Galletta v Queensland Building and Construction Commission & Anor [2025] QCATA 77

• [6] The parties propose the following order:
  1. The application for leave to appeal is granted.
  2. The appeal is allowed.
  3. That Order 1 made by the Tribunal on 17 June 2023 is set aside, and instead it is ordered that the first respondent's decision on 20 November 2020 is set aside and substituted with a decision that a Direction to Rectify be given to the second respondent.
• [7] Even where there is a consent position, it is still necessary to the Appeal Tribunal to be satisfied that there was error, and to identify the error which vitiated the administrative decision under review.[1]
• [8] The parties were asked to provide submissions to enable the Appeal Tribunal to reach a determination.

• [9] The decision of the Member below was to set aside the decision of the QBCC not to order rectification and to instead order JC Concreting to repay to Michael Galletta the amount paid under the contract. It seems that course was taken rather than substituting a decision that JC Concreting be directed to rectify defective work because of evidence at the hearing that the relationship between Michael Galletta and JC Concreting had broken down to such an extent that to order JC Concreting to return and rectify the works would not be practical. None of that evidence was identified in the decision so as to justify the inference drawn by the Member.
• [10] In my view the decision of the Member below was misconceived and indeed a differently constituted Appeal Tribunal was prepared to act very early in these proceedings to set aside the decision ordering the payment of money by JC Concreting to Michael Galletta. The order of the Member was misconceived because it was not an order available in review proceedings.
• [11] Earlier in the reasons for decision the Member observed that reliance by the QBCC on the ability of a waterproofing membrane to solve all issues with excessive leaking from the pool is the key reason for the QBCC not issuing a direction to rectify. The Member went on to find that evidence at the hearing revealed a waterproof membrane could not be installed because of the state of the concrete shell of the pool. The Member found that the works were defective.
• [12] Despite that finding the Member did not find that the correct and preferable decision was for a direction to rectify to issue, nor did the Member consider any of the available orders under s 24 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) ('QCAT Act'). Instead, the Member misdirected herself as to a remedy for Mr Galletta.
• [13] In its appeal application the QBCC submitted that it did not seek to disturb the finding that the building works were defective or the order that the original QBCC decision be set aside.
• [14] I consider the consolidated appeals raise a question of mixed fact and law. That is whether the Member failed to apply the facts found as to defective work, to decide whether it was a correct and preferable decision to substitute a decision to issue a direction to rectify. That was combined with a failure to identify facts which justified the inference that it was not practical to issue a direction to rectify.
• [15] Characterisation of errors on the part of the Member and the appropriate way to proceed were not addressed by the parties in their submissions, however, I consider my conclusion is available from a consideration of the grounds of appeal given in the applications for leave to appeal or appeal and an analysis of the reasons for decision given by the Member. The result is that leave to appeal is required and that the matter should proceed under s 147 of the QCAT Act.

• [16] In their submissions both parties have addressed an engineer's report obtained from an external engineer Booth Engineers & Associates, dated 15 April 2024. Obviously that report was not before the Member below and is additional evidence in the appeal proceeding. The report recommends rectification work to the swimming pool. Shortly after receipt of the report the QBCC proposed a resolution of the appeal proceeding on the basis that it will give JC Concreting a direction to rectify.
• [17] Although no application to rely upon additional evidence has been filed, I waive the need for compliance and grant leave for the report of Booth Engineers & Associates to be relied upon by Mr Galletta in the appeal proceeding,[2] noting that it was not in existence at the time of the hearing below, that it is credible and probative.[3]
• [18] Under s 147 of the QCAT Act regard may be had to additional evidence upon a rehearing.
• [19] On the basis of the additional evidence, the finding of defective work made below which is undisturbed, and the view of the QBCC that a direction to rectify should now issue I am satisfied that the correct and preferable decision is that in substitution for the original decision a direction to rectify should issue.
• [20] As to any concern that a direction to rectify will not be complied with, I accept the submission of Mr Galletta that such a course will in itself leave further statutory avenues for rectification and remedy available to him, which is another reason why a substituted decision directing rectification is appropriate.

• [21] Leave to appeal should be granted because of error on the part of the Member below, and a substantial injustice if leave to appeal is not granted.[4] The appeal is allowed.

• [22] It is ordered that:
  1. The application for leave to appeal is granted.
  2. The appeal is allowed.
  3. Order 1 made by the Tribunal on 17 June 2023 is set aside and a decision is substituted that the decision made by the Queensland Building and Construction Commission on 20 November 2020 is set aside and substituted with a decision that a direction to rectify be given to JC Concreting Pty Ltd.

(a) his costs of the appeal calculated on the District Court scale[5] in an amount of $25,119.20 plus the transcript fee of $1,084.95 and filing fee of $759.10; and

(b) outlays for expert reports incurred in the application for review in an amount of $9,828.25.

• [24] Mr Galletta does not seek legal costs (other than outlays) in the application before the Tribunal where he was unrepresented, despite incurring costs in obtaining legal assistance.
• [25] Mr Galletta says that he was forced to appeal and has been vindicated in the appeal by the position adopted by the QBCC on and after lodging its own appeal. It is submitted that the costs incurred over the course of the appeal are as a consequence of the QBCC's delay, but then ultimately accepting his position. That position is supported by reference to other submissions filed in the proceeding which attach the extensive correspondence between the parties.
• [26] It is submitted that dealing with the appeal and issues to refine and reach the proposed consent with the QBCC required consideration and application to complex issues for which legal representation was necessary and appropriate. Mr Galletta concludes that it is in the interests of justice that the QBCC is ordered to pay his costs as claimed.
• [27] Mr Galletta also relies on an affidavit of Philip Sidney Askin, Solicitor of Connolly Suthers Lawyers. Mr Askin is an experienced litigation lawyer. He has exhibited his firm's invoices totalling $34,000 to the date of the affidavit on 2 October 2024. Mr Askin has applied the District Court Scale hourly rate of $369.40 for attendances and work set out in the invoices to arrive at an amount of $25,119.20.
• [28] The QBCC submits that it is not in the interests of justice to order it to pay costs and relies on a line of cases to the effect that the QBCC has important statutory functions to protect the public interest and the interests of building contractors, and that it should not become reticent in the conduct of its functions for fear of a costs order in a review application, unless it has engaged in conduct which suggests a costs order should be made against it.[6]
• [29] The QBCC submits that these factors weigh against a costs order against it, that is, its role in GAR509-20 was to test the review application and to protect the State's interest, it engaged an external engineer at its own cost to resolve the appeal proceeding, it is not appropriate for a costs order to be made in relation to GAR509-20 when the application for costs has been made in the appeal. Further, the costs incurred by Mr Galletta in GAR509-20 were costs necessary to support his review application.
• [30] The QBCC says that no factor in s 102(3) of the QCAT Act weighs in Mr Galletta's favour. In particular, the QBCC was successful in its appeal from the decision below; the proceedings were not complex, the relative strengths of each party's case cannot be gleaned now that a consent position has been reached; the financial position of the parties should not be a sole determinant and in any event a statutory body does not have unlimited funds. Further, it submits that the QBCC did not act in a way that disadvantaged Mr Galletta, noting that it engaged an engineer at its own cost and that any delay related to obtaining the report. The necessity for the appeal was not caused by the QBCC but rather error of law below.
• [31] The QBCC says that the orders should be either a dismissal of the costs' application, no order as to costs or if costs are to be ordered that they be assessed on the standard basis on the District Court scale unless otherwise agreed between the parties.
• [32] In reply, Mr Galletta says that costs would not have been incurred if the QBCC had "acted appropriately and properly" in the first instance to issue a direction to rectify. Mr Galletta disputes the QBCC was acting to protect professional or industry standards in the public interest or that a costs order would negatively impact the QBCC in carrying out that role. He says that the matter was complex and that costs were incurred as a result of delay in obtaining an engineer's report when the matter could have been resolved earlier in accordance with Mr Galletta's proposal.
• [33] Mr Galletta denies that he is seeking indemnity costs and says that he agrees to an order that costs be assessed on a standard basis on the District Court scale, unless otherwise agreed as between the parties.

• [34] In this case I consider it appropriate to deal with Mr Galletta's claim for costs in both the appeal and in the Tribunal below in order to give finality to the disputes between the parties. Mr Galletta's claim for recovery of costs in the hearing below are squarely before the Appeal Tribunal and have been put to the QBCC. On a rehearing on appeal the Appeal Tribunal can determine costs at first instance without the need for an application for costs.[7]
• [35] Costs claimed with respect to the hearing below concern the cost of engineering reports relied upon in the hearing below. I note from the reasons for the decision that there was a dispute as between the QBCC and Mr Galletta's advisers as to whether the pool shell was defective, which for a considerable time could only be resolved by destructive testing. A final report obtained by Mr Galletta, introduced as additional evidence at the hearing, revealed that upon attempts to install a waterproofing membrane deteriorated block work was found requiring replacement. By reference to this material the Member found that the pool construction was defective work and the QBCC's reliance on a waterproofing membrane was now untenable.
• [36] Until the last report was obtained it is not clear that the QBCC took an unreasonable stance.
• [37] Both parties incurred the cost of an application for leave to appeal or appeal properly brought in view of the errors on the part of the Member below.
• [38] The invoices for professional fees and outlays with respect to the appeal proceeding appear to cover every item of work undertaken for Mr Galletta. Although the claim made in these proceedings applies an hourly rate by reference to the District Court scale of fees, there is no discount to reflect standard costs.
• [39] Both parties incurred the cost of further engagement whilst working towards a resolution. Interlocutory applications were made for legal representation, for a stay of the decision below and for extensions of time to comply with the Appeal Tribunal's directions, but otherwise no substantive step was taken in the appeal proceeding.
• [40] Neither party referred me to the decision of Health Ombudsman v du Toit[8], which is the most recent Court of Appeal consideration of the costs' provisions at ss 100 and 102 of the QCAT Act. The Court of Appeal held that no order for costs is to be made unless the Tribunal considers it is in the interests of justice to do so.[9] It endorsed an approach that it is not in the interests of justice for no order for costs to be made in circumstances where any success is eroded by a failure to award costs.[10] In relation to relevance of a decision-maker's statutory function the Court held that: 'it was a matter for the Tribunal, in the particular circumstances of the proceedings, as to how much weight was to be ascribed to this consideration'[11] and noted that this 'will vary according to the circumstances of each case.'[12]
• [41] This is a matter where Mr Galletta's success has been in achieving a Direction to Rectify in part through the external review process and in part by negotiation with the QBCC. That success, unlike a matter involving an award of compensation is not eroded by a failure to award costs.
• [42] I cannot ignore the nature of the proceedings which involve review of a decision made by a publicly funded statutory authority undertaking its statutory functions. It was not until the pool shell was revealed, preparatory to laying a waterproof membrane, that the extent of the defects was revealed. In the circumstances I do not think the conduct of the QBCC was such that the interests of justice "require" a costs order to be made.[13]
• [43] For these reasons I do not think the cost of engineering reports obtained for use at the hearing below are recoverable from the QBCC by way of a costs award.
• [44] Nor do I consider the interests of justice require the QBCC to meet the costs of the appeal proceeding. That is because of the limited substantive steps in the proceeding, meaning that much of Mr Galletta's costs were incurred on a "solicitor own client basis" to use older terminology. The mater was resolved by agreement of both parties as to the way forward, without the need for a hearing.
• [45] I have had regard to the considerations set out in s 102(3) of the QCAT Act which may be relevant to a costs order made in the interests of justice. None of the considerations are determinative in this matter.
• [46] The application for payment of Mr Galletta's costs by the QBCC is refused.

[1] Mackey v CIC Allianz Australia Insurance Ltd [2015] NSWSC 505, [3].

[2] Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 61.

[3] Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404.

[4] Rintoul v State of Queensland & Ors [2018] QCA 20, [10].

[5] Relying on Cowen v Queensland Building and Construction Commission [2021] QCATA 103, [77] that because of the complexity of the matter the appropriate scale is the District Court scale of costs.

[6] Pound v Queensland Building and Construction Commission [2023] QCAT 298, [63]-[77]; Fuge v Queensland Building and Construction Commission [2014] QCAT 383, [28]; Stuart v Queensland Building and Construction Commission [2016] QCATA 135; AK Group QLD Pty Ltd & Anor v Queensland Building and Construction Commission No 2 [2021] QCAT 126.

[7] Partington & Anor v Urquhart (No 4) [2019] QCATA 96, [70]; As to the power of the Appeal Tribunal to award costs in the matter below see: Colagrande & Ors v DA Radic Pty Ltd trading as David Radic Prestige Homes [2020] QCATA 86, [16]-[18]; The Sands Gold Coast Pty Ltd v The Body Corporate for the Sands CT 14967 [2020] QCATA 105, [29].

[8] [2024] QCA 235.

[10] Ibid [50] and [62] approving Marzini v Health Ombudsman (No 4) [2020] QCAT 365 ('Marzini').