Respondents: J Antoun, Solicitor of Uther Webster & Evans
[2]
Solicitors:
File Number(s): AP 15/60640
Decision under appeal Court or tribunal: Civil and Administrative Tribunal
Jurisdiction: Consumer and Commercial Division
Citation: Nil
Date of Decision: 22 September 2015
Before: J A Ringrose, General Member
File Number(s): HB 14/61603
[3]
reasons for decision
The decision under appeal was made in the Consumer and Commercial Division ("CCD") of this Tribunal on 22 September 2015. The appellants were ordered to pay to the respondents (we will also refer to them as "the purchasers") within one month $55,951.40 for rectification costs plus goods and services tax and $7,480.00 for expert report costs.
The proceedings arose in a situation where on 13 October 2012 the purchasers had entered into a contract with the appellants to purchase a town house type dwelling ("the property") which was to be built at Girraween as one of four such adjacent properties to be developed by the appellants using Ausko Building & Construction Pty Ltd ("the builder") as builder. The purchase was settled on 17 February 2014. The purchasers notified a building dispute in respect of the subject property to Fair Trading NSW in July 2014. After investigations by that Office and some rectification work on the property, the purchasers on 29 December 2014 instituted the subject proceedings against the builder and the appellants in the CCD of this Tribunal.
In a decision published with reasons on 18 May 2016 ("the principal decision") this Appeal Panel dealt with an appeal against the decision under appeal by making the following orders:
1. The time for instituting this appeal is extended to 6 November 2015.
2. Subject to order 4, the Appeal and the Application for Leave to Appeal are dismissed.
3. The order appealed from is affirmed.
4. The subject proceedings are remitted to the Consumer and Commercial Division of this Tribunal (as previously constituted, if practicable) for consideration (on the evidence tendered at the hearing on 17 August 2015) of any order that may be appropriate to be made in respect of the first respondent in the subject proceedings, Ausko Building & Construction Pty Ltd.
5. The Registrar is to arrange for a copy of this decision to be forwarded to Ausko Building & Construction Pty Ltd at its registered office promptly after publication of this decision with a covering letter drawing attention particularly to Order 4 above.
6. If the Respondents wish to make an application for their costs of this appeal, they are to do so by filing, and serving on the Appellants, written submissions within 14 days after the publication of this decision and the Appellants may file, and serve on the Respondents, submissions in reply within 14 days after service on them of the Respondents' submissions. Any such application will then be decided on the papers.
7. The application for a stay (and other order) is dismissed.
In relation to paragraph 6 of those orders the purchasers' solicitors have filed and served written submissions seeking an order that the appellants pay the purchasers' costs of and incidental to the appeal on the indemnity basis in the sum of $13,949.46. The appellants have filed and served written submissions opposing the making of such an order.
The respondents submit that this appeal was misconceived and lacking in substance and that the claims made by the appellants in the appeal had no tenable basis in fact or law. The respondents further submit that the appellants' conduct unnecessarily disadvantaged the respondents and unreasonably prolonged the time to complete the matter.
The respondents accept that r 38(2) of the Civil and Administrative Tribunal Rules 2014 (dealing with costs following the event) has no application to this appeal. Rule 38A of those Rules does not apply as the Notice of Appeal was lodged before 1 January 2016. The relevant costs provision is s 60 of the Civil and Administrative Tribunal Act 2013 ("the NCAT Act"):
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:
1. Whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
2. Whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
3. 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,
4. The nature and complexity of the proceedings,
5. Whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
6. Whether a party has refused or failed to comply with the duty imposed by section 36(3),
7. Any other matter that the Tribunal considers relevant,
1. If costs are to be awarded by the Tribunal, the Tribunal may:
1. Determine by whom and to what extent costs are to be paid, and
2. Order costs to be assessed on the basis set out the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014).
1. In this section: "costs" includes:
1. The costs of, or incidental to, proceedings in the Tribunal, and
2. 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.
Guidance concerning a costs order under this provision is conveniently presented in eMove Pty Ltd v Dickinson [2015] NSWCATAP 94 at [37] and [48]:
It must be remembered that where a court or a tribunal is conferred with the discretion to award costs, such a discretion must be exercised judicially and not capriciously (Oshlack v Richmond River City Council (1998) 193 CLR 72 at 81). It must also be remembered that the fundamental rationale for the awarding of costs is such that such an award is compensatory, not punitive: Latoudis v Casey (1990) 170 CLR 534 at 543; Oshlack v Richmond River Council (1998) 193 CLR 72 at 97).
…
The authorities considering the meaning of the expression "special circumstances" were recently reviewed in CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23-[31]. From those authorities, it can be seen that "special circumstances" are circumstances that are out of the ordinary, they do not have to be extraordinary or exceptional. Further, 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. Each situation must, of course, be assessed on a case by case basis to see whether or not special circumstances exist so as to warrant the award of costs.
Generally speaking, and apart from situations of unaccepted settlement offers, an award of indemnity costs will require a measure of misconduct on the part of the unsuccessful party (see e.g. Ritchie's Uniform Civil Procedure NSW [42.5.5] and [42.5.7] and Huntsman Chemical Co Australia Ltd v International Pools Australia Pty Ltd (1985) 36 NSWLR 242 at 245-247). Again in eMove Pty Ltd v Dickinson at [43], there are comments that have present relevance, dealing with the situation, as here, of parties appearing in person:
As in this case, the Tribunal is often confronted with litigants in person, or corporations represented by directors. The Tribunal must in these cases ensure that it makes appropriate allowances for the fact that submissions made by such parties may not have been expressed in the same way, or may have been expressed more felicitously, if they were represented by legal practitioners. There are authorities which indicate that courts are entitled to regard as a relevant factor in determining the scope of a costs order, the fact that a party is unrepresented. Generally, courts are more reluctant to order indemnity costs against a litigant in person as litigants in person can suffer the limitations arising from a lack of knowledge of the law, familiarity of court practices and the risk of a lack of objectivity (see the discussion in Dal Pont: The Law of Costs, 3rd Ed., at 16.50 pp 548-549). A recent decision of the Appeal Panel noted the difference of approach that may be necessary where a litigant in person, rather than a lawyer appears before it and make submissions which otherwise perhaps would not have been made: Pillay v Ku-ring-Gai Council [2015] NSWCATAP 83 at [36]-[41]. We agree with that approach.
Principal among submissions by the respondents are:
1. Central to each of the decision under appeal and the principal decision were findings of the failure of the appellants to adduce any adequate evidence to defend the initial application or substantiate the appeal; "this situation … underscores a finding that the Appeal was misconceived and lacking in substance and had no tenable basis in fact or law."
2. The submissions of the appellants of lack of procedural fairness in the CCD proceedings and the development of those submissions to include bias, were inappropriate.
3. The conduct of the appeal by the appellants in respect of those and other matters were thereby unnecessarily disadvantaged and the matter was thereby unreasonably prolonged.
4. Those deficiencies are of such an order as to warrant an order for indemnity costs.
The appellants in their written submissions base their opposition to any costs order being made against them on a denial that any of the "eight scenarios under s 60(3)" has or have been established. In particular they submit that order 4 in the principal decision (dealing with any order that may be appropriate to be made in respect of the builder) demonstrates that the appeal was, "not misconceived or lacking in substance and did have a tenable basis in fact or law". They also point out that the respondents have already obtained payment of the sum awarded by the decision which was under appeal and affirmed in the principal decision, and that the respondents had the benefit of some rectification work which the appellants did on the property. They conclude their submissions by saying that "any additional award of costs will be an additional undue reward to the respondents at our expense".
We note some matters which particularly bear on considerations we have canvassed above:
1. The appellants enlisted legal assistance at least for the purposes of preparing the Notice of Appeal (principal decision at [26]).
2. The Notice of Appeal did not precisely identify particular questions of law and it did not clearly distinguish in the formulation of the matters relied on between asserted questions of law and other grounds and presented those matters in a somewhat discursive and repetitive style (principal decision [30]). The Appeal Panel approached their task by "working through, in turn, the various matters relied on by the appellants in their Notice of Appeal and submissions, however they are presented, whether as questions of law, as relating to leave to appeal, or otherwise" (principal decision [34]). It was appropriate for the respondents' Solicitor to have dealt with the appeal in a similar way.
3. As to the appellants' allegations of denial of procedural fairness, the principal decision assessed the CCD Tribunal "as having given the appellants adequate opportunities to participate in the hearing by questioning the (respondents') evidence, by the production of their own evidence and otherwise" and the appellants "as having failed to make proper use of those opportunities, particularly by failing to produce their own evidence" (principal decision [43]).
4. While referring to new evidence as including in particular an expert building report, the appellants failed to produce such a report at the appeal hearing (principal decision [48]).
5. The appellants relied on a number of other matters which had to be addressed at the appeal hearing by the respondents and all of them (except that relating to an order concerning the builder) were rejected in the principal decision. Those matters included first, a contention by the appellants that they were not developers which the principal decision found to be "baseless" and said "it should not have been raised on appeal, particularly in submissions in reply" (principal decision [65]); and secondly, an allegation of bias on the part of the CCD Tribunal which the principal decision held had "no acceptable basis" (principal decision [44]).
Considering the appeal costs issue in accordance with the above outline of significant matters we conclude:
1. The ambit and asserted force of the matters raised by the appellants are such as not only to justify the respondents having sought legal assistance for the appeal but also to constitute special circumstances for the purposes of s 60 of the NCAT Act, warranting an order for costs in favour of the respondents; the appellants, in our view, inappropriately complicated the appeal; and
2. Even though all the matters raised by the appellants were rejected in the principal decision (except that relating to an order concerning the builder) they did not give rise to a situation to warrant an order for indemnity costs; while we are critical of the way they went about the appeal, we are not sufficiently persuaded that there was a requisite degree of misconduct.
The Appeal Panel therefore orders that the appellants are to pay the respondents' costs of this appeal as agreed or assessed.
We add that an affidavit by Mr Antoun, the solicitor who acted for the respondents, detailed matters giving rise to the details of his firm's fees and outgoings, totalling $13,949.46 in respect of the appeal. Notwithstanding that material, we do feel that we should not embark on an assessment of an appropriate quantum of those fees (particularly when they are not to be on an indemnity basis) but should leave that to a costs assessor.
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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: 26 July 2016