Costly conduct: a further insight into QCAT’s approach to awarding legal costs

It is generally accepted that parties must bear their own costs in matters before the Queensland Civil and Administrative Tribunal (QCAT).

This general rule is enshrined in section 100 of the Queensland Civil and Administrative Act 2009 (Qld) (QCAT Act). However, the recent judgment of Golden Vision Gold Coast Pty Ltd v Orchid Avenue Pty Ltd (no 2) [2022] QCATA 154 (Golden Vision (No 2)) demonstrates that the Tribunal is willing to displace this rule and award costs, where the parties’ conduct indicates that it is “in the interests of justice” to do so (the authors acted for the successful applicant Orchid Avenue).

Background

Golden Vision (No 2) involved an application for costs by Orchid Avenue Pty Ltd following the Tribunal’s earlier decision to dismiss an application for leave to appeal and to appeal, brought by Golden Vision Gold Coast Pty Ltd.

Golden Vision’s unsuccessful appeal related to the Tribunal’s decision in a dispute between the parties regarding the termination of a Retail Shop Lease. At first instance, the Tribunal had ordered Golden Vision to pay Orchid Avenue its losses of $28,267.81.

QCAT proceedings and costs: the legal framework

Section 100 of the QCAT Act provides that “[o]ther 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. However, section 102 gives the Tribunal discretion to award costs, where it considers it is in “the interests of justice” to do so.

In making any determination about whether it is in the interests of justice to award costs, the Tribunal may consider the factors outlined in section 102(3) of the QCAT Act:

1. Whether a party is acting in a way that unnecessarily disadvantages another party including those matters set out in section 48(1)(a) to (g) of the QCAT Act which include:
   1. not complying with a QCAT order or direction without reasonable excuse;
   2. asking for an adjournment as a result of non-compliance with a QCAT order or direction;
   3. causing an adjournment;
   4. failing to attend a mediation; and
   5. the nature and complexity of the dispute the subject of the proceeding;
2. the relative strengths of the claims made by each of the parties to the proceeding;
3. the financial circumstances of the parties to the proceeding; and
4. anything else QCAT considers relevant.

Golden Vision (No 2) provides guidance on the Tribunal’s interpretation and application of certain of those factors.

Interests of justice

A persuasive factor in favour of the award of costs in this case was that Golden Vision had acted in a way that unnecessarily disadvantaged Orchid Avenue as a party to the proceeding. In reaching this conclusion, the Tribunal had regard to the way Golden Vision had conducted the appeal. In particular, it had:

• refused a request to have the appeal hearing conducted on the papers;
• unsuccessfully sought to adjourn the final hearing of the appeal;
• prepared an appeal book in excess of 1000 pages, few of which were directly relevant to the issues in dispute; and
• refused to clarify the documents it intended to rely upon at the hearing.

The Tribunal considered each of these matters, concluding that “the way Golden Vision chose to prosecute the appeal adversely impacted on the costs incurred by Orchid Avenue.”

Other factors in favour of the award were the nature and complexity of the dispute, and the relative strengths of the claims. The Tribunal noted that the nature and complexity of the dispute between the parties, which involved quite technical arguments as to the proper construction of the Retail Shop Leases Act and the circumstances of termination, warranted legal representation. The relative strengths of the claims were assessed in light of the fact that Golden Vision was unsuccessful at first instance, and on each of its three grounds on appeal.

Balancing all of these factors, the Tribunal found that that it was in the interests of justice to make an award of costs.

Costs were awarded on the standard basis, and Golden Vision was ordered to pay a further $29,340 to Orchid Avenue.

Lessons for those involved in matters before the Tribunal

The decision in Golden Vision (No 2) is a reminder for parties and legal representatives involved in matters before the Tribunal that their conduct may have cost consequences. Parties cannot presume that the Tribunal is a no costs jurisdiction, and should reflect on this decision when deciding how to conduct any proceeding in QCAT.