Durastyle Homes Pty Limited v Gosling

NCAT Appeal Panel|2022-12-13

Background

This is an appeal against a decision made on 21 September 2022 in the Tribunal's Commercial and Consumer Division.
There were two underlying proceedings, both of which concerned certain building works performed by the appellant builder on the respondents' residence in Castlereagh NSW. The first set of proceedings was brought by the appellant against the respondents, while the second was brought by the respondents against the appellant.
On 28 June 2022, the Tribunal: 1. In relation to the first proceedings, dismissed the appellant's claim and ordered that the appellant pay the respondents' costs; 2. In relation to the second proceedings, found for the respondents, ordered the appellant to pay them $13,994.97 and further ordered that the appellant pay the respondents' costs; and 3. In relation to both sets of proceedings, gave leave to either party to seek a different costs order and made directions concerning the exchange of written submissions if such an application was made.
The appellant sought a different costs order and the parties exchanged submissions in accordance with the orders of 28 June 2022.
On 21 September 2022, the Tribunal ordered as follows: 1. By consent, a hearing was dispensed with and the issue of costs was determined on the papers; 2. The appellant's application for costs was dismissed; and 3. The orders of 28 June 20922 were affirmed.
On that same day, the Tribunal issued its reasons for that decision.
On 21 October 2022, the appellant filed at the Tribunal's office in Penrith a Notice of Appeal against that decision. On 24 October 2022 that Notice of Appeal was received by the Tribunal's Appellate Registry in central Sydney.

Scope and nature of internal appeals

Internal appeals may be made as of right on a question of law, and otherwise with permission (that is, the "leave") of the Appeal Panel: s 80(2) Civil and Administrative Tribunal Act 2013 (NCAT Act).
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons when reasons are required; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are constrained by cl 12(1) of Sch 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.

Submissions and evidence

In deciding the appeal, we have had regard to the following: 1. The Notice of Appeal lodged on 21 October 2022; 2. The Reply to Appeal filed on 2 November 2022; 3. The parties' respective written submissions and submissions in reply, which were both detailed and helpful; and 4. The oral submissions made by and on behalf of the parties at the appeal hearing.

Notice of Appeal

The Notice of Appeal was lodged on 21 October 2022. The proceedings to which the appeal relates are not residential proceedings as defined in cl 3(1) of the Civil and Administrative Tribunal Rules 2014 (the Rules), since they are proceedings that arose under the Home Building Act 1989 (NSW), rather than any of the legislation specified in that definition. What follows is that under cl 25(4) of the Rules, the period for filing the Notice of Appeal was 28 days from the later of (1) the date on which the appellant was given notice of the decision under appeal, and (2) the date on which it was given reasons for the decision.
Since the date on which the appellant was informed of (and given reasons for) the decision under appeal was 21 September 2022, the Notice of Appeal was filed two days after the end of the relevant time period. There is no controversy on this point, which the appellant squarely recognises in paragraph 4 of its Submissions on Appeal dated 14 November 2022. The issue for us is whether to exercise our discretion to extend time under s 41 of the NCAT Act for lodging the Notice of Appeal. We will return below to this question.

Legislative provisions

The starting point is s 60 of the NCAT Act, which provides relevantly as follows: 60 Costs (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.
In the case of proceedings before the Tribunal's Commercial and Consumer Division, this position is modified by r 38 of the Rules: 38 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.

The decision under appeal

The relevant findings in the decision leading to the costs order under appeal (Decision) were as follows: 1. The appellant sought to recover losses or damages on a quantum meruit basis in connection with its performance of building work conducted without having complied with the requirement to reduce its contract to writing: Decision at [47]; 2. The amount claimed by the appellant on this basis was in the sum of $78,328: Decision at [47]; 3. The appellant failed to file evidence to support its claim: Decision at [48]; 4. Since: 1. The appellant was wholly unsuccessful in its claim: Decision at [45]; 2. the respondents were required to defend a case with little prospect of success: Decision at [48], and 3. there was no delinquency attributable to the respondents that would entitle the appellant to an award of costs: Decision at [49], 4. an award of costs in their favour is appropriate: Decision at [48]; 1. The respondents commenced proceedings seeking orders for $88,000 by way of damages for defective or incomplete work: Decision at [47]; 2. This was based on a report prepared by an expert building assessor, and is thus credible evidence that, if accepted, could establish an entitlement to an order for more than $30,000: Decision at [47]; 3. The respondents were successful in their claim, albeit to a modest degree: Decision at [48]; 4. The relative modesty of the respondents' success in their claim - to the extent of 12% - does not detract from their overall success: Decision at [44]; and 5. Ultimately, the appellant was unsuccessful in both applications and costs should follow the event: Decision at [50].

Grounds of appeal and appellant's submissions

The Builder appeals on six grounds: 1. First ground: The Tribunal erred in finding that the respondents' conduct, in refusing the appellant and its expert access to the premises, neither prolonged the proceedings nor impeded the appellant's ability to make concessions as and when appropriate such as to affect the respondents' entitlement to costs. The appellant was not aware of the alleged defects until 11 January 2021 when it received the respondents' first expert report at a time that was after the commencement of proceedings. 2. Second ground: The Tribunal erred in finding that the respondents' excessive claim, relative to the amount actually awarded to them, did not detract from the overall success of their claim. The respondents were only successful to the extent of 12% in value of their claims, and the Tribunal did not take this appropriately into account; notably, by not considering whether to make different costs orders for different components of the proceedings. 3. Third ground: The Tribunal did not in exercising its discretion to award costs give appropriate consideration to the possibility of exercising its discretion to decline to award costs in circumstances where the claimed amount is inflated. 4. Fourth ground: The Tribunal erred in finding that there was credible evidence which, if accepted, could establish an entitlement for the respondents to an order for more than $30,000 and that in consequence the respondents had not embellished their claim. 5. Fifth ground: The Tribunal erred by failing to take into account the time and costs that the appellant's entirely unsuccessful claim for quantum meruit took up in the context of the overall proceedings. 6. Sixth ground: The Tribunal erred in the exercise of its discretion to award all the respondent's costs because: 1. It was not fair and equitable to do so where the majority of the respondent's allegations, that the appellant had to address, were unsuccessful; 2. The appellant is in consequence required to pay the costs of the respondents' pursuing unmeritorious claims; and 3. The Tribunal's exercise of its discretion was vitiated in terms of House v The King [1936] HCA 40; 55 CLR 499 because it was mistaken as to certain key facts and did not consider authorities relevant to the determination.
In our view, only Ground 6(c) raised a question of law: see the discussion in Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40 at [31] to [34]. In any event, the appellant says leave to appeal against the decision is warranted on the grounds that it was not fair and equitable, since: 1. The Tribunal considered that an unsuccessful component of the respondents' claim, being a claim for loss of value, did not take up much of the parties' or the Tribunal's time. It failed, however, to apply the same consideration in the context of the appellant's failed quantum meruit claim. 2. It was not fair and equitable to award the respondents' all (as distinct from a percentage) of their costs where the majority of their allegations, that the appellant had had to address, were unsuccessful. 3. It was not fair and equitable for the Tribunal to award all of the respondents' costs when the amount claimed exceeded the threshold amount under cl 38(2)(b) of the Rules but the actual award was substantially under that threshold.
The appellant also seeks leave to appeal against the decision on the grounds that it was against the weight of evidence.

The Respondents' position

The Respondents filed their Reply to Appeal on 2 November 2022.
In it: 1. They support the decision under appeal; 2. They say that the appeal was filed out of time and is incompetent; and 3. They say that no extension of time should be granted, since: 1. The prospects of success for the appeal are poor; 2. No explanation is provided as to why the appeal was lodged late; and 3. To allow the appeal to be lodged out of time would be contrary to the guiding principle in s 36 of the NCAT Act, which is discussed in more detail below.

Consideration - extension of time

The appellant observes in paragraph 4 of its Submissions on Appeal as follows: "On 21 October 2022 the Builder lodged the Notice of Appeal with the Tribunal in respect of the Tribunal's orders on the Costs Application, unfortunately 2 days out of time due to an administrative error of its solicitors".
It then quotes a well-known passage from the decision of a differently constituted Appeal Panel in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22, that has been applied generally by Appeal Panels of this Tribunal in relation to applications to extend the time for lodging notices of appeal: [22] The considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a Notice of Appeal include: (1)The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant - Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38]; (2)The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision - Jackamarra v Krakauer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success - Jackamarra at [7]; (3)Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: (a) The length of the delay; (b) The reason for the delay; (c) The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and (d) The extent of any prejudice suffered by the respondent (to the appeal)- Tomko v Palasty (No 2) (2007) 71 NSWLR 61at [55] (per Basten JA) but note also [14], Nanschild v Pratt [2011] NSWCA 85 at [39] to [42]; and (4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] - [59].
In its submissions, the appellant addresses the four criteria referred to by that Appeal Panel in paragraph [22(3)] of its reasons: 1. Length of the delay: The delay was ".. a mere 2 days..". 2. Reason for the delay: The reason for the delay "... was not the fault of the Builder". 3. The appellant's prospects of success: The appellant "... has an arguable case". 4. The extent of any prejudice suffered by the respondents (to the appeal): The respondents cannot point to any prejudice suffered.
Five months after the decision in Jackson a differently constituted Appeal Panel further considered the issue of extensions of time, in Habib v State of New South Wales (NSW Police Force) [2014] NSWCATAP 70.
Paragraphs [72] to [74] of the reasons in that case (to which the appellant did not refer in its submissions) set out the wider considerations underlying s 41 of the NCAT Act. It ties them back to the guiding principle that s 36 of the NCAT Act requires the Tribunal to have regard to in procedural matters, being "to facilitate the just, quick and cheap resolution of the real issues in the proceedings". Paragraphs [72] to [74] are as follows: [72] The discretionary power to grant an extension of time under s 41 of the Act is unfettered but it must be exercised judicially and having regard, among other things, to s 36 of the Act and the need "to facilitate the just, quick and cheap resolution of the real issue in the proceedings". [73] The discretion to extend time is given for the sole purpose of enabling the Tribunal, in this case the Appeal Panel, to do justice between the parties. In order to determine whether the rules will work an injustice, it is appropriate to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application for extension of time. It is also appropriate to consider the prospects of the appellant succeeding in any application for leave to appeal and on the appeal itself. In order to justify the Appeal Panel extending the time, there must be some material upon which the Appeal Panel can exercise its discretion. See Nanschild v Pratt [2011] NSWCA 85 at [38]; Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2] and the authorities referred to there; and also Opera Australia Ltd v Carr [1999] NSWADTAP 6 at [16] and Chand v Rail Corporation of New South Wales No 3 [2010] NSWADTAP 11 at [20]. [74] Time limits are set to promote the orderly and efficient conduct of proceedings in the Tribunal, to provide certainty for the parties to proceedings and to achieve finality in litigation. For these reasons, time limits should generally be strictly enforced unless the interests of justice require that an extension be granted.
The reasoning in Habib, and in particular paragraphs [72] to [74] quoted above, set out both the default position in relation to extensions of time - "time limits should generally be strictly enforced" - and the moral and legal justification for allowing departures from them: "unless the interests of justice require that an extension be granted". This background places the formulation in Jackson into context, as detailed guidance for the Tribunal in determining when the interests of justice demand a departure from strict compliance with time limits.
It is also important to note that appeals from decisions as to costs alone attract other specific considerations, which were not raised in Jackson or Habib. The courts have made clear that appeals relating to costs orders alone should not be entertained lightly. In an unanimous decision of the Court of Appeal in FAI General Insurance Co Ltd v Burns and Anor [1996] NSWSC 350, Mahoney P said: Where the decision appealed from is not merely discretionary but discretionary in relation to the award of costs, appellate courts have traditionally been slow to interfere. This no doubt has been influenced, inter alia, by the fact that in making orders as to costs, a judge is usually - at least, often - affected by what has occurred before him and what he has seen as to the conduct of the litigation. In judging such matters and the effect of them, the judge will frequently be in a position of advantage in the sense that inferences may be drawn, from the dialogue between bench and bar, which are not immediately apparent from a mere reading of the text of what has taken place. But, however this be, the task of upsetting a discretionary order as to costs is a different one.
In the same matter, Priestly JA noted: In a case such as the present, where a trial judge was trying to arrive at issues between parties the resolution of which would make more likely a fair and efficient conclusion of the litigation, it is inevitable that that judge knew more about the reasons why that objective was not achieved than could ever be captured on the papers subsequently available to a court of appeal. This makes it particularly important, in a question relating to a discretionary order for costs, that an appeal court deciding an appeal against such an order should not substitute its own discretionary order for that of the trial judge unless persuaded that the appellant has shown that the trial judge's order was clearly a miscarriage of discretion.
More recently, those principles have been affirmed elsewhere, confirming that "there has long been reluctance to entertain appeals against costs orders" (Commissioner of the Australian Federal Police v Opal Storm Pty Ltd and ors [2018] VSCA 301 at [27]) and "the burden of establishing a legal error in relation to an order for costs is a heavy one": Mercuri v TCM Building Group Pty Ltd [2018] VSC 604 at [41].
Of course, these considerations do not apply in this Appeal Panel if a question of law is identified; in respect of a finding about whether r 38 of the Rules is engaged; or, potentially, in respect of whether special circumstances warranting an award of costs are identified, where that is required.
Finally on this topic, in respect of decisions as to costs "[r]arely will it be necessary for a judge to give detailed reasons for decision adverting to every matter debated in argument. This Court will assume, as should the parties, that every matter addressed in argument on costs has been considered. This Court will set its face against any proposition which would require judges disposing of questions of costs to give elaborate reasons": Luxmore Pty Ltd v Hydedale Pty Ltd 20 VR 481; [2008] VSCA 212, per Maxwell P and Kellam JA at [12].

Length of and reason for the delay

We accept both that the delay was modest and that it was the result, as the appellant submits, of "... an administrative error of [the appellant's] solicitors" rather than of any direct personal error by the appellant or its officers. The underlying context, however, is one in which the parties had been engaged in legal proceedings concerning the same building work, variously in the Local Court and this Tribunal, since November 2020. Since 24 August 2020, the appellant had been legally represented in relation to the dispute; this much is apparent from paragraphs 77 to 79 of the statement dated 26 May 2021 made by Mr Andrew Gibbs on behalf of the appellant and filed in proceedings HB 21/02359. The present appeal is thus yet another round in their disputation. Not only has the appellant been legally represented throughout this (and previous) rounds, but with the assistance of its legal advisers it had until mid-October 2022 negotiated, apparently with timeliness and efficiency (if not ultimate substantive success), the rules, procedures and facilities of the Tribunal. The appellant is thus not a litigant in person attempting to navigate its way as best it can through the unfamiliar landscape of legal proceedings and procedural rules. It is not a shorn lamb to whom the Appeal Panel may reasonably temper the procedural wind through the overzealous exercise of its discretion under s 41; rather it is a commercial litigant with sufficient sophistication to seek out and obtain legal advice in relation to a dispute, the conduct of which it has entrusted to its lawyers.
Against that background, neither the relative brevity of the delay nor the proposition that it was the result of an error by the appellant's lawyers (although this is also relevant - see Stollznow v Calvert [1980] 2 NSWLR 749 at 753 per Moffitt P, with whom Hope and Mahoney JJA agreed) offers a particularly compelling reason for us to depart from the essential principle articulated in paragraph [74] of the reasons in Habib, that procedural time limits should generally be strictly enforced. There is no self-evident reason why the interests of justice demand that a matter which is essentially one between the appellant and its solicitors, namely the consequences of the latter's failure to file the Notice of Appeal within time, should through the exercise of discretion under s 41 of the NCAT Act be converted into one between the appellant and the respondents. Moreover: 1. If we do not extend time, the appellant remains entitled to whatever legal rights and commercial leverage it may have against its solicitors in relation to the late filing; it is not deprived of any such rights, but rather continues to enjoy those that are the legal and commercial corollary of the solicitors' late filing; it is thus not at all clear that, in the words of paragraph [22(1)] of Jackson, "strict compliance with the rules will work an injustice upon the appellant"; and 2. For the Tribunal to extend time would deprive the respondents of the "vested right" identified by the Appeal Panel in [22(2)] of Jackson and of which we must be cognisant: "that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision".

The appellant's prospects of success

Turning to the third consideration identified by the Appeal Panel at [22(3)] of Jackson and at [73] of Habib, namely the appellant's prospects of success in the appeal, we do not consider them to be high.
The starting point is whether r 38 of the Rules applied, or whether the general rule in s 60 of the NCAT Act applied, so that special circumstances must be identified before an award of costs could be made. In that regard: 1. The appellant's claim for quantum meruit was for $78,328. This clearly exceeds the $30,000 threshold provided for in r 38(2)(b) of the Rules. 2. The respondents' claim for damages for defective and incomplete work was for $88,000, which equally clearly exceeds that threshold. This was based on a report prepared by an expert building assessor which, as the Tribunal observed at first instance at paragraph [47] of its reasons, was "... credible evidence which, if accepted, could establish an entitlement to an order for more than $30,000". 3. We note the appellant's argument, that this report was prepared on the respondents' instructions and presupposed a particular characterisation of the contractual relationship between the appellant and the respondents. Even if this argument is correct, however, it does not follow that "the amount claimed or in dispute in the proceedings" commenced by the respondents was below the $30,000 threshold. This was not a case where there was a deliberate or reckless inflation of the respondents' claim to a figure exceeding $30,000 which they were clearly never likely to succeed in and entirely unsupported by evidence. 4. The amount, if any, awarded to the respondents might well - as in the event it was - be substantially less than the amount claimed but that does not affect either the fact that the claim was for more than the threshold or that there was a basis, in the form of the building assessor's report, for that claim. 5. Hence, we consider it unlikely that the award of costs in the proceedings would be based otherwise than on r 38, the effect of which is to apply to relevant proceedings in the Tribunal the ordinary principles as to the award of costs.
These principles as applied in the Tribunal are usefully summarised in Bonita v Shen [2016] NSWCATAP 159: 58. In Thompson v Chapman [2016] NSCATAP 6, when dealing with r 38(2)(b), the Appeal Panel said at [69]: The starting point in exercising such a discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour. 60. The Appeal Panel in Thompson referred to the decisions of the High Court in Latoudis v Casey (1990) 170 CLR 534 and Oshlack v Richmond River Council (1998) 193 CLR 72. 61. In Latoudis McHugh J said at 567: An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connection with the litigation: Kelly v. Noumenon Pty Ltd (1988) 47 SASR 182, at p 184. The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings. 62. In Oshlack McHugh J said at 97: The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation. 63. While McHugh J was in the minority in Oshlack, (which related to an individual seeking to remedy or restrain a breach of the Environmental Planning and Assessment Act, 1979 (NSW), being proceedings authorised by s 123 (1) of that Act), the majority in that case did not disagree with the general principle but rather whether, in the particular circumstances of the case, an order for costs should be made against the unsuccessful plaintiff, Oshlack. 64.On the other hand, where there is a general discretion to award costs there is no absolute rule that the successful party must receive the costs. In Thompson the Appeal Panel said at [71]-[72]: 71 Where there is a general discretion for costs there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party nor is there any rule that a successful party might not be ordered to be of the costs of an unsuccessful party: see Oshlack … per Gaudron and Gummow JJ at 88 and Kirby J at 121-123. 72 The factors to be considered in awarding costs in a particular case are not to be confined as to do so would constrain the general discretion. However it is clear from the authorities that factors that might influence whether the usual order for costs should apply and, if so, to what extent include: (1) 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; see for example Bostick Australia Pty Ltd v Liddiard (N0 2) [2009] NSWCA 304; and (2) Whether, by reason of the nature of the proceedings the usual rule should otherwise be displaced in whole or in part: see Oshlack … per Gaudron and Gummow JJ at 41-44.
The respondents were successful in both claims. They successfully defended the appellant's claim for quantum meruit and were successful in obtaining an award of damages against the appellant, although in an amount that was markedly lower than - only roughly 12% of - the amount that they claimed. On the face of matters, therefore, the respondents would be entitled to an award of costs in application of the principles outlined, subject to the exceptions contemplated by Thompson v Chapman [2016] NSCATAP 6 at [71] and [72].
The first possible exception to which the appellant has recourse in its Grounds of Appeal is disentitling conduct by the respondents, in the form of their failure to allow the appellant and its expert adequate access to the relevant property in order to determine whether (and if so on what issues) to make appropriate concessions which might have reduced the duration and cost of the proceedings. The Tribunal at first instance considered this issue and reached a reasoned conclusion that was unhelpful to the appellant. The appellant's chances of success on this point were not, in our assessment, particularly promising having regard to the Tribunal's considered analysis.
The second exception argued for by the appellant is that the disparity between the amount claimed by the respondents and the amount awarded to them is such as to justify an apportionment of costs broadly commensurate with their degree of success. The Tribunal at first instance considered this issue, and sought to apply the principles concerning it articulated by the Court of Appeal in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304, at [38], that unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.
Nothing in the appellant's submissions indicated, in our assessment, strong prospects of success for the appellant on this basis. The appellant has not identified that the Tribunal identified incorrect legal principles within which to frame its decision. Nor are those principles in any way controversial. On that basis, there is neither an issue of general principle or public importance to be considered nor does the allegation that the Tribunal erred in the eventual exercise of its discretion appear to us to rise above the merely arguable. Certainly, it does not appear to rise to the extent necessary to establish error in the sense described in House v the King.

The extent of any prejudice suffered by the respondents (to the appeal)

There was nothing to indicate any particular prejudice to the respondents in us extending the time for filing the Notice of Appeal. The appeal hearing effectively consolidated argument on both the preliminary issue - whether time should or should not be extended - and the substantive issues in the appeal, so there would be no material disadvantage to the respondents in terms of time or cost by us exercising our discretion under s 41 as sought by the appellant. However, on the same basis, we are in a strong position to assess the apparent strength of the appeal.

Conclusion

Having regard to these considerations, we were not, on balance, satisfied that this was an appropriate case in which to exercise our discretion under s 41 of the NCAT Act. The interests of justice do not, in our view, demand that we depart in the present case from the basic principle articulated in Habib, that "time limits should generally be strictly enforced" or not give full effect to the respondents' "vested right" to retain the benefit of the decision.

Orders

We will order that: 1. Leave to extend time to lodge the Notice of Appeal is refused. 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: 19 April 2023

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