This is an application for costs brought by the respondent to an appeal lodged, but then withdrawn before the hearing of the appeal, by the appellant.
The orders appealed from ordered the termination of the residential tenancy agreement entered into between the parties, ordered that possession be granted to the respondent landlord, and ordered the tenant to pay arrears of rent and a daily occupation fee until possession was in fact given.
For the reasons that follow the application for costs is refused.
[2]
Background
The orders of the Tribunal appealed from were dated 13 January 2022.
The respondent made no application for costs to the Tribunal in relation to those proceedings.
On 28 February 2022, the appellant lodged his Notice of Appeal.
By a tax invoice dated 10 March 2022 (six working days after the lodgement of the Notice of Appeal) the respondent's solicitor charged the respondent for legal services provided in relation to the tenancy dispute. The tax invoice, which was for the sum of $15,000, said the following:
"To my professional costs for and incidental to acting for you in this matter including but not limited to:
1. Receiving your instructions;
2. Correspondence with the managing agent;
3. Researching best avenue to achieve an eviction;
4. Perusing documentation from the tenant;
5. Proof reading responses to the tenant;
6. Researching claims made by the tenant as to their veracity according to the law;
7. General advice on the matter;
Exceeding 30 hours but to you say 25 hours @$600/hr
Total due and payable
NO GST IS APPLIED TO THIS INVOICE"
Quite how a solicitor could say that GST was not "applied" to the invoice given that GST is payable on the supply of legal services is not known.
On 10 March 2022, the Appeal Panel made directions in relation to the appeal, which included directions for both parties to lodge and serve by certain dates the material they desired to rely on at the hearing of the appeal.
On 31 March 2022, the appellant emailed the respondent's agent to inform him that the appellant had "pulled the plug" on the appeal.
On 31 March 2022, the respondent forwarded the appellant's email to the Appeal Panel and advised the Appeal Panel:
"I act for the Respondent in this matter.
I have forwarded an email received from the Appellant earlier this morning.
The Order issued by NCAT on 10 March 2022 required that the Appellant was to lodge with the Tribunal and give to the Respondent by 30 March 2022 all evidence on which it intended to rely.
To date, we have received no correspondence or documentation from the Appellant that would satisfy these Orders, and based on the communication provided below, I do not expect that we will receive any evidence that would comply with Order 2.
…"
On 5 April 2022, and following the appellant's application to withdraw the appeal, the appeal was dismissed and the hearing date for the appeal (being 19 April 2022) was vacated.
On 13 April 2022, the respondent lodged with the Appeal Panel an application for costs. That application was referred to the Appeal Panel for determination of the costs application and for consideration whether that determination could be conducted on the papers.
The respondent seeks $15,000 for his solicitor's fees and $3,033.25 for his managing agent's fees.
The application for costs is opposed by the appellant.
It was not clear from the respondent's application and the material lodged with it whether the respondent was seeking costs of the proceedings appealed from, costs of the appeal, or both.
Accordingly, on 6 June 2022 the Registrar wrote to the parties at the request of the Appeal Panel and said:
"An Appeal Panel may only dispense with a hearing (and decide the issues on the papers) if satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Appeal Panel.
The Appeal Panel has received and read the parties' submissions on costs, and the documents on which each party relies, however there remain two matters which require further clarification before we could be satisfied that the issues for determination can be adequately determined in the absence of the parties.
First, we are unclear from the material with which we have been provided whether the work done by the solicitor which is reflected in his bill dated 10 March 2022 was for the proceedings at first instance (which led to the Tribunal's decision dated 13 January 2022), or was work for the appeal, or was work for both. We would ask that the respondent clarify that matter in writing, copied to the appellant, by close of business on 13 June 2022. If the respondent says that some of that bill is for work done on the appeal, the respondent is directed to provide us, copied to the appellant, any evidence to that effect upon which he relies.
Second, whilst we do have power to make an award for costs incurred in relation to an appeal, our preliminary view is that we do not have power to make an award for costs incurred in relation to the proceedings at first instance where no application for costs was made to the Tribunal at first instance (which is the situation in this case as we understand it). In LMA Contractors Limited v Changizi [2017] NSWCATAP 145 the Appeal Panel said at [19]:
'We are of the view that section 81 of the Act does not allow us to make a costs determination in relation to the proceedings before the Tribunal Member at first instance, in circumstances where there was no application for an order for the costs of those proceedings. The Tribunal at first instance was not able to consider the question of costs if there was no application and therefore we as the Appeal Panel are not able to do so either.'
If the respondent wishes to argue to the contrary, and say that we do have that power, the respondent is directed to lodge with the Appeal Panel and serve on the appellant submissions on that point by close of business on 13 June 2022, and the appellant is directed to lodge with the Appeal Panel and serve on the respondent any submissions in response by close of business on 20 June 2022."
On 23 June 2022, and in response to the Registrar's correspondence, the respondent's agent emailed the Appeal Panel (on the face of it, not copied to the appellant) and relevantly said:
"In response to the Panel's query on whether the work was done in relation to the proceedings at first instance, the appeal, or both; the fact is that it was work done for both, although the vast majority of the work was done in relation to the appeal. …
… My solicitor operates largely as a sole trader, as such he does not operate under a formalised hourly billing system like large firms where he itemises each hour of consultation or time spent on research/work.
…
Further, Gary Anderson has made it clear that he has little or no funds and no intention of settling any incurred liabilities, so it would not make any sense for me to demand that my solicitor spend many additional hours of his time attempting to itemise each and every phone, email or face to face conversation we had over the past six months, along with a detailed report on each and every item of research on points of law or admissibility of evidence when I would be the one that ends up having to foot this additional cost/bill."
As we propose to dismiss the application for costs, there is no procedural unfairness arising from the respondent's agent's apparent failure to send that same correspondence to the appellant.
Neither with or in his email of 23 June 2022, or elsewhere, did the respondent's agent:
1. lodge or serve any evidence proving the statements made about which matter the solicitor's work related to (as directed by us);
2. inform us how much of the solicitor's invoice was for the proceedings appealed from or for the appeal;
3. provide any submissions taking issue with the holding in LMA Contractors Limited v Changizi [2017] NSWCATAP 145 to the effect that s 81 of the Civil and Administrative Tribunal Act 2013 (NSW) does not allow us to make a costs determination in relation to the proceedings at first instance where there was no application for an order for the costs of those proceedings made to the Tribunal.
[3]
Decision
We are satisfied that the costs issues for determination can be adequately determined in the absence of the parties by considering their written submissions and other documents lodged with the Appeal Panel. We therefore dispense with a hearing in person.
As decided in LMA Contractors, the Appeal Panel does not have power to make a costs order in relation to first instance proceedings where no application for costs was made at first instance. That is the situation here.
The managing agent's fees of $3,033.25 are not allowable as costs in Tribunal proceedings (whether at first instance or on appeal) as costs are only payable where they are legal costs and disbursements: Hammond v Ozzy's Cheapest Cars Pty Ltd t/as Ozzy Car Sales [2015] NSWCATAP 65 at [107]. We note that no disbursements are claimed or discernible on the face of the solicitor's or the agent's invoices.
We do not accept the respondent's submission that the vast majority of the work done by the solicitor which is reflected in his tax invoice of 10 March 2022 was done in relation to the appeal.
First, no evidence was filed proving that submission as requested by the Registrar.
Second, the tax invoice is only dated six working days after the filing of the Notice of Appeal. It seems very unlikely that the majority of the work referred to in the invoice was done in the intervening six working days when the appellant had not served any material on the respondent (to be relied on at the hearing of the appeal).
Third, the terms of the tax invoice are also inconsistent, at least to some degree, with the respondent's agent's submission. For example, the item "Researching best avenue to achieve an eviction" could only be a reference to the proceedings at first instance, and the item "Perusing documentation from the tenant" could only be a reference to the material served for the first instance proceedings because nothing was served in relation to the appeal.
We infer from the matters referred to in the two paragraphs immediately above that all the solicitor's work referred to in the tax invoice was for work done for the first instance proceedings. That inference could have been overcome by the respondent by the serving of evidence as we directed, but that opportunity was not taken up by the respondent's agent.
As all of the solicitor's work was for the first instance proceedings, and no application for costs was made to the Tribunal in relation to those first instance proceedings, we, as an Appeal Panel, do not have the power to award those costs now.
[4]
Orders
We make the following orders:
1. A hearing in person on the respondent's costs application is dispensed with.
2. The respondent's application for costs is dismissed.
[5]
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: 30 June 2022