Beechwood Homes (NSW) Pty Ltd v Hassos

NCAT Appeal Panel|2023-08-23

REASONS FOR DECISION

This is a costs application arising from the substantive decision (Beechwood Homes (NSW) Pty Ltd v Hassos [2023] NSWCATAP 184) published on 7 July 2023.
In this decision, the appellant is referred to as 'the builder' and the respondent is referred to as 'the owner.'
There is also a separate application by the owner to amend para [159] of the reasons of the substantive decision under s 63 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).
It is appropriate to deal with both applications in this decision.
Both parties have provided written submissions in accordance with the procedural directions made by the Appeal Panel in the substantive decision. Neither party seeks a further oral hearing on the issue of costs. It is appropriate to dispense with a further oral hearing and determine the parties costs application (and the application to amend the reasons of the decision) on the papers and without further oral hearing pursuant to s 50 (2) of the NCAT Act.
In the substantive decision, the builder succeeded on one ground of appeal (assessment of damages) but failed on all other grounds. The grounds of appeal are set out at [6]-[7] of the substantive decision.
The owner seeks that builder pay her costs of the appeal proceedings. The builder submits that there should be no order as to costs with a view that each party bears its costs of the appeal.
The basis that the owner seeks costs is that r 38 and r 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) applies to the appeal proceedings, so 'special circumstances' under s 60 (2) and (3) of the NCAT Act do not require consideration. The owner submits that she was the "successful party" in the appeal because the builder failed on most of its grounds of appeal; and that there is no disentitling conduct on the part of the owner to depart from the usual principle that the successful party should obtain a costs order in her favour.

Consideration

Under s 60 (1) of the NCAT Act, parties are to bear their own costs unless there are "special circumstances" established under s 60 (2) of the NCAT Act. Section 60 (3) of the NCAT Act sets out matter to be considered as to whether "special circumstances" are established.
However, the relevant exception to ss 60 (1) and (2) of the NCAT Act is r 38 of the NCAT Rules, which states that, in proceedings in the Consumer and Commercial Division, the Tribunal may award costs without reference to "special circumstances" if the amount "claimed or in dispute" in the proceedings exceeds $30,000.
Rule 38A of the NCAT Rules applies the same principles to appeal proceedings if r 38 of the NCAT Rules applied to the proceedings at first instance. If the amount claimed or in dispute in the appeal exceeds $30,000, the Appeal Panel may award costs of the appeal proceedings without "special circumstances" being established.
However, in respect of r 38A of the NCAT Rules, the appropriate enquiry is whether the amount claimed or in dispute in the proceedings at first instance exceeded $30,000; and additionally whether the amount claimed in in dispute in the appeal exceeds $30,000 (Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [43]; Hanave Pty Ltd v Wine Nomad Pty Ltd; Wine Nomad Pty Ltd v Hanave Pty Ltd (No 2) [2022] NSWCATAP 361 at [78]-[79]; Promina Design & Construction Pty Ltd v The Owners-Strata Plan No 97449 (No 2) [2023] NSWCATAP 164 at [7]).
In this matter, the amount claimed or in dispute in the proceedings at first instance exceeded $30,000. The amount claimed or in dispute in the appeal also exceeded $30,000 as is self-evident by the component of the appeal that challenged the quantum of damages awarded to the owner.
Accordingly, the party seeking costs does not have to establish 'special circumstances' for a costs order to be made.
The usual principle is that the unsuccessful party pays the successful party's costs of the proceedings (Oshlack v Richmond River Council [1999] HCA 11; (1999) 193 CLR 72). Costs orders are made to compensate the successful party, not to 'punish' the unsuccessful party. However, an order that the unsuccessful party pay the successful party's costs of the proceedings is not, of itself, a punitive order because the successful party should be compensated for the legal costs incurred in having to bring, or defend, the proceedings.
The circumstances in which a Court or Tribunal can depart from the principle that the unsuccessful party pays the successful party's costs of the dispute are succinctly summarised in the Judicial Commission of NSW Civil Trials Bench Book-Costs, as involving: 1. Where each party has had substantial success, in which case the Tribunal can award no order as to costs: Hogan v Trustee of the Roman Catholic Church (No 2) [2006] NSWSC 74 at [40]. 2. Where there is mixed success by the parties on multiple issues. In such circumstances, a proportionate costs order can be made. The applicable principles were summarised in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] as follows: 1. Where there are multiple issues in a case the court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd [1994] NSWCA 338. 2. In relation to trials, it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. 3. If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27]. The same principle applies to hearings at first instance. 4. Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of NSW v Stanley [2007] NSWCA 330 at [18]). 5. A separable issue can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]. 6. Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272. 1. There is disentitling conduct by the successful party, such as (a) the successful party inviting the litigation (Ritter v Godfrey [1920] 2 KB 47); (b) the successful party unnecessarily and unreasonably prolonging the proceedings (Lollis v Loulatzis (No 2) [2008] VSC 35 at [29]); (c) the successful party pursuing the matter solely for the purpose of increasing costs recoverable (G R Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263 at [20]); or (d) the successful party unreasonably failing to accept a 'Calderbank' offer in circumstances including that the offer was a genuine compromise; the successful party did not obtain a better outcome at the hearing; the offer was sufficiently detailed; and there was a reasonable time to consider the offer before its expiration (Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8]).
In Petropoulos v CPD Holdings Pty Ltd [2019] NSWCATAP 54 the Appeal panel stated (at [9]): Below is our summary of the relevant principles, derived from [20] - [24] of Rekrut and Scott v Champion Homes Sales Pty Ltd; Champion Homes Sales Pty Ltd v Rekrut and Scott [2018] NSWCATAP 97: (1) the Tribunal may make such order as it thinks appropriate as long as it acts in accordance with the subject matter, scope and purpose of the power; (2) generally costs will be awarded to the party who has been successful, without attempting to differentiate between those particular issues on which it was successful and those on which it failed; (3) a separable issue can relate to any disputed question of fact or law on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter; (4) if the appellant loses on a separable issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue; (5) where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory; and (6) there may be factors which militate against the awarding of costs to the successful party.
In this matter, no issue arises as to 'disentitling conduct' of the parties nor of there being a 'Calderbank' offer to be considered.
We do not accept that it is appropriate the owner be awarded all of her costs in the appeal. Although the builder failed on the majority of its appeal grounds; it succeeded on a significant ground of appeal that involved a substantial amount of money in dispute.
The critical issue is whether a proportionate costs order should be made; or an order that each party bear its own costs.
We are satisfied that the issue of the legal principles to be applied to the assessment of damages for loss of rental income was a dominant or separable issue from the other issues in the appeal. There was a mixed outcome in the appeal.
Weighing discretionary considerations as to the importance of that issue and the amount of the appeal submissions (and the decision) which involved that issue we are satisfied that it is appropriate that the builder pay 50% of the owner's costs of the appeal proceedings.
We do not regard it as just or appropriate in all the circumstance of the appeal that each party should bear their own costs of the appeal. The builder failed on most of the appeal grounds and the owner should not be made to bear all of her costs of the appeal.

Application to Amend Reasons Under s 63 of the NCAT Act

The owner seeks to amend [159] of the reasons in the substantive decision to include the word "and" so that the last sentence reads: "There was also no error of law established in respect of the finding of the Tribunal (and) that the defects were not a sufficient cause of the owner not being able to rent the property, and that is a further issue that cannot be raised in the remitted proceedings".
Section 63 of the NCAT Act states: 63 Power to correct errors in decisions of Tribunal (1) If, after the making of a decision by the Tribunal, the President or the member who presided at the proceedings is satisfied that there is an obvious error in the text of a notice of the decision or a written statement of reasons for the decision, he or she may direct a registrar to alter the text of the notice or statement in accordance with the directions of the President or the member. (2) If the text of a notice or statement is so altered, the altered text is taken to be the notice of the Tribunal's decision or the statement of its reasons, as the case may be, and notice of the alteration is to be given to the parties in the proceedings in such manner as the President or member may direct. (3) Examples of obvious errors in the text of a notice of a decision or a statement of reasons for a decision are where - (a) there is an obvious clerical or typographical error in the text of the notice or statement, or (b) there is an error arising from an accidental slip or omission, or (c) there is a defect of form, or (d) there is an inconsistency between the stated decision and the stated reasons.
We are not satisfied that there is any "obvious error" in the last sentence of [159]. The sentence is logical, and clearly expressed. It does not contain any typographical error or any other error. It is not inconsistent with the orders of the Appeal Panel.
The application to amend [159] of the substantive decision is dismissed.

ORDERS

An oral hearing is dispensed with under s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW).
Beechwood Homes (NSW) Pty Ltd is to pay Polixeni Hassos 50% of the costs of the appeal proceedings in Matter 2022/00275892 as agreed or 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 (NSW)).
The application to amend the reasons of the Appeal Panel in the substantive decision is dismissed.

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

Amendments 23 August 2023 - Caselaw numbering amended 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: 23 August 2023

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Cases Cited (20)