Edwards v CohenHandler Pty Ltd

NCAT Appeal Panel|2017-03-09

Solicitors: P Dobrich & Co, Lawyers (Appellants) Lazarus Legal (Respondents) File Number(s): AP 16/46495 Decision under appeal Court or tribunal: NSW Civil & Administrative Tribunal Jurisdiction: Consumer & Commercial Division Date of Decision: 21 September 2016 Before: F Holles, General Member File Number(s): COM 15/60492

Reasons for Decision

This is an appeal against a costs order made in favour of the respondent to proceedings brought in the Tribunal's Consumer and Commercial Division by the appellants under the Property, Stock and Business Agents Act 2002. The costs order was made on 21 September 2016.
The appellants appealed on 21 October 2016.
On 22 November 2016 the Tribunal gave directions for lodgement of submissions and listed the appeal for hearing on 24 February 2016.
Following the lodgement of submissions, the parties, through their lawyers, requested the Appeal Panel to dispense with a hearing under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NCAT Act), a possibility contemplated by the directions. The Appeal Panel agreed that the matter was suitable for disposal on that basis. The oral hearing was vacated.
This decision is made on the basis of the following submissions and material: Notice of Appeal (21 October 2016), Reply to Appeal (28 November 2016), Appellant's Submissions (22 December 2016), Respondent's Submissions (30 January 2017), Appellant's Reply Submissions prepared by Mr S Reuben, of counsel (10February2017); and the first instance file.

Whether Appeal in Time

The respondent has raised the issue of whether the appeal was lodged in time. An appeal of the present kind must be made 'within 28 days of the day on which the appellant was notified of the decision': Civil and Administrative Tribunal Rules 2014, cl 25(4)(c). The 'given day' is not counted in the reckoning of time: cl 6.
It will be seen that time starts on the day on which the appellant was notified of the decision. If that date was 21 September (the date of publication), then time would run from 22 September, and the appeal would therefore be 1 day out of time.
The appellants stated in their submissions that the notice of order was received by them in the post on 23 September 2016. Disputes as to the date of notification for the purpose of cl 25 are not unusual. While there is no sworn evidence on the point, the appellants' submission is accepted. The timings the appellants give as to receipt of the notice of order are consistent with usual office practice in the Registry of the Tribunal. We are not satisfied the appeal was lodged out of time. Accordingly there is no need to consider any application for leave to extend time arises.

Background to Costs Decision

The substantive dispute between the parties is the subject of a decision of the Tribunal below delivered on 1 April 2016: Edwards & Edwards v CohenHandler Pty Ltd [2016] NSWCAT (Substantive Decision).
It is necessary to explain, in brief, the background to that decision, as its outcome bears on the costs order now in issue.
On 29 September 2014 Mr Edwards (the first appellant) entered into an agreement with the respondent, a buyer's agent, to assist him in finding a house to purchase. Subsequently a house was found. Mrs Edwards (the second appellant) purchased it. The respondent made a claim for its commission (2% of the purchase price), addressed to Mrs Edwards. Mrs Edwards resisted the respondent's claim on the basis that she was not aware of the agency agreement entered into by her husband, and was not bound by it. The respondent took action against Mrs Edwards in the Local Court to recover the commission, and was unsuccessful.
The respondent then commenced action against Mr Edwards in the Local Court seeking damages for misrepresentation of authority, the amount of damages sought being the amount of the lost commission.
Those proceedings were on foot when Mr and Mrs Edwards made the Application (5 November 2015) to this Tribunal that underlies this appeal. Section 36 of the PSBA gives the Tribunal jurisdiction to deal with disputes over commissions charged by agents licensed under the Act (as the respondent was). The Edwards sought a declaration that they were not required to pay any claim by the respondent for buyer's commission, and if they were liable an order as to its amount.
The respondent objected to the Tribunal dealing with the application, first because the respondent was by that point no longer seeking to enforce the agreement against Mrs Edwards, nor against Mr Edwards in circumstances where he had not been the purchaser. Instead it was now seeking to recover the amount of the commission from Mr Edwards by means of the civil action based on alleged misrepresentation of authority, to which we have referred. explained above.
Accordingly the respondent sought an order from the Tribunal dismissing the application. The respondent relied on general law principles relating to the avoidance of duplication of disputes in different arms of the judicial system, principles reflected in the terms of cl 5(7) of Schedule 4 (Consumer and Commercial Division) of the NCAT Act: Effect of pending court proceedings on Tribunal If, at the time when an application is made to the Tribunal for the exercise of a Division function, an issue arising under the application was the subject of a dispute in proceedings pending before a court, the Tribunal, on becoming aware of those proceedings, ceases to have jurisdiction to hear or determine the issue.
The Tribunal accepted the respondent's submissions, and dismissed the application.

Costs Decision

The respondent had in its Reply to the originating Application (Reply dated 12 November 2015), foreshadowed that it would seek costs if its application for dismissal was successful.
After the decision was delivered, the matter was relisted on 25 July 2016 at the request of the respondent. The respondent renewed its application for costs.
Section 60 of the NCAT Act provides that each party to proceedings is to bear their own costs. The Tribunal is given a circumscribed power to award costs 'only if it is satisfied that there are special circumstances warranting an award of costs': s 60(2). Section 60(3) goes on to set out a range of factors that the Tribunal may take into account in that regard. They deal with a variety of types of inappropriate conduct relating to proceedings, and include the following: (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, and (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
The Tribunal gave brief written reasons for its decision to allow the respondent's application. They commence with a short background, summarise the key submissions of the parties, refer to s 60, and then state: 12. In the present case, it is difficult to see how the obvious jurisdictional difficulty did not dissuade the applicants from commencing the proceedings. 13. I find that both under s 60(3)(c) and s 60(3)(d) the application had no tenable basis in law and was misconceived. 14. In Cripps v GM Dawson Pty Ltd [2006] NSWCA 81 it was held that special circumstances were not required to be exceptional or extraordinary, simply that they were out of the ordinary (see also Mergerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120). 15. In the circumstances, I find the provisions of s 60(3)(c) and (d) apply to this application. ....
The Tribunal's reference to s 60(3)(d) is mistaken. The second consideration to which it was having regard in para [13] is factor (e) in s 60(3).
The Tribunal made an 'order that the applicants pay the respondent's costs as agreed or assessed in accordance with the provisions of s 60(4) of the NCAT Act'.

The Appeal

A costs decision is an 'ancillary' decision of the Tribunal for the purposes of the NCAT Act: s 4. An appeal may be made against an ancillary decision on 'any question of law'. It may be made on 'other grounds' with the permission (or 'leave') of the Appeal Panel. In the case of appeals from decisions of the Consumer and Commercial Division (as this is), the Appeal Panel must before granting permission (or 'leave') be satisfied that failure to consider the 'other grounds' would give rise to a 'substantial miscarriage of justice' to the appellant, because of one or more of the three reasons: see further, NCAT Act, Sch 4, cl 12.
As originally formulated, the appellants' notice of appeal was confined to questions of law. In light of the respondent's Reply (challenging the timeliness of the appeal, and arguing that various points pressed in the grounds of appeal did not truly raise questions of law), the appellants sought to amend their notice of appeal for the limited purpose of replying to the timeliness challenge and to keep alive grounds which were found not to raise questions of law. We have already dealt with the challenge to timeliness. We will turn now to the grounds of appeal.

Consideration

Ground 1 is that the Tribunal failed to give adequate reasons for; (a) its preliminary decision rejecting the submission that the Tribunal was functus officio (had completed its task) and could not therefore proceed to address the costs application; and (b) for its ultimate decision that there were special circumstances justifying a costs order.
As to (a), the appellants did acknowledge that the respondent had foreshadowed in its Reply that it would seek costs if it succeeded in its objection to jurisdiction. The appellants submit however the Member made a final order in the Substantive Decision, with the result was that the Tribunal's jurisdiction at first instance had been exhausted. The appellants argued that the Tribunal could only have retained jurisdiction to proceed as it did by making an order reserving the costs application for further consideration.
In our view, it is plain in this case that costs were a live issue that the Tribunal failed to address. In our view, this is not a circumstance to which the rule as to finality of proceedings reflected in the maxim functus officio is directed. The notice of order did not, in these circumstances, complete the proceedings. The Tribunal member had one task left to perform, to address the foreshadowed costs application.
In the leading case, Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11, the respondent to a review application before an administrative tribunal (the Minister), challenged the tribunal's decision to reopen its order dismissing the application. The Tribunal had dismissed the review application because the review applicant failed to appear at the hearing. The Tribunal reopened the matter when it learnt after the hearing that the review applicant had notified the Registry the previous day that he would be absent due to illness, and had sought an adjournment. The Tribunal decided to set a new hearing date. At the new hearing, attended by the review applicant, it revoked its earlier decision and granted the review application. The High Court upheld the Tribunal's approach.
In this case, as we see it, the Tribunal, inadvertently, failed to deal with an application that formed part of the proceedings, a foreshadowed costs application. It is common for parties in this Tribunal to reserve their right to press a costs application depending on the outcome of proceedings, especially in a case like the present where the respondent party is saying that the Tribunal is without jurisdiction or the Tribunal should not become involved in the dispute so as to avoid concurrent proceedings in different judicial forums.
Like the situation in Bhardwaj, the Tribunal denied the adversely-affected party (here the respondent) procedural fairness in not having the foreshadowed application addressed. On its face, therefore the Tribunal acted appropriately in giving directions for submissions and dealing with the application.
In Bhardwaj, the High Court accepted that the statutory scheme within which a Tribunal operates may manifest an intention that a final order not be able to reopened or revisited for any reason at all, however compelling it may be in the particular circumstances. The Court satisfied itself that the statutory scheme with which it was dealing (a detailed and complex one regulating the conduct of the Immigration Review Tribunal) did not have that effect.
In our view, there is nothing in the NCAT legislation that prevented the Tribunal Member from acting as he did. Moreover, the NCAT Act, like many tribunal statutes, includes the injunction that it is to act 'with as little formality as the circumstances of the case permit, and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms' (s 38(4)). Gleeson CJ drew attention in his reasons to a similar provision in the Immigration Review Tribunal's legislation, when he concluded at [14]: The Act, in Pt 5 Div 5, prescribed the procedures according to which the Tribunal was required to conduct its review of the delegate's decision. If the Tribunal was not prepared to decide in the respondent's favour on the written material before it, then s 360 required that it give the respondent an opportunity to appear and give evidence and present arguments. The Tribunal set out to give the respondent such an opportunity. It intended to follow the statutory procedure. As a result of an administrative slip, it denied the respondent the opportunity that he wanted to have, and that the Tribunal intended to give him. And, in consequence, it dealt with the matter in the belief that the respondent had nothing to say by way of explanation of the conduct that had resulted in the cancellation of his visa. The Tribunal, through an administrative error, failed to implement its own intention, and failed to comply with the statutory requirement to give the respondent an opportunity to be heard. In its reasons for its "decision", the Tribunal merely noted the delegate's decision, and observed that nothing had been put before it as to why the decision was unfair or inappropriate. That did not amount to the conduct of a review. The Act provided, in s 353, that the Tribunal, in reviewing the delegate's decision, was not bound by technicalities or legal forms and should act according to substantial justice. When it learned of its own administrative error, the Tribunal recognised that it had not performed its functions and proceeded to do so.
The philosophy reflected in s 38(4) of the NCAT Act is reinforced by the provisions which follow, in s 38(5) (relating to fair procedures) and s 38(6) (relating to transparency).
We accept that position might be different if a party whose foreshadowed costs application is overlooked does not reagitate the application for some significant period after the handing down of the principal decision, and when any orders have been executed. But this is not a case of that kind.
The appellants' submissions made several references to the slip rule, the rule that allows courts and tribunals to correct obvious errors and the like in the text of reasons for decisions and orders. The appellants also argued that the present circumstances were not ones that could be revisited under the slip rule (NCAT Act, s 63). We accept that submission.
This is not a case involving an issue of that kind. It is about the point at which finality of proceedings can be said to be reached in a proceeding at first instance. Normally that will be the point at which the notice of order issues. But there will be cases, as Bhardwaj illustrates, where, through oversight, a proceeding that appears on its face to be final and complete is not. This is a case of that kind.
As to (b), what is adequate by way of a set of reasons will vary according to the nature and complexity of the issues and the evidence, and the legal questions that arise: see generally, Mifsud v Campbell (1991) 21 NSWLR 725 at 728 per Samuels JA; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 281 per McHugh JA; and Absolon v NSW TAFE [1999] NSWCA 311.
A decision as to costs involves a relatively simple task in those terms. Here the Member properly informed himself as to the relevant provisions. His Substantive Decision was one that dismissed the appellant's proceedings at the entry gate, on the ground that the question sought to put in issue before him (the entitlement to the commission) would now fall to be determined in the civil proceedings in the local court at the damages stage, if the respondent succeeded in obtaining a liability ruling. He did not need to give any elaborate explanation in his Costs decision as to why he reached the view that they were 'misconceived'. This conclusion followed from the reasons he gave in the Substantive Decision.
Reasons for a costs decision of the present kind need not be elaborate. When the brief reasons provided in the Costs Decision are read in the context of the Substantive Decision, they are clear and adequate.
Ground 2 is that the Tribunal erred by rejecting the submission that he was functus officio and (inferentially) finding that he had jurisdiction to deal with the costs application. We have dealt with this issue in addressing Ground 1. It is dismissed.
Ground 3 puts in issue the Tribunal's finding of special circumstances, and suggests that it involved an error of law. Ground 4 develops the same point, and argues that his exercise of discretion miscarried in a way that breached the principles laid down in House v R (1936) 55 CLR 499 at 505.
Grounds 5 and 6 challenge the conclusions expressed by the Member in respect of the applicability of factors listed in s 60(3) to the case. Ground 5 invites the Appeal Panel to go back to the Substantive Decision, and examine the logic that led the Tribunal to conclude that it should not exercise jurisdiction and dismiss the application. Ground 6 puts in issue the Tribunal's conclusion that the original proceedings were misconceived.
This appeal is only against the Costs Decision. In the submissions in support of Grounds 5 and 6, the appellants sought, as we see it, to put in issue the reasoning in the Substantive Decision. There has been no appeal lodged in relation to that decision. In those circumstances, it would be improper of us to revisit that decision under the guise of a costs appeal.
As to Grounds 3 and 4, the Tribunal has a wide remit in exercising the discretion as to costs. As the Member observed, the 'special' circumstances need be no more than out of the ordinary. In light of his conclusions in the Substantive Decision, he quite reasonably found that factors (c) and (e) of the list given in s 63(3) were applicable, and they were sufficient to constitute 'special circumstances' warranting an award of costs.
No House v R errors have been identified. There was no error in the exercise by the Tribunal of its discretion amounting to an error of law. For the reasons given, it did not act on a 'wrong principle', it did not allow 'extraneous or irrelevant matters to guide or affect' it, it did not 'mistake the facts' or fail to take into account a 'material consideration'. It did not make a decision that was 'unreasonable or plainly unjust' having regard to the underlying facts and circumstances, such that it could be inferred that 'in some way there has been a failure properly to exercise the discretion'. There was no 'substantial wrong'.
The Grounds of Appeal have not identified any error of law. It would be unfair to the respondent and the achievement of overall finality in these proceedings to allow the appeal to continue on grounds that do not involve questions of law. It is not clear what further grounds are sought to be addressed beyond those identified as questions of law by the Grounds of Appeal. Leave to extend the appeal to any 'other grounds' is refused.

Costs

The respondent's submissions filed 27 January 2017 include an application for costs. The appellant sought an order for costs of the appeal in their Notice of Appeal, reiterated in the Reply Submissions filed 10 February 2017.
There is no basis, as we see it, for the appellants' submission given the outcome of the appeal. It is dismissed.
As to the respondent's application for costs of the appeal, we note by way of preliminary that Appeal Panels have usually made a further award of costs to the respondent where there was an award in the respondent's favour at first instance, especially in cases with an element of commerciality (there are a number of examples in the Retail Leases jurisdiction of the Tribunal).
We make the following directions:
Respondent to file and serve any submissions in relation to costs of the appeal within ten days of the date of publication of these reasons.
Appellants to file and serve any submissions in reply within a further seven days.
Please note that the Appeal Panel would be inclined to make an order under s 50 of the NCAT Act dispensing with a hearing. If a party wishes to object to that course, please include the objection in the submissions, and it will be considered.

Order

Appeal dismissed.
Appellants' application for costs dismissed.
Respondent's application for costs: see directions at para [50] of these reasons. 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

Amendments 30 March 2017 - MNC updated 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: 30 March 2017

At a glance

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Judgment (10 paragraphs)

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Cases Cited (7)

Cited By (3)