Commissioner of State Revenue v Sandgate Road Property Pty Ltd (No 2)
[2023] QCATA 120
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- Unreported Judgment
- Commissioner of State Revenue v Sandgate Road Property Pty Ltd (No 2)[2023] QCATA 120
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Commissioner of State Revenue v Sandgate Road Property Pty Ltd (No 2)[2023] QCATA 120
Commissioner of State Revenue v Sandgate Road Property Pty Ltd (No 2)[2023] QCATA 120
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Commissioner of State Revenue v Sandgate Road Property Pty Ltd (No 2) [2023] QCATA 120 |
PARTIES: | commissioner of state revenue (applicant/appellant) v sandgate road property Pty Ltd (respondent) |
APPLICATION NO: | APL085-21 |
ORIGINATING APPLICATION NO: | GAR008-20 |
MATTER TYPE: | Appeals |
DELIVERED ON: | 19 September 2023 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Senior Member Aughterson Member McVeigh |
ORDERS: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – POWER TO AWARD GENERALLY – STATUTORY BASIS GENERALLY – appeal – where appeal from decision of the Tribunal exercising its review jurisdiction – where both parties were legally represented – where respondent successful at first instance and on appeal – whether an order for costs should be made in favour of respondent Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102, s 107 Taxation Administration Act 2001 (Qld), s 66, s 72, s 73 Campbell v The Body Corporate for 70 Bowen St & Ors [2020] QCATA 26 Colagrande & Ors v D A Radic Pty Ltd trading as David Radic Prestige Homes [2020] QCATA 86 Commissioner of State Revenue v Sandgate Road Property Pty Ltd [2023] QCATA 26 Commissioner of State Revenue v Telgrove Pty Ltd (No 2) [2023] QCATA 113 Department of Justice and Attorney General v CMH [2021] QCATA 6 Fuge v Queensland Building and Construction Commission [2014] QCAT 383 Kehl v Board of Professional Engineers of Queensland [2010] QCATA 77 Monsour & Anor v C & R Darvill Pty Ltd [2023] QCAT 62 Pound v Queensland Building and Construction Commission [2023] QCAT 298 Tamawood Limited & Anor v Paans [2005] QCA 111 Thompson v Body Corporate for Arila Lodge & Anor; Thompson v Body Corporate for Arila Lodge & Anor (No 2) [2018] QCATA 133 Till v Work Health and Safety Queensland – Office of Industrial Relations, Queensland Treasury Department & Anor (No. 2) [2016] QCATA 172 Venga Pty Ltd trading as San Churro and Anor v YFG Shopping Centres Pty Ltd [2020] QCAT 118 Walker v Queensland Building and Construction Commission [2014] QCAT 228 |
APPEARANCES & REPRESENTATION: | 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
Background
- [1]This is an application by the respondent (‘Sandgate’) for costs following the dismissal of the appeal in this matter on 15 March 2023. The decision at first instance and the appeal rested on the proper interpretation of s 152 of the Duties Act 2001 (Qld) and its applicability to the facts in this case. Section 152 allows an exemption from transfer duty where there is a second transaction ‘to correct a clerical error in a previous dutiable transaction about the same property’. The respondent submitted that the exemption applied, while the appellant submitted that it did not. The respondent was successful both at first instance and on appeal to the Appeal Tribunal.
- [2]In dismissing the appeal, the Appeal Tribunal ordered that:
The parties shall file (and serve on the other party), within 35 days of the date of delivery of these orders, any written submissions in respect of the question of costs of the application for leave to appeal or appeal.
- [3]On 20 April 2023 Sandgate filed submissions seeking orders that the Commissioner pay Sandgate’s costs both in the Tribunal at first instance and on appeal.
- [4]On 21 April 2023 the Commissioner filed submissions submitting that no order as to costs should be made.
The legislation and applicable principles
- [5]Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘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:
- 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) …
- 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.
- [7]The interplay between s 100 and s 102 of the QCAT Act was considered in Pound v Queensland Building and Construction Commission,[1] 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.
- [8]The impact of s 100 of the QCAT Act in the present case is considered further below. While the factors in s 102(3) are not stated to be exhaustive, consistent with the submissions of the parties those factors are considered, below, in turn.
- [9]As a preliminary matter, it is appropriate to set out the circumstances that gave rise to the decision of the appellant and the respondent’s subsequent application to review, which are set out in the decision of the Appeal Tribunal:[2]
[2] Sandgate Road Property Pty Ltd (‘Sandgate’) intended to acquire the land at 1856 – 1860 Sandgate Road Virginia for its valuation price of $3,700,000. That land is described in the Queensland Land Register as Lot 23 on RP 81051, Lot 24 on RP 81051, Lot 1 on RP 86194 and Lot 2 on RP 107126.
[3] As a consequence of an error in the office of the solicitors for Sandgate, only three of the four lots were listed in the contract and the Transfer lodged in the Queensland Titles Registry, though the address of 1856 – 1860 Sandgate Road Virginia was shown in the contract. Sandgate paid self-assessed duty of $193,275 on the transfer, which was based on the purchase price of $3,700,000 intended for all four lots. When the solicitor’s error was discovered, the fourth lot was transferred. The Commissioner of State Revenue assessed the duty payable on the second transaction at $46,000. The Tribunal below reviewed the Commissioner’s decision and set aside the Commissioner’s assessment, reassessing it to a value of $0. The Commissioner appeals that decision.
- [10]The decision of the Tribunal at first instance was handed down on 9 March 2021. The application for leave to appeal or appeal was filed on 31 March 2021. On 22 September 2021, the respondent filed an application for miscellaneous matters in relation to a potential costs application in the following terms:
- The [respondent] seeks leave to file this Affidavit of Giovanni Porta sworn 21 September 2021 to assist an application for costs in the event that this appeal is unsuccessful.
- This fresh evidence was not available to the Tribunal previously because the Respondent chose not to seek costs in proceeding GAR008-20.
- This fresh evidence also includes costs accrued after the original decision of that proceeding, namely those accrued in responding to this appeal.
- The fresh evidence is important because it indicates the significant costs the Respondent has accrued in bringing proceeding GAR008-20 and now responding to this appeal.
- This fresh evidence should be accepted so that, in the event that the Tribunal is satisfied that there was no appealable error in proceeding GAR008-20, the Respondent should be entitled to costs in responding to this appeal.
- [11]While prior to the application for leave to appeal and appeal, Sandgate did not seek costs in relation to the proceedings at first instance, at the commencement of the appeal hearing on 29 September 2022 Sandgate indicated that it had changed its position and, if successful, would be seeking costs in relation to both proceedings. Leave was given to file an updated version of the affidavit setting out legal costs incurred to the date of the appeal hearing. That was filed on 20 April 2023. Total costs were given as $29,751 (excluding GST) for the proceedings at first instance and $60,250 (excluding GST) for the appeal.
- [12]While the Appeal Tribunal may award costs both in relation to the appeal itself and the proceedings at first instance,[3] the question remains as to whether it should make such an order.
The s 102(3) factors
- [13]The s 102(3) factors raised in the submissions of the parties are addressed in turn.
(a) Whether a party caused unnecessary disadvantage
- [14]Sandgate made no submissions in relation to this factor. The Commissioner submits that the proceedings were conducted in accordance with the directions of the Tribunal and were not conducted in a way that unnecessarily disadvantaged the other party.
(b) The nature and complexity of the dispute
- [15]In its submissions, Sandgate notes that there were five grounds of appeal going to the proper interpretation of the relevant provisions of the Duties Act, including the question conceded at the hearing at first instance as to whether there had been a ‘clerical error’, as well as the impact of Public Rulings of the Commissioner. It is also noted that the Commissioner filed lengthy written submissions and three volumes of authorities. The Commissioner does not disagree about the complexity of the dispute, but says that it was considered necessary to clarify elements of the decision of the Tribunal at first instance, given amendments that had been made to s 152 of the Duties Act and the lack of any binding authority. By s 72 of the Taxation Administration Act 2001 (Qld) (‘the TA Act’), the parties have a right to legal representation.
(c) The relative strengths of the claims made
- [16]Sandgate refers to Till v Work Health and Safety Queensland – Office of Industrial Relations, Queensland Treasury Department & Anor (No. 2),[4] in which Carmody J stated:
Litigants need to be held financially accountable for trying to argue hopeless or spurious appeal points where the reasons for the decision at first instance cannot be faulted.
- [17]However, that was a case in which the unsuccessful party’s conduct in the proceedings was found to be vexatious and the submissions in support of the appeal vague, confusing, embarrassing, argumentative, inflammatory, lacking in substance and, in part, gratuitously offensive. The same could not be said of the Commissioner’s attitude to, or submissions in, these proceedings.
- [18]It remains that Sandgate was successful both at first instance and on appeal. The Commissioner submits that though unsuccessful, arguable grounds were raised and the application of principles of statutory construction ‘is notoriously an issue upon which courts and tribunals may reasonably differ’ and that it was appropriate to obtain some clarity on an interpretation of s 152 of the Duties Act that was at odds with the Commissioner’s Public Rulings.
(d)(i) Whether the applicant was afforded natural justice by the decision-maker
- [19]Sandgate submits that before making the decision the Commissioner should have written to Sandgate requesting that its submissions be supported by affidavit evidence and that its failure to do so constituted a denial of procedural fairness.
- [20]The Commissioner refers to Kehl v Board of Professional Engineers of Queensland,[5] where Kingham J stated (footnote omitted):
The next criterion, the conduct of parties in review proceedings, has no relevance to the application for leave to appeal. Whilst the substantive proceedings are review proceedings, this is an application for leave to appeal from an interlocutory procedural order.
- [21]It is not necessary to decide the extent to which the factor at s 102(3)(d) should extend to appeals from final decisions of the Tribunal in review proceedings. Sandgate does not point to any specific obligation on the Commissioner to seek the specified evidence and we accept the submission of the Commissioner that it was open to Sandgate to provide all necessary material to support its case. The Commissioner also refers to s 66 of the TA Act, which places an onus on the objector to prove its case where there is an objection to an assessment.
(e) The financial circumstances of the parties
- [22]Sandgate refers to the costs it has incurred in conducting the proceedings and to what it says are the ‘almost unlimited funds’ of the Commissioner to pursue its position, but makes no reference to its own general financial circumstances. The Commissioner submits that it represents the public interest and administers public funds and that Sandgate is a company ‘with some resources’ and further submits that this factor is not relevant to the present proceedings.
(f) Anything else the tribunal considers relevant
- [23]Sandgate submits that the Commissioner accepted that the additional $46,000 of transfer duty would not have been payable if the clerical error in the solicitors’ office had not been made, that the Commissioner was seeking ‘to protect a windfall gain of $46,000’, and that the Commissioner was taking a narrow technical approach to the interpretation of the relevant provisions of the Duties Act, which was contrary to the model litigant principles. It also submits that ‘the appeal was self-serving for the benefit of future potential’.
- [24]The Commissioner submits that at all times it acted consistently with the model litigant principles. In particular, it acted consistently with the manner in which it had handled other claims under s 152 of the Duties Act and under its published rulings. It was further submitted that it was appropriately testing the exemption claim and was properly acting to protect the State’s interests.
Discussion
- [25]The interplay between s 100 and s 102 of the QCAT Act has been referred to above. As there noted, the question in relation to s 100 centres on the impact of a costs order on the issue of access to justice and the other objects under s 3 of the QCAT Act.
- [26]The present matter involves a review proceeding and an appeal from the first instance decision of the Tribunal. Generally with review proceedings, there would be a significant impact on access to justice if the prospect of an adverse costs order dissuaded parties from seeking review of departmental administrative decisions. Equally, it has been held that a regulatory body should not generally be burdened with a costs order when acting to protect professional or industry standards in the public interest. In Fuge v Queensland Building and Construction Commission, it was stated:[6]
I reiterate that under the QBCC Act, the Commission has a dual function in administrating the Act. That is, to protect the public interest and also the interests of building contractors. In doing so it must not be reticent in discharging its obligations for fear of adverse costs orders against it if it is unsuccessful in responding to an application for review of its decisions unless it can be demonstrated, there is some specific conduct on the part of the Commission, that would ‘so compellingly’ overcome the strong contra-indication against costs orders in s 100 of the QCAT Act. I am not satisfied that this is the case here.
- [27]The Commissioner submits that the role of the Commissioner is ‘akin to a regulator’, being responsible for the administration and enforcement of the Duties Act. While in that sense the Commissioner does act in the public interest, that is not the same thing as a responsibility to protect the general public from injury or harm by ensuring adherence to professional or industry standards by those who have been given professional or industry licences. The potential impact of a costs order in those circumstances has been noted above.
- [28]On the other hand, the imposition of a costs order following the review of a decision to levy a relatively large tax is significantly less likely to negatively impact access to justice or the other objects of the QCAT Act. As accepted in the submissions of the Commissioner, in filing the appeal the Commissioner was seeking to clarify the scope of the relevant provisions of the Duties Act, which might well impact other revenue decisions made by the Commissioner.
- [29]Also, the potential need for legal representation is recognised by the TA Act. Section 72 of that Act provides that a party may be legally represented, which may be contrasted with s 43(1) of the QCAT Act, which provides: ‘The main purpose of this section is to have parties represent themselves unless the interests of justice require otherwise’. Further, s 73 of the TA Act provides that on review before the Tribunal the applicant has the onus of proving the applicant’s case, while the general position with merits review under s 20 of the QCAT Act is that there is no onus of proof.[7]
- [30]Given the nature of the proceedings in this matter, and the accepted complexity of the issues involved, the observations of Keane JA in Tamawood Ltd v Paans are apposite:[8]
If orders for costs were not to be made in favour of successful parties in complex cases, then just claims might not be prosecuted by persons who are unable to manage complex litigation by themselves. Such a state of affairs would truly be contrary to the interests of justice; and an intention to sanction such a state of affairs cannot be attributed to the legislature which established the Tribunal.
- [31]Sandgate submits that the Tribunal should order the Commissioner to pay Sandgate’s costs fixed at $29,751 (excluding GST) in relation to the proceedings at first instance and $60,250 (excluding GST) in relation to the appeal, giving a total of $90,001 (excluding GST).
- [32]In all of the circumstances we consider that the Commissioner should pay Sandgate’s costs in the initial review proceedings and in relation to the appeal. Consistent with a number of previous decisions of the Tribunal,[9] a deduction of one third of the actual costs should be applied to arrive at a figure representing standard costs.
- [33]In accordance with the above reasons, the Commissioner should pay Sandgate’s costs fixed[10] in the total sum of $60,000 (excluding GST), calculated as follows: $90,001 (being $29,751 + $60,250.00), less one third to reflect costs on the standard basis.
Order
- [34]The appellant is ordered to pay to the respondent the sum of $60,000 for costs, within 28 days of the date of this decision.
Footnotes
[1] [2023] QCAT 298, [41]-[43].
[2] Commissioner of State Revenue v Sandgate Road Property Pty Ltd [2023] QCATA 26, [2]-[3].
[3] See Colagrande & Ors v D A Radic Pty Ltd trading as David Radic Prestige Homes [2020] QCATA 86, [16]-[19].
[4] [2016] QCATA 172, [10].
[5] [2010] QCATA 77, [8].
[6] [2014] QCAT 383, [28]. See also Pound v Queensland Building and Construction Commission [2023] QCAT 298, [45]-[50]. As to the reference to conduct that would compellingly overcome the strong contra-indication against costs orders, see Pound at [9] and following paragraphs.
[7] See, for example, Department of Justice and Attorney General v CMH [2021] QCATA 6, [11]-[15]; Walker v Queensland Building and Construction Commission [2014] QCAT 228, [23].
[8] [2005] QCA 111, [32]. In relation to that decision, see Pound at [14]-[18]. The decision in Tamawood considered the operation of the, then, Commercial and Consumer Tribunal Act 2003 (Qld), which provided: ‘The main purpose of this Division is to have parties pay their own costs unless the interests of justice require otherwise’.
[9] See, e.g., Thompson v Body Corporate for Arila Lodge & Anor; Thompson v Body Corporate for Arila Lodge & Anor (No 2) [2018] QCATA 133, [59]; Campbell v The Body Corporate for 70 Bowen St & Ors [2020] QCATA 26, [24] (‘a little more than’ one third was deducted); Venga Pty Ltd trading as San Churro and Anor v YFG Shopping Centres Pty Ltd [2020] QCAT 118, [25]; Monsour & Anor v C & R Darvill Pty Ltd [2023] QCAT 62, [47]; Commissioner of State Revenue v Telgrove Pty Ltd (No 2) [2023] QCATA 113, [50].
[10] See s 107 of the QCAT Act.