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  4. Kruger v KBJ Legal Pty Ltd t/as Cronin James McLaughlin Lawyers - [2024] QCATA 63

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Kruger v KBJ Legal Pty Ltd t/as Cronin James McLaughlin Lawyers[2024] QCATA 63

Kruger v KBJ Legal Pty Ltd t/as Cronin James McLaughlin Lawyers[2024] QCATA 63

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Kruger v KBJ Legal Pty Ltd t/as Cronin James McLaughlin Lawyers [2024] QCATA 63

PARTIES:

LIAN KRUGER

(applicant/appellant)

V

kbj legal pty ltd t/a croniN james mclaughlin lawyers

(respondent)

APPLICATION NO/S:

APL053-23

ORIGINATING APPLICATION NO/S:

MCDQ106/22

MATTER TYPE:

Appeals

DELIVERED ON:

11 June 2024

DECISION OF:

Member Lember

ORDERS:

  1. The appellant pay the respondent’s costs of the application for leave to appeal or appeal fixed at $2,095.34 by 9 July 2024.

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – DISCONTINUANCE OF OR WITHDRAWAL FROM PROCEEDING – whether costs should be awarded where application for leave to appeal or appeal an interlocutory decision in a minor civil dispute was dismissed under section 47 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) – where proceedings futile from the outset – whether indemnity costs are warranted

Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 12, s 32, s 47, s 48, s 61, s 100, s 102, s 105, s 106, s 107

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170

Ascot v Nursing & Midwifery Board of Australia [2010] QCAT 364

Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621

Barnett & Anor v Pirrone & Anor [2019] QCATA 166

Calderbank v Calderbank [1975] 3 All ER 333

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 202; (1988) 81 ALR 397

House v R (1936) 55 CLR 499

Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58

McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] QSCFC 53

Micrac Pty Ltd v Collins & Ors [2021] QCAT 23

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

Todrell Pty Ltd v Finch (No 1) [2007] QSC 386

Wharton v Duffy Constructions (Qld) Pty Ltd [2016] QCATA 12

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

  1. [1]
    This decision concerns an application for costs following the dismissal of an application for leave to appeal or appeal.

Background

  1. [2]
    Ms Kruger’s company (Superboar) entered a short-term loan arrangement with a private lender who was represented in the transaction by the respondents, trading as Cronin James McLaughlin Lawyers (CJML). Ms Kruger was a guarantor to the loan, which Superboar repaid early. CJML later acted for Superboar on a conveyancing purchase transaction. 
  2. [3]
    By an application in a minor civil dispute – minor debt filed 28 September 2022 (Q106/22 Ipswich), Ms Kruger (personally) sought orders that the respondents refund the early exit fee, overcharged amounts on the loan, legal fees on the loan and the discharge transactions, and on the subsequent conveyancing purchase. She argued unfair contract terms on the loan agreement and poor service and poor management of the legal services provided in both transactions.  
  3. [4]
    On 10 November 2022 CJML brought an application to dismiss or strike out the application in Q106/22 on the basis that Ms Kruger lacked standing to bring it, because she was not a ‘relevant person’ under s 12 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), and all claims fell outside the minor civil dispute jurisdiction. The application was preceded by an email sent by CJML to Ms Kruger on 1 November 2022 wherein they made the same claims and invited her to withdraw the application within seven days, failing which they would seek a dismissal and indemnity costs.
  4. [5]
    By an application made 29 November 2022 Ms Kruger had requested default judgment on the claim. It had not been determined when the application to strike out was refused on 25 January 2023.
  5. [6]
    On 30 January 2023 CJML filed their response to the claim, which the Registry rejected because it was filed out of time and on 7 February 2023 CJML filed an application to extend time to file their response, which was granted by a decision made 8 February 2023.
  6. [7]
    By an application filed 27 February 2023 Ms Kruger sought leave to appeal and, if successful, to appeal the decision to extend time for the filing of the response. She also sought a stay on the decision refusing leave to extend time. 
  7. [8]
    The grounds of the application for leave to appeal or appeal were that her consent was not sought to the making of the decision to extend time, that CJML missed the time limit to ask for an extension, that there was no ground or substantive reason given for requesting the extension, and that section 61(3) of the QCAT Act prevents an extension of time where it would cause prejudice or detriment, not able to be remedied by an appropriate order for costs or damages.[1] 
  8. [9]
    The application for leave to appeal proceeded through the Tribunal as follows:
    1. Initial directions made when the stay application was refused on 7 March 2023 invited Ms Kruger to withdraw the application or to inform the Tribunal that she wished to proceed with the application. She did not comply with the direction.
    2. Further directions were made on 9 May 2023 inviting submissions as to whether the application for leave to appeal or appeal should be dismissed under section 47 of the QCAT Act on the basis that:
      1. (i)
        The application pertains to an decision to extend time, which is an interlocutory decision, made exercising discretion.
      2. (ii)
        There is a strong presumption in favour of a decision involving discretionary judgment. It is not enough that the Appeal Tribunal might have decided differently: the applicant must show that in terms of House v R (1936) 55 CLR 499 and Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 that the discretion exercised by the decision maker has miscarried by acting on a wrong principle or giving weight to extraneous or irrelevant matters or failing to give weight or sufficient weight to relevant considerations or making a mistake as to the facts.  The result must be so unreasonable or plainly unjust that the Appeal Tribunal may infer that there has been a failure to properly exercise the discretion.
      3. (iii)
        An appeal from a ruling on an interlocutory application involving no more than a point of practice or procedure, particularly where there is an element of discretion, the settled law is to keep a “tight rein” on attempts to appeal[2] and where substantive rights are not effectively determined, the Appeal Tribunal will be reluctant to interfere.[3] To interfere, it must be clear that there is an error so that there is a sufficient ground to doubt the correctness of the decision and there would be substantial injustice if leave to appeal was not granted.[4]
      4. (iv)
        The application refers to section 61(3) of the QCAT Act and the denial of natural justice because the prejudice or detriment to the applicant was not, according to the applicant, considered by the Tribunal in making the decision.  However, the prejudice or detriment is, relevantly, only that which is “not able to be remedied by an appropriate order for costs or damages”. The applicant’s claim being a money claim, and there being no suggestion that the respondent would be unable to pay the claim plus costs and damages (interest) if the claim against them is ultimately successful, there is no obvious prejudice or detriment to the applicant of granting the extension that could not be remedied with a money order.
      5. (v)
        There is no time limit for the filing of an application to extend time.  The respondents were not, as the applicant suggests, “out of time” to do so.  Necessarily, most applications to extend time are in fact after the subject compliance date has passed: that is why the extension is needed.
      6. (vi)
        Importantly, the Tribunal’s jurisdiction to make the orders sought in the minor civil dispute claim is not clear.  It is not certain that the applicant would have received the benefit of a default decision even if the response had not been filed.  A default decision still requires jurisdiction and there is a serious question to be tried as to whether the claim is a “minor debt” claim, and whether the applicant is a “relevant person” for the purpose of triggering that jurisdiction.
    3. Ms Kruger did not comply with directions, but CJML did.
  9. [10]
    By a decision made 12 June 2023 the application for leave to appeal or appeal was dismissed pursuant to section 47 of the QCAT Act as foreshadowed.
  10. [11]
    CJML now seek an award of their costs of responding to the application for leave to appeal or appeal, on an indemnity basis, fixed at $5,728.62 or, alternatively assessed based on the District Court scale.
  11. [12]
    Ms Kruger did not file submissions in response to the application for costs.

What is the legislative framework?

  1. [13]
    The starting point in the Tribunal is that each party to a proceeding must bear its own costs[5]. This differs from the Courts where the starting point is that costs follow the event. However, the Tribunal can order costs if it considers it is in the interests of justice to do so.[6]  
  2. [14]
    The question 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 section 100 of the QCAT Act.[7]
  3. [15]
    In Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)[8] President Justice Wilson said:

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, which obviously confers a broad discretionary power on the decision-maker.

  1. [16]
    In deciding whether to award costs in a matter the Tribunal may have regard to factors such as:[9]
    1. whether a party to a proceeding acted in a way that unnecessarily disadvantages another party to the proceeding;
    2. the nature and complexity of the dispute the subject of the proceeding;
    3. the relative strengths of the claims made by each of the parties to the proceeding;
    4. the financial circumstances of the parties; and
    5. anything else the Tribunal considers relevant.
  2. [17]
    These factors are not grounds for awarding costs but factors to be considered in determining whether, in a particular case, the interests of justice require a costs order.[10]
  3. [18]
    Section 105 of the QCAT Act acknowledges that rules may authorise the Tribunal to award costs in other circumstances, including, for example, the payment of costs in a proceeding if an offer to settle the dispute the subject of the proceeding has been made but not accepted.
  4. [19]
    Section 106 expressly permits the Tribunal to award costs “at any stage of a proceeding or after the proceeding has ended”.
  5. [20]
    If costs are ordered, section 107 of the QCAT Act provides that costs must be fixed if possible, or, if not, assessed under the rules.
  6. [21]
    The commencement of proceedings which cannot succeed because of a known legal impediment is a factor favouring costs being ordered on an indemnity basis.[11]
  7. [22]
    In Ralacom Pty Ltd[12] the Tribunal ordered indemnity costs, observing:

[58] The watershed case for awarding costs on an indemnity basis is the judgment in Colgate-Palmolive Co v Cussons Pty Ltd.[13] Following a comprehensive review of the authorities, Sheppard J sets out a number of factors at 257 which may warrant the exercise of discretion, including:

(i) the fact that proceedings were commenced or continued in wilful disregard of known facts;

(ii) the making of allegations which ought never to have been made;

(iii) the undue prolongation of a case by groundless contentions;

(iv) evidence of particular misconduct that causes loss of time to the Court and to other parties; and

(v) imprudent refusal of an offer to compromise. These propositions have been cited in recent cases.

  1. [23]
    In that case, although the applicants were not legally qualified, their conduct in pursuing their application when they ought to have understood that it was futile, was found to have “bordered on the inexplicable”, resulted in the respondent incurring unnecessary costs and their persistence with the proceedings, after an interlocutory decision was made that suggested they should not, was found to be “unreasonable and irresponsible” and justified an order on an indemnity basis.[14]
  2. [24]
    In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 202; (1988) 81 ALR 397, Woodward J said at 401 (my emphasis added):

I believe that it is appropriate to consider awarding `solicitor and client' or `indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law.

  1. [25]
    In Barnett & Anor v Pirrone & Anor[15] the Appeal Tribunal ordered indemnity costs on a withdrawal, finding that the withdrawing party had not acted reasonably in commencing and maintaining the proceedings.  The withdrawal occurred at a late stage and after repeated warnings at directions hearings that the Tribunal lacked jurisdiction in respect of part of the claim.  Costs were ordered from when the applicant should have known that the application was misconceived, which some eighteen months after proceedings commenced. 
  2. [26]
    In Micrac Pty Ltd v Collins & Ors[16] the Tribunal was not minded to award costs in a retail shop lease dispute where the application was withdrawn at an early stage but after the respondent had taken steps in the proceedings. The early withdrawal was important to the Tribunal’s decision, but the Tribunal was also not satisfied that the applicant acted unreasonably in commencing proceedings.

Discussion

Has a party whether a party to a proceeding acted in a way that unnecessarily disadvantages another party to the proceeding?

  1. [27]
    I find that:
    1. Ms Kruger did not act reasonably in commencing the application for leave to appeal or appeal.
    2. Incidentally, nor did Ms Kruger act reasonably in bringing the application for a minor civil dispute, and there was no basis for Ms Kruger to object to the late filing of a response to claim that did not fall within the Tribunal’s jurisdiction, and that was brought by a party without standing. 
    3. After filing her application for leave to appeal or appeal, Ms Kruger did not comply with any Appeal Tribunal directions issued. Non-compliance with directions is an identified action of disadvantage under section 48 of the QCAT Act.
    4. Ms Kruger did not withdraw her application, and it was left to the Appeal Tribunal to dismiss it.
    5. CJML incurred costs responding to an application for leave to appeal and appeal that Ms Kruger did not pursue and that entirely lacked merit.
    6. Even if not legally qualified, Ms Kruger appeared to have been well-informed of the requirements of the QCAT Act, based on her citing its sections in making her application.
    7. Relevant jurisdictional issues were raised with Ms Kruger by CJML in their email of 1 November 2022. From that date, she knew, or ought reasonably to have known, that her application, and therefore her application for leave to appeal were both futile and that indemnity costs would be sought if she pursued the claim.  She also know that the respondent was a legal practice that would incurred costs to respond to her various applications.
    8. Ms Kruger also sought a stay that was dismissed as it was misconceived.
  2. [28]
    I find that Ms Kruger commenced her application and allowed the appeal proceedings to continue in a careless if not wilful disregard of its defects.  Her motive for doing so is inferred as revisiting the terms of commercial lending after the transactions ended, or in the pursuit of a misguided customer service complaint, neither of which ought properly to have come before the Tribunal’s minor civil dispute jurisdiction and certainly not to the Appeal Tribunal.
  3. [29]
    I am satisfied that Ms Kruger acted in a way that disadvantaged the respondents and that this favours an award of costs against her.

The nature and complexity of the dispute the subject of the proceeding

  1. [30]
    The dispute is not complex, and this does not favour an award of legal costs.

The relative strengths of the claims made by each of the parties to the proceeding

  1. [31]
    As stated, Ms Kruger’s application to stay an interlocutory decision made in that proceeding, and the subsequent appeal proceedings were misconceived from the outset.
  2. [32]
    This factor strongly favours a costs order against Ms Kruger. 

The financial circumstances of the parties

  1. [33]
    No evidence has been filed or submissions have been made on this point. This does not favour an award of costs.

Other relevant factors

  1. [34]
    Ms Kruger was given early warnings by CJML (the email of 1 November 2022) to withdraw her unmeritorious minor civil dispute claim, and by the Appeal Tribunal as to the futile nature of the appeal. She disregarded both.
  2. [35]
    As observed in Wharton v Duffy Constructions (Qld) Pty Ltd [2016] QCATA 12 decisions made by Ms Kruger in conducting her application in the Tribunal below are not relevant to the costs application on the application for leave to appeal, and the strongest argument in favour of a costs order is where an application for leave to appeal or appeal is misconceived and the decision to file the application is unreasonable: both factors exist in this case.

What do the interests of justice require?

  1. [36]
    In those circumstances, the interests of justice require that CJML have its costs of the appeal proceedings paid by Ms Kruger. Consistent with Barnett & Anor v Pirrone & Anor [2019] QCATA 166 indemnity costs are appropriate in the circumstances of Ms Kruger’s conduct outlined herein.

Quantum

  1. [37]
    Pursuant to section 107(1) of the QCAT Act the Tribunal may fixed costs if possible and it is possible in this case.
  2. [38]
    CJML filed itemised invoices of its costs in the proceedings, including time spent on responding to the application in and appearing before the Tribunal below which cannot be awarded in this proceeding.
  3. [39]
    Accordingly, all time entries for attendances in the minor civil dispute application are removed, leaving those on 9 March 2023 ($225.00), 3 May 2023 ($135.00), 18 May 2023 ($50.30) and 22 May 2023 ($503.00), amounting to $913.30 from the first invoice. The second invoice is entirely for appeal proceeding costs, amounting to $1,182.04. Both calculations exclude GST because, if it is even payable on this ‘supply’, CJML will receive an input tax credit for it. 

Decision

  1. [40]
    The Appeal Tribunal’s decision is that Ms Kruger is to pay CJML’s costs of the application for leave to appeal or appeal fixed at $2,095.34 by 9 July 2024.

Footnotes

[1]  Application for leave to appeal or appeal filed 27 February 2023.

[2]McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] QSCFC 53.

[3] Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170.

[4] Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58, [5].

[5]  Section 100, ibid.

[6]  Section 102(1), ibid.

[7]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 at [29].

[8]  Ibid at [4].

[9]  Section 102(3), of the QCAT Act.

[10] Ascot v Nursing & Midwifery Board of Australia [2010] QCAT 364 at [9].

[11] Todrell Pty Ltd v Finch (No 1) [2007] QSC 386 at [4].

[12]  [2010] QCAT 412.

[13]  (1993) 118 ALR 248.

[14]  Ibid at [59].

[15]  [2019] QCATA 166.

[16]  [2012] QCAT 23.

Close

Editorial Notes

  • Published Case Name:

    Kruger v KBJ Legal Pty Ltd t/as Cronin James McLaughlin Lawyers

  • Shortened Case Name:

    Kruger v KBJ Legal Pty Ltd t/as Cronin James McLaughlin Lawyers

  • MNC:

    [2024] QCATA 63

  • Court:

    QCATA

  • Judge(s):

    Member Lember

  • Date:

    11 Jun 2024

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
Adam P Brown Male Fashions Proprietary Limited v Phillip Morris Incorporated (1981) 148 C.L.R 170
2 citations
Jump To
Cite 1 - (1981) 148 C.L.R 170
Cite 2 - (1981) 148 C.L.R 170
Ascot v Nursing & Midwifery Board of Australia [2010] QCAT 364
2 citations
Jump To
Cite 1 - [2010] QCAT 364
Cite 2 - [2010] QCAT 364
Australian Coal and Shale Employees' Federation v The Commonwealth (1953) 94 CLR 621
2 citations
Jump To
Cite 1 - (1953) 94 CLR 621
Cite 2 - (1953) 94 CLR 621
Barnett v Pirrone [2019] QCATA 166
3 citations
Jump To
Cite 1 - [2019] QCATA 166
Cite 2 - [2019] QCATA 166
Cite 3 - [2019] QCATA 166
Body Corporate for Nut Tree Hill CTS 27771 v Lilley [2012] QCAT 23
1 citation
Jump To
Cite 1 - [2012] QCAT 23
Calderbank v Calderbank (1975) 3 All E.R. 333
1 citation
Jump To
Cite 1 - (1975) 3 All E.R. 333
Colgate-Palmolive v Cussons (1993) 118 ALR 248
1 citation
Jump To
Cite 1 - (1993) 118 ALR 248
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
2 citations
Jump To
Cite 1 - (1988) 81 ALR 397
Cite 2 - (1988) 81 ALR 397
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) [1988] FCA 202
2 citations
Jump To
Cite 1 - [1988] FCA 202
Cite 2 - [1988] FCA 202
House v The King (1936) 55 CLR 499
2 citations
Jump To
Cite 1 - (1936) 55 CLR 499
Cite 2 - (1936) 55 CLR 499
Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58
2 citations
Jump To
Cite 1 - [2010] QCATA 58
Cite 2 - [2010] QCATA 58
McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd[1989] 2 Qd R 577; [1989] QSCFC 53
2 citations
Jump To
Cite 1 - [1989] QSCFC 53
Cite 2 - [1989] QSCFC 53
Micrac Pty Ltd v Collins [2021] QCAT 23
1 citation
Jump To
Cite 1 - [2021] QCAT 23
Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412
3 citations
Jump To
Cite 1 - [2010] QCAT 412
Cite 2 - [2010] QCAT 412
Cite 3 - [2010] QCAT 412
Todrell Pty Ltd v Finch[2008] 2 Qd R 95; [2007] QSC 386
2 citations
Jump To
Cite 1 - [2007] QSC 386
Cite 2 - [2007] QSC 386
Wharton v Duffy Constructions (QLD) Pty Ltd [2016] QCATA 12
2 citations
Jump To
Cite 1 - [2016] QCATA 12
Cite 2 - [2016] QCATA 12

Cases Citing

No judgments on Queensland Judgments cite this judgment.

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