Beecham & anor v Reardon

NCAT Consumer and Commercial|2023-09-20

Introduction

The Tribunal gave its principal judgement in this application on 10 May 2023.
In the principal judgement the Tribunal made orders that included that the respondent builder carry out Rectification Works to the applicant homeowners home as specified in the orders.
The Tribunal also included in the orders that the applicants could make an application for costs and gave directions that: 5. The applicants' application for costs is to be supported by evidence and submissions of no more that 4 pages in length and is to be filed with the Tribunal in hard copy form and served on the respondent on or before 1 June 2023. 6. Any evidence and submissions in response to the application for costs by the respondent, of no more that 4 pages in length, is to be filed with the Tribunal and served on the other party on or before 22 June 2023. 7. If there is no submission by the applicants for costs by 1 June 2023 there will be no order as to costs. 8. The parties are to advise the Tribunal in their respective submissions as to costs, if they consent to the issue of costs being determined on the papers without a hearing. 9. Alternatively, the parties are to make submissions as to why such an order should not be made pursuant to section 50 of the Civil and Administrative Tribunal Act 2013.
The applicants made their application for costs supported by their submissions on 24 May 2024.
The respondent did not comply with direction 6 made on 10 May 2023 by 22 June 2023, or at all.
The Tribunal has considered the submissions of the applicant and for the reasons set out below, the Tribunal has determined that the respondent is to pay the applicants out of pocket expenses in bring the application in the amount of $3,369.15 by 25 October 2023.

Jurisdiction and legislation

The Civil and Administrative Tribunal Act 2013 ("CATA") provides at s 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. (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 Division 11 of Part 3.2 of the Legal Profession Act 2104 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.
CATA provides at s36 that:

Guiding principle to be applied to practice and procedure (1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The Tribunal must seek to give effect to the guiding principle when it: a. exercises any power given to it by this Act or the procedural rules, or b. interprets any provision of this Act or the procedural rules. (3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal: a. a party to proceedings in the Tribunal, b. an Australian legal practitioner or other person who is representing a party in proceedings in the Tribunal. (4) In addition, the practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings (5) however, nothing in this section requires or permits the Tribunal to exercise any functions that are conferred or imposed on it under enabling legislation in a manner that is inconsistent with the objects or principles for which that legislation provides in relation to the exercise of those functions.

Section 50 of CATA provides: 50 When hearings are required (1) A hearing is required for proceedings in the Tribunal except: (a) in proceedings for the granting of leave for an external or internal appeal, or (b) in connection with the use of any resolution processes in proceedings, or (c) if the Tribunal makes an order under this section dispensing with a hearing, or (d) in such other circumstances as may be prescribed by the procedural rules. (2) The Tribunal may make an order dispensing with a hearing if it 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. (3) The Tribunal may not make an order dispensing with a hearing unless the Tribunal has first: (a)afforded the parties an opportunity to make submissions about the proposed order, and (b) taken any such submissions into account. (4) The Tribunal may determine proceedings in which a hearing is not required based on the written submissions or any other documents or material that have been lodged with or provided to the Tribunal in accordance with the requirements of this Act, enabling legislation and the procedural rules. (5) This section does not prevent the Tribunal from holding a hearing even if it is not required.
Rule 38 of the Civil and Administrative Rules 2014 ("CATR or Rules") provides: 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.
The Tribunal is satisfied that it has jurisdiction to make a determination in respect of the applicants' costs application.
Section 60 of CATA provides that each party to proceedings in the Tribunal is to pay their own costs, except where the Tribunal is satisfied that special circumstances warrant an award of costs.
Rule 38 of the Rules grants to the Tribunal the power to award costs in the absence of special circumstances, if the amount claimed or in dispute in the proceedings is more than $30,000.00.
If Rule 38 applies the Tribunal can award costs in the absence of special circumstances.
Subsection 60(5) specifies that "costs" relevantly includes-"(a) the costs of, incidental to, proceedings in the Tribunal…"
The applicants' claimed $100,000 later amended to $50,306.25.
The Tribunal is satisfied that the applicants' claim exceeded $30,000 as the cost to rectify the alleged defective building works and that the Tribunal has a general discretion in respect of awarding costs.

Dispensing with oral hearing regarding costs

The Tribunal may dispense with an oral hearing and proceed to determine the application for costs having regard to the written submissions of the parties.
The parties were given the opportunity to consent to the determination being made without the need to have an oral hearing or alternatively, make submissions as to why an order cannot be made dispensing with a hearing pursuant to section 50 of the Civil and Administrative Tribunal Act 2013 ("CATA").
The applicants consented to their costs application to be determined on the papers without a hearing in their submissions. The respondent made no submissions or addressed the issue at all.
The Tribunal is satisfied that the parties have been afforded an opportunity to make submissions on whether a hearing on the question of costs should be dispensed with and whether the question of costs can be determined on the papers.
The Tribunal is satisfied that the question of costs can be adequately determined in the absence of the parties by considering the written submissions of the applicants notwithstanding the respondent's failure to make submissions.
Pursuant to section 50(4) of CATA the Tribunal exercises its discretion to determine the question of costs on the papers.

Consideration

Although no money order was made in the principal judgement, the making of the work order means that the applicants are the successful party.
The general rule expressed in Oshlack v Richmond River Council (1998) CLR 72 is that a successful party has a reasonable expectation of being awarded costs against the unsuccessful party. The usual principles that should apply in the exercise of discretion are that costs should follow the event.
The power to of the Tribunal to award costs was considered in The Trust Company Ltd v Diamond Certification Laboratories of Australia Pty Ltd [2016] NSWCATAP 63 at [30]: The costs power granted to the Tribunal is accordingly broad, and the Appeal Panel is satisfied the power to award costs is not dependent upon whether or not the Tribunal finds that it has jurisdiction to grant any relief: rather, the power arises because proceedings have been brought before the Tribunal. This fact is criteria upon which court is empowered to make an order for costs. For further consideration see Doula Spirit Pty Ltd v Andrew Argyrou [2014] NSWCATAP at [227].
Fairness dictates that the unsuccessful party typically bears the liability for costs unless it is demonstrated that some other order is appropriate. The Appeal Panel in Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen [2015] NSWCATAP 264 said: While the discretion to award costs under Rule 38 is unfettered, in our view costs should generally "follow the event", recognising however that factors may exist that militate against the successful party recovering all of its costs.
In ABB Engineering Construction Pty Ltd v Abigroup Contractors Pty Ltd BC200305610 per Einstein J at 14, His Honour carried out an extensive review of the authorities distilling a number of principles relevant to the determination of costs, in particular: A successful litigant is generally entitled to an award of costs. Costs are not awarded to punish an unsuccessful party. The primary purpose for an award of costs is to indemnify the successful party. If litigation had not been brought…by the unsuccessful party the successful party would not have incurred the expense it did. As between the parties fairness dictates that the unsuccessful party typically bears the cost of the unsuccessful litigation. The traditional exceptions to the usual order as to costs focus on conduct of the successful party that disentitles it to the beneficial exercise of the discretion In Anglo Cyprian Trade Agencies v Paphos Wine Industries, Devlon J referred to "misconduct" by the successful party as the basis for departure from the usual order. In that case, this conduct was construed to be misconduct relating to the litigation in circumstances leading up to it.
The purposes of a costs order is to compensate or indemnify a successful party against the expenses to which it has been put: (Latoudis v Casey [1990] HCA 59).
In Thompson v Chapman [2015] NSWCATAP 233 at [71] the Appeal Panel said: 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 nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party: Oshlack v Richmond River Council per Gaudron and Gummo JJ at 88 and Kirby J at 121-123.
The applicants were not legally represented in the proceedings. They do not seek legal costs.
The Costs Guidelines published by the Tribunal and published in August 2017 provide that where a party is not legally represented they may charge for witness expenses and photocopying charges, but: 10. A party cannot ask for any of the following costs: a. Their own travelling costs; b. Their own time spent in preparing or running the case or lost earnings of a self-represented party or non-professional agent.
Such a procedural direction is consistent with the general law that a self-represented litigant in person in court proceedings is not entitled to recover professional remuneration or profit costs from an unsuccessful party: Cachia v Hines (1994) CLR 179. Further in DP v The Law Society of the Australian Capital Territory [2006] ACTSC the ACT Supreme Court found that costs are intended to compensate a successful litigant for expenses incurred in conducting the proceedings. If unrepresented, then they have not incurred legal fees. However, they are entitled to an order for costs so that they may recover out of pocket expenses and entitled to any money paid out of the self- represented litigant in person own pocket including experts engaged by the litigant in person (Wollongong Council v Smith [1999] NSWSC 473).
The Appeal Panel of this Tribunal constituted by Principal Member Britton said in Profitability Consulting Pty Ltd v Thorpe [2018] NSWCATAP 41 at [10]: The meaning of the term "costs" in s 60 of the NCAT was considered by an Appeal Panel in Hammond v Ozzy's Cheapest Cars Pty Ltd t/as Ozzy Car Sales [2015] NSWCATAP 65 (Hammond). Noting that the term "costs" is not defined in the Act, apart from the "inclusive illustrations in s 60(5)", the Appeal Panel held at [107] that the word "costs" in s 60 refers to "the types of costs recoverable in legal proceedings and that the legal principles relating to what 'costs' may be ordered by a Court to be paid apply in relation to the Tribunal, except to the extent that they are modified by the Act or other applicable legislation". The Appeal Panel concluded at [107], [108]: Accordingly, "costs" that the Tribunal can order to be paid under s 60(2) will not include compensation for time spent by a litigant who is not a lawyer in preparing and conducting his or her case: Cachia v Hanes (1994)179 CLR 403 at 409. In Cachia, the High Court explained the position as follows at 410-411: This is hardly surprising. It has not been doubted since 1278, when the Statute of Gloucester ((30) 6 Edw.I c.1.) introduced the notion of costs to the common law, that costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal costs actually incurred in the conduct of litigation. They were never intended to be comprehensive compensation for any loss suffered by a litigant. As Coke observed of the Statute of Gloucester, the costs which might be awarded to a litigant extended to the legal costs of the suit, "but not to the costs and expences of his travell and losse of time" ((31) Coke, Second part of the Institutes of the Laws of England at 288. See also Howes v. Barber [1852] EngR 15; (1852) 18 QB 588 at 592 [1852] EngR 15; (118 ER 222 at 224); Dowdell v. The Australian Royal Mail Co. (1854) 3 El and Bl 902 at 906 [1854] EngR 604; (118 ER 1379 at 1381).).
The Tribunal is satisfied, on the evidence adduced by the applicants, that the applicants have paid Mr Moloney's fees for his expert's report, which were essential for their proof of the defective building works. The filing fee was an essential disbursement to allow the applicants to prosecute their contested claim.
The Tribunal finds that the applicants', as self-represented parties are entitled to be reimbursed for their disbursements, the authorities cited and the Tribunal Guidelines allow for the Tribunal to make an order that the costs of Expert Reports obtained and out of pocket expenses be the costs recoverable by the applicants.
The Tribunal allows the applicants claim for costs in full and orders that the respondent pay to the applicants their disbursements incurred in the prosecution of their claim, being $3,369.15 by 25 October 2023.

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: 29 September 2023

At a glance

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Decision date

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Judgment (7 paragraphs)

Parties

Cases Cited (7)