Athas v Baxter

NCAT Appeal Panel|2018-03-12

reasons for decision A P Coleman SC

In these proceedings the following orders were made on 10 October 2017; 1. Application for leave to appeal refused. 2. Appeal Dismissed. 3. The Appellant to file and serve within 7 days from today, any submissions in answer to the submissions on costs filed with the Appeal Panel by the Respondent on 10 October 2017 such submissions to be no longer than 5 pages in length. 4. The Appellant is granted leave to be legally represented for the purposes of the determination of the question of costs of the Appeal only. 5. If the Appellant does not file and serve any submissions in accordance with order 3 above, the question of costs will be dealt with on the papers without the need for any further hearing.'
Order 3 was made because it was at the hearing of the appeal that the respondent applied for the costs of the appeal and it was necessary to allow the applicant time to consider and respond to the costs application. At the hearing of the appeal the respondent's solicitor consented to the Appeal Panel determining the question of costs without the need for a further hearing. Whether or not a hearing on the question of costs is required was also raised with the appellant. She has not requested a hearing on costs in her costs submissions. We will therefore make an order pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 NSW (the Act) that a hearing on the question of costs be dispensed with and the matter deal with on the papers.
The appellant has filed submissions in accordance with order 3 which are in response to the respondent's cost submissions.
In considering this costs application, we have realised that there is an error in order 3 of the orders made on 10 October 2017 in that the reference to 10 October is incorrect and should be 5 October 2017 We will make an order under section 64 of the Act to correct that error.
In this appeal I sat with Senior Member Goldstein. We have come to the same conclusion that the application for costs should be refused, but for different reasons. I set out my reasons below. Senior Member Goldstein has also set out below his reasons, in so far as they differ from mine.

Costs jurisdiction

Section 60 of the Act provides that: '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. (4) If costs are to be awarded by the Tribunal, the Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (5) In this section: costs includes: (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) 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.'
Rule 38A of the Civil and Administrative Tribunal Rules 2014 states: '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.'
Part 4 of the Act deals with Practice and Procedure. Section 60 of the Act is in Part 4. Section 35 of the Act which is also in Part 4 states: 'Each of the provisions of this Part is subject to enabling legislation and the procedural rules.'
The effect of Section 35 of the Act makes it clear, in our view, that section 60 of the Act is subject to Rule 38A.
The appeal in these proceedings was lodged on 23 August 2017. Rule 38 of the Civil and Administrative Tribunal Rules 2014 states: '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.'
The proceedings at first instance were brought under the Home Building Act 1989 (NSW). Pursuant to section 3 of Schedule 4 of the Act, proceedings under the Home Building Act are allocated to the Commercial and Consumer Division of the Tribunal. The amount claimed by the appellant in the proceedings at first instance was $19,525.00.
Because the Tribunal did not make an order under clause 10(2) of Schedule 4 of the Act and the amount claimed or in dispute in the proceedings was less than $30,000.00. Therefore Rule 38 did not apply to the proceedings at first instance and Rule 38A has no application in this appeal. As a result, section 60 of the Act applies to the respondent's costs application and the respondent must satisfy the Appeal Panel that special circumstances exists so as to enliven the power to award costs.

The costs application

The decision in this appeal refusing leave to appeal and dismissing the appeal was given ex-tempore on 10 October 2017. The solicitor for the respondent informed the Appeal Panel that the respondent pressed his application for costs as foreshadowed in the respondent's submissions dated 4 October 2017. At paragraphs [29] and [30] of his submissions, the respondent seeks his costs of $12,000.00. These costs appear to be in relation to defending the proceedings in the Tribunal at first instance which gave rise to this appeal. We would add that the orders made by the Tribunal Member at first instance did not address the issue of costs and so far as the Appeal Panel is aware neither party to this appeal has made an application for costs in relation to the proceedings at first instance.
In LMA Contractors Limited v Changizi [2017] NSWCATAP 145 an Appeal Panel stated at [19] and [20] of that decision: '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. However, the respondents may apply for an order for the costs of the proceedings at first instance.'
We agree with that decision and accordingly we are unable to consider the question of costs in the Tribunal at first instance.
The respondent's submissions to the Appeal Panel foreshadowed an application for costs of the appeal. At the appeal hearing the costs application was made on the basis that the respondent was the successful party in the appeal. The respondent's submissions do not address section 60 of the Act and in particular which of the matters in section 60(3) are relied upon as the 'special circumstances' which would allow us to make a costs order pursuant to section 60(2) of the Act.
The costs submissions filed by the appellant point out that the Appeal Panel may only award costs if there are special circumstances as referred to in section 60(2) of the Act. In addition the appellant raises a number of issues including; 1. The way the respondent's costs have been calculated; 2. Discussions between the parties regarding settlement of the Appeal; 3. The fact that the appellant was unrepresented in the entirety of these proceedings; 4. The appellant has not been in breach of section 36(1) of the Act, and 5. The principle that each party should bear their own costs should be followed and in that regard the appellant has had to pay legal and experts costs which she has not recovered.

Costs of the Appeal

In considering the respondent's application for costs, it is necessary for the Appeal Panel to determine whether or not special circumstances exist which warrant the making of an order for costs, and if so, what that order should be.
In CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 an Appeal Panel stated that special circumstances do not need to be exceptional or extraordinary. At paragraph [32] of that decision the Appeal Panel stated: 'The authorities are consistent in stating that "special circumstances" are circumstances that are out of the ordinary; they do not have to be extraordinary or exceptional circumstances. Accordingly the question for decision is whether the conduct of the appeal by CPD is out of the ordinary and warrants the Appeal Panel ordering CPD to pay Mr and Mrs Baguely's costs.'
The appellant's appeal was broadly stated in the Notice of Appeal. Upon reading that document it is clear to us that as a self-represented litigant the applicant had little or no understanding or insight into the bases upon which she could appeal against the decision of the Tribunal at first instance given on 10 August 2017. As often happens, at the appeal hearing the appellant sought to raise a number of matters that tended toward a re-hearing of the issues that were raised before the Tribunal Member.
The proceedings below had a long history which we can briefly summarise. In January 2014 the appellant brought proceedings in the Tribunal against the respondent in connection with defects in building work that he had carried out. On 7 February 2014 those proceedings were disposed of by consent 'work orders' being made in the appellant's favour. Pursuant to clause 8(2) of Schedule 4 of the Act the appellant had the right to 'renew' those proceedings in the event that the respondent failed to comply with the Tribunal orders. A renewal had to be commenced no later than 12 months after the date of the orders.
The applicant did bring renewal proceedings in March 2017. However, she was 2 years late in bringing them. At the hearing the Tribunal Member considered whether she ought to extend the time for the lodgement of the renewal pursuant to section 41 of the Act. The Tribunal Member considered the applicable authority, Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 and the relevant evidence. After giving consideration to all relevant issues and the parties' evidence and submissions, the Tribunal Member declined to extend the time for the commencement of the proceedings and dismissed the appellant's application.
In the ex tempore reasons for decision given at the appeal hearing, we stated that the appellant had not established an error of law and she should not be given leave to appeal on the grounds that the decision of the Tribunal at first instance was not fair and equitable, against the weight of evidence or because there was significant new evidence being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with. We did not consider that she had established any of those grounds such that there was a possibility she had suffered a significant miscarriage of justice.
As stated in ACT Builders Pty Ltd v Haridemos (No 2) [2016] NSWCATAP 118 at [41] and [42]: 'the mere fact of an appeal, even if unsuccessful, is not of itself sufficient to establish there are special circumstances to enliven the power to award costs on appeal pursuant to s 60(2) of the NCAT Act. Rather, the Tribunal is required to make findings as to whether or not special circumstances are established and, if so, to exercise the discretion to make an appropriate award for costs.'
As I have observed, the respondent has not stated which of the matters in section 60(3) of the Act are relied upon as the 'special circumstances' to permit a costs order. The appellant has not therefore been in a position to specifically address the matters upon which she is at risk of being subject to a costs order. In any event, I do not think that the circumstances of this matter warrant the finding of special circumstances.
The appellant as a litigant in person was misguided in many of her submissions. She misunderstood the legal issues and failed to focus only on the relevant matters. However, this of itself in my opinion is not enough to establish special circumstances so as to warrant to award of costs. If costs were awarded against a litigant in person every time they misunderstood the practice and procedures of the Tribunal, or in effect sought to have a rehearing on appeal rather than focus precisely on the relevant legal issues necessary for the appeal or for the grant of leave, the test of special circumstances would be rendered otiose.
The starting point where s 60 is to be applied is that each party is to pay its own costs of the proceedings in the Tribunal. In this case I did not form the view that the appellant was being frivolous or vexatious in the manner in which she prosecuted her appeal. She was making a genuine attempt, unaided by legal advice, to raise matters she thought would assist her in her appeal. She had not acted in a manner contrary to her duty to co-operate in the conduct of the proceedings, nor had she acted in a manner that unnecessarily caused the proceedings to be prolonged. In my opinion, special circumstances have not been established.
In these circumstances I would make an order that each party to these appeal proceedings is to pay their own costs. Senior Member Goldstein
I agree with the orders that have been made.
The respondent's Reply submissions filed in the Appeal Panel registry on 5 October 2017 made it clear that he sought a costs order against the appellant, including an order for the costs of the appeal.
The respondent's submissions did not specifically identify the special circumstances relied upon in support of the application for a costs order foreshadowed.
I would not award the respondent an order for costs in his favour because he has not stated which of the matters in section 60(3) of the Act are relied upon as the 'special circumstances' to permit a costs order, with the result that the appellant has not been in a position to address the matters upon which she is at risk of being subject to a costs order. I am of the view that in these circumstances it is inappropriate for me independently of the respondent's submissions to consider whether special circumstances exist to justify an order for costs. If I were to do that and make a costs order, the appellant would be denied procedural fairness as she would be prevented from making submissions on the special circumstances which may be held to apply to her.
While I agree that the appellant, as a litigant in person, was misguided in many of her submissions and misunderstood the legal issues relevant to her appeal and for that reason failed to focus on what was relevant, I am unable to agree that those factors should operate to shield her, or a litigant in person, from a finding of special circumstances, or a costs order. Despite the presence of those factors, it is my view that an appeal or proceedings which have no tenable basis in fact or in law, or which are misconceived or lacking in substance will ordinarily justify a costs order being made, despite the fact that a litigant in person may have been misguided or lacked a proper understanding of the legal issues thereby failing to focus on the issues relevant to their appeal or proceedings. The fact is that such proceedings will ordinarily require a respondent to defend them and quite often to incur considerable legal expenses in so doing.

Orders 1. Pursuant to section 63 of the Civil and Administrative Act 2013 order 3 of the orders made on 10 October 2017 is amended by deleting the words '10 October 2017' and replacing with them with '5 October 2017'. 2. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act, 2013, a hearing on the question of costs is dispensed with. 3. 3. Each party to these appeal proceedings is to pay their own costs of the appeal.

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: 12 March 2018

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