Dama Building Group Pty Limited v CK Roofing Solutions Pty Limited (No 2)

Relevant legislative provisions and principles in relation to costs

1. Sections 60(1) and (2) of the NCAT Act provide that each party to proceedings in the Tribunal is to pay its own costs unless there are "special circumstances" warranting an award of costs
2. In proceedings in the Consumer and Commercial Division of the Tribunal, s 60 is subject to rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) which provides:

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.

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.

1. By s 60(4)(b) of the NCAT Act, if costs are to be awarded, the Appeal Panel "may order costs to be 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 (NSW)) or on any other basis".

(1) should an order for costs be made in favour of the respondent?

(2) if so, should the order be for a fixed amount or on the indemnity basis?

1. The amount in dispute in the Tribunal exceeded $30,000 and as such rr 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) apply. Therefore, the Appeal Panel does not need to be satisfied that there are special circumstances within the meaning of s 60(2) of the NCAT Act.
2. The principles regarding costs were set out in the Appeal Panel decision in Thompson v Chapman [2016] NSWCATAP 6 to the following effect:

(1) rule 38 provides a general discretion to award costs.

(2) the starting point in exercising such discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour.

(3) the reason for an order for costs being made is that it is considered to be appropriate for the party who incurred costs caused by the other party in litigation to be reimbursed. An award of costs is by way of indemnity to the successful party and not as a punishment to the unsuccessful party.

(4) the factors to be considered in awarding costs in a particular case are not confined as to do so would constrain the general discretion. However, factors that might influence whether the usual order for costs should apply include whether, by reason of the relative success of the parties on different issues and the time taken to determine those, that an order for costs based on issues should be made. Another factor might be whether by reason of the nature of the proceedings, the usual rule should otherwise be displaced in whole or in part.

1. McHugh J in Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [66] found:

By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs

1. The respondent was the successful party on the appeal as the appeal was dismissed. It follows that we consider that the correct exercise of the costs discretion is to order the appellant to pay to pay the respondent's costs of the Appeal.
2. The next question is to determine whether the costs order should be for a fixed amount or on the basis of indemnity costs to be assessed. The respondent's primary application is for a fixed costs order.
3. The respondent has been issued with the following invoices for legal costs; see par [12] of Mr Anne's affidavit:

1. The total amount of legal costs incurred by the respondent ex GST is $10,780 (paragraph 13 of Mr Anne's affidavit). In paragraph 15 of his affidavit, Mr Anne states that he has allowed a discount of 5% being $539 on the basis of an award of indemnity costs.
2. A Calderbank offer was issued by the respondent to the appellant on 2 April 2025 (paragraph 9 of Mr Anne's affidavit) a copy of which is annexed at pp 19-22 of the affidavit. The terms of the offer were that the appeal be dismissed with no order as to costs. The offer was open until 7 April 2025 and the offer also set out the reasons why the respondent considered the appeal was doomed to fail.
3. The offer was not accepted by the appellant.
4. The principles which govern the exercise of the discretion to fix costs under s 60(4)(b) of the NCAT Act are set out ZXJ v ZXK (No 2) [2023] NSWCATAP 76 at [11]- [16]. Applying those principles, we consider the following matters to be important:

(1) the total amount claimed for costs and disbursements incurred by the respondent on the Appeal are relatively modest;

(2) the claim for costs is marginally discounted;

(3) the costs of the solicitors as invoiced to the respondent are sufficiently detailed to enable us to determine whether the costs and disbursements claimed are fair and reasonable;

(4) the appellant has not provided any submission to contest the claim for fixed costs;

(5) we are satisfied that the claimed costs and disbursements to be fair and reasonable;

(6) fixing costs "avoid the expense, delay and aggravation" arising out of the process of assessing costs: Hamod v New South Wales [2011] NSWCA 375 at [817].

1. The alternative proposal from the respondent is for a costs order on an indemnity basis to be assessed or agreed. The respondent has made a Calderbank offer early in the Appeal.
2. 'Calderbank' offers are made pursuant to the principles set out in Calderbank v Calderbank [1976] Fam Law 93; 3 All ER 333; 3 WLR 586. Such principles have been the subject of extensive judicial and Tribunal consideration. In Singapore Airlines Cargo Pty Ltd v Principle International Pty Ltd (No 2) [2017] NSWCA 340, the NSW Court of Appeal stated (at [30]):

"Calderbank offers are a well-established means of parties seeking to compromise proceedings in circumstances where, provided that the offer is a genuine offer of compromise and the opposing party unreasonably rejects the offer, the court may, in the exercise of its discretion, make a special costs order in favour of the offeror".

1. The "special costs" order is usually on an indemnity basis for the period commencing after the date the unaccepted offer expires. We are satisfied that the offer made by the respondent on 2 April 2025 was reasonable and the appellant's failure to accept it was unreasonable. It follows that we would be satisfied that an indemnity costs order should run from the period commencing 8 April 2025 being the date after the offer closed, if the order was made for indemnity costs.
2. However, given the small amount of costs in the period before 8 April 2025 which was the first invoice dated 4 April 2025 for $660 and that the overall claim for costs is relatively modest, we believe that if costs were ordered on an indemnity basis and then assessed, there would not be a significant difference in the quantum between a fixed costs order and a costs order on the basis of ordinary costs until 7 April 2025 and from 8 April 2025 costs on an indemnity basis. We consider that the costs of any assessment may well exceed the difference.
3. For the above reasons and also in accordance with the obligation imposed by s 36(1) of the NCAT Act which requires us to give effect to the "guiding principle" to facilitate the just, quick and cheap resolution of the real issues in the proceedings, we are satisfied that a costs order for the fixed sum of $10,241.00 is the appropriate costs order.

(1) Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) the Appeal Panel dispenses with a hearing for the costs application.

(2) The appellant is to pay the respondent's costs of the appeal in the sum of $10,241.00 within 14 days of these orders.

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.