O'Donnell v Queensland Building and Construction Commission [2025] QCAT 532

• [2] Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) provides:

Each party usually bears own costs

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.

• [3] Section 102, headed 'Costs against party in interests of justice', provides:

(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.

(2) ...

(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;

(d) for a proceeding for the review of a reviewable decision -

(i) whether the applicant was afforded natural justice by the decisionmaker for the decision; and

(ii) whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;

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

(f) anything else the tribunal considers relevant.

• [4] Section 107 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.

• [5] In Cruceru v Medical Board of Australia[1] Hon JB Thomas, Judicial Member, stated:

Having regard to the objects of the QCAT Act, the discretion to fix costs under s107 is an extremely wide one and is to be exercised robustly.

• [6] The judgment of the Queensland Court of Appeal in Health Ombudsman v du Toit[2] (du Toit) put an end to two competing lines of authority in the tribunal regarding the interpretation of sections 100 and 102. The correct approach to the operation of the sections is that formulated by Judicial Member McGill in Marzini v Health Ombudsman (No. 4)[3](Marzini). The language of sections 100 and 102 of the QCAT Act is to be construed in the context of the Act as a whole.
• [7] The Court of Appeal observed that an important contextual consideration in construing section 100 is that the tribunal, in the exercise of its jurisdictions, deals with a multiplicity of matters which vary in nature, both in terms of complexity and the seriousness of the outcomes. When section 100 is construed in this context, it is a provision of general application which is to be applied to a multiplicity of the matters that fall within the tribunal's jurisdiction.[4]
• [8] In Marzini Judicial Member McGill observed that the ultimate question posed by the statutory provisions is whether in a particular case the interests of justice require the tribunal to make a costs order. He observed that because of the use of the word 'require' in s 102(1) the default position of no order as to costs should not be too readily departed from. He did not consider that there was any justification in the words of the statute for any further constraint on the operation of the power to order costs under s 102, although the section directs attention to a number of matters which may in a particular case be usefully considered. He observed that the reference to 'any other matter the tribunal considers relevant' shows that this list is not to be read in a confining sense.[5]
• [9] In Cowen v Queensland Building and Construction Commission[6] (Cowen), Judicial Member McGill observed that the QBCC 'was not just a regulator whose decision was subject to merits review by the tribunal; it was an insurer under a statutory obligation to the [homeowners] to pay on a valid claim.' He observed:

[33] In these circumstances, I consider it was not appropriate to criticise the [Commission] for being partisan. It was appropriate for it to be defending its decision, since failure to do so would result in its liability to the [homeowners] under the scheme. The builder had an interest in the outcome, because of the existence of a statutory indemnity provided by the QBCC Act s 71, and was therefore properly joined as a party, but in substance this was a fight between an insured and an insurer as to liability under the scheme. ...

...

[68] As I have indicated, although this was in form a review of an administrative decision, I regard it as in substance a commercial matter, namely a claim for assistance under the statutory insurance scheme. Although the quantum of the assistance was not in issue, so that the outcome was not a decision that the appellants be paid a specific sum, their success established an entitlement to receive the amount of assistance properly payable under the terms of the scheme. That gives the matter a commercial element.

• [10] Judicial Member McGill was content to act on his general knowledge of legal costs to know that the [homeowners'] success would be substantially eroded, if not completely exhausted, if they did not receive their legal costs as well, given the length of the matter, thirteen days of hearings, a number of expert witnesses, several directions hearings and three compulsory conferences.[7]
• [11] Member Gordon reviewed the current state of the law when deciding costs in Rosecove Pty Ltd v Queensland Building and Construction Commission[8] (Rosecove . Rosecove was an application for costs in excess of $350,000 made by the second respondent homeowner. After a hearing over a period of eight days the tribunal confirmed the QBCC's decision to issue the builder a direction to rectify the defective work. Member Gordon observed:

[4] ... In deciding whether the interests of justice require me to make an order that the builder pay the [homeowner's] costs I need to consider all the circumstances, but in particular I need to understand the commercial undercurrents in the review for the parties to the costs application, the merits of the review and of the positions taken by the parties in the various issues, and the reasonable expectations of those parties when they made decisions about the review. I need to consider whether the [homeowners] achieved success in the review and if so, whether that success would be eroded if a costs order were not made.

...

[11] When deciding whether the interests of justice require the tribunal to make a costs order there are various factors which can be considered. Some of these are in sections 102(3)(a) to (f) but others come from case law. The various factors identifiable in this way are whether the success of the costs application would be eroded when it was reasonably necessary to be legally represented to achieve that success and whether there are any countervailing considerations, the nature and complexity of the dispute the subject of the proceeding, whether there was a commercial element in the proceedings, the fact that the tribunal gave leave to be legally represented (or lack of such leave), the 'chilling effect' of costs orders on statutory bodies and review applicants (and effect on access to justice), the reasonable expectations of the parties with respect to costs, the aims and objects of the QCAT Act, whether a party to a proceeding acted in a way that unnecessarily disadvantaged another party to the proceeding including as mentioned in section 48(1)(a) to (g), the relative strengths of the claims made by each of the parties to the proceeding, in reviews whether the applicant was afforded natural justice by the decision maker and whether the applicant genuinely attempted to help the decision maker in making the decision on the merits, the financial circumstances of the parties to the proceeding, and anything else the tribunal considers relevant.

• [12] In Van Dorssen v Queensland Building and Construction Commission (No. 2) (Van Dorssen),[9] Member Howe observed that in proceedings effectively concerning payment under the statutory insurance scheme, the circumstances moved away from simple administrative review of decisions where the QBCC, as decision maker, is simply acting as a regulator of the construction industry, balancing the interests of building contractors and building owners, towards commercial litigation where cost based court orders prevail.[10] He decided that it was in the interests of justice to award the successful homeowners their costs because, failing that, their success in the action would be eroded.[11]

• [13] These proceedings were merits reviews of a series of decisions made by the QBCC over a period of three years, commencing on 27 June 2020 when the homeowners made their first complaint to the QBCC,[12] until 9 May 2023 when the QBCC decided that the work undertaken at the direction of the QBCC was not satisfactory.[13] The homeowners were not joined to the proceedings.
• [14] As the tribunal's review jurisdiction is progressively inhibited[14] the decisions under review, if not set aside, would have resulted in serious financial consequences for the builder.
• [15] The underlying facts in the proceedings were interwoven. Rather than deal with the relevant facts for each of the proceedings separately in my reasons I set out the facts in chronological order,[15] commencing on 2 September 2019 (when the building contract was signed) and concluding on 1 September 2023 when the last of the proceedings before me was filed.
• [16] During that period, relevant to these proceedings, the QBCC issued:

(a) eight directions to rectify, referring to multiple items of complaint;

(b) three notices that work had not been satisfactorily rectified; and

(c) various scopes of works under the statutory insurance scheme;

(d) other decisions relevant to these proceedings.

• [17] During that period the QBCC also issued directions to rectify to the builder that were not the subject of these proceedings.
• [18] The only decisions of the QBCC that were confirmed were the decisions made at the invitation of the tribunal that building work undertaken by the builder to rectify was of a satisfactory standard in the case of seven complaint items.[16]

Do the interests of justice require an order for costs to be made in favour of the builder?

• [19] For the reasons set out below I am satisfied in this particular case the interests of justice require an order for costs to be made in favour of the builder. Any other order would mean that the builder's success in each proceeding would be no more than a Pyrrhic victory as his success would be eroded by the costs incurred in achieving that success.

• [20] The builder submits that the QBCC caused him unnecessary disadvantage:

(a) by having to prepare for issues which should never have been in contest, i.e.:

(i) by prosecuting GAR617-21 up to the eve of the hearing;

(ii) by not conceding that seven items of work had been satisfactorily rectified until invited to do so by the tribunal;

(b) by altering its approach to issues which were the subject of expert engineering evidence;

(c) by assessing the building work based on deemed to satisfy, not performance requirements, of the National Construction Code.

• [21] I accept the QBCC's submissions that it did not delay in making concessions. Effectively the catalyst for its concessions was evidence from the builder which had come late.
• [22] I also accept the QBCC's submissions that it did not alter its approach to issues which were the subject of expert engineering evidence. It had not relied on evidence from Mr Connell in the proceedings. After Mr Fox's report was delivered it engaged an independent expert, as it was entitled to do. The builder was not disadvantaged because the QBCC engaged an engineering expert and relied on his opinions. Nor was the builder disadvantaged because the QBCC relied on evidence from its technical officers in addressing arguments about the National Construction Code.
• [23] The QBCC submits that the builder caused it unnecessary disadvantage in the manner he prepared for and conducted the applications. It points to:

(a) non-compliance, or late compliance, with many directions to provide evidence;

(b) the very late delivery of the expert report by Mr Fox on the last business day before the hearing was to commence;

(c) late statements from lay witnesses, which it submits were delivered to shore up gaps in material previously filed highlighted in the objections to evidence.

• [24] The builder's solicitor provided a comprehensive explanation for these delays in the affidavit of Stephen Rudz.[17] They included:

(a) the builder's ill-health;

(b) the terminal cancer diagnosis of Mr Bowman's brother, requiring Mr Bowman to focus on his brother, not these proceedings;

(c) the challenges faced by Mr Rudz, who is a sole practitioner;

(d) actions by the QBCC which resulted in hardship to the builder;

(e) Mr Fox's cataract operation, making it difficult for him to review material;

(f) late provision of statements from the QBCC;

(g) challenges faced by the builder in funding his solicitor, counsel and Mr Fox.

• [25] There is no doubt that after the builder borrowed the money necessary to fund his legal team and expert, the proceedings were run much more efficiently than had previously been the case, but it is not the case that the builder started his case again after 31 January 2025.
• [26] Neither party enjoyed a trouble-free run to the hearing. The QBCC's application for an adjournment, made 11 November 2024 was refused on 2 December 2024.[18] It was ready to proceed on 3 February 2025 when the builder's legal team was scrambling. The QBCC submits that although the hearing was not adjourned in the conventional sense on 3 February, that the hearing proper did not commence until 10 June 2025. It submits that time spent on 3, 4 and 5 February was spent on putting the builder's case into order. This is not entirely accurate. I refused to adjourn the proceedings as that would have been a waste of the very scarce resources of the tribunal that had been allocated to the hearing. Having regard to the objects of the QCAT Act, in particular that the proceedings should be dealt with economically, informally and as quickly as possible, I directed counsel to confer to prepare a joint issues list which was very useful in the conduct of the proceedings. I also invited the QBCC to reconsider some of the decisions it had made which were the subject of the proceedings which resulted in time saving.[19]
• [27] The QBCC submits that when Mr Fox's report was delivered on 31 January 2025, effectively the builder re-started his case. That puts undue emphasis on the report. It is correct that the builder's success in the proceedings was in no small part due to the fact that I preferred the expert evidence of Mr Fox on engineering issues. However, the QBCC was not disadvantaged by the delivery of the report: it was given time to engage an engineer and the engineers were given time to confer and prepare both a joint report and a supplementary joint report to address specific questions posed by the QBCC.
• [28] Overall, I am not satisfied that either party caused the other significant disadvantage.

• [29] It is common ground that these proceedings were complex. There is no question that the complexity of the proceedings warranted granting leave for representation, engagement of counsel and obtaining reports from experts.

Relative strengths of the claims made by each of the parties to the proceeding

• [30] It is common ground that the builder was successful in all six applications. However, the QBCC submits that this of itself is not determinative. Undoubtedly in review proceedings, unlike civil court proceedings, there can be no presumption that costs follow the event. Success alone is not determinative. The QBCC is a party to the proceedings because it made the decisions under review. It is not a respondent defending a claim in a building dispute. For this reason, decisions regarding award of costs in proceedings between homeowners and contractors do not assist me in considering whether it is in the interests of justice to make a costs order in these administrative review proceedings.
• [31] The QBCC's role in the proceedings is to help the tribunal to make the correct and preferable decision. I accept the submission that the QBCC did not run a spirited defence. It made proper efforts to assist the tribunal. However, it lost sight of the required balance between the competing interests of the homeowners and the builder. It appeared that no real assessment was made about the strength of many of the builder's claims after the material was filed in the proceedings.
• [32] I was careful in my reasons to acknowledge the efforts of the officers at the coal face and the challenges they faced in this case. However, those officers should not have been the people assessing the strengths of the builder's claims in the proceedings. Perhaps it might be argued that in instances where the outcome depended on technical engineering evidence the builder's prospects were not easy to assess, although that is doubtful given the technical expertise within, and available to, the QBCC. But in claims where the dispute was one of fact there is no reason that the QBCC could not have identified the strength of the builder's claims which turned on questions of fact.
• [33] There were instances where the QBCC officers at the coal face were unable to resist the pressure applied by the homeowners to arrive at their desired result and as a result the balance swung in favour of the homeowners. The best example of this is the saga of the replacement of panels in the roof to the rear lower-level deck. These are not facts unknown until material was delivered prior to the hearing. This information was available as the complaint progressed through the system. Briefly, the facts were:

(a) The builder was directed to repair a dent in a roof sheet on the rear deck roof. The repair was done. It was so well done that when the QBCC inspector inspected the rectification work on 6 January 2021 he concluded that the sheet had been replaced.[20] The homeowners did not share the inspector's view about the quality of the initial repair. They thought it was 'a dodgy patch job'.[21]

(b) The homeowners made a fresh complaint about the roof sheets. A QBCC officer carried out an inspection on 6 April 2021. He observed kinks in one sheet and another sheet that had signs of corrosion and rusting.[22] Mr Bowman (who attended the site because the homeowners would not permit the builder to be present) inspected the whole of the rear deck roof. He did not observe any corrosion.[23] I resolved the conflict in the evidence by preferring contemporaneous evidence which did not support a finding that there was visible corrosion in April 2021.[24]

(c) On 20 September 2021 the homeowners requested an internal review of initial scope of works, asking that the scope be amended to include replacement of roof panels that had corroded due to poor quality rectification work. They submitted that the rusting roof should have been classified as a structural defect as the rust would affect the durability and strength of the roof over time.[25] (This was the only basis upon which they could recover under the statutory insurance scheme.) Initially their request was rejected.[26]

(d) The homeowners persisted in their efforts to have two roof panels replaced under the statutory insurance scheme until they received advice from the QBCC that the question might be re-investigated while the rectification works were carried out.[27]

(e) Mrs Price complained to the QBCC that she had been fobbed off and the inspector did not want a bar to do with it.[28]

(f) The QBCC changed the classification of the defect in the corroded roof sheet from non-structural to structural, despite the absence of evidence that the roof could collapse if the rust continued, leaping from a failure to follow the manufacturer's recommendations for repair to the surface of the panel, to the likelihood of surface rust affecting the structural performance of the building.[29]

(g) The rectifying builder supplied a variation for the cost of removing and replacing a damaged insulated roof panel ($4,174.85).[30]

(h) None of the QBCC's witnesses challenged Mr Bowman's evidence that surface corrosion on a sandwich panel could not be a structural defect.[31]

• [34] The purpose of setting out these facts is not to criticise the officers at the coal face who were put under considerable pressure to give the homeowners the outcome they desired. The purpose is to demonstrate the strength of the builder's case. This is not an instance where reasonable minds might differ on technical questions. Unless it was proved that some corrosion on a sandwich panel (assuming there was any corrosion there at all) constituted a structural defect, the builder had a strong case in GAR109-22.
• [35] The issue of the valley gutter largely turned on findings of fact. I do not accept that the QBCC could not have appreciated the strength of the builder's case until material was filed in 2025. Briefly, the facts were:

(a) On 13 December 2019 the builder told the homeowner that the roof should have been designed as a skillion roof and was told that under no circumstances would any variation to the works be approved.[32]

(b) The QBCC inspector decided that rectification was required as the valley gutter had not been installed in accordance with industry standard SAA HB 39 or the NCC.[33]

(c) The builder argued that the design was reason for the water ingress that caused the initiating complaint that the roof valleys were not in accordance with NCC requirements.

(d) At the hearing the QBCC argued that the builder had a responsibility to raise concerns about design issues with relevant parties during the course of construction,[34] despite having evidence that the builder told the owner about the problem on 13 December 2019.

(e) The inadequacy of the original design was also identified by the rectifying builder in 2021.

(f) The experts agreed that the original design was inadequate.[35]

• [36] The QBCC did not need to wait until it had the joint experts report to appreciate the strength of the builder's argument that he should not be directed to rectify an issue caused by a deficient design when it had evidence from the builder not only about the inadequacy of the design but also that his concerns about it had been rebuffed. The design issue was also identified by rectifying builder.
• [37] While the QBCC would have known that if its decisions in GAR055-23 were set aside it was inevitable that the subsequent decision in GAR631-23 would be set aside, likewise, if its decisions in GAR557-21 were set aside it was inevitable that the subsequent decision in GAR109-22 would be set aside, it cannot be criticised for the process for reviewing its decisions established under the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act).
• [38] The strength of the builder's claims is a factor weighing in favour of making an order that the QBCC pay the builder's costs.

Whether the builder was afforded natural justice by the decisionmaker for the decision

• [39] The builder does not contend that he was deprived of natural justice.

Whether the builder genuinely attempted to enable and help the decision-maker to make the decision on the merits

• [40] Although the QBCC was critical of the way in which the builder prepared for, and conducted, the applications,[36] it does not contend that the builder's conduct was not genuine.

• [41] In the vast majority of administrative review proceedings, it is the case that the applicant is not as well funded as the QBCC. That fact alone carries little weight as to whether or not there should be a cost decision against QBCC.[37]
• [42] I reject the builder's request to make submissions about the financial impact the proceedings have had on him.
• [43] The publicly available licence record of the builder shows that his financial position is not strong. It shows that:

(a) in FY 2025/2026 the builder had one job valued at $25,000;

(b) in FY 2024/2025 the builder had one job valued at $60,000;

(c) in FY 2023/2024 the builder had three jobs valued at $978,000;

(d) in FY 2022/2023 the builder had one job valued at $465,872.91;

(e) in approval year 2024/2025 two claims were approved under the statutory insurance scheme totalling $400,000;

(f) in approval year 2023/2024 two claims were approved under the statutory insurance scheme totalling $98,404.55;

(g) in approval year 2021/2022 three claims were approved under the statutory insurance scheme totalling $75,441.90.

• [44] Experience tells me that preparation for, and attendance at, a seven-day hearing, and all that went before, with outlays for counsel's fees and expert's fees would impose a considerable financial burden on a small business person.
• [45] There is evidence that the builder was not receiving any significant new business which impacted his ability to fund the proceedings and that he had to borrow substantial monies to continue to fund the proceedings.[38]
• [46] I accept that the QBCC is a government agency with finite resources. No doubt an award of costs would reduce the funds available to it to conduct its operations. That does not outweigh the interests of justice in this case.

• [47] The QBCC's role is not merely that of a regulator with no interest beyond maintaining standards in the building industry, as recognised in Cowen. It also has a commercial interest in the outcome of the proceedings as the operator of the statutory insurance scheme. If it has paid out funds under the scheme and the decision on which the payment was made is set aside, it cannot look to the builder to recover amounts paid out under the scheme.
• [48] While the QBCC should not be reticent in discharging its obligations for fear of adverse costs orders, it must be cognisant that if instead of maintaining the balance between homeowners and builders it allows the balance to tip in favour of homeowners, a builder may successfully argue, given the commercial undercurrents of its decision, that the interests of justice require a costs order to be made.
• [49] I reject the QBCC's submissions that these proceedings lacked a significant commercial element. Although both Cowen and Rosecove can be distinguished on the facts, the observations regarding commercial undercurrents are apposite in this case.
• [50] While these proceedings were not, in substance, a fight between an insured and an insurer as to liability under the scheme, the builder plainly had a commercial interest in seeking a review of decisions of the QBCC which are antecedent to a decision of the QBCC under section 71, to recover the amount of the payment of a claim under the statutory insurance scheme as the decision of the QBCC to recover an amount under section 71 is not reviewable.[39]
• [51] The builder would have faced debt recovery proceedings to which he would have had no defence had he not exercised his right to seek a review of the QBCC's decisions:

(a) to give a direction to rectify (GAR617-21, GAR055-23);

(b) that building work undertaken at the direction of the commission was not of a satisfactory standard (GAR255-21, GAR557-21, GAR631-23); and

(c) about the scope of works to be undertaken under the statutory insurance scheme to rectify tribunal work (GAR109-22).

• [52] As Judicial Member McGill SC recognised in Medical Board of Australia v TXA (No. 4)[40] the balance of power lies firmly with the regulator in both disciplinary proceedings and merits review proceedings. It would not assist access to justice if builders were to be deterred from arguing with the QBCC because even if they succeed, they will almost certainly have to pay their own legal costs anyway.
• [53] I accept the QBCC's submission that the builder was not successful on all the arguments he raised. However, there is no utility in attempting to identify time spent on particular arguments that ultimately came to nothing.

• [54] An order that costs be assessed on the standard basis pursuant to the District Court scale will not lead to a result that is economical, informal or quick. I intend to take a robust approach to the assessment of the builder's costs, as the Hon JB Thomas, Judicial Member indicated was appropriate in this tribunal.
• [55] The builder's solicitor should file an affidavit addressing the actual professional fees and outlays incurred by the builder in these proceedings. There should also be an estimate of the fees to resolve the amount of costs to be paid. In my experience it is not uncommon for the professional fees to be fixed as a percentage of the actual professional fees.[41] Subject to Mr Fox's fees being a reasonable amount, they should be paid in full.
• [56] The builder was fortunate to have assistance from Mr Bowman, a retired civil, structural and forensic engineer, throughout the proceedings. He was both a witness of fact and provided engineering opinions and calculations that were accepted by the experts.[42] I understand that due to his sense that the builder had been unjustly treated by the QBCC, he provided his assistance at no charge to the builder. If that is correct then there can be no amount recovered for his involvement in the proceedings.

[1] [2016] QCAT 111, [49].

[2] [2024] QCA 235.

[3] [2020] QCAT 365.

[6] [2021] QCATA 103.

[8] [2024] QCAT 520.

[9] [2025] QCAT 140.

[14] Manwin v Queensland Building Services Authority [2007] QDC 298, [16].

[36] Those criticisms have already been dealt with above.

[40] [2023] QCAT 360, [24].