Bryant v Druery

NCAT Consumer and Commercial|2014-12-11

Application

On 14 February 2014 the applicant home owner made an application for orders under the Home Building Act 1989 that she not have to pay the respondent builder the amount of $135,184.00 in respect of building work that the applicant alleged the respondent carried out.
On 14 April 2014 the applicant sought leave to amend the application so that the applicant sought orders that the respondent pay the applicant the sum of $110,742.50 for the cost of repairing defective building works pursuant to s18B of the Home Building Act 1989, cost and any other order the Tribunal thinks fit. .
No formal order was made by the Tribunal to grant leave to amend the application.
The parties informed the Tribunal that the matter was resolved between the parties at an onsite Conclave on 12 September 2014.
The applicant and the respondent now make applications for costs.

Parties

Both parties were granted leave by the Tribunal to be represented by and are represented by solicitors.

Submissions

Pursuant to an order of the Tribunal made on 23 October 2014 the respondent was directed to file and serve submissions as to costs on or before 6 November 2014 and the applicant file and serve her submissions on or before 20 November 2014.
The respondent filed his submission on 24 November 2014 out of time.
The applicant filed her submission on 5 November 2014.
The applicant objected to the late filing and serving of the respondent's submissions. Notwithstanding the respondent's failure to comply with the Tribunal direction the Tribunal granted leave for the submissions to be relied upon by the respondent.
On 11 December 2014, both the applicant and the respondent were directed by the Tribunal to file further written submissions as to quantum of their respective costs by 18 December 2014.
The Tribunal has taken into consideration the oral submissions made at the hearing of the costs application on 11 December 2014 and the written submissions of both parties.

Applicant's submissions

The applicant submits that there are sufficient circumstances to warrant an award of costs in favour of the applicant as follows: 1. At the first return date of the application the respondent appeared by his solicitor without leave to appear being sought or granted. The applicant was then in a position where she felt she needed to be legally represented in case her position was prejudiced by the legal representation of the respondent. 2. She submits that having to do so "goes against the very nature of the principal [sic]" of s36 of the CATA. 3. Throughout the conduct of the matter notwithstanding the applicants compliance with the directions of the Tribunal, the respondent was tardy in his response, particularly demonstrated by a cost order being made against the respondent for costs thrown away for a directions hearing on 4 June 2014. 4. Following the Conclave the applicant regards that she has had a level of success in the proceedings as the result is vindication for the pursuit of the matter to have the respondent acknowledge the existence of the defects in the building. 5. The respondent conducted his response to the application in a manner that disadvantaged the applicant. 6. The applicant submits that the invoices tendered by her from her solicitors are evidence of the cost of the proceedings to her and that she claims the sum of $28,071.29 inclusive of expert reports and legal costs. 7. The applicant submits that there are special circumstances to justify an order for costs pursuant to s60 of the CATA. 8. As to the costs thrown away on 4 June 2014 in which the applicant already has an order, the applicant submits that costs of that day were $962.50 on the basis of a submission from the bar table by her solicitor with a receipt for that amount tendered by the applicant's solicitor in the submissions filed 17 December 2014. The Tribunal notes no invoice was tendered with the receipt.

Respondent's Submissions

The respondent opposes an order for costs against him in favour of the applicant and submits he is entitled to an order for costs against the applicant and that: 1. The applicant conducted the proceedings in such a way a that it it unnecessarily disadvantaged the respondent , by making a claim initially for not having to pay $135,184.00, then varying the claim to $110,742.50 as damages for defective building work when she knew or ought to have known that the proper amount of her claim was about $10,000. 2. In varying the claim, the applicant prolonged the proceedings contrary to S60(3)(b); 3. such claim having no tenable basis at fact or law for the purposes of s69(3)(c); 4. relevantly to s60(3)(d), the applicant's changing claim increased the nature and complexity of the proceedings; 5. The large gap between the amount claimed and the amount for which the matter was resolved allows a conclusion to be drawn that the proceedings were frivolous, vexatious and made for an improper purpose, misconceived or lacked substance contrary to s60(3)(e). 6. The applicant has failed to comply with her duty under s36(3) 0f CATA to facilitate the just quick and cheap solution to the real issues in the proceedings. 7. The respondent submits that he attempted to arrange mediation however, that approach was rejected by the applicant. 8. The claim grew from a claim of more than $6,000.00 when the applicant first sent to the respondent a letter of demand dated 13 October 2013. Then the claim was increased to nearly $130,000 and propelled the proceedings to a different level than they would have been had the claim been as first mooted by the applicant. The effect was: 1. The costs incurred by both parties flow from the claim of nearly $130,000 being of an amount for which ordinarily leave is granted for legal representation as opposed to a claim in the vicinity of $10,000 being a quantum for which leave is not ordinarily granted for legal representation; 2. The disparity in the applicant's expert assessment of the defects and the respondent's expert assessment is such that the respondent was put to the test in preparation for readying the defence to the claim; 3. Such a variation being so great as to deflect away from the prospects of alternative dispute resolution having any chance of resolving the matter. 4. The abandonment by the applicant's expert witness of a large amount of the claim served the applicant poorly; 1. Under those circumstances the respondent seeks its costs to be paid by the applicant in the amount of $13,250.00 and the respondents expert witness fees to be paid in the amount of $7,317.70 a total of $20,367.70. 2. In response to the quantum claimed by the applicant for the costs of 4 June 2014 the respondent submits that the appropriate costs should be $440.00. 3. That the way the applicant conducted the proceedings unnecessarily disadvantaged the respondent by exposing it to unnecessary costs and expenses; 4. The applicant's withdrawal of proceedings does not amount to special circumstances, as she: 1. Did not conduct the proceedings o disadvantage the respondent; 2. The claim has a tenable basis in fact and at law; 3. There is insufficient complexity to warrant a costs order; 4. The proceedings were not frivolous, vexatious, otherwise misconceived or lacking in substance. 1. The claim by the respondent of the stress he suffered because of the applicant's proceedings are denied: 2. the licence issues of the various entities;; 3. the applicant has suffered stress caused by the defective works 4. The applicant denies that the respondent invited her to withdraw her claim at any stage during the proceedings. 5. To impose a cost order would be unjust. 6. Having regard to the applicants submissions she further submits that there are no special circumstances that enliven the power to make a costs order.

Applicants claim for cost

Curiously, at the time of filing the application the quantum of the claim was that the applicant sought relief from having to pay the respondent $135,184.00. After the applicant instructed solicitors a variation to the claim seeking orders against the respondent for $110,742.50 as damages for defective building work.
The claim is at that stage within the purview the discretion of Rule 38 of the Tribunal Rules.
However, the amount for which the matter was settled was an amount, had it been claimed initially, such that the general provisions as to costs would apply under s60 and costs would only be awarded if special circumstances applied.
The Tribunal having considered the manner in which the applicant conducted the proceedings is satisfied that the general rule as to costs in the Tribunal under s60 should be applied to the applicant seeking an order for costs against the respondent.
The applicant submits that special circumstances are relevant to the claim that construe against the general principle that each party pay their own costs in accordance with s60 (1). However, to do so she must satisfy the Tribunal that it can find special circumstances apply and in doing so satisfy the criteria of s60(3).
The Tribunal has considered the applicants submissions and is not satisfied that the applicant has established that special circumstances apply.
In Doula Spirit Pty Ltd v Argyrou [2014] NSWCATCD 227 Senior Member Smith dismissed an application for costs as he was not satisfied that "special circumstances that warrant an award of costs" arose. He referred to McHugh J's decision in Latoudis v Casey [1990] 170 CLR 834 where he said "The rationale of the order is that it is just and reasonable that the party who caused the other party to incur 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". Senior Member Smith goes on to state that although it is universal practice for courts to award costs to a successful party, that does not apply in the Tribunal due to the operation of s60(1) unless there are no special circumstances.
As such, as to the applicant's application for costs, it is dismissed so that intent of the general principle of s60(1) applies and the applicant is to pay her own costs.
As to the quantum of the costs order made by the Tribunal on 4 June 2014 in favour of the applicant against the respondent, the Tribunal is presented with a claim by the applicant for $962.50 and the respondent concedes $440. The Tribunal assesses those costs to be $750.00.
The respondent is ordered to pay the amount of $750.00 within 14 days of the publication of these orders to the applicant for the costs of the hearing thrown away on 4 June 2014.

Respondents claim for costs

In his claim for costs against the applicant, the respondent's submissions address the Tribunal's discretion to consider a costs order in relation to special circumstances of s60.
The Tribunal retains discretion even if special circumstances are present.
Having found that the applicant has failed to establish special circumstances in compliance with the criteria in s60(3) the Tribunal is now not satisfied that they are present in the respondent's defence of the application despite the respondent's particularisation of circumstances that he agitates support his contention.
Accordingly, the Tribunal refuses the respondents application for costs against the applicant to the intent that the respondent should pay his own costs in accordance with the general principle of s60(1). P Boyce Senior Member Civil and Administrative Tribunal of New South Wales 29 April 2015

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 July 2015

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Judgment (9 paragraphs)

Parties

Cases Cited (1)