Asia Invest Enterprises Pty Ltd v Bircan

NCAT Appeal Panel|2019-09-16

Reasons for decision

On 2 July 2019 we refused the Appellant's application for an extension of time to file a Notice of Appeal against the Tribunal's decision at first instance in matter GEN 17/41963. The appeal was accordingly dismissed: Asia Invest Enterprises Pty Ltd v Bircan [2019] NSWCATAP 160.
At the same time we made the following orders as to the costs of the appeal: 1. Any party may file written submissions within 14 days seeking an order in relation to the costs of the appeal. 2. If a party files submissions in accordance with order 3, any other party may file submissions in response within a further 14 days. 3. Any submissions filed in accordance with orders 3 and 4 should address whether the question of costs may be determined on the papers and without a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013.
Both Respondents have filed written submissions in accordance with those orders. The Appellant has not.
Both Respondents have also indicated they consent to the question of costs being determined on the papers.

Determination of the costs question on the papers

The Appeal Panel is 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 Tribunal without a further hearing. The parties would be put to unnecessary expense if a hearing on costs were held. Accordingly, we have made an order dispensing with a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).

Principles

Although the usual rule in the Tribunal is that each party pays its own costs unless there are 'special circumstances' (s 60 NCAT Act), this is displaced in the case of proceedings in the Consumer and Commercial Division where the amount claimed or in dispute is more than $30,000, and in internal appeals in such proceedings (Rules 38 and 38A Civil and Administrative Tribunal Rules 2014 (NSW) (the Rules)).
The Second Respondent submits that the amount in issue both at first instance and on appeal exceeded $30,000. It says the amounts the First Respondent claimed or sought to be relieved from paying at first instance exceeded $30,000 and the Tribunal at first instance made orders reflecting that claim and ordering the Appellant to pay the Second Respondent amounts that exceeded $30,000. The Appellant appealed from that decision, seeking to have the initial orders set aside, including the orders that the Appellant pay the Second Respondent amounts exceeding $30,000.
We agree with those submissions. Accordingly the Appeal Panel is not required to be satisfied that there are special circumstances warranting an award of costs.

The First Respondent's submissions

The First Respondent submits, in short, that the Appellant conducted the proceedings in a way that disadvantaged her, through delay, non-adherence to the Tribunal's orders and directions, and by unreasonably prolonging the time taken to complete the proceedings. She also notes that the Appellant failed to provide a satisfactory explanation or evidence as to why the Appellant did not lodge its appeal within time.

The Second Respondent's submissions

The Second Respondent submits that as Rule 38(2)(b) applies, the usual order that costs follow the event should apply. Indeed, it submits that the Appellant's conduct of the appeal gives rise to circumstances that warrant an order for indemnity costs. It points to the lateness of the filing of the Notice of Appeal, the inadequate particularisation of the grounds of the appeal, the lack of a proper or reasonable explanation for the delay, the Appellant's non-compliance with the Tribunal's orders and directions, the fact that the grounds of the appeal shifted throughout the hearing, necessitating the filing of an amended Notice of Appeal after the hearing, and the fact that neither the original nor the amended grounds of appeal had any real prospects of success.

Consideration

The Tribunal has a wide discretion to make an order for costs, and Rule 38 does not specify the factors the Tribunal must take into account in exercising the discretion. The purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, this means that a party who is successful is entitled to an order for costs in its favour: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; Oshlak v Richmond River Council [1998] HCA 11.
The starting position is that the Respondents are entitled to recover their costs of and incidental to the appeal proceedings, particularly where there has been no disentitling conduct on their part to cause the discretion to award costs in their favour not to be exercised: Owners Corporation SP 79417 v Trajcevski (No.2) [2017] NSWCATAP 173. However, as discussed by the Appeal Panel in Thomson v Chapman [2016] NSWCATAP 6 at [71], where there is a general discretion for costs there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party, and nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party. In circumstances where there is a general discretion to award costs, the Tribunal in exercising its discretion is to have regard to the nature of the proceedings before it and all relevant factors arising in connection with those proceedings for the purpose of determining what order for costs, if any, should be made.
As to the question of the basis on which an order for costs should be made, we note the summary of the principles on which an order for indemnity costs might be made in Mendonca v Tonna [2017] NSWCATAP 176: 59. Indemnity costs are only awarded in limited circumstances. The discretion to do so must be the subject of careful reasoning (Degmam Pty Ltd (In Liq) v Wright (No 2) [1983] 2 NSWLR 354) and caution should be exercised in making such an award: Leichhardt Municipal Council v Green [2004] NSWCA 341; Ng v Chong [2005] NSWSC 385 at [13]. 60. Other than in relation to the unreasonable refusal of a genuine offer of settlement, one circumstance in which indemnity costs may be awarded is when a case is commenced or continued where there is no chance of success (Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 at [4]), such as where the claim is "without substance", "groundless", "fanciful or hopeless" or so weak as to be futile, such as where a limitation period is obviously at an end: Hillebrand v Penrith Council [2000] NSWSC 1058. However, mere weakness of a case will not be sufficient to warrant an exercise of the discretion to award indemnity costs: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534. … 62. Another circumstance which may warrant an order for costs on an indemnity basis is where the proceedings amount to an abuse of process: Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362. Examples of abuse of process include where the proceedings are commenced other than in good faith or for an ulterior or collateral purpose: Palmer v Gold Coast Newspapers Pty Ltd [2013] QSC 352; Packer v Meagher [1984] 3 NSWLR 486 at 500. … 63. An award of indemnity costs may also be made for unreasonable conduct. Such conduct may include unnecessarily prolonging the proceedings, (Degmam Pty Ltd (in liq) v Wright (No 2), at 358); unfounded allegations of fraud or improper conduct (Maule v Liporoni (No 2) (2002) 122 LGERA 216 at 229); deliberate or high-handed conduct (Rouse v Shepherd (No 2) (1994) 35 NSWLR 277) and behaviour which causes unnecessary anxiety, trouble or expense, such as the failure to adhere to proper procedure (FAI General Insurance Co Ltd v Burns (1996) 9 ANZ Ins Cas 61-384). Disregard of court orders may justify an indemnity costs order (O'Keefe v Hayes Knight GTO Pty Ltd [2005] FCA 1559 at [35]). Perverse persistence by an unrepresented litigant with a hopeless application may also do so: Rose v Richards [2005] NSWSC 758. 64. Misconduct of a serious nature, such as fraud, perjury, contempt or dishonest conduct may also justify costs being awarded on an indemnity basis: Berkeley Administration Inc v McClelland [1990] FSR 565 at 568-569; Ivory v Telstra Corporation Ltd [2001] QSC 102); Vance v Vance (1981) 128 DLR (3d) 109 at 122.
The Appeal Panel considers the Appellant's case to have been weak and poorly articulated, with the grounds of appeal not precisely identified until the very last moment. The appeal was brought very late and the Appellant provided little justification for the delay. There was no disentitling conduct on the part of either respondent to the appeal, and accordingly, having been successful in the outcome, there is ample justification for an order for costs in favour of the Respondents. However, while weak and poorly articulated, the Appellant's case could not be said to have been an abuse of process; and while the appeal was brought late, the Appellant's conduct of the appeal could not be said to have been unreasonably prolonged. Accordingly, we do not agree that this is an appropriate case for the award of indemnity costs.

Orders

The orders of the Appeal Panel are: 1. A hearing is dispensed with pursuant to s 50(2) Civil and Administrative Tribunal Act 2013. 2. The Appellant must pay the Respondents' costs of and incidental to appeal AP 18/53357 on the ordinary basis as agreed or 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: 16 September 2019

(2002) 122 LGERA 216

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