This is an application for costs by the second and third respondents against the appellant.
[2]
Background
The first respondent purchased two hot bar and two cold bar units from the third respondent. The two units were manufactured by the appellant. The second respondent is the sole director of the third respondent.
SSSR complained that the two hot bar units were faulty. A number of unsuccessful attempts were made to repair the units.
SSSR commenced proceedings in the Tribunal against the other parties. It sought a refund of the purchase price paid for those units, an order that the units be returned and made a claim for business losses said to have been caused by the faulty units.
A hearing in the Tribunal took place on 30 September 2020. On that day all parties appeared except for the appellant.
The Tribunal was satisfied that notice of the hearing had been given to the appellant, there was no explanation for the appellant's non-appearance at the hearing and that the hearing should proceed in the absence of the appellant.
The Tribunal considered the evidence place before it, found that the units were faulty and not of acceptable quality. The Tribunal was satisfied that SSSR was entitled to recover against the appellant the price paid for the units, being $12,067.00. The Tribunal was not satisfied that any other damages had been established by SSSR against the appellant.
The Tribunal ordered that the appellant pay to SSSR the sum of $12,067.00 on or before 28 October 2020, that the appellant collect the faulty units from SSSR at the appellant's own cost and dismissed SSSR's claims against Elite and Mr Staltari.
The appellant filed an Application to Set Aside or Vary Tribunal Decision seeking that the orders made against it by the Tribunal on 30 September 2020 be set aside. The application was filed out of time. Only SSSR was made a respondent to this application and nothing in the application suggested that the appellant also sought to set aside the order dismissing SSSR's claim against Mr Staltari and Elite.
On 20 October 2020 the Tribunal informed the parties as follows:
"The Tribunal has received an application from the Applicant to set aside a decision made on 30 September 2020 in matter number GEN 20/23454.
The Tribunal makes the following orders:
1. The application for a stay order is refused.
Reasons:
No reasons given for not attending the hearing.
Directions:
1. The Applicant is to make any submissions concerning the application to set aside by 27 October 2020, such submissions to be lodged with the Tribunal and provided to the Respondent. Address why you were absent from the hearing?
2. The Respondent is to make any submissions in reply to the Applicant's submissions by 5 November 2020, such submissions to be lodged with the Tribunal and provided to the Applicant.
Note: Submissions must address whether leave should be granted to extend the time to make the set aside application.
The application may be determined on the papers without an oral hearing. Provide as much information and documentation supporting your application as possible."
The Application to Set Aside was determined on 6 November 2020. On that Application the Tribunal said:
"The application to set aside the decision in matter number GEN 20/23454 has been considered and the following orders are made:
The application is dismissed because:
Reasons:
1. Although the orders were made in the absence of the applicant, and the Tribunal is satisfied that the party's absence resulted in their case not being adequately put to the Tribunal, in the exercise of discretion the Tribunal is not satisfied that there is a real likelihood that it would be unjust to let the decision stand.
2. The application was not made in time and leave is not granted to extend time.
3. The applicant has not provided any explanation for its failure to attend the hearing on 30 September 2020, any defence it has to the application or requested an extension of time. The Applicant has not provided any reason for the delay in filing the set aside application, or that its case has merit. The applicant did not file any submissions as requested by the orders made on 20 October 2020."
The appellant appealed from that decision dismissing its Application to Set Aside.
In the appellant's Notice of Appeal the only respondent named was SSSR.
Directions were made by the Appeal Panel on 4 December 2020. They were amended on 14 December 2020.
Those directions included the following orders:
"1. Joe Staltari and Elite Food Appliances Pty Ltd are added as 2nd and 3rd respondents.
2. Leave is given to the 2nd and 3rd Respondent to be legally represented.
3. The Respondents are to lodge with the Appeal Panel and give to the Appellant a copy of the Reply to Appeal by 19/12/2020 and any application for removal as parties.
4. The Appellant is to lodge by email with the Appeal Panel and email to the Respondents all the material the Appellant relies upon by 04/12/2020.
5. The Respondents are to lodge with the Appeal Panel and give to the Appellant by 15/01/2021:
(a) All the evidence provided to the Tribunal below on which it is intended to rely;
(b) Any evidence not provided to the Tribunal in making the decision under appeal, on which it is intended to seek leave to rely;
(c) The Respondent's written submissions in opposition to the appeal; and
(d) The sound recording or transcript of the hearing at first instance, if that has not already been provided and the Respondent is relying on what happened at the hearing and a typed copy of the relevant parts.
6. The Appeal is listed for HEARING on 15/02/2021 at 10:15AM by telephone for full day.
7. The issue of whether the Appeal Panel should:
1. extend the time for filing the Notice of Appeal
2. give leave to appeal on grounds other than a question of law
3. allow fresh evidence or evidence in addition to evidence received by the Tribunal at first instance
is to be determined at the hearing of the appeal.
8. ....
NOTE:
(1) If a party does not lodge with the Appeal Panel and give to the other parties documents, sound recordings and submissions as directed above, that party may not be allowed to rely on those documents, sound recordings and submissions at the hearing of the appeal.
(2) If any party wishes to make an application for costs of the appeal, that party is to lodge with the Appeal Panel and give to the other party any submissions on costs at the same time as their submissions in relation to the appeal.
(3) At the hearing the Appeal Panel may proceed, if appropriate, to deal with the appeal by way of a new hearing, under the Civil and Administrative Tribunal Act 2013 (NSW), section 80(3). The parties should be prepared to put before the Appeal Panel any fresh evidence or evidence in addition to evidence received by the Tribunal at first instance and make any submissions in relation to the original application that they want to make.
(4) If a party wishes to rely on a sound recording of a hearing, the party must identify for the Appeal Panel which parts of the sound recording are relied in their written submissions.
The basis upon which Elite and Mr Staltari were joined as respondents was not explained on the appeal, although we note r 29 (b) of the Civil and Administrative Tribunal Rules 2014 (NSW) requires that any person or body (other than the appellant) who was a party to the proceedings before the Tribunal at first instance must be a party to an appeal.
The appellant did not comply with any of those directions which applied to it, but most particularly did not comply with Order 4 in that it did not provide any material upon which it relied in relation to the decision dismissing its Application to Set Aside (which is the decision it appealed against).
On 23 December 2020, Elite and Mr Staltari filed an application to be removed as parties to the appeal per Order 3 made on 4 December 2020. Included with that application were four pages of submissions.
Many of the submissions made, whilst conceivably of some relevance were far from the real issues on the appeal and the grounds upon which the appeal failed because they concerned matters pertaining to the hearing in the absence of the appellant on 30 September 2020 rather than the separate and distinct decision made on 6 November 2020 dismissing the appellant's Application to Set Aside, which is the decision appealed against.
On 6 January 2021 the Appeal Panel made the following directions:
1. Each respondent party to the application is to advise the Appeal Registry and each other party, in writing, whether they oppose the application, by 15 January 2021. In the event that any party opposes the application they are to lodge in the Appeal Registry and give to each other party any evidence and submissions they rely upon in opposition to the application, by 15 January 2021.
2. The Appeal Panel may dispense with a hearing of the application to remove the first and second named respondents from the appeal. Any party who opposes such an order should make any submissions on the issue of whether a hearing of the application for removal should be dispensed with, when complying with these directions or, in any event, by 15 January 2021.
3. In the event that no party lodges material in response to the application by 15 January 2021 opposing the application, the Appeal Panel will proceed on the basis that the application is consented to by each party.
Both the appellant and SSSR opposed the application. On 20 January 2021 the Appeal Panel dispensed with a hearing to have parties removed and dismissed the application.
The appeal was heard on 15 February 2021.
On the hearing of the appeal the appellant desired to raise matters which might have been relevant at a hearing of the matter at first instance before the Tribunal, but were not relevant to an appeal from the decision of the Tribunal dismissing the appellant's Application to Set Aside.
After some discussion the appellant withdrew its appeal, and we made an order dismissing the appeal pursuant to s 55(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act").
Elite and Mr Staltari now seek an order for costs against the appellant for their costs of the appeal.
They also originally sought a costs order against SSSR, but that claim was withdrawn. SSSR makes no application for costs.
The amount claimed or in dispute on the appeal was $12,067.00. No order was made by the Tribunal under clause 10(2) of Schedule 4 to the NCAT Act in relation to the proceedings. Therefore, by operation of rr 38 and 38A of the NCAT Rules, the provisions of s 60 of the NCAT Act apply to the determination of the costs application - see Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [43].
The principles applicable to s 60, and which we apply in this case, are well settled and do not require lengthy recitation in these reasons. They are summarised in The Owners - Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273 as follows (footnotes omitted):
"[6] The general rule set out in s 60(1) was:
"… designed to promote access to justice generally and to minimise the overall level of costs in tribunal proceedings as far as is practicable: Choi v University of Technology Sydney [2020] NSWCATAP 18 at [41].
[7] In Feng v OzWood (Australia) Pty Ltd [2020] NSWCATAP 42 the Appeal Panel said, at [8], that the discretion to award costs had to be exercised judicially:
"...having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. (See eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]-[31]; Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (no 2) [2016] NSWCATAP 168 at [16].)"
[8] Section 60(2) says that the Appeal Panel may award costs to a party "only if" satisfied there are special circumstances warranting an award of costs.
[9] Section 60(3) sets out a non-exclusionary list of factors to which an Appeal Panel may have regard in determining whether special circumstances warranting an award of costs exist.
[10] "Special circumstances" are circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary: Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] (Santow J); Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32]; Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8]; Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 at [9]; Youssef v NSW Legal Services Commissioner (Costs) [2020] NSWCATOD 115 at [107].
[11] However, it does not follow that a costs order should be made simply because one or more of the factors in s 60(3) are made out.
[12] Even if satisfied that there are special circumstances, the Appeal Panel must further be satisfied that they are circumstances "warranting an award of costs" - Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103 at [21]; Youssef at [108].
[13] The exercise of the discretion requires the Tribunal "to weigh whether those circumstances are sufficient to amount to 'special' circumstances that justify departing from the general rule that each party bear their own costs": BPU v New South Wales Trustee and Guardian (Costs) [2016] NSWCATAP 87 at [9]; Obieta v Australian College of Professionals Pty Ltd (2014) NSWCATAP 38 at [81]; Khalafv Commissioner of Police [2019] NSWCATOD 178 at [29]; Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 at [35].
[14] He who asserts must prove, and so the party seeking the costs order bears the onus of proving that special circumstances exist - Styles v Wollondilly Shire Council [2017] NSWCATAP 108 at [5] under the heading "Costs".
[15] Whether special circumstances exist is a question of fact and each case must be assessed according to its circumstances: Wynne Avenue Property Ltd v MJHQ Pty Ltd (No 2) [2019] NSWCATAP 68 at [57]; The Owners - Strata Plan 20211 v Rosenthal [2019J NSWCATAP 49 at [15]."
Elite and Mr Staltari submit that their written submissions contained in the Reply to Appeal and the removal application put the appellant on notice of the issues affecting the appeal, including the need for an extension of time to make the set aside application, the circumstances under which Mr Staltari and Elite became parties to the appeal and the considerations for removing Mr Staltari and Elite from the appeal.
Elite and Mr Staltari submit that the appellant was at liberty to seek legal advice in relation to the appeal but elected not to do so.
Elite and Mr Staltari submit that the appellant has never identified any basis on which it could challenge on the appeal the order made in the substantive proceedings dismissing SSSR's claim against them. They submit that they should be awarded costs of the appeal because of this and because the appellant opposed them being removed from the appeal. They submit the appeal had no merit.
In our opinion the appellant should be ordered to pay 50% of Elite's and Mr Staltari's costs of the appeal from 18 December 2020 (the date of the application for removal), including 50% of the costs incurred in preparing and lodging the application for removal dated 18 December 2020 and filed on 23 December 2020.
Before that point in time Elite and Mr Staltari were arguably required to be parties to the appeal by operation of r 29(b) of the NCAT Rules.
However, after that date, we accept the general thrust of Elite's and Mr Staltari's submissions to the effect that there was never a basis shown for disturbing the order dismissing SSSR's claim against them, the appellant opposed the removal of them from the appeal, the appellant did not comply with any of the Tribunal's orders to serve relevant material from the Application to Set Aside, did not serve any submissions as to the arguments it would make on the appeal and, as became apparent on the hearing of the appeal, did not proceed with any challenge to the decision appealed against.
In substance, the appellant conducted the proceedings in a way that unnecessarily disadvantaged Elite and Mr Staltari by opposing their removal as parties [s 60(3)(a) of the NCAT Act] when there was no tenable basis in fact or law for them to continue being parties [s 60(3)(c) of the NCAT Act].
Furthermore, the appeal was misconceived [s 60(3)(e) of the NCAT Act] as the appellant did not challenge the decision appealed against but wished to agitate matters relevant only to the earlier decision of the Tribunal on 30 September 2020.
Finally, the appellant failed to comply with the duty imposed on it by s 36(3) of the NCAT Act, namely its duty to comply with directions and orders of the Tribunal. We do make this award of costs on this ground as some sort of punishment for non-compliance. Rather, had the appellant turned its mind to the appeal and complied with those directions, it may have brought home to the appellant that it had no basis to appeal the order made in favour of Elite and Mr Staltari, or might have allowed Elite and Mr Staltari to renew their removal application in light of those matters or to have incurred lesser costs in preparing for the appeal.
In Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 the Court said at [38]:
"In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal."
The Court also said that the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation.
For those reasons we are of the opinion that special circumstances warranting an award of costs have been established, and in the exercise of our discretion such an order should be made. However, it should only be made to the extent of 50% of Elite's and Mr Staltari's costs because many of their submissions, whilst conceivably of some relevance, were far from the real issues on the appeal and from the grounds upon which the appeal failed.
We order the appellant to pay 50% of Elite's and Mr Staltari's costs of the appeal, as agreed or assessed, from 18 December 2020, including 50% of the costs incurred in preparing and lodging the application for removal dated 18 December 2020 and filed on 23 December 2020.
[3]
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: 07 April 2021