Duo Perfect Pty Ltd as Trustee for The Perfect Duo Trust v Body Corporate for Northmarque Community Titles Scheme 43944

Health Ombudsman v George du Toit [2024] QCA 235

TLL Investment Pty Ltd v The Body Corporate for the Grange CTS 30993 (No 2) [2018] QCAT 444

Body Corporate and Community Management Act 1997, s 314

Queensland Civil Administrative Tribunal Act 2009, s 48, s 77, s 100, s 102, s 107, s 164

Mr BWJ Kidston instructed by Hynes Legal for the applicant

Mr BP Strangman instructed by Stratify Legal for the respondent

• [1] The applicant is a company with an issued capital of $2. Mr and Mrs Daniel are the shareholders and Mr Daniel is the sole director.
• [2] In 2015, the applicant and the respondent entered into an arrangement for caretaking and letting of the respondent's property. The applicant paid $1,150,000 to obtain this position, including a lot in the scheme. The applicant was then an on-site caretaker and manager, living at the property.
• [3] Towards the end of 2022, a problem arose. The applicant claimed that the respondent refused to pay remuneration due to the applicant under the terms of the caretaking agreement and refused to reimburse the applicant for consumable items under the terms of that agreement.
• [4] The total sum involved in this dispute was $18,438.10. The respondent claimed that it had previously overpaid the applicant by that amount and withheld this sum as a set-off.
• [5] The applicant commenced proceedings in this Tribunal in order to recover this money.
• [6] In March 2023, the respondent gave the applicant a Remedial Action Notice which claimed that the applicant had not carried out various of its duties as required.
• [7] The applicant took the position that the notice was invalid and that the breaches had been remedied. The respondent's position was that it was entitled to terminate the caretaking agreement.
• [8] In April 2023, the respondent's legal representative filed an application with the Tribunal to the effect that both parties should have leave to be legally represented in the Tribunal in this dispute which had grown to include complex questions of law.
• [9] The Tribunal promptly granted the request.
• [10] After this, the applicant amended its claim in the Tribunal to include declaratory and injunctive relief.
• [11] In late 2023, the respondent adopted the Body Corporate Standard Module in place of the previously existing Accommodation Module. This had a disadvantaging effect on the applicant as it would limit the term of a caretaking agreement to 10 years. The previously existing agreement had at that point around 16 years left to run.
• [12] In response, the applicant amended its claim again to seek damages for breach of its contract with the respondent.
• [13] There were multiple attempts between the parties to reach an agreed outcome to the dispute; none were successful.
• [14] Early in 2025, the Tribunal made directions requiring a response to the applicant's claim as amended and for a hearing over three days in late July 2025.
• [15] Before it filed its response, the respondent paid the sum originally in dispute, with interest. In addition, it withdrew the Remedial Action Notice and took steps to change the module back to the Accommodation Module.[1] This resolution was passed towards the end of May 2025.
• [16] The result is that the substance of the dispute has ceased to exist. What remains is a dispute in regard to the legal costs of it. The applicant has sought costs throughout. It claims that it has incurred costs of $53,359.50 in relation to the dispute that are not properly costs of the proceedings so it is not seeking those costs from the respondent.
• [17] The applicant is seeking costs in the sum of $124,042.25 to be fixed by the Tribunal in respect of costs to be paid by the respondent.
• [18] If unsuccessful in this, it seeks costs on the standard basis and an order that the costs be assessed on the Supreme Court scale.
• [19] In addition, it was seeking an order under section 314 of the Body Corporate and Community Management Act 1997 to the effect that the applicant not be required as a member of the community title scheme to pay any part of the costs order itself. It points out that it has already paid levies to the body corporate to fund the defence of the proceeding which it, the applicant, has brought. It is not seeking any adjustment in respect of that matter.

• [20] The respondent points to Division 6 of Chapter 2 of the Queensland Civil Administrative Tribunal Act 2009 ('QCAT Act'), particularly sections 100 and 102 which, relevantly, provide as follows -

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.

102 Costs against party in interests of justice

(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.

(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;

(e) the financial circumstances of the parties to the proceeding;

48 Dismissing, striking out or deciding if party causing disadvantage

(1) This section applies if the tribunal considers a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including by -

(a) not complying with a tribunal order or direction without reasonable excuse; or

(b) not complying with this Act, an enabling Act or the rules; or

(c) asking for an adjournment as a result of conduct mentioned in paragraph (a) or (b); or

(e) attempting to deceive another party or the tribunal; or

(g) failing to attend conciliation, mediation or the hearing of the proceeding without reasonable excuse.

• [22] Section 107 is also relevant; it provides -

(1) If the tribunal makes a costs order under this Act or an enabling Act, the tribunal must fix the costs if possible.

(2) If it is not possible to fix the costs having regard to the nature of the proceeding, the tribunal may make an order requiring that the costs be assessed under the rules.

(3) The rules may provide that costs must be assessed by reference to a scale under the rules applying to a court.

• [23] The respondent points out that the matter did not proceed to a hearing and that the applicant repeatedly amended its proceeding and was unsuccessful in an application for interim orders. It further submits that the applicant maintained a pleaded case that was inconsistent with known facts and withdrew from settlement opportunity, referencing the most recent offer that was on better terms than the result achieved.
• [24] Along with the applicant, the respondent refers to Health Ombudsman v George du Toit,[2] a decision of the Court of Appeal which is binding on this Tribunal.
• [25] The respondent submits that there is a risk in placing too much reliance on that case, which is not a commercial case but a professional disciplinary matter. In this connection, it pointed to the Court of Appeal's reasons at [53] where it was recognised that different factors may well operate in considering costs in commercial litigation when the interests of justice are being weighed.
• [26] It also submitted that regard should be had to the decision in Ascot v Nursing and Midwifery Board of Australia.[3] There, the learned Deputy President said that the considerations in section 102(3) are not grounds of awarding costs but factors to be taken into account when determining whether the interests of justice require that a costs order be made.
• [27] The respondent submits that the decision of Bond J in Fairfield Services Pty Ltd (in liq) v Leggett[4] ought to be distinguished because it considered the Uniform Civil Procedure Rules 1999 and also because the respondent has not effectively surrendered.
• [28] It is submitted that in this Tribunal costs are normally borne by the parties, a very different situation, and that this case is like those considered by Bond J where a supervening event effectively resolves the dispute. Here, the applicant entered into a contract to sell its management rights and the caretakers' lot. This, the respondent submits, had the practical effect of "... resolving the tension between the parties".[5]
• [29] The decision of Bond J indicates that, in cases where a supervening event has effectively ended the dispute, this might provide a reason for each party to bear their own costs if there is no clear reason to proceed in a contrary way to that.

Maintaining a case inconsistent with known facts

• [30] The respondent submits that the applicant maintained a case that was inconsistent with known facts in that it has claimed damages of $859,000 consequent on the change of the regulation module from the Accommodation Module to the Standard Module. In that regard, it had asserted that the fair market value of its agreements with the respondent would be reduced in value, possibly to then being of no value at all or, alternatively, $100,000 with the caretaker's lot being worth $500,000.
• [31] In May 2025, the applicant entered into a contract to sell the agreements for $235,000 and the caretaker's lot for $740,000.
• [32] The damages claim was not amended to reflect these values.

• [33] In April 2023, a settlement was agreed but the applicant withdrew its consent to it. A second attempt was in negotiation up to late 2024 but did not result in an agreement as the respondent was not satisfied with the terms of the draft deed of settlement.
• [34] In March, 2025, the respondent made another settlement offer including what has now occurred, namely -

(a) withdrawal of the Remedial Action Notice, the code contravention notice that also existed and payment of the disputed remuneration;

(b) reverting to the Accommodation Module;

(c) discontinuation of these proceedings, with both parties bearing their own costs.

• [35] This was rejected by the applicant, which additionally sought releases from any future proceedings that the respondent was not prepared to give and which could not have been obtained in the proceedings.
• [36] The respondent submits that the three settlement offers all contained at least what the applicant achieved by what has now occurred. Accordingly, the applicant has acted imprudently in refusing three settlement offers and ought not be entitled to its costs.

• [37] The respondent, in agreement with the applicant on this point, submits that if this Tribunal determines that it is in the interests of justice to award the applicant its costs, the most appropriate order is that costs be fixed.
• [38] It submits that the costs sought should be discounted by 50%, GST should be deducted and, as the invoices supplied on behalf of the applicant are not particularised, it will be difficult to determine what costs should be fixed with any confidence. It also maintains that the oral hearing on 29 July 2025 with respect to costs was unnecessary and, as it previously submitted, costs should have been determined on the papers.
• [39] The respondent provided a schedule which applies its suggested 50% discount and costs proposals with and without the hearing on 29 July 2025. In total, if the 29 July 2025 hearing is included, costs under that prepared model would be fixed at $74,401.53. This may be compared with the sum of $124,042.25 sought by the applicant. The difference is in the order of $50,000.
• [40] The respondent submits that it has not capitulated but acted pragmatically and that there should not be any order of costs against it.
• [41] The respondent does not submit that, if the Tribunal decides that the applicant should have costs, then the costs should be what it set out in the schedule handed up during the hearing, $74,401.53 or a lesser amount as set out there if, for instance, costs are not allowed in respect of the hearing on 29 July 2025. The schedule was not presented as removing the difficulties to which it referred in submissions; such as the lack of detail in the invoices provided on behalf of the applicant. The Tribunal would still need to fix costs without the schedule being seen as more than illustrative of possibilities.

• [42] The first question is that raised by section 100 of the QCAT Act and section 102 which impinges on the starting position that each party must bear their sum costs. Attention must be directed to section 102. The decision in Health Ombudsman v George Du Toit provides critical guidance.
• [43] It is recognised that the case before the Court of Appeal was one where legal representation was available. It is also recognised that legal representation was permitted in this case upon it being applied for.
• [44] The Court of Appeal considered sections 101 and 102 of the QCAT Act broadly and its judgment is equally applicable to the construction of these provisions as they apply to this case.
• [45] These sections must be construed in the context of the QCAT Act as a whole.[6]
• [46] The Tribunal deals with a wide range of matters of varying complaints and potential seriousness of outcomes.[7]
• [47] The complexity of the matter is relevant.[8]
• [48] Section 100 is subject to Section 102 and the discretion in Section 102(1) is wide and the interests of justice will vary according to the circumstances of each case.[9]
• [49] The word "require" in section 102(1) is wide in meaning.[10]
• [50] Section 102(3) describes a wide range of circumstances.[11]
• [51] The Tribunal's objective in being, inter alia, informal and quick is subordinate to its duty to act fairly and according to the substantial merits of the case.[12]
• [52] In complex cases the QCAT Act contemplates a readiness to depart from the approach in minor civil disputes in favour of one more aligned with conventional litigation.[13]
• [53] The default position of no order as to costs should not be too readily departed from.[14]

• [54] The proceeding was necessitated by the respondent's actions in withholding a sum of money. Complexity, which the parties agreed existed, was added by the subsequent conduct of the respondent which threatened the valuable asset of the applicant's rights. The applicant's conduct in the litigation was substantially necessitated by the actions of the respondent.
• [55] The engagement of legal assistance by both parties was reasonable in view of the seriousness of the dispute, which is a commercial dispute where the applicant has a significant asset which was under threat.
• [56] Concerning section 102(3), the Tribunal will consider the relevant provisions seriatim.

• [57] It does not appear that either party acted so as to unnecessarily disadvantage the other. Section 48(1)(a) to (g) is considered in this regard.

• [58] This was a commercial dispute where a significant asset of the applicant was in danger of loss or a large reduction in value. It was a complex dispute.

• [59] It is not possible to judge this aspect as there was no hearing on the merits.

• [61] The parties are both corporate entities. The applicant is a private company with a nominal share capital and it appears that its principal asset was the arrangements for caretaking and management which were under threat. The respondent is able to levy unit holders in respect of its financial obligations. The applicant was a unit holder.

• [62] All of the matters referred to in these reasons are also relevant in respect of this consideration.
• [63] The applicant has not been successful at a hearing, that having been made unnecessary by the actions of the respondent which have remedied the situation complained of.
• [64] Viewing the litigation overall, it can be concluded that it has ended because the applicant received from the respondent something which the applicant sought, the money initially in dispute, and the respondent rolled back the other steps it took as the dispute festered. The applicant's failure to accept the settlement offer needs to be appreciated in the context of the escalation of the dispute by the respondent. In the circumstances, the failure of the third settlement offer when a broad release from future claims was not to be given is readily understood. The applicant had experienced the respondent escalating this dispute.
• [65] Maintaining the claim for damages of $859,000 in view of the contract of sale of the agreements and the caretaker's lot is validly criticised. It needs to be understood, though, in the context that the matter did not go to trial so the claim was not actually pressed at a hearing. Accordingly, in the context of the respondent's actions in ending the dispute, this failure by the applicant should not be seen as such as to result in it being disqualified from the possibility of a costs order because of it.

• [66] Taking all of the matters to which reference has been made into account, the Tribunal considers that the interests of justice require it to make an order that the respondent pay all of the costs of the applicant in this proceeding. Such costs should be on the Supreme Court scale and on the standard basis.

• [67] If, as has occurred, the Tribunal has decided that the interests of justice require it to make an order as to costs, the QCAT Act relevantly provides -

(1) If the tribunal makes a costs order under this Act or an enabling Act, the tribunal must fix the costs if possible.

(2) If it is not possible to fix the costs having regard to the nature of the proceeding, the tribunal may make an order requiring that the costs be assessed under the rules.

(3) The rules may provide that costs must be assessed by reference to a scale under the rules applying to a court.

• [68] The final question is whether it is possible to make such an order fixing the costs.
• [69] The respondent has made criticisms of the applicant's material relating to costs that have been noted. As an example, some Tribunal time was expended attempting to find a precise explanation for an invoiced sum of $1,500. The invoices do not descend into a great deal of detail, at least in the pages that have been provided in the material.
• [70] The Tribunal has the benefit of the affidavit of Ms J E Graham, the applicant's solicitor. It has tax invoices and other material relevant to costs annexed to it. It was sworn on 6 June 2025. In [44] and [45] of that affidavit, the solicitor asserts that "as a general rule of thumb",[15] costs are assessed in the Supreme and District Court on the standard basis at around approximately 55% to 70% of the actual costs charged on a time-costed basis. The solicitor goes on to refer to 85% to 90% on a second basis which is, clearly erroneously, also referred to as the standard basis. The Tribunal has no doubt that the 55% to 70% range is the standard basis intended to be understood as such.
• [71] The solicitor, Ms J E Graham, has provided a further affidavit, sworn 28 July 2025. This updates the costs in this matter, including for counsel.
• [72] Concerning the schedule of supported costs calculation provided by counsel for the respondent at the hearing, it is noted that it employs a 50% discount rate on some costs, particularly for the hearing on 29 July 2025, which the respondent submits was unnecessary. There is no evidence which supports that rate. The Tribunal found the oral hearing of great value in understanding the totality of the matter, since there has not been a hearing of the merits of the dispute. The Tribunal is satisfied that the hearing on 29 July 2025 was fully necessary in relation to the matter of costs.
• [73] The affidavit of the applicant's solicitor sworn on 6 June 2025 was received by QCAT on 16 July 2025. The follow-up affidavit of the solicitor, sworn on 28 July 2025 is brief and should not have been unexpected.
• [74] The respondent was represented by counsel. The deponent of the two costs affidavits, the applicant's solicitor, was not required for cross-examination. Additionally, there was no affidavit material provided or witness called on behalf of the respondent to contend for any other quantum of costs. The respondent, with the benefit of legal representation, chose to not contest this material in a meaningful way.
• [75] The evidence before the Tribunal in relation to costs is cogent and is accepted. The applicant referred to a decision of this Tribunal in TLL Investment Pty Ltd v The Body Corporate for the Grange CTS 30993 (No 2)[16] where the Tribunal accepted that costs should be fixed at 65% of the solicitor's costs on a time-costed basis. This case is an example; however, the Tribunal will decide in this case what the appropriate rate should be in the context of all the circumstances of the case.
• [76] It is noted that, generally, counsel's fees are often recoverable in full, if it was not unreasonable for them to be incurred.[17]
• [77] The Tribunal accepts that counsel's fees in this matter were reasonably incurred.
• [78] The Tribunal accepts the submissions from the applicant that costs ought to be fixed in the sum of $124,042.25.
• [79] The applicant, as a lot owner, has already been levied to pay for the respondent's legal costs. It does not seek to recover this. It is however not keen to pay a lot owner's share of the order for fixed costs at this stage. The applicant referred to section 314 of the Body Corporate and Community Management Act 1997 ('BCCM Act') in this regard. It is there provided that -

314 Liability of owners for monetary obligations of body corporate

(1) In a proceeding by or against the body corporate for a community titles scheme, a court may order that an amount payable under a judgment or order against the body corporate be paid by the owners of particular lots included in the scheme in proportions fixed by the court.

(2) If an order is sought under subsection (1) against the owner of a lot who is not a party to the proceeding, the owner must be joined as a party.

• [80] The applicant seeks an order that it not be required to pay any part of the costs order. This is reasonable as it would dilute its benefit of the order in an unfair way.
• [81] The respondent suggests that this Tribunal is not a court within the meaning of section 314.
• [82] The Dictionary for the BCCM Act is in Schedule 6. It relevantly provides that -

court, for chapter 2, part 9, see section 77.

• [84] Section 77 is in Chapter 2, Part 9. Section 314 is in Chapter 7 "Miscellaneous".
• [85] "Court" is not limited to the District Court for the purposes of section 314.
• [86] This Tribunal is a court of record. Section 164 of the QCAT Act constituting it says -

(3) The seal must be kept under the direction of the principal registrar.

• [87] It appears that section 314 is potentially able to be called in aid in support of making the order sought.
• [88] In any event, recourse to it is not necessary as the Tribunal has power to make the costs order and may frame it so that it is just, equitable and effective. In written submissions received at 6:06 pm on 30 July 2025, the lawyers for the applicant provided written notice that the applicant was no longer seeking an order pursuant to section 314. This was pursuant to the Tribunal allowing the parties a brief period in which to address this issue in written submissions. The applicant, while not relying on section 314 has not withdrawn its submission that it should not have to, in effect, bear any part of a costs order that is intended to compensate it for its legal costs. This submission is accepted and the order will be framed accordingly.
• [89] The order will be made in a form so that the applicant is not required to contribute towards satisfying it.

1. The respondent is to pay to the applicant in this matter costs fixed in the sum of $124,042.25 within 30 calendar days of the publication of these reasons.
2. The applicant, as a lot holder or otherwise, is not to be required to make any contribution whatsoever to these costs.

[1] Body Corporate and Community Management (Accommodation Module) Regulation 2020.

[2] [2024] QCA 235.

[3] [2010] QCAT 364 [9].

[4] [2020] QSC 183; (2020) 5 QR 50 [23].

[5] Respondent's outline of submissions [10].

[6] [2024] QCA 235 [21].

[15] Affidavit of J E Graham sworn 6 June 2025 [44].

[16] [2018] QCAT 444.

[17] Affidavit of J E Graham sworn on 6 June 2025 [45].