Cubic Metre Pty Ltd v C & E Critharis Constructions Pty Ltd

Overview

A sub-contractor, Cubic Metre Pty Ltd, successfully appealed from the Tribunal's decision that each party pay its own costs after the builder, C & E Critharis Construction Pty Ltd, withdrew its application: Cubic Metre Pty Ltd v C & E Critharis Constructions Pty Ltd [2019] NSWCATAP 130 (28 May 2019). The Appeal Panel upheld the appeal because the Tribunal had not applied the correct legal principles. After applying what we considered the correct principles, we came to the same decision - that there should be no order as to costs at first instance. The sub-contractor and the builder have both applied to the Appeal Panel for their costs on appeal. We have decided that there are no special circumstances warranting an award of costs in favour of either party.
The builder originally brought proceedings against the sub-contractor in the Consumer and Commercial Division of the Tribunal seeking damages in excess of $87,000. The proceedings related to supplying and constructing a sandstone retaining wall. The builder withdrew the application after the second directions hearing.
Both parties agreed to their costs application being determined without a hearing. We are satisfied that the issues can be adequately determined in the absence of the parties by considering their written submissions: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) s 50(2) NCAT Act.

Are there "special circumstances" warranting an award of costs in favour of either party?

The sub-contractor submitted that we should take into account the outcome of the appeal because that is a relevant matter: NCAT Act, s 60(3)(g). According to the sub-contractor, the outcome was that not only was it successful, but it met the "high bar for successful appeals in respect of discretionary decisions" set out in House v The King [1936] HCA 40; 55 CLR 499. The sub-contractor submitted that the fact that the Appeal Panel was satisfied that the costs discretion had miscarried is "special" or "out of the ordinary": CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32].
In addition, the builder's conduct in contesting what the sub-contractor referred to as "compelling grounds of appeal" lengthened the time of the appeal and increased costs. We assume that the sub-contractor is relying on s 60(3)(b) of the NCAT Act - "whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings".
In summary, the sub-contractor submitted that, noting the outcome of the appeal, the grounds on which the appeal was successful and the general principle that costs following the event, the Appeal Panel should order the builder to pay 80% of the sub-contractor's costs of the appeal. There should be no costs in relation to the Appeal Panel's decision to re-hear the costs application.
Contrary to the sub-contractor's submission, the general principle that costs follow the event, is not relevant. The outcome of the appeal is only relevant if the relative strengths of the claims warrant a costs order being made: NCAT Act, s 60(3)(c). This is not a case where the appeal was so obviously meritorious that the builder should have agreed that the matter be remitted to the Tribunal at first instance for determination according to law. It follows that neither the strength of the grounds of appeal, nor the time taken to deal with the appeal, warrants a costs order in favour of the sub-contractor.
The builder's case was that the appeal was unlikely to succeed and the proceedings were disproportionate to the claim in the substantive proceedings. We assume the builder is relying on s 60(3)(c) of the NCAT Act when submitting that the appeal was unlikely to succeed. The difficulty with this submission is that the Appeal Panel upheld the appeal. While we made the same order as the Tribunal made at first instance, we re-exercised the costs discretion based on our understanding of the correct legal principles.
According to the builder, because the Tribunal proceedings comprised only two directions hearings before the claim was withdrawn, the sub-contractor should pay the costs of a "totally disproportionate" appeal. At first instance, the builder proposed that the proceedings be transferred to the Local Court, but the sub-contractor did not consent. Given those circumstances, and the relatively low level of costs incurred, the sub-contractor "acted in a disproportionate manner in pursuing an appeal that was unlikely to succeed in changing the result." We assume that these circumstances are said to amount to "any other matter that the Tribunal considers relevant": NCAT Act, s 60(3)(g).
In our view, even if the result was the same, the sub-contractor was successful on appeal. In this case, appealing from a decision where the amount in dispute is relatively small does not warrant a costs order against the successful appellant.
None of the matters relied on by either party satisfy us that there are special circumstances warranting an award of costs.

At a glance

Court

Decision date

Source

Judgment (5 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (3)