In this appeal the successful appellant seeks an order that the respondents pay the appellant's costs of the appeal. The application is opposed.
The relevant background facts are found in our decision on the appeal - ACS Equip Pty Ltd v Richard [2020] NSWCATAP 236 - and need not be repeated unless necessary for a proper understanding of these reasons.
The parties were afforded the opportunity to make submissions about a proposed order that we dispense with a hearing of this application in person. Neither party provided any submissions opposing such an order.
We are satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions and other documents or material lodged with or provided to the Appeal Panel. Accordingly, we order that a hearing in person be dispensed with and we shall determine this application on the papers pursuant to s 50 (2) of the NCAT Act.
[2]
Principles
The general rule in relation to costs in the Tribunal in a case involving a sum such as the present is that, unless special circumstances are established, the parties pay their own costs - s 60(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act").
Section 60(3) says:
(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.
In The Owners - Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273 the Appeal Panel summarised a number of the applicable principles, which includes each principle relied upon by the parties in their submissions on this application, as follows:
"6. The general rule set out in s 60(1) was (citing Youssef v NSW Legal Services Commissioner (Costs) [2020] NSWCATOD 115 at [107]):
'… designed to promote access to justice generally and to minimise the overall level of costs in tribunal proceedings as far as is practicable: Choi v University of Technology Sydney [2020] NSWCATAP 18 at [41].'
7. In Feng v OzWood (Australia) Pty Ltd [2020] NSWCATAP 42 the Appeal Panel said, at [8], that the discretion to award costs had to be exercised judicially:
'...having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. (See eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]-[31]; Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (No 2) [2016] NSWCATAP 168 at [16].)'
8. Section 60(2) says that the Appeal Panel may award costs to a party 'only if' satisfied there are special circumstances warranting an award of costs.
9. Section 60(3) sets out a non-exclusionary list of factors to which an Appeal Panel may have regard in determining whether special circumstances warranting an award of costs exist.
10. 'Special circumstances' are circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary: Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] (Santow J); Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32]; Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8]; Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 at [9]; Youssef v NSW Legal Services Commissioner (Costs) [2020] NSWCATOD 115 at [107].
11. However, it does not follow that a costs order should be made simply because one or more of the factors in s 60(3) are made out.
12. Even if satisfied that there are special circumstances, the Appeal Panel must further be satisfied that they are circumstances 'warranting an award of costs' - Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103 at [21]; Youssef at [108].
13. The exercise of the discretion requires the Tribunal 'to weigh whether those circumstances are sufficient to amount to 'special' circumstances that justify departing from the general rule that each party bear their own costs': BPU v New South Wales Trustee and Guardian (Costs) [2016] NSWCATAP 87 at [9]; Obieta v Australian College of Professionals Pty Ltd (2014) NSWCATAP 38 at [81]; Khalaf v Commissioner of Police [2019] NSWCATOD 178 at [29]; Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 at [35].
14. He who asserts must prove, and so the party seeking the costs order bears the onus of proving that special circumstances exist - Styles v Wollondilly Shire Council [2017] NSWCATAP 108 at [5] under the heading 'Costs'.
15. Whether special circumstances exist is a question of fact and each case must be assessed according to its circumstances: Wynne Avenue Property Ltd v MJHQ Pty Ltd (No 2) [2019] NSWCATAP 68 at [57]; The Owners - Strata Plan 20211 v Rosenthal [2019J NSWCATAP 49 at [15]."
[3]
The Appellant's Submissions
The appellant submitted that on 1 September 2020, at the call over, the Tribunal made comments to the effect that the better course for the parties to adopt may be to set aside the decision.
The appellant submitted that on 2 September 2020 its solicitors sent correspondence to the respondents' solicitors noting that there were substantive grounds of appeal. It made an offer to the respondents to the effect that the parties consent to having the decision set aside, the matter to be remitted for hearing and each party to pay their own costs.
The appellant submitted that its appeal was objectively strong.
It submitted that it was unreasonable for the respondents to have rejected the offer having regard to the objective strength of the appellant's case taking into consideration that both parties were legal represented.
The appellant submitted that the respondents advanced arguments which were plainly incorrect and maintained those arguments even after the appellant told them so in their submissions in reply.
The appellant submitted that the respondents maintained a baseless argument that the Tribunal at first instance found certain contractual terms, had found them breached, and also made findings that there had been breaches of the statutory guarantees ins 60 and s 61 of the Australian Consumer Law (NSW). Those arguments were baseless because, the appellant submitted, the Tribunal's reasons do not refer to any of these causes of action or to their ingredients.
In relation to the various matters relied upon by it, the appellant submitted that whilst those matters might not be extraordinary or exceptional, they did not need to be. The appellant submitted that those matters were out of the ordinary. The appellant submitted that it drew the respondents' attention to matters which were not only fatal to defending the appeal but were obviously so. The respondents could have avoided the appeal completely, and saved the appellants not inconsiderable costs, but chose not to do so.
[4]
The Respondents' Submissions
In relation to the alleged comment made at the call over, the respondents submitted that the Member merely suggested that "one other option" was the possibility of consenting to having the decision set aside and the proceedings be remitted to the Consumer and Commercial Division for re-hearing.
The respondents submitted that the appellant's offer did not disclose any ground that was consistent with the overall conclusion of our decision, namely that the basic elements of a cause of action were lacking in the decision of the Tribunal at first instance. Further, the respondents submitted that, in basic terms, the appellant's analysis of the strength and weaknesses of the respective parties' cases was not substantially reflected in the reasons we gave for upholding the appeal.
The respondents submitted that the appellant never mentioned the matters we ultimately relied upon in upholding the appeal and, to the extent the offer referred to a "wrong test", that fell well short of putting the respondents on notice of a fatal flaw in their case.
The respondents submitted that there was insufficient objective evidence that the respondents' case was objectively weak and rejected the contention that their defence to the appeal had no tenable basis in fact or law.
The respondents submitted that even in light of the successful appeal, the respondents' rejection of the offer did not, of itself, amount to special circumstances if such a rejection was not unreasonable. The respondents submitted that while the appellant's success on appeal might be relevant to the question of costs, it is not determinative, and it was not unreasonable for them to reject the appellant's offer.
The respondents submitted that whilst some of the respondents' arguments may ultimately have been somewhat weaker than those of the appellant, they were not so unarguable, unreasonable or untenable as to amount to a substantial disparity between the strength of one claim and the weakness of the other.
The respondents submitted that the appellant had not proved the existence of any of the factors set out in s 60(3) of the NCAT Act. In the alternative, the respondents submitted that the only factor established was the rejection of the offer, and that of itself was not of sufficient weight nor import to justify a departure from the ordinary rule as to costs.
[5]
Decision
In our opinion the appellant has not demonstrated that special circumstances exist which warrant an award of costs.
We do not consider any comments made by the Tribunal at a call over to be relevant to this costs application. We have no transcript or sound recording of those comments and, given those absences, we would not be prepared to act upon alleged comments in the absence of complete agreement between the parties as to what was said (and which does not exist in this case).
Further, too much accuracy and nuance is lost when all we are given are submissions in narrative form as to what was said, as distinct from, for example, affidavit evidence with the relevant comments set out in the first person.
The appellant had the burden of establishing grounds to uphold the appeal, and so it is not quite to the point for the appellant to point to perceived weaknesses in the respondents' opposition to the appeal. Rather, if this ground is to be taken, at least in an appeal such as this, an appellant really needs to show that its grounds of appeal were so strong that the resistance to them was all but misconceived.
In this case we are not persuaded that this was so. The success of the appellant, or rather the precise reasoning for that success, was not sufficiently of that character as to amount to a special circumstance. Nor were our reasons sufficiently clearly or precisely articulated in the appellant's offer as to amount to a 'putting on of notice' of the respondent of the relevant kind.
The underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs is an important one, hence the need for special or out of the ordinary circumstances to be established in order to warrant an award of costs. In this case the circumstances are not, in our opinion, special or out of the ordinary in the necessary sense.
In all of those circumstances we do not agree that rejection of the appellant's offer was unreasonable, or that rejection of that offer was a special or out of the ordinary circumstance.
[6]
Order
We order that:
1. A hearing in person is dispensed with.
2. Each party is to bear its, his or her own costs of the appeal.
[7]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 04 March 2021