El Ali v Beaini Enterprises Pty Ltd and Anor

NCAT Appeal Panel|2022-11-10

REASONS FOR DECISION

This is a costs decision following orders in an internal appeal under s 80 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) by Mr El Ali and Yates Holdings Victoria Pty Limited against a decision made in the Consumer and Commercial Division of the Tribunal on 8 December 2021 concerning a residential tenancy.
The substantive appeal was decided on 15 July 2022 whereby leave to appeal was refused by the Appeal Panel and the appeal was dismissed. That decision was published as: El Ali v Beaini Enterprises Pty Ltd and Anor [2022] NSWCATAP 230.
The Appeal Panel in dismissing the appeal made the following orders: 1. Leave is granted to file the amended Notice of Appeal dated 18 February 2022. 2. The application for leave to appeal is refused. 3. The appeal is otherwise dismissed. 4. If any party desires to make an application for its costs of the appeal: a. that party is to so inform the other party within 14 days of the date of these reasons. b. the applicant for costs is to lodge with the Appeal Panel and serve on the respondent to the costs' application any written submissions of no more than five pages on or before 14 days from the date of these reasons. c. the respondent to any costs' application is to lodge with the Appeal Panel and serve on the applicant for costs any written submissions of no more than five pages on or before 28 days from the date of these reasons. d. any reply submissions limited to three pages are to be lodged with the Appeal Panel and served on the other party within 35 days of the date of these reasons. e. the parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs' application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted rather than the application being determined on the papers.
The respondents to the appeal made a submission in favour of an order for costs in accordance with the procedure outlined at Order 4 of the Appeal Panel decision. That submission / application for costs was filed on 28 July 2022 and broadly complies with the terms of Order 4 (b). Further submissions of one page were made on the issue of proceeding to determine the costs application by dispensing with a hearing in accordance with s 50 (2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act).

Background

On the substantive tenancy matter, the matter has been before the Tribunal since October 2021. In each instance the tenant had been unsuccessful before the Tribunal. The early history of the dispute and proceedings is summarised at [2] - [4] of the Appeal Panel decision. 2. The Landlord, Beaini Enterprises Pty Ltd initially sought relief in the Consumer and Commercial Division of the Tribunal against the tenant Yates Holdings Victoria Pty Ltd and Nathan El Ali in October 2021 to enforce a termination notice dated 30 September 2021. During those proceedings and prior to hearing Nathan El Ali was removed as a respondent as he was not listed on the Residential Tenancy Agreement. During the hearing of the matter Yates Holdings Victoria Pty Ltd (Yates) through their legal representative confirmed that they were the appropriate tenant. Yates confirmed that they were in rental arrears. The arrears were in excess of the 14 days when the termination notice was issued and totalled $18,182 on the day of the hearing. In reply, the tenant Yates challenged the application on the basis that the termination notice was not properly served. 3. The tenant also raised an issue with the Residential Tenancy Agreement in that there was a second landlord listed in the agreement- being Beaini Corp Pty Ltd (as distinct from Beaini Enterprises Pty Ltd). The notice was therefore challenged on two grounds. 4. The Tribunal dealt with the defect in service by applying the discretion provided under s 113 of the Residential Tenancies Act 2010 NSW (the RT Act)
The proceedings then progressed to the substantive hearing which is summarised in the Appeal Panel decision at [5] - [10]: 5. The Tribunal then sought submissions from the parties as to (a) jurisdiction noting the Tribunal's jurisdictional limit is $15,000 per breach, and (b) whether the proceedings were properly constituted before the Tribunal having regard to the parties / entities listed on the agreement. 6.The landlord (Beaini Enterprises Pty Ltd) in submissions sought to add Beaini Corp Pty Ltd (ACN 806 713 553) to the proceedings under s 44 of the NCAT Act. They accepted the $15,000 jurisdictional limit, and sought orders that: (a) the lease be terminated forthwith, (b) the tenant vacate within 14 days of the orders, and (c) rental arrears of $15,000 be paid within 14 days of the orders. 7. The tenant in submissions submitted that they should pay $15,000 to the Landlords in satisfaction of the rental arrears by 13 December 2021, that the tenancy agreement be terminated effective from 14 January 2022, and that they give vacant possession of the subject premises to the landlord by 15 January 2022 and the proceedings be otherwise dismissed with no order as to costs. 8. The Tribunal decided the matter with orders predominantly along the lines set out in the submissions. The Tribunal departed from the tenant's proposed payment date of 14 January 2022 instead ordering that the amount be paid over two instalments with the first instalment due on 20 December 2021. A separate order was made for water usage arrears with an earlier usage claim being dismissed as out of time under the Residential Tenancy Regulation 2019 (the regulation). 9. The issues in the proceedings not only related to the proper constitution of the landlord under the Residential Tenancy Agreement, but also the tenant. It became apparent during the application both before the Tribunal and the Appeal Panel that whether Yates was in fact the tenant, or whether the tenant was actually Alan El Ali, who occupied the residential premises under the lease was determinative in answering the questions relating to purported defects in procedure such as service of the termination notice. 10. Whilst some of these issues appear to have been ventilated and to an extent clarified by legal representatives at the hearing before the Tribunal, this issue was the significant ground for which the appeal was brought. However in disposing of the appeal we noted the evidence that possession of the premises had been given up to the landlord some months prior to the hearing with the premises since relet. In addition, the occupier Mr El Ali had secured other premises and was not seeking to reopen the residential tenancy on appeal.
A set aside application was lodged by the tenant following the decision and that matter was dismissed by the Tribunal in January 2022. A separate matter was lodged by Mr El Ali in December 2021 to be recognised as the tenant and that matter was also dismissed.
The appeal before the Appeal Panel brought by the tenant was unsuccessful. The Appeal Panel orders are at [3] above.
The respondent's to the appeal concede that in these proceedings s 60 of the NCAT Act applies to any decision to award costs in that costs do not ordinarily follow the event but a successful costs applicant must establish the existence of special circumstances.

Hearing on the papers

In their application and submission on costs the respondents did not seek an oral hearing and requested that the matter of costs be decided on the papers. The respondents submitted that the issues in the proceedings are narrow (only relating to costs) and that to require the matter to proceed to a further oral hearing before the Appeal Panel would be a waste of the Tribunal's time and resources.
Further submissions concerned how dispensing with an oral hearing would be consistent with the objects of the NCAT Act having regard to both s 3 and the guiding principle under s 36 of the NCAT Act. 3 Objects of Act The objects of this Act are - ….. (d) to enable the Tribunal to resolve the real issues in proceedings justly, quickly, cheaply and with as little formality as possible… 36 Guiding principle to be applied to practice and procedure (1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
As noted above no submissions on costs or dispensing with a hearing were received from the appellants.
As the parties to the costs application have been given an opportunity in accordance with s 50(3) of the NCAT Act to make submissions about whether a hearing of the costs application should be dispensed with, we have decided to dispense with such a hearing and deal with the application on the papers. In our view the issues can be adequately determined without a hearing.

Costs application

The application for costs was made on the basis that there are special circumstances warranting an award of costs. Whilst these are appeal proceedings arising from proceedings in the Consumer and Commercial Division of the Tribunal, they are not proceedings to which Rule 38 of the Civil and Administrative Tribunal Rules 2014 (the NCAT Rules) apply. Where applicable that rule provides for the awarding of costs in circumstances other than special circumstances. As r 38 does not apply, this application is governed by the provisions of s 60 of the NCAT Act which provide for costs only in special circumstances.
Section 60 relevantly provides the following matters relating to an award of costs: 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.

Submissions

The respondent applied for costs and disbursements in the lump sum amount of $11,112.50 and submitted that the costs incurred in relation to all the proceedings beyond the original hearing of 7 December 2021 should be borne by the appellants. The respondent submitted that the provisions of s 60 (3) (b) (c ) (e ) and (f) were relevant to the consideration of special circumstances in this matter.
The respondent submitted that s 60 (3) (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings was relevant in that the matter had been before the Tribunal since October 2021 and was expected to be resolved in December 2021. The first appellant was an excluded party to the proceedings and sought to challenge orders made against the second appellant. The respondents submitted that the first appellant had been denied at every juncture before the Tribunal and the Appeal Panel and this position had unnecessarily delayed the matter.
The observation by the Appeal Panel that the appeal was moot, demonstrates in the respondent's view that the circumstances of the appeal had no merit.
The respondent submitted that special circumstances apply and relies on s 60 (3) (c) that 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. The respondent submitted that the appellants claimed to have evidence to support their claim but no such evidence was tendered until the matter was before the Appeal Panel. The respondent submitted that the evidence sought to be tendered was more limited than initially claimed and in any event was rejected by the Appeal Panel. The appellants claim was said to be based on matters for which there was no evidence.
The respondents relied on s 60 (3) (e) in that the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance. In support of this contention the respondents outlined that the first appellant initiated proceedings in the Tribunal to challenge the orders made on 8 December 2021, however each of the first appellant's applications have been dismissed. The respondents submitted that the claim by the appellants that they had evidence to support their claims, and then failing to provide such evidence demonstrates that the proceedings they initiated were frivolous. The respondents adopted the Appeal Panel's approach concerning the position that an appeal is not an opportunity to put on new arguments and run a different case but to demonstrate where the Tribunal in first instance fell into error in their approach.
Reliance was placed on the Appeal Panel's observation that the appellants had appeared to conflate the terms tenant and occupier to the facts and on this basis the respondents submitted that the proceedings were misconceived and lacking in substance.
The respondents also relied on s 60 (3) (f) in that the matter demonstrated that a party has refused or failed to comply with the duty imposed by s 36 (3) of the NCAT Act in that the appellants had failed to comply with the duty imposed under s 36 (3) to give effect to the guiding principle of the Tribunal. In this regard submissions were made that the appellant's actions caused the respondents to incur legal costs from 8 December 2021 through to 6 April 2022. In addition submissions were made that the first appellant had failed to comply with directions set by the Tribunal.

Consideration

We observe that s 60 of the NCAT Act does not require that all the provisions need to be enlivened to establish special circumstances.
To enliven the "special circumstances" under s 60 the circumstances may be out of the ordinary, but they need not be extraordinary or exceptional.: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11], applying Cripps v G & M Mawson [2006] NSWCA 84 at [60].
On the material before the Appeal Panel, it appears that the appellants were essentially seeking to rerun the case on different arguments. In the substantive appeal we observed that the appellants were running a different argument before us, in direct contrast to the matters which they had conceded before the Tribunal.
In the case of Brodyn Pty Ltd - v- Owners Corporation - Strata Plan 73019 (No 2) [2016] NSWCATAP the Appeal Panel considered special circumstances under s 60 existed but declined to make any order favouring one party. At [23] to [29] the Appeal Panel observed: 23. Any application for costs depends upon the circumstances of the individual case: Brunsprop Pty Ltd v Joanne Hay & Wes Davies [2015] NSWCATAP 152 at [27]. 24. Further, where special circumstances are found to exist, the Tribunal has a discretion to exercise in deciding what, if any, order should be made. Relevant to the exercise of that discretion are those facts upon which the finding of special circumstances was based. However, those findings do not constitute the whole of the relevant matters to be considered in deciding what, if any, order for costs should be made. Rather, the principles applicable to awarding costs generally must also be taken into account. These include: (1) Costs are compensatory: see Latoudis v Casey (1990) 170 CLR 334; (2) That an unsuccessful party bears the costs of the successful party: Oshlack v Richmond River Council [1998] HCA 11 at [134]; (3) 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 eg Bostick Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304. 25. Further, in some circumstances where s 60 of the NCAT Act regulates an award for costs, a limited order for costs might be made to reflect the fact that only some aspects of the appeal should properly be categorised as out of the ordinary and to make a general order for costs in favour of a successful party might be inappropriate having regard to principle that absent special circumstances each party is to pay their own costs. See eg McPherson v Mace (No 2) [2016] NSWCATAP 198. 26. Overall, the Tribunal is to exercise its discretion in a manner that is fair and reasonable having regard to the circumstances of the particular case. Should a costs order be made? 27. At pars [192] and [193] of its substantive reasons, the Appeal Panel formed the preliminary view, subject to the receipt of submissions, that each party should pay its own costs in this matter. As we noted, the appellant had limited success in this appeal, with one matter being conceded by the respondent, and the other matter being remitted to the Tribunal for further consideration. 28. The respondent submits that the complexity consists of "the proper interpretation of the terms of a deed and consideration of whether the deed binds the respondent", and legal arguments including the proper interpretation of s 48A of the HB Act. In our view, these matters do establish that this was a complex appeal involving the interpretation of the HB Act, 1989. Further, the appeal raised complex issues concerning the circumstances in which an allowance for betterment should be made. Lastly, the respondent also challenged earlier decisions of the Tribunal concerning its appeal jurisdiction. 29. Each of these issues could properly be described as out of the ordinary and amount to special circumstances within the meaning of s 60(2) of the NCAT Act.
In Brodyn the Appeal Panel declined to make an order favouring one party because during the hearing of the matter the Appeal Panel reached a preliminary view that each party should pay its own costs of the proceedings.
We are satisfied that some of the provisions of the section apply to the circumstances of this appeal. The position that the appeal involved a re-agitation of the primary dispute on different grounds leads us to be satisfied that the circumstances of the case warrant an order for costs, and because of the matters outlined above, which have not been challenged, those matters in our view amount to special circumstances.
The position that the respondent's as landlord were required to defend or meet an appeal whereby the grounds of appeal were unorthodox having regard to the reasons for decision of the Tribunal and transcript of the proceedings in first instance, and broadly appeared to constitute a set aside request rather than any demonstration based on evidence that the Tribunal fell into error, leads us to that conclusion.
In such circumstances we find that there are special circumstances within s 60(3) and that in the exercise of our discretion under s 60(2) a costs order in favour of the respondents on the appeal is warranted for the reasons given.
However rather than making a lump sum costs order, we apply the reasoning of the Appeal Panel in the case of Abed v Cosgrove t/as Alison Arts; Cosgrove v Abed (No 2) [2018] NSWCATAP 133 at [31]. 31. We are not satisfied that a lump sum costs order should be made. Relevant principles applicable to the making of a lump sum cost order are summarised by Davies J in Stankovic v State of NSW (No 2) [2016] NSWSC 335 at [11]- [13]. There is insufficient evidence for the Appeal Panel to be satisfied that it can logically, fairly and reasonably assess a costs amount in a manner that is fair to the parties, and with sufficient confidence of arriving at an appropriate sum on the materials available. There is also insufficient evidence that Cosgrove is impecunious or would otherwise be unlikely to be able to pay the costs of assessment if the parties fail to reach an agreement on quantum of costs.
For these reasons we believe that the respondent's cost of the appeal should be paid as assessed or agreed.

Orders

The Appeal Panel makes the following orders: 1. Pursuant to s 50 (2) of the Civil and Administrative Tribunal Act 2013, order that a hearing of the respondent's application that the appellants pay the respondent's costs of the appeal be dispensed with. 2. The application for a costs order made by the respondents is granted. 3. The appellants are to pay the respondent's costs on a party / party basis, such costs to be agreed or assessed on the basis set out in the legal costs legislation (as defined in s 3A of the Legal Profession Uniform Law Application Act 2014).

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: 10 November 2022

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