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- Spedding Estates Pty Ltd as trustee for The Spedding Family Trust t/as Summergrove Estate v Reid No 2[2023] QCATA 117
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Spedding Estates Pty Ltd as trustee for The Spedding Family Trust t/as Summergrove Estate v Reid No 2[2023] QCATA 117
Spedding Estates Pty Ltd as trustee for The Spedding Family Trust t/as Summergrove Estate v Reid No 2[2023] QCATA 117
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Spedding Estates Pty Ltd as trustee for The Spedding Family Trust t/as Summergrove Estate v Reid No 2 [2023] QCATA 117 |
PARTIES: | SPEDDING ESTATES PTY LTD AS TRUSTEE FOR THE SPEDDING FAMILY TRUST t/as SUMMERGROVE ESTATE (appellant) v DEAN KIMBALL REID (respondent) |
APPLICATION NO/S: | APL260-22 |
ORIGINATING APPLICATION NO/S: | Q223/22 |
MATTER TYPE: | Appeals |
DELIVERED ON: | 12 September 2023 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member Lumb |
ORDERS: |
|
CATCHWORDS: | PROCEDURE – COSTS – APPEAL – where appeal from decision of the Tribunal exercising its minor civil disputes jurisdiction – where parties were not legally represented and leave for representation was refused – where appellant succeeded in overturning the decision at first instance – whether an order for costs should be made in favour of respondent pursuant to s 102 of the Queensland Civil and Administrative Tribunal Act 2009 – whether order for payment of filing fee should be made Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 48, s 100, s 102, Schedule 3 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 83, r 85, r 86 Brown and Anor v Noosa Constructions Pty Ltd [2012] QCATA 194 Commissioner of State Revenue v Telgrove Pty Ltd (No 2) [2023] QCATA 113 Drane v Taylor (No 2) [2022] QCATA 157 Emmetlow Pty Ltd t/as Colonial Village v Pomroy [2015] QCATA 131 Spedding Estates Pty Ltd as trustee for The Spedding Family Trust t/as Summergrove Estate v Reid [2023] QCATA 96 |
APPEARANCES & REPRESENTATION: | |
Applicant: | Self-represented |
Respondent: | Self-represented |
REASONS FOR DECISION
Introduction
- [1]This is a determination of the question of costs of the proceeding before the Appeal Tribunal.
- [2]On 17 July 2023, the Appeal Tribunal made various orders in this proceeding including granting leave to appeal, allowing the appeal, and setting aside the decision made by the Tribunal below dated 6 July 2022.[1]
- [3]The appellant (Spedding) has filed written submissions on costs dated 7 August 2023 (Spedding’s submissions), together with a supporting affidavit of Amber Jane Wemyss sworn 7 August 2023 (Ms Wemyss’ affidavit). Spedding seeks costs fixed in the amount of $13,563.60.
- [4]The respondent (Mr Reid) filed written submissions on costs dated 8 August 2023 (Mr Reid’s submissions). Mr Reid submits that each party should bear their own costs, as provided for by s 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act).
The relevant principles re costs
- [5]Section 100 of the QCAT Act provides:
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.
- [6]Section 102 of the QCAT Act provides:
- (1)The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order.
- (2)However, the only costs the tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section.
- (3)In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following—
- (a)whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);
- (b)the nature and complexity of the dispute the subject of the proceeding;
- (c)the relative strengths of the claims made by each of the parties to the proceeding;
- (d)for a proceeding for the review of a reviewable decision—
- (i)whether the applicant was afforded natural justice by the decision-maker for the decision; and
- (ii)whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;
- (e)the financial circumstances of the parties to the proceeding;
- (f)anything else the tribunal considers relevant.
- [7]The Appeal Tribunal has recently summarised the relevant principles as to costs in Commissioner of State Revenue v Telgrove Pty Ltd (No 2):[2]
- [8]We accept the Commissioner’s submissions that:
- (a)s 102 is not to be read on its own; rather, it must be read with s 100;
- (b)the position provided for by s 100 that each party must bear their own costs has been variously described as, relevantly, ‘the starting position’, ‘the prima facie position’ and ‘the usual position’. It has also been described as ‘the default position’.
- [9]The interplay between s 100 and s 102 of the QCAT Act was considered in Pound v Queensland Building and Construction Commission, where it was stated (footnote omitted):
- [41]The objects of the QCAT Act, including the issues of access to the Tribunal and the minimisation of costs, provide an appropriate reference point for the operation of s 100 of the QCAT Act and, in that context, may be placed in the balance along with the s 102(3) interests of justice considerations. The interplay between s 100 and s 102(3) may well vary, depending on the impact a costs order in the case at hand might have on access to justice and the other objectives in s 3 of the QCAT Act.
- [42]For example, the prospect of an adverse costs order is likely to weigh heavily on any decision to seek review of certain administrative decisions, which will potentially have a significant impact on access to justice. On the other hand, in relation to body corporate disputes involving significant monetary or other considerations, the interests of justice in awarding costs, as alluded to by Keane JA in Tamawood, might weigh heavily in favour of a costs order. In those circumstances, the disincentive of a potential costs order in bringing a matter before the Tribunal is less likely to loom so large and, accordingly, considerations of access to justice might weigh relatively lightly in the balance against a costs order.
- [43]On that basis, the underlying concern of s 100, in particular of not impeding access to justice and maintaining a low cost jurisdiction, may simply be placed in the balance along with the s 102(3) considerations, with the weight accorded to it being largely dependent on the nature and scope of the proceedings.
- [10]... In relation to s 102(3), it is noted that those provisions do not provide grounds for awarding costs, merely factors the Tribunal may take into consideration …
(citations omitted)
- [8]Before addressing the factors in s 102(3), it is necessary to address some preliminary matters arising from the respective submissions.
Preliminary matters
The costs claimed at first instance
- [9]The amount of costs claimed by Spedding comprises 60% of the total costs it contends it incurred, both at first instance ($9,882.00) and on the Appeal Application ($12,724.00).[3]
- [10]Rule 83 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (the Rules) provides:
For section 102 of the Act, the tribunal may award costs against a party to a proceeding for a minor civil dispute other than a minor debt claim—
- (a)only if the party is a respondent against whom the tribunal has made a final decision; and
- (b)only to order the party to pay to the applicant the amount of any prescribed fee paid by the applicant on filing the application for the proceeding.
- [11]I consider that the proceeding at first instance was a ‘minor civil dispute’ as defined in paragraph 1(b) of that definition in Schedule 3 to the QCAT Act. The dispute involved a claim arising out of a contract between a consumer and trader for payment of money of a value not more than the ‘prescribed amount’ (which is $25,000.00). I also consider that the proceeding involved a minor civil dispute ‘other than a minor debt claim’ for the purposes of the Rules. The phrase ‘minor debt claim’ is defined in the Rules to mean a minor civil dispute that is a claim within the meaning of paragraph 1(a) of the definition ‘minor civil dispute’ in Schedule 3 to the QCAT Act.
- [12]In my view, rule 83 precludes any order for costs at first instance in favour of Spedding pursuant to s 102 of the QCAT Act.[4] In any event, for the reasons set out below, I would not have been minded to make an order for costs in favour of Spedding at first instance.
Paragraph 14 of Spedding’s submissions
- [13]For the reasons given above in relation to the nature of the claim, I reject the contention in paragraph 14 of Spedding’s submissions that the proceeding ought to have been brought in the District Court of Queensland, insofar as Mr Reid’s primary claim in relation to the doctrine of frustration is concerned. The Adjudicator had jurisdiction to address that aspect of the claim.
The offers to settle
- [14]In support of its claim for costs, Spedding relies upon two offers to settle, the first by Spedding itself on 18 November 2021 to refund to Mr Reid $1,600.00,[5] and the second by Spedding’s solicitors on behalf of Spedding by letter dated 21 January 2022 to refund the sum of $1,600.00 within seven days of the parties executing a deed of settlement to be prepared by Spedding’s solicitors.[6]
- [15]Mr Reid submits:[7]
No offer was made or received in the context of the appeal proceedings. The Appellants [sic] made an offer to settle the proceedings at first instance in the sum of $1,600 and upon the execution of a deed. Insofar as that offer is relevant there are a few issues. Firstly, the offer was not capable of acceptance because the deed was in unknown terms. Secondly, the QCATA might question whether the offer is actually a genuine comprise noting that it represents about 10% of the Respondent’s claim. Thirdly, the offer remains contingent (so it is submitted) upon the determination of the ACL issue, noting the Appellants addressed that issue.
- [16]Both of Spedding’s offers were made prior to the MCD Application being filed.
- [17]In my view, the offers to settle do not assist Spedding.
- [18]Rule 86 of the Rules provides:
- (1)This rule applies if—
- (a)a party to a proceeding, other than a proceeding for a minor civil dispute, makes another party to the proceeding a written offer to settle the dispute the subject of the proceeding; and
- (b)the other party does not accept the offer within the time the offer is open; and
- (c)in the opinion of the tribunal, the decision of the tribunal in the proceeding is not more favourable to the other party than the offer.
- (2)The tribunal may award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made.
- (3)If a proceeding involves more than 2 parties, this rule applies only if the acceptance of the offer would have resulted in the settlement of the matters in dispute between all the parties.
- (4)In deciding whether a decision is or is not more favourable to a party than an offer, the tribunal must—
- (a)take into account any costs it would have awarded on the date the offer was given to the other party; and
- (b)disregard any interest or costs it awarded relating to any period after the date the offer was given to the other party.
(emphasis added)
- [19]In my view, the legislature has expressly excluded from the operation of rule 86, consideration of a written offer to settle the dispute the subject of a minor civil dispute proceeding. Consequently, I consider that the offers cannot provide an independent basis for the making of a costs order against Mr Reid at first instance. Rather, Spedding needs to satisfy the Tribunal that the interests of justice require the making of an order for costs of the Appeal Application pursuant to s 102 of the QCAT Act. The appeal proceeding is a separate proceeding from the proceeding at first instance.[8] To the extent that the offers to settle could have any relevance to the appeal proceeding, I consider that they do not assist Spedding on the basis of the first and third arguments of Mr Reid set out in paragraph 15 above.
- [20]I now turn to s 102 and, in particular, the factors identified in s 102(3). I note that Spedding has not expressly referenced s 102 in its written submissions.
Section 102(3)(a) (acting in a way that unnecessarily disadvantages another party)
- [21]Mr Reid submits that, first, none of the factors listed at s 48 of the QCAT Act is in play here and, second, that neither party has acted in a manner which has disadvantaged the other.[9]
- [22]I accept these submissions and note that Spedding has not identified any basis for a contrary conclusion, other than, in a broad sense, that it has succeeded on appeal.
Section 102(3)(b) (the nature and complexity of the dispute)
- [23]Spedding submits that:[10]
- 5.The proceeding involved complex questions of law involving the doctrine of frustration of contracts. The Respondent also sought to argue further complex questions of law as to which the Tribunal does not have jurisdiction (regarding unfair contract terms).
- 6.Those questions were such that it was not possible for the directors of the Appellant, who have no legal training, to litigate the proceeding independently (at all, much less effectively). It is apparent that it was not possible for the Respondent to do so either, given solicitors for the Respondent prepared and signed his submissions notwithstanding they were not granted leave to represent him (the basis on which that was appropriate being unclear). The complexity of those question is evidenced by the incorrect application of the law by the Tribunal member at first instance.
- 7.The same applies with respect to the preparation of the submissions as to costs.
- [24]Mr Reid submits, relevantly, that:[11]
This was not a complex case. No experts were required. No leave was granted for representation by either for Solicitors or Counsel. It was a matter for the parties to incur those costs in the circumstances. The matter was such that it could be heard by telephone …
- [25]Insofar as Spedding submits that Mr Reid sought to argue further complex questions of law which the Tribunal does not have jurisdiction to decide (regarding unfair contract terms), I observe that Spedding did not address the question of unfair terms at all in its written submissions on the Appeal Application. Further, its submissions in relation to the Frustrated Contracts Act 1978 (NSW) on the Appeal Application were, on one view, limited to one sentence (in paragraph 40) or, another view, limited to one paragraph (paragraph 40). Spedding’s costs in this respect would likely have been minimal.
- [26]I accept that the doctrine of frustration has some complexity when viewed from the perspective of a self-represented party who is not legally qualified. However, I consider the overarching principles of frustration to be well settled in Australia and there was no contest as to those principles between the parties on the Appeal Application.
- [27]In my view, the fact that the matter was of some complexity is a material consideration to be considered together with other relevant considerations.
Section 102(3)(c) (the relative strengths of the claims made by each of the parties)
- [28]Spedding relies upon the success it had on the Appeal Application.[12] It did not direct its submissions to the relative strengths of the competing arguments.
- [29]Mr Reid submits that:[13]
- 21.The fact that the Respondent succeeded at first instance demonstrates in part that its claim had merit.
- 22.Whilst the Appellant was successful in overturning the decision at first instance, there was nothing remarkable about that process, and certainty no disparity in the strengths and weakness of the arguments sufficient to support an award of costs.
- 23.The Respondent (so it is submitted), continues to have a claim of significant strength in the District Court for the ACL claim in circumstances where the terms of contract are very similar to other cases in which the Courts have declared to be “unfair”.
- 24.By contrast, in Drane v Taylor (No 2) the appeal was misconceived and the argument so weak that it was held to be vexatious. That is not the case here.
(citation omitted)
- [30]In my view, this factor focuses attention on the merits of the respective cases on the Appeal Application. I do not accept the submission that merely because Mr Reid succeeded at first instance, this demonstrates that his claim had merit. However, I consider that, on the Appeal Application, Mr Reid did have a reasonably arguable case in seeking to uphold the decision by the Adjudicator. I also accept that Drane is plainly distinguishable. In that case it was found that all of the matters raised in the application for leave to appeal were ‘without substance’ and that it was appropriate to draw the inference that the application was ‘vexatious’.[14]
- [31]In my view, the merits of Spedding’s arguments on appeal were not so plain as would warrant the making of a costs order against Mr Reid.
Section 102(3)(d) (specified factors in a proceeding for the review of a reviewable decision)
- [32]This factor applies to an application for a review of a reviewable decision. It has no application to this case.
Section 102(3)(e) (the financial circumstances of the parties)
- [33]
The Appellant is a small business and has been substantially impacted financially over the last few years due to Covid-19 restrictions affecting wedding venues (this proceeding being an example of the difficulties faced by it). The costs and the time invested by the directors in defending this proceeding have impacted it.
- [34]
- 25The Respondent in the proceeding is an ordinary person, having lost the entire consideration paid under a contract for events outside of his control.
- 26The Appellants are a business and will no doubt have the benefit of claiming their legal fees as a tax-deductible expense (for which the QCATA can take judicial notice).
- [35]Neither party has provided evidence of, or made submissions in respect of, its or his own financial position.
- [36]In my view, on the state of the material before the Appeal Tribunal, this factor does not justify, alone or in conjunction with other factors, the making of a costs order under s 102.
Section 102(3)(f) (anything else the tribunal considers relevant)
The issue of legal representation
- [37]Spedding submits that:[17]
- 8.At first instance the Respondent unsuccessfully applied for leave to be represented and no similar application was made by the Appellant due to that decision. With respect to the appeal, the Appellant unsuccessfully applied for leave noting that the Respondent positively opposed the granting of such leave (in circumstances where he continued to utilise solicitors himself and notwithstanding that the solicitors prepared, signed and filed the submissions as noted above).
- 9.The Appellant also applied for an oral hearing conditional upon leave to be represented. It is not clear why an oral hearing was ordered notwithstanding leave to be represented was refused. Nonetheless, the application by the Appellant to be represented was likewise linked to and principally in respect of the need, on the Appellant’s case, for oral submissions by lawyers at the hearing to assist the Appeals Tribunal. It was not related to the preparation of written submissions.
- 10.That no leave to be represented by lawyers was obtained is relevant, but no bar against the order for costs sought (see Drane v Taylor (No 2) [2002] QCATA 157 at [19] to [21] (enclosed)).
- 11.As legal assistance was necessary it was also therefore appropriate.
- [38]
The Appellant was not granted leave for legal representation. One infers that the Tribunal’s reasoning was grounded in the premise that the matter was not sufficiently complex and that the cost of the proceeding would be minimal. It is submitted that this is a significant discretionary factor when deciding the issue of costs.
- [39]Although I accept that a refusal of leave to be represented is not a bar to an award of costs, it is plainly a material consideration in assessing whether the interests of justice require the making of a costs order against the unsuccessful party.[19] I consider that the refusal of leave for representation in the present case tells against any order for costs in favour of Spedding, particularly given the absence of any strong countervailing factors such as existed in Drane.
Mr Reid’s further argument
- [40]Mr Reid submits that:[20]
In the context of the entire proceedings, the parties have had equal measures of success with the Respondent succeeding at first instance; and with the Appellant succeeding on appeal.
- [41]In my view, the measure of success, insofar as costs are to be determined, is to be gauged in respect of the outcome of the Appeal Application and not Mr Reid’s initial success at first instance.
The ACL Claim
- [42]
The Respondent (so it is submitted), continues to have a claim of significant strength in the District Court for the ACL claim in circumstances where the terms of contract are very similar to other cases in which the Courts have declared to be “unfair”.
(citations omitted)
- [43]I have already considered that there is a reasonably arguable claim under the Australian Consumer Law. I am not in a position to, and I consider that it would not be appropriate to, provide any assessment as to the ultimate merits of that claim, including expressing a view as to whether there is ‘significant strength’ in such a claim. This is the subject of any ultimate decision in the District Court. The question of costs is to be determined on the basis of the findings made in the primary decision of the Appeal Tribunal.
Conclusion on costs
- [44]Having regard to all the circumstances of the case, I am of the view that, subject to issue of payment of the filing fee on the Appeal Application addressed below, the interests of justice do not require the making of an order that Mr Reid pay Spedding’s costs (in whole or in part).
- [45]Whilst Spedding succeeded in having the decision below set aside and, further, the matter involves some complexity, I consider that those factors are not sufficient to displace the default position under s 100 when regard is had to the fact that the application for leave to be legally represented was refused and Mr Reid had a reasonably arguable case on the Appeal Application.
The filing fee
- [46]The costs sought by Spedding include the amount of $734.00 paid as the fee for filing the Appeal Application.
- [47]Rule 85 of the Rules provides:
If the tribunal makes an order against a respondent in a proceeding, other than a proceeding for a minor civil dispute, the tribunal may order the respondent to pay to the applicant the amount of any prescribed fee paid by the applicant on filing the application or referral for the proceeding.
- [48]Rule 85 is separate from s 100 and s 102 of the QCAT Act and does not come under the principles set out in those sections nor the case law which considers those sections.[22] Rather, the question of whether to award costs in the form of the filing fee remains one in the general discretion of the Tribunal.[23]
- [49]In circumstances where the payment of the filing fee was a requirement of instituting the Appeal Application, where Spedding succeeded in overturning the decision at first instance, and where there is no suggestion that Mr Reid would suffer financial hardship if ordered to pay the amount of the filing fee, I consider that the exercise of the Appeal Tribunal’s discretion under Rule 85 should be exercised in favour of awarding the filing fee to Spedding.
Further order sought by Spedding
- [50]Spedding submits:
- 18.On 20 October 2022, an application made by the Appellant to stay the decision of the Tribunal pending the appeal was refused. The judgement [sic] sum ($9,770.00) was therefore paid to the Respondent pursuant to the original order.
- 19.On 1 August 2023, MKW Legal on behalf of the Appellant wrote to the solicitors for the Respondent requesting repayment of that sum. No response to that letter, or repayment, has been received (see paragraphs 11 of the Affidavit).
- 20.The Appellant respectfully requests that the orders be amended to make it clear that the payment is to be repaid, to avoid the Appellant being forced to file its own originating application with the Tribunal seeking repayment.
- [51]This was not an issue raised by the Appeal Application and I consider that, if Mr Reid has failed to repay the amount paid by Spedding, it is a matter for Spedding to take such action as it may be advised to seek to recover the amount paid.
Orders
- [52]For the above reasons:
- (a)Mr Reid is ordered to pay to Spedding the amount of the filing fee of $734.00, within 21 days of the date of this decision;
- (b)otherwise, the parties should bear their own costs of the proceeding.
Footnotes
[1] Spedding Estates Pty Ltd as trustee for The Spedding Family Trust t/as Summergrove Estate v Reid [2023] QCATA 96.
[2] [2023] QCATA 113, [8]-[10].
[3] Ms Wemyss’ affidavit, Annexure “AJW-01”.
[4] I note that Drane v Taylor (No 2) (Drane) [2022] QCATA 157, [3] concerned costs on an application for leave to appeal, not costs at first instance.
[5] Ms Wemyss’ affidavit, Annexure “AJW-02”.
[6] Ms Wemyss’ affidavit, Annexure “AJW-03”.
[7] Mr Reid’s submissions, paragraph 28.
[8] Drane v Taylor (No 2) [2022] QCATA 157, [3].
[9] Mr Reid's submissions, paragraph 18.
[10] Spedding’s submissions, paragraphs 5-7.
[11] Mr Reid's submissions, paragraph 18.
[12] Spedding’s submissions, paragraph 12.
[13] Mr Reid's submissions, paragraphs 21-24.
[14] At [29].
[15] Spedding’s submissions, paragraph 13.
[16] Mr Reid’s submissions, paragraphs 25 and 26.
[17] Spedding’s submissions, paragraphs 8-11.
[18] Mr Reid’s submissions, paragraph 29.
[19] Drane, [6], [19]-[22].
[20] Mr Reid’s submissions, paragraph 27.
[21] Mr Reid’s submissions, paragraph 23.
[22] Emmetlow Pty Ltd t/as Colonial Village v Pomroy [2015] QCATA 131, [101].
[23] Brown and Anor v Noosa Constructions Pty Ltd [2012] QCATA 194 at [92], [102].