Costs in merits reviews? Don’t count on it

An award of costs in the Queensland Civil and Administrative Tribunal for even a successful party is not a given.

And the recent decision of AK Group Qld Pty Ltd v Queensland Building and Construction Commission No.2 [2021] QCAT 126 explores the reasons for this.

Practitioners should note that it was both the nature of merits reviews, as well as the strong contra-indication against the award of costs in these matters,1 that determined the issue.

The decision concerned an application for costs by AK Group Qld Pty Ltd (the applicants) following its successful review of two decisions by the Queensland Building Construction Commission (QBCC). The issue was significant in that the applicants sought in excess of $100,000 in costs and disbursements, while QBCC submitted there should be no order as to costs.

The decision turned on the issue of whether or not the interests of justice warranted an order for costs in light of the provisions of sections 100 and 102 of the Queensland Civil and Administrative Tribunal Act 2009.

The applicants took the position that they had always had the stronger case, as shown by the fact that the tribunal found that QBCC got the decision wrong. QBCC referred to its statutory duty to assist the tribunal in making the correct and preferable decision, its role as a regulator and that its conduct had been reasonable throughout.

The tribunal noted (at [25]) that there was nothing unreasonable in the conduct adopted by QBCC, including the cross-examination of the applicants’ expert witness. The matter involved issues of fact and credit and the testing of the evidence was justified. Crucially, the member concluded (at [26]):

“For the above reasons, I do not consider the original decisions can be categorised as ‘wrong’. The Tribunal reached a different conclusion based on an assessment of all the evidence presented including the evidence of Mr Leiper.”

The member found that the interests of justice did not warrant an award of costs in the applicants’ favour, noting (at [41]):

In particular, this was a review proceeding and I find that the QBCC did not act unreasonably in its approach to the original decision or the manner of its conduct in the proceeding including the hearing.”

The tribunal also considered the effect of an offer made by the applicants. While ultimately the tribunal found the offer not capable of acceptance (and therefore not capable of justifying an order for costs) due to uncertainty, the nature of the proceedings and the role of the QBCC were again considered by the tribunal. The applicants’ offer had contained two alternatives, one of which was that, “…the QBCC will consider observing our client’s review of the decisions in QCAT and permitting it to take its course without the additional expense to both parties of QBCC acting as contradictor”.

The tribunal considered and rejected that course being open to the QBCC, noting (at [49]):

“I accept the QBCC’s contention that it does not act as a ‘contradictor’ in a review proceeding. As noted above, the QBCC has a statutory obligation to assist the Tribunal pursuant to s21 of the QCAT Act. In my view, for the QBCC to only take a ‘passive role’ in the proceeding would be contrary to such obligation.”

Ultimately, the tribunal did not award the applicants their costs, other than the filing fees for the applications (totalling $704).

The emphasis that the tribunal put on the nature of merits review proceedings, the role of the QBCC and its conduct during the proceedings is significant. Practitioners should note this and ensure that clients are well aware that recovery of costs in these proceedings is rare, and not determined by the outcome of the review.

Footnote
1 Per Wilson J in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No.2) [2010] QCAT 412 at [29].

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One Response

  1. Not only are costs not guaranteed when the Regulator wins. The Regulator can get costs when it “loses”.

    Lazarevski, L. v QBSA (No. 2) [2003] QCCTB 12 (1 December 2004)
    Is authority for the proposition that an unsuccessful Respondent Regulator can get costs against a successful Applicant (under the old QBSA ACT).

    In that case until the oral evidence of the Applicant was presented, which had not previously been presented to the regulator, the Regulator was correct in refusing the application. The regulator successfully argued that if the oral evidence been presented before the hearing, the Regulator would have come to the same decision as the Tribunal. The Regulator successfully sought costs against the Successful Applicant as the Applicant had caused litigation that was not necessary.

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