CANBERRA INSULATION SPECIALISTS PTY LTD v DEVARAPALLI & ANOR

2. The respondents are to pay, on an indemnity basis, the following costs of the applicant: (a) 100% of the costs arising from the conduct of the hearing on 28 February 2025 (b) 100% of the costs arising from the hearing conducted on 4 April 2025.

3. Costs are to be calculated at the Supreme Court scale.

4. Costs should be agreed. 5. If the parties are unable to reach agreement as to costs within 28 days of the date of this order: (a) the applicant is to file and serve a bill of costs using the form provided in the Court Procedures Rules 2006; (b) the respondent is to file and serve a document setting out any objections to the bill within 7 days of service of the bill; (c) the parties are to participate in a conference at a time and place directed by the ACAT Tribunal Registrar; (d) the Tribunal Registrar is to consider the bill and any objections and make a recommendation to the original Tribunal about the amount of costs to be paid under Order 2 of these Orders. The original Tribunal shall consider the recommendation of the Tribunal Registrar and make an order as to the amount of costs to be paid under order 2 of these orders; and (e) in the event that the Tribunal Registrar’s conference fails to achieve a recommendation, the matter is to be relisted before the original Tribunal, which will consider the information provided pursuant to orders 4(a) and (b) above and make an order as to the amount of costs to be paid under order 2 of these orders.

……………………………….. Member M Hanna REASONS FOR DECISION Background

1. This matter concerned a contractual dispute whereby the applicant claimed the respondent had failed to pay in full the sum it owed for goods and services delivered.

2. The applicant filed a Civil Dispute Application on 29 August 2024 seeking payment of a debt.

3. The respondents ultimately counterclaimed that the services were not performed properly, that they should be refunded in full and compensation granted for damages they say were caused by the applicant in the course of delivering the services should also be awarded to them in a claim amounting to nearly $40,000.

4. Despite being filed on 29 August 2024, the matter did not ultimately make it to final hearing effectively until 4 April 2025. This was at least partly due to issues related to the response and delays as to whether a counterclaim was going to be filed.

5. Rule 107 of the ACT Civil and Administrative Tribunal Procedures Rules 2020 ("the Rules") states that “a respondent must lodge a response to a civil dispute application within 21 days after the application is served”. Rule 112 (2)(d) requires any counterclaim to be lodged at the same time as the response (or at another time allowed by the Tribunal).

6. The respondents filed a response within the prescribed time limit but did not file a counterclaim.

7. On 23 October 2024, the Tribunal made orders including an order granting leave to file a counterclaim out of time (emphasis added): The Respondent must give to the Tribunal and to the applicant, by Wednesday 20 November 2024 at 4pm: a) An updated response that replies to the amended application, includes any counterclaim (pay the filing fee) and setting outlining the orders the respondents seek; b) If the respondents file a counterclaim, a written submission setting out the factual and legal basis for the counterclaim by reference to the contract terms and other relevant material.

8. On 20 November 2024, the respondents filed an updated response but did not file a counterclaim. The respondents submitted that they did not intend to file a counterclaim with the Tribunal, stating the following at paragraph 51(g)(viii) of their submissions filed that day: Respondents will lodge a claim in the Magistrate court as was advised by the applicant's lawyer in his email correspondence dated 8 Dec 2023. (sic)

9. On 26 November 2024, following a conference between the parties, the Tribunal made orders setting the matter down for a final hearing on 28 February 2025. The Tribunal did not grant further leave to file a counterclaim.

10. On 17 December 2024, the applicant’s legal representative wrote to the Tribunal and to the respondents to seek clarification whether a counterclaim was no longer in issue. The respondents did not reply to this email nor provide any clarity to the applicant or the Tribunal. The respondents did not advise the applicant or the Tribunal whether they intended to file a counterclaim. The applicant has submitted it relied on the respondents’ submission of 20 November 2024 that the respondent would file a claim in the Magistrate’s Court and therefore was misled and forced in this matter to ultimately incur costs it would not have otherwise.

11. On 17 February 2025, six months after the application had been filed in August 2024, the respondents filed a counterclaim seeking compensation totalling $28,423.85. The counterclaim comprised approximately 180 pages of substantially new material and since that date the respondents filed further material with the Tribunal totalling approximately 400 pages.

12. Later, on 17 February 2025, the applicant wrote to the Tribunal seeking orders be made in chambers to dismiss the counterclaim and/or to vacate the existing listing date, citing a denial of procedural fairness. On 18 February 2025, the Tribunal declined to make any orders in chambers.

13. On 28 February 2025, the final hearing initially commenced before this Tribunal. The Tribunal sought clarification from the parties as to whether they agreed to proceed in the matter exceeding the ACAT Civil limit of $25,000 in accordance with Section 21 of the ACT Civil and Administrative Tribunal Act 2008 (“ACAT Act”).

14. The applicant submitted it had relied on the respondents’ submission of 20 November 2024 that the respondent would file a claim in the Magistrate’s Court, had therefore been misled and forced to ultimately incur costs it would not have otherwise.

15. The applicant made a verbal application for costs of the proceedings pursuant to section 48(2)(b).

16. As proceedings continued it became evident that the respondents were unaware of legal cost implications being put to the Tribunal by the applicant in light of the counter claim and the respondent’s delays, especially as to how this could affect them should they lose the proceedings. The Tribunal adjourned proceedings to allow the respondents, who were unrepresented legally, to seek legal advice on both costs and whether they intended to continue with their counterclaim exceeding the ACAT civil threshold of $25,000. A decision on the applicant’s cost application was reserved.

17. It should also be noted that I gave the parties another chance to settle the matter on 28 February 2025 when the applicant suggested it was prepared to and made an offer. Despite discussions at that time, no settlement was reached and the matter was adjourned so that the respondents could get legal advice and for the applicant to be able to fully prepare for a final hearing based on all the material before it.

Issues

18. The Final Hearing resumed on 4 April 2025.

19. The respondents confirmed they had sought legal advice. The parties confirmed that they agreed to run the proceedings on the basis of an agreement under Section 21 of the ACAT Act to proceed in excess of the civil limit of $25,000.

20. The fundamental issues in dispute were: a) When was the contract formed between the parties? b) Were the terms and conditions of that contract part and parcel of the original quotation given to the respondent? c) Did the respondents owe a debt to the applicants as a result of the work undertaken by the applicant on site? d) Did the applicant in the course of delivering the goods and services contracted, cause damage to the respondents by leaving defects and does that allow the respondents to not make payment for the contract in full and receive further compensation? e) If the counterclaim fails, does the applicant have a claim for legal costs and if so, should they be awarded indemnity costs as the applicant claims?

Evidence

21. In addition to the detailed written submissions, the parties called Mr. J Watson (for the applicant) and Mr Kiran Kumar Devarapalli (the first respondent) to the stand to give sworn evidence and be cross-examined.

The Contract and terms of contract

22. The first issue was to determine the date, nature and terms of the contract the parties agreed on. Both parties agreed that the respondents first contacted the applicant and sought a quote on 17 February 2022 and that the applicant supplied a detailed quote with terms and conditions attached on 24 February 2022. Both parties agreed that the ultimate scope of works agreed on was supplied by the applicant on 29 July 2022.

23. The applicant’s position was that the terms and conditions first supplied on 17 February 2022 were part of the ultimate contract despite not being literally attached to the final amendment of the scope of works given and accepted by the respondents. In the words of the applicant: There was a quotation issued on 24 February. The applicant honoured the prices contained in that quote throughout a series of amendments. There was no material variation to the price of the works. The only variations were made to the change of the scope at your request, and that the original quote provided to you on 24 February 2022 clearly contained the terms and conditions of trade and that each subsequent quote provided to you either those terms and conditions attached or referenced those terms and conditions where it stated that you agree to make payment in accordance with the conditions contained in the original quote.

24. The applicant pointed out that at clause 2.1 of the terms and conditions it states: The client is taken to have exclusively accepted and is immediately bound jointly and severally by this terms and conditions if the client places an order for or accepts delivery of any works.

25. And that at 2.3 it reads: Any amendment to the terms and conditions contained in those contract may only be amended in writing by the consent of both parties.

26. The respondents argued that the various changes in the scope of works meant that only the terms attached to the ultimate scope of works accepted were valid. Consequently, because the ultimate scope of works which the parties agreed on, on 29 July 2022, did not have the attached terms and conditions to the updated scope of works document, that the terms and conditions that had been expressly supplied at the start of the quotation were null and that the only terms that were connected to the contract were those implied terms contained in statute.

27. In the view of the Tribunal, the respondents’ argument fails because it specifically ignores: (a) the fact that the same terms and conditions were supplied on at least two occasions; (b) that the document that formed the final contract was materially similar to the proposal first sent on 24 February 2022 (which contained the written terms and conditions) except that on the request of the respondents, an updated quote with a revised scope of works, responding to a request for such a discount from the respondents, was supplied; (c) whilst the scope of works did change, the number on the quotation remained constant throughout the process; (d) there was no discussion whatsoever of any other terms or conditions by either party; (e) Terms 2.1 and 2.3 of the Terms supplied at the very origin of the contract formation make it clear that the terms supplied then are the terms for any works undertaken. (f) At page 38 of the quote that the respondents indicate is the quote they accepted and which forms the contract states: “Conditions provided for on the original quote”.

28. The applicant submitted that the terms were expressly part of the agreement between the parties. It would seem based on the evidence that this is the case, but even if the argument was made that the terms and conditions were implied to be part of the contract, this Tribunal finds it impossible to resist the argument that the terms and conditions, first enclosed within the quotation and scope of works of 24 February 2022, did form part of the varied contract ultimately formed on 29 July 2022 and were that contract’s terms and conditions. Sum owed on contract not paid

29. That the respondents had failed to pay the final sum of $4,765.45 to the applicant was not in dispute. The respondents however argued that it should not be paid as the applicant had left defects in their work which meant that they had failed to fulfil their contract and that therefore the respondents should be refunded and paid compensation.

30. The applicant argued that even if there had been defects, where services are rendered subject to consumer guarantees, such guarantees oblige the applicant not to waive any part of the contract sum but to remedy any defect associated with the works or services provided. They argued that the respondents’ claim is contingent on the respondents having complied with the requirements of the Australian Consumer Law (“the ACL”) by giving the applicant reasonable opportunity to remedy any defects associated with the goods or services. Contrary to the ACL, the applicant argued they had not been provided the opportunity to rectify any defects associated and that there are no provisions within the ACL that allow for the respondents to seek damages or financial recompense where the applicant has not been give satisfactory opportunity to address the concerns.

31. Further to those submissions, the applicant argued that the alleged defects were not defects at all and that the respondents were attributing fault to the applicant for a number of works that weren’t carried out by the applicant.

32. One of the primary defects alleged was the applicant was responsible for “nuisance tripping” in the respondents’ home subsequent to the works undertaken.

33. In the course of giving evidence however, the first respondent was asked: Mr Bryant: I’m asking you were you aware on 24 February, were you made aware that the derating of circuits in your premises, which is a requirement of the insulation refit…that this would increased the risk of nuisance tripping in the premises? Yes or no. 1 Witness K Devarapalli: Yes.

34. The first respondent goes on to allege that they were not made aware that nuisance tripping will only be handled at an additional cost. However, the applicant refers him to the retrofit guide supplied on 24 February and puts it to Mr Devarapalli 2 that, “You were made aware of that on the 24 February. Is that right?” 3

35. The witness replied: “Through the retrofit guide, yes.”

36. The applicant continued to press the point. He highlighted that a video had been linked to the original offer which further dealt with issues of nuisance tripping and compliance which formed a second document providing the applicant with the data on electrical compliance and cost involved. The first respondent admitted this was so.

37. The applicant pressed the issue further: Mr Bryant: Mr Devarapalli I don’t want to labour the point too much but let me take you to page 24 of the retrofit guide annexed to your witness statement. You’ve just given evidence to the Tribunal that the retrofit guide stated that nuisance tripping would be avoided when in actual fact the guide states that the likelihood of nuisance tripping would be increased as a consequence… It advises you that nuisance tripping – the likelihood would 4 be increased. Is that correct?

38. Ultimately Mr Bryant puts it to the first respondent: Mr Bryant: Mr Devarapalli I will put it to you that there is a series of multiple oversights by you in which you failed to read the information in the retrofit guide concerning the derating of circuits and the increased 5 likelihood of nuisance tripping. That is correct, isn’t it?

39. Ultimately the first respondent admits: Mr Devarapalli: Details of invoice, I have read them – what do you call – the lines, but I didn’t compare it with the previous quotes. That was my 1 Transcript of hearing dated 4 April 2025, page 40 2 Transcript of hearing dated 4 April 2025, page 28 3 Transcript of hearing dated 4 April 2025, page 29 4 Transcript of hearing dated 4 April 2025, page 34 5 Transcript of hearing dated 4 April 2025, page 46 mistake. That why I said – like, I partially admitted because it’s partially 6 my fault.

40. On the basis of the above data, the Tribunal finds that the contract was formed as submitted by the applicants and that the respondents owed the applicant $4,765.45 for services rendered.

The Counterclaim

41. The basis of the counterclaim filed was that defects existed that were not corrected and on that basis the fees paid should be refunded and compensation should also be paid to the respondents.

42. The applicant asked the respondents: Mr Bryant: Mr Devarapalli, do you understand the difference between 7 works that are incomplete and works that are defective?

43. Having examined the difference, the applicant confirmed with the first respondent that the primary defects that the respondents relied on were as at page 32 of his witness statement namely, “a damaged duct, bulb is pending and power trip-offs”.

44. Over the course of the cross examination of Mr Devarapalli, the applicant effectively puts it to the respondents that these three issues were either fully rectified by the applicant or that arrangements were repeatedly made by the applicant to do so but “the efforts were rejected because you felt the proposed 8 solution was not to your satisfaction.” 9

45. The first respondent admitted that he “rejected [repairs] it a third time”.

46. Ultimately, the applicant put to the witness: Mr Bryant: Now, I put it to you Mr Devarapalli we’ve just gone over a reasonable amount of evidence that the indicates that the applicant made every endeavour not only to repair your air conditioning unit or the damaged duct which was one of the three main concerns you’ve raised but they were also willing to use your preferred supplied and repairer at their

6 Transcript of hearing dated 4 April 2025, page 47 7 Transcript of hearing dated 4 April 2025, page 49 8 Transcript of hearing dated 4 April 2025, page 50-65 9 Transcript of hearing dated 4 April 2025, page 60, line 9 cost in order to ensure that you were satisfied with the outcome. Do you accept that? 10 Mr Devarapalli: Yes.

47. Ultimately the first respondent admits that the three defects the respondents had claimed compensation for were either repaired or that the applicant had sought to make appointments to have the matters repaired and that ultimately the problems with the tripping circuits was caused by shoddy electrical work prior to the 11 engagement of the applicant.

48. Under questioning from the Tribunal, it became clear that the respondent made repeated assumptions regarding what he had read and misunderstood in the 12 applicant’s documents. The first respondent gave examples to the Tribunal from the retrofit guide – such as “where tripping occurs, we simply run a new cable with a higher temperature rating to the kitchen power points. That allows us to 13 install a larger fuse on that circuit.”

49. On the basis of statements such as these he testified that he relied on the applicant doing this for free. Yet he could point to nothing in any documentation or any statement from an applicant representative where this had been promised or even implied. When, as it has already been pointed out by the applicant, the tripping was being caused by work not done by the applicant but, it is hard to see why such work would be free unless stated to be so.

50. The Tribunal is forced to conclude then that the cross claim filed by the respondents is based on misunderstandings and assumptions of the contract, the actual circumstances they found themselves in and the law. The relief under the ACL that the respondents sought may well be accessible if the applicant had refused to fix its work and had left defects in place. The evidence before the Tribunal indicates this is not the case.

10 Transcript of hearing dated 4 April 2025, page 65 11 Transcript of hearing dated 4 April 2025, pages 71-76 12 Transcript of hearing dated 4 April 2025, pages 83-84 13 Transcript of hearing dated 4 April 2025, page 83, line 44 General Principles as to Costs

51. Costs are intended primarily as compensation for the successful party, not punishment for the unsuccessful party.

52. Costs awards are said to rely upon the principle that a successful party is entitled to compensation for at least some of the expenses to which they have been put by reason of the litigation.

53. An award of costs is not intended to be a comprehensive compensation for all costs incurred by the successful party: what is compensated are the legal costs including disbursements incurred by the successful party in vindicating its legal rights. It does not compensate for the disruption, distress or other financial costs 14 that may have been associated with the litigation.

54. Where there is a statutory conferral of the power to award costs, courts and tribunals exercise discretion. That discretion is absolute and unfettered unless 15 constrained by statute. It must be exercised judiciously, not arbitrarily.

Costs in ACAT

55. Sections 48 and 49 of the ACAT Act provide: 48 Costs of proceedings (1) The parties to an application must bear their own costs unless this Act otherwise provides or the tribunal otherwise orders. (2) However— (a) if the tribunal decides an application in favour of the applicant—the tribunal may order the other party to pay the applicant the filing fee for the application; or (b) if the tribunal considers that a party to an application caused unreasonable delay or obstruction before or while the tribunal was dealing with the application—the tribunal may order the party to pay the reasonable costs of the other party arising from the delay or obstruction; or (c) subject to section 49, if a party to the application contravenes an order of the tribunal—the tribunal may order the party to pay the costs or part of the costs of the application to the other party; or

14 David Bamford, Principles of Civil Litigation, (Lawbook, Co 2010) at [11.60] 15 David Bamford, Principles of Civil Litigation, (Lawbook, Co 2010) at [11.50] (d) if the application is an application for review of a decision under the Heritage Act 2004, the Planning and Development Act 2007 or the Tree Protection Act 2005, and the tribunal makes an order under section 32 (2) (Frivolous and vexatious applications)—the tribunal may order the applicant to pay the reasonable costs of the other party arising from the application. (3) For subsection (2) (d), reasonable costs of the other party arising from the application include reasonable legal costs but do not include holding costs. Examples—holding costs interest and lender imposed charges associated with a loan costs of engaging workers and subcontractors and hiring equipment for a development Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132). 49 Costs for contravening an order (1) The tribunal may award costs against a party for contravening an order under section 48 (2) (c) only if satisfied that it is in the interests of justice to do so. (2) In deciding whether it is in the interests of justice to award costs, the tribunal must consider the following: (a) whether the contravention was deliberate or could easily have been avoided; (b) whether (and if so, the extent to which) the contravention has affected the tribunal’s ability to hear the application promptly; (c) the importance to the community of people being able to afford to bring applications to the tribunal. (3) The tribunal may consider any other relevant matter. (4) Costs are payable in accordance with the scale of costs in the rules under the Court Procedures Act2004 applying in relation to the Supreme Court

56. Section 48 (1) of the ACAT Act provides the Tribunal with a starting point or presumptive rule that each party must bear their own costs. That presumptive rule is qualified by the proviso unless this Act otherwise provides. The ACAT Act does otherwise provide in section 48, subsection (2) and section 49. The departure from the presumptive rule permitted in subsection (2) and section 49 is prescribed, limited and, for the most part, generally speaking, relates to the conduct of a party to the proceedings. The concluding words of section 48 (1), or the Tribunal otherwise orders, confers upon the Tribunal a discretion which may be exercised in accordance with section 48 (2) and section 49 of the ACAT Act.

57. In CIC Australia Ltd v ACT Planning and Land Authority; Mainore Pty Ltd and ACT Civil and Administrative Tribunal [2013] ACTSC 96 Justice Penfold considered the interpretation and application of section 48 of the ACAT Act. Her Honour concluded that section 48 confers a narrow costs power on the Tribunal, being the power to make the order specified in section 48 (2) and only in the 16 circumstances specified in that provision .

58. The Tribunal must then determine what is meant by section 48(2)(b): if the Tribunal considers that a party to an application caused unreasonable delay or obstruction before or while the Tribunal was dealing with the application, the Tribunal may order the party to pay the reasonable costs of the other party arising from the delay or obstruction.

59. Legislative provisions of this kind cover the manner of pursuit of the litigation and the conduct of the matter, including persistence in a hopeless line of argument, a refusal to make a concession that clearly should be made, or deliberate failure to comply with procedural directions. Such provisions do not contain a power to award costs to successful parties as a matter of course, nor do 17 they contain a power to award indemnity, as distinct from party and party costs .

60. An award of costs does not automatically follow an outcome in the tribunal. There must be factors evident in the matter, or in the manner in which the matter was conducted, which would justify the Tribunal moving from the presumption that each party bears their own costs.

Unreasonable delay or obstruction before or while the Tribunal was dealing with the application

61. The ACAT Act does not provide guidance as to what type of conduct would fall within ‘under reasonable delay or obstruction’. Neither the second reading speech nor the explanatory memorandum for the ACT Civil and Administrative Tribunal Bill 2008 provide any guidance to Tribunal members in the determination of

16 CIC Australia Ltd v ACT Planning and Land Authority; Mainore Pty Ltd and ACT Civil and Administrative Tribunal [2013] ACTSC 96 at [82] . 17 JRS Forbes, Justice in Tribunals, third edition, The Federation Press, 2010, at 16.64 whether an award of costs should be made. The Tribunal therefore examines case law which may assist in making such a determination.

62. In Jarrad v Santamaria [2005] SASC 196 the court, considering a provision which allowed an award of costs where one party had acted ‘in bad faith or 18 unreasonably’ , awarded costs against an unsuccessful applicant where the evidence did not support the assertions made in the application, the affidavits contained significant hearsay and the unsatisfactory and misleading nature of the evidence was such as to lead to the conclusion that the proceedings were brought unreasonably.

63. In White Industries (Qld) Pty Ltd v Flower & Hart [1998] FCA 806 the Federal Court considered the issue of whether solicitors acting for a party where proceedings were commenced with no or substantially no prospects of success, should be liable for costs. The court noted that the courts must be open to any party who claims that he or she has been wronged and seeks to vindicate a right to compel the enforcement of an obligation. The court noted that: the authorities do not support the proposition that simply instituting or maintaining a procedure on behalf of a client which has no or substantially no prospect of success would invoke the jurisdiction [to award costs]. There must be something more namely, carrying on that conduct reasonably. It is not clear what is encompassed by “unreasonably” initiating or continuing procedures if they have no or substantially no chance of success. It seems to me that it involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success with either a recognition that there is no chance of success but an intention to use the proceedings for an ulterior purpose or with a disregard of any proper 19 consideration of the prospects of success.

64. The court also noted that bringing litigation in relation to the same matter on several occasions is potentially vexatious and may amount to an abuse of process. The court stated: the concept of “abuse of process” in this context involves a party using court proceedings and procedures for a purpose unrelated to the objectives which the court process is designed to achieve. The concept of “abuse of process” was considered by the High Court in Williams v Spautz (1992) 174 CLR 509. The decision makes it clear that: “central to the tort of abuse of process is a requirement that the party who has instituted the 18 Section 189 (2a) of the Summary Procedure Act 19 White Industries (Qld) Pty Ltd v Flower & Hart [1998] FCA 806 (14 July 1998), at page 76 proceedings has done so for a purpose or to effect an object beyond that which the legal process offers…. It is the predominant purpose of the litigation which is the relevant criterion and it is not necessary for the improper purpose to be the sole purpose of the litigation before abuse of process can be established.

65. The Federal Court noted the case of Goldsmith v Sperrings Ltd [1997] 1 WLR 478, where it was stated that court proceedings may not be used for the purpose of obtaining some collateral advantage to the applicant. It was noted, however, that if it could be shown that a litigant was pursuing an ulterior purpose unrelated to the subject matter of litigation and that, but for his ulterior purpose, he would not commence proceedings at all, then this is an abuse of process.

Application of discretion in this matter

66. ACAT is primarily a ‘no cost’ jurisdiction. This is consistent with the stated purposes of ACAT set out in sections 6 and 7 of the ACAT Act: that the procedures of ACAT should be as simple, quick, inexpensive and informal as is consistent with achieving natural justice and observing procedural fairness. Section 48 makes it clear that parties in ACAT should bear their own costs unless the Tribunal orders otherwise; where one party has caused unreasonable delay or obstruction before or while ACAT is dealing with the matter, then ACAT may make an order for costs. It should be noted that such a costs order is confined to those costs which arise from the unreasonable delay or obstruction or where a matter is considered frivolous or vexatious.

67. Unreasonable delay or obstruction can arise from the manner in which the party conducts their case and would encompass bringing an unmeritorious action, where the bringing of an action amounted to bad faith or abuse of process. Bad faith may be demonstrated by: (a) unsatisfactory evidence, that is where the assertions of the party are not supported by any evidence which is relevant, reliable or probative; (b) where a party commences an action for a primary motive not related to the legal issues; (c) where a party commences multiple actions based upon the same or largely similar facts; (d) where the proceedings had no chance of success, and the applicant knew that; and (e) conduct of a party during the time the Tribunal is dealing with the matter where that conduct is not properly related to the progress of the matter.

Applicant’s submissions on costs

68. Having noted those factors in costs, it is hard to ignore the submissions of the applicant in relation to costs arguing that the Tribunal justify a departure from the presumptive rule that each party bear their own costs.

69. The applicant submitted that the Tribunal ought to make the orders sought under section 48(2) of the Act on the basis that the respondents: (a) failed to comply with the rules and the tribunal's orders with respect to the time for lodgement of the counterclaim; (b) misled the applicant and the tribunal by making submissions that a counterclaim would be filed in another jurisdiction; (c) failed to take the opportunity to advise the applicant and the tribunal that a counterclaim would be filed in the tribunal, when the applicant had emailed all parties on 17 December 2024 seeking clarification; (d) caused the applicant to throw away substantial legal costs; and (e) caused the tribunal to waste valuable taxpayer resources in convening a final hearing that could not proceed. (f) that on 29 July 2022, the applicant and respondents entered a binding contract for the provision of goods and services. The conditions of the contract are particularised in the document entitled "Canberra Insulation Specialists Pty Ltd T/A Alexander Watson Insulation - Terms & Conditions of Trade." ("Contract Terms") (g) that Clause 17.2 of the contract terms provides an enforceable basis for legal costs to be recovered on an indemnity basis, as the respondents have failed to make payment of the contract sum and the applicant has incurred costs and disbursements in recovering the debt: 17.2 If the Client owes AWi any money the Client shall indemnify AWi from and against all costs and disbursements incurred by AWi in recovering the debt (including but not limited to internal administration fees, legal costs on a solicitor and own client basis, AWi's contract default fee, and bank dishonour fees).

70. The applicant argued that by operation of clause 17.2 of the contract, the respondents are required to indemnify the applicant against all costs and disbursements incurred by the applicant in recovering the debt subject of these proceedings (including but not limited to internal administration fees, legal costs on a solicitor and own client basis).

71. The applicant submitted that it had incurred $40,920 in legal fees directly related to the recovery of the debt of $4,765.45, an enormous sum in comparison to the original debt.

72. The applicant attributed the intensification of legal fees to the respondents’ delay in filing a counter claim, filing it days before the final hearing was due to commence on 28 February 2025, the respondents’ unpreparedness for the final hearing on 28 February as well as the substantial (and in its view unnecessary) volume of documents filed by the respondents in what the applicant submitted should be considered a frivolous counterclaim. 20

73. The applicant relied on Credit Corp Services Pty Ltd v Adam, to support its application to recover interest and fees. The applicant continues to rely on Credit 21 Corp Services to the extent that it establishes good authority for the Tribunal to make orders for the recovery of those amounts separately to the entitlement to recover the primary debt. Also, as recent authority confirming the below cases.

74. However, the applicant submitted that the present case can be distinguished from Credit Corp Services on the basis that on 28 February 2025, the Tribunal made orders by consent of the parties such that the jurisdictional thresholds don't apply in any event; and that the terms of the contract in this matter provide a much broader indemnity than those considered in Credit Corp Services, permitting the recovery of legal fees on a solicitor an own client basis without the requirement

20 Credit Corp Services Pty Ltd v Adam [2024] ACAT 85 21 Credit Corp Services Pty Ltd v Adam [2024] ACAT 85 at [38]-[39] to assess reasonableness.

75. The applicant also relied on the decision in Trustees of the Roman Catholic Church for the Archdiocese of Canberra and Goulburn as Trustee for St Mary 22 Mackillop College Canberra v Kenningham, recognised that a party to a civil dispute in the Tribunal may recover legal costs and disbursements as a contractual debt. In that case, Presidential Member Symons made orders for the recovery of 23 reasonable legal expenses, having regard to the following matters: a) Matters going to the enforceability and content of the expenses clause, including: (i) Whether the Clause is sufficiently clear and particular to be enforceable, (ii) Is it clear and particular enough to include legal costs incurred in tribunal proceedings, (iii) Is it clear and particular enough to include costs on an indemnity basis, (iv) If not on an indemnity basis, is the Clause subject to a dual 'reasonableness' limitation and if so, would this require the Tribunal to impermissibly trespass on the Supreme Court jurisdiction to assess reasonableness of legal costs [...]

76. The applicant submitted that, having regard to the considerations above, there was clear evidence before this Tribunal to determine that clause 17.2 of the contract terms is: a) Sufficiently clear and particular; b) Is clear and particular enough to include legal costs incurred in tribunal proceedings; and c) Is clear and particular enough to include costs on an indemnity basis.

77. Presidential Member Symon's decision in Trustees of the Roman Catholic Church made clear that in considering such matters, the Tribunal must distinguish between contracts that provide a basis for the recovery of reasonable fees and/or costs, and those contracts that provide an unambiguous right to recover legal fees

22 Trustees of the Roman Catholic Church for the Archdiocese of Canberra and Goulburn as Trustee for St Mary Mackillop College Canberra v Kenningham [2017] ACAT 97 23 Trustees of the Roman Catholic Church for the Archdiocese of Canberra and Goulburn as Trustee for St Mary Mackillop College Canberra v Kenningham [2017] ACAT 97 at [14] on an indemnity basis. In that case, the relevant clause read: Each person signing below agrees: 2. I agree jointly and severally to pay all school fees, levies and charges incurred while my child is enrolled, including any expenses 24 incurred by the School as a result of late or non-payment.

78. The applicant submitted that Presidential Member Symons referred to the High Court decision of Australian Broadcasting Commission v Australasian 25 Performing Right Association Ltd (ABC v APRA) in which their Honours considered the proper construction to be given to the proviso to a clause in an agreement between the parties. The Presidential Member observed that this required construing a written contract and whether the words used were ambiguous. By a majority of 2:1 Barwick CJ and Stephen J found that the language was plain and unambiguous. Stephen J said: The approach of courts to the construction of such documents, when they contain no ambiguity nor any other patent error or omission cannot be 26 other than that of an uncritical rendering of the meaning of the text.

79. The applicant noted that Presidential Member Symons also had regard to an 27 earlier tribunal decision of Trpkovski v Williams Love Nicol Lawyers Pty Ltd (Trpkovski), observing: Having reached that conclusion the tribunal noted that costs are always a matter for the court or tribunal's discretion. That there may be a contractual basis for engaging a costs entitlement and an agreement to pay costs is a factor in informing the exercise of the tribunal's discretion but such an agreement cannot require the exercise of that discretion in a 28 particular way. That tribunal decided that the tribunal's jurisdiction did not provide a basis for assessing the reasonableness of the fees charged and that the tribunal's jurisdiction was limited to addressing the 29 contractual relationship between the parties

80. Their submissions continued, “Although recognising Trpkovski as good law, Presidential Symons ultimately determined that the clause in question in Trustees

24 Trustees of the Roman Catholic Church for the Archdiocese of Canberra and Goulburn as Trustee for St Mary Mackillop College Canberra v Kenningham [2017] ACAT 97 at [115] 25 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 26 ABC v APRA, page 115 27 Trpkovski v Williams Love Nicol Lawyers Pty Ltd [2014] ACAT 13 28 Chen v Kevin McNamara & Son Pty Ltd (No. 2) [2012] VSCA 229 29 Trpkovski v Williams Love Nicol Lawyers Pty Ltd [2014] ACAT 13 at [21] was not sufficiently clear that legal costs could be recovered on an indemnity basis, finding that: 42. The Tribunal finds that the Clause in the present matter does not entitle the applicant to recover expenses that have not been properly incurred and are not reasonable in amount. The Tribunal will consider this 'dual reasonableness' limitation below. 43. If the clause does not include costs on an indemnity basis, the applicant accepts that any legal costs to be awarded must have been reasonably incurred and be of a reasonable amount that is the dual 'reasonableness' limitation.

81. The applicant concluded that the same ambiguity is not present in this matter and that clause 17.2 of the contract terms is clear and that the Tribunal ought to award legal costs on an indemnity basis or a solicitor/ own client basis. Whereas the 30 subject clause in Trustees of the Roman Catholic Church referred to "expenses" in a general sense, the wording of the relevant provision in this case specifically and clearly states that an indemnity is created and that legal fees may be recovered on a solicitor an own client basis. Following ABC v APRA, the applicant submits that the Tribunal ought to follow the ordinary meaning of the terms.

Conclusions

82. The respondents’ submissions on costs can be crystallised to “Legal costs are not applicable for the below two reasons: (a) In the Tribunal, each party bears their own costs. (b) As mentioned in the submissions and during the hearing, there are no specific contractual terms or terms of trade in the agreed quote.”

83. I have dealt with the first submission that each side bearing their costs earlier in these reasons in detail. I have also reviewed the arguments as to why this matter can be an exception to the norm.

84. The respondents were self-represented and were allowed a great deal of latitude in the evidence, manner of presentation of their case and filing of material. However the Tribunal notes that a considerable deal of time was wasted bringing the matter to hearing considering that the application was originally filed on

30 Trustees of the Roman Catholic Church for the Archdiocese of Canberra and Goulburn as Trustee for St Mary Mackillop College Canberra v Kenningham [2017] ACAT 97 at [115] 29 August 2024 and it was only six months later that the respondents finally filed a counter claim. It is hard not to agree with the applicant that the respondents submitted largely unmeritorious arguments, irrelevant and non-probative evidence and accusations of wrongdoing against the applicant that did not stand the weight of evidence.

85. I agree with the applicant’s submissions on costs. The weight of case law supports them, as does the contract that the parties signed. In the circumstances, I am satisfied that there are circumstances or matters of sufficient weight which justify a departure from the presumptive rule that each party should bear their own costs. In all the circumstances, it is reasonable that the applicant should pay those costs of the respondents which arise from an unreasonable delay or obstruction caused by the applicant.

86. However, the applicant’s submissions lack a breakdown outlining how the costs were accrued, the hourly cost charged and a full breakdown so that the reasonableness of these costs can be assessed. The orders made seek to deal with that so that reasonable costs, can be properly assessed and awarded.

CORRECTED ORDER The Tribunal orders that: 1. Within 28 days of these orders, the respondents are to pay to the applicant the sum of $5,165.45 which consists of: a) $4,765.45 for goods and services received from the applicant. b) ACAT Filing fee of $366 c) Search fees of $34

2. The respondents are to pay, on an indemnity basis, the following costs of the applicant: a) 100% of the costs arising from the conduct of the hearing on 28 February 2025 b) 100% of the costs arising from the hearing conducted on 4 April 2025.

3. Costs are to be calculated at the Supreme Court scale. 4. Costs should be agreed.

4. If the parties are unable to reach agreement as to costs within 28 days of the date of this order: a) the applicant is to file and serve a bill of costs using the form provided in the Court Procedures Rules 2006; b) the respondent is to file and serve a document setting out any objections to the bill within 7 days of service of the bill; c) the parties are to participate in a conference at a time and place directed by the ACAT Tribunal Registrar; d) the Tribunal Registrar is to consider the bill and any objections and make a recommendation to the original Tribunal about the amount of costs to be paid under Order 2 of these Orders. The original Tribunal shall consider the recommendation of the Tribunal Registrar and make an order as to the amount of costs to be paid under order 2 of these orders; and e) in the event that the Tribunal Registrar’s conference fails to achieve a recommendation, the matter is to be relisted before the original Tribunal, which will consider the information provided pursuant to orders 4(a) and (b) above and make an order as to the amount of costs to be paid under order 2 of these orders.

……………………….. Member M Hanna Date(s) of hearing: 4 April 2025 Solicitor for the Applicant: Mr M Bryant, Bryant & Co Lawyers Respondent: Mr K Devarapalli (in person) Ms K Devarapalli (remote)

****************************************** Amendments 7 November 2025 Order 2 (a) Replacing “April” with “February” Page 22 Replacing “authorised representatives” for “Solicitor for the Applicant” Adding “Bryant & Co Lawyers”