These reasons concern the costs of the appeal in this matter.
This was an appeal from the Consumer and Commercial Division of the Tribunal (the Tribunal) of 2 May 2017 (the Decision). For reasons published on 4 October 2018, we decided to dismiss the appeal: Bartel v Ryan [2018] NSWCATAP 231.
For the following reasons, we have decided to order the appellant to pay the respondent's costs of the appeal.
[2]
Costs principles
The relevant principles can be stated briefly. This is an appeal where r 38A of Civil and Administrative Tribunal Rules 2014 (the Rules) applies. That rule provides that:
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.
The first instance costs provisions appear in r 38 of the Rules and 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.
There were two proceedings before the Tribunal. In application (HB 17/04880) the appellant (the Builder) claimed $30,000 for variations to the contract which he had not been paid for. In proceedings HB 17/07028 the respondent (the Homeowner) claimed $120,000 in respect of incomplete and defective works.
The Tribunal dismissed the Builder's proceedings. In the Homeowner's proceedings, the Builder was ordered to pay Ms Ryan $62,300.00. The Builder appealed in relation to that decision.
Given these matters, r 38A applies. As the Appeal Panel commented in Singh v Fobupu Pty Ltd [2018] NSWCATAP 127 at [21], where that rule applies, there is a general discretion to award costs, the usual position being that a successful party is entitled to their costs: see for example Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72; Bonita v Shen [2016] NSWCATAP 159 and Thompson v Chapman [2016] NSWCATAP 6.
[3]
The parties' submissions
The Homeowner correctly submits that while r 38A may not give rise to a general rule that costs follow the event, costs are in the discretion of the Tribunal and any exercise of that discretion must be in accordance with:
the general principles set out in s 36 of Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act); and
the principles applying under the general law to the exercise of such judicial discretions.
The Homeowner relies on Wright v Foresight Constructions Pty Limited [2011] NSWCA 327, where the Court of Appeal considered a similar provision in the Consumer, Trader and Tenancy Tribunal Regulation 2009 (NSW). The Court said at [36] that the power under the regulation was unfettered provided the Tribunal acted judicially in accordance with the subject matter, scope and purpose of the legislation. The Court further noted that the accepted purpose is, where costs are awarded to a successful party, to compensate the successful party for the expense incurred in respect of the litigation.
The Homeowner submits, in our view correctly, that the exercise of an unfettered power to award costs involves costs "following the event" unless there are factors which mitigate against the successful party being awarded all of the party's costs: Oshlack at [67] and [69].
Accordingly, the Homeowner submits that as she was entirely successful in the appeal and there are no factors that militate against an award for costs or a departure from the general principles, it is appropriate to make an order that the Builder pay her costs of the appeal.
We agree.
In summary, the Builder submitted that no order as to costs should be made. He articulates several reasons for this, but he has not addressed r 38. He refers to s 60 of the NCAT Act, as he submits that there are no special circumstances justifying an award of costs. However, for the reasons set out above, that is not to the point.
In large part, the Builder simply repeats the submissions he made at the appeal hearing. For instance, he submits that it was "unfair" for his opinions in relation to the Scott Schedule to be discounted because he had "an interest to make the costs of completing the project as low as possible". He again asserts that he had depression at the Tribunal hearing, although that submission was expressly abandoned at the appeal hearing.
He submits that as the Homeowner had the benefit of $30,000 "for technical contract reasons" it would be unjust for him to pay her costs.
None of the matters put forward by the Builder justify a departure from the usual rule.
[4]
Lump sum order
The Homeowner asks that the Appeal Panel order the Builder to pay her appeal costs on the indemnity basis and in the sum of $26,925.45.
If costs are awarded by the Tribunal, the Tribunal may determine by whom and to what extent costs are to be paid: Civil and Administrative Tribunal Act 2013 (NSW); s 60(4): Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48. The Appeal Panel has regularly made lump sum or "gross costs" orders: see for instance Kurmond; Zucker v Burbank Montague Pty Ltd [2018] NSWCATAP 135. This is consistent with the guiding principle of "just, quick and cheap" justice.
The Homeowner relies on the following matters as warranting an order for indemnity costs:
1. the claims of the Builder were filed late; were without merit; lacked substance; were misconceived; disingenuous; and were frivolous and/or vexatious;
2. the Builder, without leave of the Appeal Panel, filed several versions of the Notice of Appeal continually modifying the grounds of appeal for which the Homeowner was required to reply. The Builder further "expanded the scope of his claim, after the appeal hearing considerably";
3. the material and submissions filed by the Builder were unintelligible and prolix;
4. the Builder showed little regard for the procedural framework of the Tribunal including filing of late documents; filing of documents without leave of the Tribunal; failing to appear in the telephone directions hearing; failing to provide a copy of the transcript when relying upon the sound recording (despite directions to do so); and making a belated request to attend the hearing by telephone without notice to the Homeowner;
5. the grounds of appeal were from the outset manifestly weak and had no reasonable prospects of success.
There is some substance in the suggestion that the manner in which the appellant conducted the appeal disadvantaged the Homeowner. Nevertheless, she was represented by competent legal practitioners. There is also substance in the suggestion that the appeal lacked merit. However, we do not think that these matters are sufficient to support an application for indemnity costs.
In our view, in circumstances where no notice was given to the Builder prior to the appeal hearing that indemnity costs would be sought (such as a "Calderbank" offer or letter: see Calderbank v Calderbank [1976] Fam 93; [1975] 3 All ER 833) we do not consider that any basis for indemnity costs is established.
We conclude therefore that the appropriate order is that the Builder pay the Homeowner's costs as agreed or as assessed.
[5]
Orders
The Appeal Panel makes the following order:
1. The hearing is dispensed with pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).
2. The applicant is to pay the costs of the respondent, as agreed or assessed.
[6]
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: 08 November 2018
Parties
Applicant/Plaintiff:
Bartel
Respondent/Defendant:
Ryan
Legislation Cited (3)
Consumer, Trader and Tenancy Tribunal Regulation 2009(NSW)