Chahrouk v Bardouh

NCAT Appeal Panel|2024-12-10

Introduction

Our reasons for decision in this matter were published on 23 September 2024: Chahrouk v Bardouh [2024] NSWCATAP 181 (Appeal Decision).
For the reasons stated in the Appeal Decision, we refused to grant leave to appeal, with the consequence that the appeal was otherwise dismissed.
The respondent subsequently sought an order that the appellant pay her costs.
On 10 October 2024, we issued the following order and reasons: Order 1 The appellant is to file any submissions in opposition to the respondent's application for costs of the appeal within 14 days. Reasons The respondent has sought her costs of the appeal, relying on r 38A of the Civil and Administrative Tribunal Rules 2014 (NSW). Subject to receiving submissions from the appellant, the Appeal Panel proposes to make that order as the appellant was unsuccessful. The Appeal Panel proposes to deal with the question of costs on the papers (that is, without a hearing). If the appellant opposes that course he must address that issue in his submissions, which must be limited to three pages.
No submissions were received from the appellant in accordance with our order or at all.
For the following reasons, we order the appellant to pay the respondent's costs as agreed or as assessed in accordance with the applicable costs legislation.

Preliminary Issue

Neither party opposed us determining costs on the papers. As we are satisfied that the issue of costs can be adequately determined in the absence of the parties by considering their written submissions, we dispense with a hearing: Civil and Administrative Tribunal Act 2023 (NSW) (NCAT Act), s 50(2).
In this respect, we note that in Westerweller v The Owners Strata Plan No 18482 [2023] NSWCATAP 113, the Appeal Panel stated at [85] that: [i]t is the experience of the Appeal Panel that costs decisions in the Consumer and Commercial Division and on appeal (unless dealt with at the time of the hearing) are routinely considered "on the papers", and without a hearing. The parties were given an opportunity to provide written submissions and did so. They can be presumed to have included all relevant issues in their written submissions.

Issues to be determined

The following issues fall to be determined: 1. What is the relevant costs rule? 2. Is the respondent entitled to costs? 3. Should costs be awarded?

What is the relevant costs rule?

The starting point is s 60 of the NCAT Act which relevantly 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. …
However, r 38 of the NCAT Rules provides: 38 Costs in Consumer and Commercial Division of the Tribunal (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if-- (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10(2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000.
That means that the relevant costs rule in the proceedings at first instance was that found in r 38.
Rule 38A then provides: 38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the "first instance costs provisions" ) differed from those set out in section 60 of the Act because of the operation of-- (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
The appeal we heard was an internal appeal: NCAT Act, ss 4, 32.
The respondent submits that by reason of these matters the relevant costs rule is that found in r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules).
We agree.

Is the respondent entitled to costs?

In Culina v Timilty Constructions Pty Ltd [2022] NSWCATCD 109 the Tribunal stated: 89 Section 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (CATA), together with rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (the Rules), provide that the ordinary costs rules apply, even in the absence of special circumstances required by s 60, where "the amount claimed or in dispute in the proceedings is more than $30,000". 90 The threshold amount was exceeded in the owner's claim as finalised in evidence so the ordinary costs rules apply to these proceedings. 91 The starting point for exercise of costs discretion on the usual principles is that costs follow the event. "The event" is usually the overall outcome of the proceedings - did the successful party have to go to the Tribunal (in this case) to get what it achieved, rather than being offered at least that relief. If there are distinct issues on which the party seeking relief did not succeed, that may be taken into account in the exercise of costs discretion. Appeal Panel decisions have made no order as to costs (to the intent that each party paid its or their own costs) where there has been a measure of success on both sides: Johnson t/as One Tree Constructions v Lukeman [2017] NSWCATAP 45 at [25]-[29]; applied in Oppidan Homes PL v Yang [2017] NSWCATAP 67. 92 Costs will include the assessed or agreed amount for expenses on expert reports, unless those expenses have been claimed and allowed as damages. Here there was no evidence of the costs of expert reports so there is no present basis for including such expenses in damages or costs. 93 Costs are usually ordered on the ordinary basis as agreed or assessed, unless the parties tender material and/or make submissions that justify an award of costs on the indemnity basis as agreed or assessed, in whole or part.
Accordingly, as the respondent was the successful party, our preliminary view is that she entitled to her costs as agreed or assessed.
No argument to the contrary was made by the appellant.

Should costs be awarded?

All that said, any award of costs is discretionary. As the Appeal Panel stated in eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94: [37] It must be remembered that where a court or a tribunal is conferred with the discretion to award costs, such a discretion must be exercised judicially and not capriciously (Oshlack v Richmond River City Council (1998) 193 CLR 72 at 81). It must also be remembered that the fundamental rationale for the awarding of costs is that such an award is compensatory, not punitive: Latoudis v Casey (1990) 170 CLR 534 at 543; Oshlack v Richmond River Council (1998) 193 CLR 72 at 97. [48] … Further, the discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. Each situation must, of course, be assessed on a case by case basis …
And, as the Tribunal stated in Beecraft Pty Ltd v Tudor;Tudor v Beecraft Pty Ltd [2021] NSWCATCD 119: 127 When rule 38 applies there is a general discretion to award costs and it is well established, by decisions such as News v Cotes [2019] NSWCATAP 186, Bonita v Shen [2016] NSWCATAP 159 and Thompson v Chapman [2016] NSWCATAP 6, that: (1) the starting point is that the usual order for costs should be in favour of the successful party, (2) the award is not to punish the unsuccessful party but to compensate the successful party for the costs incurred in the proceedings, and (3) departure from the usual order is permissible if the circumstances favour that course of action. 128 Simply stated, when rule 38 applies it is not necessary to establish special circumstances and the usual order is that costs follow the event (ie follow the outcome of the case) unless there is disentitling behaviour by the successful party: Latoudis v Casey [1990] HCA 59, Oshlak v Richmond River Council [1998] HCA 11. When rule 38 applies, as was observed in Tom v Jenkins [2018] NSWCATCD 24 at [12], the successful party can be said to have a reasonable expectation of being awarded costs.
Given these principles, we consider that it is appropriate to order the appellant to pay the respondent's costs as agreed or as assessed.

Orders

Accordingly, the Appeal Panel orders: 1. A hearing is dispensed with. 2. The appellant is to pay the respondent's costs as agreed or as assessed in accordance with the applicable costs legislation.

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: 10 December 2024

Civil and Administrative Tribunal Act 2023(NSW)

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