Chi v Roger Fuller Pty Ltd

NCAT Appeal Panel|2018-09-19

REASONS FOR DECISION

The Appeal Panel published its decision in this matter on the 23 April 2018. By its decision the Appeal Panel refused leave to appeal, and dismissed the application. The question of costs was reserved: Chi v Roger Fuller Pty Ltd [2018] NSWCATAP 95. Directions were made for the parties to file and serve written submissions on the issue of costs, if any costs order was sought.
The successful respondent has applied for orders that the applicant pay its costs of the appeal. The unsuccessful applicant has also made an application for costs.
Each party has filed submissions which the Appeal Panel has read and considered.
The Appeal Panel is satisfied, in accordance with s 50 (2) of the Civil and Administrative Tribunal Act 2013 ('the NCAT Act') that the issue of costs be determined on the papers and a further oral hearing dispensed with.

Applicable Principles

These proceedings originated in the Consumer and Commercial Division of the Tribunal. Section 60 of the NCAT Act states: 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) In this section: 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.
However, in respect of proceedings in the Consumer and Commercial Division of the Tribunal, Reg 38 of the Civil and Administrative Tribunal Rules 2014 ('the NCAT Rules') states: 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.
In respect of the Appeal Panel of the Tribunal determining the issue of costs, Reg 38A of the NCAT Rules states: 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.
In this matter, the appellant's claim at first instance involved an amount in dispute of less than $30,000. Accordingly, for any costs order to be made, the Appeal Panel must be satisfied that there are "special circumstances" under s 60 (2) of the NCAT Act, having regard to the matters set out in s 60 (3) of the NCAT Act.
"Special circumstances" are circumstances out of the ordinary, but not necessarily extraordinary or exceptional: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]. Whether or not "special circumstances" have been established depends upon the facts and circumstances of the particular case, in the context of the matters for consideration under s 60 (3) of the NCAT Act.
The authorities relating to costs awards pursuant to s 60 (2) are summarised in Gaynor v Burns [2015] NSWCATAP 150 [16] - [19].
In summary, the circumstances must be of a type which is distinguished or different from what is ordinary or usual. If such a finding is available, then "special circumstances" may be found to exist and the threshold test for consideration for an award of costs is met. Otherwise, as has been affirmed in Allen v Tricare (Hastings) Ltd [2017] NSWCATAP 25 at [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 parties 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."

Respondent's submissions

The respondent's grounds can be summarised as follows:
The respondent submits that the appellant unreasonably prolonged the time taken to complete the proceedings in the Appeal Panel. In this regard, the respondent submits: 1. The matter was set down for hearing on 30 January 2018 when directions were made for the future conduct; 2. On 9 February 2018 the appellant sought an extension of time to serve his evidence and submissions; 3. On 26 February 2018, being the due date for the appellants evidence and submissions, nothing was filed by the appellant; 4. On 1 March 2018 the appellant served his material to be relied on at the appeal; 5. On 8 March 2018 the appellant applied for an adjournment; 6. On 15 March 2018 a second application for an adjournment was made by the appellant; 7. On 16 March to 2018, being the due date for any written submissions in reply, the appellant had filed and served no submissions; 8. On 22 March 2018, being the date fixed for hearing, the appellant sought to rely upon submissions provided that day to the respondent.
Secondly, the respondent submits that the claims of the appellant were without merit; lacked substance; were misconceived; and were frivolous and/or vexatious.
The respondent submits that much of the material and submissions were unintelligible and prolix. Further, even if any error of law was established by the appellant, it is impossible to determine how such error would alter the result.
The respondent submits that the appellant has produced no evidence or shown any error of law which would have thrown doubt on the decision appealed from. Further, the appellant had raised a ground of appeal of bias and there was no logical or other basis to found any apprehension of bias or of actual bias. The grounds of appeal also raised a ground of appeal of jurisdictional error that was clearly without merit.
The respondent submits that the grounds of appeal were manifestly weak and that, in effect, the appellant was merely a disgruntled litigant seeking to re-argue the case heard at first instance.

Amount of the Respondent's costs

The respondent engaged a firm of legal practitioners, namely Morgan &. English This firm has rendered tax invoices to the respondent for their professional services in the amounts of $3,653.30 and $5,519.25, mounting a total to almost $9,000. The respondent seeks a lump sum costs order, rather than an order that costs be as agreed or assessed under the Legal Profession Uniform Law Application Act 2014.
The respondent also makes a claim for the loss of wages of one day of its director who attended the hearing and the cost of disbursements in fuel and company vehicle costs. The total amount which the respondent seeks a way of costs is amount of $9,772.55.
In support of its application, the respondent stated it was necessary to engage legal practitioners where advice was required; the respondent conducted a family owned business as an auctioneer; and there were heavy work commitments over the Christmas period when preparation for the appeal was necessary.

Appellant's submissions

The appellant has provided a response to the application. The chronology of events regarding default in the timetable to file and serve submissions as set out in the respondent's submissions is not disputed.
However the appellant sets out his justification for seeking additional time. The appellant raises other issues, for example his difficulty in obtaining the transcript; and some correspondence received from the Financial Ombudsman Service. The appellant also maintains that he sought the adjournments because of his inability to complete his submissions in chief in the allocated time which have been imposed by the Tribunal in its original directions.
In response to the submission that his appeal grounds were lacking in substance, the appellant asserts that he has no legal training and English is his second language. He claims that he needed a lawyer to assist him and referred to a Solicitor, who had made an application for Legal Aid. In respect of the assertion that there was no error of law demonstrated, the appellant claims he intended to submit over 58 "pieces of the fresh evidence". Such purported evidence apparently relates to events which occurred at the Singleton Sale Yard on 29 January 2014 when the appellant's cattle were sold by public auction.
In respect of the ground of appeal of bias, the appellant has made several submissions. It is not apparent how those submissions relate to bias. He asserts that the Tribunal member ignored evidence and that the Tribunal decision at first instance was "intentionally" selective.
In respect of the allegation that the appellant had not brought any material relating to alleged jurisdictional error or excessive jurisdiction, the appellant submits that he was: "unaware that he could argue error of law such as jurisdictional error, and excess jurisdiction at home (sic). So the appellant asked for legal assistance from the legal aid."
In respect of the respondent's submission that the grounds of appeal were manifestly weak, the appellant refers to the application of the Australian Consumer Law 2010 ('the ACL') throughout Australia. He maintains it was difficult to find a solicitor at the particular time. The appellant submits that his application for Legal Aid was refused. He refers to the evidence which he would like to have called of a Mr Wicks who was a commission buyer. Mr Wicks was not called at the first hearing.

Appellants Submissions in Reply

In respect of legal costs, the appellant submits that the respondent is not entitled for its own travelling costs; the time spent in preparing or conducting a case; or lost earnings of a director of a company that was a party to the proceedings. The appellant claims that the respondent was "not granted leave for a legal representative", so there was no basis for a lawyer to be engaged. The appellant submits that because the respondent engaged a lawyer, there was a breach of s 60 (2) of the NCAT Act.
The submission of the appellant that the respondent was "not granted leave" to be legally represented is incorrect. At the directions hearing of the Appeal Panel in the proceedings on 30 January 2018, the following direction was made: "1. Leave is granted to the Respondent to be legally represented by an Australian Legal Practitioner".

Appellants Cross Application for Costs

The appellant claims that there was an irregularity concerning the identity of the correct defendant. He refers to a business name of Roger Fuller Pty Ltd, and the fact that Mr Roger Fuller is described as its director. The actual irregularity cannot be discerned from the submissions.
Irrespective, the appellant submits that the respondent refused to tender documents or provide any information in respect of a Summons to produce documents that was dealt with at the hearing at first instance
Further, the appellant again refers to Mr Wicks, the relevance of which is unclear from his submissions.
The applicant seeks to refer to parts of the ACL in support of his assertion that he conducted the case by himself; that the timeframes regarding the filing and service of documents imposed by the Appeal Panel were unreasonable; that the adjournments were contested; that he was treated poorly; that such conduct was untoward; and that the respondent had: "created multiple controversial behaviours against legal principles and legislation of both state and Commonwealth in these events throughout in entire this [sic] proceeding".
The appellant requests the Tribunal to make an order for his costs totalling $700.

Consideration

The relevant principles regarding whether or not "special circumstances" are established have been discussed previously in this decision.
Further, there are certain fundamental principles which must be considered by the Tribunal when costs are sought. Firstly, an award of costs is not punitive in nature: rather it is compensatory: see Hamod v State of NSW (2002) 188 ALR 659; [2002] FCA 424; [2002] FCAFC 97; see also Oshlak v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72.
An award of indemnity costs may be made in circumstances where a Tribunal or Court is satisfied that there has been behaviour that causes unnecessary anxiety, trouble or expense to the other party in the proceedings, such as the failure to adhere to proper procedure: see FAI General Insurance Co Ltd v Burns (1996) 9 ANZ Ins Cas 61 - 384. Significant or repeated failure to comply with directions may be sufficient "relevant delinquency" in the conduct of proceedings to order indemnity costs.
The respondent's claim for its full costs in a lump sum amount is, in substance, an application for costs on an indemnity basis although the respondent does not clearly articulate that is seeking an indemnity costs order.

Respondent's Claim for Costs-Have Special Circumstances Been Established?

As to the respondent's claim that the proceedings were unduly prolonged, The Appeal Panel notes the repeated applications for adjournments by the appellant. However each application was dismissed. Accordingly, the Appeal Panel is not satisfied that there was prolongation of the time taken for the preparation of the hearing by reason of such conduct.
Further, although the appellant was approximately four days late in filing his original submissions, it is not suggested that such delay caused any real prejudice to the respondent. Further, whilst the respondent claims that it was prejudiced because the submissions in reply of the appellant were not provided until the morning of the hearing, again, it is impossible to discern that the respondent was prejudiced.
Late service of submissions in reply may have been inconvenient for the respondent but no actual disadvantage has been indicated that sufficiently impacts upon the issue of whether "special circumstances" have been established under s 60 (2) of the NCAT Act. The hearing was conducted on the day fixed at the first directions hearing, and accordingly there was no ultimate delay in the progress of the hearing in the Tribunal.
The Appeal Panel is not satisfied that there was any prolongation by reason of the conduct of the appellant in the Appeal Panel proceedings sufficient to warrant "special circumstances". However, the Appeal Panel must consider the other criteria under s 60 (3) of the NCAT Act, not merely the issues of delay and compliance with directions.
The appellant instituted proceedings at first instance essentially in breach of contract and in negligence. Since the parties clearly entered into a contractual relationship whereby the appellant's cattle would be sold by the respondent at a sale yard, the appellant's claim was one which was based upon contract, although the appellant raised alleged breaches of s 45 of the Competition and Consumer Act 2010 (Cth) and misleading or deceptive conduct under s 18 of the ACL.
However, the claim and the appeal included various assertions, which were somewhat confused, concerning the "implications" of the ACL.
The Tribunal determined at first instance that the evidence adduced by the appellant could not sustain his cause of action and the appellant failed on each of the appeal ground raised.
The grounds of appeal and submissions of the appellant were repetitive, unclear and prolix. The written and oral submissions of the appellant were also confusing and poorly expressed. Further, as was clear in the costs submissions of the applicant that has "58 pieces of fresh evidence" and in the submissions and arguments put forward by the appellant in the appeal generally, the appellant was seeking to re-argue the case he had unsuccessfully brought at first instance motivated by a misguided subjective perception that he had suffered an injustice, rather than identify grounds of appeal with any substance.
Further, the ground of appeal that the Senior Member who conducted the hearing displayed apprehended bias clearly had no substance, and appeared to arise from the appellant's disgruntlement that he had lost the case.
In respect of s 60 (3) (c) and (e) of the NCAT Act, we are satisfied that the appellant's grounds of appeal and submissions were sufficiently weak and misconceived that "special circumstances" have been established under s 60 (2) of the NCAT Act (Abed v Cosgrove t/as Alison Arts [2018] NSWCATAP 133 at [30]). Accordingly, the Appeal Panel is satisfied that a costs order should be made in favour of the respondent.

Appellant's Cross Application for Costs

There is no basis for the appellant to make a claim for costs. He was the unsuccessful party and an award of costs, if made, is intended to compensate the successful party only.

Should a Lump Sum Costs Order be Made?

The Tribunal has the power to make orders that costs be payable in a lump sum (Islam v Metricon Homes Pty Ltd [2018] NSWCATAP 116; Ellis v The Owners Strata Plan 80605 [2018] NSWCATAP 174 'Ellis'). The relevant criteria for making a lump sum costs order is discussed in Ellis at [44]-[48].
However, the Appeal Panel is not satisfied the respondent has established that a lump sum costs order should be made. The power to make a lump sum costs order can only be exercised when the Tribunal considers it can do so fairly between the parties and where an appropriate sum can be determined from the documents submitted by the respondent. The invoices of the respondent's solicitors do not contain an itemised break down of work performed; time spent; and charge out rates. Further, there is no evidence to establish to the satisfaction of the Appeal Panel any appropriate percentage discount to be applied to reflect the assessment process (see Ellis at [49]).

Should Costs Be Awarded on an Indemnity Basis?

The submissions of the respondent do not clearly indicate that costs are sought on an indemnity basis, and if so, the reasons for departing from the usual order that costs be awarded on the ordinary basis rather than on an indemnity basis, such as "disentitling conduct" of the applicant (Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [69]-[70]).
For the Appeal Panel to make an indemnity costs order, which departs from the usual order that costs be paid on the ordinary (i.e. party/party) basis, it is the responsibility of the appellant to clearly articulate that it is seeking an indemnity costs order, and establish the basis for making such an order.
In the absence of a clearly articulated basis for making an indemnity costs order, the Appeal Panel is not satisfied that the usual order that costs be awarded on the ordinary basis should be departed from.

Is the Director of the Respondent Entitled to His Expenses in Attending the Appeal Panel Hearing?

In addition to the respondent's legal costs, the respondent claims $600 for the cost of lost wages and "car and fuel expenses" for the director of the respondent in attending the Appeal Panel hearing.
The Appeal Panel is not satisfied such expenses, being the costs of a director of a company which is a party to proceedings attending a hearing are legal costs, and accordingly no order is made in this regard (Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403 at 405; McGinn v Barilla [2018] NSWCATAP 85 at [77]).

Conclusion

The respondent has established "special circumstances" under s 60 (2) of the NCAT Act, and the appellant is to pay the respondent's legal costs of the appeal on a party/party basis as agreed or assessed on the basis set out in the legal costs legislation (as defined in s 3A of the Legal Profession Uniform Law Application Act 2014).

Orders

The Tribunal orders that: 1. The costs application is determined on the papers with an oral hearing dispensed with under s 50 (2) of the NCAT Act. 2. The appellant is to pay the respondent's legal costs of the appeal on a party/party basis as agreed or assessed on the basis set out in the legal costs legislation (as defined in s 3A of the Legal Profession Uniform Law Application Act 2014). 3. The appellant's application for costs is dismissed.

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: 19 September 2018

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