Abed v Cosgrove t/as Alison Arts; Cosgrove v Abed

Abed v Cosgrove t/as Alison Arts; Cosgrove v Abed - [2018] NSWCATAP 133 - NSWCATAP 2018 case summary — Zoe

Section 60 of the Civil and Administrative Tribunal Act 2013 (NSW) ('the NCAT Act') states as follows: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant. (4) If costs are to be awarded by the Tribunal, the Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (5) In this section: costs includes: (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.
Rule 38 of the Civil and Administrative Rules 2014 ('the NCAT Rules') states as follows: 38 Costs in Consumer and Commercial Division of the Tribunal (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if: (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10 (2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000.
Rule 38A of the NCAT Rules states as follows: 38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of: (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
In the Appeal Panel proceedings, Abed's appeal involved an amount in dispute of over $30,000.00, because in the proceedings below, Abed claimed an amount in excess of $30,000. However, there were no proceedings below involving a cross claim by Cosgrove, because the Tribunal did not have jurisdiction under Part 6A of the Fair Trading Act 1987 (NSW) in this regard (Cosgrove being the supplier of services rather than the recipient of services).
In respect of the cross appeal by Cosgrove, Cosgrove sought an order overturing the decision of the Member below to award Abed $10,897.50 and asserting that there had been no breach by Cosgrove of any provision of the Australian Consumer Law 2010, or any other relevant cause of action asserted by Abed.
Whether the amount in dispute in Cosgrove's cross appeal exceeds $30,000.00 depends upon whether there is a realistic prospect the wealth of Cosgrove would be changed by more than $30,000.00 if Cosgrove was successful in the cross-appeal (Allen v TriCare (Hastings) Pty Ltd [2017] NSWCATAP 25 at [57]). Had Cosgrove succeeded in the cross-appeal, there is no realistic prospect Cosgrove's wealth would have changed by more than $30,000 as the decision which Cosgrove appealed against was that Cosgrove pay Abed $10,897.50, with no order having been made regarding costs. No order was made at first instance under cl 10 (2) of Sch 4 of the NCAT Act.
Accordingly, r 38 of the NCAT Rules does not apply to the cross appeal, and the provisions of s 60 of the NCAT Act apply. For Abed to succeed in obtaining a costs order, Abed must show there are "special circumstances". "Special circumstances" are circumstances which are out of the ordinary but not necessarily extraordinary or exceptional: see eg Cripps v G & M Mawson [2006] NSWCA 84 and Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120. Section 60 (3) of the NCAT Act sets out the matters which may be considered to establish whether or not there are special circumstances. Each case depends upon its own particular facts.
Abed submits that there are special circumstances that warrant an order that Cosgrove pay the costs of the cross appeal for the following reasons: 1. Cosgrove's appeal was "retaliatory" and only filed when Cosgrove realised that there was a prospect that Cosgrove may be liable for more than $10,897 if Abed's appeal was successful. 2. The late filing of Cosgrove's cross appeal caused the hearing of the appeal and the cross appeal to be part heard to a further date. If the cross appeal had not been filed late, no further hearing date in the Appeal Panel would have been required. 3. Cosgrove's written submissions on the cross appeal raised numerous allegations that Abed had conspired with her expert witnesses to "inflate" estimates to repair Abed's vehicle, and Abed's expert witnesses were not independent. Such claims were vexatious and required Abed's lawyer to spend "significant" time addressing the allegations in written submissions. 4. Cosgrove's grounds of cross appeal were weak in substance, and there was little prospect that Cosgrove would obtain leave to extend the limitation period to file the cross appeal, or succeed on the cross appeal.
Abed sought a lump sum costs order of $11,270 and provided an itemised schedule of costs prepared by Abed's Solicitor.
Cosgrove denies that there are special circumstances that warrant an order for costs. Cosgrove's submissions can be summarised as follows: 1. Cosgrove had made an offer to settle proceedings on the basis that there be an "exchange" with Cosgrove providing "another identical model of similar klms and condition including exchange of engine, suspension, exhaust and wheels" or "discussing" Cosgrove having the vehicle re-painted "through our industry contacts whom are experienced, licensed, professionals" (email of S Cosgrove to Abed's Solicitor dated 19 June 2017). Abed had rejected the offer and made an offer of $25,000.00 in full and final settlement of the proceedings. 2. Cosgrove's conduct had not unreasonably delayed the matter in the Appeal Panel, or caused the unreasonable escalation of costs. The first hearing date in the Appeal Panel was to deal with Abed's appeal and Cosgrove's application for a stay of the original orders. No directions had been made to deal with the cross appeal. Abed's appeal was not finalised on the first hearing date in the Appeal Panel in any event, and the second day included further submissions that dealt with both Abed's appeal and Cosgrove's cross appeal. 3. Cosgrove did not accept that the cross appeal had little merit. 4. Cosgrove submitted that the schedule of costs was inflated, and included items that were not solely confined to the cross appeal.
Abed's submissions in reply can be summarised as follows: 1. Abed continued to submit that, had Cosgrove filed and served the cross appeal within time, directions regarding the filing and serving of submissions could have been made at the call-over of Abed's appeal, and all issues (including the stay application by Cosgrove) could have been dealt with at the first Appeal Panel hearing date. 2. It was Abed's "understanding" that Cosgrove had, at the conclusion of the first day of the hearing in the Appeal Panel sought that there be oral argument on the cross appeal, rather than the cross appeal being dealt with on the basis of written submissions. 3. There was nothing unreasonable about Abed refusing Cosgrove's offers. 4. The estimate of costs by Abed's Solicitor was not inflated.

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