Cusick Real Estate Pty Ltd t/as L J Hooker Gosford v Kochan

NCAT Appeal Panel|2017-07-07

Background

This is an internal appeal from a decision of the Consumer and Commercial division of the Tribunal made on 6 April 2017.
At that time the Tribunal ordered that the appellant pay the respondent's costs of the principal proceedings (Norma Hazel Kochan v Cusick Real Estate Pty Ltd t/as L J Hooker Gosford [2016] NSWCAT, 13 January 2017). That costs order was made subsequent to the decision of the Tribunal in the principal proceedings and following the receipt of submissions from both parties on the question of costs of those proceedings. There was no hearing on the issue of costs. Each party had agreed that the issue of cost could be determined by the Tribunal "on the papers".
Critically, there has been no appeal from the decision of the Tribunal in the principal proceedings. The factual and other findings of the Tribunal made in the principal proceedings, which it repeated in the decision the subject of this appeal and on which it based its conclusion that special circumstances existed so as to enliven its discretion to award costs to the present respondent were, and remain, unchallenged. Despite this, the appellant seeks to now challenge those findings and seeks to set aside the Tribunal's decision on costs.
For the reasons below, we dismiss the appeal.

The Reasons in the Substantive Proceedings

It is convenient to have brief regard to the findings made by the Tribunal in its reasons in the principal proceedings before considering the reasons in the costs decision.
In its written reasons in the principal proceedings, at [75]-[113] the Tribunal set out in some detail relevant findings of fact. It is not necessary to repeat all of them here. It is relevant to note, however, that those findings included findings that the respondent, who was at the time a 95 year old woman, signed the Exclusive Agency agreement with Starr Partners the day before she signed one with the appellant. It was also found that the appellant did not carry out any marketing of the property or promotional activities in respect to its sale including by way of advertisements or holding inspections. Nor did the appellant introduce any prospective purchasers to the property.
The Tribunal made additional findings in a section of its reasons headed "The Decision" at [114]-[160]. It accepted the respondent as a witness of truth who was doing her best to give accurate and honest evidence. It generally accepted the evidence of Mr Cusick of the appellant, although not in all regards.
At [153] the Tribunal determined that no amount claimed by the appellant for its commission was reasonable. It set out at [154] the bases for that conclusion. That paragraph lists significant unchallenged findings made against the appellant including that the respondent was not given a chance to obtain independent legal advice before signing the agreement with the appellant, that the day after it signed the agreement with the respondent, the appellant knew of the other agreement entered into by the respondent, that it made a misrepresentation to the respondent about the length of the cooling off period and that the appellant did nothing about the sale of the respondent's unit.
The Tribunal concluded that in the circumstances it would be unjust to order the respondent to pay any commission to the appellant and, thus, the amount of reasonable commission was $NIL. The Tribunal agreed with the submission of the solicitor for the respondent that he could not think of a less deserving case for the Tribunal to award commission to an agent.

The Costs Decision

In its reasons for awarding costs, the Tribunal correctly accepted that there needed to be special circumstances so as to warrant the award of costs (see s 60 Civil and Administrative Tribunal Act (2013) (CAT Act). It repeated its findings in the principal proceedings, which were relied on by the present respondent.
The Tribunal referred to the appellant's submissions that the respondent bore the onus of establishing special circumstances to justify the award of costs and that no such special circumstances existed. The appellant submitted that there had been no conduct on its part that prejudiced the respondent's case, it had participated properly in the proceedings and it had made a tenable claim for commission. It submitted that the proceedings were not complex. It submitted that each party should pay its or their own costs.
The Tribunal set out the correct statutory test as to whether there was special circumstances so as to award costs. At [38]-[42] it relied on several now well-known Appeal Panel and other authorities with respect to the exercise of discretion to award costs and what constitutes special circumstances. In particular, it correctly referred to the principle that special circumstances are circumstances which are unusual or different, without having to be extraordinary or exceptional.
The Tribunal found that the appellant did not conduct the case in a way that unnecessarily disadvantaged the respondent, nor so as to prolong unreasonably the conduct of the proceedings. It also found that the appellant did not fail or refuse to comply with the duty imposed on parties to Tribunal proceedings pursuant to s 36(3) of the CAT Act.
At [45]-[46] the Tribunal correctly noted that, in determining whether there were special circumstances, it may take into account the relative strengths and weaknesses of the claims made by each party. It held that the claims made by the respondent were much stronger than those made by the appellant. At [47] the Tribunal referred to its unchallenged findings at [154] of the principal proceedings (referred to above). It repeated (at [50]) its conclusion that there could be no less deserving case for an award of commission.
At [52] it observed, correctly, that in determining whether there are special circumstances that warrant an award of costs, the Tribunal may also take into account any other matter that it considers relevant. It took into account as a relevant factor the age and vulnerability of the respondent. It observed that the age and vulnerability of the respondent made "necessary and appropriate" the grant of leave for her to be legally represented in the proceedings.
The Tribunal therefore found that there were special circumstances justifying the award of costs, having regard to the relative strengths and weaknesses of the parties' cases and the age and vulnerability of the respondent.

The Appeal

By Notice of Appeal filed 3 May 2017 the appellant identified three grounds of appeal: 1. That the tribunal made a wrong finding of law. This was particularised in the submissions in support of the appeal (and in oral submissions at the appeal hearing) to be that the Tribunal erred in law by ordering that the appellant pay the respondent's costs as agreed or assessed in accordance with Division 11 of Pt 3.2 of the Legal Profession Act. 2. Further, or alternatively, with leave of the Appeal Panel, that the Tribunal was not fair and equitable and/or the decision of the Tribunal made on 6 April 2017 was against the weight of evidence. 3. The appellant may have suffered a substantial miscarriage of justice.
The grounds of appeal were purportedly expanded upon (indeed, changed) in the appellant's Submissions for Appeal filed 29 June 2017. That document identified 4 grounds of appeal: 1. That the Tribunal erred in finding that the respondent had an extremely strong and compelling case for relief from payment of commission and that the decision was so unreasonable that no reasonable decision maker would have made it. 2. That the Tribunal failed to take into account the strengths of the appellant's claim for commission. 3. That the Tribunal failed to take into account the weakness of the claim made by the respondent. 4. That the Tribunal took into account an irrelevant consideration, namely that the appellant did nothing to sell or market the property.

Is Leave to Appeal Required?

A costs decision is an ancillary decision of the Tribunal for the purposes of the CAT Act: s 4. An appeal may be made against an ancillary decision on 'any question of law'. An appeal may also be made on 'other grounds' with the leave of the Appeal Panel. As this is an appeal from a decision of the Consumer and Commercial Division, before granting leave to appeal, the Appeal Panel must be satisfied that on the grounds sought to be agitated there is a possibility that the appellant would suffer a 'substantial miscarriage of justice': see CAT Act, Sch 4, cl 12 and Collins v Urban [2014] NSWCATAP 17 .
A consideration of the grounds of appeal, whether as stated in the Notice of Appeal or as set out in the submissions, shows that only ground 1 as stated in the Notice of Appeal (asserting an error of law by the Tribunal in its application of the Legal Profession Act) could be said to raise a question of law. All of the other grounds, as seems to be accepted by the appellant, require leave to appeal.
For the reasons set out below, we would not grant such leave.

Disposition of Appeal

The fundamental problem for the appellant is that it has not sought to appeal the findings made by the Tribunal in the principal proceedings. As we have set out above, there are significant findings against the appellant as to its conduct, which led to the Tribunal determining that the reasonable amount of commission to be paid to the Appellant was $NIL. The Tribunal took the view that there was no case where an agent was less deserving of commission.
It was the findings made in the principal proceedings which the Tribunal relied on to reach its conclusion that there were special circumstances so as to enliven its discretion to award costs. We see no error of the kind required for us to intervene with the exercise of that discretion (see House v R (1936) 55 CLR 499 at 504-505).
There was no error in the Tribunal, having reached the conclusion that there were special circumstances so as to award costs, then ordering that those costs be as agreed or assessed under the relevant part of the Legal Profession Act. The appellant argued that, because the Local Court has restrictions on the amount of costs it can award in respesct of claims less than $20,000 by reason of the relevant practice note, the Tribunal did not have power to make such an order. This argument is without basis. It is rejected. The practice note does not apply to the Tribunal at all.
There was nothing unfair or inequitable in the Tribunal considering the age and vulnerability of the respondent as one of the matters it weighed up in considering whether special circumstances existed, and whether an award of costs was appropriate. In the context of the findings the Tribunal had made, that was a matter it was entitled to consider in accordance with s 60(3)(g) of the CAT Act.
The Tribunal considered the relative strengths and weaknesses of the cases of each side based upon the findings it had made. The appellant sought to challenge those findings before us on appeal. The Appeal Panel repeatedly noted that as the principal decision (and the findings made by the Tribunal in that decision) had not been appealed, it was not open to the appellant to seek to challenge those findings on appeal. Yet, when properly understood each of the bases of appeal, in order to succeed, required a challenge to those findings and for that challenge to be successful. This led to the solicitor for the appellant making an oral application seeking an extension of time pursuant to s 41 of the CAT Act to appeal the principal decision. That application was unsupported by any evidence and there was no explanation as to why the principal decision had not been appealed, nor was there any grounds of appeal from that decision identified. That application was dismissed.
None of the appellant's grounds of appeal can succeed. The findings made by the Tribunal as to special circumstances so as to enliven its discretion to award costs were plainly open to it. The finding of special circumstances enlivened its power to award costs in the exercise of its discretion, and it did so. The appellant has identified no error.

Orders

For the above reasons, the orders we make are: In so far as leave to appeal is required, leave is refused. Appeal dismissed. The orders made by the Tribunal on 6 April 2017 are confirmed.

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: 25 September 2017

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