Estate of Bovaird v Milstern Retirement Services Pty Ltd

Consideration

1. The parties provided written submissions in respect of the costs applications. Milstern's submissions are dated 29 March 2022, the Frost estate's submissions are dated 5 April 2022 and the appellant's submissions in reply are dated 20 April 2022.
2. We will consider the submissions under the following headings: 1. Need for a hearing of the costs applications. 2. Costs of proceedings at first instance. 3. Costs of Appeal proceedings.

Need for a hearing of the costs applications

1. Both Milstern and the Frost estate consented to an order being made under s 50(2) of the Civil and Administrative Tribunal Act, 2013 (NSW) (NCAT Act) dispensing with a hearing.
2. The appellant said the costs hearing should be deferred or stayed by reason of the fact that an application had been made to the Supreme Court of New South Wales seeking leave to appeal our decision. Further, the appellant said it did not consent to dispensing with a hearing in respect of costs.
3. It seems to us that the fact an application has been made to the Supreme Court for leave to appeal our decision is not, of itself, reason to stay the proceedings before us in so far as they relate to applications for costs. Further, no reason has been given as to why a further hearing is required.
4. All parties have had an opportunity to make submissions in relation to the question of costs and have provided submissions in support of their respective positions. In these circumstances, we are satisfied the applications for costs can be dealt with on the papers without a further hearing and without further cost of the parties.
5. Accordingly, we will make an order dispensing with a hearing.

Costs of proceedings at first instance

1. As far as we are aware, no application for costs was made to the Tribunal at first instance following the Dismissal Decision or the Primary Decision and no decision has been made by the Tribunal at first instance in relation to costs of either proceedings.
2. Each of Milstern and the Frost estate have made an application to the Appeal Panel to make an order for costs in respect of the proceedings at first instance. The applications made include applications for indemnity costs supported by submissions concerning the manner in which the appellant conducted the proceedings below.
3. In the Appeal Decision we permitted the parties to make an application for costs in relation to these appeals. However, we did not give leave for an application for costs to be made to the Appeal Panel in connection with the proceedings at first instance.
4. In disposing of these appeals, the Appeal Panel may exercise all of the functions that are conferred or imposed on the Tribunal at first instance: s 81(2). However, in the present case we are not satisfied it is appropriate to do so.
5. The issues raised in support of the costs applications concern offers made prior to proceedings at first instance being commenced and the conduct of the appellant in the proceedings below. At that stage the Bovaird estate was represented by Mr Leon Bovaird, the executor of the estate. In our view, such matters are best considered by the Tribunal as constituted at first instance rather than the Appeal Panel. One reason for that view is that a decision on costs made by the Tribunal at first instance preserves the right to appeal to the Appeal Panel of the Tribunal, whereas if we were to decide costs at first instance any appeal would be to the Supreme Court and then only with leave on a question of law. The former option is more consistent with the Tribunal's obligation to ensure proceedings in the Tribunal are conducted quickly and cheaply.
6. It is regrettable that any application for costs was not first made to the Tribunal when the original proceedings were concluded. Ordinarily, and ideally, all costs applications should be made to the Tribunal at first instance and finalised as soon as possible after the substantive issues in proceedings at first instance are determined if they cannot be resolved at the time the substantive decision is made.
7. Be that as it may, we will direct that any application for costs in respect of the proceedings at first instance be first made in the Consumer and Commercial Division as originally constituted.

Costs of Appeal proceedings

1. Each of Milstern and the Frost estate made applications for costs.
2. In respect of the appeal, Milstern sought the following orders: 1. Milstern's costs in the Appeal Proceedings be paid by the appellant on the indemnity basis; and 2. alternatively, Milstern's costs of the appeals be paid on the ordinary basis.
3. In relation to the Frost estate, a lump-sum order of $22,000 was sought for costs in respect of the proceedings at first instance and on appeal, such amount to be paid from the trust account referred to above. In the alternative, the Frost estate sought an order that the appellant and Milstern pay its costs of appeal 2021/122743 assessed on the ordinary basis, if not agreed.
4. In respect of the lump-sum order sought by the Frost estate in respect of both the proceedings at first instance and the appeal, we do not propose to make such an order as we do not propose to deal with the costs of the proceedings at first instance for the reasons stated above. Consequently, the issue for determination is whether an order should be made that the appellant pay the costs of the Frost estate in respect of appeal 2021/122743 on the ordinary basis.

Submissions

1. Milstern submitted that r 38(2)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW) (Rules) applied to costs in these proceedings
2. Milstern referred to offers of compromise which had been made in connection with the proceedings at first instance at various times prior to the Tribunal making the Primary Decision. These offers were not relied upon in support of its application for costs in the appeal.
3. Rather, in the appeals, Milstern said there had been five separate Notices of Appeal and Milstern relied on its success in the proceedings which it described in the following terms: a. Milstern has succeeded unanimously at the Appeal Hearing. b. Not one of the 17 appeal grounds raised by the Bovaird Estate was accepted by the Appeal Panel.
4. Consequently, Milstern submitted the appeal grounds advanced by the appellant were hopeless, not marginal or difficult and "reflective of an unsuccessful litigant who was simply disappointed with the result at first instance". Milstern said: The Appeal Panel should make it known that the Tribunal will not readily accept its time and a successful litigant's money being wasted on proceedings which have no tenable basis in fact or law and order that the Bovaird Estate to pay Milstern's costs of an indemnity basis in accordance with the position taken by Australian Appellate Courts.
5. The Frost estate submitted that the appellant's Further Amended Notice of Appeal contains no less than 11 grounds of appeal "many of which were without merit". This, the Frost estate submitted, unnecessarily prolonged the preparation for hearing and gave rise to the need for a full day to hear the appeal. In this regard the material provided by the appellant was lengthy and complicated.
6. The Frost estate submitted it was successful in the appeal and the appellant was entirely unsuccessful. The Frost estate said that it had unnecessarily incurred legal expenses "due to the unreasonable conduct of the [appellant]".
7. While a lump sum order was sought in connection with the proceedings below and the appeal, no evidence was provided in support of this claim to enable any assessment to be made for the purpose of the appeal.
8. In response the appellant made the following submissions.
9. First, in the Milstern application, the appellant said: 1. no amount was claimed in any application filed, 2. Milstern changed the claim four times; and 3. the amount ordered to be paid, namely $30,022.16 was an amount payable by the respondents jointly so that each respondent was only liable to $15,000.08. Consequently, there was no amount claimed or in dispute greater than $30,000 and r 38(2)(b) did not apply to the proceedings at first instance.
10. It was not suggested by the appellant that r 38(2)(b) did not apply to the Bovaird application.
11. Secondly, the appellant said no order for costs was made in either of the proceedings at first instance and no order should be made in connection with the appeals in favour of Milstern. The appellant said there were no special circumstances warranting an order for costs, the Tribunal at first instance had effectively determined there be no costs awarded in respect of those proceedings (in part because each side had had a measure of success) and "for similar reasons no costs should be awarded to any party in this appeal"
12. Thirdly, in relation to the stay applications made to the Appeal Panel, the appellant said nothing was put by Milstern concerning the first stay application. In relation to the second stay application the appellant says it was justified "because an order was made to prevent distribution of the estate pending appeal".
13. We note at this point that a stay application was originally made in appeal 2021/00056129 with the Tribunal noting in orders made 12 March 2021 that the application for stay was dismissed because it had been withdrawn. It does not appear that any orders were made determining the second stay application lodged in respect of appeal 2021/122743 and it is unclear what happened to this application.
14. As to the position of the Frost estate, the appellant submitted an order in the nature of a Sanderson Costs Order should not be made.
15. Reference was made to the position adopted by the Frost estate in the proceedings at first instance, the appellant referring to a claim by the Frost estate that no recurrent charges were incurred directly by Ms Frost. The appellant said that, at first instance, the Tribunal had determined both the estates were liable for recurrent charges to Milstern.
16. On appeal, the Frost estate's only issue was whether the remaining proceeds of the sale were held in equal shares by the Frost estate and the appellant. The Frost estate was only a party to appeal 2021/122743, being an appeal in respect of the Milstern application. The appellant said the involvement of the Frost estate was limited in this appeal. At para 50 of the appellant's written submissions the appellant described the involvement of the Frost estate as follows: I Less than 30 minutes time was spent on the submissions; II It was reasonable and proper to join the Frost estate as a respondent to decide the matter once and for all; III There is no unreasonable behaviour on the part of the [appellant] conducting the appeal proceedings.
17. Consequently, there was "no behaviour in the conduct of the [appellant] that that makes it fair to impose some liability on it for the appeal costs of the Frost estate". Reliance was placed on the decision of the Court of Appeal in Almeida v Universal Dye Works Pty Ltd & Ors (No 2) [2001] NSWCA 156 at [32].

Analysis

1. Rule 38 applies when determining costs in the appeals if it applied to the proceedings at first instance: r 38A.
2. Relevantly, r38(2)(b) provides: (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 - … (b) the amount claimed or in dispute in the proceedings is more than $30,000.
3. As the rule states, there must be an amount claimed or in dispute greater than $30,000 in order to displace the operation of s 60 of the NCAT Acts.
4. The meaning of the expression "amount in dispute" was dealt with by the Appeal Panel in The Owners Corporation Strata Plan No. 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256. As explained in Malachite at [75] and following, the rule is not concerned with a change in wealth. Rather, the rule is concerned about the "amount claimed or in dispute".
5. In both proceedings at first instance there were disputes concerning recurrent charges and other amounts and who was entitled to the balance of proceeds of sale held in the trust account. As recorded in the Primary Decision, the amounts in dispute were greater than $30,000. Consequently, r 38(2)(b) applied to the proceedings at first instance. Consequently, that rule applies to costs of these appeals.
6. In both appeals, the amounts in dispute are greater than $30,000, being the amount of recurring charges properly payable and the amount to which the appellant was entitled from the trust account. Further, the claims are interlinked. Consequently, r 38(2)(b) applies to both appeals and there is a general discretion to award costs: Thompson v Chapman [2016] NSWCATAP 6 at [68] and following.
7. The appellant was unsuccessful against both respondents. As stated in Thompson at [69]: The starting point in exercising such discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour: see Latoudis v Casey [1990] 170 CLR 534 per Mason CJ at 554 and Oshlack v Richmond River Council per McHugh J at 97.
8. In our view, there is no basis to displace the usual order for costs. The fact no costs applications were made to or determined by the Tribunal at first instance does not affect this position.
9. In the case of the Frost estate, while this respondent was joined as a respondent to appeal 2021/122743 by order 1 of the Appeal Panel made 21 May 2021, such an order was both necessary and appropriate having regard to r 29(1)(b) of the Rules. This rule mandates that parties to an internal appeal include any personal body who was a party to the proceedings before the Tribunal at first instance. As a respondent, the Frost estate was entitled to participate in the appeal and make submissions and resist changes to the order made in its favour in the Milstern application.
10. While the appellant said the Frost estate undertook minimal work and had minimal involvement in the appeal, any issues concerning costs incurred can be dealt with through the usual process of assessment.
11. As to the applications for indemnity costs, in our view such orders are not warranted in the present circumstances.
12. While the appellant was unsuccessful, the issues raised in the appeal were complicated and could not be said to be so hopeless as to warrant a special order for costs.
13. Contrary to Milstern's submissions, we do not accept as a relevant consideration that the Appeal Panel "should make it known that the Tribunal will not readily accept it's time … being wasted on proceedings which have no tenable basis in fact or law". While a lack of merit in disputes between parties may warrant an order for costs by way of compensation in favour of one party (including an order that costs be paid on an indemnity basis), the obligation of the Appeal Panel is to adjudicate on appeals brought before it in a manner consistent with the guiding principle and the obligations imposed on the parties and the Tribunal including under s 36 of the NCAT.
14. Accordingly, we will make an order that the appellant pays the costs of each of the respondents in the respective appeals, such costs to be assessed on the ordinary basis.

Orders

1. The Appeal Panel makes the following orders: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 the Tribunal dispenses with a hearing in respect of the applications for costs brought by Milstern Retirement Services Pty Ltd and the Estate of the Late Margaret Esther Frost in respect of these appeal proceedings. 2. The Appeal Panel directs that any application for costs in respect of the proceedings at first instance is to be first made in the Consumer and Commercial Division to the Tribunal as originally constituted. 3. The appellant is to pay: 1. the costs of Milstern Retirement Services Pty Ltd in appeals 2021/56129 and 2021/122743, such costs to be as agreed or assessed on the ordinary basis: and 2. the costs of the estate of the late Margaret Esther Frost (executor Robert Walker Frost) in appeal 2021/122743, such costs to be as agreed or assessed on the ordinary basis. 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: 26 May 2022