Chen v Metrix Development Pty Ltd

TENANTS' SUBMISSIONS

1. The Tenants submit they are entitled to an award of costs because "The Landlords unreasonably made a second application seeking a Termination Order in circumstances where a Termination Order was already made on 30 March 2021" and " The 2nd Application ought not to have been commenced in the first place and once brought, ought to have been withdrawn at a much earlier time than the weekend prior to the listed date for Hearing, when no great expense had been incurred."
2. The Tenants submit that "the 2nd Application was simply an attempt to re-agitate matters, which had already been considered in the 1st Application (which resulted in essentially the same result as that sought in the 2nd Application)."

LANDLORDS' SUBMISSIONS

1. The Landlords oppose the making an order for costs and submit it is not appropriate to make an order for costs in the circumstances.
2. The Landlords submit that under section 60(1) of the Civil and Administrative Tribunal Act 2013 (NSW) ("the NCAT Act") "each party to the proceedings is to pay the party's own costs".
3. Under section 60(2) of the NCAT Act, the Tribunal may award costs "only if it is satisfied that there are special circumstances warranting an award of costs".
4. The Landlords submit that Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) does not apply as the claim is not over $30,000.
5. The Landlords submit that the only avenue available to the Tenants for an award of costs is section 60 of the NCAT Act. They contend that there are no special circumstances which warrant an award of costs. The Landlords' submissions address each of the matters referred to in section 60(3) which the Tribunal must consider when determining if there are special circumstances.

TENANTS' SUBMISSIONS IN REPLY

1. The Tenants submit they incurred unnecessary legal costs to defend a matter which had already been agitated in the Landlords' first application for an order for termination.
2. The submission addresses each of the matters in section 60(3) and argues there are special circumstances to warrant an award of costs.
3. The Tenants submit that the Landlords rejection of the Calderbank offers made by them was unreasonable.

HEARING ON THE PAPERS

1. The parties provided written submissions on the issue of costs in accordance with directions made by the Tribunal on 10 June 2021. Both parties were given the opportunity to address in those submissions whether a further oral hearing was sought regarding the costs application and neither party sought an oral hearing.
2. Both parties consented to the costs application being determined on the papers. The Tribunal is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions provided by them. Accordingly the Tribunal dispenses with the oral hearing under section 50(2) of the NCAT Act.
3. The Tribunal read and considered the submissions of both parties on the issue of costs. Those submissions were received in a hardcopy format and by email.

The Law

1. The Tribunal is empowered, pursuant to section 60 of the NCAT Act to award costs. Pursuant to section 60(1) each party to proceedings before the Tribunal is to pay its own costs. However pursuant to section 60 (2), the Tribunal is empowered to award costs if it is satisfied that there are "special circumstances" warranting an award of costs.
2. Section 60 of the NCAT Act 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)Inthissection: "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.
3. Pursuant to rule 38(2) of the Civil and Administrative Tribunal Rules 2014 (NSW) (the "NCAT Rules") the Tribunal may award costs even in the absence of special circumstances warranting such an award where, inter alia, the amount claimed or in dispute in the proceedings is more than $30,000: see rule 38(2)(b).
4. The provisions of rule 38 takes supremacy over the costs provisions contained in section 60: see Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen[2015] NSWCATAP 264 at [82]- [86]
5. The effect of section 60(1) and (2) of the NCAT Act was discussed in Allen v TriCare (Hastings) Ltd [2017] NSWCATAP] 25 at [71] and [76]: [71]. Section 60 of the NCAT Act states the general proposition in subs (1) that each party to proceedings in the Tribunal is to pay the party's own costs. Section 60(2) modifies this by permitting the Tribunal to award costs but "only if it is satisfied that there are special circumstances warranting an award of costs". [76] "[S]pecial circumstances" for the purposes of s 60(2), are those which are out of the ordinary but they do not have to be extraordinary or exceptional: see the Appeal Panel in CPD Holdings Pty Ltd v Baguley [2016] NSWCATAP 160 at[6]; citing the Court of Appeal in Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] which concerned the same expression in the previous legislation governing the (then) Administrative Decisions Tribunal. In addition, s 60(3) gives a non-exhaustive list of matters that the Tribunal may take into account when determining whether there are special circumstances….
6. In its submissions the Tenants relied on the following matters said to constitute special circumstances: 1. The Landlords commenced proceedings for essentially the same remedy being a termination order and release of the bond in circumstances where they had identical orders made on 30 March 21; 2. The second application was commenced recklessly and was tantamount to being misconceived, frivolous and/or vexatious; 3. It is in the interests of justice to find there are special circumstances warranting an award of costs against the Landlords; 4. The submission then addressed the matters in section 60(3) of the NCAT Act to which the Tribunal must have regard to in determining whether there are special circumstances.
7. Rule 38 is an exception to section 60 of the NCAT Act. Rule 38 (2) operates "Despite section 60 of the Act" and is not dependent upon or in any way constrained by the provisions of section 60(1) of the NCAT Act.
8. Rule 38(2)(b) 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 irrespective of whether a particular party has conducted the proceedings to the disadvantage of another. There is a general discretion to award costs where the amount claimed or in dispute exceeds $30,000.
9. The Tenants submit that Rule 38 applies in this case as the amount of rent arrears in dispute was accepted by Member De Jersey as exceeding $30,000.00.
10. The Tribunal rejects that submission and finds that Rule 38 does not apply to this application. The only orders sought by the landlords were in respect of the rental bond and termination and possession. The Landlords did not request in their application an order for rent arrears or any other money order.
11. The Tenants submit that the provisions of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") apply to proceedings before the Tribunal. The Tenants rely on R.42.20(1) which provides for costs on dismissal of proceedings. The Tribunal accepts the Landlords submission that the provisions of the UCPR do not apply in the Tribunal.
12. The issue in this application is whether the Tribunal is satisfied there are special circumstances warranting an order for costs.
13. Taking into consideration the submissions of the parties and the matters in section 60(3), the Tribunal is not satisfied there are special circumstances warranting an award of costs.
14. The evidence does not satisfy me that the Landlords conducted the proceedings in a manner which caused disadvantage to the Tenants. The Tenants submit that the claim was unmeritorious and had little chance of success. The claim was withdrawn before the hearing. There was no formal determination by the Tribunal on the merits of the claim. I reject the Tenants' submission.
15. The Tenants submit the Landlords were responsible for prolonging unreasonably the time taken to complete the proceedings.
16. The Appeal Panel dismissed the Tenants' appeal on 18 May 2021.The Landlords withdrew this Application on the following day. The Landlords acted quickly to withdraw these proceedings once they knew the outcome of the appeal. I reject the Tenants' submission.
17. The Tenants submit they incurred substantial legal costs to defend matters already agitated in the earlier proceedings.
18. The Landlords obtained orders for termination and possession under section 87 of the Act on 30 March 2021.The Tenants appealed that decision and were successful in obtaining a stay of the orders pending the determination of the appeal.
19. The Tribunal rejects the Tenants' submission that they were required to "defend matters already agitated in the 1st application for essentially identical orders which had been granted to the Landlords on 30 March 2021."
20. The legal requirements to make orders under sections 85 and 87 of the Act are substantially different. Whilst there may be some overlapping of the requirements, the Landlords were within their rights to seek an order for termination relying on the first NOT in case the Tenants' appeal was successful.
21. The material tendered by the Tenants in support of their submissions that the Landlords application had no merit, was misconceived, was vexatious or frivolous or otherwise misconceived or lacking in substance is not sufficient for the Tribunal to make the findings sought by the Tenants.
22. For the foregoing reasons the Tribunal is not satisfied that special circumstances exist which would justify departing from the usual rule under section 60 of the NCAT Act that each party pay their own costs.

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: 27 September 2021