de Tarle v Newland

NCAT Appeal Panel|2022-07-20

Background

On 9 May 2021 the Appeal Panel made the following orders and direction in this appeal. (1) Time is extended pursuant to s 41 of the Civil and Administrative Tribunal Act 2014 to allow the appellant to lodge this appeal on 10 December 2021. (2) Appeal allowed. (3) Orders 2 and 3 made on 11 November 2021 in SC 21/27790 are set aside. (4) The appellant shall file and serve by no later than 31 May 2022 his submissions in reply on the issue of costs (limited to 5 pages plus material attachments) in the proceedings on file number SC21/27790. (5) The Appeal Panel will then re-determine the appealed decision without a hearing, on the basis of the written submissions provided.
Reasons for those orders and directions were provided in de Tarle v Newland [2022] NSWCATAP 148.
Since then the Appeal Panel has sought submissions on, considered, and refused an application by the appellant for a summons to issue to the second respondent, seeking video and sound recordings of certain meeting of its strata committee. We considered those recordings irrelevant to the costs issue.
The appellant has since made the submissions we sought in order 4 of our orders made 9 May 2021. In those submissions the appellant indicated that he disagreed with the Appeal Panel's refusal to issue the summons but added, at par 37, that he would "not press" the summons matter. The submissions as they addressed the costs issues are discussed below.
The second respondent has made uninvited, general submissions with respect to matter. We do not think that the second respondent's general submissions will be of assistance to the Tribunal in determining the costs issue. To consider them in the context they were provided would be unfair to the appellant. As a result, we will not have regard to the second respondent's uninvited submissions.

Procedural History

Before re-determining the costs issue, it is convenient to revisit the procedural history of this matter, which we outlined in our May decision, at paragraphs 1 to 15. 1. On 24 June 2021 the first respondent to this appeal commenced proceedings in the Consumer and Commercial Division of the Tribunal against The Owners - Strata Plan No 576 (the second respondent) seeking orders that the appellant be removed from the strata committee under s 238 of the Strata Schemes Management Act 2015 (NSW). 2. On 21 July 2021, on his own application, the appellant was joined as the second respondent to that proceeding. He says he did so in order to protect his reputation. 3. The first directions hearing in the proceedings took place on 6 August 2021. No objection was taken to the appellant being joined as a respondent in the proceedings. The directions hearing was adjourned to 27 August 2021. It was noted that the appellant was standing for re-election to the strata committee at an Annual General Meeting of The Owners - Strata Plan No 576 to be held on 16 August 2021. The future of the proceedings was contingent on the outcome of the election. If the appellant were not re-elected, he would not remain on the strata committee. 4. On 23 August 2021, the first respondent wrote to the Tribunal seeking to withdraw her application because the appellant had not been re-elected to the strata committee. That day the Tribunal made an order dismissing the application as it had been withdrawn under s 55(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act). 5. On the same day, the appellant sought an order for the payment of his costs in the proceedings. While he had not been represented in the proceedings, he indicated that he had sought legal advice. 6. On 31 August 2021, the Tribunal issued directions with respect to the filing of "evidence and submission" by the parties with respect to that costs application and as to whether costs could be determined on the papers. The appellant was to file his submissions on 14 September 2021, the respondent's submission were due by 29 September 2021, with any submissions in reply from the appellant due 13 October 2021. The "costs submission" were not to exceed 5 pages in length. 7. The appellant then wrote a series of emails to the Tribunal seeking advice as to whether the Tribunal had received submissions from the other parties on the costs issue. The responses he received, while some were equivocal, were in the negative. On 12 October 2012, the day before his submissions in reply were due, he emailed the Tribunal confirming that no responses had been received to his costs application. 8. In reality, the first respondent (the applicant in the initial proceedings) had emailed her response to the Tribunal on 27 September 2021 (not copied to the other parties) and asked whether filing by email was acceptable. The Tribunal did not alert the appellant to this, despite his numerous requests. 9. On 8 November 2021, the Tribunal made the following orders in chambers: 1. On 31-Aug-2021 Principal Member Rosser issued procedural directions in this matter SC 21/27790. The directions were issued to facilitate determination of the costs application. The parties were advised that the Tribunal proposes to dispense with a hearing on costs and determine the application on the basis of the written material provided. A timetable was issued for the parties to submit their evidence and submissions. 2. The Tribunal has received documents from both the second respondent Benoit de Tarle (5 pages hard copy) and the applicant Jan Newland (1 page electronic copy). 3. It appears that both the respondent Benoit de Tarle's request dated 17-Sep-2021 and the applicant Jan Newland's request dated 27-Sep-2021 to file and serve electronically have not have [sic] been properly considered by the Tribunal at those times as requested Those applications in respect of electronic service are now considered to facilitate the final determination of the cost application on matter SC 21/27790 on 10-Nov-2021. 4. The Tribunal makes an order permitting electronic service of documents by both parties on each other and to the Tribunal in the matter. 5. To avoid any doubt, both parties are to provide each other with a further electronic copy of the documents that have previously been submitted to the Tribunal on or before 7.30 pm on 8-Nov-2021. 6. To address the second respondent's right to reply, the time for compliance with previous procedural direction 3 issued by the Tribunal on 31 Aug-2021 is now extended to 4.00 pm on 9-Nov-2021. That being [sic] the following procedural direction is now issued as relevant: i. The second respondent is to provide electronically any evidence and submissions in reply to the applicant and the Tribunal by 4.00pm on 9 November 2021. 7. The cost application shall then proceed to be determined on the already submitted documents provided by the parties and any additional documents that are submitted by the second respondent in compliance with procedural direction 6. 10.On 9 November 2021 at 11:29 pm the appellant emailed the Tribunal (copied to the other parties) stating that no submissions regarding costs had been received from the other parties and requesting details of how the submissions were made and copies thereof. … 11. On 11 November 2021, the Tribunal dispensed with a hearing on costs, and determined the costs application on the materials provided. No note was made of the appellant's email of 9 November 2021. The Tribunal dismissed the appellant's costs application and ordered that each party pay their own costs. The appellant does not appeal against the Tribunal's first order to dispense with a hearing on costs. He seeks orders that the decision otherwise be set aside and re-determined. 12. It is clear that no submissions in reply were made by the appellant, who says he did not receive submissions from the respondents to which he could reply. He claims that the timeframe provided by the order of 8 November 2021 was so short that he could not comply with it. He claims that this was procedurally unfair. In making its decision that Tribunal accepted the second respondent's submissions which the appellant says had not been given to him. The appellant claims this was also unfair to him. … 13. On 10 December 2021, the appellant lodged a notice of internal appeal in which he appealed against the costs order. He indicated that he had received the decision under appeal on 12 November 2021. He had 28 days from then in which to lodge his appeal under r. 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW) (the NCAT Rules). That 28 day period expired on Friday, 7 December 2021. The notice of appeal was received on Monday 10 December 2021, the business day after it was due to be made. As a result, the appellant will require an extension of time under s 41 of the NCAT Act for his internal appeal to proceed. 14. … 15. The appeal was listed for call over on 14 January 2021 when directions were made regarding the future management of the appeal, including the filing of submissions and supporting materials. Importantly, the Appeal Panel: a) joined The Owners - Strata Plan No 576 as a second respondent to this appeal; and b) dispensed with an oral hearing of the appeal pursuant to s 50(2) of the NCAT Act.

Costs - the applicable law

Costs in the Consumer and Commercial Division of the Tribunal are to be determined in accordance with s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) and rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (the NCAT Rules).
Section 60 provides: (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.
Rule 38 provides an exception to section to s 60 with respect to certain matters in the Consumer and Commercial Division. It provides: (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 this case there is no suggestion that rule 38 has any application. The Tribunal's power to award costs in this case is that found in s 60.
The Tribunal's power to award costs is discretionary. McHugh J explained in Ex Parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6 that: 6. In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. 7. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans. 8. Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in The South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare. 9. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.
In One.Tel Limited v Commissioner of Taxation (2001) 101 FCR 548, at 6, Burkett J made a distinction between cases: "… in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs."

Material before the Appeal Panel:

In considering this appeal and the costs issue we have had regard to the following materials provided by the parties. 1. By the appellant: 1. notice of appeal lodged 10 December 2021 and annexures; 2. submissions filed on 7 February 2022 with attached materials in tabs 1 to 14 totalling 215 pages; 3. submissions filed on 25 February 2022 with attached materials in tabs 15 to 28 totalling 84 pages, and 4. Submissions of the appellant for 20 June 2022. 1. From the first respondent: 1. reply to the appeal dated 21 January 2022 in which Ms Newland opposes the appeal; and, 2. response received 16 February 2022. 1. From the second respondent a reply with two attachments filed on 21 January 2022.
As already explained have not had regard to the second respondent's uninvited submissions of 3 June 2022.

Consideration

In this case the first respondent withdrew her application to have the appellant removed from the strata committee of the second respondent under s 238(1)(a) of the Strata Schemes Management Act 2015 (NSW) after the appellant was not re-elected to that committee. When that occurred, the application became redundant, as the appellant ceased to hold office and could no longer be removed as a committee member. To allow the proceeding to continue once that occurred would have been unreasonable. The only reasonable thing for the first respondent to do was to withdraw the application. This she did as soon as she reasonably could as a result of changed circumstances.
That this was a possible outcome of the proceedings was plain to the Tribunal and to the parties at the time the appellant was joined, on his own application, as a party to the removal proceedings on 21 June 2021. This was noted at the directions hearing on 27 August 2021, when the orders made reflected an intention to wait on the outcome of the upcoming election.
In our opinion this is a case where the first respondent's decision to withdraw her application was made following a change in circumstances -the appellant not being re-elected to the strata committee - over which she had no control. It was a reasonable one. It was not a surrender or a capitulation, but an acknowledgement that due to a change in circumstances the proceedings were redundant. If she had tried to proceed with the application, then the appellant would have had a strong argument that she was wasting time and costs in pursuit of an untenable claim.
It is clear from surveying the extensive submissions and materials relied on by the appellant, that he considers the application to remove him from the committee to have had no basis in fact or law. He seeks to have the conduct of the respondent's examined in the context of the costs application, essentially asking the Tribunal to make numerous findings of fact in his favour with respect to past and present conduct by the respondents. The determination of his costs application does not justify a hypothetical consideration of the motivation of the other parties for commencing the proceedings.
Relevantly to s 60 of the NCAT, Act the appellant submits that the application to have him removed for the strata committee was bound to fail because it was made immediately after his appointment and constituted an abuse of process. While this may be the case there were clearly issues to be determined while the appellant remained a member of the strata committee. All other parties supported his removal.
The parties shows that they were at odds with each other over past issues and questioned their respective conduct and motivations. In support of his application for costs the appellant alleged that the application was based on misleading and vilifying material. The application was said to be frivolous and vexatious, lacking in substance, and to have no tenable basis of law or fact. The appellant says that these amount to special circumstances under s 60 warranting a costs order in his favour. In short, he says the application should never have been made.
The appellant complained that the size limit on his initial submissions to the Tribunal to 5 typed pages - with a similar limit on appeal - meant that he had considerable difficulty adducing evidence to prove the matters he is relying on with respect to costs. In reality - with attachments - he has submitted more that 200 pages of materials said to be relevant to the costs issue, mostly going to the substantive issue. He has also sought to summons recordings of Strata Committee meetings, asserting that they are relevant to the costs issue without explaining why.
We do not think it plain that the initial application for the removal of the appellant from the strata committee was made unreasonably, or that the conduct of the proceedings - including their withdrawal when the appellant lost his place on that committee rendering the proceeding futile - were unreasonable: see Shellharbour City Council v Minister for Local Government [2017] NSWCA 256 at 6 per Basten JA, Macfarlan JA, Sackville AJA.
In Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84 Basten JA said: 8 Secondly, although it is possible to make an order for costs against one party if it can be shown that it has invited the litigation by its unreasonable behaviour, or has unreasonably pursued the litigation, such an order should only be made where that judgment is manifest by reference to known circumstances, not in dispute between the parties. If the question cannot be answered without reviewing large swathes of evidence and resolving, on a tentative basis, disputed questions of fact, the task should not be embarked upon. 9 Thirdly, if contrary to the views set out above, it was appropriate to investigate whether the applicants or the respondent had been unreasonable, either in their conduct prior to the proceedings, or in their conduct of the proceedings, the approach adopted was untenable. Thus, regard was had to the motives of the respondent in commencing proceedings, but no account was taken of the motives of the applicants in capitulating. … See also Payne JA at 32.
In this case the merits of the first respondent's commencement of the proceedings cannot be resolved "without reviewing large swathes of evidence and resolving, on a tentative basis, disputed questions of fact". The Appeal Panel is bound not to embark on such and inquiry and declines to do so.
There is nothing in the parties conduct of the proceedings below which suggests they were conducted in a manner that would constitute special circumstance. The proceedings were withdrawn as a result of an intervening circumstance which meant they were of no utility.
There are no special circumstances meriting an award of costs in the proceedings below under s 60. This means that each party is to pay their own costs of those proceedings.

Orders

The Appeal Panel makes the following order with respect to its redetermination of the costs order in the initial proceedings: 1. The application for an award of 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: 20 July 2022

At a glance

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Judgment (7 paragraphs)

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Legislation Cited (3)

Cases Cited (6)

Cited By (1)