Ferntree Homes Pty Ltd v Bernleiter

NCAT Appeal Panel|2023-11-27

REASONS FOR DECISION

In these proceedings on 26 June 2023 leave to appeal was refused and the appeal was dismissed.
Orders were made in the event that a party was minded to make an application for the costs of the Appeal.
We have received submissions from the: 1. respondent's solicitors dated 4 July 2023; and 2. appellant's solicitors dated 24 July 2023.
The respondents have filed reply submissions which they have prepared in their personal capacity. The appellant objects to the reply submissions on the basis that there was no orders from the Appeal Panel which allowed reply submissions. We have decided not to take the reply submissions into account because our orders did not allow for that.
The respondents seek the following orders as to costs: 1. the appellant pays their costs in an amount as fixed by the Appeal Panel, or as specified by the Appeal Panel as to how costs are to be otherwise fixed; or 2. in the alternative, if the Appeal Panel declines to award fixed costs, that the appellant pays the respondents' costs as agreed or assessed.
The respondents filed submissions on costs and in support, an affidavit of their solicitor Mr Weicheng Zheng affirmed 10 July 2023.
The appellant states that a fixed costs order is not appropriate. It submits that the appropriate order is for the appellant to pay the respondent's costs as agreed or as assessed.
The parties do not specifically address whether s60 of the Civil and Administrative Tribunal Act 2013 applies or whether Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) applies.
In the first instance proceedings the amount in dispute was more than $30,000.00 which is borne out by the fact that the decision appealed against was in the sum of $90,000.00. The appellant sought to set aside that decision.
In Riman v Smith [2023] NSWCATAP 205 Principal Member Suthers explained the costs position on Appeals at [8] to [10]: 'The primary provision governing costs in relation to proceedings in the Tribunal is s 60 of the NCAT Act. Pursuant to that section, each party to proceedings is generally to pay their own costs in appeals of this nature. However, that general rule may be displaced in respect of decisions of the Consumer and Commercial Division, and appeals from such decisions, by rr 38 & 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (the Rules). In that regard, where the amount claimed or in dispute in the proceedings at first instance is more than $30,000, the general rule in those proceedings is modified by r38(2)(b) of Rules and the Tribunal in those proceedings may award costs even in the absence of special circumstances. It is undisputed that this is the case here. In an appeal from a decision in such proceedings it is then necessary to consider r 38A of the rules, which provides: 38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of - (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal. Where r 38 is engaged in the proceedings at first instance, r 38A(1) is engaged in an appeal from a decision in those proceedings. However, that is not the end of the enquiry as to whether s 60 of the Act applies to costs in such an appeal. Rule 38A(2) commands that the first instance costs provisions apply in such an appeal, not that the effect of the application of such provisions in those proceedings be carried over to the appeal. As a result, s 60 of the Act will apply in the appeal unless the amount claimed or in dispute in the appeal is also more than $30,000: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25. Again, though, that was the case here.

Respondents' submissions and evidence

The respondents' submissions state that $49,430.68 has been spent on legal fees and disbursements in this appeal up to 15 February 2023. Mr Zheng's evidence was that there was an unbilled fee of $5,361.14 inclusive of GST as at 7 July 2023 and that he expected that a further amount of $2,200.00 inclusive of GST would be the costs incurred in the costs application. This leads to a total of $56,992.08 which is stated to be the respondents' costs of the appeal.
Mr Zheng has annexed the respondents' solicitor's accounts of 20 December 2022 and 1 March 2023 which have some information redacted due to asserted privilege. These accounts total $40,149.43, excluding counsel's fees which were $9,281.25.
The respondents submit that there is sufficient material available for the Appeal Panel to determine a fair amount of costs to be awarded. There is no submission made regarding what discount should be applied.
The respondents also submit that a significant consideration in making a lump sum costs order is the fact that the parties have a poor relationship and that the appellant has been uncooperative and obstructive, leading them to believe that an assessment of costs would likely to be protracted. They also submit that the appellant stated in the stay application that it was impecunious and that is a reason which supports a lump sum costs order.

The appellant's position

The appellant's solicitors submit that the appropriate principles are that the Tribunal should not make a lump sum costs order except in exceptional circumstances and generally where there has been 'megalitigation'. They also submit that the Tribunal should be satisfied first, that the circumstances of the case warrant a lump sum costs order and secondly that there is proper evidence of the quantum of the costs involved.
So far as the material that the respondents rely upon to establish the amount of costs to be awarded, the appellant submits that in connection with the first of the respondents' solicitors invoices it is not possible to ascertain who did the work referred to, or how much time was spent in doing each of the items of work billed for. In addition the appellant raises the issue of the redactions on the first and second invoices which we have identified, submitting that the redactions make the assessment of reasonable costs difficult. Comments are also made in connection with drafting a witness statement and whether the witness statement was used in the appeal, the time charged for preparing the brief to counsel and the time charge for drafting the Reply to Appeal. In connection with the unbilled fee of $5,361.14, the appellant states that there is no indication of the work that was carried out and charged for when the appeal was heard on 13 February 2023. In that regard, the second invoice from the respondents' solicitors billed up to the day after the appeal was heard. In those circumstances, information describing the work the subject of the fee of $5,361.14 is of relevance in considering whether to make a lump sum costs order.

Determination of the application for a lump sum costs order

We are not persuaded in the circumstances that the respondents' submissions referred to justify the making of a lump sum costs order. In particular we are not persuaded that the appellant will be in a position to delay and protract the assessment of their costs. In our view the appeal proceedings were not overly complex or lengthy such that the making of a lump sum costs order is desirable to avoid a lengthy assessment process. Importantly, having regard to the appellant's submissions, we are not confident that the materials relied upon by the respondents gives us sufficient confidence that we will be in a position to arrive at an appropriate sum for a lump sum costs order. The issue of the redactions on the respondent's solicitor's invoices is a factor in holding that view, as is the fact that there is no information at all about what work the respondents' solicitors carried out when they charged $5,361.14, and why such work should be paid for by the appellant when it seems highly likely that the work the subject of the invoice was carried out after the appeal was concluded. Finally, the respondents have not provided evidence to assist the Appeal Panel in arriving at an appropriate discount factor to be applied in finalising a lump sum costs order.
Despite the fact that we have decided not to make a lump sum costs order, the appellant does not oppose an order being made which requires it to pay the respondents' costs of the appeal such costs if not agreed to be assessed. We will make an order that the appellant must pay the respondents' costs of the appeal, such costs if not agreed to be assessed on the basis set out in the legal costs legislation (as defined in section 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: 27 November 2023

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Judgment (4 paragraphs)

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Cases Cited (15)