On 3 February 2022 I made an order that the respondent immediately pay the applicant the sum of $21,210.00.
On 8 February 2022 I made directions for the filing of submissions on costs. The effect of these orders was that the respondent's costs submissions were due on 22 February 2022 and the applicants were due on 8 March 2022.
By a letter dated 16 September 2021 (sic) the respondent's solicitor wrote to the Tribunal (received in the Tribunal on 16 February by email and on 18 February 2022 by post) requesting a stay of the decision. The primary basis of the request was that NSW Fair Trading had written to the respondent threatening to suspend the respondent's licence if the amount ordered in the applicant's favour was not paid. In support of the request was the submission that the respondent was seeking the costs of the application against the applicant. The respondent stated that it should not have to pay the amount ordered because it had a claim for costs which exceeded the amount it was obliged to pay the applicant. A copy of its submissions on costs dated 16 February 2022 and an affidavit from Mr Ralph, a director of the respondent was enclosed with the letter.
Some other factors were mentioned by the respondent's solicitors, namely:
1. The respondent would not easily be able to recover the judgement from the owner because there 'is a real risk that the judgement sum will be dissipated or removed from the jurisdiction of the Tribunal pending the hearing of the costs application.'; and
2. 'There is a real risk or probability that the builder would be deprived of the fruits of their costs application if a stay is not granted due to the Owners strong connection to family in China.'
A Licence Suspension Warning issued by the Fair Trading Department was attached. Contrary to footnote 1 of the respondent's solicitor's letter, the Licence Suspension Warning gave no indication that there was a real risk or probability that the builder would be deprived of the fruits of its costs application if a stay was not granted due to the Owner having a strong connection to family in China.
In response to the respondent's solicitor's letter the Tribunal made the following directions on 17 February 2022:
'1. By 21 February 2022, the builder is to file and serve any submissions in support of the stay application, including but not limited to submissions addressing the Tribunal's power to stay a money order made under the Home Building Act 1989 in the absence of an appeal.
2. By 25 February 2022, the owner is to file and serve any evidence and submissions in response to the stay application.
3. By 1 March 2022, the builder is to file and serve any material in reply.
4. Subject to the parties' submissions on this point, the Tribunal proposes to dispense with a hearing and determine the application on the basis of the evidence and submissions provided.
5. The parties are strongly encouraged to have settlement discussions with a view to settling the issue of costs.'
I have not been provided with a copy of the respondent's submissions on the stay application which were to be filed on 21 February 2022. The applicant's submissions at [33a] suggest that no submissions were filed in accordance with the Tribunal's directions. I will proceed on the basis that the respondent relies on the material that I have referred to at [3].
On 25 February 2022 the applicant filed its submissions on the stay application. On 28 February 2022 the respondent filed its reply submissions.
The respondent states that the Tribunal has the jurisdiction to make a stay order pursuant to s29(2)(a) of the Civil and Administrative Tribunal Act 2013.
[2]
The respondent's application for a stay
The respondent has stated that:
1. The respondent would not easily be able to recover the judgement from the owner because there 'is a real risk that the judgement sum will be dissipated or removed from the jurisdiction of the Tribunal pending the hearing of the costs application.'; and
2. 'There is a real risk or probability that the builder would be deprived of the fruits of their costs application if a stay is not granted due to the Owners strong connection to family in China.'
I find that there is no evidence to support these assertions. The respondent appears to take the position that it is the applicant's obligation to refute these mere assertions. I reject that submission. The only evidence that the respondent can point to is the evidence that the applicant stated that she would receive funds from China to help pay the contract price. I do not regard that evidence as a satisfactory basis for making the assertions referred to in the preceding paragraph. It is also relevant that such evidence was not referred to in the respondent's letter dated 16 September 2021 (sic) (received in the Tribunal on 16 February by email and on 18 February 2022 by post). It would appear that such an evidentiary reference has been referred to as an afterthought.
The substance of the stay application appears to be that the respondent would prefer not to pay the judgement sum because it expects to be successful in its costs application and receive a costs order which will exceed the judgement sum. When it made its stay application that was an expectation only. The applicant had not filed her costs submissions.
The respondent has not established that it is unable to pay the judgement sum. The strong inference is that it would prefer not to pay until the costs position is resolved.
The respondent has provided no evidence that there is a real risk:
1. that the judgement sum will be dissipated pending the hearing of the costs application;
2. that the judgement sum will be removed from the jurisdiction of the Tribunal pending the hearing of the costs application;
3. or probability that the builder would be deprived of the fruits of its costs application if a stay is not granted due to the Owners strong connection to family in China.
The respondent does not submit that it does not have the means to pay the judgement sum and on that basis a stay should be made because it has what it considers to be a promising costs application which would extinguish the judgement sum.
I reject the respondent's stay application and can find no proper basis for staying the order made on 3 February 2022 that the respondent immediately pay the applicant the sum of $21,210.00 (emphasis added).
[3]
Costs
The respondent's costs application was made on 16 February 2022. The builder states that its total costs were $72,921.83. It seeks the payment of the totality of those costs.
The applicant's cost submissions were dated 28 February 2022 and received without an excerpt of a sound recording, contrary to what was stated. The applicant submits that the applicant should receive an order for costs in her favour and that the respondent's application for a gross lump sum costs order and an order for indemnity costs should be rejected.
I find that my jurisdiction to deal with the costs of these proceedings is found in Rule 38 of the Civil and Administrative Rules 2014 by reason of the fact that the amount claimed by the applicant was $143,472.00.
Under rule 38 I am not required to find the existence of special circumstances in order to make a costs order. I am able to make a costs order based on the exercise of my discretion in a judicial manner.
The fact is that the applicant was successful insofar as she obtained an order for $21,210.00 for general damages for delayed completion by the builder. The applicant's submissions also point out that 2 of the defective work items raised by the applicant in her expert's report were conceded by the respondent who rectified them before the hearing. These items are identified as:
1. Defective brickwork which was valued at $7,377.48; and
2. Poor workmanship to entry pillars valued at $5,252.28.
At [4] of the principal judgement I found that the joint expert report was dated 14 July 2021. The hearing was held on 6 December 2021. The applicant's claims were recorded by me at [7] as:
1. '(1) a defects claim of primarily $72,292.20;
2. a claim for $40,860.00 for a refund on the building price;
3. a claim for $4,040.00 for a kitchen variation;
4. a claim for $4,180.0 for repairing the garage door;
5. a claim for $700.00 for the laundry sink linen cupboard;
6. a claim for $400.00 for the last step of the stairs; and
7. a claim for $21,000.00 for delay.'
At [11] - [13] of the principal judgement I found that the experts had resolved the issues of defective brickwork, gap to structural flooring and poor workmanship to entry pillars. These items were within the defects claim referred to above.
The respondent submits that it was effectively the successful party in the proceedings and should obtain a costs order in its favour because the applicant was not successful on a number of the claims that she had brought. In that regard the fact is that the applicant was not successful on claims 2, 3, 4, 5 and 6.
In Rekrut and Scott v Champion Homes Sales Pty Ltd; Champion Homes Sales Pty Ltd v Rekrut and Scott [2018] NSWCATAP 97 an Appeal Panel stated at [21]-[23]:
"21 Generally, the exercise of an unfettered power to award costs involves costs "following the event" unless there are factors which militate against the successful party being awarded all of the party's costs - Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] and [69]; [1998] HCA 11.
22 Generally the "event" refers to the event of the claim or the appeal, as the case may be, and may be understood as referring to the practical result of a particular claim or appeal - Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15].
23 Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed - Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 (Bostik) at [38].
The issue on which the applicant was successful, claim 7, was in my view clearly separable from the other claims in the proceedings. The delay aspect of the applicant's case was dealt with late in the afternoon of the hearing. This aspect of the owner's case was rejected by the respondent in its Opening Submissions. The respondent conceded $15,000.00 in open court. The parties were left to see if an agreement could be reached on the applicant's late completion case while I left the hearing room. I was told on my return that there was no agreement. In the principal judgement at [28] - [31] I dealt with this issue. I rejected the respondent's submission that 9 weeks should be deducted from the delay period.
There is a dispute between the parties as to what was offered by the respondent. The respondent states that an offer of $22,000.00 was made to the applicant. The applicant denies this. She states that the offer was $20,000.00. I find that it is of no relevance to the costs position as to what the respondent's offer was. In the absence of some certain evidence, I am unable to accept the testimony of one witness over another. The delay issue came up late in the day. Even if the respondent offered $22,000.00 I would not allow it the costs of the entire day because of a failure to accept the offer which was made very late in the proceedings.
I also find that the respondent's previous offers of $20,444.00 and $20,444.44 should not be taken into account. I find that they were not genuine offers. In my view any person with a knowledge of Chinese culture would have known that the offers referred to would as a certainty, not be accepted. The offer of $20,444.44 was effectively telling the applicant to 'die' six times since it is well known that the number 4 is equivalent to the word death in either Cantonese or Mandarin. I find that the respondent is not entitled to an indemnity costs order because the applicant did not accept its offers.
The applicant was successful in relation to her delayed completion claim and in relation to some of her defective work claims as referred to at [23] above.
As stated, the applicant was self-represented in the proceedings. In eMove Pty Ltd v Dickinson [2015] NSWCATAP 94 an Appeal Panel stated at [50]:
'costs for the purposes of s 60(5) of the Act cannot include costs to compensate a litigant who is not a lawyer for time spent in preparing and conducting the appeal: Hammond v Ozzy's Cheapest Cars Pty Ltd t/as Ozzy Car Sales [2015] NSWCATAP 65 at [107]-[108] citing Cachia v Hanes (1994) 179 CLR 403 at 405.'
In Profitability Consulting Pty Ltd v Thorpe [2018] NSWCATAP 41 an Appeal Panel stated at [107] and [108]:
'Accordingly, "costs" that the Tribunal can order to be paid under s 60(2) will not include compensation for time spent by a litigant who is not a lawyer in preparing and conducting his or her case: Cachia v Hanes (1994)179 CLR 403 at 409. In Cachia, the High Court explained the position as follows at 410-411:
'This is hardly surprising. It has not been doubted since 1278, when the Statute of Gloucester ((30) 6 Edw.I c.1.) introduced the notion of costs to the common law, that costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal costs actually incurred in the conduct of litigation. They were never intended to be comprehensive compensation for any loss suffered by a litigant. As Coke observed of the Statute of Gloucester, the costs which might be awarded to a litigant extended to the legal costs of the suit, "but not to the costs and expences of his travell and losse of time" ((31) Coke, Second part of the Institutes of the Laws of England at 288. See also Howes v. Barber [1852] EngR 15; (1852) 18 QB 588 at 592 [1852] EngR 15; (118 ER 222 at 224); Dowdell v. The Australian Royal Mail Co. (1854) 3 El and Bl 902 at 906 [1854] EngR 604; (118 ER 1379 at 1381).).'
The relevance of the above authorities is to establish that the applicant is not entitled to her own costs of the proceedings. She is not entitled to costs because of her success on the delayed completion claim. Equally she should not pay the respondent's costs of that claim.
The applicant had some success on her defects claim. However that was promptly, early and sensibly resolved by the experts and the respondent. I find that by the time of the hearing, the rectification work had been completed. Nonetheless the applicant was obliged to obtain an expert's report to support her claims. Because of her limited success on the defects claims, I find that the applicant should be entitled to her expert's costs of preparing the report and attending the expert's conclave. The applicant has sent two invoices from her expert to the Tribunal in the amounts of $3,575.00 and $2,640.00, total $6,215.00. I will allow her to recover those costs and have taken this approach in accordance with s36(1) of the Civil and Administrative Tribunal Act to facilitate the just quick and cheap resolution of this aspect of the applicant's costs application.
As I have stated at [24] the applicant was not successful on claims 2, 3, 4, 5 and 6. I find that these claims were distinguishable from the defects claim and the delayed completion claim. I find that the respondent being successful on these heads of claim, which had very poor prospects of success, should recover its costs of the proceedings in meeting these claims and securing success on them. I would estimate that the issues on which the applicant was unsuccessful took approximately 85% of the hearing time. I find that the applicant should pay the respondent 85% of its costs of the proceedings, excluding the applicant's defects claim and her delayed completion claim, such costs, if not agreed, to be assessed in accordance with the Legal Profession Uniform Law Application Act 2014.
The respondent seeks a gross sum costs order. It does not address the authorities which are relevant to making a gross sum costs order. Appeal Panels of this Tribunal have considered lump sum costs orders in Islam v Metricon Homes Pty Ltd [2018] NSWCATAP 116 and in Zucker v Burbank Montague Pty Ltd [2018] NSWCATAP 135. The applicant's submissions address the relevant authorities. I decline to make a gross sum costs order. I accept that a gross sum costs order is typically discounted. The respondent does not propose that its costs be discounted. I addition I do not believe that I am able to assess the respondent's costs in a way that will produce a fair outcome between the parties, including determining the discount that should be applied.
The final issue is whether the respondent should pay the applicants costs of the stay application. The applicant's submission at [33] is that the respondent should pay the applicant's costs of the stay application. Rule 38 is relied on. The applicant states that the respondent failed to file submissions in support of the application and that no reasonable basis was articulated for the granting of a stay order.
The respondent replies that rule 38 does not apply and that s60 of the Civil and Administrative Tribunal Act applies. If that is wrong the respondent submits that Rule 38 does not apply because the Tribunal has rejected the applicant's claim of $143,472.00.
Rule 38 states:
'(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.'
I find that in determining these proceedings under the Home Building Act 1989 and all aspects of them, all relevant functions of the Tribunal are allocated to the Consumer and Commercial Division of the Tribunal. The next issue is whether:
'the amount claimed or in dispute in the proceedings is more than $30,000'
In Thornton v Desire Constructions Pty Ltd [2020] NSWCATAP 116 an Appeal Panel considered this issue and stated at [83] - [89]:
'In considering the meaning to be given to the words 'the amount claimed or in dispute in the proceedings' we first consider what is meant by the word 'the proceedings'. In Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 an Appeal Panel observed at [33]:
'The word "proceedings" is used extensively in the NCAT Act but there is no definition of that term in the NCAT Act or in the Interpretation Act 1987 (NSW) (the Interpretation Act).'
After considering numerous provisions of the CAT Act and the Civil and Administrative Tribunal Rules the Appeal Panel stated at [37]:
'These examples from the NCAT Act and the NCAT Rules demonstrate that "proceedings" refers to the process set in motion, or commenced, by lodging an application or notice of appeal. That process includes the steps taken by the Tribunal to hear and determine whether to grant the relief sought in the application or notice of appeal, as well as any interlocutory or ancillary steps. Proceedings are defined by the subject matter raised in the application or notice of appeal.'
The passage extracted above provides strong support for finding that the amount claimed or in dispute in the proceedings means the amount claimed in the application by which the appellant commenced her case in the Tribunal.
Bonita v Shen [2016] NSWCATAP 159 is consistent with the position stated in Allen v TriCare (Hastings) Ltd. In Bonita v Shen at [37] the Appeal Panel considered Rule 38 stating:
'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.'
In Carlson v ARA Engine Reconditioning Pty Ltd (No 2) [2020] NSWCATAP 39 an Appeal Panel considered the position in circumstances where an appellant commenced proceedings seeking an amount less than $30,000.00, but after the respondent's evidence was filed, his claim exceeded $30,000.00. At [27] the Appeal Panel stated:
'Mr Carlson's solicitor has submitted that the original claim "was for a figure of $10,771" and claims that the change in the amount sought by Mr Carlson was "a direct result of the position [ARA Engine Reconditioning] took" in the proceedings below. It is correct that Mr Carlson's originally claimed $10,771. However, regardless of the reason he increased his claim, by the time the matter came before the Tribunal for hearing, the amount claimed in the proceedings was more than $30,000. Rule 38 therefore applied to costs of the Tribunal proceedings.'
In Carlson v ARA Engine Reconditioning Pty Ltd (No 2) the Appeal Panel found that the relevant time to consider the 'the amount claimed or in dispute' in the proceedings was at the time the matter came before the Tribunal for hearing.
Based on the authorities that we have discussed above, we are of the view that the amount claimed or in dispute in the proceedings is to be determined by the amount claimed in the application, or the amount claimed at the commencement of the hearing. We find that there is no authority to support the position taken by the Tribunal Member at first instance that the amount claimed or in dispute in the proceedings is for the purposes of rule 38(2)(b) of the Civil and Administrative Tribunal Rules to be determined by reference to the amount that is claimed by an applicant at the end of the hearing.'
Following what was said in Thornton v Desire Constructions Pty Ltd, I find that for the purposes of the applicant's costs application on the respondent's stay application, that Rule 38 applies and the amount claimed or in dispute in the proceedings, $143,472.00, was more than $30,000.
The respondent's stay application did not succeed. Because she was the successful party on the stay application I find that on the application of conventional principles, the applicant should receive an order for her costs on the stay application, such costs if not agreed to be assessed in accordance with the Legal Profession Uniform Law Application Act 2014.
[4]
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: 11 July 2022