Miles v Queensland Building and Construction Commission [2025] QCATA 60

• [4] The offer was stated to be open for acceptance for a period of 14 days.
• [5] Following a hearing, the Tribunal set aside the reviewable decision and substituted an earlier decision made by the respondent allowing the applicant's claim under the insurance scheme ('the primary decision'). The applicant sought his costs of the proceeding or, alternatively, that the respondent pay his costs from the date of the offer to settle. After considering the parties' submissions on costs, the Tribunal ordered the respondent to pay to the applicant the 'prescribed fee' in the amount of $400.40 ('the costs decision'). No additional costs were allowed.[1]
• [6] The applicant appeals the costs order.
• [7] In the application for leave to appeal and appeal, the applicant relies upon two grounds of appeal:

(a) Error in deciding that the interests of justice did not require an order for costs against the respondent;

(b) Error in finding rule 86 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) ('QCAT Rules') did not apply on the basis that the final decision in the review proceeding was more favourable to the applicant than the offer to settle.

• [8] Only the second ground of appeal is pressed by the applicant.[2]

• [9] A party may appeal to the appeal tribunal against a decision of the tribunal.[3] An appeal against a costs order may only be made with the leave of the appeal tribunal.[4] The principles to be applied when considering whether to grant leave are:

(a) Is there a reasonably arguable case of error in the primary decision?[5]

(b) Is there a reasonable prospect that the applicant will obtain substantive relief?[6]

(c) Is leave necessary to correct a substantial injustice to the applicant caused by some error?[7]

(d) Is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage?[8]

• [10] The applicant was a building owner. The applicant entered into a contract with a building contractor for the performance of building work. On 22 February 2021 the respondent made a decision to accept a claim by the applicant in respect of defective building work and approve a scope of works under the statutory insurance scheme to rectify the work ('the February decision').
• [11] On 5 October 2021 the respondent made a further decision that the applicant had not validly terminated the building contract with the consequence the applicant's insurance claim was disallowed ('the October decision'). The applicant sought internal review of the October decision. On 20 December 2021 the respondent confirmed the October decision ('the reviewable decision'). On 17 January 2022 the applicant commenced the review proceeding.
• [12] The applicant argued that the respondent was not entitled to make the October decision having already made the February decision which rendered the respondent functus officio. The applicant said that until and unless it was set aside by the Supreme Court, the February decision stood.
• [13] In giving a statement of reasons for the reviewable decision, the respondent said that the February decision was infected by jurisdictional error and that it was therefore not functus officio in respect of that decision.
• [14] At the hearing below the respondent argued that the February decision, being infected by jurisdictional error, was not a decision within the meaning of regulation 59, schedule 6 of the Queensland Building and Construction Commission Regulation 2018 (Qld). The learned member found that any error by the respondent was within jurisdiction with the consequence that the decision was validly made. The learned member set aside the subsequent decision and substituted the February decision[9] ('the primary decision'). The primary decision was not appealed.

(a) Referred to s 100 and s 102(1) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) ('QCAT Act');

(b) In exercising the discretion pursuant to s 102(1), did not consider that the interests of justice required the Tribunal to make an order against the respondent to pay all or a stated part of the applicant's costs having regard to the applicant's submissions;

(c) Having regard to the matters set out in s 102(3) decided that the interests of justice did not require a costs order in favour of the applicant;

(d) Relied upon the following passage from J.Mac Constructions Pty Ltd v Queensland Building and Construction Commission:[10]

The applicant has not overcome the strong contra-indication against costs orders.

(e) Determined that the offer to settle was a written offer in accordance with rule 65 of the QCAT Rules;

(f) Determined that the primary decision was more favourable to the applicant than the offer to settle;

(g) Determined that rule 86 of the QCAT Rules had no application in the circumstances;

(h) Considered the application of rule 85 of the QCAT Rules and ordered the respondent to pay the filing fee on the application.

• [16] Rule 86 of the QCAT rules provides:
  1. Additional power to award costs if particular offers to settle rejected

(1) This rule applies if -

(a) a party to a proceeding, other than a proceeding for a minor civil dispute, makes another party to the proceeding a written offer to settle the dispute the subject of the proceeding; and

(b) the other party does not accept the offer within the time the offer is open; and

(c) in the opinion of the tribunal, the decision of the tribunal in the proceeding is not more favourable to the other party than the offer.

(2) The tribunal may award the party who made the offer all reasonable costs incurred by that party in conducting the proceeding after the offer was made.

(3) If a proceeding involves more than 2 parties, this rule applies only if the acceptance of the offer would have resulted in the settlement of the matters in dispute between all the parties.

(4) In deciding whether a decision is or is not more favourable to a party than an offer, the tribunal must -

(a) take into account any costs it would have awarded on the date the offer was given to the other party; and

(b) disregard any interest or costs it awarded relating to any period after the date the offer was given to the other party.

• [17] As a matter of statutory construction, the following is apparent: the reference in rule 86(1) to 'a party' is a reference to the offeror and the reference in rule 86(1) to 'another party' is a reference to the offeree. It then follows, as a matter of construction, that rule 86(1)(c) refers to a final decision that is not more favourable to the offeree (that is, the recipient of the offer) than the offer to settle.
• [18] In the reasons for the costs order, the learned member stated:

The offer was to set aside the decision made by the respondent on 20 December 2021. The decision made on 28 September 2023 was to set aside the decision made on 20 December 2021, including the decision which was reviewed on 5 October 2021, and to substitute with its own decision, being the decision of 22 February 2021, continuing in effect. Rule 86 does not therefore apply, as in the opinion of the Tribunal, the decision in the proceeding on 28 September 2023 is more favourable to the applicant than the offer made on 4 September 2023.[11]

• [19] There are three issues arising from the passage from the reasons.
• [20] The first issue is that, contrary to the learned member's characterisation, the offer was not one that the Queensland Building and Construction Commission set aside the reviewable decision. Rather, the offer was that the parties consent to an order by the Tribunal setting aside the decision.
• [21] The second issue is whether the learned member misunderstood the meaning of rule 86. The learned member was required to consider not whether the decision of the Tribunal was more favourable to the applicant than the offer but whether the decision of the Tribunal was not more favourable to the respondent than the offer. Is there however a difference in the practical effect of expressing the rule thus?
• [22] The applicant says that the finding by the learned member that the final decision was more favourable to the applicant than the offer may be expressed in another way: that the final decision was less favourable to the respondent than the offer. This submission is accepted. If the final decision of the Tribunal is more favourable to a party than an offer made by the party, it stands to reason that the final decision is less favourable to the other party than the offer.
• [23] The third issue is whether, if accepted, the offer would have resolved the matter. The proceeding below was brought in the Tribunal's review jurisdiction. The purpose of the review of a reviewable decision is to produce the correct and preferable decision.[12] The tribunal must hear and decide a review of a reviewable decision by way of a fresh hearing on the merits.[13] A review proceeding is different in nature to a proceeding for a civil dispute. Subject to consent orders being within jurisdiction, the parties to a civil proceeding may resolve the matter on such terms as may be agreed. A review proceeding may come to an early end if, for example, the applicant withdraws the review application. The parties may also seek an order that the decision maker may be invited by the tribunal to reconsider the decision.[14] In the latter circumstance, if the tribunal makes a decision acceptable to the applicant the applicant may withdraw the review application.
• [24] As to the second issue, the learned member erred in concluding that rule 86 could not have any application in the circumstances. There should be leave to appeal.
• [25] The ground of appeal relied upon by the applicant involves a question of law, that is, in misconstruing rule 86 did the learned member's costs discretion miscarry. The appeal will therefore be determined in accordance with s 146 of the QCAT Act. An appeal on a question of law is an appeal in the strict sense and involves no element of rehearing.
• [26] Section 86 of the QCAT Act applies if a settlement is reached by the parties to a proceeding other than in a compulsory conference or at conciliation or mediation.[15] The parties may record the terms of the settlement in writing and sign the written terms and file the signed written terms in the registry.[16] If no party to the proceeding notifies the tribunal of the party's intention to withdraw from the settlement within seven days after the written terms are filed in the registry, the tribunal may make the orders necessary to give effect to the settlement.[17] Section 87 provides an important qualification on the making of order giving effect to a settlement reached by the parties to a proceeding. An order may be made only if the tribunal is satisfied it could make a decision in the terms of the settlement or in terms consistent with the settlement.
• [27] The power of QCAT to make consent orders in review proceedings has not been the subject of detailed judicial consideration in Queensland although it has been in Victoria where the power of VCAT to make such orders has been considered in a number of matters. In Muto v Secretary to the Department of Planning and Community Development Pty Ltd[18] ('Muto') the Victorian Court of Appeal considered the power of VCAT to make consent orders in review proceedings. The analogue of s 86 of the QCAT Act is found in s 93(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('VCAT Act') which provides:

If the parties agree to settle a proceeding or any part of it at any time, the Tribunal may make any orders necessary to give effect to the settlement.

• [28] Muto involved proceedings brought against a local government councillor alleging misconduct. Following a mediation, the parties entered into a written settlement under which the applicant agreed to withdraw allegations of gross misconduct and Mr Muto agreed to consent to findings being made by the Tribunal that he had engaged in misconduct. The parties agreed to submit to VCAT the form of orders to be made. The Judge at first instance noted that while it was for him to determine the appropriate penalty for the misconduct:

... where a regulatory body and a respondent have reached a negotiated settlement and the penalty proposed is, broadly speaking, within the 'permissible range' having regard to all the circumstances) ... [the Tribunal] should not depart from the agreed sanction.

• [29] Of relevance for present purposes is what the Court of Appeal had to say about the application of s 93 of the VCAT Act in proceedings other than for civil disputes. Mr Muto argued that the settlement reached between parties could not be equated with a settlement between private individuals. The Court stated:

The purpose of div 5 (particularly s 93) of the VCAT Act is to facilitate settlement of proceedings, including settlements reached as the result of mediation. The Act attempts to encourage a variety of forms of dispute resolution, including compulsory conferences and mediation. In this case the Orders made by his Honour were 'necessary to give effect to' the settlement to which the parties had agreed. Section 93 would have been expressed more restrictively if it were intended to confine its operation to the settlement of disputes between private individuals. The purpose of div 5 would be undermined if s 93 (and other procedural provisions including those dealing with the giving of directions) were read down to exclude their application in cases where sch 1 requires the Tribunal to be constituted in a specific manner.

• [30] In AGL Loy Yang Pty Ltd v Department Head, Department of Economic Development, Jobs, Transport and Resources (Red Dot)[19] ('AGL Loy Yang') VCAT considered the power to make consent orders in review proceedings. The Tribunal stated:

However, in making consent orders to give effect to a settlement in a review proceeding, VCAT is primarily exercising the power under s 93 of the VCAT Act. It is not formally determining the application on its merits pursuant to the enabling enactment that gave rise to the decision under review, but rather it is considering the appropriateness and efficacy of the settlement as a matter of justice. Nor is the VCAT member who makes the consent order taking responsibility for the merits outcome in the same way as if he or she had fully and independently considered the matter and given a reasoned decision. As s 93 expressly states, the orders are to give effect to a settlement agreed by the parties. The very nature of the agreed settlement is that it is avoiding a merits decision being independently considered and imposed by VCAT.

In Muto, the Court of Appeal considered that the orders properly made under s 93 were based solely on the settlement reached by the parties. The Tribunal, howsoever constituted, needed to be satisfied of the efficacy of the settlement. Where the issues involved in the proceeding involved more than mere private rights and interests, it may involve the Tribunal being satisfied of the propriety and efficacy of the orders as a matter of public interest. However, this is in reality no different from the general responsibility of any court or tribunal to exercise its judgement in order to determine whether a settlement was appropriate as a matter of justice and, therefore, whether to make the order suggested to give it effect. [The case in Muto concerned a local government disciplinary matter, and the constitution of the Tribunal, but similar 'public interest' considerations will also arise as in many review proceedings.]

This position is broadly consistent with other recent judicial opinion in relation to consent orders in a court, albeit not directly arising in relation to s 93 of the VCAT Act or a review proceeding. It has been held that, although a consent order may be given the same legal effect as an order made after a hearing in the court, this does not impute any finding to the court. There is no finding of fact or law by the court that resolves the controversy between the parties. Where a consent order reflects an agreement of the parties in circumstances where no exercise of judicial power is required to determine the terms of the agreement, it is the agreement of the parties that settles the terms, and the consent order merely facilitates the enforcement of the compromise.

To take a different view in relation to a VCAT review proceeding would effectively require a hearing by default, before any consent order could be made, with all of the associated costs and delays for the parties, and resource implications for the justice system. This would run contrary to the purpose and intent of s 93. It would be contrary to the purpose and objectives of VCAT in providing a forum for timely and cost-effective dispute resolution, including the use of mediation and compulsory conferences to promote a settlement between the parties.

...

The power under s 93 of the VCAT Act is discretionary. However, in considering whether a proposed consent order is a preferable decision comprising one of acceptable outcomes, it is highly relevant that the agreement reflects and promotes a settlement that is obviously acceptable to the parties. In a review proceeding, where the public decision-maker whose decision is under review is a consenting party to the settlement, VCAT can also reasonably assume that the decision-maker, in giving its consent, has had appropriate regard to all of the relevant matters it was required to consider under the enabling enactment (including relevant matters of a 'public' character) and that the consent position is in conformity with the relevant regulatory regime administered by that decision-maker.

In most instances, in exercising the discretion under s 93 in review proceeding, VCAT need do no more than consider whether the settlement appears to be generally satisfactory and within the range of acceptable outcomes on the material before it, having regard to the subject matter of the proceeding and the broad nature of the decision under review, and that there is nothing overtly wrong or odd about it. VCAT therefore still has an important role to play in providing a 'check and balance', albeit in many cases to a relatively cursory level.

...

If the settlement is within the broad range of acceptable outcomes on the material before it, VCAT should not lightly interfere, and it is not under any obligation to investigate or consider all elements of the matter in detail. This is the case notwithstanding that the settlement may not reflect the preferred decision of the member making the consent order had he or she separately decided the matter following a full hearing. As I have said, VCAT can commonly assume that the consenting decision-maker has (or should reasonably have) taken such matters into account in reaching the settlement.

It follows nonetheless that, in some cases, VCAT may exercise a discretion not to make a consent order to give effect to a settlement. VCAT is not a rubber stamp for any or all consent orders placed before it to finally resolve a proceeding.

With all of this in mind, VCAT can still make the 'correct or preferable decision' in giving effect to a consent order under s 93 of the VCAT Act in a review proceeding. It is still the preferable decision if it is within jurisdiction, reflects an agreement reached by the parties to resolve their own dispute without duress, and where the outcome is within the broad range of acceptable outcomes on the material before VCAT, without VCAT having to undertake a detailed examination of the merits of the underlying decision under review.

• [31] In The Big Apple Group Pty Ltd v Melbourne City Council[20] Ginnane J of the Victorian Supreme Court stated that s 93(1) of the VCAT Act enlivened the jurisdiction of VCAT when parties informed it that they had agreed to settle a dispute and consented to the making of orders to give effect to the settlement.
• [32] AGL Loy Yang was referred to with approval by Croft J in John Barr Investments Pty Ltd v Mordialloc Sporting Club Inc & Anor[21] who stated:

In the AGL Loy Yang decision, Deputy President Dwyer, as did Ginnane J in the Big Apple case, emphasised that in making consent orders it is primarily exercising a power under s 93 of the VCAT Act. In my view, this is an important consideration, as on this analysis the statutory power, though it may be dependent upon certain preconditions, is a power which does not rely upon the position of the parties, in the sense that the power itself is not one conferred by party agreement. A precondition to its exercise is party consent, but this is not the basis of the statutory power. Consequently, this is not a situation where consideration has been given to the application of the inherent powers and jurisdiction of a superior court to make orders by consent to facilitate a settlement.

...

In my view, the position set out by Deputy President Dwyer in VCAT does, together with the reasoning of Ginnane J in the Big Apple case, provide an accurate and comprehensive analysis of the nature and extent of the power conferred on VCAT by s 93 and the manner in which the legislature would have expected it to be exercised. In particular, I note the statement of Deputy President Dwyer that, '... VCAT need do no more than consider whether the settlement appears to be generally satisfactory and within the range of acceptable outcomes on the material before it, having regard to the subject matter of the proceeding and the broad nature of the decision under review ...'.

• [33] In Medical Board of Australia v Martin[22] ('Martin') Judge Horneman-Wren, the then Deputy President of QCAT, said the following in the context of disciplinary proceedings in the Tribunal:

[91] The parties have jointly proposed a sanction. The Tribunal ought not to depart from a proposed sanction agreed between the parties unless it falls outside of the permissible range of sanction for the conduct, bearing in mind that the purpose of disciplinary proceedings is protective rather than punitive.

[92] In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission, Burchett and Kiefel JJ referred to the important public policy involved in a court (or tribunal) not departing from agreed sanctions which are within a permissible range in all the circumstances of the case. That public policy identified was in not jeopardising the beneficial consequences of potentially lengthy and complex litigation being concluded with an acknowledgement of wrong doing and agreement as to an appropriate sanction for the conduct. Their Honours observed that such beneficial consequences could be jeopardised if parties "...were to conclude that proper settlements were clouded by unpredictable risks".

[93] Whilst those observations were made in the conduct of a consumer protection litigation, they are, in my opinion, apposite to disciplinary proceedings such as these. It would be an unfortunate consequence, detrimental to the system of just and timely resolution of proceedings of this kind, facilitated as they are by the encouragement of parties to participate in alternative dispute resolution, if the parties were to conclude that proper agreements reached might be upset by the Tribunal simply taking a different view of what may be an appropriate sanction in a particular matter. This is particularly so given that a party proposing the agreed sanction will be a National Board charged with the functions of registering suitably qualified and competent persons in the relevant health profession; imposing conditions on their registration; and developing and approving appropriate standards, codes and guidelines for the health profession.

(footnotes omitted)

• [34] The statements in Martin are consistent with the approach taken in Muto and AGL Loy Yang Pty Ltd. In circumstances where, in a review proceeding, the parties resolve the matter on agreed terms and present to the Tribunal consent orders reflecting those terms, the power of the Tribunal pursuant to s 86 of the QCAT Act is enlivened. In considering whether to make a consent order:

(a) The Tribunal is not required to undertake a hearing on the merits. Rather, the Tribunal must determine the appropriateness and efficacy of the proposed consent orders as a matter of justice;

(b) The Tribunal is required to exercise a discretion and must be satisfied that a decision could be made in the terms of the settlement or in terms consistent with the settlement;

(c) The Tribunal must be satisfied that the settlement is within the broad range of acceptable outcomes on the material before it;

(d) The Tribunal should not depart from the terms of the proposed consent orders unless the outcome falls outside of the broad range of acceptable outcomes;

(e) Consent orders may not reflect the decision the member making the order might make after a full hearing.

• [35] The above approach is consistent with the object of the QCAT Act to have the tribunal deal with matters in a way that is accessible, fair, just economical, informal and quick.[23] It is also consistent with the functions of the tribunal to encourage the early and economical resolution of disputes before the tribunal and ensuring proceedings are conducted in an informal way that minimises costs to parties and is as quick as is consistent with achieving justice.[24]
• [36] Was the offer to settle, if accepted, capable of resolving the matter? If the offer had been accepted, the Tribunal would have undertaken the process referred to above. The primary decision was to set aside the reviewable decision and substitute the earlier decision made by the respondent allowing the applicant's claim under the insurance scheme. It may therefore be accepted that the offer was within the broad range of acceptable outcomes on the material before the Tribunal. I conclude that the offer to settle was capable of resolving the matter had the offer been accepted by the respondent.
• [37] Did the offer involve a genuine compromise? Relying on the decision of the Appeal Tribunal in McGee v Queensland Building and Construction Commission[25] ('McGee') the respondent says that the applicant's offer did not involve a genuine compromise. In McGee the QBCC had decided to refuse to categorise Mr McGee as a permitted individual. Mr McGee sought to review the decision. Mr McGee made an offer, relatively early in the proceeding, that the QBCC categorise him as a permitted individual and that each party bear their own costs of the proceedings. The decision of the Tribunal was to categorise Mr McGee as a permitted individual. The Tribunal dismissed Mr McGee's application for costs. Mr McGee appealed. The appeal was dismissed. The Appeal Tribunal stated:

Whether an offer involves a genuine compromise is a relevant matter when considering a Calderbank offer. Similarly, the nature of an offer and its context is a relevant consideration in the exercise of the discretion to award costs under the rules. An offer would ordinarily imply some element of compromise by the party making the offer. In this case there is no such aspect. The applicant simply required that the QBCC accept his position, in this case that he should be categorised as a permitted individual. The offer was, in effect, an invitation to the QBCC to capitulate completely in respect of the applicant's claim. Such an offer does not involve a real element of compromise nor does it involve a compromise as envisaged by the words "offer to settle" in rule 86. The compromise on costs contained in the offer was illusory in circumstances where there was a presumption against an award of costs in the proceeding.

• [38] The decision in McGee was considered by the Appeal Tribunal in Owltown Pty Ltd v Norwinn Commercial & Anor[26] ('Owltown') where it was stated:

The reason for section 105 and rule 86 is to encourage parties to try to settle their disputes. This accords with one of the objects of the QCAT Act. In this respect, it would seem odd that an offer which merely suggested that the other side should capitulate should come within the rule. If that were so, it would mean that every respondent would be advised to write to an applicant suggesting that they withdraw the application. Then if the application is dismissed, the respondent could claim that they are entitled to an order for costs because the offer should have been accepted. Equally every applicant would be advised to write to a respondent inviting them wholly to accede to the application. Then if the application wholly succeeds, the applicant can claim an entitlement to costs because the offer should have been accepted.

This is unlikely to be the intention of the provisions, and so as stated in McGee, it is clear that in order for an offer to come within rule 86 it must be a genuine offer to settle. Where a suggestion is made that the other side simply capitulate, this will not by itself be an offer to settle. If it is combined however, with an offer by a legally represented party not to seek costs and acceptance of that suggestion would relieve the other party from a real risk of an adverse costs order, then this is a genuine offer to settle and can come within rule 86. Hence in some cases it will be necessary to consider the risk of a costs order being made at the time such an offer is made to decide whether rule 86 is engaged.

(footnotes omitted)

• [39] The decision in McGee and the analysis in Owltown are compelling For an offer to settle to come within rule 86 of the QCAT rules, there must be a genuine offer of compromise. Although the offer to settle by the applicant was expressed in different terms to that in McGee, the effect of the offer was the same. The respondent was required to capitulate completely by agreeing to set aside the reviewable decision. This would have left the February decision operative, the outcome sought by the applicant. It follows from the foregoing that there was no element of compromise in the offer. The offer to settle was not a genuine offer as contemplated by rule 86.

• [40] While error has been established in the approach of the learned member to the construction of rule 86, for the reasons set out that error has not been productive of error in the final costs decision.
• [41] The appeal is dismissed.

[1] Miles v Queensland Building and Construction Commission (unreported) GAR018-22, 21 December 2023.

[3] Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142(1).

[4] Ibid, s 142(3)(a)(iii).

[5] QUYD Pty Ltd v Marvass Pty Ltd [2008] QCA 257; [2009] 1 Qd R 41 ('QUYD').

[6] Cachia v Grech [2009] NSWCA 232 [13].

[8] Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577, 578, 580.

[9] Miles v Queensland Building and Construction Commission (unreported) GAR018-22, 10 October 2023.

[10] [2019] QCAT 249.

[11] Transcript of reasons for decision, T1-6, lines 36-42.

[18] [2013] VSCA 85.

[19] [2016] VCAT 1249.

[20] [2020] VSC 393.

[21] [2022] VSC 100.

[22] [2013] QCAT 376.

[25] [2018] QCATA 124.

[26] [2020] QCATA 145.