Arjunan v Neighbourhood Association DP No 285853

NCAT Appeal Panel|2022-04-01|Before: Neighbourhood Association DP

Summary

The appellants appealed against two decisions of the Consumer and Commercial Division of the Tribunal (Tribunal) of 1 October 2020 and 10 November 2020 in matter SCS 20/20812.
The appeal was lodged five months out of time in respect of the first decision and four months out of time in respect of the second.
As we noted in Arjunan v Neighbourhood Association DP No 285853 [2021] NSWCATAP 357 (Primary Decision) at [2], the first decision (described in the Primary Decision as the substantive decision) made on 1 October 2020, dismissed the appellants' application. The second decision, made on 10 November 2021 (described in the Primary Decision as the costs decision), awarded the respondent its costs of the proceeding, in a fixed sum of $3,000.
Following a hearing on 11 November 2021, and for the reasons given in the Primary Decision, we refused to extend the time for the appellants to file their Notice of Appeal.
At the conclusion of Primary Decision, we directed that submissions be filed by the parties in relation to costs.
For the following reasons, we have decided that the appellants are to pay the costs of the respondent as agreed or as assessed.

Dispensing with a hearing

In the Primary Decision we stated that we proposed to determine costs "on the papers" and without a hearing, but gave the parties the opportunity to make submissions on this matter.

Submissions

As we have noted, was an appeal from two decisions of the Tribunal, as described above.
In summary, the respondent submitted on 25 November 2021 that this is a matter where rr 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (Rules) applies, and therefore, having been successful, the respondent was entitled to its costs.
Alternatively, the respondent submitted that if the Appeal Panel found that if this was a matter where s 60 of the NCAT Act applied, then special circumstances existed warranted an award of costs. In this respect, the respondent relied on ss 60(a), (b), (c), (e) (f) and (g) of the NCAT Act.
In summary, the appellants submitted (by way of letter dated 17 December 2021): … On 8 December 2021, the Appellants filed submissions that did not raise new issues as reported by the Respondent at [2] - [5]. [2] was there in the submission dated 23.6.21 pages 20-21 [3] the 9.7.21 reference is based on my submission to the other panel on 5.5.21. [4] The old version was in page 99-100 of appellants submission to Panel on 23.6.21 [5] The respondent refers to an annexure in their cost submission with a copy to Appellant but not attached or served the annexure to the Appellant. As such there is no need for leave and it is Appellant response opposing the cost claimed.

Principles for both decisions

The starting point is s 60 of the NCAT Act which relevantly provides: 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. …
However, rr 38 and 38A of the Rules provide: 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. 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 its submission, the respondent submitted that "the costs of the Below Proceedings" would not exceed $30,000, but that an order for costs may be made in respect of an appeal where the amount in issue on the appeal exceeds $30,000. The respondent further submits that the amount in issue in an appeal is the amount by which the appeal might affect the position of the parties: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [57], BCS Strata Management Pty Ltd v The Owners SP 61759 [20167] NSWCATAP 275.
The respondent then submits that: 15. In considering the expense that the appellant put the respondent to in respect to both the below proceedings in this appeal, the respondent submits that its prejudice in defending such proceedings, invokes rule 38 and as such, the Appeals Panel may dispense with considerations under section 60 of the [NCAT] Act. 16. For the abundance of clarity, the respondent advises that the costs incurred in the Below Proceedings in these proceedings exceed $30,000.
With respect, these submissions are confused. We are dealing with the costs of the appeal. In doing so pursuant to r 38A(2), we must apply the costs rule at first instance. The costs rule at first instance is that s 60 of the NCAT Act applies, unless there are special circumstances warranting an award of costs, the Tribunal: s 60(3). However, despite s 60, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award relevantly if the amount claimed or in dispute in the proceedings is more than $30,000.
In the first decision, as we noted in the Primary Decision: 6. The appellants are lot owners in a neighbourhood association constituted under the Community Land Management Act 1989 (NSW) ("the Act"). A management statement for the scheme applies to the 14 private lots and the common property encompassed by the scheme. The appellants own one lot in the scheme and brought proceedings the Consumer and Commercial Division claiming that various contributions levied against lot owners were excessive. They sought orders under s 83 of the Act to reduce those contributions. 7. On 28 September 2020, the Tribunal conducted a hearing in respect of that application. The Tribunal delivered its decision and reasons on 1 October 2020. It thoroughly examined the applicants' claims and, in respect of each of them, made clear findings that the applicants failed to demonstrate that any aspect of the contributions levied were excessive or, to use the words in s 83 of the Act, "too much".
The Tribunal dismissed the appellants' application. In its decision the Tribunal said: 48. The applicants have not indicated either which amount they seek to have varied or what the varied amount should be. On an overall basis, the applicants have asserted that there has been a 366% increase in the Administrative Fund budget since 2008. However, they have only provided evidence in relation to the period from 2011. They have not provided supporting documents. 49. It is clear, from the evidence provided by the respondent, that contributions for the Administrative Fund are based on the annual budget for that fund which has increased from $9147 in 2011 to $12,031 in 2019, an increase of less than 24%. The only year in which there was a significant increase was in 2013 when the increase was just under 16% and in four of those nine years there has been no increase at all. 50. The respondent's evidence suggests a conservative approach to budgeting so that the contributions from the lot owners do not prove to be insufficient to cover the expenditure required to meet the NA's obligations under then NMS. The deficits in 2011 and 2012 were recovered by the surplus in 2013. A small deficit of $431.63 arose in 2016 which is not surprising since unexpected expenditure can obviously arise. Significantly for present purposes, not only has the Administrative Fund budget been kept at $12,031 for three years (2017-2019) but, while that amount was required in 2016, there have been surpluses in 2917 and 2018. 51. Accordingly, since the available evidence does not suggest the contributions are excessive, the applicants have failed to prove their case under section 83 of the CLM Act.
Given those matters, we are not satisfied that r 38 was applicable to either the substantive decision or the costs decision, and therefore we are not satisfied that r 38A applies to the appeal. In our view, to be successful on its application for costs in relation to either the substantive decision or the costs decision, the respondent needs to establish special circumstances warranting an award of cost and, if it does, then persuade us that it is appropriate for us to order costs in the exercise of our discretion.

Application of s 60 of the NCAT Act

As the Appeal Panel noted in The Owners - SP No 91684 v Liu (No 2); The Owners - SP No 90189 v Liu (No 2) [2022] NSWCATAP 74 at [11], the general approach to the application of s 60 is well settled and described in numerous published decisions, one example of which is Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 where it was stated: 9. 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]. 10. A party's success on appeal is relevant to the question of costs, although it is not determinative: Hammond v Ozzy Cheapest Cars Pty Ltd t/as Ozzy Car Sales [2015] NSWCATAP 65. The Tribunal's discretion to award costs must be exercised judicially and not capriciously: Oshlack v Richmond River City Council (1998) 193 CLR 72 at 81; eMove Pty Ltd v Naomi Dickinson[2015] NSWCATAP 94 at [37].
In Liu at [12] the Appeal Panel also noted that in Alexander James Pty Ltd v Pozetu Pty Ltd (No 2) [2016] NSWCATAP 75 at [14] the Appeal Panel stated: An assessment whether circumstances are "special" involves the exercise of a value judgement carried out by way of comparison between what is not "special", and what is special. There are no scientific means by which the former can be ascertained. The evaluative process is necessarily one of impression informed by the particular provisions of section 60….

Substantive decision

Turning then to the respondent's submissions, in relation to s 60(a) of the NCAT Act, the respondent submits that the Appeal Panel was required to consider issues and evidence not forming part of the appeal. While unsuccessful on those points, the raising of new issues in the dismissed appeals contrary to the orders made by the Appeals Panel resulted in hearing time and costs to be expended unnecessarily.
This it is submitted is in the respondent's favour. We agree; see [29] of the Primary Decision where we noted that the appellants had sought to raise an argument not made in the first instance proceedings. This factor favours a finding of special circumstances.
In relation to s 60(b), the respondent relies on [40] of the Primary Decision. Paragraph [40] was our conclusion that any prejudice suffered by the appellants had been brought about by their own delay. That conclusion followed [37] where we found that '[t]he appellants were clearly aware of their right to appeal" and that "their delay in lodging this appeal is unreasonable".
In the circumstances, we find that this factor also favours a finding of special circumstances.
In relation to s 60(c), we agree with the respondent that the relative weakness of the appeal favours the respondent.
As to s 60(e), the appellants simply submit that "this factor is in its favour for the same reasons as stated above". This submission is not particularised in any way and lacks substance.
As to s 60(g), the submission of the respondent goes to the exercise of our discretion, and of itself is neutral to determining whether or not there are special circumstances.
Weighing all these matters, we are satisfied that that the respondent has established special circumstances.

Should costs be awarded?

Having decided that special circumstances exist, the next issue is whether we should, in the exercise of our discretion, award costs. In Brodyn Pty Ltd v Owners Corporation - Strata Plan 73019 (No 2) [2016] NSWCATAP 224 the Appeal Panel said: 24 Further, where special circumstances are found to exist, the Tribunal has a discretion to exercise in deciding what, if any, order should be made. Relevant to the exercise of that discretion are those facts upon which the finding of special circumstances was based. However, those findings do not constitute the whole of the relevant matters to be considered in deciding what, if any, order for costs should be made. Rather, the principles applicable to awarding costs generally must also be taken into account. These include: (1) Costs are compensatory: see Latoudis v Casey (1990) 170 CLR 334; (2) That an unsuccessful party bears the costs of the successful party: Oshlack v Richmond River Council [1998] HCA 11 at [134]; … 26 Overall, the Tribunal is to exercise its discretion in a manner that is fair and reasonable having regard to the circumstances of the particular case.
We note that the discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94.
In our view, having found that special circumstances are established, and having considered the principles applicable to awarding costs generally, including that costs are compensatory, given the lack of merit in the appeal and the lengthy delay in filing the Notice of Appeal, we consider that this is a matter in which costs should be awarded.

The costs decision

Thus far we have been considering the costs of the substantive decision of 1 October 2021. However, on 10 November 2021 in the costs decision, the Tribunal ordered the appellants to pay the respondent's costs in the fixed sum of $3,000.
The respondent appealed from that decision, and in Neighbourhood Association DP No 285853 v Kannapiran [2021] NSWCATAP 92 the Appeal Panel allowed the appeal and varied the decision in the costs decision by ordering the appellants to pay the respondent's costs of the proceedings before the Tribunal on the ordinary basis as agreed or assessed on the basis set out in the legal costs legislation (as defined in s 3A of the Legal Profession Uniform Law Application Act 2014 (NSW)).
The respondent did not provide submissions directly addressing the costs of the appeal in relation to the costs decision. Very brief submissions were provided by the appellants, who stated that: In the previous two occasions, the Tribunal did not allowed [sic -allow] costs (copy attached) as the Grace Lawyers are not authorised to represent the NHA. In the present proceedings, there is no special circumstance as claimed and the amount claimed is less than $10,000 and therefore no costs be awarded.
As with the appeal in relation to the substantive decision, the appeal in so far as it relates to the costs decision was filed months out of time, in this case four months out of time. And, as we noted in the Primary Decision: 39. As regards the costs decision, the appellants claim that the respondent "falsely claimed special circumstances" to establish an entitlement to an award of costs. Again, the appellants would require leave to agitate this argument on appeal. Further, it could, and properly should, have been raised during the conduct of the respondent's appeal from the costs decision. If necessary, the appellants should have lodged and maintained their own appeal whilst those proceedings were on foot and sought to have them heard together. They elected not to do so and were refused leave to raise the issues at the hearing of the respondent's appeal: Neighbourhood Association DP No 285853 v Kannapiran [2021] NSWCATAP 92 at [19]. 40. We interpolate to note that the appellants also seek to raise an argument not made in the proceedings which are the subject of this appeal, as to the whether the respondent's lawyers had been properly retained. Again, they would need leave to do so in this appeal and, given the history of the matter, itis highly unlikely that they would be given leave to agitate the issue.
Having found that special circumstances are established, given the lack of merit in the appeal and the lengthy delay in filing the Notice of Appeal, we consider that this is a matter in which costs should be awarded.

Orders

The Appeal Panel orders: 1. A hearing of the costs application is dispensed with. 2. The appellants are to pay the costs of the respondent in relation to the appeal in relation to the Tribunal's decision of 1 October 2020, as agreed or as assessed. 3. The appellants are to pay the costs of the respondent in relation to the appeal in relation to the Tribunal's decision of 10 November 2020, as agreed or as assessed.

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: 01 April 2022

Community Land Management Act 1989(NSW)

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Cases Cited (15)