orders, after the applicant had sold her lot in the scheme.
- The body corporate incurred legal expenses in excess of $2,000 engaging lawyers to respond to the application on its behalf.
- [20]I also found in my reasons that it follows from what I found in relation to the first ground of appeal, namely its dismissal on the basis that it was out of time, that even if a different result can be arrived at in relation to the merits of the application, the finding refusing to waive the time compliance would nevertheless be fatal on this issue. In other words, even if the Adjudicator had decided that some or all of the complained of conduct by the Body Corporate was open to criticism or that there was some conceptual basis to set aside or declare invalid the general meetings, and the nominations and appointments of committee members, that would not have resulted in a different outcome in relation to the merits of the application to grant that relief.
- [21]I also found in my reasons that the proposition by the Applicant that a number of her complaints were upheld by the Adjudicator had no foundation, when the proposition is put under scrutiny. Despite her assertions to the contrary no orders were made in her favour concerning the distribution of minutes of committee meetings.
- [22]For example, in relation to the complaint about the failure to complete committee nomination forms, paragraphs [47] to [50] of the Reasons showed that the Adjudicator clearly did not in any way accept the Applicant’s complaints as having any validity. In relation to what were complained of as voting irregularities, rather than acknowledging the validity of the complaints as she contended had occurred, the Adjudicator actually concluded that there were no such irregularities. In relation to the complaints about including proxy votes when proxy was not in attendance, the Adjudicator’s decision was set out in the Reasons in paragraph [35]. They did not hold her complaint had any validity. In relation to the complaint about failure to provide access to records, the relevant findings did not contain any acknowledgement of the complaint having any validity. The same may be said about the Applicant’s complaint about the chairperson attending the EGM by teleconference, and her reference to the issue of whether the Body Corporate had refused to mediate. The Applicant referred to paragraph [70] of the Reasons. That paragraph made no reference to this issue.
- [23]The Respondent Body Corporate refers to a number of adjudication decisions in which the language of s 270(1)(c) has been considered. These include the decisions in TV Rocks Resorts [2016] QBCCMCmr 281, Sierra Grand [2016] QBCCMCmr 516 and Sandown [2019] QBCCMCmr 400. In the latter decision of Sandown at [57] and [58] the Adjudicator correctly held that the language of s 270(1)(c) does not require there to be a finding that an application was in every respect frivolous and vexatious and misconceived and without substance. It is enough that one or more of those bases be upheld so that an application might be held for example to be frivolous or vexatious, even if not “entirely devoid of substance”.
- [24]Reference has also been made to the decision of this Tribunal in Walden v Broadwater Tower Body Corporate [2015] QCATA 28 where at [34] the Tribunal concluded that it had been appropriate for an Adjudicator to make award for costs in circumstances where the application had been made outside of the scope of the legislation, without giving consideration to its threshold requirements. That case was merely an example of the application of the section to particular facts.
- [25]Section 270 of the Act specifically authorises an Adjudicator to have regard to previous applications made by a particular Applicant in deciding whether to order costs. It not an error of law to do so.
- [26]I also found in my reasons that the considerations that the Adjudicator took into account in deciding to award costs on the basis that the application was misconceived and without substance because there was no basis in law for any of the orders sought was one properly arrived at, having regard to all of the relevant considerations. I found that the Applicant has demonstrated no error of law on the part of the Adjudicator in arriving at that conclusion.
- [27]For the Respondent Body Corporate, it is submitted that there ought be an order for costs in favour of the Body Corporate under s 47(2) of the QCAT Act on the basis that the proceeding in this Tribunal is itself frivolous, vexatious, misconceived and/or lacking in substance. Alternatively, it submits that it is appropriate to make a costs order under s 102 of the QCAT Act.
- [28]The expression “frivolous, vexatious, misconceived or lacking in substance” appears in a wide variety of statutory contexts and the meaning of the individual terms in this sequence has been considered in a number of cases in different jurisdictions, e.g. State Electricity Commission of Victoria v Rabel [1998] 1 VR 102 and Cocks Macnish v Biundo [2004] WASCA 194. The term "vexatious" is used in the context of the Act in the sense illustrated by the Shorter Oxford Dictionary when it says "Of legal actions: instituted without sufficient grounds for the purpose of causing trouble or annoyance to the defendant" (cf. Aspar Autobarn Co-operative Society v Dovala Pty Ltd (1987) 74 ALR 550 at 554, where this meaning was approved by the Federal Court of Australia in a different statutory context).
- [29]An application is misconceived where it is conceived wrongly. That is, it proceeds from a misunderstanding or an idea, notion or belief on the part of the applicant that is plainly wrong.
- [30]In my view this case bears a close resemblance to the circumstances identified by the President in Ralacom, in which his Honour found that the Applicant brought an application which was misconceived, futile and persisted in, in circumstances which were unreasonable and irresponsible. His Honour concluded that the conduct in question there “bordered on the inexplicable”. I consider that the same may be said of the circumstances here.
- [31]As I have said earlier in these reasons, it is clearly not in the interests of a Body Corporate to be open to having decisions made at properly convened general meetings challenged long after the decisions had been made and implemented, particularly in circumstances where there is no clear explanation for the delay in bringing the application, and insofar as explanations exist, they do not excuse the delay.
- [32]As I have also said earlier in these reasons it is not consistent with the objects of the Act to permit vexatious challenges by parties who, by the time decisions are being made about whether to invalidate meetings, no longer even own a unit in the relevant scheme, and therefore have no direct ongoing interest in the outcome of those decisions except to the extent that they affect her pecuniary interests.
- [33]The Applicant must have known that in bringing the application, as she did so late, that it was a mischievous act with little purpose to be achieved, and was devoid of merit. It was misconceived, futile and persisted in, in circumstances which were unreasonable and irresponsible for her to do so.
- [34]There are other relevant considerations which arise under s 102 of the QCAT Act. The Respondent submits that the Applicant has acted in a way in the course of the proceedings which disadvantaged the Respondent, and specifically references a failure to comply with directions made on 9 August 2019 in relation to the Appeal Book, seeking directions that she be permitted to file further submissions, but despite being permitted to do so failing to file any further submissions and obtaining an adjournment of a directions hearing which was scheduled on 11 March 2020. No attempt has been made to quantify what, if any, disadvantage this ultimately caused to the Respondent, and in my view these are matters which would not, by themselves, justify the making of a costs order.
- [35]The Respondent also submits that the matter was complex, and points in that regard to the fact that the Tribunal permitted legal representation on the part of the Respondent body corporate. In my view, it was appropriate that the Respondent be legally represented, and although there were questions of law raised in the appeal, these were not particularly complex in themselves.
- [36]The relative strengths of the respective cases is the matter referenced in s 102(3)(c) of the QCAT Act. As my findings above indicate, I considered the Applicant’s case to have little or any merit and furthermore considered that she must or ought to have reasonably known that that was the case.
- [37]The final relevant consideration, which is related to the last observations, is that in paragraphs 2 and 3 of the statutory declaration of Jarad Maher dated 22 May 2020 and filed with the submissions, the Respondent identifies that on 22 July 2019 and 12 September 2019, the solicitors for the Body Corporate wrote to the Applicant pointing out the lack of merit and the absence of prospects of success in the appeal and notifying her that the Respondent would be seeking its costs of defending the appeal proceedings against her. The Applicant’s response of 16 September 2019 was to insist that the appeal was likely to succeed and that she had no intention of withdrawing her appeal.
- [38]The costs sought which have been particularised in the material before me show that the Body Corporate incurred costs of $10,968.25. On the basis of the principles discussed in well known authority, including that in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] 81 ALR 397 and Di Carlo v Dubois and others [2002] QCA 225, in my view it is appropriate in cases such as this where the proceedings were misconceived and had no real prospects of success, to allow costs on what is referred to in the Courts as the indemnity basis. In my view this is an appropriate case for such an award having regard to the relevant principles that have been held to apply in those circumstances.
- [39]In my view it is appropriate to order that the Applicant pay the Respondent’s costs fixed in the amount of $10,968.25 and I do so order.
Footnotes
[1] 1027-2018.