Durran t/a Canberra Sheds and Outdoor Storage v Bliss

NCAT Appeal Panel|2017-11-01|Before: Mr J

Solicitors: Respondent: Elringtons Lawyers File Number(s): AP 17/33635 Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 27 June 2017 Before: G Sarginson, Senior Member File Number(s): HB/31967 and HB/30357

Introduction

These reasons relate to an application for costs made by the respondents to the appeal in circumstances where the appeal was withdrawn.
The appellant is a builder who entered a contract with the respondents to carry out residential building work. The respondents were homeowners of a property located at Murrumbateman in New South Wales.
Disputes arose between the parties which were the subject of home building applications HB 16/30357 and application HB 16/31967. In the first application the appellant was the applicant who claimed from the respondents the sum of $16,895.00 for unpaid monies said to be due under the contract. In the second application, the respondents were the applicants who said that the appellant had failed to construct the required works in accordance with the terms of the contract. In particular, the respondents said that the contract required the appellant to construct a building suitable for occupation under Class 1A of the Building Code of Australia however the building as constructed was of Class 10A, being a building which could only be used as a storage shed or garage. The respondents sought damages of $28,995.07, having originally filed an application in the Tribunal seeking an amount in excess of $30,000.

Notice of Appeal and history of appeal proceedings

The Notice of Appeal was filed on 25 July 2017, within 28 days of the date on which the appellant received notice of the decision. Consequently, the appeal was lodged in time. The appeal was lodged with an application for stay.
The Notice of Appeal is signed by the appellant. It does not name a representative for the appellant. It includes details of the grounds of appeal, including in respect of those matters for which leave to appeal is required. Attached to the Notice of Appeal are various annexures which appear to be correspondence between the parties and other documents provided before and during the carrying out of the work, the subject of the contract.
Under Part C of the Notice of Appeal (Orders The NCAT Appeal Panel Should Make) the appellants said: The orders that I would like made would be, is to classify the structure based on which the other party had led everyone to believe. My understanding was that the home owner was wanting a class 10 A structure to be utilised as a shared/workshop and that any rectification work be determined based on the classification of a Class10a as opposed to a Class 1A structure according to the BCA. Further I would like a more in-depth determination of the rectification work required due to the fact that rectification report provided by Leary States items that require rectification but were never included in the original quotation for example doors and windows needed changing to bring up to a class 1A structure when in fact the other party had chosen and picked the structure prior to myself becoming involved and were aware of the zoning requirements of the land. I would also like to suggest that orders should made to confirm that if the tribunal upon appeal does decide to keep the original judgement the homeowner are to provide evidence that rectification have taken place as opposed to profiting from this matter which in turn has misled the tribunal. In my opinion I do not believe that the homeowners should have the right to fight this matter based on classification then get a payout which then in turn decide "we are actually not going to change the structure".
The proceedings were listed for call over on 17 August 2017 and to determine the stay application. At that time, a stay was granted in respect of the order that the appellant pay to the respondents the sum of $13,499.68. Also, the Tribunal made directions requiring: 1. the appellant to file and serve documents and submissions in support of his appeal by 21 September 2017; 2. the respondents to file and serve documents and submissions in opposition to the appeal by 19 October 2017; and 3. the appellant to file and serve submissions in reply by 26 October 2017.
In addition, the Tribunal fixed the appeal for hearing on 1 November 2017 and directed that any issue concerning leave to appeal on grounds other than a question of law would be determined at the hearing of the appeal.
There were no further directions hearings.
The appellant provided to the Tribunal and the respondents various documents and submissions in support of his appeal. These were provided in August and September 2017.
The respondents filed documents and submissions in reply on 24 October 2017. There is a dispute concerning the date the appellant received these documents although it appears from the evidence provided by the appellant that some were received by email on 23 October 2017, some on 24 October 2017 and a folder containing evidence from original hearing a few days later.
Be that as it may, on Friday, 27 October 2017 the appellant sent to the Tribunal an email in the following terms: I, Colin Durran wished to withdraw my application of appeal from the Tribunal; I believe that the odds are stacked against me even though I was under the awareness that I was doing everything correct. As per original orders I will have payment of $13,499.68 ready upon advice or withdrawal from the Tribunal. I seek leave to appear by telephone or via your Queanbeyan and offices as I am located in Canberra for reasons in regards to this withdrawal. I do not wish to waste the Tribunal's time in continuing with this matter.
A copy of the request was sent to the respondents asking whether they objected to the proceedings being withdrawn. By letter dated 31 October 2017, the respondents' lawyers advise they consented to an order dismissing the appeal under s 55(1)(a) of the Civil and Administrative Tribunal Act, 2013 (NCAT Act). The respondent also advised the Tribunal they were seeking an order that the appellant pay the costs of the appeal pursuant to s 60(2) of the NCAT Act. In that request, the respondents proposed the hearing date be vacated and that directions be made for the filing and service of submissions in relation to the costs application.
The Appeal Panel made directions for the costs application to be dealt with on 1 November 2017, being the date previously fixed for hearing of the appeal. Directions were made for the parties to file and exchange evidence and submissions in respect of the costs application by 9am on 1 November 2017.
Each of the parties provided written submissions in relation to the costs application. The respondent also provided an affidavit from the solicitor, Imogen Thomas, affirmed 1 November 2017. At the hearing of the application on 1 November 2017, Mr Pearson of Counsel appeared for the respondents. The appellant appeared by telephone. Each party made oral submissions.
The appellant also gave oral evidence at the hearing of the application about why he withdrew his appeal. Mr Pearson cross-examined the appellant on various aspects of his evidence.
At one stage during the hearing, Mr Pearson indicated that he may seek an adjournment having regard to the evidence provided by the appellant. Ultimately, Mr Pearson did not press that application.
Mr Pearson made oral submissions to the same effect as the written submissions. In short, the respondents said that the appellant raised a litany of issues about which the respondents were required to obtain advice. This was in circumstances where the decision of the Tribunal at first instance was "relatively unassailable". Further, Mr Pearson submitted that there was a lack of clarity in what the appellant was saying and that unnecessary material was put forward in the appeal.
The appellant's submissions were largely unresponsive to the matters raised by the respondents concerning costs of the appeal. Rather than focusing on the appeal and matters relevant to whom should pay the costs of the appeal, the appellant provided a lengthy written narration of issues relating to the proceedings at first instance, offers made in connection with those proceedings and the failure to mediate.
In relation to the appeal proceedings, the appellant said the respondents were late in providing documents. The appellant says the respondents' documents were sent by "Overnight Express" on 31 October 2017 and that he had to "pay extra charges to have the documents released" to think can.
In his written submissions, the appellant said he has "decided to lodge the appeal with no legal representation to save on costs and due to the principal (sic) of the matter" but then "decided to save both parties and … to end the matter" by withdrawing the appeal.
Finally, in oral submissions the appellant said that he did not believe the proceedings were out of the ordinary, he had no legal knowledge and he had previously dismissed his lawyers. Otherwise, he said he had seen a number of cases which the Tribunal had decided against builders.

Consideration

Costs in appeals are regulated by s 60 of the NCAT Act and r 38 and 38A of the Civil and Administrative Tribunal Rules, 2014 (Rules).
In the present case, 38A applies because the proceedings at first instance are "proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal" and the procedural rules (r 38) applied to those proceedings. Therefore, the "first instance costs provisions" apply to this appeal.
It is common ground in this appeal that the amount in dispute in the appeal was less than $30,000. Cl 10 (2) of Schedule 4 of the NCAT Act is irrelevant as it can only be made in proceedings in the Consumer and Commercial Division. Consequently, the provisions of s 60 of the NCAT Act are not displaced because the provisions of r 38(2) are not satisfied.
Section 60 provides that the Tribunal, in this case the Appeal Panel, "may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award for costs". Section 60 (3) sets out the factors to which the Tribunal may have regard in determining whether there are special circumstances warranting an award for costs.
There is no dispute in this appeal that the expression "special circumstances" means out of the ordinary but not necessarily extraordinary or exceptional: see eg Cripps v G & M Mawson [2006] NSWCA 84 and Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120.
The respondents categorised the special circumstances as falling under three headings: 1. Weak prospects of success: s 60(3)(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; 2. The voluminous and irrelevant material: s 60(3)(d) and (f)- the nature and complexity of the proceedings and whether a party has refused or failed to comply with the duty imposed by section 36 (3); 3. Late withdrawal of appeal: s 60(3)(f).
The first circumstance relied upon by the respondents is that the appellant had weak prospects of success.
The respondents submitted that the appellant's main contention in the appeal, namely his inability to attend the original hearing on 10 March 2017, was unsupported by evidence explaining why he could not attend. In this regard the respondents noted the appellant was legally represented at that hearing at first instance and that his representative did not seek an adjournment. In the absence of any explanation as to why he did not attend being provided at the original hearing or in this appeal, this ground was unmeritorious.
The respondents also submitted that other contentions of the appellant were "unmeritorious and regrettable". In this regard, the respondents referred to the Notice of Appeal and the assertions by the appellant that documents were overlooked by the Tribunal, the Tribunal inappropriately characterise the appellant's conduct as misleading, that the appellant had no intention of misleading the respondents and that the respondents had themselves misled the Tribunal.
In our view the matters identified do not make this case out of the ordinary.
The respondents themselves suggested the decision was "relatively unassailable", a submission itself suggesting the appeal could not be categorised as having "no tenable basis in fact or law".
There is a right of appeal on a question of law. Otherwise leave is required: see s 80(2)(b) of the NCAT Act. Some of the matters raised by the appellant would, if established, constitute appealable error. In circumstances where the appeal is withdrawn, particularly where a party is self-represented and where the Appeal Panel does not have the benefit of hearing the full appeal, we are not satisfied in this case that the appeal was "unmeritorious". Further, even if this appeal could be categorised as weak, such a finding by itself is not usually sufficient to constitute special circumstances.
The second circumstance relied on by the respondents is that the appellant provided voluminous and irrelevant material. Of this material the respondents said that the appellant's "submissions themselves are of little assistance in understanding the appellant's case".
The respondents said that it was necessary for them to incur additional time and cost reviewing and responding to the appellant's assertions and because the issues raised were unmeritorious, what occurred was "particularly unfortunate".
Both parties provided documents for the appeal. We would not accept that the material provided could be described as voluminous.
It is correct that the appellant provided two sets of submissions in support of his appeal, the first dated 9 August 2017, the second dated 21 September 2017. The first was provided as part of the appellant's appeal documentation, the second provided as part of submissions filed in consequence of directions made by the Appeal Panel for the preparation of the appeal for hearing. These submissions were repetitive to some extent. However, they were prepared by a layperson seeking to set out the matters which he sought to have dealt with in the appeal. Again, the volume of this material, their content and the manner in which they were provided does not lead us to conclude the circumstances were out of the ordinary.
The third circumstance relied upon by the respondents is the late withdrawal of the appeal.
The respondents submitted that the appellant has had since at least 11 August 2017 to consider whether to pursue the appeal, being the date the Reply to Appeal was heard. The appellant, having now formed a view that the appeal was unlikely to succeed, has decided to withdraw the appeal. The respondents say if this had occurred earlier a significant portion of the legal cost could have been avoided.
As is evident from the history of these proceedings, they were commenced on 25 July 2017. There was one callover and the usual directions were made the parties to provide the evidence and submissions in relation to the appeal. The appeal was fixed for hearing on 1 November 2017, that day ultimately being used to hear the application for costs.
Section 36(3) requires parties and their representatives to assist the Tribunal in complying with its obligations in respect of the guiding, namely the just, quick and cheap resolution real issues in dispute.
There is nothing in the preparation of this case for hearing of the appeal that would suggest the appellant has breached any relevant obligation. Certainly the appellant has not delayed the proceedings being heard and the parties have substantially complied with the Appeal Panel's directions in the appeal.
It is not generally appropriate for the Appeal Panel to embark upon a determination of the substantive issues in an appeal which has been withdrawn for the purpose of determining costs. However, it is clear from the Notice of Appeal and the information provided by the appellant in support of his appeal that one of his contentions was that the Tribunal had erred in concluding there was a contractual obligation for him to provide a Class 1A building as opposed to a Class 10A building. While the appellant sought to adduce new evidence in relation to some of the issues raised on appeal, neither this fact nor the particular challenges to the original decision give rise to circumstances which are out of the ordinary.
When the above factors are considered collectively, again we are not satisfied that special circumstances have been established.
The respondents provided an affidavit from his solicitor, Ms Thomas, sworn 1 November 2017, setting out the claim for costs. That evidence states that cost of the appeal calculated on an indemnity basis are $11,730.73 (GST inclusive) and that the solicitor estimates costs on a party-party basis would be $8,211.51 (GST inclusive).
Having regard to the size of claim, this is a significant amount. However, the fact these costs have been incurred does not of itself indicate circumstances out of the ordinary. Further, the fact one party has been given leave to be legally represented and has appointed a lawyer does not mean special circumstances are established in the present case.
The appeal was relatively straight forward. While there was some slippage in the timetable for the filing and exchange of documents, the resolution was not delayed.
It follows that the application for costs should be dismissed.

Orders

The Appeal Panel makes the following order: 1. The application by the respondents that the appellant pay their costs of the appeal is dismissed. 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: 12 February 2018

At a glance

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Source

Judgment (6 paragraphs)

Parties

Cases Cited (2)