Draybi Bros Pty Ltd v Diab

NCAT Appeal Panel|2014-09-18

reasons for decision 1The appellant company is a home builder. The respondents are individuals who performed rendering work for the appellant at two building sites. The appellant lodged a claim against the respondents for defective work in the home building jurisdiction of the Consumer Trader Tenancy Tribunal (as it was then known (CTTT)). In respect of work at one site the claim was of the order of $240,000; and in respect of the other site, of the order of $40,000. (We note that the second respondent has not actively participated in the proceedings. The fourth respondent is named in respect of the first claim, the higher claim (HB10/47685) but not the second claim (HB10/47969). Our references to the respondents should be read in that light.) 2The respondents applied for the proceedings to be transferred to the District Court. The application was successful but not on their primary ground. The respondents had raised equitable estoppel in reply to a key claim that they had failed to install the appropriate kind of metal angles in laying the render. They failed in their submission that the limits imposed by law on the Tribunal's jurisdiction prevented it from dealing with a claim of this kind. However, they also had made a number of other objections to the competence of the appellant's claim remaining in the Tribunal, in particular in relation to the effect of statutory limitation periods governing proceedings in the Tribunal. The appellants' were substantially successful in relation to those objections, and the Tribunal, therefore granted the order they had sought transfer of the proceedings to the District Court. 3The Tribunal's reasons on these issues are lengthy: see Draybi Pty Ltd v Diab and ors [2014] NSWCATCD 67 (31 January 2014), and were issued seven months after the hearing was held. At the end of the reasons, the Tribunal alluded to the issue of the costs of the proceedings and expressed the following provisional view: 156. In relation to the issue of costs, each party has had some success. My preliminary view is that the costs of the application should follow the event and await the final determination of the dispute between the parties. 4The Tribunal made directions for the filing of submissions, dealt with them on the papers, and decided, contrary to its provisional view, to make a costs order substantially in favour of the respondents, as follows: 1. That the applicant pay to the respondents two thirds of the respondents costs of the application to transfer, such costs to be as agreed or assessed immediately. 2. That the applicant pay to the respondents the respondents' costs incurred in the proceedings before the Tribunal relating to the preparation of points of defence and evidence being costs wasted by reason of the transfer of the proceedings to the District Court of New South Wales, the determination of such costs to be agreed or assessed at the conclusion of the proceedings. 5The Tribunal reduced the order sought by the respondents by a third to recognise that the appellant had been successful on one of their points of objection to the transfer, namely that it was within the jurisdiction of the Tribunal to deal with the equitable estoppel point. The Tribunal was satisfied that the Act absolutely barred it from considering a negligence claim made by the appellant because it was time barred under the law governing the home building jurisdiction of the Tribunal. It was not time barred under the limitations laws applying to the courts. 6The primary hearing occurred in the Consumer Trader and Tenancy Tribunal (CTTT) prior to its abolition and absorption into this Tribunal. The Tribunal considered that it was bound to apply the law that had governed applications for the costs of proceedings in the CTTT under the now repealed Consumer, Trader and Tenancy Tribunal Act 2002, having regard to the transitional provisions of the Civil and Administrative Tribunal Act 2013 (NCAT Act). We agree with the Tribunal's assessment, and it was not in dispute in the appeal. The provisions relevant to these proceedings are: 7Under the CTTT Act: 53 Costs (1) Subject to this section and the regulations, the parties in any proceedings are to pay their own costs. (2) The Tribunal may, in accordance with the regulations, award costs in relation to any proceedings. (3) If costs are to be awarded by the Tribunal in accordance with the regulations, 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 Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. ... Under the Regulations (Consumer, Trader and Tenancy Regulation 2009): 20 Costs generally (1) This clause applies to the awarding of costs by the Tribunal as provided by section 53 of the Act. ... (4) In any proceedings in respect of which the amount claimed or in dispute is more than $30,000, the Tribunal may award costs in relation to the proceedings in such circumstances as it thinks fit.

The Appeal 8The appellant now appeals against these orders. The appeal is made under the provisions of the NCAT Act. The appellant has an unqualified right to appeal in relation to a question of law: s 80(2)(b). The appeal may be made on 'other grounds' but that right is qualified. This appeal raises questions of law, and applies for leave to be heard on other grounds. We will deal first with the questions of law aspect of the appeal. 9The appellant's principal submission is that the provisional view expressed by the Tribunal in its decision issued in January should have been maintained. It contends that it is premature to dispose of the costs issues in connection with the costs of the transfer application until the final outcome of the proceedings is known.

Question of Law Appeal 10A difficulty in this case is that the question of law grounds as originally formulated in the notice of appeal filed 10 July 2014 (subsequently amended in a minor way, 19 August 2014) do not correspond to the way in which the questions of law were formulated in the appellant's written submissions filed 29 August 2014 and the oral submissions made at hearing on 18 September 2014. Understandably, the respondents replied in their written submissions filed 8 September 2014 to the grounds as set out in the notice of appeal. 11In combination the notice of appeal and the written and oral submissions raised the following possible errors of law: (1) failure to give adequate reasons; (2) unreasonableness in the exercise of the costs discretion; and (3) misapplication of the principles governing the exercise of the costs discretion. 12Adequacy of Reasons. The objections as formulated in the grounds of appeal that appeared in the notice of appeal were, in effect, reworked by the appellant's submissions into an alleged failure to give adequate reasons. That the tribunal has a legal duty to give adequate reasons is well accepted. On the other hand the reasons need not be elaborate in dealing with an exercise of discretion of the kind that the costs discretion is. In this instance the member set out in considerable detail his reasons for making the order that he did. He acknowledged that the respondents had only been successful on one of their two bases for the application for transfer. As the appellant noted, the order made was not the primary order sought by the application (outright dismissal of the applicant's claim) but the alternative order (transfer). 13The appellant suggested that the Tribunal had failed to give adequate reasons for choosing to make a costs order in circumstances where the application only had success on one of its grounds. This is a familiar situation for courts and tribunals exercising a costs discretion. It is not unusual for success to be achieved on one of the many bases on which a case or a procedural application rests. 14In our view it is clearly a matter for the judgment of the determiner of the costs application as to how the balance of success within the confines of a case or application are dealt with. 15Unreasonableness. Misapplication of relevant principles. The costs discretion conferred by reg 20(4) is broad in character. The Tribunal had regard to one circumstance in its decision to award costs, the fact that the application had been successful. In our view it was open to the Tribunal to proceed in that way. 16It referred frequently in its reasons, as did the parties in their submissions to us, to the usual rule in the ordinary courts, that costs follow the event. We should note that the jurisdiction exercised on this occasion was a statutory one as set out in reg 20(4) and conditioned by the terms of s 53 of the CTTT Act and the objectives of that Tribunal. A clause such as reg 20(4) should not, we think, be read as though it simply introduces into the tribunal environment a rule as routinised as the one applied in ordinary civil litigation in the courts. 17In relation to the exercise of the discretion, the appellant argued that it would have been better had the Tribunal not made a final costs order on this aspect of the proceedings at this stage. It would have preferred an order that the costs of the successful motion be reserved or be costs in the cause. While often interlocutory applications are dealt with in that way, it is a matter of discretion for the tribunal to decide whether it is appropriate to make a costs order in relation to an interlocutory matter. As counsel for the respondent pointed out, as this was a circumstance where the case was leaving the Tribunal it made sense for the Tribunal to dispose of the one issue that remained before it, and to have that done by the member who had presided in the matter. The appellant did not draw our attention to any law that might limit the Tribunal in the way suggested. This is not question of law. 18Both parties referred to the recent observations of the Appeal Panel in Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38 at [31]-[33], on the limited circumstances in which a challenge to a finding of fact or the exercise of a judicial discretion can be undone on error of law grounds. Counsel for the respondents referred to statements made by appeal judges in some recent cases involving appeals from jurisdictions of this Tribunal where appellants had sought to have decisions as to the facts or exercises of discretion undone on error of law grounds. See PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446 at [113]-[116] per Sackville AJA; and Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86 per Macfarlan JA at [49]. The latter remarks explain succinctly why challenges to weight of evidence do not raise a question of law. The statements of law made in the cases cited here are familiar ones, and draw on well-established lines of authority. The submissions of counsel for the respondents dealt comprehensively with the relevant law, and we will not repeat that material here. 19In our view, there were no errors of law identified in the way the Tribunal exercised its discretion.

Application for Leave to Appeal on Other Grounds 20Section 80(2)(b) of the NCAT Act provides that an appeal may be made with the leave of the Appeal Panel on any grounds other than questions of law. The leave power is constrained in the case of appeals from decisions of the Consumer and Commercial Division of the Tribunal, the position here, by the provisions of cl 12(1) of Schedule 4, i.e. 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 21In the notice of appeal, and in the later written submissions, the appellant gave reasons as to why leave should be granted. The appellant asserted that it had suffered a substantial miscarriage of justice, because the costs discretion was not fair and equitable (ground (a) above). The appellant's written submissions mainly consisted of a narrative of the history of the proceedings and included some questioning of the substance of the principal decision of 31 January 2014. There was no appeal lodged in relation to that decision, and we will not reopen the points of substance. Once these parts of the submissions are excluded from consideration, there is little left by way of submissions that the decision was not fair and equitable. There are four paragraphs that appear on the last two pages of the 12 pages of the written submissions. 22As we have already noted, the Tribunal was engaged in a not-unusual exercise of discretion in a matter where both parties had enjoyed some success. It was open to it to make the proportionate order that it settled on. 23We are not satisfied that the finalisation of the costs issue as it relates to the transfer decision gives rise to any substantial injustice to the appellant. If, as the appellant would hope, the proceedings before the District Court result in an order in its favour, it is open, in our opinion, to the appellant to ask for account to be taken by the Court in any costs order it makes of the costs the appellant incurred in relation to the successful transfer application. The respondents' submission in reply, we expect, would be that it was successful in having the matter transferred, and it was fair for its costs of that application to be met regardless of the ultimate outcome of the proceedings in the District Court.

Costs 24The respondents applied for their costs of the appeal. The provision relevant to the costs of the appeal is s 60 of the NCAT Act. It was the usual practice of the Administrative Decisions Tribunal Appeal Panel to treat a failed appeal as a circumstance strongly favouring an order for costs, as a successful party at first instance has been put to the time and expense of a second round of litigation. 25If the appellant wishes to be heard on the costs question, it should notify the Registry within 7 days of the publication of this decision and a date for a short oral hearing, possibly by telephone, will be arranged. If there is no such request, we will proceed to exercise the discretion, and issue an order within a further 14 days.

Order

Appeal dismissed.
As to respondents' application for costs, see paragraph [25] of these reasons. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar

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: 29 October 2014

At a glance

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Judgment (7 paragraphs)

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Cases Cited (5)