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 proceedings.[1]

[6] The Retail Shop Leases Act 1994 (Qld) is the relevant enabling Act. It does not confer an express power to award costs. In these circumstances we find that the enabling Act does not otherwise provide[2] and therefore the application for costs is to be determined under the QCAT Act.

[7] The starting point may be displaced if the Tribunal considers it is in the interests of justice to do so. The then President previously accepted that the phrase confers a broad discretion.[3] He also noted that the decision of Keane JA (as he then was) in Tamawood Ltd and Anor v Paans[4] was made in the context of the cost provisions in the Commercial and Consumer Tribunal Act 2003 and that the costs provisions in the QCAT Act are different. The relevant starting point under the QCAT Act is much more clearly in favour of an order that the parties bear their own costs.

[8] It is necessary to consider the matters referred to in s 102(3) of the QCAT Act, to the extent they are relevant to a particular case, to determine if the interests of justice point so compellingly to a costs award to overcome the starting position that each party bear their own costs.

[9] If an order is made the Tribunal should fix the costs if possible.[5]

Whether a party is acting in a way that unnecessarily disadvantages another party[6]

[10] We are not satisfied that this is a factor in favour of an award of costs to Lisa Craig Corporation or to Mintman.

[11] Lisa Craig Corporation submits that Mintman acted in a way which unnecessarily disadvantaged it by continuing to expand and increase its claim against it under the Lease. Whilst the submission in this respect is brief it appears to primarily be a reference to the evidence before the Tribunal that Mr Boyle originally raised a limited number of 'make good' items at about the time of Lisa Craig vacating the premises and then a number of months later a number of additional items were raised.

[12] We have been unable to locate any decided cases which support the proposition that the disadvantage referred to in s 48 of the QCAT Act which may found an award of costs relates to conduct prior to the proceedings having been commenced.

[13] The Tribunal has previously found in Robertson and Robertson v Airstrike Industrial Pty Ltd[7] that:

All of the examples of causing unnecessary disadvantage referred to in section 48(1), are things that may occur during the conduct of a proceeding. The matters to be taken into account under section 48(3) support this interpretation. As a matter of statutory construction, it is clear that section 48 applies in respect of causing unnecessary disadvantage in the course of conducting proceedings before the tribunal. Accordingly, the submissions of both parties which relate to matters occurring prior to the commencement of the proceedings, including any alleged delay in making the claim, are irrelevant and are not considered further.

[14] In these circumstances we are not satisfied that expanding the claims made under the Lease can found a claim for costs under s 48 of the QCAT Act.

[15] In so far as the submission might relate to the amendment of Mintman's counter-application during the course of the proceeding a matter which must be established is whether any disadvantage was 'unnecessary' as distinct from a disadvantage experienced in the usual course of a dispute proceeding. It is not uncommon for a party to amend its claims during the course of the proceeding. This is in the nature of a disadvantage experienced in the usual course of a dispute proceeding.

[16] Mintman claims that Lisa Craig Corporation acted in a way which unnecessarily disadvantaged Mintman in that it contends that the commencement of the proceedings was unmeritorious so that it was forced to engage solicitors. Whilst the claim for fixtures was ultimately unsuccessful Lisa Craig Corporation also sought orders as to any amounts which may be owing under the Lease. A claim is not vexatious simply because it is not a strong case or the claim wholly fails.[8]

[17] In circumstances where the tenancy had ended on 30 June 2011 and the parties had not been able to resolve what amounts were owing over five months later we do not consider it unreasonable for Lisa Craig Corporation to commence proceedings to try to resolve the issues in dispute. It is also clear on the evidence that Mintman had chosen to engage lawyers well prior to the commencement of proceedings. We do not accept that the commencement of proceedings 'forced' Mintman to engage lawyers as distinct from perhaps encouraging Mintman to continue to retain lawyers.

The nature and complexity of the dispute[9]

[18] This is not a factor in favour of an award of costs to either party.

[19] The issues for determination at the hearing were not overly complex. Lisa Craig Corporation's submissions opposing legal representation are to this affect. The mere fact that parties were granted leave to be legally represented is not of itself determinative of whether the issues for determination were as matters transpired complex nor is it determinative of whether costs ought to be awarded.

Relative Strengths of the claims[10]

[20] This is a factor in favour of an award of costs to Lisa Craig Corporation.

[21] Lisa Craig Corporation's claim for the value of fixtures was not a strong one. However it had strong grounds for resisting the majority of Mintman's claims and for seeking a determination of what amounts were owing under the Lease.

[22] Mintman pursued 14 claims totalling $80,231.86. Mintman was substantially unsuccessful in the claims it brought.

[23] In respect of eight of the claims it recovered no amount including the claim for legal fees under the Lease prior to and after commencement of proceedings, which comprised over half of the claimed amount at $48,969.03. In respect of two of the claims it recovered only the amount conceded. In respect of another claim it recovered less than half of the amount claimed. In respect of the remaining three of the claims it recovered the amount claimed.

[24] Mintman appears to contend that its claim for legal fees is as yet undetermined and ought not be taken into account in determining the relative strengths of the claims. The claim for legal fees as presented to the Tribunal under the terms of the Lease was determined and was completely unsuccessful.

[25] We indicated in our reasons that Mintman might have an entitlement to seek costs of the proceedings under s 100 of the QCAT Act and in addition to the usual factors under s 102 a relevant factor to be considered in the exercise of our discretion might include that the terms of the Lease provided a right to claim legal fees in certain circumstances.

The financial circumstances of the parties[11]

[26] This is not a factor in favour of awarding costs.

[27] There is insufficient evidence to make a finding in respect of the relative financial positions of the parties.

Anything else that the Tribunal considers relevant[12]

[28] Lisa Craig Corporation relies upon an offer to settle which it made in writing on 23 April 2012. The offer was to pay $16,000 by way of instalments comprising $4,000 within 28 days of acceptance of the offer and monthly payments of $1,000 on or before the first day of each succeeding month for a period of 12 months. The offer was open for a period of seven days.

[29] We accept that the making of an offer is a relevant factor to be considered in the exercise of our discretion. Section 105 of the QCAT Act and r 86 grants an additional power (other than that found in s 102) to award all reasonable costs incurred after the offer was made.

[30] Lisa Craig Corporation offered to settle the disputes and the offer was not accepted. If it had been accepted Mintman would have received $16,000 by about June 2013. The decision awarded Mintman $12,259.88 by 28 March 2014.

[31] Rule 86 requires a finding as to whether the decision of the Tribunal was not more favourable to Mintman than the offer. In doing so r 86(4) requires the Tribunal to take into account any costs it would have awarded on the date the offer was given to the other party. Given the difference between the offer and the amount awarded costs to be awarded at 23 April 2012 would need to be less than $3,740.12 for the decision of the Tribunal to be not more favourable to Mintman than the offer.

[32] Lisa Craig Corporation commenced proceedings in December 2011. As at 23 April 2012 some legal fees would have been incurred in respect of Mintman's successful claims. It is difficult to make a finding as to what costs Mintman would have been awarded as at 23 April 2012 because the awarding of costs is discretionary. It is well settled in the Tribunal that the principle applicable in Court proceedings that costs follow the event is displaced by s 100 so it cannot be assumed that costs would have been awarded as at the time the offer was made. A factor in respect of whether legal costs would have been awarded to Mintman as at 23 April 2012 is that leave was not granted for legal representation until August 2012. This is a factor against Mintman being awarded costs as at 23 April 2012 but not determinative.

[33] We are not satisfied that the preconditions in r 86 have been satisfied. Given the amount awarded in the decision and the relatively early time this offer was made it quite possibly was more favourable than the ultimate decision. However we are not satisfied that it was clearly imprudent for Mintman to fail to accept the offer.[13]

[34] Accordingly this settlement offer is not a factor in favour of an award of costs to Lisa Craig Corporation.

[35] Mintman contends that there were other settlement offers made on 14 February 2013. Mintman offered to settle by accepting $20,000 in full and final settlement and Lisa Craig Corporation counter-offered to settle by paying $10,000. Rule 86 requires that the offer be made in writing and that the offer not be accepted within the time the offer is open and a finding as to whether the decision of the Tribunal was not more favourable than the offer.

[36] The evidence of the offers is an email from Mintman's lawyers to Mintman dated 15 February 2013. There is insufficient evidence to find that either offer satisfied the requirement that the offer be in writing. We are not satisfied that the preconditions in r 86 have been satisfied.

[37] Lisa Craig Corporation's counter-offer was less favourable than the ultimate decision. In order to assess whether Mintman's offer was one which it was imprudent of Lisa Craig Corporation to reject would require a finding as to whether costs would have been awarded to Mintman as at 14 February 2013 and the amount of those costs. We are not satisfied that it was clearly imprudent for Lisa Craig Corporation to fail to accept the offer.

[38] Accordingly this settlement offer is not a factor in favour of an award of costs to Mintman.

[39] Mintman submits that the terms of cl 49.2 of the Lease is a relevant factor to be considered in the exercise of our discretion and seeks to identify costs incurred in relation to Mintman's claims. Mintman produced invoices and schedules. Clause 49.2 of the Lease entitles Mintman to recover from Lisa Craig Corporation legal costs that were 'lawfully' incurred.

[40] The terms of the Lease is a factor in favour of an award of costs to Mintman but only to the extent that costs were incurred in respect of the claims that the Tribunal determined were valid. Therefore costs incurred in respect of the unsuccessful claims are to be excluded.

[41] Mintman contends that it has analysed each invoice and schedule and the associated correspondence and emails to remove items not attributable to valid claims. Mintman has apportioned the cost by reference to the number of 'valid' items or units of time over the total number of items or units of time.

[42] This analysis has some flaws because it assumes that the charge out rate for each lawyer is the same. It is apparent that different lawyers worked on the file at different times within the time span of many of the invoices. It would be unusual for the charge out rate to be the same for all lawyers. There is no evidence before the Tribunal that Mintman and its lawyers had an agreed 'blended' rate so that all lawyers were charged out at the same rate. There is no evidence before the Tribunal as to the charge out rate for each lawyer.

[43] Another difficulty is that some of the schedules show units of time and others give a description of work performed without indicating the units of time. The apportionment assumes that each described item of work has an equal value within the time span of each invoice. It would be unusual for the same amount of time to be spent on each and every item of work during the time span of an invoice. A further difficulty is that many of the items of work set out in the schedules are described generically so that it is difficult to be satisfied that the item only related to claims in respect of which Mintman was ultimately successful.

[44] We are not satisfied that all costs incurred relating to unsuccessful claims have been removed through this analysis. By way of example and without being exhaustive:

1. invoice 3279998 in the sum of $993.74 with a due date of 14 November 2011 has been claimed in its entirety. The schedule shows that quite a few items of work relate to the claim for default interest which was not a claim in respect of which Mintman was ultimately successful because it was not pursued. The schedule also refers to outgoings. No amount was allowed by the Tribunal in respect of a claim for outgoings.

2. In respect of Invoice 3281866 with a due date of 5 January 2012 an item of work claimed by Mintman is described as drafting claim and statement of claim. It has a value of 10 units, all of which have been claimed. It is highly unlikely that none of those costs related to the unsuccessful claims.

3. In respect of invoice 3285841 with a due date of 14 May 2012 many items of work relate to preparation for and attendance at mediation. None of those items have been discounted for the costs incurred in respect of the claims which were not pursued or the unsuccessful claims.

[45] Given the evidence and its limitations we are not satisfied that we are in a position to quantify the legal costs attributable to successful claims at the points in time of the offers referred to earlier in these reasons or now.

[46] Having considered each of these factors some of which are in favour of an award of costs and some of which are not, we are not satisfied that the interests of justice point compellingly to a costs award in favour of either party.

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

[4] [2005] QCA 111.

[6] QCAT Act, s 48(1)(a)-(g), s102(3)(a).

[7] [2011] QCAT 120.

[8] Civic Steel Homes v Mitra [2006] QDC 322; Leo v Paulsen [2010] QCAT 122.

[13] Colgate Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 118 ALR 248.