Aksan v Godfrey

REASONS FOR DECISION

This is our decision on costs arising out of our principal decision in Aksan v Godfrey [2022] NSWCATAP 338. This costs decision assumes familiarity with our principal decision.
The respondent sought indemnity costs of the appeals, or alternatively costs on the ordinary basis. The respondent's total legal bill for the appeal was $6,836.50 plus GST. The respondent also sought an order for a lump sum costs amount.
In accordance with our directions made in our principal decision the respondent has provided written submissions in support of his costs application and has consented to the costs application being dealt with on the papers.
No submissions were provided by the appellants.
We are satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions provided and accordingly make an order pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act") dispensing with an oral hearing of the costs application.

Decision

The question whether rr 38 and 38A of the Rules applies is to be determined by the amount claimed or in dispute on the appeal, not the original proceedings - Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [43].
In this case that question is difficult to answer because the appellants were not clear what particular relief they sought.
Be that as it may, we are satisfied that the respondent's alternative argument should succeed and therefore we do not need to decide what was the amount claimed or in dispute on the appeal. That is, we are satisfied that special circumstances exist and that the discretion as to costs should be exercised in the respondent's favour.
Some of the general principles applicable to the exercise of the costs discretion under s 60 of the NCAT Act (and which are applicable here) were set out in The Owners - Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273. In that decision the Appeal Panel at [5]-[15] said: 5 Section 60 of the NCAT Act relevantly says: 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. 6 The general rule set out in s 60(1) was: "… 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].
In this case we agree with the respondent's submission that the principal appeal had no tenable basis in fact or law and was lacking in substance.
We are not in any doubt that the appellants genuinely thought that there had been some wrongdoing that entitled them to a remedy in the proceedings appealed from. We are also in no doubt that they genuinely thought that the Tribunal arrived at the wrong result.
However, holding a genuine belief that the Tribunal had made a mistake is not the same as an appeal having a tenable basis in fact or law or having some legal substance. In other words, the appellants' belief that the Tribunal had made the type of error which might be appellable were mistaken.
As we attempted to explain in our principal decision, the appellants had freely and voluntarily entered into a contract (which was reflected in the consent orders). Having done so, the law says that they should be held to the terms of that contract unless one of the matters we mentioned in our principal decision was proved to have occurred. The appellants did not prove that any one of those matters existed and hence they lost their case before the Tribunal. The Tribunal, to its credit, also looked at whether their complaints about the signing off by Mr Moroney had any substance and found, on the evidence, that they did not.
Against that background, the appellants needed to prove on the principal appeal that the Tribunal had made some type of mistake in its reasoning process which caused it to arrive at the wrong decision and which entitled them to appeal and to have the Tribunal's decision changed. But the appellants did not identify any alleged mistake nor was one apparent to us. On the contrary, in our view the Tribunal's decision was correct.
More relevantly for this costs application, the appellants did not have any tenable basis for arguing the Tribunal's made some type of appellable mistake which might cause us to change the Tribunal's decision. Simply saying the Tribunal's decision was wrong and then re-arguing the same matters as had been argued before the Tribunal does not amount to a legal basis for an appeal. An appeal is about whether a Tribunal made a mistake in its decision making. It is not a second hearing hoping for a different result.
As we said at [13] of our principal decision: … an appeal (is) not a second hearing but (is) concerned with whether the Tribunal had made some type of mistake in its decision-making process which resulted in a flawed decision.
This is made clear, in different words, in paragraphs 3 - 5 of the NCAT Guideline - Internal Appeals which appellants are expressly urged to read before proceeding with an appeal by a paragraph appearing at the top of the Notice of Appeal filled in and signed by appellants.
Therefore, in our opinion the principal appeal had no tenable basis in fact and law, and that is a special circumstance specified in s 60(3)(c) of the NCAT Act.
We note that the appellants have not provided any written submissions identifying any reason why the respondent should not have his costs, including not identifying any disentitling conduct of the respondent which might have persuaded us that the respondent should not have his costs.
It is our further opinion that it is appropriate that we exercise our discretion to order the appellants to pay the respondent's costs of the appeals, that those costs be paid on the indemnity basis and that we fix the sum of those costs at $6,836.50 plus GST. Our reasons are as follows.
Costs are ordered not by way of punishment of the unsuccessful party but as compensation to the successful party for the costs incurred in defending the appeal. The respondent was put to the costs and expense of defending himself in the principal appeal when that appeal had no prospects of success. The appellants were, in effect, seeking to renege on their contract (which was reflected in the consent orders) when they were not entitled to do so and when they did not allege any relevant mistake having been made by the Tribunal in holding them to their contract.
In addition, the Tribunal considered the appellants' alternative case and found against them. On the appeal, no error of any sort in that decision was identified. In other words, the appeal against the decision on the appellants' alternative case had no prospects of success because the appellants did not identify any error of the relevant type made by the Tribunal.
In all those circumstances it is our opinion the respondent should be indemnified for his legal costs.
The amount claimed by the respondent is, in our experience, modest, and in the circumstances, it is our opinion that the parties should not be put to the further disproportionate cost and expense of having the respondent's legal bill assessed.
The costs appeal was really just part of the principal appeal in the sense that the result of it would probably follow the result of the principal appeal. Therefore, any costs incurred in the costs appeal are subsumed in the costs incurred in the principal appeal and no separate order should be made about them. In other words, the costs incurred for the costs appeal should be treated as part of the cost of the principal appeal.

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