AGY Global Wealth Pty Ltd v Gillies

The appeal

1. The builder filed a Notice of Appeal dated 9 January 2023. On 27 February 2023 the builder lodged submissions which did not include a sound recording or transcript of the oral reasons.
2. The matter was heard by the Appeal Panel on 2 March 2023. At that hearing, the builder was represented by counsel, who acknowledged that the Notice of Appeal had been lodged out of time and sought an extension of time in which to lodge the Notice of Appeal.
3. We refused to grant the application for an extension of time and dismissed the appeal because the builder had not made out compelling reasons for the delay in filing the Notice of Appeal and has not shown a reasonably arguable case that that the appeal might succeed. Without a recording or transcript of the oral reasons, we were unable to ascertain what the reasons were for making the order that the builder sought to overturn. As a result, the builder was unable to demonstrate that those reasons raised a question of law upon which there would be a right of appeal or a substantial miscarriage of justice for which leave to appeal could be sought. Additionally, we were satisfied that the owner would suffer considerable prejudice if an extension of time in which to appeal were granted.
4. The application for an extension of time to lodge the Notice of Appeal was refused and the appeal was dismissed. Written reasons were published by the Appeal Panel on 23 March 2023.

The costs application

1. On 31 March 2023 the owner lodged an application for miscellaneous matters, seeking orders that the respondent (builder) pay the applicant's (owner's) costs of and incidental to the appeal and any other order the Tribunal deemed fit.
2. On 13 April 2023 the Appeal Panel made orders that required that the owner file and serve all submissions and evidence in support of the costs application by 20 April 2023; the builder file and serve any submissions and evidence in response to the costs application by 27 April 2023; the owner file and serve any submissions and evidence in reply to the costs application by 4 May 2023 and that the submissions must address whether a hearing on the question of costs could be dispensed with.
3. On 13 April 2023, counsel for the builder advised that he no longer acted in the matter and all documents in relation to the matter needed to be provided to the builder.
4. On 24 April 2023 the owner provided submissions.
5. The owner's costs submissions and the miscellaneous matters application were emailed to the builder by the Tribunal. No submissions in relation to the costs application were lodged by or on behalf of the builder by the time of writing.

Issues

1. The issues to be determined are: 1. Should a hearing on the application be dispensed with in accordance with s 50(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act)? 2. Has the owner made out special circumstances warranting the award of costs in her favour? If so, 3. Should the Tribunal exercise its discretion to award costs?

Should a hearing on the application be dispensed with in accordance with s 50(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act)?

1. Under s50(3) of the NCAT Act, the Tribunal may not make an order dispensing with a hearing unless the Tribunal has first afforded the parties an opportunity to make submissions about the proposed order and taken the submissions into account.
2. As part of the orders which were made on 13 April 2023, the Appeal Panel required that each party's submissions address whether an order should be made dispensing with a hearing.
3. The owner submitted that the Appeal Panel should dispense with an oral hearing and that the matter be determined in the absence of the parties. The builder did not make any submissions.
4. We are satisfied that the parties have been afforded an opportunity to make submissions regarding whether the matter should be decided on the papers and the owner has consented to this course. The costs issues can be adequately determined in the absence of the parties by considering the written submissions provided by the owner. Accordingly it is consistent with the Tribunal's guiding principle under s36(1) of the NCAT Act to facilitate the just, quick and cheap resolution of the real issues in the proceedings to dispense with a hearing in relation to costs.

Has the owner made out special circumstances warranting the award of costs in her favour?

General principles on costs in the Tribunal

1. Under s 60(1) of the NCAT Act, each party to proceedings in the Tribunal is to pay the party's own costs. Under s60(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. Under s 60(5), costs includes the costs of, or incidental to, proceedings in the Tribunal, and 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.
2. An exception to s 60(2) is found in rule 38 of the Civil and Administrative Tribunal Rules 2014 (NCAT Rules), which relates to the Consumer and Commercial Division of the Tribunal. Under rule 38(2), the Tribunal may award costs in the absence of special circumstances warranting such an award if the amount claimed is more than $10,000 but not more than $30,000 and the Tribunal has made an order under cl 10(2) of Sch4 of the Act in relation to the proceedings, or the amount claimed or in dispute in the proceedings is more than $30,000.
3. There is no suggestion that rule 38(2) applies in these proceedings, and costs have been sought on the basis of special circumstances. Accordingly, we may only award costs in the proceedings if satisfied that there are "special circumstances warranting an award of costs" within the meaning of s 60(2) of the NCAT Act.
4. Subsection 60(3) of the NCAT Act provides: (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.
5. Subsection 60(3) uses the expression "may have regard to the following" and the factors are not mandatory considerations. The list is also not exclusive: NCAT Act s 60(3)(g).
6. In Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249, at [9], the Appeal Panel said: Special circumstances are circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary. These principles are well established and have been consistently applied in this Tribunal: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32].
7. The Tribunal's discretion to award costs must be exercised judicially, and not arbitrarily, capriciously or so as to frustrate the legislative intent: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [22] (Oshlack).
8. A costs order is compensatory and not punitive: Dr Douglass v Lawton Pty Ltd (No 2) [2007] NSWCA 90 at [22].

The owner's submissions for costs

1. The grounds claimed in the application for miscellaneous matters included: 1. The owner should be compensated for the expense she has been put to in defending/responding to the appeal 2. The appeal panel found that the builder had filed is appeal more than three months out of time and that it had not made out compelling reasons for the delay, nor shown that it had a reasonably arguable case that the appeal might succeed. 3. Leave was not granted for the appeal to be heard out of time.
2. The owner submitted that the special circumstances applied under ss 60(3)(c), (e) and (f).
3. Regarding 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 (s 60(3)(c)), the owner submitted that the builder's claim was doomed to fail from the outset, having been filed three months out of time without compelling reasons for the delay or a reasonably arguable case that the appeal might succeed. The work was performed in December 2018 and rectification orders were not complied with. The builder's application was to have the money order set aside and to attend to rectification of its faulty work, but the owner had already enforced the money order and had arranged for a replacement solar inverter and for its installation.
4. The owner further submitted that, for the same reasons, and the failure to comply with the orders, the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance under s 60(3)(e).
5. The circumstances set out by the owner in relation to s 60(3)(c) formed part of the reason for the owner's success in the proceedings and the builder's failure to be granted an extension of time but do not necessarily indicate that the claim was without tenable basis or "doomed from the outset". It was necessary to investigate the duration and reasons for the delay, the prospects of success and the potential prejudice of an extension of time being granted before determining whether an extension of time in which to lodge the application should be granted. In the absence of the transcript or the reasons for the decision, the builder could not identify a question of law upon which there would be a right of appeal or a substantial miscarriage of justice for which leave to appeal could be sought and as a result the extension of time was not granted. As a result, the relative strengths of the parties' claims were not considered, and there was no basis on which to find that proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance. Special circumstances do not exist under s 60(3)(c) or 60(3)(e).
6. Section 36(1) of the NCAT Act stipulates that the guiding principle for the NCAT Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Section 36(3) of the NCAT Act requires that parties and Australian legal practitioners or other persons representing a party in Tribunal proceedings are under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal.
7. Regarding whether a party has refused or failed to comply with the duty imposed by s 36(3) under s 60(3)(f), the owner contended that on 25 January 2023 the Appeal Panel gave each party leave to be legally represented. It furthermore ordered that the builder was to lodge with the appeal registry and give to the respondent by 8 February 2023 all the evidence given to the Tribunal at first instance, any other evidence, written submissions and a typed transcript of the relevant parts of the hearing together with the sound recording of the entire hearing. None of these orders was complied with and, without having the benefit of being provided with those materials, the owner complied with order 5 which directed her to lodge her evidence and submissions with the appeal registry and provide them to the builder by 22 February 2023. The owner submitted that the builder subsequently served its evidence including the typed transcript and sound recording on the owner on the afternoon of 27 February 2023, three days before the hearing of the appeal, leaving the owner with no opportunity to reply.
8. The Appeal Panel's directions on 25 January 2023 relevantly set out: … 4 The Appellant is to lodge with the Appeal Registry and give to the Respondent by 08 February 2023: (a) All the evidence given to the Tribunal at first instance on which it is intended to rely; (b) Any evidence not provided to the Tribunal at first instance in making the decision under appeal, on which it is intended to seek leave to rely; (c) The Appellant's written submissions in support of the appeal; and (d) As oral reasons were given a typed transcript of the relevant parts of the hearing, together with the sound recording of the entire hearing. 5 The Respondent is to lodge with the Appeal Registry and give to the Appellant by 22 February 2023: (a) All the evidence provided to the Tribunal at first instance on which it is intended to rely; (b) If appropriate in response to (b) above, any evidence not provided to the Tribunal at first instance in making the decision under appeal, on which it is intended to seek leave to rely; (c) The Respondent's written submissions in opposition to the appeal; and (d) If oral reasons were given and/or what happened at the hearing at first instance is being relied on by the Respondent in the appeal, a typed transcript of the relevant parts of the hearing (except to the extent already provided by the Appellant), together with the sound recording of the entire hearing (unless already provided by the Appellant). … 8 NOTES: (1) If a party does not lodge with the Appeal Registry and give to the other parties documents, sound recordings and submissions as directed above, that party may not be allowed to rely on those documents, sound recordings and submissions at the hearing of the appeal. (2) If any party wishes to make an application for costs of the appeal, that party is to lodge with the Appeal Registry and give to the other party any submissions on costs at the same time as their submissions in relation to the appeal.
9. It was common ground at the hearing that the builder did not comply with Order 4(d) in providing a typed transcript of the relevant parts of the hearing, together with the sound recording of the entire hearing by 8 February 2023.
10. Similarly, in not making an application for costs at the same time as their submissions in relation to the appeal, the respondent did not comply with the notes in order 8(2).
11. For the Tribunal to award costs under s 60(2) of the NCAT Act, those circumstances must constitute "special circumstances warranting an award of costs." Further, even when those "special circumstances warranting an award of costs" exist, the Tribunal must further consider whether it should exercise its discretion to award costs.
12. Although there are circumstances which fall within s 60(3)(f), in that the builder did not serve the submissions and documents within the prescribed time frame, the circumstances set out in s 60(3)(a) - (g) are circumstances to which the Tribunal may have regard in determining whether there are special circumstances warranting an award of costs; they do not necessarily constitute special circumstances warranting the award of costs by themselves. In this case, the builder's failure to comply with the Appeal Panel's orders formed part of the builder's inability to show grounds for a successful appeal. As a result, the owner was potentially advantaged and, at a minimum, not prejudiced by the builder's failure to file evidence, submissions or a transcript. We are not of the view that the builder's failure to comply with the Appeal Panel's direction itself gives rise to special circumstances.
13. Further, even though there are circumstances which might fall within s 60(3)(f), in this case we are not satisfied that those circumstances warrant an award of costs.

Should the Tribunal exercise its discretion to award costs?

1. Even if special circumstances warranting an award of costs had been established, it is not mandatory that an order for costs be made. Where there are special circumstances warranting an award for costs, the discretion is to be exercised in accordance with the usual principles that an order for costs is in the nature of compensation, not a form of punishment, and is to compensate the successful party: Latoudis v Casey (1990) 170 CLR 534 per McHugh J at 567 and Oshlack per McHugh J at 97.
2. As noted above, although the owner submits that the typed transcript and sound recording of the hearing was served on her, those documents were not filed with the Appeal Panel and the failure to do so formed part of the builder's inability to show grounds for a successful appeal.
3. As a result, although the appellant did not provide the evidence and submissions which were required by the due date, the owner was potentially advantaged and, at a minimum, not prejudiced by the failure to do so.
4. In those circumstances, even if special circumstances warranting an award of costs had been established, we also would not exercise the discretion to award costs.

Orders 1. A hearing on costs is dispensed with in accordance with s 50(2) of the Civil and Administrative Tribunal Act 2013. 2. The application for costs is dismissed. 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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 June 2023