Bonita v Shen

Grounds of appeal

1. A Notice of Appeal dated 25 November 2015 was filed on 25 November 2015 in the Tribunal. The Notice of Appeal was filed within time, namely 28 days after the date of the decision as required by Rule 25(4)(c) of the Civil and Administrative Tribunal Rules, 2014 (NCAT Rules).
2. In item 5B of the Notice of Appeal, the appellants raised six grounds of appeal: 1. The Tribunal erred in that it failed to have proper regard to s 60 of the Civil and Administrative Tribunal Act, 2013 (NCAT Act); 2. The Tribunal erred in that it failed to provide any legal basis or justification for the orders on costs ultimately made; 3. The Tribunal at [18] considered the issue of the percentage of costs to which the respondent should be entitled without making a determination that the respondent should be entitled to costs at all; 4. The Tribunal took into account or applied Rule 38 of the Tribunal Rules which rule is invalid being inconsistent with section 60 of the NCAT Act; 5. The Tribunal erred by failing to have regard to or to require the respondent to produce evidence in relation to the quantum of costs which the respondent was claiming for a one day hearing; and 6. The Tribunal erred by making orders which are inconsistent inter se.
3. Insofar as the grounds did not raise questions of law, the appellants also sought leave to appeal, leave being necessary because of operation of s80(2)(b) of the NCAT Act. Because the proceedings were an appeal from a decision of the Tribunal made in the Consumer and Commercial Division, there is a further limitation on the question of whether leave should be granted in that the appellants are also required to demonstrate they may have suffered a substantial miscarriage of justice: see cl 12 of Sch 4 of the NCAT Act.
4. In relation to why leave should be granted the appellants said: 1. The costs decision was not fair and equitable because, having made a preliminary decision that no order for costs should be made in favour of either party, no order should have subsequently been made unless the Tribunal was satisfied there were special circumstances warranting the award of costs and the Tribunal made no such determination; 2. In relation to why the decision of the Tribunal was against the weight of evidence, the appellants relied in order 2 made in the Original Decision and said that the respondent provided no evidence as to the cost that she had incurred. Again, the appellants said that the Tribunal should have adhered to the views expressed in the Original Decision unless there were special circumstances "such as to overturn the Order which was made on 25 June 2015"; and 3. In relation to significant new evidence, the appellants relied on a claim that had subsequently been made by the respondent which identified "costs to be assessed in the amount of $65,727.92". In relation to these costs, the appellants said that this document was provided on 10 November 2015 after the costs decision and was "therefore not in existence at the time of the Tribunal decision".
5. The respondent filed a reply to appeal dated 27 January 2016. In response to each of the six grounds identified in the Notice of Appeal, the respondent said (reply to appeal item 3B): 1. Ground 1 is misconceived: the Reasons amply demonstrate that the Tribunal was cognisant of section 60 of the Act. 2. The Tribunal provided reasons consistent with the legislation. The Tribunal analysed the circumstances of the instant case informed by the provisions of section 60. 3. The Tribunal proceeded on an orthodox and acceptable analysis of the overall costs award in circumstances where a party is compelled to litigate to make partial recovery of its claim but is not wholly successful on all issues. 4. The Appellants in their written submissions on costs did not raise the proposition that Reg 38 is ultra vires the Civil and Administrative Tribunal Act (2013). In any event, the Tribunal relied on the section 60 itself and did not rely on Reg38. The decision awarding costs is supportable even in the absence of Reg 38. The respondent to the appeal does not concede that Reg.28 is ultra vires, but contends that point is irrelevant to the instant decision. The fact that the Tribunal mentioned the regulation in its reasons, cannot be taken to somehow "infect" or invalidate the decision making process. 5. The Tribunal's decision is the customary "in principle" decision on costs routinely made by courts and tribunals. The actual quantification is left to the parties ("costs as agreed") or failing agreement by assessment ("costs as assessed"). The Tribunal was not embarking on the exercise of costs assessment. Thus there was no need to consider costing evidence, and there is no error in no requiring or considering any such evidence. 6. The appellants have not identified any alleged inconsistency.
6. The respondent also said that there was no basis for the grant of leave to appeal.

Written and oral submissions

1. The parties filed written submissions and made oral submissions at the hearing of the appeal. It is convenient to summarise the effect of these submissions as follows.

Appellants' submissions

1. There were two matters of form in the costs orders made which the appellants raised in the course of hearing the appeal relating to the wording of the particular orders.
2. Firstly, the appellants said that the costs order incorrectly referenced the legalisation by which the costs were to be assessed. In particular the appellants said that the requirement in the order for the costs to be "assessed under Part 4.3 Div 7 of the Legal Profession Uniform Law Application Act 2014" was incorrect. It was agreed by the parties that the Appeal Panel should rectify any deficiency in form by consent.
3. The second issue of form related to the expression "within 28 days of the date of this order" found in order 1 made 29 October 2015. The appellants submitted there was some ambiguity as these words suggested that payment was to be made within 28 days of the date of the order, notwithstanding that order 2 required any payment to be made "within 14 days or agreement or assessment".
4. In relation to this second matter of form, the Appeal Panel noted that the comma after the words "failing agreement" had probably been misplaced and should have in fact been placed after the expression "within 28 days of the date of this order" so that order 1 would permitted assessment if there had by no agreement within 28 days of the date of the order and order 2 would then operate to provide for payment either: 1. 14 days after agreement; or 2. 4 days after assessment, as the case may be.
5. While there was no express consent in relation to making this amendment, this is a matter which the Appeal Panel is able to correct and should do so as part of the resolution of this appeal to facilitate the just, quick and cheap resolution of the real issues in dispute.
6. As to the substantive issues raised on appeal, the appellants' submissions can be summarised as follows: 1. The Tribunal made no finding that there were special circumstances warranting an award for costs. All that occurred is that the Tribunal referred to the Appeal Panel in Gaynor v Burns [2015] NSWCATAP 150 and simply recorded at [18] of the Costs Decision that the respondent had not been completely successful on the damages issue; 2. Insofar as the Tribunal relied on r 38 of the NCAT Rules to make an award for costs, this rule is invalid and inconsistent with the NCAT Act; 3. If the Tribunal was not acting pursuant to r 38 it failed to provide any legal basis or justification for its orders; 4. The Tribunal should have sought from the respondent (costs applicant) "an indication or a statement as to the amount of costs actually sought and its components". This would have avoided the need for any assessment of costs and/or prevented the applicant from seeking an exorbitant amount of costs as occurred in this case; and 5. The initial position of the Tribunal expressed in the Original Decision that each party should pay their own costs was an appropriate outcome and this initial indication should not have been displaced.
7. In relation to s 60 of the NCAT Act and the need to find special circumstances, the appellants appeared to submit that there was some obligation on the Tribunal to justify a departure from the view expressed on a "provisional" basis in the Original Decision. The appellants referred to the costs decision, particularly [16] - [18] and said that these paragraphs do not provide any reasons as to why a "opposite" view was arrived at by the Tribunal to that contained in order 2 of the original decision. The appellants said there was no justification for a finding that there were special circumstances and therefore no order for costs should be made. The appellants also relied on the submission that the Tribunal exercised a "no costs" jurisdiction, that is ordinarily no costs order should be made in favour of one party or the other. In relation to this point, the appellants contended this was a relevant consideration both to claims where a party was to demonstrate special circumstances and in the case of r 38 (should r 38 be found to be valid).
8. In relation to the validity of r 38, the Appeal Panel noted that the written submissions of the parties did not address the provisions of subs 4(4) and (5) of the NCAT Act nor the provisions of s 17 and 35 of the NCAT Act. However, the appellants dealt with these matters in oral submissions.
9. Firstly, the appellants sought to compare the provisions to those previously found in the Consumer, Trader and Tenancy Tribunal Act, 2001 (CTTT Act) and the Consumer, Trader and Tenancy Tribunal Regulation 2009 (CTTT Regulation). The appellants submitted that the provision in s 53(1) of the CTTT Act, which provided that parties to proceedings are to pay their own costs, was not absolute in terms but rather "subject to this section and regulations". The appellants then said that reg 20 of the CTTT Regulation displaced the position found in s 53(1) that the parties are to pay their own costs.
10. On the other hand, the appellants submitted that r 38 was not an exception and, the expression "exceptions" found in sub 4(4) of the Act must be read ejusdem generis with the expressions "limitations or other restrictions". Consequently, the appellants submitted that there was not a "general dispensation" that permitted a rule to be made that overrides the operation of or is inconsistent with the NCAT Act.
11. As to the provision in the order that the respondent was only entitled to 60% of her costs of the original proceedings, it did not appear that there was any significant challenge to the amount awarded as a percentage of the total costs. Rather, the issue of quantum of costs was raised in the context of the respondent providing to the appellants in consequence of the Costs Decision a total claim for costs (before reduction to 60%) of $65,727.92.
12. As to the amount of the claim and whether r 38 applied, the Appeal Panel had before it a copy of the original application in which the respondent as landlord had claimed $122,166.76. The appellants relied on the fact that the Original Decision had only made an award in favour of the respondent in the sum of $27,166.69 plus interest at 12% per annum from 11 July 2013. While the appellants conceded that the amount awarded, with interest exceeded $30,000.00, the appellants said that the respondent had been substantially unsuccessful by reference to the amount originally claimed.

Respondent's submissions

1. In relation to the form of the order for costs, the respondent submitted that the correct reading of order 1 was that there was "a time limit for agreement" and that "order (2) operates only after the costs are quantified".
2. While the respondent submitted that r 38 was valid, essentially the respondent appeared to submit that the Tribunal was required to and did in fact find special circumstances which justified the making of an order for costs. In particular, the respondents submitted that at [16] of the Costs Decision the Tribunal made findings concerning the relative strengths of the claim and the nature and complexity of the proceedings and that r 38(2)(b) of the NCAT Rules was also a relevant consideration in concluding that special circumstances existed: see s 60(3)(c), (d) and (g) of the NCAT Act.
3. Consequently, the respondent submitted that "it is unnecessary for the Appeal Division to consider whether or not Rule 38 is ultra vires the Act". The respondent then submitted that there was no error in apportioning costs and that the approach taken by the Tribunal was "conventional… (when) faced with a multiplicity of issues which impact on the ultimate award of damages or other relief".
4. In relation to order 2 made in the Original Decision, which expressed the Tribunal's provisional view, the respondents submitted that the Tribunal was not functus officio and that the issue of what costs order was to be made was an open issue to be determined upon application and submissions by the parties. Consequently, the respondent said there was no denial of procedural fairness or inappropriate conduct of the Tribunal in calling for submissions and making the Costs Decision.
5. In developing the respondent's position in oral submissions, Counsel for the respondent submitted that: 1. There were complex issues concerning equitable leases, indefeasibility of title and factual issues concerning the relationship between the parties; 2. The Tribunal relied upon the Gaynor decision at [20] of the decision and was correct to do so. In this regard the respondent submitted there was a power to make a costs order but no requirement to do so in all circumstances; 3. The matters set out in the Costs Decision at [16] - [18] record the factors which establish special circumstances and a fair reading of the Costs Decision demonstrates that the Tribunal made relevant findings of special circumstances under s 60 of the NCAT Act; 4. It was necessary for the respondent to bring the proceedings to enforce the rights in questions; 5. No error has been shown in apportioning costs and the fact that no details of the costs being claimed was placed in evidence before the Tribunal is not a matter which prevents the Tribunal from making an award for costs and having those costs subsequently assessed; and 6. The respondent submitted that r 38 was not ultra vires however the respondent did not seek to develop this submission nor was any detailed response provided to the matters raised by the Tribunal or appellants in connection with the proper construction of the NCAT Act with regards to the validity of r 38.

Consideration

1. The decision made by the Tribunal is a decision made in respect of costs. Accordingly, it is an "ancillary decision" within the meaning of the NCAT Act: see definition of ancillary decision in s 4(1) of the NCAT Act. Consequently there is a right of appeal on a question of law and otherwise with leave: see s80(2)(b) of the NCAT Act.
2. Where leave is required, leave may only be granted if the appellants establish they may have suffered a substantial miscarriage of justice: see cl 12 of Sch 4 of the NCAT Act. The principles concerning the grant of leave are set out in the decision of Collins v Urban [2014] NSWCATAP 17.
3. The appeal essentially raises four issues for determination: 1. Does r 38(2)(b) of the NCAT Rules regulate the awards for costs in the present dispute or is the respondent required to demonstrate special circumstances as required by s60 of the NCAT Act? 2. Is r38 ultra vires? 3. Did the exercise of the discretion in connection with costs miscarry? and 4. Should the form of the order be amended to correct the reference to the relevant legislation concerning assessment and to clarify the apparent ambiguity between orders 1 and 2 made 29 October 2015?

Does r 38(2)(b) of the NCAT Rules regulate the awards for costs in the present dispute or is the respondent required to demonstrate special circumstances as required by s60 of the NCAT Act?

1. The general position in respect of costs under the NCAT Act is regulated by s60. This section provides: 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 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.
2. However, s 25 of the NCAT Act allows the Rules Committee of the Tribunal to make rules of the Tribunal in respect of practice and procedure to be followed in the Tribunal, such rule making power to include making rules in respect of matters specified in Sch 7 of the NCAT Act. The relevant item in Sch 7 is item 20 that provides: The costs in proceedings in the Tribunal (but not including any matter relating to costs that is regulated by the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014)).
3. Rule 38 of the NCAT Rules provides for costs in respect of proceedings in the Consumer and Commercial Division of the Tribunal. This rule 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.
4. Hearing disputes under the Retail Leases Act, 1994 (RL Act) are functions of the Tribunal allocated Consumer and Commercial Division: see cl 3 of Sch 4 of the NCAT Act.
5. In the present case, which is proceedings under the RL Act, the amount claimed in the application was $122,166.76. This amount is greater than $30,000.00 (as was the amount of the final award when interest was taken into account). Accordingly, as the amount claimed or in dispute is more than $30,000.00 and the proceedings are for the exercise of the function of the Tribunal allocated to the Consumer and Commercial Division of the Tribunal, r38(2)(b) applies to the present proceedings.
6. As made clear by the introductory words of r 38(2) of the NCAT Rules, despite s60 the Tribunal may award costs even in the absence of special circumstances warranting such an award.
7. In our view the effect of this rule is to displace the otherwise limited circumstances in which an award for costs can be made. This is because s 60 forms part of Part 4 - Practice and Procedure of the NCAT Act and s 35 of the NCAT Act provides that: 35 Application of Part Each of the provisions of this Part is subject to enabling legislation and the procedural rules.
8. Accordingly, in our opinion, r 38(2)(b) is the provision which regulates the Tribunal's power to make an order for costs in the Original Proceedings.

Is r38 ultra vires?

1. As indicated above, s 35 provides that Part 4 of the NCAT Act, including s 60 is subject to the procedural rules. The "procedural rules" means: 1. The Tribunal rules; and 2. The regulations in their application to the practice and procedure of the Tribunal. See definitions- s4(1) of the NCAT Act.
2. To the extent the Rules are inconsistent with the regulations, the regulations prevail "to the extent of any inconsistency": see s 25(5) of the NCAT Act. There is no present regulation in respect of costs except Regulation 7 of the Civil and Administrative Tribunal Regulation, 2013 (NCAT Regulation) which relates to costs in connection with summonses. However, it should be noted that the original Rules of the Tribunal in Schedule 3 of the NCAT Regulation (now repealed by reason of the making of the NCAT Rules in 2014) contained rule 37 Costs in Consumer and Commercial Division of the Tribunal which was in the same terms as r38 of the NCAT Rules.
3. The Tribunal Rules may prescribe different rules for each Division of the Tribunal and different classes of matters: see s 25(3) of the NCAT Act. The specific provisions do not limit: 1. the generality of s 42 of the Interpretation Act 1987 (Interpretation Act), which relate to matters for which statutory rules may make provision: see s25(3) of the NCAT Act, 2. the operation of s78 (Rules of Court) of the Interpretation Act, : see s 25 (6) of the NCAT Act.
4. In relation to s 78 of the Interpretation Act, the section provides: 78 Rules of court (1) The power of a person or body to make rules of court includes power to make rules of court for the purposes of any Act or statutory rule that permits or requires any thing to be done by or in accordance with rules of court. (2) If an Act or statutory rule: (a) confers any jurisdiction on a court or tribunal, or (b) extends or varies the jurisdiction of a court or tribunal, the person or body having power to make rules or orders regulating the practice and procedure of the court or tribunal may make rules or orders (including rules or orders with respect to costs) regulating the practice and procedure of the court or tribunal in the exercise of the jurisdiction so conferred, extended or varied.
5. That is, s78 permits the Tribunal to make rules "including with respect to costs".
6. Therefore the question is whether or not, upon its proper construction, the NCAT Act otherwise prevents the making of r 38 contrary to the provisions of s 60 of that NCAT Act.
7. Subsection 4(4) of the NCAT Act is in the following terms: (4) Any provisions of this Act that are expressed to be subject to the procedural rules have effect subject to any exceptions, limitations or other restrictions specified by the procedural rules.
8. In our opinion, r 38 is an exception "specified by the procedural rules" to the provisions in respect of costs found in s 60 of the NCAT Act which is permitted by subs4(4).
9. In this regard "exception" is defined in the Oxford English Dictionary as "a case to which the general rule is not applicable". While an exception may be a departure from a general rule which limits the operation of the general rule in a particular way, there is no reason to construe the word "exceptions" in sub s 4(4) as only permitting the imposition of further limits rather than permitting a complete departure from a provision specified in the NCAT Act.
10. This interpretation is supported by the introductory words of sub s 4(4) which expressly provides that certain provisions of the NCAT Act are "subject to the procedural rules". In the present case the relevant provision is s 60 and the requirement that a party may be awarded costs only if the Tribunal "is satisfied that there are special circumstances warranting an award of costs".
11. Further, and in any event, the word "exceptions" has a separate meaning to the words "limitations or other restrictions". This is because the use of the word "exceptions" would have been unnecessary if Parliament was only intending to permit exceptions by way of "limitations or other restrictions".
12. The appellants sought to contend that the word "exceptions" in the expression "any exceptions, limitations or other restrictions specified by the procedural rules" needed to be interpreted in accordance with the ejusdem generis principle. However, the rule has no application to the interpretation of the word "exceptions". That is because the ejusdem generis principle has limited application and provides that where particular words are followed by general words, the general words are limited to the same kind as the particular words: see eg the decision of Mahoney JA in Mattinson v Multiple Incubators Pty Ltd [1977] 1 NSWLR 368 at 377 and following. In the case of sub s4(4), the general words are "other restrictions" and these general words cannot confine the meaning of "exceptions", at least by application of the ejusdem generis principle.
13. Finally, the appellants sought to demonstrate the power to make procedural rules was limited and r38 was inconsistent and invalid by submitting that the procedural rules could not make a rule inconsistent with s 36 of the Act and the provisions in respect to the "guiding principle".
14. The problem with this submission is that s 4(5) of the NCAT Act provides to the contrary. This subsection says: (5) Subject to section 17 (3), procedural rules that make provision as referred to in subsection (4) are not inconsistent with this Act.
15. That is, a rule which is an exception to a provision in Part 4- Practice and procedure of the NCAT Act is expressly not inconsistent with the Act.
16. While s17(3) provides primacy to the provisions in the Division Schedules over both the NCAT Act and the procedural rules, there is no provision in Schedule 4 of the NCAT Act (which relates to the Consumer and Commercial Division) which would override r38. Indeed in the case of proceedings under the RL Act, the only provision relating to this legislation concerning matters dealt with in Part 4 of the NCAT Act is clause 7 of Schedule 4 which, "despite section 45" of the NCAT Act permits representation "by an Australian lawyer or an agent without leave of the Tribunal".
17. Accordingly, the appellants challenge to the validity of r38 of the NCAT Rules fails.

Did the exercise of the discretion in connection with costs miscarry?

1. Rule 38 (2)(b) of the NCAT Rules provides that the Tribunal "may" award costs. This provision confers upon the Tribunal a power which may be exercised at the discretion of the Tribunal: see s9 of the Interpretation Act.
2. In Thompson v Chapman [2016] NSCATAP 6, when dealing with r 38(2)(b), the Appeal Panel said at [69]: The starting point in exercising such a discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour.
3. The Appeal Panel in Thompson referred to the decisions of the High Court in Latoudis v Casey (1990) 170 CLR 534 and Oshlack v Richmond River Council (1998) 193 CLR 72.
4. In Latoudis McHugh J said at 567: An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connection with the litigation: Kelly v. Noumenon Pty Ltd (1988) 47 SASR 182, at p 184. The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings.
5. In Oshlack McHugh J said at 97: The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party[96]. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.
6. While McHugh J was in the minority in Oshlack, (which related to an individual seeking to remedy or restrain a breach of the Environmental Planning and Assessment Act, 1979 (NSW), being proceedings authorised by s 123 (1) of that Act), the majority in that case did not disagree with the general principle but rather whether, in the particular circumstances of the case, an order for costs should be made against the unsuccessful plaintiff, Oshlack.
7. On the other hand, where there is a general discretion to award costs there is no absolute rule that the successful party must receive the costs. In Thompson the Appeal Panel said at [71]-[72]: 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 be of the costs of an unsuccessful party: see Oshlack … per Gaudron and Gummow JJ at 88 and Kirby J at 121-123. 72 The factors to be considered in awarding costs in a particular case are not to be confined as to do so would constrain the general discretion. However it is clear from the authorities that factors that might influence whether the usual order for costs should apply and, if so, to what extent include: (1) Whether, by reason of the relative success of the parties on different issues and the time taken to determine those that an order for costs based on issues should be made; see for example Bostick Australia Pty Ltd v Liddiard (N0 2) [2009] NSWCA 304; and (2) Whether, by reason of the nature of the proceedings the usual rule should otherwise be displaced in whole or in part: see Oshlack … per Gaudron and Gummow JJ at 41-44.
8. Where an award for costs has been made in the exercise of such a discretion, the circumstances in which the Appeal Panel can intervene are, usually, limited to where the exercise of the discretion has miscarried. As the Appeal Panel said in Thompson at [86], the applicable principles for determining the question of whether the exercise of discretion has miscarried were set out by the High Court in House v The King [1936] HCA 40; (1936) 55 CLR 499. What an appellant must demonstrate is that the decision maker: 1. made an error of legal principle; 2. made a material error of fact; 3. took into account some irrelevant matter; 4. failed to take into account or gave insufficient weight to some relevant matter, or 5. arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning.
9. The appellants sought to argue in this appeal that any discretion was further confined because the provisions of the NCAT Act made the Tribunal a "no cost" jurisdiction. The appellants relied on ss 35, 36 and 38 of the NCAT Act as well as s60(1).
10. In relation to ss 35, 36 and 38, no particular features of those sections were identified by the appellants which would lead to the conclusion that the Tribunal is a "no cost" jurisdiction. Indeed, the guiding principle as expressed in s 36 of the NCAT Act which requires the Tribunal "to facilitate the just, quick and cheap resolution of the real issues in the proceedings", appears to expressly recognise there is a cost to proceedings. While the Tribunal is obliged to try and minimise such costs, proceedings before the Tribunal are not cost free.
11. As to the reliance upon s60(1), the problem with this submission is that r38 is an exception to section 60. By its terms, r 38(2) operates "Despite section 60 of the Act" and an examination of r38(2) indicates that the powers given are not dependent upon or any way constrained by the provisions of s 60 (1) of the NCAT Act.
12. In the case of r38(2)(a), which relates to claims of more than $10,000 but not more than $30,000, an order for costs may be made where "the Tribunal has made an order under clause 10 (2) of Schedule 4 of the Act in relation to the proceedings". Clause 10 (2) provides a power to dismiss or strike out an applicant's proceedings or determine the proceedings in favour of an applicant in circumstances (as the case may be) where the party against whom an order is to be made has caused disadvantage. Disadvantage relates to the conduct in the proceedings by a party, including failing to comply with directions. Factors that must be considered in determining whether an order should be made under cl 10 are set out in cl 10(3) of Schedule 4.
13. In the case of r38(2)(b), this rule enables the Tribunal to make an order for costs if satisfied "the amount claimed or in dispute in the proceedings is more than $30,000", whether or not a particular party has conducted the proceedings to the disadvantage of another.
14. Having regard to the terms of r38(2)(a), it is illogical that a discretion to award costs which is enlivened in circumstances where a finding of disadvantage has been made should nonetheless be constrained by requiring the Tribunal to first consider why there should be a departure from the position that each party to proceedings should pay their own costs. Similarly, under r38(2)(b) it is illogical that the power conferred upon the Tribunal to make an order for costs where a claim is greater than $30,000, can only be exercised if the Tribunal is satisfied that there should be a departure from the "usual rule" that each party is to pay their own costs.
15. On the other hand, it is quite logical to interpret r38 as conferring a general discretion to award costs where the particular circumstances prescribed by r38(2)(a) or (b) have been established. That is, there is a general discretion to award costs depending upon the value of the claim being made and, in the case of claims between $10,000 and $30,000, the conduct of the parties in the proceedings. This interpretation is also consistent with the gradated cost rules found in courts which are dependent upon the value of the amount in dispute.
16. Finally, the interpretation is consistent with the fact that, in particular classes of cases, parties may incur substantial costs and expenses in making the claims. For example, in the present proceedings under the RL Act, a party has an express right to be represented by a legal practitioner (see cl 7 of Schedule 4 of the NCAT Act referred to above) and might incur significant cost in establishing their legal rights. Similarly, in complex building claims under the Home Building Act, 1989 a party may require expert evidence complying with Procedural Directions 3 - Expert Witnesses, in order to successfully prosecute a claim. It would be somewhat anomalous if, in these types of cases where there are significant sums of money in dispute, that: 1. r38 should be construed in a manner such that there should be a presumption against the award of costs because of s60 of the NCAT Act despite the clear language of r38; and 2. a party should have to bear significant costs in bringing or defending a claim to establish their legal rights, being costs which are reasonable and necessary to incur and cannot otherwise be recovered as damages.
17. A similar position was expressed by the Appeal Panel in Hasan v Pirasta [2015] NSWCATAP 153 at [38]-[40], which was a claim under the RL Act as is the present proceedings.
18. Accordingly, we do not accept that the discretion to award costs under r38 is fettered by any presumption that the Tribunal is a "no cost" jurisdiction.
19. The next challenge to consider in respect of the Costs Decision is the appellant's submission that it was necessary for the Tribunal to explain why it departed from the "provisional" position expressed in order 2 made in the Original Decision.
20. In our view this submission has no merit. As made clear by the Tribunal in [67] of the Original Decision, a provisional view was expressed by reference to the relative positions of the parties and an indication given that there would be "no order for costs" unless the parties made submissions contending a different position. Such an approach is consistent with the just, quick and cheap resolution of the real issues in dispute, had regard to the relative success of the parties and provided a focus for any application which might be made as to the matters which any cost application would need to address and how such an application would be dealt with by the Tribunal, namely on the papers. The approach taken was appropriate and conformed with the practice adopted by the Tribunal and indeed by courts when dealing with costs issues.
21. The adoption of this approach was not a pre-judgement of the issues nor did the Tribunal thereby confine itself to the "provisional" view. No submissions had been received and no ruling was made at the time the view was expressed,. Consequently, it is difficult to understand how the Tribunal thereby became bound to justify why it departed from any provisional views, as opposed to providing reasons why the particular costs order should be made following receipt of submissions the parties.
22. Next the appellant submitted that the Tribunal was obliged to obtain "an indication or a statement as to the amount of costs actually sought and its components". The appellant sought to tender on the appeal a claim for costs made in consequence of the Cost Decision. The appellants said that the failure to obtain this evidence and the fact of the size of the cost demonstrates the award made was in error.
23. In our view this evidence does not assist the appellant in the present case. That is, there is no general obligation upon the Tribunal to obtain evidence of costs for the purpose of making a ruling as to which party should pay costs and what order should be made. Such an obligation would only arise in circumstances where the Tribunal proposed to fix the amount of costs and/or make a money order for the amount.
24. As made clear by s60(4), the Tribunal is empowered to make an order for costs to be assessed. Where such an order is made, it is the role of the assessor, not the Tribunal, to determine what costs are reasonably and necessarily incurred. Parties may lead evidence as to the amount of costs when an application for costs is made to the Tribunal. However, absent evidence, it is not incumbent upon the Tribunal to require such evidence to be provided as a precondition to the award of costs where those costs are to be assessed.
25. Insofar as the appellants say the costs are excessive, the orders provided by the Tribunal enable the parties to meet and agree an appropriate amount. Alternatively, the appellants are able to require the respondent to have the costs assessed as contemplated by the orders made.
26. Accordingly, no relevant error has been shown.
27. The final issue to deal with relates to the percentage of costs awarded and the inadequacy of the findings made in connection with the award costs.
28. In part, the submissions made related to the Tribunal failing to make express findings that there were special circumstances. For the reasons outlined above, it was not necessary to make such a finding because r38 regulates the award of costs.
29. The appellant also appeared to submit that the only substantial finding made by the Tribunal was in [19] of the Cost Decision and that the Tribunal had failed to take account of the fact that the respondent was unsuccessful in relation to the issue of mitigation of damages and that the award for costs was substantially less than the amount claimed.
30. The failure to give adequate reasons may amount to an error of law as may a failure to have regard to a relevant consideration in the exercise of discretion. On the other hand, particularly in relation to costs, the adequacy of the reasons needs to be considered in the context of the substantive decision and inadequacy should not be found merely because of a failure in a costs decision to repeat all that has gone before. In this regard the cases referred to by the Appeal Panel in McPherson v Mace [2015] NSWCATAP 203 are instructive when considering the Costs Decision and whether the Tribunal fell into error. At [28]-[29] the Appeal Panel said: 28 In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel said at [49]: One reason why reasons are generally required, notwithstanding a provision such as s 62, is that if reasons for decision are neither sought nor prepared and an appeal or application for leave to appeal is lodged, the findings of fact and legal reasoning of the decision maker at first instance would not be available to the appellate body by way of written reasons. In many instances not having findings of fact and legal reasoning explicitly available may render effectively worthless any appeal right because the appellate body does not have a statement of the findings of fact, the relevant law and explanation of how the law was applied to the facts as found, by the decision maker at first instance. and at [53]: The other basis upon which it has been held that reasons are generally required to be given was recently reiterated by the Court of Appeal in Keith v Gal [2013] NSWCA 339 (per Gleeson JA at [109] as being that failure to provide sufficient reasons promotes 'a sense of grievance' and denies 'both the fact and the appearance of justice having been done', thus working a miscarriage of justice, citing Mifsud v Campbell (1991) 21 NSWLR 725 at 729: Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 442 per Meagher JA. and at [57]: A number of propositions can be derived from the authorities concerning the nature and extent of the duty to give of reasons as follows: (1) notwithstanding that there have been many cases (some of which are collected in De Iacovo v Lacanale (1957) VR 553, at pp 558-559) in which it has been held that it is the duty of a judge, magistrate or other relevant decision maker to state reasons, that does not mean that a decision maker must give his or her reasons in every case. There is no "inflexible rule of universal application" that reasons should be given for judicial decisions. Whilst it is no doubt right to describe the requirement to give reasons as "an incident of the judicial process", it is subject to the qualification that it is a normal but not a universal incident - Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 667 per Gibbs CJ; (2) the content and detail of the reasons for decisions to be provided will vary according to the nature of the jurisdiction which the body in question is exercising and the particular matter the subject of the decision - Wainohu v New South Wales (2011) 243 CLR 181 at [56] per French CJ and Kiefel J; (3) the administration of justice in this regard requires a pragmatic and functional approach to the obligations imposed upon decision makers at first instance - Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [46] per Basten JA; (4) not only is the obligation not universal in nature, but it is variable in its content and whilst transparency in decision-making is an important value, it is not cost free, and may involve separate parameters of quantity and quality - Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] per Basten JA. 29 To these observations should be added the comments and the observations of the Court of Appeal in Pollard v RRR Corporation Pty Limited [2009] NSWCA 110 conveniently summarised in Moussa Enterprises Pty Ltd v Stanford [2015] NSWCATAP 99 at [30]. In Pollard v RRR Corporation Pty Limited [2009] NSWCA 110 McColl JA, with whom Ipp JA and Bryson AJA agreed, noted the following relevant principles. (1) The giving of adequate reasons lies at the heart of the judicial process. Failure to provide sufficient reasons promotes "a sense of grievance" and denies "both the fact and the appearance of justice having been done", thus working a miscarriage of justice. (2) The extent and content of reasons will depend upon the particular case under consideration and the matters in issue: (3) While a judge is not obliged to spell out every detail of the process of reasoning to a finding, it is essential to expose the reasons for resolving a point critical to the contest between the parties. (4) The reasons must do justice to the issues posed by the parties' cases. Discharge of this obligation is necessary to enable the parties to identify the basis of the judge's decision and the extent to which their arguments had been understood and accepted. (5) Because a primary judge is bound to state his or her reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Where it is apparent from a judgment that no analysis was made of evidence competing with evidence apparently accepted and no explanation is given in the judgment for rejecting it, it is apparent that the process of fact finding miscarried.
31. In the Cost Decision the Tribunal determined that the appellant should pay the respondent 60% of her costs incidental to the proceedings, including the submissions on costs. Failing agreement within 28 days from the date of the order, the respondent was able to have the costs assessed if not agreed. Payment was to be made 14 days after the date of any agreement or assessment of the costs as the case may be.
32. This decision was made following the Original Decision where the Tribunal made the following determinations: 1. The appellants in the Original Proceedings had challenged the respondent's claim for damages because "there was no valid lease, or at the minimum there was a monthly lease terminated by the (first appellant) on notice": Original Decision [11]; 2. The appellants contended that the effect of registration of a transfer of the premises to the respondent "destroyed the unregistered lease" and that any continuing occupation of the premises after registration of the transfer to the respondent meant there must be a new lease, the terms of which were required to be proved by the respondent in order to establish any entitlement to damages: Original Decision [12]; 3. The first appellant was the lessee and signed the unregistered lease which bound her and the second appellant was liable to the respondent as guarantor under the unregistered lease: Original Decision [43] and [66]; 4. While the respondent had claimed loss of rent for the whole period in which the premises remained vacant, she was only entitled to four months' rent as compensation and the respondent had failed to explain why the property had remained unless until September 2014: Original Decision [54] and [60]; and 5. The first appellant, Bonita had breached her obligations under an unregistered lease: Original Decision [67]; 6. The appellants were liable to pay the respondent the sum of $27,166.69 plus interest at 12% from 11 July 2013: Original Decision [69]; 7. Consequently, the appellants failed in their substantial defence that there was no liability under an unregistered lease however had succeeded in confining the claim for damages for breach of the unregistered lease: Original Decision [68].
33. It is in this context that the Cost Decision needs to be considered.
34. The appellants submitted that paragraphs [16] - [18] of the Costs Decision do not record any conclusions or findings of the Tribunal and that [19] of the Costs Decision is, of itself insufficient reason to justify an award in favour of the respondent requiring the appellants to pay 60% of the respondent's costs.
35. In our view, a fair reading of the Costs Decision, in particular [16] - [18] does not support this submission for the following reasons: 1. The respondent's application was that the appellants should pay 75% of her costs; 2. The respondent relied on s 60(3)(c) and (d) of the NCAT Act, r 38 of the NCAT Rules and the fact defences to her claim had failed, the Tribunal found in the second sentence of the Costs Decision at [16] that r 38(2)(b) was relevant to determining costs because of the "amount of damages ordered". While the Tribunal was in error to the extent that it concluded that the amount of award, as opposed to the amount of the claim, was relevant to the question of costs, the Tribunal was correct to conclude that r 38(2)(b) was relevant to the determination of the issue of costs in the present proceedings; 3. The respondent had engaged legal representation in circumstances where the appellants denied her claim and said there was no lease and no entitlement to damages. The Tribunal accepted that the issue of the enforceability of an unregistered lease and "whether the lease was destroyed was complex and required analysis of conflicting views": Costs Decision at [17]; 4. The Tribunal concluded that in [18] of the Costs Decision that while the respondent was overall success in her application, nonetheless "she was not completely successful on the question of damages following from the breach of lease as she failed to adequately mitigate when reletting the premises", a matter which the respondent recognised in her application for costs: Cost Decision at [18]. This "recognition" is substantiated by the fact that the respondent only claimed 75% of her costs.
36. When considered in the context of the Original Decision it seems to us that the "balancing act" to which the Tribunal was referring in [19] of the Costs Decision is properly to be understood as an analysis of the success of the respondent on particular issues in the proceedings, an approach which is appropriate and consistent with principle: see for example Bostick Australia (supra). In this regard it is clear that in [19] the Tribunal was "taking into account the complexity of the matters to be resolved and the countervailing arguments regarding the validity of the lease".
37. Again, on a fair reading, this reference to complexity should be seen as not limited to the question of validity of the unregistered lease but also the complexity of all matters to be resolved including issues of the identity of the lessee, estoppel, the duty to mitigate and the liability of the second appellant as guarantor.
38. Having regard to all these facts we see no basis to conclude that the exercise of the discretion miscarried in any relevant sense or that the Tribunal failed to give adequate reasons for its decision.
39. One final matter to mention is the Tribunal's reference to the decision in Gaynor, a case dealing with whether or not special circumstances existed such to justify an order for costs in relation to appeal proceedings. It is unclear from the Costs Decision whether the Tribunal considered that it was required to find special circumstances in order to make an award for costs. There was no express finding that there were special circumstances or that s 60(2) of the NCAT Act applied. For the reasons outlined above, to the extent that the Tribunal was proceeding on the basis that s 60(2) operated to regulate costs in the present dispute, in our view such an approach would have been in error.
40. However, we think the better view arising from [16] of the Costs Decision is that the Tribunal proceeded to determine the costs in accordance with r38(2)(b) which it found to be "relevant". Accordingly, having identified the correct rule, there was a discretion which the Tribunal was to exercise in determining who should pay costs and to what extent.
41. Factors relevant to the exercise of this discretion were that the respondent was legally represented and was required to deal with claims by the appellants that the lease was invalid. The Tribunal was also entitled to consider the complexity of the issues raised in determining who and to what extent costs should be paid in resolving the question of costs. Again these were proper matters for consideration in the exercise in the discretion for costs, as was the relative success the respondent enjoyed.
42. As we indicated above, all these factors were taken into account by the Tribunal in exercising its discretion for costs and no error has been shown. Accordingly, this aspect of the appeal does not succeed.

Should the form of the order be amended to correct the reference to the relevant legislation concerning assessment and clarify the apparent ambiguity between orders 1 and 2 made 29 October 2015?

1. The final matter to consider is the correction of the form of order 1 by reason of its reference to the legislation by which costs are assessed and the apparent ambiguity concerning the reference to 28 Days in order 1 and 14 days in order 2, an issue explained above.
2. In relation to the first aspect, namely the reference to the relevant legislation by which an assessment is to be undertaken, the parties consented to the Tribunal amending the particular order to bring it into conformance with the relevant legislation. Accordingly, the Appeal Panel will vary order 1 by consent to rectify this matter.
3. In relation to the second issue, as raised by the Appeal Panel during the hearing of the appeal, it seems clear that the comma after the words "failing agreement" is misplaced and should be after the words "within 28 days of the date of this order". That is, order 1 should be amended to reflect an intention that the parties have 28 days in which to reach agreement following the making of order 1, after which the respondent is able to have her costs assessed under the relevant legislation. The effect of this amendment will be that order 2 will take effect according to its terms, such that if costs are subsequently agreed, they will be payable 14 days after agreement or if there is no agreement the costs will be payable 14 days after they are assessed.

Costs of the appeal

1. At the hearing of the appeal the respondent made an application for costs and provided submissions in support of that application if she was successful in the appeal.
2. In short, the submissions were to the effect that the appeal was out of the ordinary. The matters identified to support this contention were that: 1. The "inconsistency issue" in relation to Order 1 and Order 2 ("28 days" and "14 days" reference) on analysis had no substance; 2. The placement of the comma and the need to correct the original orders was a matter that could be dealt with by a slip rule application; 3. The suggestion that the Tribunal was bound by its tentative view was clearly wrong; 4. The approach taken by the appellants in their analysis of the Costs Decision was to read the decision in a manner that "truncated" the reasons of the Tribunal and was in appropriate.
3. In reply, in opposing an order for costs, the appellants said that the appeal was entirely ordinary and that there was no basis to conclude there were special circumstances applicable to the appeal.
4. It should be noted at this point that the appeal is not regulated by r 38A of the NCAT Rules, which, now provides that the costs rules which apply for the determination of internal appeals are the same costs rules as would apply to the proceedings at first instance. Accordingly, costs of the appeal were to be determined under s 60 of the NCAT Act and not under r 38, as r 38A did not commence until 2016, after the present appeal was filed: see r 38A(1).
5. The provisions of s 60(3) which record the matters to be considered in determining whether or not special circumstances exist, are set out above.
6. However, it is sufficient to conclude in the present case the Appeal Panel is not satisfied that this is the case where special circumstances warrant an order for costs.
7. As is clear from these reasons, there have been a number of cases in which r 38 has applied to disputes where the amount claimed was in excess of $30,000.00. Examples are the cases of Thompson and Hasan to which we have referred. Further, because costs decision are ancillary decision there is a right of appeal on a question of law or otherwise with leave and the fact of an appeal does not, of itself make the proceedings out of the ordinary: see for example Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120.
8. In relation to matters which could have been corrected by the slip rule, either party could have sought to file a consent order to resolve these matters whether before the appeal was lodged or after the appeal. However, this did not occur and correcting the error in the form of orders is a matter which can properly be and often ordinarily is the subject of an appeal.
9. Finally, we note that the respondent's primary submission is that the Tribunal "did consider special circumstances under s 60" and that it was "unnecessary for the Appeal Division (sic) to consider whether or not r 38 is ultra vires the Act".
10. In our view, having regard to the conclusion we have reached, these submissions did not focus upon the real issues for resolution in the appeal. As the Appeal Panel indicated at the commencement of the hearing, up until the day of the appeal no detailed submissions were made by the parties as to the operation of the various sections of the NCAT Act and the power of the Rules Committee to make r 38 in the terms that has been made.
11. Having regard to these matters, in our opinion there is no basis to conclude that there are special circumstances such to warrant a favour in of the respondent that the appellants pay the respondents costs of appeal. Accordingly, the application by the respondent for the appellants to pay her costs of the appeal is dismissed.

Orders

1. There is one final matter to deal with which is the form of the variation to Order 1 in the Original Decision in respect to assessment of costs.
2. During the course of the appeal the parties referred to the applicable costs legislation for the assessment of costs as being the costs legislation as defined in s 3(A) of the Legal Profession Uniform Law Application Act, 2014 (NSW) (LPULA Act). This legislation is referred to in s 60(4)(b) of the NCAT Act where a costs order is made on the basis the costs are to be assessed. The effect of the submissions was that the form of order should be amended to reflect this legislation and that the reference to Part 4.3 Div 7 of the Legal Profession Uniform Law Application Act was incorrect. It should be noted there is in fact no Part 4.3, Division 7 of the Legal Profession Uniform Law Application Act. Further, the definition of "Legal Profession Legislation" in the Legal Profession Uniform Law Application Act as defined in s 3A of that Act means: 1. The LPULA Act and the local Regulations; and 2. The Legal Profession Uniform Law (NSW); and 3. The Uniform Regulations and the Uniform Rules as they apply in the jurisdiction.
3. In reg 9 of the Legal Profession Uniform Law Application Regulation, 2015, the transitional provisions in relation to ordered costs provides as follows: 59 Ordered costs - transitional provision The provisions of the Legal Profession Act 2004 and the Legal Profession Regulation 2005 relating to ordered costs continue to apply to a matter if the proceedings to which the costs relate commenced before 1 July 2015.
4. The present proceedings were commenced prior to 1 July 2015. Accordingly, the Legal Profession Act 2004 and the Legal Profession Regulation 2005 continue to apply to any costs ordered.
5. In these circumstances, and to avoid any ambiguity or unnecessary further arguments it is sufficient for the Appeal Panel to amend the orders to provide for assessment under the applicable legislation and delete the reference in the existing costs order to Part 4.3, Div 7 of the Legal Profession Uniform Law Application Act 2014 (NSW).
6. Consequently, the Appeal Panel makes the following orders: 1. Order 1 made 29 October 2015 is varied to read as follows: 1. The first respondent, Sarah Bonita, and the second respondent, Joshua Lie shall pay 60% of the costs of the applicant incidental to the proceedings including the submissions on costs as agreed and, failing agreement within 28 days of the date of this order, as assessed under the applicable legislation. 1. The appeal is otherwise dismissed; 2. Each party is to pay their own costs of 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

Amendments 08 August 2016 - Corrections to paragraphs 61 and 62 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 August 2016